DCIT, Central circle-1, Gurugram V. Deepak Kumar, New Delhi

ITA 7716/DEL/2018

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) which deleted the additions made by the AO regarding unaccounted investments in jewellery and cash by the assessee, Bharat Bhushan Kumar and Deepak Kumar, for the assessment year 2016-17. The Revenue challenged the CIT(A)'s decision on several grounds, including the lack of evidence for telescoping and the separate legal entity of M/s Spaze Towers Pvt. Ltd. The Tribunal reviewed the assessment order, the CIT(A)'s order, and the order of the Hon'ble ITSC, and found that the CIT(A)'s decision was supported by the disclosures made to the Settlement Commission, leading to the dismissal of the Revenue's appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131757 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-04-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 03-12-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Onus to prove
• Section: 143(3); 2(22)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘B’, NEW DELHI Before Smt. Diva Singh, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 7715/Del/2018 : Asstt. Year: 2016-17 DCIT, Central Circle-1, Gurugram Vs. Bharat Bhushan Kumar, K-91, 2 nd Floor, Lajpat Nagar-II, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAEPK8742M ITA No. 7716/Del/2018 : Asstt. Year: 2016-17 DCIT, Central Circle-1, Gurugram Vs. Deepak Kumar, K-91, 2 nd Floor, Lajpat Nagar-II, New Delhi (APPELLANT) (RESPONDENT) PAN No. AAAPK4112D Assessee by : Sh. Parikshit Aggarwal, CA Revenue by : Sh. T. James Singson, CIT DR Date of Hearing: 11.04.2023 Date of Pronouncement: 19.04.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals have been filed by the revenue against the orders of ld. CIT(A)-3, New Delhi dated 04.09.2018. 2. Since, the issues involved in both the appeals are similar, they were heard together and being adjudicated by a common order. ITA No. 7715 & 7716/Del/2018 Bharat Bhushan Kumar & Deepak Kumar 2 3. In ITA No. 7715/Del/2018, the revenue has raised the following grounds of appeal: “(i) Whether on the facts and the circumstances of the case, the Ld. CIT(A) erred in deleting the addition made on account of unaccounted investment in jewellery and cash made in the hands of the assessee for the assessment year under consideration. (ii) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that the additions made on account of unexplained investment in jewellery and cash were neither recorded in the books of account/ITR/ computation of income of M/s Spaze Towers Pvt. Ltd. nor those of the assessee and the telescoping sought by the assessee is just a figment of imagination of the assessee group as not even an iota of evidence was found during the course of search nor furnished during the assessment proceedings to substantiate the claim that the undisclosed income earned by M/s Spaze Towers Pvt. Ltd. was utilized to make the investment by the assessee or was kept in form of cash. (iii) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that the benefit of telescoping can be given only to the same assessee and that too only when he is able to demonstrate that undisclosed income was actually earned before the date of utilization and the onus to prove it, is on the person who is claiming the benefit and not on the Revenue. (iv) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that there is no evidence that the amount shown to have been invested in jewellery was received by the assessee as loan / deposit from M/s Spaze Towers Pvt. Ltd. in cash and the ledger account submitted by the assessee before him showing receipt of amount in cash and repayment thereof by cheques in subsequent year is an afterthought to reduce the tax liability. (v) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that the findings of the Hon’ble ITSC are binding in respect of the applicants ITA No. 7715 & 7716/Del/2018 Bharat Bhushan Kumar & Deepak Kumar 3 only and such findings in respect of a non-applicant i.e. the assessee cannot be accepted if not supported by any evidence. (vi) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that M/s Spaze Towers Pvt. Ltd. is a separate assessee and legal entity and appropriation of its funds by the directors/promoters or their family members including the assessee for the purpose of making investment in jewellery amount to income in the hands of directors/promoters or their family members in view of the provisions of sec. 2(24)(iv) and sec. 2(22) (e) of the Act. (vii) Whether on the facts and the circumstances of the case, the Ld. CIT(A) failed to appreciate that the unexplained jewellery amounting to Rs. 1.45 crore was surrendered by the assessee in his statement u/s 132(4) on 19.02.2016 and 08.04.2016, which was also confirmed in a letter dated 11.03.2016 and these were never retracted.” 4. Heard the arguments of both the parties and perused the material available on record. 5. We have extensively gone through the • Assessment Order u/s 143(3) dated 26.12.2017, • Order of the ld. CIT(A) u/s 254 dated 04.09.2018 • Order of the Hon’ble ITSC u/s 245D(4) dated 24.05.2018 6. The AO made addition on account of unexplained cash and unaccounted investment in jewellery. It was brought to the notice of the ld. CIT(A) that the same amount stands offered to tax and the order of the Settlement Commission clearly dealt with the unaccounted income offered and accepted the contention of the assessee. ITA No. 7715 & 7716/Del/2018 Bharat Bhushan Kumar & Deepak Kumar 4 7. The ld. CIT(A) has deleted the addition and gave a categorical finding that the income brought to tax by the AO for indeed constitute a part of the disclosure made before the Hon’ble Settlement Commission. 8. Having gone through the record, we find that the observation of the ld. CIT(A) cannot be disputed and no contrary material has been brought to our notice by the Revenue and hence, we decline to interfere with the order of the ld. CIT(A). 9. In the result, the appeals of the Revenue are dismissed. Order Pronounced in the Open Court on 19/04/2023. Sd/- Sd/- (Diva Singh) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 19/04/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR