ACIT, New Delhi V. Sh. Vijay Kumar Goel, New Delhi

ITSSA 27/DEL/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0475 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 01-12-2014
• Assessment Year: misc
• Appeal Filed On: 02-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RIS GILL
• Keywords: Opportunity of being heard; Peak credit; Block assessment; Documents seized
• Section: 132

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI S.V. MEHROTRA ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. , JUDICIAL MEMBER IT (SS) NO . 27 / DEL / 201 2 BLOCK PERIOD 01.01.1996 TO 06.03.200 3 (PAN AA PPG 3258 H ) (APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI C.S. ANAND, ADVOCATE RESPONDENT BY: SHRI R.I.S. GILL, CIT. DR. ORDER PER SHRI GEORGE GEORGE K , J M : 1. TH IS APPEAL A T THE INSTANCE OF THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE , ARISES OUT OF THE CIT(A) S ORDER DATED 22.02.2012, PERTAINING TO THE BLOCK PERIOD 01.04.1996 TO 06.03.2003 . A CIT, CIRCLE 29 (1), NEW DELHI. VS. S H. VIJAY KUMAR GOEL, PROP. M/S PYARE LAL VIJAY KUMAR & M/S PAWAN INDUSTRIES, G - 40, LAXMI NAGAR, DELHI - 110092 CO NO. 240 /DEL /201 2 ( IN IT(SS) NO.27/DEL/2012) BLOCK PERIOD 01.01.1996 TO 06.03.2003 SH. VIJAY KUMAR GOEL, PROP. M/S PYARE LAL VIJAY KUMAR & VS. ACIT, CIRCLE 29(1), M/S PAWAN INDUSTRIES, NEW D ELHI G - 40, LAXMI NAGAR, DELHI - 110092 IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 2 2. GROUNDS RAISED IN REVENUE S APPEAL READS AS FOLLOWS: ( I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.17,64,527/ - MADE BY AO ON ACCOUNT OF UNDISCLOSED INCOME DETERMINED ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND IN THE SEARCH. ( II) ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.17,64,527/ - BY ACCEPTING FRESH EVIDENCE IN VIOLATION OF RULE 46A . 2.1 . GROUNDS RAISED IN THE ASSESSEE S CROSS OBJECTION READS AS UNDER: (I) . THAT ON THE FACTS OF THE CASE A ND UNDER THE LAW, THE LD. CIT(A) HAS ERRED IN NOT HOLDING THAT THE LD. AO HAD WRONGLY ASSUMED JURISDICTION TO INITIATE PROCEEDINGS U/S 158BD OF THE IT ACT 1961 IN THE CASE OF THE ASSESSEE. (II) . THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. CIT( A) HAS ERRED IN NOT QUASHING THE ASSESSMENT ORDER DT. 29.05.2009 AS PASSED BY THE LD. AO U/S 158BC/158BD. (III) . THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE INTEREST U/S 158BFA(1) OF THE IT ACT 1961 WAS NOT CHARGEABLE. 3 . BRIEF FACTS OF THE CAS E ARE AS FOLLOWS. THE ASSESSEE AN INDIVIDUAL , IS PROPRIETOR OF M/S PYARE LAL VIKAY KUMAR AND M/S PAWAN INDUSTRIES. A SEARCH U/S 132 OF THE ACT , WAS CONDUCTED ON 06.03.2003 IN THE CASE OF M/S GIAN CHAND RAMJI DASS GROUP (IN SHORT, GCRD). DURING THE COURSE OF SEARCH, INCRIMINATING DOCUMENTS CONTAINING THE BUSINESS TRANSACTION OF M/S GIAN CHAND RAMJI DASS AND ASSESSEE S PROPRIETARY CONCERN WERE SEIZED. THEREFORE, A NOTICE U/S 158BD OF THE ACT WAS ISSUED TO THE ASSESSEE . SINCE THE ASSESSEE DID NOT COOPERATE WI TH THE ASSESSMENT PROCEEDING , BLOCK ASSESSMENT WAS COMPLETED FOR THE PERIOD 01.04.1996 TO 06.03.2003 FIXING TOTAL UNDISCLOSED INCOME AT RS.17,64,527/ - . IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 3 THE DETAILS OF THE UNDISCLOSED INCOME THAT WAS CALCULATED IN THE HANDS OF TWO PROPRIETARY CONCERN S OF THE ASSESSEE ARE AS FOLLOWS: I) ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME BY WORKING OUT NET PROFIT AT 1% OUT OF THE TOTAL PURCHASES MADE FROM M/S GIAN CHAND RAMJI DASS. A.Y. PYARE LAL VIJAY KUMAR PAWAN INDUSTRIES TOTAL 1997 - 98 NIL 149667 149667 1998 - 99 70545 92595 163140 1999 - 00 55770 145994 201764 2000 - 01 NIL 91568 91568 2001 - 02 NIL 74928 74928 2002 - 03 NIL NIL NIL 2003 - 04 NIL NIL NIL 126315 554752 681067 II) ADDITION MADE ON ACCOUNT OF PEAK CREDIT IN THE BANK ACCOUNT OF PYARE LA L VIJAY KUMAR AND PAWAN INDUSTRRIES A.Y. PYARE LAL VIJAY KUMAR PAWAN INDUSTRIES TOTAL 1997 - 98 429862 [AS ON 09.11.1996 IN BANK OF RAJASTHAN LTD.] NIL 429862 1998 - 99 NIL 653598 [AS ON 07.05.1997 IN UNION BANK OF INDIA] 653598 1999 - 00 NIL NIL NIL 2000 - 01 NIL NIL NIL 2001 - 02 NIL NIL NIL 2002 - 03 NIL NIL NIL 2003 - 04 NIL NIL NIL 429862 653598 1083460 IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 4 4 . AGGRIEVED BY THE ADDITION S MADE IN THE BLOCK ASSESSMENT, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTH ORITY CHALLENGING THE INITI ATION OF BLOCK ASSESSMENT U/S158BD OF THE ACT AND ALSO ON MERITS OF THE ADDITIONS . THE CIT(A) ALLOWED THE PLEA OF THE ASSESSEE ON MERITS HOLDING THAT NO INCRIMINATING DOCUMENTS WAS FOUND OUT IN THE COURSE OF SEARCH , PERTAINING TO THE ASSESSEE AND THEREFORE TWO ADDITIONS WAS NOT WARRANTED . THE REASONING OF THE CIT(A) IN DELETING THE TWO ADDITIONS IS IDENTICAL AND SAME READS AS UNDER: - 7.4. I HAVE CONSIDERED THE ORDER OF THE AO, REMAND REPORT OF THE AO AND THE SUBMISSIONS OF THE AS SESSEE I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT APPARENTLY THERE IS NO INCRIMINATING BOOKS AND DOCUMENTS SEIZED AGAINST THE ASSESSEE ON THE BASIS OF WHICH THE AO HAS MADE THE ADDITION. IT IS APPARENT THAT THE AO HAS MADE THE ADDITIO N ON ESTIMATE AND AD - HOC BASIS WITHOUT ANY MATERIAL EVIDENCE AGAINST THE ASSESSEE. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE VIEW THAT IT IS NOT POSSIBLE TO SUSTAIN SUCH ESTIMATED AND AD - HOC ADDITION AND ACCORDINGLY, THE SAM E AS DELETED. 4 .1 AS AGAINST THE ASSESSEE S GROUND CHALLENGING THE ASSESSMENT FRAMED U/S 158BD OF THE ACT, THE CIT(A) DECIDED THE ISSUE AGAINST THE ASSESSEE VIDE PARAGRAPH 5.4 OF THE IMPUGNED ORDER. 5 . THE REVENUE BEING AGGRIEVED BY THE DELETION OF RS.1 7,64,527/ - IS IN APPEAL BEFORE US AND THE ASSESSEE BEING AGGRIEVED BY THE CIT (A) S ORDER REJECTING THE ASSESSEE S PLEA , FOR QUASHING ASSESSMENT U/S 158BD HAS FILED CO NO. 240/2012 BEFORE US. 6 . THE LD. D R RELIED ON THE ORDER OF THE ASSESSING OFFICER. THE L D. AUTHORIZED REPRESENTATIVE REITERATED THE SUBMISSION MADE BEFORE THE INCOME TAX AUTHORITY. IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 5 7 . WE HAVE HEARD RIVAL SUBMISSION S AND PERUSED THE MATERIAL ON RECORD. THE TOTAL UNDISCLOSED INCOME OF RS.17,64,527/ - COMPUTED BY THE AO, COMPRISES OF THE FOLLOWI NG TWO ADDITIONS (BOTH PROPRIETARY CONCERN OF THE ASSESSEE) : I) N.P. AT 1% OF THE TOTAL PURCHASES FROM M/S GIAN CHAND RAMJI DASS GROUP RS. 6,81,067/ - II) ADDITION OF PEAK CREDIT IN BANK ACCOUNT RS.10,83,460/ - TOTAL RS.17,64 ,527/ - 7 .1 WE SHALL BE DEAL WITH THE ABOVE TWO ADDITIONS AS UNDER: I) ADDITION OF RS.6,81,067/ - IN THE COURSE OF SEARCH PROCEEDING IN THE PREMISES OF M/S GIAN CHAND RAMJI DASS DOCUMENTS PERTAINING TO M/S PYARE LAL VIKAY KUMAR AND M/S PAWAN INDUSTRIES (ASSESSEE S PROPRIETARY CONCERN) WERE SEIZED , WHEREIN PARTICULARS OF TRANSACTION BETWEEN THE SEARCH ED PERSON AND THE PROPRIETARY CONCERN S OF THE ASSESSEE WERE RECORDED. M/S GIAN CHAND RAMJI DASS GROUP (THE SEARCH PERSON) WERE RECORDING CERTAIN PORTION OF THEIR SALES OUTSIDE THE BOOKS OF ACCOUNT AND MANY OF THE SE SALES WERE MADE TO TWO PROPRIETARY CONCERN S OF THE ASSESSEE. THESE FACTS ARE EVIDENT FROM THE READING OF THE ASSESSMENT ORDER AND THE APPRAISAL REPORT PREPARED IN THE COURSE OF THE SEARCH PROCEEDIN G. THE ASSESSEE WAS ASKED TO EXPLAIN WHETHER THE PURCHASES FROM M/S GIAN CHAND RAMJI DASS GROUP , WERE DULY ACCOUNTED OR NOT. THERE WAS LACK OF COOPERATION ON THE PART OF THE ASSESSEE AND DID NOT PROVIDE THE NECESSARY MATERIAL CALLED FOR BY THE ASSESSING OF FICER . THEREFORE, THE ASSESSING OFFICER WAS COMPELLED TO ESTIMATE NP AT 1% OF THE PURCHASE MADE FROM M/S GIAN IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 6 CHAND RAMJI DASS GROUP. THE ASSESSEE OUGHT TO HAVE COOPERATED AND FURNISHED NECESSARY EVIDENCE TO SHOW THAT THE PURCHASE S FROM M/S GIAN CHAND RAMJI DASS GROUP WAS DULY REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. THE CIT(A) DELETED THE DISALLOWANCE FOR THE REASON THAT NO INCRIMINATING DOCUMENTS AGAINST THE ASSESSEE WERE FOUND DURING COURSE OF SEARCH . I N THE ASSESSMENT ORDER IT HAS BEEN MENTIONED THAT M/S GIAN CHAND RAMJI DASS GROUP HAS SOLD GOODS OUTSIDE ITS BOOK OF ACCOUNT TO THE PROPRIETARY CONCERN S OF THE ASSESSEE . THE ADDITION OF RS.6,81,067/ - WOULD NOT HAVE BEEN WARRANTED , HAD ASSESSEE COOPERATED AND PRODUCED THE DETAILS CALLED FOR IN THE COU RSE OF ASSESSMENT PROCEEDING. THE ASSESSEE OUGHT TO HAVE FURNISHED NECESSARY MATERIAL TO SHOW THAT THE PURCHASES FROM M/S GIAN CHAND RAMJI DASS GROUP WERE DULY REFLECTED IN THE REGULAR BOOK ACCOUNT MAINTAINED BY THE PROPRIETARY CONCERNS. FOR THE AFORESAID REASONS, WE ARE OF THE OPINION THAT CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.6,81,067/ - . THEREFORE, IN THE INTEREST OF JUSTICE AND EQUITY , THE ISSUE OF ADDITION OF RS.6,81,067/ - , IS RESTORED TO AO FOR FRESH CONSIDERATION. THE ASSESSEE SHALL B E AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD BEFORE ASSESSMENT IS REFRAMED. II) ADDITION OF RS.10,83,460/ - 7.2 THE PEAK CREDITS IN TWO BANK ACCOUNTS WERE ADDED BY THE AO AS UNDISCLOSED INCOME. T HE ASSESSING OFFICER DOES NOT HAVE A CASE THAT THE BANK ACCOUNTS ARE NOT DISCLOSED TO THE INCOME TAX DEPARTMENT. HE HAS MERELY ADDED THE PEAK CREDIT WITHOUT GIVING ANY REASONING FOR TREATING THE SAME AS UNDISCLOSED IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 7 INCOME OF THE ASSESSEE . WHEN THE BANK ACCOUNTS ARE REFLECTED IN THE NORMAL COURSE OF ASSESSEE S B USINESS, WE SEE NO REASON THAT THE PEAK CREDIT IN THE TWO BANK ACCOUNT S SHOULD BE ADDED AS UNDISCLOSED INCOME . THEREFORE, THE CIT(A) S ORDER DELETED THE ADDITION OF RS.10,83,460/ - IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR . IT IS ORDERED ACCORDINGLY. CO NO.240/2012 8 . SINCE THE ISSUE OF ADDITION OF RS.6,81,067/ - IS REMANDED TO THE AO , FOR DE NOVO CONSIDERATION, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE S RAISED IN ASSESSEE S CROSS OBJECTION ALSO TO THE AO FOR FRESH CONSIDERA TION. NEEDLESS TO STATE , THE ASSESSEE SHALL BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD , BEFORE ASSESSMENT IS REFRAMED. IT IS ORDERED ACCORDINGLY. 9 . IN THE RESULT : I) THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES : & II) CROSS OBJE CTION FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 5 TH DECEMBER , 201 4 . SD/ - SD/ - ( S.V. MEHROTRA ) (GEORGE GEORGE K.) A CCOUNTANT MEMBER J UDICIAL MEMBER DATED: 5 TH DECEMBER , 201 4 . AKS/ - IT (SS) NO. 27 /DEL /201 2 CO NO. 240 /DEL/2012 8 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NEW DELHI