Anil Sanghi, Noida V. DCIT, New Delhi

ITSSA 11/DEL/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8642 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-01-2011
• Assessment Year: misc
• Appeal Filed On: 24-01-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SWATY KOTHARI
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IT(SS)A NO. 11/DEL/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T(SS)A. NO. 11/DEL/2008 BLOCK PERIOD : 1.4.1986 TO 1.11.1996 SH. ANIL SANGHHI, E-10, SECTOR-15, NOIDA-201 301 VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-23, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. VINOD BINDAL & MS. SWATY KOTHARI DEPARTMENT BY : SH. ASHOK PANDEY, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-23, NE W DELHI PERTAINING TO BLOCK PERIOD 1.4.1986 TO 1.11.1996. 2. THE FIRST ISSUE RAISED IS THAT ASSESSING OFFICE R HAS ERRED IN MAKING THE ADDITION OF ` 8,04,950/- FOR VARIOUS DEPO SITS IN THE BANK ACCOUNT OF THE ASSESSEE IGNORING THE FACTS AND EVID ENCES PLACED ON RECORD ABOUT THE SOURCE OF THE SAME. 2.1 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS IN THIS REGARD. LD. COUNSEL OF THE ASSESSEE SUBMITTED THA T HE SHALL BE PRESSING ONLY THE FOLLOWING ADDITIONS:- A) ` 50,000/- THE PAYMENT OF ` 50,000/- HAS BEEN WRONGLY CONSIDERED AS DEPOSIT AND THE IT(SS)A NO. 11/DEL/2008 2 ADDITION HAS BEEN MADE. B) ` 75,000/- AMOUNT WRONGLY MENTIONED AS CASH IN THE BANK STATEMENT THOUGH IT WAS A CHEQUE RECEIVED FROM ANOLA INVESTMENT ON BEHALF OF PROFESSIONAL LEASING (EVIDENCE PLACED ON PAGES NO. 66-75 OF THE PB) C) ` 2,00,000/- CASH RECEIVED FROM ANIL SANGHI AND ASSOCIATES AND DEPOSITED IN GANPATI INV. CONSULTANTS, BOTH PROPRIETORSHIP CONCERNS OF THE ASSESSEE BUT THE DATE WAS WRONGLY ENTERED IN THE BOOKS AS 27.3.96 INSTEAD OF 25.3.96 THOUGH ENOUGH CASH BALANCE WAS AVAILABLE AS ON 25.3.2006. 3. THIS IS THE SECOND ROUND OF APPEAL BEFORE THE I TAT. EARLIER THE ITAT HAS SET ASIDE THE ORDER TO THE FILES OF THE AS SESSING OFFICER WITH CERTAIN DIRECTIONS. WE HAVE CAREFULLY CONSIDERED T HE SUBMISSIONS AND PERUSED THE RECORDS. AS REGARDS THE PAYMENT OF ` 50,000/- IT HAS BEEN CLAIMED TO BE WRONGLY CONSIDERED AS DEPOSITS. WE FIN D THAT ASSESSEE HAS SUBMITTED A PAPER BOOK IN WHICH THE RELEVANT BAN K ACCOUNT HAS ALSO BEEN PRODUCED. IN THE SAME AMOUNT OF ` 50,000/- HAS CLEARLY BEEN SHOWN AS WITHDRAWN. ASSESSING OFFICER HAS ER RED IN TREATING THE SAME AS DEPOSIT AND ADDED THE SAME. BOTH THE COUN SEL FAIRLY AGREED THAT THIS IS AN ERROR ON THE PART OF THE ASSESSING OFFICER. ACCORDINGLY, WE DELETE THE ADDITION OF ` 50,000/- IN THIS REGA RD. 3.1 AS REGARDS THE CHEQUE DEPOSIT IN BANK ACCOUNT NO. 612 WITH J&K BANK OF ` 75,000/-. IT HAS BEEN MENTIONED THAT TH E BANK STATEMENT IT(SS)A NO. 11/DEL/2008 3 WRONGLY SHOWED IT AS CASH DEPOSIT THOUGH IT WAS A C HEQUE DEPOSITS. WE FIND THAT IN THE PAPER BOOK AT PAGE NO. 67 SUBMIT TED BY THE ASSESSEE IN THE BANK STATEMENT, IT IS CLEARLY MENT IONED THAT CASH OF ` 75,000/- HAS BEEN DEPOSITED. HENCE, WE DO NOT FIN D ANY COGENCY IN THE ASSESSEES SUBMISSIONS AND HENCE WE UPHOLD THE A DDITION OF ` 75,000/-. 3.2 AS REGARDS THE CASH DEPOSITS IN CITI BANK OF ` 2,00,000/- IT HAS BEEN CLAIMED THAT THE AMOUNT HAS BEEN RECEIVED FROM A NIL SANGHI AND ASSOCIATES AND DEPOSITED IN GANPATI CONSULTANTS, BO TH PROPRIETORSHIP CONCERNS OF THE ASSESSEE BUT THE DATE WAS WRONGLY E NTERED IN THE BOOKS AS 27.3.96 INSTEAD OF 25.3.96 THOUGH ENOUGH C ASH BALANCE WAS AVAILABLE AS ON 25.3.96. HOWEVER, IN THE ASSESSEE S CASH BOOK IN THIS REGARD ON 27.3.96 CASH DEPOSITS OF ` 2 LAKH HAS BEE N SHOWN AND NO DEPOSIT IS REFLECTED ON 25.3.96. UNDER THE CIRCUM STANCES, WE DO NOT FIND ANY COGENCY IN THE SUBMISSION THAT ` 2 LAKHS DE POSITED ON 25.3.96, WAS NOT AN UNDISCLOSED INCOME. ACCORDING LY, WE CONFIRM THE ADDITION IN THIS REGARD. 4. THE NEXT ISSUE RAISED IS THAT ASSESSING OFFICE R ERRED IN MAKING ADDITION OF ` 1,50,634/- ON ACCOUNT OF INTEREST ON FDR AS UNDISCLOSED INCOME IGNORING THE FACTS THAT THE SAID INCOME WAS DULY RECORDED IN IT(SS)A NO. 11/DEL/2008 4 THE BOOKS OF THE ASSESSEE AND HAS ALSO BEEN ASSESSE D U/S 143(3) FOR THE A.Y. 1997-98. HENCE, THE SAID ADDITION SHOUL D BE DELETED. 4.1 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS IN THIS REGARD. ASSESSEES COUNSEL HAS SUBMITTED THAT THE P ERIOD FOR FILING RETURN FOR ASSESSMENT YEAR 97-98 WAS NOT OVER AS THE SEARCH TOOK PLACE ON 1.11.96. HENCE, THERE CANNOT BE ANY ADDITI ON IN THIS REGARD. HOWEVER, WE FIND THAT ASSESSING OFFICER HAS OBSERV ED AS UNDER IN THIS REGARD:- THE ASSESSEE WAS ASKED TO STATE AS TO WHY INTEREST INCOME OF ` 1,50,634/- ON ACCOUNT OF INTEREST ON FDRS WITH ANDHRA BANK MAY NOT BE ADDED AS UNDISCLOSED INCOME, PARTIC ULARLY WHEN INTEREST WAS RECEIVED PRIOR TO 1.11.96 (DATE O F SEARCH). THE ASSESSEE HAS EXPLAINED THAT INTEREST INCOME HAS BEEN ASSESSED FOR A.Y. 1997-98. SINCE THE INT EREST INCOME PERTAINED TO UNDISCLOSED FDR DEPOSITS AND INT EREST WAS RECEIVED PRIOR TO THE DATE OF SEARCH, INTEREST INCOME IS LIABLE TO BE ASSESSED AS UNDISCLOSED INCOME. IT IS F OR THE ASSESSEE TO GET REMEDIAL ACTION FOR EXCLUSION OF INC OME ALREADY OFFERED BY HIM AND ASSESSEE FOR A.Y. 97-98. HENCE, ADDITION OF ` 1,50,634/- IS BEING MADE. IT(SS)A NO. 11/DEL/2008 5 4.2 WE HAVE CAREFULLY CONSIDERED THE ABOVE. WE FIND THAT AS THE INCOME PERTAIN TO UNDISCLOSED FDR DEPOSITS, IT CAN NOT BE PRESUMED THAT ASSESSEE WOULD HAVE DISCLOSED THE SAME. UNDER THE CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE F INDING OF THE ASSESSING OFFICER IN THIS REGARD. ASSESSEE COUNS EL REQUESTED THAT SINCE THE SAID ADDITION HAS ALSO BEEN MADE IN ASSESS MENT YEAR 97-98, THE SAME MAY BE DELETED. WE NOTE THAT IN THIS RE GARD ASSESSING OFFICER HAS NOTED THAT THIS IS FOR THE ASSESSEE TO GET REMEDIAL ACTION FOR THE EXCLUSION OF INCOME ALREADY OFFERED BY HIM AND ASSESSED FOR A.Y. 97-98. WE ACCORDINGLY ENDORSE THE SAME. 5. THE NEXT ISSUE RAISED IS THAT ASSESSING OFFICER ERRED IN MAKING THE ADDITION OF 79,127/- BEING PART OF CASH FOUND D URING THE COURSE OF SEARCH IGNORING THE FACT THAT THE SAID CASH BELONG ED TO M/S PROFESSIONAL LEASING & CAPITAL SERVICES LTD. AND WAS SO DECLARED IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH. T HUS, THE ADDITION SO MADE SHOULD BE DELETED. 5.1 WE HAVE CAREFULLY HEARD BOTH THE COUNSEL A ND PERUSED THE RECORDS. WE FIND THAT THE PAPER BOOK AT PAGE NO. 90 WERE THE COPY OF THE STATEMENT OF THE ASSESSEE DURING SEARCH HAS BEEN PRODUCED. REGARDING THE CASH FOUND ASSESSEE HAS STATED THAT A PPROXIMATELY ` 80,000/- BELONG TO M/S PROFESSIONAL LEASING AND CAPI TAL SERVICES LTD. IT(SS)A NO. 11/DEL/2008 6 ON PAGE NO. 91 IN THE CASH BOOK OF PROFESSIONAL LEA SING AND CAPITAL SERVICES PVT. LTD. CLOSING BALANCE AS ON 1.11.96 IS DEPICTED ` 79,127/-. SINCE THE STATEMENTS WERE RECORDED DURING THE COUR SE OF SEARCH AND WAS DULY CORROBORATED WITH THE BOOKS, WE FIND TH E PLEA OF THE ASSESSEE COGENT IN THIS REGARD AND ACCORDINGLY, WE DIRECT THAT ` 79,127/- BEING PART OF THE CASH FOUND SHOULD NOT BE CONSIDERED AS ASSESSEES UNDISCLOSED INCOME AND ADDITION IN THIS REGARD SHOULD BE DELETED. 6. THE NEXT ISSUE RAISED PERTAINS TO CHARGING OF IN TEREST U/S 220(2). 6.1 IN THIS REGARD ASSESSEES SUBMISSIONS ARE AS UN DER:- SINCE THE HONBLE ITAT IN THE FIRST ROUND OF ASS ESSMENT SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING O FFICER WITH CERTAIN DIRECTIONS AND AN ASSESSMENT ORDER WAS PASS ED IN PURSUANCE TO THE SAID DIRECTION, INTEREST U/S 220(2 ) SHOULD BE CHARGED AFTER 30 DAYS OF THE SERVICE OF THE ASSE SSMENT ORDER PASSED IN THE SECOND ROUND FOLLOWING THE UNDE RNOTED AUTHORITIES: A) ITO VS. A.V. THOMAS & CO. 160 ITR 818 (KER.) B) VIKRANT TYRES LTD. VS. FIST ITO 115 TAXMAN 202 (SC) . C) SMS SCHOLEMANN SIEMAG, AG VS. DCIT CTR 59 (AP) IT(SS)A NO. 11/DEL/2008 7 D) C.I.T. VS. ALLAHABAD SAINT PAUL SOCIETY 216 ITR 863 (ALL) E) BHARAT COMMERCE AND INDUSTRIES VS. UOI (2003) 181 CT R (DEL) 262, 263 SAME VIEW HAS BEEN TAKEN BY THE ITAT, DELHI BENCH IN THE CASE OF DELHI COOPERATIVE HOUSING FINANCE CORPN. LTD. IN I TA NOS. 473- 474/DEL/07 IN PARA NO. 12-14, A COPY OF WHICH IS ENC LOSED. THUS RESPECTFULLY FOLLOWING THE ABOVE MENTIONED AUTHORITI ES, THE LEVY OF INTEREST FOR THE PERIOD FROM THE DATE OF ORIGINA L ASSESSMENT ORDER TO THE DATE OF ASSESSMENT ORDER IN SECOND ROU ND SHOULD BE DELETED. FURTHER, INTEREST U/S 220(2) OF ` 20.57 CRORES HAS B EEN CHARGED ON THE TAX LIABILITY OF ` 16.67 CRORES IGNORING THAT F UNDS TO THE EXTENT OF ` 22.52 CRORES WERE SEIZED DURING THE COURSE OF SEARCH FROM DIFFERENT ASSESSEES (WHO HAVE REQUESTED TO ADJUST TH EIR FUNDS AGAINST THE DEMAND DUE TO THE ASSESSEE) AND WERE LY ING WITH THE DEPARTMENT. REFER PAGES NO. 96 111 OF THE PAPER BOOK. THE ASSESSEE HAS MENTIONED WHILE FILING HIS RETURN OF IN COME THAT THE TAX DUE ON THE UNDISCLOSED INCOME TO BE RECOVERED FR OM BORROWERS WHOSE MONEY HAS BEEN SEIZED BY THE IT DE PARTMENT. THUS, DIRECTIONS SHOULD BE ISSUED TO DELETE THE LEV Y OF INTEREST U/S 220(2) OF THE ACT. IT(SS)A NO. 11/DEL/2008 8 - SANDIRK ASIA LTD. VS. C.I.T. (2006) 280 ITR 643(SC) - DR. PRANNOY ROY VS. C.I.T. (2002) 254 ITR 755 (DEL) - C.I.T. VS. PRANNOY ROY 2008 TIOL 180 SC LT 6.2 WE HAVE CAREFULLY HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THERE IS NO DISCUSSION IN THIS REGARD IN THE ASSESSMENT ORDER. HENCE BOTH THE COUNSEL FAIRLY A GREED THAT THE MATTER SHOULD BE REMITTED TO THE FILES OF THE ASSESSI NG OFFICER TO CONSIDER THE SUBMISSIONS OF THE ASSESSEE AND DECIDE THE MATTER ACCORDINGLY. ACCORDINGLY, IN THE INTEREST OF JUSTIC E, WE REMIT THIS ISSUE TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH AND DECIDE ACCORDINGLY. NEEDLESS TO ADD THAT THE AS SESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/01/2011, U PON CONCLUSION OF HEARING. SD/- SD/- [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 06/01/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, IT(SS)A NO. 11/DEL/2008 9 DEPUTY REGISTRAR, ITAT, DELHI BENCHES