Ashok Kumar Arora, New Delhi V. ACIT, New Delhi

ITA 842/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3499 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RC DANDEY
• Assessee Lawyers: SUMIT MANCHANDANI
• Keywords: Salary income; Document seized; Retraction; Documents seized
• Section: 143(3); 132

Judgement Text

1 ITA NO. 842/DEL/ 2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 842/DEL/2014 ( A.Y 2009-10) ASHOK KUMAR ARORA UNIT NO. 134, 1 ST FLOOR, RECTANGLE 1, SAKET DISTRICT CENTRE, SAKET NEW DELHI AEPPK9937B (APPELLANT) VS ACIT CENTRAL CIRCLE-19 NEW DELHI (RESPONDENT) APPELLANT BY MR. ANANYA KAPOOR & SH. SUMIT MANCHANDANI, ADV RESPONDENT BY SH. R. C. DANDEY, SR.DR ORDER PER SUCHITRA KAMBLE THIS APPEAL IS FILED AGAINST THE ORDER DATED 10/10/ 2013 PASSED BY CIT(A)-XXXIII, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE CIT(A) HAS , IN VIEW OF THE FACTS AND CIRC UMSTANCES OF THE CASE, ERRED ON FACTS AND IN LAW IN UPHOLDING THE PENALTY ORDER PASSED BY THE AO. THE PENALTY ORDER IS ILLEGAL, BAD IN LAW AND WI THOUT JURISDICTION. 2. THAT THE CIT(A) HAS, IN VIEW OF THE FACTS AND CIRC UMSTANCES OF THE CASE, ERRED ON FACTS AND IN LAW IN UPHOLDING THE PENALTY OF RS 1,83,357/- LEVIED BY THE AO U/S 271AAA . DATE OF HEARING 28.09.2017 DATE OF PRONOUNCEMENT 07.11.2017 2 ITA NO. 842/DEL/ 2014 3. THAT THE CIT(A) HAS , IN VIEW OF THE FACTS AND CIR CUMSTANCES OF THE CASE, ERRED ON FACTS AND IN LAW IN OBSERVING THAT THE CAS E OF THE APPELLANT DOES NOT FIT INTO THE SCOPE OF SEC 271 AAA . 4. THAT THE CIT(A) HAS , IN VIEW OF THE FACTS AND CIR CUMSTANCES OF THE CASE, GROSSLY ERRED ON FACTS AND IN LAW IN OBSERVING THAT THE SURRENDER MADE BY THE ASSESSEE IS NOT IN COURSE OF THE STATEMENT RECO RDED U/S 132(4) AND HENCE SEC 271 AAA BENEFIT CANNOT BE GRANTED TO THE APPELLANT . 5. THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN D ISMISSING THE APPEAL OF THE ASSESSEE AND THE CIT(A) HAS FAILED TO ADJUDICAT E THE MATTER IN A JUDICIOUS MANNER . 6. THAT THE EVIDENCE AND SUBMISSIONS FILED AND MATERI ALS AVAILABLE ON RECORD HAVE NOT BEEN PROPERLY CONSTRUED AND JUDICIO USLY INTERPRETED, HENCE THE PENALTY LEVIED IS UNCALLED FOR. 7. THAT THE VARIOUS OBSERVATIONS MADE BY THE CIT(A) I N THE IMPUGNED ORDER ARE ILLEGAL , BAD IN LAW, CONTRARY TO THE FACTS ON RECORD AND BASED ON SURMISES AND CONJECTURES . 8. THAT IN ANY CASE THE PENALTY IS HIGHLY EXCESSIVE A ND SHOULD BE REDUCED. 3. THE ASSESSEE DECLARED INCOME OF RS. 21,56,750/- IN THE RETURN OF INCOME WHICH CONSISTED OF INCOME FROM SALARY AT RS.18,00,000/-, SHARE FROM PARTNERSHIP FIRM M/S R.S.RICE & GEN. MIL LS AT RS.7,702/-, INTEREST FROM BANK/DAWAT FOODS AND NSCS AT RS.2,42,681/- AND INCOME FROM TRADING BUSINESS UNDE R THE HEAD OTHER INCOME AT RS.5,31,076/- AND DEDUCTIONS TO T HE EXTENT OF RS.4,24,709/- WERE CLAIMED. BESIDES THIS, AN AMOUNT OF RS. 13,02,500/- WAS ADDED BACK AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH WAS OFFERED BY THE ASSESSEE AS ADDITIONAL INC OME DURING ASSESSMENT PROCEEDINGS. DURING THE ASSESSMENT PROCE EDINGS THE ASSESSEE WAS ASKED TO FILE THE DETAILS OF INCOME FR OM TRADING BUSINESS WHICH WAS SHOWN UNDER THE HEAD OTHER INCO ME TO THE 3 ITA NO. 842/DEL/ 2014 EXTENT OF RS.5,31,076/- IN THE COMPUTATION OF INCOM E FILED WITH HIS RETURN OF INCOME AND HE WAS ALSO ASKED TO SPECIFY T HE NATURE OF BUSINESS CARRIED OUT BY HIM, THE BASIS OF COMPUTING SUCH INCOME AND TO IDENTIFY THE PARTIES WITH WHOM SUCH BUSINESS WAS CONDUCTED. 