Kishor Kumar Sachdeva, V. ACIT, Range-I,

ITSSA 390/DEL/2005

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2881 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-01-2017
• Assessment Year: misc
• Appeal Filed On: 05-10-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN SENIOR
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Opportunity of being heard; Documents seized
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KULDIP SINGH, JUDICIAL MEMBER IT(SS)A NO.390/DEL./2005 (BLOCK PERIOD : 01.04.1989 TO 31.03.1999) SHRI KISHORE KUMAR SACHDEVA, VS. ACIT, RANGE 1, PROPRIETOR OF M/S. S.K.S. PROPERTIES, FARIDABAD. 3C / 193, NIT, FARIDABAD (HAYANA) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ALOK KUMAR GUPTA, CA REVENUE BY : SHRI S.K. JAIN, SENIOR DR DATE OF HEARING : 17.01.2017 DATE OF ORDER : 24.01.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THIS IS SECOND ROUND OF LITIGATION. PRESENT APPEAL HAS BEEN RECEIVED BY WAY OF REMAND AS PER ORDER DATED 11.02. 2014 PASSED BY THE HONBLE HIGH COURT OF PUNJAB AND HARYANA, CH ANDIGARH VIDE ITA NO.65 OF 2008 AFTER SETTING ASIDE THE ORDE R DATED 18.05.2007 PASSED BY THE ITAT, DELHI BENCH A, NEW DELHI TO DECIDE AFRESH ON MERITS IN ACCORDANCE WITH LAW. E ARLIER, THE COORDINATE BENCH OF THE TRIBUNAL DECIDED THE PRELIM INARY ISSUE, ITA NO.390/DEL./2005 2 AS TO WHETHER THE NOTICE ISSUED UNDER SECTION 158B D WAS A VALID NOTICE AND QUASHED THE ASSESSMENT. 2. NOW, THE ASSESSEE BY FILING THE PRESENT APPEAL S OUGHT TO SET ASIDE THE IMPUGNED ORDER ON MERIT ON THE GROUNDS IN TER ALIA THAT :- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT A) ACIT, RANGE - 1, FARIDABAD HAD JURISDICTION TO ISSUE NOTICE U/S 158BD. B) THE NOTICE ISSUED U/S 1588D WAS A VALID NOTICE. C) THAT PROPER OPPORTUNITY WAS GIVEN TO THE ASSESS EE. D) PROVISIONS OF CHAPTER XIV-B WERE COMPLIED WITH. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDI TION OF RS.50,000/- AS UNDISCLOSED INVESTMENT IN DOUBLE STO RY HOUSE IN NH-2. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDI TION OF RS.20,000/- AS INCOME FROM UNDISCLOSED SOURCES. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDI TION OF RS.1,10,000/- & RS.31,200/- AS UNDISCLOSED PROFIT E ARNED BY THE ASSESSEE. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDI TION OF RS.1,60,000/- & RS.1,10,000/- AS INVESTMENT IN PROP ERTY NO.839/49, FARIDABAD. 6. THE ASSESSEE DENIES LIABILITY TO PAY INTEREST CHARGED U/S 158BFA(1). ITA NO.390/DEL./2005 3 7. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND OR DELET E ANY OF THE GROUNDS OF APPEAL. 3. BRIEFLY STATED FACTS OF THIS CASE ARE : DURING T HE SEARCH AND SEIZURE OPERATION CONDUCTED ON THE BUSINESS AND RES IDENTIAL PREMISES OF SHRI M.L. SAINI, WHO WAS HAVING BUSINES S DEALING WITH ASSESSEE, AND OTHERS ON 10.03.1999, CERTAIN INCRIMI NATING DOCUMENTS WERE FOUND, ON THE BASIS OF WHICH NOTICE U/S 158BD WAS ISSUED TO THE ASSESSEE FOR THE BLOCK PERIOD 01. 04.1989 TO 10.03.1999 WHICH REMAINED UNSERVED TILL 23.04.2002 AND THEN ANOTHER NOTICE U/S 142(1) WAS ISSUED AND SERVED ON 25.04.2002 AND IN RESPONSE THERETO, ASSESSEE FILED ITS RETURN FOR THE BLOCK PERIOD SHOWING NIL INCOME FROM UNDISCLOSED SOURCES. 4. ASSESSEE WAS CALLED UPON TO EXPLAIN ENTRIES WHIC H WERE SHOWN BY SHRI M.L. SAINI IN THE DOCUMENTS SEIZED BY THE DEPARTMENT, COPIES OF WHICH HAVE BEEN SUPPLIED TO T HE ASSESSEE BUT THE ASSESSEE FAILED TO JOIN THE PROCEEDINGS DESPITE ADJOURNING THE CASE FOR 05.03.2003 AND 12.03.2003. THEN, ANOTHER NOTICE U/S 143(2) WAS ISSUED AND THE CASE WAS FIXED FOR 25.03. 2003 AND ASSESSEE FILED WRITTEN SUBMISSIONS THROUGH SHRI R.K . MALHOTRA. ASSESSEE ACCEPTED SOME TRANSACTIONS AND DENIED SOME OTHER TRANSACTIONS ON THE PRETEXT THAT HE DOES NOT KNOW A BOUT THESE TRANSACTIONS. ASSESSEE WAS ISSUED A QUESTIONNAIRE DATED ITA NO.390/DEL./2005 4 19.02.2003 REQUIRING HIM TO EXPLAIN THE ENTRIES. A O HAS ABRUPTLY CAME TO THE CONCLUSION THAT THE ASSESSEE HAS PAID A SUM OF RS.95,000/- DURING THE YEAR 1996 AND RS.4,11,200/- DURING THE YEAR 1997 AND SOURCE OF THESE AMOUNTS WERE REMAINED UNEX PLAINED AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE FOR THE B LOCK PERIOD AT RS.5,06,200/- FROM UNDISCLOSED SOURCES. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS PARTLY ALLOWED THE APPEAL . FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL WHO HAS QUASHED THE NOTICE ISSUED U/S 158BD VIDE ORDER DATE D 18.05.2007, WHICH WAS CHALLENGED BEFORE THE HONBLE HIGH COURT OF PUNJAB & HARYANA BY THE REVENUE AND THE HONBLE HIGH COURT A LLOWED THE REVENUES APPEAL AND REMANDED THE CASE TO THE TRIBU NAL FOR DECIDING AFRESH ON MERITS. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. AO ASSESSED THE INCOME OF THE ASSESSEE FOR THE B LOCK PERIOD 01.04.1989 TO 31.03.1999 U/S 158BD AT RS.5,06,200/- BEING INCOME FROM UNDISCLOSED SOURCES BY RETURNING THE FO LLOWING FINDINGS :- ITA NO.390/DEL./2005 5 3. THE ASSESSEE IN HIS WRITTEN SUBMISSIONS HAS ACC EPTED SOME OF THE TRANSACTIONS AND WHERE AS SOME OF THESE HAVE BEEN DENIED ON THE PRETEXT THAT HE DOES NOT KNOW ABOUT THESE TRANS ACTION. HE HAS FURTHER STATED THAT IT IS WELL SETTLED LEGAL POSITI ON THAT MERE ENTRIES OR NAME IN THE BOOK OF THIRD PARTY IN THE DAIRIES O R IN A LOOSE PAPERS HAS NO EVIDENTIAL VALUE AS HELD BY THE HONBLE SUPR EME COURT IN THE CASE OF L.K. ADVANI VS. CBI (1997) UI DRJ AND OTHER AND ALSO IN CASE OF SHUKLA & OTHERS IAR 1998 SC.BECAUSE HE HIMSELF. THE ASSESSEE WAS ISSUED A QUESTIONNAIRE DATED 19.0 2.2003 REQUIRING HIM TO EXPLAIN THE FOLLOWING ENTRIES :- DATE / YEAR CASH PAID (RS.) CASH RECEIVED (RS.) 17.9.96 50,000 - 17.9.96 - 50,000 17.9.96 - 50,000 06.11.96 - 25,000 15.1.97 - 20,000 08.05.97 1,10,000 - 08.05.97 31,200 - 30.08.95 1,60,000 - 01.09.95 1,10,000 - THE ABOVE ENTRIES WHEN RESCHEDULED IN THE CHRONOLOG ICAL APPEARS AS UNDER :- DATE / YEAR CASH PAID (RS.) CASH RECEIVED (RS.) 17.9.96 50,000 50,000 .9.96 - 50,000 DATE / YEAR CASH PAID (RS.) CASH RECEIVED (RS.) 17.9.96 - 50,000 06.11.96 - 25,000 15.1.97 - 20,000 (MINUS) 1,45,000 50,000 95,000 1997 08.05.97 1,10,000 - 08.05.97 31, 200 - 30.08.95 1,60,000 - 01.09.97 1,10,000 - 4,11,200 95,000 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS P AID A SUM OF RS.95,000/- DURING THE YEAR 1996 AND RS.4,11,200 /- DURING THE YEAR 1997. THE SOURCE OF THIS AMOUNT REMAINS UNEXP LAINED AND THE ITA NO.390/DEL./2005 6 SAME IS, THEREFORE, ADDED BACK TO THE INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT. IN VIEW OF THIS TOTAL INCOME FOR THE BLOCK PERIOD I S ASSESSED AT RS.5,06,200/- FROM THE UNDISCLOSED SOURCES. 8. BARE PERUSAL OF THE FINDINGS RETURNED BY AO GOES TO PROVE THAT EXCEPT DISCLOSING CERTAIN DATES AND FIGURES OF MAKING PAYMENT IN CASH AND RECEIVING PAYMENT IN CASH, WITHOUT DISC LOSING AS TO WHO HAS MADE THE PAYMENT AND WHO HAS RECEIVED THE S AID PAYMENT PROCEEDED TO ASSESS THE INCOME OF THE ASSESSEE AT R S.5,06,200/- FROM UNDISCLOSED SOURCES. AO HAS ALSO NOT CLARIFIE D AS TO WHICH OF THE TRANSACTIONS WERE ACCEPTED BY THE ASSESSEE AND WHICH OF THE TRANSACTIONS WERE DENIED BY THE ASSESSEE. SO, THE ORDER PASSED BY AO IS CRYPTIC AND NON-SPEAKING AND THIS FACT HAS BE EN FAIRLY CONCEDED BY THE LD. DR FOR THE REVENUE. SO, IN THE SE CIRCUMSTANCES, WE HAVE NO OPTION EXCEPT TO RESTORE THE FILE TO AO TO PASS FRESH ORDER BY PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE PARTIES. CONSEQUENTLY, PRESENT APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF JANUARY, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBE R DATED THE 24 TH DAY OF JANUARY, 2017 TS ITA NO.390/DEL./2005 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.