ACIT,, Chandigarh v. Sh. Rajesh Syal,, Chandigarh

ITA 129/CHANDI/2009 | 1998-1999
Pronouncement Date: 27-07-2012 | Result: Allowed

Appeal Details

RSA Number 12921514 RSA 2009
Assessee PAN YFROM1991T
Bench Chandigarh
Appeal Number ITA 129/CHANDI/2009
Duration Of Justice 3 year(s) 5 month(s) 16 day(s)
Appellant ACIT,, Chandigarh
Respondent Sh. Rajesh Syal,, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-07-2012
Date Of Final Hearing 23-07-2012
Next Hearing Date 23-07-2012
Assessment Year 1998-1999
Appeal Filed On 10-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI T.R. SOOD AM AND MS. SUSHMA CHOWLA JM ITA NO. 129/CHD/2009 ASSESSMENT YEAR: 1998-99 A.C.I.T. CIRCLE 3(1) V. RAJESH SYAL CHANDIGARH H NO. 1285 SECTOR 42 CHANDIGARH PAN: (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.K. MITTAL RESPONDENT BY: SHRI S.K. MUKHI DATE OF HEARING: 23.07.2012 DATE OF PRONOUNCEMENT: 27.07.2012 ORDER PER T.R. SOOD A.M IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) IN APPEAL NO. 133/P/06-07 VIDE ORDER DATED 5.12.2008 H AS ERRED IN DELETING: I) THE ADDITION BY HOLDING THAT AS THE OWNERSHIP O F THE DEPOSITS HAS NOT BEEN PROVED IN THE HANDS OF SHRI RAJESH SYAL DUE TO LACK OF EVIDENCE THE DEPOSITS CANNOT BE SAID TO BE BELONGING TO THE ASSE SSEE. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 2. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER RECEIVED REPOT FR OM THE ITO WARD 1 PANCHKULA THAT MANY ACCOUNTS WERE OPENED IN THE NAM E OF SHR S.K. SHARMA AND SMT. KIRAN SHARMA AT THE BEHEST OF SHRI RAJESH SYAL DIRECTOR OF MARIGOLD LEASING INDIA LTD. IN THESE ACCOUNTS HUGE AMOUNTS T OTALING TO RS. 2 23 73 216/- WERE MADE. VARIOUS NOTICES WERE SENT TO THE ASSESS EE BUT NOBODY APPEARED BEFORE HIM. IT WAS EXPLAINED BEFORE US THAT THE AS SESSEE WAS IN THE JAIL THEREFORE NO REPRESENTATION COULD BE MADE. DURIN G ASSESSMENT PROCEEDINGS IT WAS FURTHER NOTICED THAT SHRI S.K. SHARMA WAS AN EMPLOYEE OF M/S MARIGOLD LEASING (INDIA) PVT LTD. AND WAS GETTING SALARY OF RS 3500/- AND HRA OF RS. 1000/- PER MONTH AND HE WAS MADE TO OPEN THESE ACCO UNTS IN HIS NAME THE OPERATION OF WHICH WAS UNDER THE CONTROL OF HIS EMP LOYER SHRI RAJESH SYAL WHO 2 ROUTED PAYMENTS FOR PURCHASE OF LAND AND LAND DEVEL OPMENTS THROUGH THESE ACCOUNTS. IT WAS FURTHER NOTICED THAT THE INCOME O F SMT. KIRAN SHARMA WAS ASSESSED AT RS. 47 27 000/- ON PROTECTIVE BASIS BEC AUSE THE MONEY BELONGED TO THE ASSESSEE I.E. SHRI RAJESH SYAL. SIMILARLY I N CASE OF SHRI S.K. SHARMA INCOME WAS ASSESSED ON PROTECTIVE BASIS AT RS. 2 03 87 061/-. IN THIS BACKGROUND THE ASSESSING OFFICER MADE AN ADDITION O F RS. 2 50 65 821/- (RS. 2 03 38 821/- PLUS RS. 47 27 000/-). 3. ON APPEAL BEFORE THE LD. CIT(A) IT WAS MAINLY S UBMITTED THAT THERE WAS NO JUSTIFICATION ON SUBSTANTIVE ASSESSMENT IN THE H ANDS OF THE ASSESSEE WITHOUT MAKING PROPER ENQUIRY. THE ADDITION HAS BEEN MADE MAINLY ON THE BASIS OF SUBMISSIONS OF SHRI S.K. SHARMA AND HIS WIFE SMT. K IRAN SHARMA WITHOUT AFFORDING ANY PARTICULAR CROSS EXAMINATION. THE AS SESSEE HAD NOTHING TO DO WITH THE DEPOSITS MADE BY SHRI S.K. SHARMA AND HIS WIFE SMT. KIRAN SHARMA. IT WAS STATED THAT SHRI S.K. SHARMA HAS PURCHASED LAND FOR THE GOLDEN FOREST AND WAS ALSO EARNING INCOME FROM COMMISSION. FURTH ER DETAILED SUBMISSIONS WERE MADE AND FEW DOCUMENTS WERE FILED. ACCORDINGL Y THE LD. CIT(A) SOUGHT THE REMAND REPORT FROM THE ASSESSING OFFICER. AFTE R MAKING FEW OBSERVATIONS THE ASSESSEE WAS ALLOWED TO CROSS EXAMINE SHRI S.K. SHARMA AND HIS WIFE SMT. KIRAN SHARMA. 4. THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS A ND THE REMAND REPORT OBSERVED THAT THE DEPOSITS WERE FOUND IN THE NAME O F SHRI S.K. SHARMA THEREFORE THE ONUS WAS ON THE REVENUE TO PROVE TH AT THE DEPOSITS BELONGED TO SHRI RAJESH SYAL AND THUS THE ASSESSEE COULD NOT BE SADDLED WITH A LIABILITY. ULTIMATELY THE ISSUE WAS DECIDED VIDE PARA 22 WHICH IS AS UNDER:- THE ASSESSEE HAS PLACED ON RECORD THAT HE HAS NO L INK WHATSOEVER WITH M/S GOLDEN FOREST GROUP. IT WAS ALSO STATED THAT S HRI S.K. SHARMA WAS HIS EMPLOYEE ONLY FROM 1991 TO 1996 AND THEREAFTER SHRI S.K. SHARMA WAS ASSOCIATED WITH M/S GOLDEN FOREST GROUP. THERE IS NO MATERIAL BROUGHT ON RECORD TO PROVE THAT THE ASSESSEE HAS BE EN A BENEFICIARY ON ACCOUNT OF DEPOSITS MADE IN THE ACCOUNTS OF SHRI S .K. SHARMA. THE ASSESSEE HAS GIVEN SUFFICIENT MATERIAL WHICH HAS AL READY BEEN REPRODUCED IN PARA 16 ABOVE TO PROVE THAT THE TRANS ACTIONS HAVE BEEN DONE BY SHRI S.K. SHARMA ON BEHALF OF M/S GOLDEN FO REST GROUP. THE ASSESSEE HAS NO CONNECTION WHATSOEVER WITH M/S GOLD EN FOREST GROUP. IF ANY ACTION LIES IT WOULD BE IN THE HANDS OF SHR I S.K. SHARMA OR SMT. KIRAN SHARMA AS THE DEPOSITS HAVE BEEN FOUND IN THE IR BANK ACCOUNT. 3 HOWEVER THE ASSESSING OFFICER HAS TO MAKE INVESTIG ATION ON THE MATERIAL SUPPLIED BY THE ASSESSEE IN REGARD TO THE TRANSACTIONS CONDUCTED BY SHRI S.K. SHARMA WHETHER THESE REALLY BELONG TO HIM OR SOME OTHER PERSONS. ON FACTS IT CANNOT BE TREATED THAT THE MONEY IS BELONGING TO THE ASSESSEE BECAUSE NO MATERIAL HAS B EEN BROUGHT ON RECORD TO PROVE THE OWNERSHIP OF THE ASSESSEE. 5. BEFORE US THE LD. DR FOR THE REVENUE SUBMITTED THAT THERE IS NO MERIT IN THE OBSERVATIONS OF THE LD. CIT(A) THAT THE ASSESSE E HAS NO LINK WHATSOEVER WITH GOLDEN FOREST GROUP. M/S GOLDEN FOREST (INDIA) LTD. WAS OWNED BY ASSESSEES FATHER AND WAS BEING LOOKED AFTER BY HIS BROTHER AN D THE ASSESSEE. FURTHER SHRI S.K. SHARMA WAS AN EMPLOYEE OF THE ASSESSEE TI LL 1998. IN THIS REGARD HE PLACED ON RECORD A COPY OF STATEMENT OF SHRI S.K. S HARMA DATED 4.8.2003. IN THIS STATEMENT HE ANSWERED TO QUESTION NO. 2 IN WHI CH IT WAS SPECIFICALLY STATED THAT SHRI S.K. SHARMA THAT HE WAS AN EMPLOYEE WITH SHRI RAJESH SYAL FROM 1991-92 TO 31.3.1998. APART FROM THIS HE ALSO REFE RRED TO CROSS EXAMINATION BY THE ASSESSEE OF SHRI S.K. SHARMA WHICH HAS BEEN ANN EXED AT ANNEXURE A TO THE IMPUGNED ORDER. HE PARTICULARLY REFERRED TO PA GE 7 OF THE STATEMENT WHEREIN SHRI S.K. SHARMA IN RESPONSE TO A QUESTION CLEARLY STATED THAT HE WAS PURCHASING LAND UNDER THE DIRECTION AND GUIDANCE OF SHRI RAJESH SYAL I.E. THE ASSESSEE. THIS ITSELF SHOWS THAT THE MONEY BELONGE D TO SHRI RAJESH SYAL THE ASSESSEE. 6. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT AFTER THE STATEMENT RECORD ON 4.8.2003 WHICH WAS RECORDED BEHIND THE BACK OF THE ASSESSEE ANOTHER STATEMENT OF SHRI S.K. SHARMA WAS RECORDED IN WHICH HE STATED THAT HE WORKED WITH SHRI RAJESH SYAL TILL 31 .3.1996. IN FACT THE ASSESSEE I.E. SHRI RAJESH SYAL HAD NOTHING TO DO WITH M/S GO LDEN FOREST (INDIA) LTD. THAT COMPANY WAS BEING LOOKED AFTER BY HIS BROTHER. IN FACT ASSESSEES GROUP OF BUSINESS IS KNOWN AS M/S MARIGOLD LEASING (INDIA) P VT LTD. IT IS ACCEPTED FACT THAT THE MONEY DEPOSITED IN THE ACCOUNT OF SHRI S.K . SHARMA AND HIS WIFE SMT. KIRAN SHARMA WAS MAINLY USED FOR PURCHASE OF LAND B Y M/S GOLDEN FOREST (INDIA) LTD. THEREFORE IT CANNOT SAID THAT THE MO NEY DEPOSITED BY SHRI S.K. SHARMA HAD ANY ACCOUNT WITH THE ASSESSEE. 4 7. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND THAT THOUGH THE LD. CIT(A) HAS MADE THE FOLLOWING OBSERVATIONS AT P ARA 22: HOWEVER THE ASSESSING OFFICER HAS TO MAKE INVESTI GATION ON THE MATERIAL SUPPLIED BY THE ASSESSEE IN REGARD TO THE TRANSACTIONS CONDUCTED BY SHRI S.K. SHARMA WHETHER THESE REALLY BELONG TO HIM OR SOME OTHER PERSONS. WE FIND IT STRANGE THAT ON THE ONE HAND THE LD. CI T(A) IS OF THE VIEW THAT MORE INVESTIGATION IS REQUIRED AND ON THE OTHER HAND HE IS MAKING OBSERVATIONS THAT IT CANNOT BE SAID THAT THE MONEY BELONGS TO THE ASS ESSEE. IN FACT REAL TRUTH CAN BE DETERMINED ONLY AFTER DETAILED ENQUIRIES AND AFT ER THE CROSS EXAMINATION OF SHRI S.K. SHARMA BY THE ASSESSEE THE LD. CIT(A) SH OULD HAVE ASKED TO MAKE FURTHER ENQUIRIES AND FURNISH REMAND REPORT. INSTEA D THE LD. CIT(A) CHOOSE TO DELETE THE ADDITION AN AT THE SAME TIME MADE A COMM ENT THAT FURTHER ENQUIRIES ARE REQUIRED. IT IS SIGNIFICANT TO NOTE THAT DURING CROSS EXAMINATION OF SHRI S.K. SHARMA BY THE ASSESSEE FOLLOWING QUESTIONS AND ANS WERS (AT PAGE 7 OF ANNEXURE A) ARE GIVEN:- Q (RS) PLEASE STATE THE SOURCE OF DEPOSITS SIN YOU R BANK ACCOUNTS I.E. A/C NO. 362 3955 500 100203 AND 762 MAINTAI NED WITH DIFFERENT BANKS AND TOTALING TO RS. 2 23 73 216/-. PLEASE ST ATE THE UTILIZATION OF THIS MONEY (ONE BANK ACCOUNT 762 BELONG TO YOUR WIF E MRS. KIRAN SHARMA? ANS (SK) SUCH HUGE DEPOSITS WERE RECEIVED FROM M/S GOLDEN FOREST GROUP AND DEPOSITED WITH MY ACCOUNTS AT THE TIME OF PURCHASING LAND FOR GOLDEN FOREST GROUP UNDER THE DIRECTIONS AND GUIDAN CE OF SHRI RAJESH SYAL DIRECTOR M/S MARIGOLD LEASING INDIA LTD. MANI MAJRA. I WAS ONLY AN EMPLOYEE OF SHRI RAJESH SYAL DRAWING A SALARY OF RS . 6000/- PM (INCLUSIVE OF ALLOWANCES). OUT OF THESE DEPOSITS R EFLECTING IN MY ACCOUNTS VARIOUS LANDS WERE PURCHASED IN THE NAME OF DIFFERENT COMPANIES ALL PERTAINING TO GOLDEN FOREST GROUP. I AM ALSO SUBMITTING DETAILS OF LAND PURCHASED THE DETAILS IS REGISTRA R EXECUTED. THE ABOVE ANSWER CLEARLY SHOW THAT THE MONEY DID NO T BELONG TO SHRI S.K. SHARMA AND IT WAS DEPOSITED IN HIS ACCOUNT FOR PURC HASING LAND. HOWEVER HE HAS CLEARLY STATED THAT THE LAND WAS BEING PURCHASE D FOR M/S GOLDEN FOREST (INDIA) LTD. UNDER THE DIRECTIONS AND GUIDANCE OF S HRI RAJESH SYAL DIRECTOR OF M/S MARIGOLD LEASING (INDIA) PVT LTD. THIS SHOWS T HAT THE ASSESSEE WAS ALSO INVOLVED IN THE OPERATION OF M/S GOLDEN FOREST (IND IA) LTD. IN OUR OPINION THIS NEEDS FURTHER INVESTIGATION AND ENQUIRIES. THEREFO RE WE SET ASIDE THE ORDER OF 5 THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE FIL E OF ASSESSING OFFICER WITH A DIRECTION TO RE-EXAMINE THE ISSUE AFTER MAKING PROP ER ENQUIRIES. 8. IN THE RESULT APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 27.07. 2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 .07.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 6