4. A SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT IN DAWAT GROUP OF CASES INCLUDING THE ASSESSEE ON 1 0/02/2009. DURING THE COURSE OF ASSESSMENT U/S 143(3) OF THE I NCOME TAX ACT, 1961, THE ASSESSEE OFFERED ADDITIONAL INCOME OF RS. 13,02,500/-. THE ASSESSMENT U/S 143(3) WAS COMPLETED VIDE ORDER DATED 31/12/2010 BY MAKING ADDITION OF RS.34,59,250/- AS REGARDS ADDITIONAL INCOME OFFERED BY THE ASSESSEE DURING AS SESSMENT PROCEEDINGS. AT THE TIME OF ASSESSMENT ORDER THE AS SESSING OFFICER HELD THAT AS REGARDS IMMUNITY FROM IMPOSITION OF PE NALTY U/S 271 AAA IS CONCERNED THAT CANNOT BE GRANTED TO THE ASSE SSEE FOR THE REASON THAT THE ASSESSEE HAS NOT FULFILLED THE COND ITIONS LAID IN SUB SECTION 2 OF SECTION 271AAA OF THE ACT AND ACCORDIN GLY PENALTY PROCEEDINGS U/S 271AAA WAS INITIATED. PENALTY OF R S.1,83,357/- WAS IMPOSED U/S 271AAA OF THE ACT BY ASSESSING OFF ICER VIDE ORDER DATED 28/6/2011 STATING THEREIN THAT THE DEFA ULT OF THE ASSESSEE WAS DELIBERATE. 5. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 6. THE LD. AR SUBMITTED THAT SINCE THE SURRENDER WA S ACCEPTED BY THE DEPARTMENT THEN ITS NOT A CASE FOR LEVY OF ANY PENALTY. THE 4 ITA NO. 842/DEL/ 2014 LD. AR FURTHER RELIED UPON THE ORDER OF THE ITAT, N EW DELHI IN CASE OF THE ASSESSEES BROTHER WHEN IN SIMILAR ISSUE HAS BEEN ALLOWED IN FAVOUR OF THE BROTHER OF THE ASSESSEE RELATING TO I MPOSITION OF PENALTY U/S 271AAA. THE LD. AR FURTHER SUBMITTED T HAT SURRENDER WAS MADE WITH REFERENCE TO THE SEIZED DOCUMENTS AND THE SAME WAS ACCEPTED BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT AS THE INCOME ASSESSED AND THE INCOME RETURNED/SURR ENDERED WAS THE SAME. THE ASSESSEE HAS ALSO PAID THE TAXES ON THE SAID ASSESSED INCOME. IN-FACT MANNER OF EARNING THE SUR RENDERED INCOME WAS ALSO DISCLOSED BY THE ASSESSEE. THE LD. AR FURTHER SUBMITTED THAT THE ITAT HAS ALREADY DECIDED THIS IS SUE IN FAVOUR OF THE ASSESSEES BROTHER IN ITA NO. 6615/DEL/2013 ASS ESSMENT YEAR 2009-10 DATED 16 TH AUGUST, 2017. 7. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND THE CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ISSUE BEFORE US IS IDENTI CAL IN NATURE TO THAT OF BROTHER OF THE ASSESSEES CASE WHEREIN THE ITAT HAS ALLOWED THE APPEAL OF THE ASSESSEE THEREIN. THE ITAT, NEW D ELHI IN ITA NO. 6615/DEL/2013 ASSESSMENT YEAR 2009-10 DATED 16 TH AUGUST, 2017 HELD AS UNDER:- 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. THE SEARCH WAS INITIATED ON 10.0 2.2009 ON THE DAWAT GROUP OF CASES. THE SEARCH WAS CONDUCTED AT VARIOUS PLACES INCLUDING THE FACTORY PREMISES, REGI STERED 5 ITA NO. 842/DEL/ 2014 OFFICES, RESIDENCES, LOCKERS ETC. DIFFERENT PANACHN AMAS WERE MADE AT DIFFERENT PREMISES ON DIFFERENT DATES. ADMI TTEDLY THE LAST PANCHNAMAS OF THE GROUP WERE MADE ON 23.03.200 9, 25.03.2009 AND 27.03.2009. THE LETTER DATED 17.03.2 009 SURRENDERING THE AMOUNT OF RS 17 CRORES WAS ALSO FI LED IN RESPECT OF DAWAT GROUP AND IT COVERED ALL THE GROUP COMPANIES, DIRECTORS AND INDIVIDUAL FAMILY MEMBERS OF THE GROUP. HENCE WE ARE OF THE VIEW THAT THE LETTER DAT ED 17.03.2009 CANNOT BE SAID THAT IT WAS NOT FILED DUR ING THE COURSE OF SEARCH. 11. THE ASSESSEE HAD FILED LETTERS DATED 21.01.2010 AN D 28.12.2010 IN CONTINUATION AND IN REFERENCE TO LETT ER DATED 17.03.2009 DECLARING THE EXACT INCOME BELONGING TO HIM BASED ON THE SEIZED DOCUMENTS. ACCORDING TO THE ASS ESSEE HE MODIFIED THE SURRENDER MADE IN RESPECT OF INCOME BELONGING TO HIM BASED ON THE SEIZED DOCUMENTS. THE RE IS NO DISPUTE ABOUT THE FACT THAT THE AO ASSESSED THE SAM E INCOME AS DECLARED OR SURRENDERED BY THE ASSESSEE. THE AO HAS NOT ASSESSED THE INCOME OF RS 17 CRORES BUT HAS ASSESSE D THE INCOME AT THE SAME AMOUNT DECLARED OR SURRENDERED B Y THE ASSESSEE ON THE BASIS OF THE SEIZED DOCUMENTS. 12. IT IS NOT THE CASE OF THE REVENUE THAT THE INCOME B ELONGING TO THE ASSESSEE WAS MORE THAN WHAT IS SURRENDERED B Y HIM. THE ASSESSEE HAS MODIFIED THE SURRENDER MADE DURING THE 6 ITA NO. 842/DEL/ 2014 COURSE OF SEARCH ON 17.03.2009 AND AS SUCH IT CANNO T BE THAT IT IS A CASE OF RETRACTION BECAUSE THE INCOME DECLARED BY THE ASSESSEE WHICH IS ASSESSED BY THE AO. THE LETTER DA TED 17.03.2009 WAS FILED BEFORE THE DIRECTOR OF INCOME TAX (INVESTIGATIONS) I NEW DELHI WHO WAS THE IN CHARGE OF THE SEARCH AND IT IS ALSO STATED IN THE SAID LETTER THI S SURRENDER IS FOR THE WHOLE GROUP AND THE TAXES SHALL BE PAID IN RESPECTIVE HANDS/ PERSONS AFTER GOING THROUGH THE SEIZED MATER IAL. IT IS CLEAR THAT WHEN THIS LETTER WAS FILED THE SEIZED MA TERIAL WAS NOT WITH THE ASSESSEE. THE SUBSEQUENT LETTERS MODIF YING THE SURRENDERED AMOUNT ARE BASED ON THE INCOME BELONGIN G TO THE ASSESSEE ON SEIZED MATERIAL. 13. THE LD. DR HAS POINTED OUT THAT THE MANNER OF EARNI NG OF THE SURRENDERED INCOME HAS NOT BEEN DISCLOSED BY TH E ASSESSEE INCOME HAS NOT BEEN DISCLOSED BY THE ASSE SSEE WHEREAS THE ASSESSEE BY LETTER DATED 21.01.2010 HAS DISCLOSED THE MANNER OF EARNING THE SAID INCOME BY WAY OF TRADING IN COMMODITIES AND REAL ESTATE AND ALSO STA TED THIS FACT IS SUBSTANTIATED FROM THE SEIZED MATERIAL. MOREOVER THIS FACTUAL POSITION IS NOT DENIED BY THE AO AND THIS IS NOT TH E BASIS FOR IMPOSING THE PENALTY. IN THAT VIEW OF THE MATTER AN D IN VIEW OF SUCH FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A ) IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO AND AC CORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY IMPOSED UNDER S ECTION 271AAA OF THE ACT. ACCORDINGLY, THE APPEAL OF THE A SSESSEE IS ALLOWED. 7 ITA NO. 842/DEL/ 2014 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THUS, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH NOVEM BER, 2017 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 07/11/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 11/10/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 11/10/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY JM/AM 8 ITA NO. 842/DEL/ 2014 SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 7.10.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 7 .10.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.