DCIT, New Delhi V. M/s. Classic Buildwell Pvt. Ltd., New Delhi

ITSSA 1/DEL/2011

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7918 (ITAT-DELHI)
• Duration Of Justice: 8 year(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-07-2017
• Assessment Year: misc
• Appeal Filed On: 07-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI IRS
• Assessee Lawyers: P D MITTAL
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI, J.M. AND SHRI O.P. KANT, A.M. I.T.(S.S.)A.NO.1/DEL./2011 BLOCK PERIOD 01.04.1996 TO 20.09.2002 THE DCIT, CIRCLE-3(1), NEW DELHI. VS. M/S. CLASSIC BUILDWELL PVT. LTD., MITTAL HOUSE, 4 BATTERY LANE, RAJPUR ROAD, CIVIL LINES, NEW DELHI. PAN AACCC4526A (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI SATPAL GULATI, IRS, CIT-DR FOR ASSESSEE : SHRI P.D. MITTAL, C.A. DATE OF HEARING : 03.01.2019 DATE OF PRONOUNCEMENT : 07.01.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-IV, DELHI, DATED 02.11.2010, FOR THE BLOCK PERIOD 01.04.1996 TO 20.09.2002, ON THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS.52,99,500/- ON ACCOUNT 2 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. OF UNDISCLOSED INCOME UNDER SECTION 158BD IGNORING THAT THE ADDITION ON THIS ACCOUNT HAS BEEN MADE ON THE BASIS OF COGENT EVIDENCE IN THE FORM OF SEIZED DOCUMENTS WHICH WERE DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. IT IS NOTED IN THE IMPUGNED ORDER THAT THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON THE PREMISES OF D.D. MITTAL GROUP OF CASES. ONE SUCH PREMISES COVERED WAS 4, BATTERY LANE, RAJPUR ROAD, CIVIL LINES, DELHI, WHICH WAS THE RESIDENCE OF SHRI VINOD MITTAL, DIRECTOR OF SOME OF THE GROUP COMPANIES INCLUDING THE ASSESSEE. NOTICE UNDER SECTION 158BD READ WITH SECTION 158BC WAS ISSUED WHICH HAVE CULMINATED INTO THE PASSING OF THE ASSESSMENT ORDER DATED 30.11.2007 MAKING ADDITION OF RS.52,99,500/-. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A). THE LD. CIT(A) NOTED THAT THE PERUSAL OF THE 3 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. IMPUGNED ASSESSMENT ORDER SUGGESTS THAT DURING THE COURSE OF SEARCH AT THE RESIDENCE OF SHRI VINOD MITTAL, A HAND- WRITTEN DOCUMENT WAS FOUND AND SEIZED. THIS WAS IDENTIFIED AS A1, PAGE-5. THIS WAS APPARENTLY IN THE NATURE OF ASSET STATEMENT REFLECTING VARIOUS ASSETS AND LIABILITIES OF SHRI VINOD MITTAL AND ALLEGEDLY DISCLOSE THE ACTUAL INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF LAND IN ARDEE CITY, GURGAON FROM ARDEE INFRASTRUCTURE PVT. LTD., THE TOTAL LAND ACQUIRED WAS 17,800 SQ. YARDS WHICH WORKED-OUT TO THE TUNE OF RS.8,50,20,000/-. THE PER SQ. YARD INVESTMENT CAME TO RS.4776/- AGAINST RS.1000/- SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNT. OUT OF 17,800 SQ. YARDS, THE ASSESSEE- COMPANY PURCHASED A TOTAL LAND OF 1500 SQ. YARDS. BALANCE WAS BOUGHT BY THE GROUP COMPANIES. THIS MEANT THAT THE ASSESSEE HAD MADE AN INVESTMENT OF RS.56,64,000/- FROM UNDISCLOSED SOURCES. IT WAS SUBMITTED BEFORE THE AO THAT THE SALE CONSIDERATION PAID WAS THROUGH PUNJAB NATIONAL BANK, CIVIL LINES BRANCH, DELHI BY CHEQUE. IT WAS ARGUED THAT THE LOOSE SHEETS MENTIONED ENTRIES, ON THE BASIS OF WHICH CENTRAL CIRCLE-1, LUDHIANA HAD ASSESSED THE 4 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. UNDISCLOSED INCOME AT RS.1,12,73,340/- IN THE CASE OF M/S CHAVAN RISHI INTERNATIONAL LTD., A GROUP COMPANY. IN THAT CASE ALSO PURCHASE PRICE WAS TAKEN AT RS.4533/- PER SQ. YARD AS AGAINST THE REFLECTED PRICE OF RS.1000/- PER SQ. YARD. IN THAT CASE, THE ADDITION WAS DELETED AT THE FIRST APPELLATE LEVEL. AND THE DELETION WAS UPHELD BY THE ITAT. IT WAS, THEREFORE, SUBMITTED THAT THE VERY BASIS FOR ASSUMING THE UNDISCLOSED INCOME HAS ALREADY BEEN HELD TO BE OF NO BASIS IN THE CASE OF CHAVAN RISHI INTERNATIONAL LTD. THE ASSESSEE HAS BEEN TAKING THE STAND THAT THE SAID STATEMENT WAS NOTHING BUT AN ESTIMATE OF THE MARKET VALUE OF THE ASSET AND NOT THE COST PRICE. THE FINDINGS OF THE AO ARE BASED ON THE STATEMENT OF SHRI J.C. MALHOTRA BUT LATER ON RETRACTED FROM THE STATEMENT. THERE WERE NO BASIS TO MAKE ANY ADDITION AGAINST THE ASSESSEE. HOWEVER, THE A.O. MADE THE AFORESAID ADDITION. 3. THE ADDITION WAS CHALLENGED BEFORE THE LD. CIT(A) AND SAME SUBMISSIONS WERE REITERATED. IT WAS SUBMITTED THAT ENTIRE CONSIDERATION WAS PAID BY ACCOUNT PAYEE CHEQUES WHICH ARE RECORDED IN THE BOOKS OF ACCOUNT AND 5 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. ALSO RECORDED IN THE REGISTERED DEEDS. IT WAS ARGUED THAT WHEN THE STATEMENT DURING THE COURSE OF SEARCH OPERATION WAS RECORDED OF SHRI VINOD MITTAL, IT WAS ADMITTED THAT SAME HAD BEEN PREPARED BY AN EMPLOYEE UNDER HIS GUIDANCE. THE ENTRIES IN THE SEIZED DOCUMENT REPRESENTED THE TOTAL MARKET VALUE OF THE LAND AND WAS NOT THE COST PRICE. RELIANCE WAS PLACED ON THE DECISION OF ITAT, CHANDIGARH TRIBUNAL IN THE CASE OF CHAVAN RISHI INTERNATIONAL LTD. THE LD. CIT(A) FOLLOWING THE ORDER OF THE LD. CIT(A) IN THE CASE OF M/S. JMD BUILDWELL PVT. LTD., DATED 16.11.2009, DELETED THE ADDITION. 4. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT DEPARTMENTAL APPEAL AND CROSS OBJECTION IN THE CASE OF DCIT, CIRCLE-4(1), NEW DELHI VS., M/S. JMD BUILDWELL PVT. LTD., IN ITA.NO.86/DEL./2009 AND IN C.O.NO.66/DEL./2010 FOR THE A.Y. 2003-2004, HAVE BEEN DECIDED BY ITAT, DELHI D-BENCH VIDE ORDER DATED 10.08.2011 WHEREBY THE TRIBUNAL HAS SET ASIDE THE GROUNDS RAISED IN REVENUES APPEAL AS WELL AS ASSESSEES CROSS OBJECTIONS, TO THE FILE OF LD. CIT(A) FOR DECIDING THE ISSUE 6 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. AFRESH. COPY OF THE ORDER IS PLACED ON RECORD. HE HAS FURTHER SUBMITTED THAT LD. CIT(A) TILL DATE HAS NOT PASSED ANY ORDER. COPY OF THE ORDER IS ALSO PROVIDED TO THE LD. D.R. BOTH THE PARTIES, THEREFORE, SUGGESTED THAT MATTER MAY BE REMANDED TO THE LD. CIT(A) FOR FRESH ADJUDICATION AS IS DIRECTED IN THE CASE OF M/S. JMD BUILDWELL PVT. LTD., (SUPRA). 5. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LD. CIT(A). THE LD. CIT(A) WHILE GRANTING RELIEF TO THE ASSESSEE, FOLLOWED THE ORDER OF HIS PREDECESSOR IN THE CASE OF M/S. JMD BUILDWELL PVT. LTD., DATED 16.11.2009. THIS ORDER HAVE BEEN SET ASIDE BY THE TRIBUNAL VIDE ORDER DATED 10.08.2011 (SUPRA) TO THE FILE OF LD. CIT(A). SINCE THE LD. CIT(A) HAS NOT GIVEN ANY INDEPENDENT FINDINGS IN THE MATTER AND ALLOWED THE RELIEF TO THE ASSESSEE BY FOLLOWING THE ORDER OF THE LD. CIT(A) IN THE CASE OF M/S. JMD BUILDWELL PVT. LTD., WHICH IS ALREADY SET ASIDE BY THE TRIBUNAL, THEREFORE, THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LD. CIT(A). WE, 7 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER IN ISSUE TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO DECIDE THE APPEAL OF ASSESSEE AFRESH, AS PER LAW, BY GIVING REASONABLE, SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (O.P.KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 07 TH JANUARY, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH, DELHI 6. GUARD FILE. 8 I.T.(S.S).A.NO.1/DEL./2011 M/S. CLASSIC BUILDWELL PVT. LTD., NEW DELHI. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.