VIKRAM KUMAR BAJAJ,NEW DELHI V. DCIT, CENTRAL CIRCLE-32, NEW DELHI

ITA 2210/DEL/2023

AI Insights

This case involves cross appeals by Vikram Kumar Bajaj and the DCIT, Central Circle-32, New Delhi, concerning the assessment order under sections 143(3) and 153A of the Income Tax Act, 1961, following a search operation. The primary contention revolved around the legitimacy of the additions made to the assessee's income based on cash seized during the search. The CIT(A) had deleted some additions while confirming others, leading both parties to appeal. The Tribunal examined the evidences, including audited financial statements and the trust deed of the RNB Temple Trust, and considered the precedents set in similar cases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474562 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2018-2019
• Other Referred Cases: Vinod Kumar Bajaj vs. DCIT, ITA No.2189/Del/2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: VED JAIN; AMAN GARG
• Keywords: Additional evidence; Accommodation entries; Benefit of exemption; Bogus
• Section: 143(3); 143(1); 153A; 12A; 234B; 10B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.2210/Del/2023 Assessment Year: 2018-19 Vikram Kumar Bajaj, RNB House 1, Shivaji Enclave, Main Road, Near Raja Garden, New Delhi – 110 027. PAN: ACXPB6203D Vs DCIT, Central Circle-32, New Delhi. ITA No.2474/Del/2023 Assessment Year: 2018-19 DCIT, Central Circle-32, New Delhi Vs. Vikram Kumar Bajaj, RNB House 1, Shivaji Enclave, Main Road, Near Raja Garden, New Delhi – 110 027. PAN: ACXPB6203D (Appellant) (Respondent) Assessee by : Shri Ved Jain, Advocate & Shri Aman Garg, CA Revenue by : Shri Dayainder Singh Sidhu, CIT-DR Date of Hearing : 13.03.2025 Date of Pronouncement : 02.04.2025 ORDER These are cross appeals preferred by the assessee and the Revenue against the order dated 12.06.2023 of the Commissioner of Income-tax (Appeals)-30, ITA No.2210/Del/2023 ITA No.2474/Del/2023 2 New Delhi (hereinafter referred to as the ld. First Appellate Authority or ‘the Ld. FAA’ for short) in Appeal No.10373/2019-20 arising out of the appeal before it against the order dated 20.12.2019 passed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT, Central Circle-32, New Delhi (hereinafter referred to as the Ld. AO). 2. Heard and perused the record. The relevant facts are that a search was conducted in the case of Bajaj group on 20.04.2017 and cash amounting to Rs.22,55,680/- was seized from RNB House 2-3, Shivaji Enclave, Main Road, Opp. Mother Dairy, Near Raja Garden, New Delhi. During the search operation, statement of Shri Radhey Shyam Bajaj was recorded on 22.04.2017 and, in his statement, he had explained that the cash was duly accounted in the books of account of various RNB group and only present assessee knows of it. As there was no explanation from assessee, the ld. AO was not satisfied and made addition in the hands of the assessee. Before the ld.CIT(A), the assessee submitted details of accounted cash balance in audited financial statements/ITRs of various RNB entities along with audited financial statement, cash book, assessment order, ITRs, copies of which are available at pages 175 to 513 of the paper book. The ld.CIT(A) has deleted this addition to the extent of Rs.19,26,234/-, but, confirmed to the extent of Rs.39,946/- allegedly belonging to Vikram Kumar Bajaj (HUF). ITA No.2210/Del/2023 ITA No.2474/Del/2023 3 3. Then we find that consequent to the search on 20.04.2017, five lockers maintained by the RNB group were searched on 04.05.2017, 05.05.2017, 23.05.2017 and 24.05.2017 and cash were found in the lockers which were seized. Shri Vinod Kumar Bajaj had made a statement explaining the cash seized from locker No.111 and 198 alleging that the same pertained to RNB Temple Trust. The assessee in his statement recorded on 23.05.2017 explained that locker No.72 and 74 are used to keep cash in hand, petty cash of group individuals and entities and certain cash in locker belonged to the RNB Temple Trust. The assessee has also furnished copy of audited balance sheet of RNB Temple Trust for AY 2017-18 and copy of trust deed of the Temple Trust. The statement of Shri Vinok Kumar Bajaj substantiated the facts mentioned by the assessee. However, the addition was made by the AO alleging that the cash found is unaccounted money. An addition of Rs.1,30,00,000/- was made as seized from locker No.111 and 198 of HDFC Bank and Federal Bank. The same was deleted by the CIT(A), 4. Accordingly the both sides are in appeal and the grounds of both the appellants are reproduced below:- 4.1 The grounds taken by the assessee:- “1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT (A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the learned AO under section 153A r.w.s 143(3) is ITA No.2210/Del/2023 ITA No.2474/Del/2023 4 illegal and bad in law as the same has been passed without having valid jurisdiction. 3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the AO under section 153A r.w.s. 143(3) is bad and liable to be quashed as the same has been framed consequent to the search which was initiated under the wrong pretext. 4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the learned AO under section 153A r.w.s 143(3) is bad and liable to be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eyes of law. 5. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the assessment framed under section 153A r.w.s. 143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 6. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred in making the addition in order passed u/s 153A r.w.s 143(3) of the Act, without any incriminating material having been found during the course of search. 7. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the consequent reassessment framed under section 153A r.w.s 143(3) are in violation of mandatory provisions of Section 153D of the Act and as such the same is bad in eyes of law. (ii)That the CIT(A) has erred in ignoring the contention of the assessee that the purported approval u/s 153D of the Act is illegal, bad in law and also without any application of mind. 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed by the AO is invalid and bad in law as the same was passed in violation of the circular No. 19/2019 issued by CBDT which mandates that no order shall be passed without there being valid Document Identification Number (DIN). ITA No.2210/Del/2023 ITA No.2474/Del/2023 5 9. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 3,29,446/- made by the AO on account of cash found during the course of search treating the same as unexplained. (ii) That the addition has been confirmed rejecting the explanation given by the assessee that the above cash of Rs. 3,29,446/- belongs to Vikram Bajaj HUF, which is separately assessed and has been accounted for in its books of accounts and therefore, addition cannot be made in the hands of the assessee. 10. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the learned AO by indulging in conjecture and surmises only on the basis of presumption and assumption. 11. On the facts and circumstances of the case, the learned CIT (A) has erred in facts and in law in confirming interest charged u/s 234B and 234C of the Act. 12. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” 4.2 The grounds taken by the Revenue: “1. Whether On the facts and in the circumstances of the case, the Ld. CIT(A) is correct in deleting the addition of Rs. 1,30,00,000/- made by the AO by treating the cash amounting to Rs. 1,15,00,000/- and Rs. 15,00,000/- found from locker no. 111 and 198, HDFC Bank, Vishal Enclave, Delhi pertains to the RNB Tempe Trust despite the fact that Shri Vikram Bajaj was unable to provide any satisfactory explanation as to how the alleged “gupt daan” was collected by them and when, there was no registration under section 12A granted to the trust till date of search. 2. Whether on the facts and circumstances of the case, the LD. CIT(A) has erred in deleting the addition without appreciating the fact that the cash found in the locker is the undisclosed income for the AY. 2018-19 to be issued in the hand of the person who last operated the locker, who in this is Shri Vikram Bajaj. 3. Whether on the facts and circumstances of the case, the LD. CIT(A) is correct in deleting the addition of Rs. 19,26,234/- by giving the benefit of cash in hand shown in the audited books/cash book of the business concerns named RNB Overseas Pvt. Ltd., RNB Merchantile Pvt. Ltd., RNB Infrastructure Pvt. Ltd. and RNB International Pvt. Ltd. which amounted to ITA No.2210/Del/2023 ITA No.2474/Del/2023 6 Rs. 19,26,234/- without appreciating the fact that there being substantial evidence in this context. 4. Whether on the facts and circumstances of the case, the LD. CIT(A) has erred in deleting the addition without appreciating the fact that one of the Bajaj entity M/s Ram Bajaj Foundation was involved in dubious transaction of Money and providing accommodation entries by means of receipt of bogus donation in exchange of returning cash to the door. 5. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 6. The grounds of appeal are without prejudice to each other. 7. The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.” 5. Ld. AR has not contested the legal grounds raised in the appeal of assessee. Then with regard to the ground no. 1,2 and 4 in appeal of the revenue, though ld. DR has supported the assessment order but was not able to specifically controvert the findings of ld. CIT(A) in para 16.13, which we reproduce below:- “16.13 On perusal of the documentary evidences filed by the trust before CIT (Exemption) at the time of application for registration under section 12A of the Act, it is noticed that the trust is having PAN AACCTR9422P on which date of incorporation is mentioned as 09.08.2016. In the trust deed was executed on 09.08.2016 which was registered with the Registrar/ sub-registrar, VI A, New Delhi on 28.11.2016 vide registration number 1818 in book no.4 volume no.1141. As per this trust deed, the main object of the trust is to construct and maintain a place of worship at RNB Global City, Ganga Nagar. Road, Bikaner for the benefit of public at large. The list of the trustees includes Vikram Kumar Bajaj, Pramod Kumar Bajaj, Vinod Kumar Bajaj, Ishneet Gandhi and MK Ghadoliya. Among the trustees, Sh. Vikram Kumar Bajaj (appellant) is the president of the trust. Further on perusal of the audited balance sheet of the trust it is noticed that in the FY 2016-17 the trust has received donations amounting to Rs.1,78,93,000/- and corpus fund of Rs. 11,000/-, out of which fund of Rs.1,75,00,000/- was set apart for temple construction fund. Further, as on 31.03.2017 the trust had reported cash in hand of Rs. ITA No.2210/Del/2023 ITA No.2474/Del/2023 7 1,79,03,880/-. As per the written submissions in the case of Sh. Vikram Bajaj and Sh. Vinod Kumar Bajaj it has been submitted that the said cash in hand of RNB Temple Trust was held in different locker of the trustees Sh. Vikram Bajaj, Sh. Pramod Bajaj and Sh. Vinod Bajaj in the following manner: Name of locker Name of the locker holders Amount of cash found 72, Federal Bank, Rajouri Garden, Delhi Vikram Bajaj and Vi nod Bajaj Rs.41,00,000 299, SBI, Rajouri Garden, Delhi Vikram Bajaj and Vinod Bajaj Rs. 8,00,000 (out of Rs. 22,00,000/ found, balance Rs. 14,00,000 pertains to Ram Bajaj 111, HDFC Bank, Vishal Enclave, New Delhi Vikram Bajaj Rs. 1,15,00,000/- 198, HDFC Bank, Vishal Enclave, New Delhi Vikram Bajaj, Pramod Bajaj and Vinod Bajaj Rs. 15,00,000/- Total 1,79,00,000/. 6. Ld. AR has pointed out that the case of the assessee is squarely covered by the coordinate Bench decision in the case of Vinod Kumar Bajaj vs. DCIT, ITA No.2189/Del/2023 dated 20.11.2024. 7. We find that the ld. AO had made similar addition in respect of cash seized from locker No.72 of Federal Bank and locker No.299 of SBI bank by drawing similar presumption as done in the case of the assessee. That since Shri Vinod Kumar Bajaj has last operated these lockers, the cash belonged to the person that last operated the locker. 8. Now, we find that in case of Vinod Kumar Bajaj (supra), wherein similar addition was made, the coordinate Bench, has held in order dated 20.11.2024 (supra) as follows:- ITA No.2210/Del/2023 ITA No.2474/Del/2023 8 “11. Considered the rival submissions and material placed on record. We observed that lockers kept in the name of Vikram Kumar Bajaj and assessee were searched and cash found in locker no.72 of Federal Bank and Rs.41,00,000/- and locker no.299 of SBI of Rs.22,00,000/-. After considering the submissions of the assessee, these cash were belonged to RNB Temple Trust and Ram Bajaj Foundation. After analysing various evidences submitted before ld. CIT (A), ld. CIT (A) gave a clear finding that the cash found during the search relating to RNB Temple Trust to the extent of Rs.1,75,00,000/- and he sustained the addition of only Rs.4,00,000/- even though there is a cash balance outstanding in the RNB Temple Trust to the extent of Rs.1,79,00,000/-. Ld. CIT (A) gave relief to the extent of Rs.1,75,00,000/- only by observing the Balance Sheet that the funds earmarked for temple construction is only Rs.1,75,00,000/- and he has not considered the actual cash in hand with the Trust. After careful consideration, we are of the view that what is relevant is cash available with the Trust. As per the Balance Sheet submitted before us, it clearly indicates that the Trust holds cash in hand to the extent of Rs.1,79,00,000/-. Therefore, the cash found in the locker which pertains to RNB Temple Trust is already brought on record to the extent of Rs.1,79,00,000/-. Accordingly, the addition sustained by the ld.CIT(A) to the extent of Rs.4,00,000/- is already explained. Therefore, this addition of Rs.4,00,000/- is also allowed.” 9. We find that in order to substantiate the claim that the cash belonged to RNB Temple Trust, the assessee had filed the following documents:- - Copy of application Form 10A filed on 18.04.2017 in the office of CIT (Exemption), New Delhi (PB Pg. 129-132) - Copy of Trust Deed (PB Pg. 133-151) - Copy of PAN card of the Trust (PB Pg. 152) - List of Founder/Author (PB Pg.153) - List of trustees (PB Pg,154) - Copy of resolution for authorization (PB Pg. 155-156) - Copy of Financial Statements for AY 2016-17 (PB Pg. 157-161) ITA No.2210/Del/2023 ITA No.2474/Del/2023 9 - Copy of the audit report u/s 12A(b) of the Act in Form 10B of RNB Temple Trust was duly filed on the Income tax portal on 28.10.2017 (PB Pg.162-163) - Copy of intimation u/s 143(1) of the Act dated 30.08.2018 wherein return of income has been duly processed (PB Pg.164-173) - Copy of order of registration granted to the RNB Temple Trust on 16.10.2017 (PB Pg. 174) 10. We find that aforesaid evidences have been also considered in the case of assessee also and accordingly the Ld.CIT(A) has found the cash to be accounted in the hands of Temple Trust. Since the audited accounts of Temple Trust are not disturbed and the exemption benefits of Temple Trust are not disturbed by the department, there is no reason to disturb the findings of ld. CIT(A) and the factual acceptance of same by co-ordinate bench in the case of Vinod Kumar Bajaj (supra), thus without entering into the merits of assertions again on first principles, we are inclined to follow the co-ordinate bench decision, and find no substance in the grounds no 1,2 and 4 of revenue qua the present assessee too. 11. As with regard to the appeal of assessee and ground no. 3 in appeal of the revenue, we find that after taking into consideration the additional evidence and remand report, in para no. 17.5, ld.CIT(A) has made following vital observations:- “17.5 On careful consideration of the statements of Sh. Vikram Bujaj and the facts of the case, it is observed that the premises from which the cash ITA No.2210/Del/2023 ITA No.2474/Del/2023 10 was seized is the corporate office of the concerns of the Bajaj group from where the business activities of the group are controlled and managed. From the ITRs and the audited financials of the Bajaj group companies as referred by the appellant in its written submissions it is noticed that these concerns are registered at Premise no. 1, Shivaji Enclave, Main Road opp. Mother Dairy, Near Raja Garden, New Delhi which is adjacent to Premise No.2 and 3, Shivaji Enclave. All the three nos exist and operate as joint property as RNB House. This fact is also observed by the Authorized Officer while recording the statement of Sh. Vikram Bajaj on 20.04.2017. It is further noticed that no credit of \"cash in hand\" reported in the audited financials/ITR of these concerns has been given by the AO, while assessing the cash found during the course of search in hands of the appellant. It is further noted that the group has not claimed cash found at any other premise or locker as the cash of the business concerns mentioned in the table supra. The cash in the books of these concerns are mentioned in the audited financial statements, and no mistake whatsoever were pointed out by the AO and their books were accepted by the AO in their assessment orders u/s 153A. Accordingly, it is not justified on the part of the AO in rejecting all the cash found from these premises. In view of these facts, I find it reasonable and fair to allow the benefit of cash in hand shown in the audited books / cash book of the business concerns namely RNB Overseas Private Limited, RNB Merchantile Private Limited, RNB, Infrastructure Private Limited and RNB International Private Limited which amounted to Rs. 19,26,234/-. As regard to cash shown by the appellant in the books of Vikram Bajaj (HUF) amounting to Rs.3,29,446/-, I find that the appellant has not shown any business activity of the HUF in which cash was being generated. No statement was given at the time of search that the HUF of Sh. Vikram Bajaj used to operate from the corporate office at Shivaji Enclave. It is also noted that the HUFs of other family members namely Sh. Ram Narain Bajaj, Vinod Bajaj, Pramod Bajaj and Krishna Kumar Bajaj have been claimed to be operating from Bikaner. In the case Sh. Ram Narain Bajaj 2008-19, the appellant claimed that the cash in hand of these HUFs were kept at Bikaner. Further, the books of the HUF are not audited and there is no third-party verification/proof to show that the HUF was having cash in hand which was kept at the premise. Further Sh. Vikram Bajaj in his statement recorded u/s 132(4) at the time of search/ survey at the premises at 1,2,3 RNB House, Shivaji Enclave did not mention that any HUF used to function from the said premise, when he was asked a pointed question about the entities operating from the said premises. Accordingly, cash shown in the hands of HUF is considered as an afterthought / manipulation and is not being considered as a valid explanation.” 12. Since the ld. AO having opportunity in remand proceedings to examine the veracity of claim of assessee has failed to rebut the same with any material ITA No.2210/Del/2023 ITA No.2474/Del/2023 11 discrepancy in the books of business concerns of the group, the conclusion of ld. CIT(A) qua the amount of Rs. 19,26,234/- deserve no interference. 13. As with regard to addition of Rs. 3,29,445/- in the hands of assessee, we are of considered view that the existence, composition and operations of Vikram Bajaj (HUF) being not pleaded immediately at time of search statement, so we find no error in the findings of ld. CIT(A), while sustaining the addition to extent of Rs. 3,29,446/-. The grounds of both the sides have no merit. 14. Resultantly both the appeals are allowed partly with consequences to follow as per determination of grounds above. Order pronounced in the open court on 02.04.2025. Sd/- Sd/- (M. BALAGANESH) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 02nd April, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "