Smt. Sujata Trikha, New Delhi V. ACIT, New Delhi

ITSSA 30/DEL/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1889 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 14-03-2016
• Assessment Year: misc
• Appeal Filed On: 18-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Keywords: Gift; Search and seizure
• Section: 132; 154; 15

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 30/DEL/2013 BLOCK PERIOD : 01.04.1990 TO 19.10.2000 SUJATA TRIKHA, VS. ACIT 150, AGL CHAMBERS, CENTRAL CIRCLE 7, VILLAGE KAPESHERA, NEW DELHI. NEW DELHI. AAJPT5406C (APPELLANT) (RESPONDENT) ASSESSEE BY: SH. SAMEER KAPOOR, CA REVENUE BY: SH. ANKUR GARG, CI T-DR ORDER PER L.P. SAHU, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(A)-VI, NEW DELHI ORDER DATED 18 TH OCTOBER, 2013 FOR THE ASSESSMENT YEAR BLOCK PERIOD 01/04/1990 TO 19/10/2000 ON THE FOLLOWING GROUNDS: 1. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND CI RCUMSTANCES OF THE CASE IN NOT DECIDING THE GROUND OF APPEAL FO R IMPOSITION OF INTEREST U/S 220(2) WITHOUT GRANTING THE CREDIT OF CASH SEIZED DURING THE SEARCH. 2. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND CIRC UMSTANCES OF THE CASE IN UPHOLDING THE ACTION OF THE LD. ASSESSI NG OFFICER IN DENYING THE INTEREST IN ACCORDANCE WITH THE PROVISI ONS OF SEC. 132B(4) FOR THE CASH AMOUNTING TO RS. 3,45,000/- SE IZED DURING THE SEARCH FROM THE DATE IMMEDIATELY FOLLOWI NG THE EXPIRY OF THE PERIOD F ONE HUNDRED AND TWENTY DAYS FROM THE DATE ON WHICH THE LAST OF THE AUTHORIZATIONS FOR SE ARCH U/S 132 DATE OF HEARING 14.03.2016 DATE OF PRONOUNCEMENT 11.05.2016 2 WAS EXECUTED TO THE DATE OF COMPLETION OF THE ASSES SMENT UNDER CHAPTER XIVB. 3. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND FACT S OF THE CASE IN APPLYING THE INSTRUCTION NO. 11/2006 DT. 1.12.20 06 ISSUED BY THE CBDT IN A MANNER NOT ENVISAGED IN SEC. 132B. 4. THE ASSESSEE MAY PLEASE BE ALLOWED THE RIGHT TO ADD/DELETE/MODIFY ANY OF THE ABOVE GROUNDS OF APPEA L AT ANY STAGE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE ES INCOME WAS DETERMINED AT RS. 20,75,126/- BY THE ORDER U/S 245D (4) OF THE I.T. ACT, 1961 DATED 30/03/2011. THE AMOUNT DEPOSITED IN PD ACCOUNT IS RS. 3,45,000/- WAS DEPOSITED AGAINST THE OUTSTANDING DE MAND IN THE CASE OF THE ASSESSEE BESIDES PAYMENTS MADE BY HER. AN APPL ICATION WAS MOVED U/S 154 OF THE I.T. ACT BY THE ASSESSEE WHICH IS AS UNDER: IT HAS BEEN NOTICED THAT WHILE CALCULATING THE DE MAND, CREDIT OF SEIZED CASH OF RS. 3,45,000/- HAS NOT BEEN ALLOW ED. PLEASE REFER OUR EARLIER LETTER DT. 27/04/2011 IN W HICH WE HAVE REQUESTED TO ALLOW THE CREDIT OF SEIZED AMOUNT W.E. F. DATE OF SEARCH I.E. 19.10.2000. YOU ARE REQUESTED TO PLEAS E RECTIFY THE MISTAKE U/S 154. WE HAVE ALREADY SUBMITTED WITH YOUR GOOD SELF TWO JUDGMENTS IN WHICH IT WAS HELD THAT THE CREDIT OF T HE SEIZED HAS TO BE ALLOWED W.E.F. DATE OF SEARCH. ONCE AGAI N COPIES OF THE SAME JUDGMENTS ARE BEING ATTACHED FOR YOUR REFE RENCE. 1. COMMISSIONER OF INCOME TAX VS. KESAR KIMAM KARYALAYA (196 CTR DEL 611, 2005 278 ITR 296 (DEL.) ; 2. SUDHAKAR M. SHETTY VS. ACIT (2008) 10 DTR (MUMBA I) (TRIB) 173. YOUR ARE REQUESTED TO PLEASE RECTIFY THE MISTAKE U/ S 154 AND ISSUE FRESH DEMAND NOTICE AFTER RECTIFICATION. 3. SEARCH WAS CONDUCTED ON 19 TH OCTOBER, 2000 AND CASE SEIZED OF RS. 3,45,000/- WHICH WAS KEPT IN PD ACCOUNT. THE O RDER WAS PASSED U/S 245D(4) OF THE I.T. ACT AND LIABILITY WAS DETER MINED. THEREFORE, THE ASSESSEE MOVED AN APPLICATION BEFORE THE LD. ASSESS ING OFFICER U/S 154. 4. AGAINST THE ORDER U/S 154 OF THE I.T. ACT, 1961 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTH ORITY. THE LD. CIT(A) DISALLOWED THE APPEAL OF THE ASSESSEE AGAINST THE O RDER OF THE FIRST 3 APPELLATE AUTHORITY THE ASSESSEE FILED AN APPEAL IN TRIBUNAL. THESE GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE RELATED ONLY FOR THE ISSUE OF INTEREST NOT GIVEN ON DEPOSITED ON PD ACCOUNT OF RS . 3,45,000/-. THEREFORE, WE ARE TAKING TOGETHER TO THE ABOVE GROU NDS. 5. THE LD. AR SUBMITTED THAT THE REVENUE AUTHORITIE S HAVE WRONGLY INTERPRETED THE INSTRUCTION NO. 11/2006 DT. 01/12/2 006 ISSUED BY THE CBDT REGARDING CASE DEPOSITED IN THE PD ACCOUNT SPE CIALLY SEARCH AND SEIZURE CASES U/S 132B. HE SUBMITTED A DETAILED CA LCULATION BEFORE US ACCORDING TO WHICH HE HAS CALCULATED INTEREST U/S 2 20(2) 6,71,672/-, WHEREAS AS PER ITNS 150 INCOME TAX COMPUTATION FORM INTEREST HAS BEEN CALCULATED BY THE REVENUE AUTHORITIES IS RS. 1 0,00,251/- AND CLAIMED REFUND OF RS. 328,579/-. CALCULATION SUBMI TTED BY THE LD. AR IS AS UNDER: MRS. SUJATA TRIKHA CALCULATION OF ADDITIONAL TAX PAYABLE & DETAILS OF TAX PAID DATE OF NOTICE U/S 158BC 06.06.2002 DATE OF FILING OF RETURN IN RESPONSE TO NOTICE U/S 158BC 16.07.2002 DATE OF ORDER U/S 245D(1) 16.06.2005 DATE OF RECEIPT OF ORDER U/S 245D(1) 24.06.2005 DATE OF ORDER U/S 245D(1) 31.03.2011 DETAILS OF SHOWING ADDITIONAL TAX PAYABLE & PAID ASSTT. YEAR INCOME OFFERED RATE OF TAX ADDITIONAL TAX PAYABLE BLOCK PERIOD (1.4.90 TO 19.10.2000) 2075126 60% 1,245,076 ADD: SURCHARGE @ 13% 17% 211,663 TOTAL TAX 1,456,738 ADD: INTT. U/S 158BFA(1) 1.25% 36,418 TOTAL TAX AND INT. PAYABLE 1,493,157 ADD: INT. U/S 220(2) 671,672 TOTAL TAX & INT. PAYABLE 2,164,829 CHART SHOWING PAYMENT OF TAXES & CASH SEIZED TOTAL TAX PAYABLE 2,164,829 4 (AS ABOVE) LESS: TAX ALREADY PAID AND CASH SEIZED CASH SEIZED 345,000 18.07.2007 73,000 31.07.2007 1,097,000 25.05.11 649,829 28.06.11 328579 2,493,408 REFUND DUE 328,579 6. THE LD. ASSESSING OFFICER DISPOSED OFF THE APPLI CATION WHICH IS AS UNDER: AS REQUESTED BY THE ASSESSEE, THE CREDIT OF SEIZE D CASH OF RS. 3,45,000/- HAS BEEN GIVEN. FURTHER THE ASSESSE E HAS REQUESTED THAT THE CREDIT OF THE SEIZED AMOUNT SHOU LD BE ALLOWED W.E.F. THE DATE OF SEARCH I.E. 19.10.2000. IN THIS REGARD, IT IS TO BE MENTIONED THAT THE FACTS OF THE CASES MENTIONED IN THE PETITION BY THE ASSESSEE ARE TOTAL LY DIFFERENT FROM THE FACTS OF THE CASE OF THE ASSESSEE. (1) A MOUNT OF CASH SEIZED KEPT IN THE PD ACCOUNT HAS ONLY BEEN AD JUSTED AFTER THE ORDER PASSED BY THE HONBLE ITSC. (2) N EITHER THE AMOUNT OF PD ACCOUNT HAD BEEN ADJUSTED AGAINST PAYM ENT OF ADVANCE TAX NOR THE SAME HAD BEEN ADJUSTED AGAINST THE DEMAND RAISED AFTER COMPLETION OF ASSESSMENT U/S 15 8BC AS THE ASSESSEE HAD MOVED A PETITION BEFORE THE HONBL E ITSC DURING THE PENDENCY OF APPELLATE PROCEEDINGS. (3) THE DEMAND DUE COULD NOT BE ENFORCED DURING THE PENDENC Y OF PETITION OF THE ASSESSEE BEFORE THE ITSC. AS SUCH, THE AMOUNT WITHDRAWN FROM THE PD ACCOUNT WAS ADJUSTED ONLY AFTER THE ORDER PASSED BY THE HON BLE ITSC U/S 245D(4) OF THE I.T. ACT. PROCEEDINGS IN THE CASE OF THE ASSESSEE HAVE TAKEN PLACE IN BONAFIDE MANNER AND THERE IS NO MISTAKE AP PARENT FROM RECORDS WHICH IS REQUIRED TO BE RECTIFIED U/S 154 OF THE I.T. ACT. KEEPING IN VIEW THE FACTS OF THE CASE, T HE APPLICATION OF THE ASSESSEE U/S 154 IS HEREBY REJECTED. 6.1 THE LD. AR HAS RELIED UPON THE ORDER OF THE IT( SS)A NO. 6/KOL/2010 IN THE CASE OF M/S INDIA TRADERS VS. INC OME TAX OFFICER, KOLKATA. 6.2 THE CASE LAW SUBMITTED BY THE LD. AR IS DISTING UISHABLE BECAUSE THERE WAS AN AMOUNT DEPOSITED IN THE PD ACCOUNT WAS RS. 10,07,917/- WAS MORE THAN THE AMOUNT AFTER GIVING APPEAL EFFECT TO THE ORDER OF THE 5 TRIBUNAL IT MEANS RS. 4,70,856/- AND REFUND WAS DUE AFTER CAREFUL READING OF THE ABOVE INSTRUCTIONS AS STOOD BY THE C BDT THAT IF ANY AMOUNT DEPOSITED IN PD ACCOUNT CAN BE ADJUSTED ONLY AFTER THE DETERMINATION OF THE TAX LIABILITY. 7. THE LD. DR RELIED ON THE ORDER OF THE LOWER AUTH ORITIES AND HE HAS SUBMITTED THAT LOWER AUTHORITIES HAVE CALCULATED TA X DEMAND CORRECTLY AND INSTRUCTION ISSUED BY THE CBDT REGARDING SEARCH AND SEIZURE IS CORRECTLY. LD. DR VEHEMENTLY OBJECTED THAT THE LOW ER AUTHORITIES HAVE MADE GOOD ORDER AND DOES NOT REQUIRE ANY INTERFEREN CE. 8. AFTER HEARING BOTH THE PARTIES AND MATERIALS AVA ILABLE ON RECORD, WE FOUND THAT THE CIT(A) HAS DONE DETAILED DISCUSSI ONS IN THE APPEAL FILED BY THE ASSESSEE. FOR THE SAKE OF CONVENIENCE , WE HAVE REPRODUCED THE CIT(A)S ORDER WHICH IS AS UNDER: 5. DECISION IN APPEAL I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE FACTS OF T HE CASE AND THE ORDER OF THE ASSESSING OFFICER AS WELL AS ORDER S OF SUPERIOR AND OTHER AUTHORITIES, RELEVANT TO THE ISSUES INVOL VED IN THE GROUNDS OF APPEAL. I HAVE ALSO GONE INTO THE LEGAL PROPOSITIONS AND LEGAL PRONOUNCEMENTS IN THIS REGARD. 5.1 THIS IS NOT A MATTER UNDER DISPUTE THAT THE ASS ESSING OFFICER HAS NOT ADJUSTED THE AMOUNT WITHDRAWN FROM THE PD ACCOUNT OF THE CONCERNED COMMISSIONER OF INCOME TAX , AFTER PASSING OF ORDER BY THE HONBLE ITSC U/S 245D(4) OF THE ACT I.E. 30.03.2011. THEREFORE, THE ASSESSING OFFICER HAS ALREADY GIVEN THE CREDIT OF SEIZED CASH OF RS. 3,45,000/- A S REQUESTED BY THE ASSESSEE. BUT THE ASSESSEE REQUESTED BEFORE THE ASSESSING OFFICER THAT THE CREDIT OF SEIZED AMOUNT SHOULD BE ALLOWED W.E.F. DATE OF SEARCH I.E. 19.10.2000. HOW EVER, THE ASSESSING OFFICER FOUND THE PLEA OF THE ASSESSEE UN ACCEPTABLE DUE TO THE FOLLOWING REASONS: I. AMOUNT OF CASH SEIZED KEPT IN THE PD ACCOUNT HAS ONLY BEEN ADJUSTED AFTER THE ORDER PASSED BY THE HONBLE ITSC U/S 245D(4) OF THE ACT DT. 30.03.2011. II. NEITHER THE AMOUNT OF PD ACCOUNT HAD BEEN ADJUS TED AGAINST THE PAYMENT OF ADVANCE TAX NOR THE SAME HAD 6 BEEN ADJUSTED AGAINST THE DEMAND RAISED AFTER COMPLETION OF ASSESSMENT U/S 158BC OF THE ACT, AS T HE ASSESSEE HAD MOVED A PETITION BEFORE THE HONBLE IT SC DURING THE PENDENCY OF APPELLATE PROCEEDINGS. III. THE DEMAND DUE COULD NOT BE ENFORCED DURING TH E PENDENCY OF PETITION OF THE ASSESSEE BEFORE THE ITS C. THEREFORE, THE AMOUNT WITHDRAWN FROM THE PD ACCOUN T WAS ADJUSTED ONLY AFTER THE ORDER PASSED BY THE HON BLE ITSC U/S 245D(4) OF THE ACT. THEREFORE, THE APPLICATION OF THE ASSESSEE U/S 154 OF THE ACT WAS REJECTED BY THE ASS ESSING OFFICER. 5.2 IT IS PERTINENT TO MENTION HERE THAT THE CIT OF FICE ONLY MAINTAINS THE PD ACCOUNT & ANY ACTION WHETHER RELEA SE OR ADJUSTMENT IS DONE ONLY ON THE RECOMMENDATION OF TH E CONCERNED ASSESSING OFFICER. FURTHER, ANY AMOUNT L YING IN THE PD ACCOUNT PRIMARILY BELONGS TO THE ASSESSEE JURISD ICTION OVER WHICH LIES WITH THE ASSESSING OFFICER. HOWEVER, AS CORRECTLY OBSERVED BY THE ASSESSING OFFICER, THAT AMOUNT OF S EIZED CASH KEPT IN THE PD ACCOUNT OF CIT COULD NOT BE ADJUSTED BY HIM AFTER PASSING THE ORDER U/S 158BC OF THE ACT DT. 27 .11.2002 (BLOCK PERIOD 01.04.1990 TO 10.10.2000), AS THE ASS ESSEE MOVED BEFORE THE HONBLE ITSC TO REDRESS ITS GRIEVA NCE, DURING THE PENDENCY OF THE APPELLATE PROCEEDINGS AND DEMAN D COULD NOT BE ENFORCED DURING THE PENDENCY OF PETITION OF THE ASSESSEE BEFORE THE ITSC. HOWEVER, EVERY ORDER PAS SED BY THE HONBLE ITSC SHALL PROVIDE FOR THE TERMS OF SET TLEMENT INCLUDING ANY DEMAND BY WAY OF TAX, PENALTY OR INTE REST. THE ORDERS OF THE SETTLEMENT COMMISSION ARE FINAL BUT S UBJECT TO CONSTITUTIONAL REMEDIES AS WAS HELD IN CIT VS. EXPR ESS NEW PAPER LTD. (1994) 206 ITR 443 (SC). 5.3 SECTION 132 OF THE ACT LAYS DOWN THE PROCEDURE FOR APPLICATION AND RELEASE OF ASSETS SEIZED U/S 132 OR REQUISITION U/S 132A OF THE ACT. AS PER THE PROVISIONS OF CLAU SE (I) OF SECTION 132B(1), SUCH ASSETS HAVE TO BE APPLIED FOR RECOVERY OF ANY EXISTING LIABILITY UNDER THE INCOME TAX ACT, TH E WEALTH TAX ACT, THE EXPENDITURE TAX ACT, THE GIFTS TAX ACT AND THE INTEREST TAX ACT AND THE LIABILITY DETERMINED ON THE COMPLET ION OF SEARCH & SEIZURE ASSESSMENT INCLUDING ANY PENALTY L EVIED OR INTEREST PAYABLE IN CONNECTION WITH SUCH ADJUSTMENT HAS TO BE FORTH WITH RELEASED TO THE PERSON FROM WHOSE CUSTOD Y THE ASSET WAS SEIZED, IN ACCORDANCE WITH THE PROVISIONS OF SE CTION 132B(3). THEREFORE, CASH DEPOSITED IN THE PD ACCOU NT IS REQUIRED TO BE ADJUSTED AGAINST THE EXISTING LIABIL ITY AND THE 7 DEMAND RAISED IN THE SEARCH AND SEIZURE ASSESSMENT. HOWEVER, DESPITE THE COMPLETION OF ASSESSMENT U/S 1 58BC OF THE ACT, THE ASSESSING OFFICER COULD NOT ENFORCE TH E DEMAND DUE TO FILING OF THE APPLICATION BY THE ASSESSEE BE FORE THE HONBLE ITSC. THERE IS NO VIOLATION OF CBDT INSTRU CTION NO. 11/2006 DT. 01.12.2006, AS CLAIMED BY THE APPELLANT , AS THE AMOUNT WITHDRAWN FROM THE PD ACCOUNT WAS ADJUSTED O NLY AFTER THE ORDER PASSED BY THE HONBLE ITSC U/S 245D (4) OF THE ACT. THEREFORE, THERE IS NO INFIRMITY FOUND IN THE ORDER OF ASSESSING OFFICER PASSED U/S 154 OF THE ACT AND THE APPELLANT GETS NO RELIEF AS SUCH. 9. FROM THE ABOVE CIT(A)S ORDER, THE CIT(A) HAS MA DE GOOD ORDER AND THE ABOVE INSTRUCTION NO. 11/2006 DT. 01/12/200 6 HAS BEEN CORRECTLY INTERPRETED BY THE LOWER AUTHORITIES. THEREFORE, W E UPHOLD THE ORDER OF THE CIT(A). 10. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.05.2016 SD/- SD/- (C.M. GARG) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11.05.2016 *KAVITA ARORA COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR 8 DATE 1. DRAFT DICTATED ON 11.05.2016 2. DRAFT PLACED BEFORE AUTHOR 11.05.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 11.05.2016 6. KEPT FOR PRONOUNCEMENT ON 11.05.2016 7. FILE SENT TO THE BENCH CLERK 12.05.2016 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.