M/s. Sequence Estate Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITSSA 1/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9133 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: S K CHATURVEDI
• Keywords: Unexplained investment; Document seized; Documents seized; Set aside

Judgement Text

I.T(SS).A.NO.1/DEL/2017/BLOCK PERIOD 1989-90 TO 19 99-00 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER . . /. I.T(SS)A. NO.1/DEL/2017 / BLOCK PERIIOD 1989-90 TO 1999-00 SEQUENCE ESTATE PVT. LTD. A-13/1, VASANT VIHAR, NEW DELHI. VS. DCIT CIRCLE 23(2) NEW DELHI. PAN NO. AABCS6285M APPELLANT / RESPONDENT /ASSESSEE BY SH. S.K. CHATURVEDI, CA /REVENUE BY SH. PRAKASH DUBEY, SR. DR / DATE OF HEARING: 1 1 .0 8 .20 2 1 /PRONOUNCEMENT ON 11 .0 8 .20 2 1 /O R D E R PER MADHUMITA ROY, J.M. 1. THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 16.11.2016 PASSED BY THE LD. CIT(A)-17, NEW DELHI ARISING OUT OF THE ORDER DATED 31.03.2015 PASSED BY THE LD. DCIT, CIRCLE 23(2), NEW DELHI U/S 158BFA(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE BLOC K PERIOD 1989-90 TO 1999-00. I.T(SS).A.NO.1/DEL/2017/BLOCK PERIOD 1989-90 TO 19 99-00 2 2. AT THE TIME OF HEARING OF THE INSTANT APPEAL, THE L D. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE QUANTUM APPEAL HAS BEEN DISPOSED OF BY THE HONBLE TRIBUNAL IN IT(SS)A NO. 21/DEL/2013 ON 20.07.2018 UPON DELETION OF ADDITION OF RS. 5 LAKHS OUT OF RS. 5,48,285/-. HOWEVER, REGARDING THE SECO ND ADDITION OF RS. 18,48,025/- THE LD. TRIBUNAL HAS BEEN PLEASED T O DIRECT THE LD. AO TO VERIFY THE SAME SHARES WHETHER RECORDED IN TH E BOOKS OF ACCOUNTS OR NOT UPON EXTENDING REASONABLE OPPORTUNI TY TO THE ASSESSEE. A COPY OF THE SAID ORDER PASSED BY THE L D. TRIBUNAL HAS ALSO BEEN PLACED ON RECORD BEFORE US. 3. THE LD. AR, THEREFORE, PRAYED FOR THE MATTER TO BE SET ASIDE TO THE FILE OF THE LD. AO TO PASS THE ORDERS ON THE BASIS OF THE QUANTUM ORDER TO BE PASSED BY HIM IN TERMS OF THE ORDER PAS SED BY THE LD. TRIBUNAL EARLIER. 4. WE HAVE HEARD THE PARTIES, WE HAVE ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORDS INCLUDING THE ORDER P ASSED BY THE HONBLE TRIBUNAL IN IT(SS)A NO. 21/DEL/2013 DATED 2 7.07.2018; THE RELEVANT PORTION WHEREOF IS REPRODUCED HEREINBELOW: - 23. IN THE THIRD POSSIBILITY THAT TRANSACTION IS OVER BY THE DATE OF THE SEARCH AND DOCUMENTS ARE RETURNED B Y MR. RAVI TANDON AND LYING WITH THE ASSESSEE FOR SOM E PURPOSES. THIS IS ALSO THE VIEW OF THE LOWER AUTHO RITIES AND WE TEND TO AGREE WITH THE SAME. NOW THE ISSUE ARISES IS WHAT ADDITION IS REQUIRED TO BE SUSTAINED IN THE HANDS OF THE ASSESSEE. EVEN IF IT IS ASSUMED THAT THE ASSESSEE BORROWED THE MONEY IN JUNE 1997 OF RS. 5 L AC I.T(SS).A.NO.1/DEL/2017/BLOCK PERIOD 1989-90 TO 19 99-00 3 AND FURTHER THE SAME IS REPAID WITHIN 90 DAYS AND T HUS CANCELLED CHEQUE WERE FOUND FROM THE PREMISES OF TH E ASSESSEE, THEN UNLESS THE UTILIZATION OF THE LOAN O F RS. 5 LAC IS SHOWN FOR SOME OTHER PURPOSES AND REPAYMENT OF SUCH LOAN FROM SOME OTHER SOURCES OTHER THAN THE OR IGINAL LOAN TAKEN IS ESTABLISHED, ASSESSEE DESERVES THE CR EDIT OF LOAN TAKEN AS SOURCES OF REPAYMENT ALSO. HENCE, ADDITION OF PRINCIPAL SUM OF RS. 5 LAKHS CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. IN VIEW OF THIS, WE DO NOT FIND ANY REASON TO SUSTAIN THE ADDITION OF RS. 5 LA KHS IN THE HANDS OF THE ASSESSEE. FURTHER, IF THE LOAN HAS BEEN REPAID OUT OF ORIGINA L LOAN TAKEN BY THE ASSESSEE, STILL EXPLANATION FOR THIS. THEREFORE, SAME DESERVES TO BE CONFIRMED. IN VIEW OF OUR ABOVE FINDING, WE REVERSE THE ORDERS OF THE LOWER AUTHORITIES TO THE EXTENT OF ADDITION MADE OF RS. 5 LAKHS BUT CONFIRM THE BALANCE ADDITION OF RS. 33285/-. ACCORDINGLY, GROUND NO. 3 OF THE APPEAL OF THE ASSE SSEE IS PARTLY ALLOWED . 25. THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US ON THIS ISSUE VIDE GROUND NO. 4 OF THE APPEAL. THE ISSUE INVOLVED IS ADDITION OF RS. 1848025/- BECAUSE OF TH E VALUE OF THE SHARES OF JAIPRAKASH INDUSTRIES LTD. THE LD AO NOTED THAT THREE SEIZED PAPERS SHOWS THE INVESTM ENT OF RS. 16.58 LACS AND RS. 54050/- AND RS. 135850/- AS INVESTMENT IN THE SHARES OF JAI PRAKASH INDUSTRIES LTD. RESPECTIVELY. LD. AR PRODUCED BEFORE US THE BALANC E SHEET OF THE ASSESSEE WHEREIN, THE INVESTMENT OF RS . 5232250/- OF 452500 EQUITY SHARES OF JAI PRAKASH INDUSTRIES LTD. WERE SHOWN IN THE INVESTMENT SCHEDU LE AS ON 31.03.2019. HE FURTHER EXPLAINED THAT AS ON 31.03.1992 THE ASSESSEE WAS HAVING 285600 EQUITY SHARES OF THE ABOVE COMPANY AT COST OF RS. 3303607/ -. HE, THEREFORE, SUBMITTED THAT THE VALUE OF SHARES S HOWN IN THE SEIZED DOCUMENTS ARE LESS THAN THOSE ARE SHO WN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE LD. AO A ND THE LD. CIT(A) CONFIRMED THE ABOVE ADDITION FOR THE REASON THAT THE SEIZED DOCUMENTS SHOWS THE INVESTMENT AND THE ASSESSEE COULD NOT EXPLAIN AND RECONCILE IT HOLDING SHOWN IN ITS BOOKS OF ACCOUNT. ON PERUSAL OF THE B ALANCE SHEET IT IS APPARENT THAT THE ASSESSEE HAS SHOWN HO LDING OF 452500 EQUITY SHARES OF RS. 10 EACH OF JAI PRAKA SH INDUSTRIES LTD. AT COST OF RS. 5234250/-. OUT OF T HESE SHARES AS ON 31.03.1991, THE ASSESSEE SOLD SOME OF THE SHARES DURING THE FY 1991-92 AND HAS DISCLOSED PROF IT OF I.T(SS).A.NO.1/DEL/2017/BLOCK PERIOD 1989-90 TO 19 99-00 4 RS. 3876769/- IN ITS PROFIT AND LOSS ACCOUNT. THER EFORE, WITHOUT VERIFYING THE ORIGINAL HOLDING AS WELL AS T HE AMOUNTS SHOWN IN THE SEIZED DOCUMENTS QUA NUMBER OF SHARES, IT IS NOT FAIR TO SAY THAT THE TRANSACTION SHOWN IN THE SEIZED DOCUMENTS IS UNACCOUNTED INVESTMENT OF T HE ASSESSEE. TO TAX THE SUM AS PER SEIZED DOCUMENTS I N THE HANDS OF THE ASSESSEE, IT IS NECESSARY TO SHOW THAT THESE ARE THE SHARE BOUGHT BY THE ASSESSEE OVER AND ABOVE INVESTMENT DISCLOSED IN ITS BOOKS OF ACCOUNT. THE ASSESSEE SUBMITS THAT THE TRANSACTIONS SHOWN IN SEI ZED DOCUMENTS ARE ALREADY RECORDED IN THE BOOKS OF ACCO UNTS AND DOES NOT REPRESENT UNDISCLOSED INCOME. THE LD. AO ALSO MADE ADDITION WITHOUT FINDING OUT THE NUMBER O F SHARE PURCHASED LOOKING AT THE PREVAILING MARKET RA TES OF THOSE SHARES. THEREFORE, IT IS NOT ASCERTAINABLE T HAT HOW MANY SHARES DO THE ASSESSEE AND WHETHER ANY FURTHER SHARES WERE PURCHASED WHICH ARE NOT RECORDED IN THE SE BOOKS AS PER SEIZED DOCUMENTS HOLD. THIS FACT NEED S VERIFICATION FROM THE SHAREHOLDERS FOLIO NUMBERS T O VERIFY WHETHER ON THE DATES SHOWN IN THE SEIZED DOCUMENTS OR THEREAFTER SUCH SHARES WERE TRANSFERRED IN THE NAME OF THE ASSESSEE. ANYWAY, WE DO NOT WANT TO RESTRICT T HE LEVEL OF INQUIRY OF THE LD. AO AS WELL AS THE RIGHT OF THE ASSESSEE TO ADDUCE THE EVIDENCE IN ITS SUPPORT. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS GROUND OF APPEAL BACK TO THE FILE OF THE LD. AO FOR EXAMINATION AFRESH. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE THE RELEVANT DETAILS OF THE SHARES HELD BY IT AS WELL AS TRANSACTION CONTAINED IN THOSE SEIZED DOCUM ENTS WITH RECONCILIATION. IN THE RESULT, GROUND NO. 4 O F THE APPEAL OF THE ASSESSEE IS ALLOWED ACCORDINGLY. 5. HAVING REGARD TO THE ABOVE FACTS, WE DISPOSE OF T HE APPEAL BY DELETING THE PENALTY AND TO RESTORE THE ISSUE TO TH E FILE OF THE LD. AO TO PASS ORDERS IN REGARD TO PENALTY, IF REQUIRED , ON THE BASIS OF THE QUANTUM ORDER TO BE PASSED BY HIM IN TERMS OF T HE ORDER DATED 20.07.2018 PASSED BY THE LD. TRIBUNAL. I.T(SS).A.NO.1/DEL/2017/BLOCK PERIOD 1989-90 TO 19 99-00 5 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/08/2021. SD/- SD/- (N.K. BILLAIYA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH AUGUST, 2021 * KAVITA ARORA, SR. P.S. COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI