Mr. Jai Pal Aggarwal, New Delhi V. ACIT, New Delhi

ITSSA 8/DEL/2010

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8522 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-10-2012
• Assessment Year: misc
• Appeal Filed On: 29-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: O P SAPRA
• Keywords: Opportunity of being heard
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : D NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI CM GARG, JM IT(SS)A NO. 08/DEL/2010 BLOCK PERIOD 01.04.1985 TO 19.04.1996 MR.JAI PAL AGGARWAL VS. CIRCLE 22(1) A 22, FIRST FLOOR NEW DELHI FRIENDS COLONY EAST NEW DELHI PAN: ALUPA 5169 R (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.O.P.SAPRA, ADV. RESPONDENT BY:- SH. DK MISHRA , D.R. O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 158 BC(C ) READ WITH S.254 OF THE INCOME TAX ACT, 1961 ON 13.12.2009. AS THE SEA RCH WAS CONDUCTED ON 20.3.96, THE APPEAL WAS FILED DIRECTLY BEFORE TH E TRIBUNAL. 2. FACTS IN BRIEF:- THE ASSESSEE IS AN INDIVIDUAL. SEARCH UNDER SECTION 132(1) WAS CONDUCTED ON 20.3.1996 AT THE RE SIDENCE OF SHRI JAI PAL AGGARWAL AT A-22, FRIENDS COLONY, NEW DELHI AND AT HIS LOCKERS WITH PUNJAB NATIONAL BANK, ASHRAM ROAD AND CANARA BANK, MAHARANI BAGH, NEW DELHI ON 19.4.2006. DURING THE COURSE OF SEARC H AT THE ASSESSEES PREMISES CASH, JEWELLERY AND DOCUMENTS WERE FOUND A ND SEIZED. ASSESSMENT UNDER SECTION 158 BC(C) WAS FINALIZED IN THE CASE BY THE ERSTWHILE DCIT, SR-15, NEW DELHI ON 29.4.1997. THE SAID BLOCK IT(SS)A 8/DEL/2010 PAGE 2 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL ASSESSMENT ORDER WAS SET ASIDE BY THE HONBLE DELHI BENCH A OF THE ITAT VIDE THEIR COMBINED ORDER IN THE CASE OF SHRI JAI PAL AGGARWAL AND SMT.VIDHU AGGARWAL, IN IT(SS) NO.113/DEL/97 AND 12 7/DEL/97 DT. 23.7.2008. THE HONBLE ITAT GAVE THE FOLLOWING DIR ECTIONS IN THEIR ORDER: WE RESTORE THE MATTERS BACK TO THE FILE OF ASSESSI NG OFFICER WITH THE DIRECTION TO REFRAME THE ASSESSMENTS AFTER GIVING D UE OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. THE ASSESSEES ARE ALSO DIR ECTED TO COOPERATE WITH THE ASSESSING OFFICER FOR EXPEDITIONS FINALIZATION OF ASSESSMENTS. 3. THE ONLY ISSUE THAT ARISES FOR OUR ADJUDICATION IS AN ADDITION OF RS.13 LAKHS MADE BY THE ASSESSING OFFICER PLACED ON SEIZED MATERIAL ANNEXURE A9 PAGE 86 AND ANNEXURE A1 PAGE 31. 4. THE ASSESSING OFFICER CONFIRMED THE ADDITION BY HOLDING AS FOLLOWS:- AS DIRECTED ENQUIRIES WERE CONDUCTED TH IS DID NOT YIELD ANY CONCLUSIVE RESULT. HENCE RELIANCE IS PLACED ON THE SEIZED MATERIAL (ANNEXURE A9 PAGE 86 AND ANNEXURE A1 PAGE 31). ON PAGE 86 OF ANNEXURE A-9 SEIZED FROM THE ASSESSEES RESIDENCE T HE VALUE OF THE PROPERTY AT A-7/50, BHAJAN PURA IS MENTIONED AS 5 . EXAMINATION OF THE SEIZED PAPERS LEADS TO THE CONCLUSION THAT THE FIGURES MENTIONED IN THE PAPER ARE IN LACS WHICH HAS NOT BEEN NEGATED BY THE APPELLATE AUTHORITY ALSO. THEREFORE, THE CONTENTION OF THE A SSESSEE THAT THE FIGURES SHOULD BE TAKEN IN THOUSANDS IS NOT ACCEPTABLE. TH E ADDITION TO THE EXTENT TO RS.13 LACS IS SUSTAINED. PENALTY PROCEED INGS UNDER SECTION 158 BFA(2) IS INITIATED SEPARATELY. IT(SS)A 8/DEL/2010 PAGE 3 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL 5. THE LD.COUNSEL FOR THE ASSESSEE MR.OP SAPRA SUBM ITTED THAT THE ASSESSING OFFICER HAD OBVIOUSLY CONDUCTED ENQUIRIES WITH THE SUB REGISTRAR OFFICE AND HAS ALSO ISSUED NOTICES TO THE PARTIES, WHO PURCHASED AND SOLD THE PROPERTIES. HE SUBMITTED TH AT THE ASSESSEE WAS NOT IN POSSESSION OF THE COPIES OF THE POWER OF ATT ORNEY AND THE AGREEMENT OF SALE TO SELL AS THE ENTIRE DOCUMENTS W ERE HANDED OVER TO THE PURCHASERS OF THE PROPERTY. HE VEHEMENTLY CONTENDE D THAT THE ASSESSEE HAD PURCHASED PLOT NO.A-2/25 FOR RS.60,000/- IN THE YEAR 1988-89 AND THE SAME WAS REFLECTED IN THE STATEMENT OF AFFAIRS AS ON 31.3.1989 WHICH WAS SUBMITTED VIDE REPLY DT. 25.4.1997. HE SUBMITT ED THAT PLOT NO.A- 7/50 WAS PURCHASED FOR RS.49,000/- IN THE YEAR 1989 -90 AND THIS WAS ALSO REFLECTED IN THE STATEMENT OF AFFAIRS AS ON 31 .3.1990. 6. REFERRING TO THE SEIZED PAPER WHICH IS AT ANNEXU RE I TO HIS SUBMISSIONS, THE LD.COUNSEL SUBMITTED THAT THE ASSE SSING OFFICER HAS INCORRECTLY VALUED THE ABOVE FIGURES AT RS.5 LAKHS FOR PLOT A-7/50, BHAJAN PURA AND RS.8 LAKHS FOR PLOT NO.A-2/25 AT BHAJANPUR A WHILE DECODING THE FIGURES 5 & 8 MENTIONED IN THE ABOVE PAPERS SE IZED DURING THE SEARCH. 7. HE POINTED OUT THAT THESE VERY SAME PROPERTIES WERE SOLD IN THE FY 1995-96 FOR RS.1,49,000/- AND THAT SUCH SALE PROCEE DS WERE DECLARED BY THE ASSESSEE AND ACCEPTED BY THE REVENUE. THAT THI S CLEARLY SHOWS THAT THE VALUE OF RS.13 LAKHS ADOPTED BY THE ASSESSING O FFICER WAS WRONG. HE SUBMITTED THAT THE ASSESSEE HAD FILED EVIDENCE AND ALSO GIVEN THE NAMES IT(SS)A 8/DEL/2010 PAGE 4 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL OF THE PURCHASERS AND THE SELLERS WITH ADDRESSES, P HONE NUMBERS ETC. AND REQUESTED THE OFFICER WHO ISSUED SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT, 1961, AS THE ASSESSEE WAS NOT IN A POSITION TO COMPEL COOPERATION FROM THE SELLERS AS WELL AS THE PURCHAS ERS. HE POINTED OUT THAT WHEN ASSESSING OFFICER WAS ISSUED NOTICES UNDE R SECTION 131 DT. 18.12.2009 TO THE PRESENT OCCUPANTS OF THE PROPERTI ES, THEY HAD APPEARED BEFORE THE ASSESSING OFFICER AND FILED VAR IOUS DOCUMENTS. HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN 30 ITR 181 FOR THE PROPOSITION THAT DEPOSITION IN AN AFFIDAVIT, WHEN NOT CONTROVERTED, DESERVE TO BE ACCEPTED. HE RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SH FAKIRCHAND 49 ITR 561 AND THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . MAKHINI & TYAGI P.LTD. 267 ITR 433 FOR THE PROPOSITION THAT NO ADV ERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE IF THE ASSESSING OFFI CER DID NOT ENFORCE THE ATTENDANCE BY ISSUE OF NOTICE UNDER SECTION 131 OF THE INCOME TAX ACT, 1961. HE RELIED ON THE SUBMISSIONS MADE BEFORE TH E ASSESSING OFFICER. 8. GROUND NO.2 WHICH IS AGAINST THE LEVY OF INTERES T UNDER SECTION 158 BFA OF THE INCOME TAX ACT, 1961 HE SUBMITTED TH AT THE NOTICE UNDER SECTION 158 BC OF THE INCOME TAX ACT, 1961 DT. 13.1 .1997 WAS SERVED ON 15.1.1997. HE POINTED OUT THAT S.158 BFA OF THE IN COME TAX ACT, 1961 WAS BROUGHT INTO THE STATUTE BY THE INCOME TAX (AME NDMENT) ACT 1997 W.E.F. 1.1.1997 AND WHERE AS THE SEARCH IN THE CASE OF THE ASSESSEE WAS CONDUCTED ON 20.3.1996 AND AS SUCH THE PROVISION DO ES NOT APPLY TO THE IT(SS)A 8/DEL/2010 PAGE 5 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL ASSESSEE. FURTHER THAT AT THE TIME OF THE ORIGINAL ASSESSMENT NO INTEREST WAS LEVIED UNDER SECTION 158 BFA OF THE INCOME TAX ACT, 1961. HE ALSO DISPUTED THE PERIOD OF DELAY IN FILING THE BLOCK RE TURN. 9. THE LD.D.R. MR.DK MISHRA ON THE OTHER HAND VEHEM ENTLY CONTROVERTED THE ARGUMENTS OF THE ASSESSEES COUNSE L AND SUBMITTED THAT IT IS WELL KNOWN THAT BOTH PURCHASE AND SALE CONSID ERATION ARE SUPPRESSED IN REAL ESTATE TRANSACTIONS AND IN SUCH A SCENARIO AN ERROR OF ACCEPTING A PARTICULAR FIGURE AS SALE PRICE SHOULD NOT RESULT IN AN ERROR IN ACCEPTING THE PURCHASE PRICE. HE SUBMITTED THAT SA LE DEED IS THE BEST EVIDENCE AND THIS WAS NOT PRODUCED BY THE ASSESSEE. ON CONTENTS OF THE AFFIDAVIT HE SUBMITTED THAT THESE ARE SELF-SERVING DOCUMENTS AND THAT WHEN CONTRARY EVIDENCES ARE AVAILABLE, THE SAME CAN BE CONTROVERTED. HE RELIED ON THE FOLLOWING CASE LAWS:- SMT.GUNWANTI BAI RATILAL VS CIT, 146 ITR 140 (MP) SILK MUSEUM V. COMMISSIONER OF INCOME-TAX [2002] 25 7 ITR 22 (GUJ) HE SUBMITTED THAT THE ASSESSING OFFICER DID ISSUE S UMMONS UNDER SECTION 131 OF THE INCOME TAX ACT, 1961 AND HAS ALS O WRITTEN TO THE SUB REGISTRAR AND HENCE IT IS WRONG TO STATE THAT THE A SSESSING OFFICER DID NOT CONDUCT INVESTIGATIONS. AS INVESTIGATIONS DID NOT YIELD RESULTS, THE ASSESSING OFFICER RELIED ON SEIZED MATERIAL AND MAD E THE ADDITION. HE SUBMITTED THAT USUALLY THE FIGURE FIVE WOULD BE RS.5 LAKHS AND NOT RS.50,000/- AS CLAIMED BY THE ASSESSEE. HE TRIED T O DECODE THE SEIZED IT(SS)A 8/DEL/2010 PAGE 6 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL MATERIAL AND DEMONSTRATED THAT THE FIGURES WERE IN FACT IN LAKHS, WHICH IS CODED INTO SINGLE DIGITS. 10. IN REPLY THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THERE WERE NO SALE DEEDS EXECUTED, AS REGISTRATION WAS BANNED AND TRANSFERRED IN THOSE PERIODS AND THAT SALE TOOK PLACE BASED ON PO WER OF ATTORNEYS AND AGREEMENT TO SELL. HE POINTED OUT THAT THE REVENUE HAS ACCEPTED THESE VERY DOCUMENTS WHEN THE PROPERTIES WERE SOLD AND PR OCEEDS OFFERED TO TAX. 11. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDER ATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOL LOWS:- 12. A PERUSAL OF THE SEIZED MATERIAL DOES NOT SUGGE ST THAT ANY DATA RELATING TO PURCHASE OF PROPERTY IS MENTIONED. WE EXTRACT THE RELEVANT PORTION OF THE SEIZED MATERIAL. PROPERTIES SOLD : A 7/50, BHAJANPURA - 5 B 300 YARDS MAIN ROAD, BP - 8 THE ISSUE IS WHETHER THE FIGURE 5 READS RS.50,000 /- OR RS.5 LAKHS. A CLOSE EXAMINATION OF THE SEIZED MATERIAL DOES NOT L EAD US TO A CONCLUSION EITHER WAY. THUS WE HAVE TO NECESSARILY RELY ON OT HER EVIDENCES. 13. THE ASSESSING OFFICER IN THIS CASE HAS ISSUED N OTICE UNDER SECTION 131 OF THE INCOME TAX ACT, 1961 DATED 18.12.2009 TO MRS.SATHYA W/O MR. PRITHAM SINGH, MRS.BHIMA RANI. SHRI RAJPAL H /O SMT.BHEEMA IT(SS)A 8/DEL/2010 PAGE 7 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL RANI DULY APPEARED BEFORE THE ASSESSING OFFICER AND FILED THE FOLLOWING DOCUMENTS: GPA DT. 7.6.89, COPY AT PAGE 107-108 AGREEMENT DT. 7.6.89, COPY AT PAGE 109-110 WILL DT. 7.6.89, COPY AT PAGE 111 AFFIDAVIT DT. 7.6.89, COPY AT PAGE 112 RECEIPT DT. 7.6.89, COPY AT PAGE 113 14. AN ENQUIRY WITH THE SUB REGISTRARS OFFICE BY T HE AOHAS NOT YIELDED ANY RESULT AS THERE WERE NO REGISTRATIONS. A PERU SAL OF THESE DOCUMENTS SUBMITTED BY MR.RAJPAL SHOWS THAT THE AMOUNT IN QU ESTION IS IN THOUSANDS AND NOT IN LAKHS. THE RECEIPTS, THE AFFI DAVITS, THE AGREEMENTS OF SALE, REFLECT THE FACT THAT THE PROPERTY A/50 WAS PURCHASED FOR A SUM OF RS.46,000/- IN THE FY 1989-90 FROM SMT.KANTHA N ARANG. THE ASSESSING OFFICER HAS NO CONTRARY EVIDENCE, DESPITE DETAILED ENQUIRY. IN OUR OPINION THE ENTIRE ADDITION HAS BEEN MADE, BASE D ON SURMISES AND CONJECTURES. CONTENTS OF AN AFFIDAVIT HAVE TO BE A CCEPTED, UNLESS THEY ARE CONTROVERTED, BY EVIDENCE. 15. WHEN THESE PROPERTIES WERE SOLD IN THE YEAR 199 5-96 THE REVENUE HAS ACCEPTED THE SALE AT RS.60,000/- FOR PLOT NO. A 7/50, BHAJANPURA AND FOR RS.89,000/- FOR PLOT A2/25, BHAJANPURA TOTALING TO RS.1,49,000/- WHILE SO, THE FINDING OF THE ASSESSING OFFICER THAT THE PURCHASES WERE MADE IN LAKHS AND NOT IN THOUSANDS, CANNOT BE ACCEP TED. FOR ALL THESE REASONS WE UPHOLD THE CONTENTION OF THE ASSESSEE AN D DELETE THE ADDITION. IT(SS)A 8/DEL/2010 PAGE 8 OF 8 BLOCK PERIOD : 01.04.1985 TO 19.4.1996 JAI PAL AGGARWAL 16. COMING TO LEVY OF INTEREST UNDER SECTION 158, B FA OF THE INCOME TAX ACT, 1961, WE FIND THAT THE SEARCH IN THE CASE OF THE ASSESSEE WAS CONDUCTED ON 20.3.1996 AND WHEREAS THE PROVISION FO R LEVY OF INTEREST CAME INTO THE STATUTE WEF 1.1.997. HENCE THE PROVI SION DOES NOT APPLY IN THIS CASE. IN THE RESULT THE LEVY OF INTEREST IS H EREBY DELETED. 17. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD NOVEMBER,2012. SD/- SD/- (C.M.GARG ) ( J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 23 RD NOVEMBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON: