M/s. General Copy House, Delhi V. ACIT, New Delhi

ITSSA 28/DEL/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1709 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-03-2016
• Assessment Year: misc
• Appeal Filed On: 18-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEHGA MITTA L
• Assessee Lawyers: ANKUR GARG
• Keywords: Search and seizure; Block assessment
• Section: 28; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER , AND SHRI L.P. SAHU, ACCOUNTANT MEMBER, IT SS A NO. 2 8 /DEL /20 1 3 [ BLOCK A.Y : 1.4.199 6 TO 06 . 03 .200 3 ] THE GENERAL COPY HOUSE VS. THE A.C.I.T HOUSE NO. 981/4 CIRCLE 29(1) CHAWRI BAZAR , NEW DELHI NEW DELHI PAN : AA A FG 2439 F [APPELLANT] [RESPONDENT] DATE OF HEARING : 1 4 . 03 . 201 6 DATE OF PRONOUNCEMENT : 18 . 0 3 .201 6 APPELLANT BY : SHRI ANKUR GARG, CIT - DR RESPONDENT BY : MS. MEHGA MITTA L , CA ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - X XV , NEW DELHI , DATED 0 9 / 1 0 /2 01 3 FOR BLOCK A.Y 1.4.199 6 TO 6 . 03 .200 3 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (I) THE ORDER DATED 9.10.2013 PASSED BY THE LD. CIT(A) - XXV, NEW DELHI IS BAD IN LAW AND ON FACTS. IT SS A NO. 28 /DEL/20 1 3 2 (II) THAT ON THE FACTS AND IN LAW THE LD. CIT HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/ 158BF A (2) AND DIRECTING THE AO TO RECOMPUTE THE QUANTUM OF PENALTY ATTRIBUTABLE TO THE UNDISCLOSED INCOME OF RS. 3,18,602/ - AS AGAINST RS. 3,68,602/ - COMPUTED IN THE BLOCK ASSESSMENT ORDER DATED 31.10.2005 FOR THE BLOCK PERIOD 1.4.1996 TO 6.3.2003. 3 . FACTS, IN BRIEF, ARE THAT A SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT THE PREMISES OF THE FIRM M/S GYA N CHAND RAMJI DAS ON 6.3.2003. DURING THE SEARCH PROCEEDINGS, CERTAIN INCRIMINATING DOCUMENTS W ERE FOUND BY THE INVESTIGATION WING. IN ONE OF SEVERAL SUCH BOOKS, CERTAIN ENTRIES WERE NOTICED WHICH PERTAINED TO THE ASSESSEE, M/S GENERAL COPY HOUSE, NEW DELHI. AS A RESULT, PROCEEDINGS WERE VALIDLY INITIATED AGAINST THE ASSESSEE FOR THE BLOCK A.Y UNDER CONSIDERATION. WHEN ASKED TO REPLY TO CERTAIN QUERIES, THE ASSESSEE CLARIFIED THE SAME THROUGH REPLIES. THE ASSESSEE REPLIED THAT T HE EN TRIES WERE NOT OF ANY USE OR RELEVANT TO HIM AS THE FIGURES REPRESENTED IN THE TABLE DID NOT MAKE ANY LOGICAL SENSE AS THE ALL THE ENTRIES WERE IN A FASHION WHICH DID NOT CONNOTE ANYTHING. IT WAS ALSO SUBMITTED THAT IT WAS THE CHILDREN WHO MADE SUCH CREAT IONS WHILE LEARNING THE COMPUTER PLAYFULLY WROTE THEM. NOT SATISFIED WITH THE EXPLANATION TENDERED BY THE ASSESSEE, THE AO WAS OF THE VIEW THAT IT WAS A PERCEIVED DESIGN, A SYSTEM BEHIND THE WRITINGS WHICH WERE IN A CODED FORM. THE AO FURTHER OBSERVED THAT THE PERSON INTERROGATED STATED THAT THE DECIMALS REFLECTED OMISSION OF THREE PLACED IN THE IT SS A NO. 28 /DEL/20 1 3 3 FIGURES I.E. UPTO THE HUNDREDTH PLACE. THE AO CONCLUDED THAT IT WAS AN OBVIOUS COLLUSIVENESS AND ADOPTED WITH A MUTUAL UNDERSTANDING BETWEEN THE PARTY SEARCHED AND THE ASSESSEE TO CONCEAL THE INCOME SO PROJECTED. HENCE THE AO INITIATED PENALTY PROCEEDINGS U/S 158BFA OF THE INCOME TAX ACT, 1961 [FOR SHORT, 'THE ACT']. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS FURNISHED A COPY OF TRIBUNAL ORDER DATED 26.12.2014 IN ASSESSEE S OWN CASE IN ITSSA NO. 25/DEL/2013 FOR THE BLOCK PERIOD 1.4.1996 TO 6.3.2003 WHEREIN THE ITAT C BENCH HAS ALLOWED THE APPEAL OF THE ASSESSEE IN QUANTUM APPEAL BY HOLDING AS UNDER: WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE RELEVANT RECORD AVAILABLE WITH US S PECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONG WITH WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY ALONG WITH OTHER DOCUMENTARY EVIDENCE SUPPORTING THE CLAIM OF ASSESSEE. WE FIND THAT IN THE SEARCH 56 PAPERS WERE SEIZED FROM THE PREMISES OF M/S GIAN CHAND RAMJI DAS AND 33 PAPERS ARE LINKED TO THE GENERAL COPY HOUSE SENT TO THE AO OF THE ASSESSEE. ON EXPLANATION BY THE ASSESSEE ON THE SEIZED DOCUMENT THE ASSESSEE IT SS A NO. 28 /DEL/20 1 3 4 STATED THAT THEY WERE NOT AWARE OF THE COMPANIE S M/S AAA EXPORTS & M/S ABC EXPORTS ETC. THE ASSESSEE HAS ALSO FILED A LETTER FROM MR. CHANDRA PRAKASH PARTNER OF M/S GIAN CHAND RAMJI DAS IN WHICH HE HAS STATED THAT HE HAS MADE THESE ENTRIES FOR HIS LEARNING AND ALSO TOLD THAT THESE ENTRIES ARE FOR HIS C ONVENIENCE SAKE AND HAS NO CONCERNED WITH ASSESSEE'S BOOKS OF ACCOUNTS. THE ASSESSEE HAS ALSO STATED BEFORE THE REVENUE AUTHORITY THAT SH. CHANDRA PRAKASH IS HANDLING THEIR EXPORT OF THEIR PAPER AND BOARD BUSINESS AND IS ALSO THEIR ATTORNEY WITH UNION BANK OF INDIA, SADAR BRANCH. THE ASSESSEE HAS CATEGORICALLY DENIED THAT THEY HAVE NOT RECEIVED EVEN A SINGLE PIECE FROM HIM. 6. AFTER GOING THROUGH THE EXPLANATION GIVEN BY THE ASSESSEE TO THE LD. FIRST APPELLATE AUTHORITY IN THE SHAPE OF WRITTEN SUBMISSIONS MENTIONED ABOVE. WE ARE OF THE VIEW THAT ASSESSEE HAS EXPLAINED ABOUT ALL 33 PAPERS ALLEGEDLY RELATED TO THE ASSESSEE AND ESTABLISHED THAT ASSESSEE HAS NOT RECEIVED ANY PAYMENT MENTIONED IN THE SEIZED PAPERS BUT THE LD. FIRST APPELLATE AUTHORITY HAS NOT AP PRECIATED THE EXPLANATION GIVEN BY THE ASSESSEE WHICH IS SUPPORTED BY EVIDENCES ALSO. 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE LD. FIRST APPELLATE AUTHORITY HAS MADE THE ADDITION OF RS. 3,18,602/ - WITHOUT ANY BASIS AND CONTRARY TO THE EXPLANATION GIVEN BY THE ASSESSEE AS WELL AS CONTRARY TO THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES. THEREFORE, THE ADDITION OF RS. 3,18,602/ - UPHELD BY THE LD. FIRST APPELLATE AUTH ORITY IS DELETED BY ACCEPTING TH E APPEAL FILED BY THE ASSESSEE. IT SS A NO. 28 /DEL/20 1 3 5 8. IN THE RESULT, THE APPEAL FI LED BY THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING OUR OWN ORDER IN ASSESSEE S OWN CASE, WE FIND FORCE IN THE ARGUMENTS OF THE LD. AR AND HOLD THAT THE LD . CIT(A) HAS WRONGLY CONFIRMED THE PENALTY LEVIED U/S 158BFA(2) OF THE ACT AND DIRECTED THE AO TO RECOMPUTED THE QUANTUM OF PENALTY ATTRIBUTABLE TO THE UNDISCLOSED INCOME OF RS. 3,18,602/ - AS AGAINST RS. 3,628,602/ - COMPUTED IN THE BLOCK ASSESSMENT ORDER D ATED 31.10.2005. IN THAT VIEW OF THE MATTER, WHEN THE ASSESSEE HAS EXPLAINED ALL THE PAPERS ALLEGEDLY RELATED TO THE ASSESSEE AND ESTABLISHED THAT THE ASSESSEE HAS NOT RECEIVED ANY PAYMENT MENTIONED IN THE SEIZED PAPERS, WHICH HAS BEEN SUPPORTED BY EVIDE NCES ALSO, WE HAVE NO HESITATION IN DELETING THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S 158BFA(2) OF THE ACT. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER IS PR ONOUNCE D IN THE OPEN COURT ON 1 8 . 0 3 .201 6 . SD/ - SD/ - ( L.P. SAHU ) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 8 T H MARCH , 2016 VL/ IT SS A NO. 28 /DEL/20 1 3 6 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI