Anita Rani, V. ACIT, CC Faridabad,

ITSSA 3/DEL/2007

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0730 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 4 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2015
• Assessment Year: misc
• Appeal Filed On: 05-01-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Block assessment
• Section: 2

Judgement Text

1 IT(SS)A NO. 3/DEL /2007 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI N.K. SAINI , ACCOUNTANT MEMBE R AND SHRI ABY T. VARKEY, JUDICIAL MEMBER IT (SS) A. NO. /3/DEL/2007(AY-1/4/1996 TO 23/8/20 02) MRS. ANITA RANI, 86, SECTOR-16A, FARIDABAD (APPELLANT) VS THE ACIT CENTRAL CIRCLE, FARIDABAD. (RESPONDENT) APPELLANT BY DR. RAKESH GUPTA, ADV RESPONDENT BY SYED NASIM ALI, CIT DR DATE OF HEARING 22/4/2015 ORDER PRONOUNCED ON 06/05/2015 ORDER PER N. K. SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 16/11/2006 OF CIT(A)1, LUDHIANA FOR THE BLOCK PERIO D 1/4/1996 TO 23/8/2002, FOLLOWING GROUNDS HAS BEEN RAISED IN THIS APPEAL. 1. THAT THE APPELLANT DENIES HER LIABILITY TO BE A SSESSED AT ALLEGED UNDISCLOSED INCOME OF RS.5,69,000/- AND THAT TOO U/ S158BD AND ACCORDINGLY DENIES HER LIABILITY TO PAY TAX, INTERE ST DEMANDED THEREON. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A), HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A.O IN ASSUMING JURISDICTION AND THAT TOO U/S 1 58BD TO 2 IT(SS)A NO. 3/DEL /2007 PROCEED AGAINST THE APPELLANT AND TO FRAME THE IMPU GNED ASSESSMENT AND THAT TOO WITHOUT COMPLYING WITH STAT UTORY CONDITIONS. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A.O IN MAKING AN ADDITION OF RS.5,69,003/- ON ACCOU NT OF ALLEGED UNDISCLOSED INCOME MORE SO WHEN THE IMPUGNED ADDITI ONS COULD NOT BE MADE UNDER ANY CIRCUMSTANCES AND THAT TOO IN THE IMPUGNED ASSESSMENT ORDER AND THAT TOO WITHOUT GIVI NG AN ADEQUATE OPPORTUNITY OF BEING HEARD AND ON THE BASI S OF SURMISES AND CONJECTURES. 4. IN ANY VIEW OF THE MATTER AND IN ANY CASE, ACTIO N OF LD. A.O. IN MAKING THE ADDITION OF RS.5,69,003/-AS UNDISCLOSED INCOME IN THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. A.O HAS ERRED IN LAWS AND ON FACTS IN CHARGING INTE REST U/S 158BFA AND LD. CIT(A) OUGHT TO HAVE DELETED THE SAME. 6. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTH ER. 2. FROM THE ABOVE GROUNDS, IT WOULD BE CLEAR THAT T HE GRIEVANCE OF THE ASSESSED VIDE GROUND NO.1 TO 4 RELATES TO THE CONFI RMATION OF ADDITION OF RS.5,69,003/-MADE BY THE AO. FACTS OF THE CASE IN BRIEF ARE THAT IN THE COURSE OF SEARCH PROCEEDINGS AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF SHRI O.P. SINGHAL, CERTAIN DOCUMENTS RELATING TO SALE OF SHARES WERE FOUND AND STATEMENT OF SHRI O.P. SINGHAL WAS RECORDED. IN TH E SAID STATEMENT IT WAS STATED THAT HE HAD NEVER PURCHASED/SOLD ANY SHARES AND HAD NO KNOWLEDGE OF SHARE BUSINESS. IN THIS CONNECTION STATEMENT OF SH RI ASHOK GUPTA, DIRECTOR OF M/S JRD /STOCK BROKER PVT. LTD WAS ALSO RECORDED WH ERE IN HE ADMITTED THAT THERE WAS NO SALE OF SHARES AND IT WAS ONLY AN ACCO MMODATION ENTRY. THE AO OBSERVED THAT THE BANK ACCOUNT HOLDERS FROM WHERE T HE MONEY CAME TO THE ACCOUNT OF M/S JRD/SHARE BROKER PVT. LTD, IN THEIR S TATEMENT HAD STATED THAT THEY HAD SIGNED BLANK CHEQUE BOOKS AT THE INSTANCE OF SHRI ASHOK GUPTA AND 3 IT(SS)A NO. 3/DEL /2007 HAD NO KNOWLEDGE ABOUT THE DEPOSITS AND WITHDRAWAL MADE THROUGH THEIR BANK ACCOUNT. HE ALSO OBSERVED THAT THE ASSESSEE H AD SHOWN LONG TERM CAPITAL GAIN OF RS.4,74,003/- ON THE SALE OF SHARES OF M/S RAJENDRA DEPOSITS AND ADVANCES LTD. THE AO POINTED OUT THAT AS PER R ECORDS OF M/S RAJENDRA DEPOSITS AND ADVANCES LTD, THE ASSESSEE WAS STILL H OLDING THE SHARES ON THE DATE OF SEARCH AND THE SAME HAD NOT BEEN SOLD BY HE R. THE AO HELD THAT THE AMOUNT OF RS.5,69,003/-CLAIMED TO HAVE BEEN RECEIVE D ON ACCOUNT OF ALLEGED SALE OF SHARES WAS NOTHING BUT THE ASSESSEES OWN M ONEY GIVEN TO THE BROKER AND IN LIEU OF THE SAME SHE GOT THE CHEQUE. ACCORD INGLY AN ADDITION OF RS.5,69,003/- WAS MADE, THE SAID ADDITION WAS CONFI RMED BY THE LD. CIT(A). NOW, THE ASSESSEE IS IN APPEAL. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUT SET STATED THAT THIS ISSUE IS SQUARELY COVERED VIDE ORDER DATED 30/7/2010 IN I T(SS)A NOS. 274 TO 276/DELHI 2005 IN THE CASES OF ACIT, CENTRAL CIRCLE , FARIDABAD, VS. SHRI RAVINDER SINGHAL, SMT. OMWATI SINGHAL AND SHRI OM P RAKASH SINGHAL FOR THE BLOCK PERIOD 1/4/1996 TO 23/8/2002. THE COPY OF TH E SAID ORDER WAS FURNISHED. IN HIS RIVAL SUBMISSIONS, THE LD. CIT D R ALTHOUGH SUPPORTED THE ORDER OF THE AUTHORITIES BELOW BUT COULD NOT CONTR OVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICE D THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED VIDE AFO RESAID REFERRED TO ORDER DATED 30/7/2010 BY THE ITAT DELHI BENCH I NEW DEL HI IN IT(SS)A NOS. 274 TO 276/DEL/2005 WHEREIN RELEVANT FINDINGS HAS BEEN GIV EN IN PARA 5 AND 6 WHICH READS AS UNDER:- 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT CITED BY THE LD. AR OF THE ASSESSEE. WE FIND THAT THERE IS NO ALLEGATI ON OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER OF ANY OF THESE ASSESSES 4 IT(SS)A NO. 3/DEL /2007 THAT THERE WAS ANY ADVERSE MATERIAL FOUND IN THE CO URSE OF SEARCH SUGGESTING THAT ALL THESE TRANSACTIONS OF PURCHASE AND SALE OF SHARES ARE BOGUS. ADMITTEDLY, IN THE STATEMENT REC ORDED OF THESE ASSESSES, THEY HAD ADMITTED THAT THEY HAD NOT CARRI ED OUT ANY ACTUAL PURCHASE/SALE OF SHARES BUT THIS IS AN ADMIT TED POSITION THAT ALL THESE TRANSACTIONS WERE DULY REPORTED IN T HE REGULAR RETURN OF INCOME FILED BY THESE ASSESSES BEFORE THE DATE OF SEARCH. AS PER THE PROVISIONS OF SECTION 158BB(1), THE UNDI SCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE ASSESSED ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNTS OR OTHER DOCUMENTS AND OTHER MATERIAL OR INFORMATION M AY ALSO BE CONSIDERED IF THE SAME ARE RELATABLE TO SUCH EVIDEN CE FOUND IN THE COURSE OF SEARCH. IN THE PRESENT CASES, THERE IS N O MENTION OF ANY ADVERSE MATERIAL HAVING BEEN FOUND IN THE COURSE OF SEARCH AND THE ADDITION HAS BEEN MADE ON THE BASIS OF STATEMEN T OF THESE ASSESSES AND SUBSEQUENT STATEMENTS OF THE BROKERS. WE ARE OF THE CONSIDERED OPINION THAT UNDER THESE FACTS, NO A DDITION CAN BE MADE IN THE COURSE OF BLOCK ASSESSMENT ALTHOUGH IN THE COURSE OF REGULAR ASSESSMENT, THE ASSESSING OFFICER COULD HAV E MADE ADDITIONAL ON THE BASIS OF STATEMENTS OF THE ASSESS ES AND THE SUBSEQUENT ENQUIRIES AND STATEMENTS OF THE BROKERS. THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN TH E CASE OF RAVI KANT JAIN (SUPRA) IS SQUARELY IN FAVOUR OF THE ASSE SSEE AND IT WAS HELD BY THE HONBLE DELHI HIGH COURT IN THAT CASE T HAT THE ASSESSMENT OF UNDISCLOSED INCOME AS DEFINED IN SE CTION 158B(B) IS ONLY RELATABLE TO MATERIAL FOUND AS A RESULT OF SEARCH. IT IS ALSO HELD THAT UNLESS THE MATERIALS ARE UNEARTHED AS A R ESULT OF SEARCH, THERE IS NO QUESTION OF ASSESSMENT OF UNDISCLOSED I NCOME IN TERMS OF SECTION 158BA IN CHAPTER-XIVB. IT IS ALSO OBSER VED BY HONBLE DELHI HIGH COURT IN THAT CASE THAT SPECIAL PROCEDUR E OF CHAPTER- XIVB INTENDED TO PROVIDE A MODE OF ASSESSMENT OF UN DISCLOSED INCOME WHICH HAS BEEN DETECTED AS A RESULT OF SEARC H. IT IS ALSO HELD THAT AS PER THE PROVISIONS OF THIS CHAPTER, IT IS NOT INTENDED TO BE A SUBSTITUTE FOR REGULAR ASSESSMENT AND THIS IS IN ADDITION TO REGULAR ASSESSMENT ALREADY DONE OR TO BE DONE. HEN CE, IN THIS PRESENT CASE, THIS JUDGMENT OF HONBLE DELHI HIGH C OURT IS SQUARELY APPLICABLE BECAUSE IN THE PRESENT CASE, INCOME ASSE SSED BY THE ASSESSING OFFICER IN ALL THESE THREE CASES IS NOT O N THE BASIS OF ANY MATERIAL FOUND IN THE COURSE OF SEARCH BECAUSE THER E IS NO REFERENCE BY THE ASSESSING OFFICER IN THE ASSESSMEN T ORDER OF ANY ADVERSE MATERIAL HAVING BEEN FOUND IN THE COURSE OF SEARCH. THE WHOLE ASSESSMENT IN ALL THE THREE CASES IS BASED ON THE STATEMENT OF THE ASSESSEE AS WELL AS SUBSEQUENT ENQUIRY FROM THE BROKERS AND HENCE AS PER THIS JUDGMENT OF HONBLE DELHI HIG H COURT, THE 5 IT(SS)A NO. 3/DEL /2007 PROVISION OF CHAPTER-XIVB CANNOT BE INVOKED BECAUSE THERE WAS NO MATERIAL UN-EARTHED AS A RESULT OF SEARCH SUGGES TING ANY UNDISCLOSED INCOME OF THE ASSESSEE. THE CAPITAL GA IN IN QUESTION WAS ALREADY DISCLOSED BY THE ASSESSEE IN REGULAR RE TURN OF INCOME FILED BY THEM BEFORE THE DATE OF SEARCH AND HENCE T HIS INCOME IS NOT A DISCOVERY OF SEARCH. THE QUESTION AS TO WHET HER THE IMPUGNED RECEIPTS ARE ON ACCOUNT OF SALE OF SHARES OR NOT CAN BE DECIDED IN THE REGULAR ASSESSMENT BUT THE SAME CANN OT BE QUESTIONED IN THE BLOCK ASSESSMENT PROCEEDINGS. 6. RESPECTFULLY, FOLLOWING THIS JUDGMENT OF HONBLE DELHI HIGH COURT, WE HOLD THAT THE ADDITIONS MADE BY THE ASSESSING OF FICER IN THE BLOCK ASSESSMENT OF THESE THREE ASSESSES IS NOT SUS TAINABLE IN VIEW OF THE FACTS OF THE PRESENT CASES AS DISCUSSED ABOV E. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) IN ALL THESE THREE CASES. 5. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRE D TO ORDER, WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A), THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS DELETED. 6. GROUND NO. 5 RELATES TO THE CHARGING OF INTEREST U/S158 BFA OF THE ACT. AS REGARDS TO THIS ISSUE, IT WAS THE COMMON CONTENT ION OF BOTH THE PARTIES THAT IT IS CONSEQUENTIAL IN NATURE. WE ORDER ACCORDINGL Y. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- (ABY T VARKEY) (N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 06 /05 /2015 R. NAHEED 6 IT(SS)A NO. 3/DEL /2007 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI SL.NO. DESCRIPTION DA TE 1. DATE OF DICTATION BY THE AUTHOR 5/5/2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 6/5/201 5 3. DRAFT PLACED BEFORE THE SECOND MEMBER 6/5/2015 4. DRAFT APPROVED BY THE SECOND MEMBER 6/5/2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6/5/2 015 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER 7 IT(SS)A NO. 3/DEL /2007 8 IT(SS)A NO. 3/DEL /2007 10.