Mrs. Shashi Puri, New Delhi V. ACIT, New Delhi

ITA 991/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6823 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-02-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 28-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: V K AGGARWAL
• Keywords: Gift; Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. N. K. SAINI, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO. 990 & 991/DEL/2012 (ASSESSMENT YEAR 2001-02 & 2004-05) APPELLANT BY : SH. V.K. AGGARWAL, AR RESPONDENT BY : SH. S. S. RANA, CIT DR DATE OF HEARING : 08.02.2017 DATE OF PRONOUNCEMENT: 14.02.2017 ORDER PER BEENA A. PILLAI, JM: 1. THE PRESENT APPEALS HAS BEEN FILED BY ASSESSEE AGAI NST ORDER DATED 03.01.2012 PASSED BY CIT (A)-1, NEW DEL HI FOR ASSESSMENT YEARS 2001-02 AND 2004-05 ON THE FOLLOWI NG GROUNDS OF APPEAL: ITA 990/DEL/2012 (2001-02) 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ASSESSMENT ORDER PASSED BY THE LD. CIT(A) IS ILLEGAL BEING AGAINST THE PRINCIPLES OF NATURAL JUS TICE AND AGAINST THE PROVISIONS OF IT ACT 1961. SHASHI PURI A-1/36, PANCHSHEEL ENCLAVE NEW DELHI GIR/PAN: AKPPP3852Q VS. A CIT, CENTRAL CIRCLE-13, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 990 & 991/DEL/2012 PAGE 2 OF 8 2. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS W ELL AS IN LAW IN CONFIRMING THE ADDITION OF RS. 2,78,23 1/- ON ACCOUNT OF OPENING CASH BALANCE. 3. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONFIRMING THE CHARGING OF INTEREST UN DER VARIOUS SECTIONS OF THE IT ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD AFTER, MODIFY AND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. ITA 991/DEL/2012 (2004-05) 1. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS WEL L AS IN LAW IN HOLDING THAT THE ASSESSMENT ORDER IN T HE NAME OF THE APPELLANT U/S 153 A IS NOT ILLEGAL INSP ITE OF THE FACT THAT THERE WAS NO SEPARATE SEARCH WARRA NT IN THE NAME OF THE APPELLANT, THERE BEING SEARCH WARRANT ONLY IN THE JOINT NAME OF THE APPELLANT AND HER HUSBAND SHRI VINAY PURI. 2. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AS W ELL AS IN LAW IN HOLDING THAT THE ASSESSMENT ORDER U/S 153A IS NOT ILLEGAL INSPITE OF THE FACT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH TO ENABLE THE AO TO FRAME REASSESSMENT U/S 153A AGAINST THE ALREADY COMPLETED ASSESSMENT. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIF Y AND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. 2. AT THE OUTSET LD. AR SUBMITTED THAT LEGAL ISSUE RA ISED IN BOTH THESE ASSESSMENT YEARS ARE SAME. THEREFORE, WE ARE ITA NO. 990 & 991/DEL/2012 PAGE 3 OF 8 INCLINED TO DISPOSE OF THESE APPEALS BY WAY OF A CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF TH E ACT WAS CARRIED OUT IN THE PREMISES OF SUDESH NANDA GRO UP OF CASES ON 28.02.2007. THE CASE OF ASSESSEE WAS CENTR ALISED BY CIT, KOLKATA AND NOTICE UNDER SECTION 153A WAS ISSU ED TO THE ASSESSEE. IN RESPONSE TO THE SAME, ASSESSEE FILED R ETURN OF INCOME DECLARING INCOME OF RS.47,823/- FOR ASSESSME NT YEAR 2001-02 AND FOR ASSESSMENT YEAR 2004-05, ASSESSEE F ILED RETURN DECLARING INCOME OF RS.1,54,369/- ON 23.09.2 009. FOR ASSESSMENT YEAR 2004-05, LD.AO IN THE ASSESSMENT OR DER RECORDS THAT THE ORIGINAL RETURN WAS PROCESSED UNDE R SECTION 143(1) OF THE ACT AT RS.1,54,369/-. 4. ASSESSING OFFICER FOR ASSESSMENT YEAR 2001-02 MADE AN ADDITION OF RS.2,78,231/- ON THE GROUND THAT THE CA SH IN HAND AND BANK BALANCES FOUND IN THE BALANCE SHEET O F ASSESSEE, COULD NOT BE EXPLAINED TO THE SATISFACTIO N OF LD. AO. FOR ASSESSMENT YEAR 2004-05, LD. AO OBSERVED FROM T HE RETURNS FILED THAT ASSESSEE HAD RECEIVED GIFT FROM SH. DIKSHANT SUKHIJA WHO WAS A BRITISH CITIZEN. LD. AO CAME TO THE CONCLUSION THAT THE GIFT RECEIVED BY ASSESSEE W AS NOT OUT OF NATURAL LOVE AND AFFECTION ARISING OUT OF BLOOD RELATION. LD. AO, THUS MADE ADDITION AND PASSED ORDER UNDER SECTI ON 153A ITA NO. 990 & 991/DEL/2012 PAGE 4 OF 8 READ WITH SECTION 143(3) OF THE ACT FOR BOTH THE AS SESSMENT YEARS UNDER CONSIDERATION. 5. AGGRIEVED BY THE ORDERS OF ASSESSING OFFICER ASSES SEE PREFERRED AN APPEAL BEFORE LD. CIT (A). IT WAS ARGU ED BEFORE LD. CIT (A) THAT THE ADDITIONS MADE BY LD. AO ARE N OT BASED ON ANY INCRIMINATING MATERIAL THAT HAS BEEN UNEARTH ED DURING THE SEARCH PROCEEDINGS. AS ASSESSMENT FOR TH E YEARS UNDER CONSIDERATION HAS NOT ABATED THERE MUST BE INCRIMINATING MATERIAL FOR MAKING ANY ADDITION IN T HE HANDS OF ASSESSEE. ASSESSEE ARGUED THAT THE ASSESSMENT MA DE BY ASSESSING OFFICER IS BAD IN LAW AND WITHOUT JURISDI CTION. LD. CIT(A) HOWEVER, DECIDED THE APPEAL AGAINST ASSESSEE . 6. AGGRIEVED BY THE ORDERS OF LD. CIT (A), ASSESSEE I S IN APPEAL BEFORE US NOW. 7. LD. AR SUBMITTED THAT FOR ASSESSMENT UNDER SECTION 153A, ADDITIONS COULD BE MADE ONLY IF THERE ARE INC RIMINATING MATERIALS THAT HAS BEEN UNEARTHED DURING THE COURSE OF SEARCH, WHERE ASSESSMENT HAS NOT ABATED. LD. AO SUB MITTED THAT WHAT WAS FOUND DURING THE COURSE OF SEARCH WAS ONLY SOME JEWELLARY WHICH WAS NOT CEASED BEING FULLY EXP LAINED. HE DREW ATTENTION TO PAGE 10 OF PAPER BOOK, WHERE T HE PUNCHNAMA HAS BEEN ENCLOSED. FROM THE PUNCHNAMA HE ARGUED THAT NOTHING HAS BEEN SEIZED FROM THE PREMIS ES OF ASSESSEE AND THE JEWELLARY THAT WAS FOUND HAS BEEN HANDED OVER BACK TO ASSESSEE. LD. AR SUBMITTED THAT THE AD DITION ITA NO. 990 & 991/DEL/2012 PAGE 5 OF 8 MADE BY ASSESSING OFFICER IS BASED ON DOCUMENTS ALR EADY ON RECORD BEING BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND THE RETURN OF INCOME FILED BY ASSESSEE. HE PLACED HIS R ELIANCE UPON DECISION OF HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS KABUL CHAWLA, REPORTED IN (2016) 380 ITR 573 . HE SUBMITTED THAT UNDER SUCH CIRCUMSTANCES, ASSESSING OFFICER WAS WITHOUT ANY JURISDICTION TO MAKE ADDITIONS UNDE R SECTION 153A OF THE ACT AND THE ASSESSMENT SO MADE IS BAD I N LAW. 8. ON THE CONTRARY, LD. DR RELIED UPON THE DECISION O F HONBLE KERELA HIGH COURT IN THE CASE OF E.N.GOPA K UMAR VS. CIT, REPORTED IN (2016) 75 TAXMANN.COM 215 . LD. DR SUBMITTED THAT SECTION 153A CLEARLY SHOWS THAT NOTI CE COULD BE ISSUED CALLING FOR FILING OF RETURN EVEN WHEN NO INCRIMINATING MATERIAL HAS BEEN UNEARTHED, AS AGAIN ST ASSESSEE AS OR AS AGAINST ANY THIRD PERSON DURING T HE COURSE OF SEARCH UNDER SECTION 132. LD. DR PLACES RELIANCE UPON THE ORDERS PASSED BY THE AUTHORITIES BELOW AND SUBMITTE D THAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER MAY BE UPHELD. 9. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH T HE SIDES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. 10. ON PERUSAL OF THE ASSESSMENT ORDER FOR BOTH ASSESS MENT YEARS UNDER CONSIDERATION WE AGREE WITH THE CONTENT IONS OF LD. AR THAT THE ADDITIONS MADE BY THE ASSESSING OFF ICER IS BASED ON THE DETAILS THAT IS AVAILABLE ON RECORD TH AT IS FROM DOCUMENTS LIKE BALANCE SHEET, PROFIT AND LOSS ACCOU NT, ITA NO. 990 & 991/DEL/2012 PAGE 6 OF 8 RETURNS FILED BY THE ASSESSEE. IT IS ALSO OBSERVED THAT NO MATERIAL HAS BEEN CEASED FROM THE PREMISES OF ASSES SEE, OR ELSEWHERE, THAT IS BELONGING TO ASSESSEE, WHICH COU LD BE A BASIS OF MAKING ADDITION IN THE HANDS OF ASSESSEE. THERE IS NO MENTION REGARDING ANY SUCH INCRIMINATING MATERIA LS BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 11. FURTHER FOR ASSESSMENT YEAR 2004-05 IT IS OBSERVED THAT INTIMATION UNDER SECTION 143(1) WAS PROCESSED BY TH E ASSESSING OFFICER ON THE BASIS OF THE ORIGINAL RETU RNS FILED BY AND TIME LIMIT FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) HAS PASSED IN CASE OF BOTH ASSESSMENT YEARS. UNDER SUCH CIRCUMSTANCES ASSESSMENTS HAD NOT ABATED AS ON THE DATE OF SEARCH AND IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL A COMPLETED ASSESSMENT CANNOT BE INTERFERED WITH, BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT UNDER SECTION 153A. IN A PECULIAR CASE LIKE THIS THE ADDITIOUS HA S TO BE BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH, WHICH WAS NOT PRODUCED. 12. AS FAR AS THE DECISION OF HONBLE KERELA HIGH COUR T IN THE CASE OF E.N. GOPA KUMAR VS. CIT (SUPRA) RELIED UPON BY LD. DR AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) RELIED UPON BY LD. AR IS CONCERNED, WE FIND THAT THE JUDGMENT OF THE HON BLE DELHI ITA NO. 990 & 991/DEL/2012 PAGE 7 OF 8 HIGH COURT IS IN FAVOR OF THE ASSESSEE, AND THE DEC ISION AND THE ORDER OF HONBLE KERELA HIGH COURT AND IS AGAIN ST ASSESSEE. IN SUCH CIRCUMSTANCES, THE RULE OF JUDICI AL PRECEDENCE DEMANDS THAT THE VIEW FAVORABLE TO THE A SSESSEE MUST BE ADOPTED, AS HELD BY THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192. FOLLOWING THE ABOVE FUNDAMENTAL RULE DECLARED BY TH E HONBLE SUPREME COURT, WE HAVE TO FOLLOW THE JUDGMENT OF TH E HONBLE DELHI HIGH COURT ALSO BEING THE JURISDICTIO N HIGH COURT, WHICH IS IN FAVOR OF THE ASSESSEE. ACCORDIN GLY, WE HOLD THAT ASSESSING OFFICER DID NOT HAVE JURISDICTION TO FRAME ASSESSMENT FOR THE YEARS UNDER CONSIDERATION. CONSEQUENTIALLY, WE HOLD THE ASSESSMENT ORDERS PASS ED WITH REFERENCE TO SECTION 153A OF THE ACT ARE UNSUSTAINA BLE IN LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMENT YEAR 2001-02 AND 2004-05 ARE ALLOWED IN THE RESULT APPEAL FILED BY THE ASSESSEE FOR ASSE SSMENT YEAR 2001-02 AND 2004-05 STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2017. SD/- SD/- (N. K. SAINI) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 14.02.2017 @M!T COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI.