M/s. Anand Swaroop Khandelwal, New Delhi V. ACIT, New Delhi

ITSSA 34/DEL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3545 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-05-2017
• Assessment Year: misc
• Appeal Filed On: 19-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: VED JAIN ADV SH ASHISH GOEL
• Keywords: Unexplained investment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI B.P.JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER IT(SS)A NO. 34/DEL /2014 BLOCK PERIOD 1.4.1988 TO 15. 10.1998 ANAND SWAROOP KHANDELWAL, 1163/6, KUCHA MAHAJANI, CHANDNI CHOWK, DELHI-06 VS ACIT, CIRCLE 29(1), NEW DELHI, (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN, ADV. SH. ASHIS H GOEL, CA RESPONDENT BY : SHRI S.K. JAIN, SR. DR DATE OF HEARING : 09.11.2017 DATE OF PRONOUNCEMENT: 27.12.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(A)-XXV , NEW DELHI. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERAT ION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS CONDUCTED ON 15/10/1998. PURSUANT TO THE SEARCH, TH E ASSESSEE WAS SERVED WITH A NOTICE DATED 11/11/1999 UNDER SECTION 158BC OF THE ACT AND IN RESPONSE THE ASSESSEE FILED HIS RETURN OF IN COME FOR THE BLOCK ITA 1468/DEL/2016 ASSESSMENT YEAR 2011-12 2 | P A G E PERIOD DECLARING AN INCOME OF RS. 3,47,000/-. THE A SSESSMENT WAS COMPLETED DETERMINING UNDISCLOSED INCOME OF RS. 22, 86,89,132/-, WHICH ON ASSESSEES APPEAL BEFORE THE FIRST APPELLA TE AUTHORITY AND ITAT WAS SUBSTANTIALLY REDUCED. CERTAIN ADDITIONS W ERE ALSO SET ASIDE AND REMITTED TO THE FILE OF THE AO BY THE ITA T. 2.1 THEREAFTER, THE AO, IN TERMS OF THE DIRECTIONS OF THE ITAT, AGAIN ISSUED NOTICE UNDER SECTION 143 (2) OF THE ACT ON T HE ASSESSEE AND AFTER HEARING THE ASSESSEE, THE AO PASSED ORDER UND ER SECTION 158BC OF THE ACT WHEREIN THE ASSESSEES UNDISCLOSED INCOM E WAS ASSESSED AT RS. 23,22,550/- WHICH COMPRISED OF ADDITION ON ACCO UNT OF UNDISCLOSED INVESTMENT AMOUNTING TO RS. 22,14,767/- , SPECULATIVE INCOME FROM FORWARD TRANSACTIONS AMOUNTING TO RS. 1 9,14,067/-, UNEXPLAINED INVESTMENT IN GROUP HOUSING SOCIETY AMO UNTING TO RS. 15,500/- AND ALLEGED INCOME FROM FORWARD TRANSACTIO NS AMOUNTING TO RS. 24,253/-. 2.2 THE ASSESSEE AGAIN APPROACHED THE LD. FIRST APP ELLATE AUTHORITY WHO DISMISSED THE ASSESSEES APPEAL AND, THEREAFTER , ON FURTHER APPEAL BY THE ASSESSEE, THE ITAT DELHI BENCH DELETED ALL T HE ADDITIONS EXCEPT ADDITION ON ACCOUNT OF SPECULATIVE INCOME FROM FORW ARD TRANSACTIONS ITA 1468/DEL/2016 ASSESSMENT YEAR 2011-12 3 | P A G E AMOUNTING TO RS. 19,14,067/- VIDE ORDER DATED 19/10 /2012 IN ITA NO. 02/DEL/2010. 2.3 SUBSEQUENTLY, THE AO IMPOSED PENALTY UNDER SECT ION 158BFA (2) OF THE ACT FOR THE BLOCK PERIOD AMOUNTING TO RS . 11,48,440/- WHICH WAS CONFIRMED BY THE LD. CIT (APPEALS). NOW, THE AS SESSEE HAS APPROACHED THE ITAT AND HAS CHALLENGED THE CONFIRMA TION OF PENALTY. 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE DREW OUR ATTENTION TO THE IMPUGNED ASSESSMENT ORDER AND SUBM ITTED THAT THE AO HIMSELF HAD NOT MADE ANY SEPARATE ADDITION OF RS . 19,14,067/- ON ACCOUNT OF ALLEGED SPECULATIVE INCOME FROM FORWARD TRANSACTIONS. HE SUBMITTED THAT THAT THE AO HIMSELF HAS MENTIONED IN THE ASSESSMENT ORDER THAT NO SEPARATE ADDITION WAS BEING MADE ON A CCOUNT OF THE TRANSACTION AS THIS AMOUNT OF RS. 19,14,067/-, RECE IVABLE BY THE ASSESSEE ON 12/05/1998 FROM SH. SHRI RAM, HAS BEEN CONSIDERED TO BE PART OF HIS OVERALL INVESTMENT IN HIS BUSINESS AND MERGED IN THE SUBSEQUENT BALANCE SHEET DATED 06/08/1998 FOR WHICH ADDITION OF RS. 22,14,767/- HAD ALREADY BEEN MADE. HE ALSO DREW OUR ATTENTION TO THE COMPUTATION OF INCOME AT PAGE 13 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE IMPUGNED AMOUNT ON WHICH THE PEN ALTY HAS BEEN ITA 1468/DEL/2016 ASSESSMENT YEAR 2011-12 4 | P A G E IMPOSED WAS NOT PART OF THE COMPUTATION THERE ALSO. IT WAS SUBMITTED THAT SINCE THE AMOUNT ITSELF WAS NOT ADDED BY THE A O, THERE WAS NO QUESTION OF IMPOSITION OF PENALTY ON THAT AMOUNT. 4. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIA NCE ON THE ORDERS OF THE AUTHORITIES BELOW AND VEHEMENTLY ARGU ED THAT THE PENALTY HAD BEEN RIGHTLY IMPOSED BUT HE COULD NOT N EGATE THE FACT THAT THE AMOUNT HAD BEEN SPECIFICALLY EXCLUDED BY T HE AO IN PAGES 7 AND 8 OF THE ASSESSMENT ORDER AS WELL AS THE COMPUT ATION ON PAGE 13 OF THE ASSESSMENT ORDER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE AVERMENTS OF T HE LD. AUTHORISED REPRESENTATIVE ARE CORRECT AS THE AO HIMSELF HAS ME NTIONED IN PAGE 8 OF THE ASSESSMENT ORDER THAT NO SEPARATE ADDITION W AS BEING MADE ON ACCOUNT OF TRANSACTION OF RS. 19,14,067/- AND THE S AME WAS BEING CONSIDERED TO BE A PART OF THE OVERALL INVESTMENT O F THE ASSESSEE IN THE BUSINESS AND ALSO MERGED IN THE BALANCE SHEET DATED 06/08/1998 FOR WHICH ADDITION OF RS. 22,14,767/- HAS ALREADY BEEN MADE. THE AO HAS ALSO MENTIONED THAT THIS VIEW HAS BEEN TAKEN AFTER GIVING THE BENEFIT OF TELESCOPING TO THE ASSESSEE AS PER THE DIRECTION S OF THE ITAT. THUS, ITA 1468/DEL/2016 ASSESSMENT YEAR 2011-12 5 | P A G E IT IS AMPLY CLEAR THAT THIS AMOUNT WAS NOT ADDED TO THE INCOME OF THE ASSESSEE. ACCORDINGLY, THERE IS NO QUESTION OF PENA LTY BEING IMPOSED ON THE IMPUGNED AMOUNT AS QUANTUM ADDITION ITSELF H AS NOT BEEN MADE BY THE AO IN THE FIRST PLACE. THUS, IT IS VERY MUCH CLEAR THAT THE IMPUGNED PENALTY HAS BEEN IMPOSED ON AN AMOUNT WHIC H HAS NOT BEEN ADDED TO THE INCOME OF THE ASSESSEE AT ALL. IN THE CIRCUMSTANCES, THERE IS NO GROUND FOR THE SUSTENANCE OF PENALTY AN D WE SET ASIDE THE ORDER OF THE LD. CIT (APPEALS) AND DIRECT THE AO TO DELETE THE PENALTY. 6. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27 TH DECEMBER, 2017. SD/- SD/- (B.P. JAIN ) (SUDHANSHU SRIVAST AVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH DECEMBER, 2017 DRAGON ITA 1468/DEL/2016 ASSESSMENT YEAR 2011-12 6 | P A G E COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGI STRAR