DCIT, Faridabad V. Smt. Pinky Bedi, New Delhi

ITA 75/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3881 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: S S KALRA
• Keywords: Unexplained investment; Search and seizure
• Section: 142(1); 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G', NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 6422/DEL/2012 ASSESSMENT YEAR: 2005-06 PINKY BEDI, VS. ACIT, CENTRAL CIRCLE-II, DIRECTOR, M/S JMD LIMITED FARIDABAD 6, UPPER GROUND FLOOR, DEVIKA TOWERS, NEHRU PLACE, NEW DELHI 110 019 (PAN: AALPB0401B) (APPELLANT) (RESPONDENT) ITA NO. 75/DEL/2013 ASSESSMENT YEAR: 2005-06 DCIT, CENTRAL CIRCLE-II, VS. SMT. PINKY BEDI, FARIDABAD DIRECTOR, M/S JMD LTD., W-24, GREATER KAILASH NEW DELHI 48 ASSESSEE BY : SH. RAJAN BHATIA, AD V. & SH. S.S. KALRA, CA DEPARTMENT BY : SH. S.S. RANA, C IT(DR ) ORDER PER H.S. SIDHU, JM THE ASSESSEE AND DEPARTMENT HAS FILED CROSS APPEAL S WHICH ARE EMANATE FROM THE COMMON ORDER DATED 29.10.2012 OF THE LD. CIT(A) (CENTRAL), GURGAON PERTAINING TO A.Y. 2005-06. S INCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEALS 2 WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ASSESSEES APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES APPLICABLE TO TH E CASE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE INVESTMENT MADE HAVE BEEN FULLY EXPLAINED AND DISALLOWANCE OF RS. 2 9,43,121/- CONFIRMED WITHOUT APPRECIATING THE INFORMATION PROV IDED. HENCE THE ADDITION IS UNCALLED FOR. 2. APPELLANT CRAVES LEAVE TO AMEND ALTER AND DELETE ABOVE GROUND OF APPEAL. 3. THE GROUNDS RAISED IN REVENUES APPEAL READ AS U NDER:- 1. WHETHER ON THE CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) WAS RIGHT IN DELETING THE ADDITION ON ACCOUN T OF UNEXPLAINED INVESTMENT IN HOUSE MADE BY THE ASSESSE E BY IGNORING THE FACT THAT THERE WAS ACTUAL DIFFEREN CE BETWEEN DVOS REPORT AND INVESTMENT SHOWN BY THE ASSESSEE BY RS. 1,01,11,000/- AND THAT THE ASSESSEE HAD PRODUCED NO EVIDENCE THAT CONSTRUCTION OF SAID HOUSE WAS COMPLETED IN FY SUBSEQUENT TO FY 2004-05 ESPECIALLY WHEN THE PURCHASES DEED IS DATED 23.4.2004? 3 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) WAS RIGHT IN IGNORING THE STATEMENT REC ORDED U/S. 132(4) IN WHICH THE ASSESSEE HAD MADE DISCLOSU RE OF AN ADDITIONAL INCOME ON CONSTRUCTION OF HOME AND HAD NOT BEEN DECLARED BY HER IN THE RETURNS FILED B Y THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH A ND SEIZURE OPERATION UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED AS THE ACT) WAS CONDUCTED ON 06.08.2008 AT THE RESI DENTIAL / BUSINESS PREMISES OF THE PERSONS ASSOCIATED WITH THE JMD GRO UP. AMONG OTHERS, THE RESIDENTIAL PREMISES AT W-24, GREATER KAILASH-I , NEW DELHI RESIDENCE OF SH. SUNIL BEDI, SH. KARAN BEDI AND SMT. PINKY BE DI, DIRECTORS OF M/S JMD LIMITED WAS ALSO SUBJECT TO SEARCH AND SEIZURE OPERATION. IN RESPONSE TO NOTICE U/S. 153A OF THE ACT THE ASSESSE E FILED ITS RETURN OF INCOME ON 31.12.2009. NOTICES UNDER SECTIONS 143(2) AND 142(1) OF THE ACT ALONGWITH DETAILED QUESTIONNAIRE WERE ISSUED WH ICH CULMINATED INTO ASSESSMENT FRAMED AT RS. 79,22,872/- U/S. 153A(1)(B ) OF THE ACT BY ADDITION OF RS. 67,50,000/- VIDE ORDER DATED 30.12. 2010. 5. AGAINST THE ASSESSMENT ORDER DATED 30.12.2010, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), GURGAON, WHO VIDE H IS IMPUGNED ORDER DATED 29.10.2012 HAS PARTLY ALLOWED THE APPEAL OF T HE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER, THE ASSESSEE AS WELL AS REVENUE 4 ARE IN CROSS APPEALS BEFORE THE TRIBUNAL ON SOME OF THE ISSUES MENTIONED IN THEIR RESPECTIVE APPEALS. 6. LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT L D. CIT(A) HAS FAILED TO APPRECIATE THAT THE INVESTMENT MADE HAVE BEEN FULLY EXPLAINED AND DISALLOWANCE OF RS. 29,43,121/- CONFIRMED WITHO UT APPRECIATING THE INFORMATION PROVIDED, HENCE, HE STATED THAT THE ADD ITION IS UNCALLED FOR. 6.1 LD. DR RELIED UPON THE ORDERS OF THE AO WITH RE GARD TO DELETION OF ADDITION ON ACCOUNT OF INVESTMENTS. LD. DR ALSO FI LED THE WRITTEN SUBMISSIONS IN THE CASE AND RELIED UPON SOME OF THE CASE LAWS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RECORDS, ESPECIALLY THE WRITTEN SUBMISSIONS. THE ASSESSEE A ND REVENUE HAS CONTESTED THEIR RESPECTIVE ADDITIONS BEFORE US. WE FIND THAT WHILE FRAMING THE ASSESSMENT, THE AO TOOK THE TOTAL VALU E OF PROPERTY OF RS. 1,35,00,000/- AND NOT CONSIDERED EXPENDITURE OF RS. 40 LAKHS WHICH WAS DULY ACCOUNTED FOR BY THE ASSESSEE AND ALSO FURNISH ED THE BILL AT THE TIME OF ASSESSMENT. MOREOVER, THE AO DID NOT CONSIDER R S. 50 LACS SURRENDERED BY ASSESSEE AND WHICH HAVE BEEN USED F OR THE RENOVATION OF THE HOUSE PROPERTY I.E. THE AMOUNT ASSESSEE SURREND ERED AT THE TIME OF SEARCH OPERATION. THE AO HAS MADE THE ADDITION OF RS. 67,50,000/-. IN APPEAL LD. CIT(A) CONSIDERED ALL THE FACTS AND GA VE THE CREDIT FOR RS. 40 LACS ON ACCOUNT OF FINISHING AND FURNISHING AND RS . 50 LACS ON ACCOUNT OF AMOUNT SURRENDERED, BUT DIRECTED TO ADD THE COST OF ELEVATORS AND DG SET AND AIR CONDITIONER OF RS. 10,50,033/- + RS. 4,21 ,505/-. WE NOTE THAT AO HAS ACCEPTED THE COST OF DG SET AND AIR CONDITIO NERS, HOWEVER, THERE IS NO REASONS TO ADD THESE COST IN THE UNEXPLAINED INVESTMENT AS THE ASSESSEE HAS ALREADY RECORDED THESE TRANSACTION IN THE BOOKS OF ACCOUNT. ON PERUSING THE PAGE BOOK PAGE NO. 48 TO 51 WHICH A RE THE COPIES OF THE INVOICE, IT IS CLEAR THAT ASSESSEE PRODUCED THE BIL L OF THESE EXPENDITURE DURING THE ASSESSMENT ALSO AND AO HAS NOT RAISED AN Y OBJECTION IN THIS RESPECT, THEREFORE, IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS WRONGLY 5 DIRECTED TO ADD RS. 14,71,538/- (RS. 10,50,033+ RS. 4,21,505) AS UNEXPLAINED INVESTMENT, BECAUSE THESE ITEMS WERE PR OPERLY ACCOUNTED FOR BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS AND EV IDENCE WERE SUBMITTED AND AO HAS NOT TAKEN ANY ADVERSE VIEW IN THIS RESPE CT. THEREFORE, THE ADDITION MADE BY THE LD. CIT(A) OF RS. 14,71,538/- (50% SHARE OF ASSESSEE RS. 7,35,769/- IS WRONG AND NEEDS TO BE DE LETED. WE FURTHER NOTE THAT AO HAS WRONGLY REFERRED THE MATTER TO THE DVO, BECAUSE THERE WAS NO INCREMENT DOCUMENT WAS FOUND NEITHER DURING THE SEARCH OPERATION NOR AT ANY TIME LATER ON. WE FURTHER FIN D THAT THE CASE LAWS CITED BY THE LD. DR ARE NOT APPLICABLE IN THE PRESE NT CASE. ACCORDINGLY, WE DELETE THE ADDITION IN DISPUTE CONFIRMED BY THE LD. CIT(A). ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED AND GROUNDS RAISED BY THE REVENUE STAND REJECTED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND ALLOWED AND APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED ON 27/10/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 27/10/2017 'SRBHATNAGAR' COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 6