ACIT, New Delhi V. Shri Bharat Bhushan Bansal, New Delhi

ITSSA 8/DEL/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7514 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-05-2012
• Assessment Year: misc
• Appeal Filed On: 07-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GEETMALA M OHANTHY
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA IT(SS) A NO. 8/DEL/2011 BLOCK PERIOD: 1997-98 TO 2003-04 ASSISTANT COMMISSIONER OF IT, VS. SHRI BHARAT BHUS HAN BANSAL, CIRCLE 25(1), 148, BHERA ENCLAVE, NEW DELHI. PASCHIM VIHAR, DELHI (PAN: AAHPG5146Q) (APPELLANT) (RESPONDENT) APPELLANT BY: MS. GEETMALA M OHANTHY, CIT(DR) RESPONDENT BY: SHRI SURESH KUMAR GUPTA, CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS), NEW DELHI DATED 28.12.2010 FOR THE BL OCK PERIOD STARTING FROM 01.04.1996 ENDING ON 13.2.2003. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDER: 1. DELETING THE PROTECTIVE ADDITION MADE BY THE A. O. WITHOUT APPRECIATING THAT THE ISSUE OF SUBSTANTIAL ADDITION HAS STILL NOT ASSUMED FINALITY IN THE CASE OF THE COMPANY. 2. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CONDUCTED ON 13.2.2003 AT THE RESIDENCE OF THE ASSE SSEE. ASSESSING OFFICER 2 HAS OBSERVED THAT THE SEARCH WAS PART OF THE LARGER SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASES OF M/S. GOPAL VA NASPATI GROUP OF CASES CONSISTING OF M/S. SHYAM SUNDER (HARYANA) IND. PVT. LTD., M/S. SAGAR INTERNATIONAL PVT. LTD. AND M/S. SHYAM SUNDER VANAS PATI LTD. ASSESSING OFFICER HAD PASSED AN ASSESSMENT ORDER UNDER SECTIO N 158BC ON 28.2.2005. HE DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AS UNDER:- 1. SUBSTANTIVE ADDITION RS. 3,70,987 2. PROTECTIVE ADDITION RS.5,14,22,162 TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD: RS.5,17,93,149 3. ON APPEAL, LEARNED CIT(APPEALS) HAS DELETED THE PROTECTIVE ADDITION AND REDUCED THE SUBSTANTIVE ADDITION TO RS.1,78,900 AS AGAINST RS.3,70,987 MADE BY THE ASSESSING OFFICER. 4. DISSATISFIED WITH THE LEARNED CIT(APPEALS)S ORD ER DATED 6.12.2005, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE ITA T VIDE IT(S.S) A. NO.44/DEL/06. THE APPEAL OF THE REVENUE HAS BEEN AL LOWED FOR STATISTICAL PURPOSES AND ITAT HAS REMITTED THE ISSUES WITH RESP ECT TO THE PROTECTIVE ADDITION TO THE FILE OF THE ASSESSING OFFICER. THE OBSERVATIONS OF THE ITAT READ AS UNDER: 3 4. WE HAVE CONSIDERED THE SUBMISSIONS. IT IS NOTIC ED FROM THE ASSESSMENT ORDER THAT THE ASSESSING AUTHORITY HAS M ADE THE PROTECTIVE ADDITIONS ON THE GROUND SINCE THE CONTENTION OF TH E ASSESSEE IS NOT VERIFIED AS THE BOOKS OF ACCOUNT HAVE NOT BEEN PROD UCED/NEITHER ARE THE PHOTOCOPIES AVAILABLE HENCE PROTECTIVE ADDITION IS BEING DONE IN THE HANDS OF THE ASSESSEE. THE SUBSTANTIVE ADDITION S WOULD BE MADE IN THE HANDS OF THE COMPANY IF THE CONTENTION OF THE A SSESSEE IS CORRECT AND SUBSEQUENT REMEDIAL MEASURE WOULD BE TAKEN FOR THE ASSESSEE. THUS, IT IS NOTICED THAT THE PROTECTIVE ADDITIONS H AVE BEEN MADE ONLY BECAUSE THE CONTENTION OF THE ASSESSEE COULD NOT BE VERIFIED IN THE ABSENCE OF BOOKS OF ACCOUNT. 5. IN REPLY TO THE QUERY FROM THE BENCH, THE LEARNE D COUNSEL ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE WRIT PETI TION AS FILED BY THE COMPANIES HAVE NOT YET BEEN DISPOSED OFF. THIS BEIN G SO, WE ARE OF THE VIEW THAT THE INTEREST OF JUSTICE WOULD BE SERV ED IF THE PROTECTIVE ADDITIONS ARE RESTORED TO THE FILE OF THE ASSESSING AUTHORITY TO REDO THE ASSESSMENT IN REGARD TO THE ISSUE OF PROTECTIVE ADD ITIONS AFTER THE GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBST ANTIATE HIS CLAIM, AND WE DO SO. IN THE CIRCUMSTANCES, THE FINDING OF THE LEARNED CIT(APPEALS) ON THIS ISSUE IS REVERSED AND THE ISSU ES IN REGARD TO THE PROTECTIVE ADDITIONS REVENUE ARE RESTORED TO THE FI LE OF THE A.O. WHO SHALL REDO THE ASSESSMENT IN REGARD TO THE SAID ISS UES AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HIS C LAIM. IN REGARD TO THE ACTION OF THE LEARNED CIT(APPEALS) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF THE UNDISCLOSED INVESTMENT IN JEWELLE RY. IT IS NOTICED THAT THIS TRIBUNAL HAS IN THE CASE OF SHRI BALWANT BANSAL REFER TO SUPRA AFTER DRAWING SUPPORT FROM THE INSTRUCTION NO. 1916 DATED 11.05.1994 4 ISSUED BY THE CBDT HAD UPHELD THE ACTION OF THE LEA RNED CIT(APPEALS) IN DELETING THE ADDITION. RESPECTFULLY FOLLOWING THE DECISION OF THIS TRIBUNAL IN THE CASE OF SHRI BALWA NT BANSAL, REFER TO SUPRA THE FINDING OF THE LEARNED CIT(APPEALS) ON TH IS ISSUE STANDS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. 5. ASSESSING OFFICER HAS PASSED THE FRESH ASSESSMEN T ORDER ON 10.12- 2009 UNDER SECTION 158BC OF THE INCOME-TAX ACT, 196 1 READ WITH SECTION 254 OF THE ACT. IT WAS CONTENDED BY THE ASSESSEE TH AT THE DOCUMENTS ON THE BASIS OF WHICH PROTECTIVE ADDITION IS BEING MADE IN HIS HANDS PERTAINS TO THE COMPANY AND, THEREFORE, NO PROTECTIVE ADDITION DESE RVES TO BE MADE. THE ASSESSEE SOUGHT TO PRODUCE ALL THOSE DOCUMENTS INVE NTORIZED IN AS A1 TO A12. LEARNED ASSESSING OFFICER DID NOT CONSIDER THE NATURE OF SEIZED MATERIAL BUT REPEATED THE ASSESSMENT ORDER. HIS FIN DINGS READ AS UNDER:- THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED. TH E ASSESSEE HAS INFORMED THAT HON'BLE PUNJAB AND HARYANA HIGH COURT HAS NOT YET VACATED THE STAY ON THE POST SEARCH PROCEEDINGS IN THE CASE OF THE ABOVE NAMED COMPANY BUT SINCE THE DIRECTOR HAS CONF IRMED THAT THESE DOCUMENTS PERTAIN TO THE COMPANY NAMELY M/S. SHYAM SUNDER VANASPATI LTD. WHICH HAS THE REGISTERED OFFICE AT T HE PLACE AT THE PLACE WHERE THE DOCUMENTS HAVE BEEN FOUND, HOWEVER, SINCE THE ASSESSMENT OF THE ABOVE COMPANY HAS BEEN STATED BY THE HON'BLE PUNJAB AND 5 HARYANA HIGH COURT, I AM NOT INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE AND THE ADDITIONS MADE IN THE ORIGINAL ASS ESSMENT AS PROTECTIVE ADDITION IS AGAIN MAINTAINED TO SAFEGUAR D THE INTEREST OF THE REVENUE AND THE ASSESSEE AND THE ABOVE COMPANY SHAL L HAVE CHANCE TO PROVE THE DOCUMENTS BELONGING TO THE ABOVE COMPANY WHEN THE ASSESSMENT OF THE COMPANY AS A RESULT OF SEARCH IS UNDERTAKEN. IN VIEW OF THIS, PROTECTIVE ADDITION OF RS.5,14,162 IS MADE TO THE UNDISCLOSED INCOME IN ADDITION TO THE SUBSTANTIVE ADDITION OF R S.1,78,900 CONFIRMED BY THE LEARNED CIT(APPEALS) AND ALSO BY T HE ITAT (AS DISCUSSED ABOVE). WITH THESE REMARKS, THE TOTAL INC OME OF THE ASSESSEE IS COMPUTED AS UNDER: THE ASSESSED AS UNDISCLOSED INCOME AS UNDER: 1. SUBSTANTIVE ADDITION RS. 1,78,900 2. PROTECTIVE ADDITION RS.5,14.22.162 TOTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD RS. 5,16,01,062 6. ON APPEAL, ASSESSEE CONTENDED THAT THE ITAT HAS DIRECTED THE ASSESSING OFFICER TO GO THROUGH THE BOOKS OF ACCOUN T OF THE SAID COMPANY AND THEREAFTER ADJUDICATE THE ISSUE WHETHER ANY PRO TECTIVE ADDITION DESERVES TO BE MADE IN THE HANDS OF THE ASSESSEE. LEARNED AS SESSING OFFICER HAS NOT GONE THROUGH THOSE ASPECTS. WE FIND THAT THE LEARNE D CIT(APPEALS) HAS SIMPLY REPRODUCED THE LETTER OF THE ASSESSEE ON PAG E 3 OF THE IMPUGNED ORDER DID NOT RECORD ANY FINDING AND DELETED THE PROTECTI VE ADDITION BY OBSERVING AS UNDER: 6 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE AR AND PERUSED THE MATERIAL ON THE RECORD. FOLLOWING MY PR EDECESSORS ORDER DATED 06.12.2005 IN THIS CASE FOR RELEVANT BLOCK PE RIOD; THE PROTECTIVE ADDITION MADE BY THE A.O. IS HEREBY DELETED. ACCORD INGLY, THE APPELLANT GETS RELIEF. 7. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. LEARNED DR HAS POINTED OUT T HAT THE ASSESSMENT IN THE CASE OF COMPANY HAS BEEN STAYED BY THE HON'BLE PUNJ AB AND HARYANA HIGH COURT, THEREFORE, IT WAS DIFFICULT FOR THE REVENUE TO PASS THE ASSESSMENT ORDER ON SUBSTANTIVE BASIS IN THE CASE OF THE COMPANY AND CONSEQUENTLY PROTECTIVE ADDITION HAS BEEN MADE. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT ALL THE DOCUMENTS WERE SEIZED FROM THE PREMISES OF THE COMPANY AND THE ASSESSING OFFICER COULD RECORD A FI NDING ON THOSE DOCUMENTS. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT IS QUITE UNFORTUNATE THAT E VEN AFTER SECOND ROUND OF LITIGATION, ASSESSING OFFICER DID NOT BOTHER TO ASC ERTAIN THE NATURE OF DOCUMENTS AND HOW ASSESSEE CAN BE ASSOCIATED WITH T HESE DOCUMENTS, THE ASSESSMENT PROCEEDINGS HAS BEEN STAYED IN THE CASE OF THE COMPANY BUT EVEN ON PROTECTIVE BASIS ASSESSING OFFICER HARBORED A BE LIEF THAT IN SOME WAY ASSESSEE APPEARS TO BE ASSOCIATED WITH THOSE DOCUME NTS THEN HE COULD HAVE 7 CALLED FOR THOSE DOCUMENTS, INVESTIGATE THEIR NATUR E AND RECORD A SPECIFIC FINDING, THEREAFTER HE COULD SAY WHETHER EVEN ON PR OTECTIVE BASIS, AN ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE OR NOT. TH E PROTECTIVE ADDITION ARE BEING MADE WHERE IT IS DIFFICULT TO ASCERTAIN IN WH OSE HANDS THE INCOME IS TO BE ASSESSED. IN THE PRESENT CASE, WHEN ITAT HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER, HE AT LEAST DISCUSSED THE ISSUE, WHAT IS THE OUTCOME OF EACH DOCUMENTS AND HOW ASSESSEE ASSOCIATED WITH THESE DOCUMENTS. PRIMA FACIE, IF SOME REASONABLE NEXUS IS DISCERNIBL E WITH THE ASSESSEE ONLY THEN HE COULD HAVE MADE THE PROTECTIVE ADDITION. TH E LEARNED ASSESSING OFFICER HAS UNNECESSARILY DRAGGED THE ASSESSEE IN T HE SECOND ROUND OF LITIGATION. WHEN THE MATTER TRAVELLED TO THE LEARNE D CIT(APPEALS), HE ALSO DID NOT BOTHER TO GO INTO THE FACTS AND CIRCUMSTANC ES. HE SIMPLY RELIED UPON THE ORDER OF HIS PREDECESSOR WHICH IS NO MORE IN EX ISTENCE. LEARNED FIRST APPELLATE AUTHORITY OUGHT TO HAVE APPLIED HIS MIND TO THE SEIZED MATERIAL, IF ANY, OUGHT TO HAVE RECORDED A CATEGORICAL FINDING. THE ORDER OF THE LEARNED CIT(APPEALS) DATED 6.12.2005 PASSED IN THE ORIGINAL ROUND OF LITIGATION HAS ALREADY BEEN SET ASIDE BY THE ITAT, THEREFORE, LEAR NED CIT(APPEALS) OUGHT TO HAVE NOT HARPED UPON THAT ORDER. NEITHER THE ASS ESSING OFFICER NOR THE LEARNED CIT(APPEALS) HAS COMMENTED ON MERITS ABOUT THE NATURE OF ADDITION AND WE ARE AGAIN ON THAT VERY POINT WHICH WE LEFT ON 25.7.2008 8 WHILE DECIDING IT(S.S) A. NO. 44/DEL/06 I.E. THE AP PEAL OF THE REVENUE. FACED WITH THIS DIFFICULTY, WE SET ASIDE BOTH THE O RDERS AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. WE DIREC T THE ASSESSING OFFICER TO RECORD SPECIFIC FINDING ON EACH DOCUMENTS, IF ANY, HE IS USING FOR MAKING EVEN PROTECTIVE ADDITION. IT IS NEEDLESS TO SAY THA T THE ASSESSING OFFICER SHALL GRANT AN OPPORTUNITY OF HEARING TO THE ASSESSEE BEF ORE READJUDICATING THE ISSUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 04.05.20 12 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/05/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR