ACIT, New Delhi v. Sh. Kalyan Das, New Delhi

ITA 357/DEL/2009 | 2002-2003
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 35720114 RSA 2009
Assessee PAN AAKPD2382G
Bench Delhi
Appeal Number ITA 357/DEL/2009
Duration Of Justice 1 year(s) 5 month(s) 23 day(s)
Appellant ACIT, New Delhi
Respondent Sh. Kalyan Das, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 23-07-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 2002-2003
Appeal Filed On 30-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE G.E. VEERABHADRAPPA HON'BLE VICE-PRESIDENT AND SHRI RAJPAL YADAV: HONBLE JUDICIAL MEMBER I.T.A. NOS. 356 TO 358/DEL/2009 ASSESSMENT YEARS: 2001-02 TO 2003-0 4 ASSISTANT COMMISSIONER OF IT VS. SHRI KALYAN DAS CENTRAL CIRCLE-9 C-42 4 TH FLOOR NEW DELHI. MAHENDRA ENCLAVE NEW DELHI. (PAN AAKPD2382G) (APPELLANTS) (RESPONDENT) APPELLANT BY: SHRI MANEESH BHUG UNA SR.DR RESPONDENT BY: SHRI ANI L JAIN CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT THREE APPEALS ARE DIRECTED AT THE INST ANCE OF THE REVENUE AGAINST THE SEPARATE ORDERS OF EVEN DATE I.E. 18.11 .2008 PASSED BY THE LEARNED CIT(APPEALS) FOR ASSESSMENT YEARS 2001-02 T O 2003-04. THE GROUNDS RAISED BY THE REVENUE IN ALL THE THREE YEAR S ARE VERBATIM SAME EXCEPT VARIATION IN THE QUANTUM. THE GROUND OF APPEAL RAIS ED IN ASSESSMENT YEAR 2001-02 READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LE ARNED CIT(APPEALS) ERRED IN DELETING THE TRADING ADDITION OF RS.10 00 000 MADE BY THE A.O. ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSE E HOLDING THAT THE ADDITION ON THE SAME ISSUE HAS BEEN CONFIRMED IN TH E CASE OF 2 M/S.DANGSONS HOTELS & RESTAURANT PVT. LTD. ON SUBST ANTIVE BASIS WHICH HAS NOT YET BECOME FINAL AND M/S. DANGSONS HO TELS & RESTAURANT PVT. LTD. MAY FILE APPEAL BEFORE THE HON BLE INCOME-TAX APPELLATE TRIBUNAL. 2. IN ASSESSMENT YEAR 2002-03 THE AMOUNT IN DISPUT E IS RS.1 80 000 AND IN ASSESSMENT YEAR 2003-04 IT IS RS.2 20 000. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE WAS THE MANAGER OF M/S. DANGSONS HOTELS & RESTAURANT PVT. LTD. SITUATE D AT B-28 LAWRANCE ROAD NEW DELHI. A SEARCH AND SEIZURE OPERATION UND ER SEC. 132 OF THE ACT WAS CONDUCTED AT THE GROUP OF SEVEN SEAS INCLUDING THE BUSINESS PREMISES OF M/S. DANGSONS HOTELS & RESTAURANT PVT. LTD. THE RESIDENCE OF THE ASSESSEE WAS ALSO COVERED UNDER THE SEARCH AND SEIZ URE OPERATION. FROM THE PREMISES OF THE ASSESSEE CERTAIN DOCUMENTS WERE FO UND AND INVENTORIZED AS ANNEXURE A-1 TO A-22. THE ASSESSING OFFICER HAS OBS ERVED THAT ENTRIES RECORDED IN ANNEXURES A-14 TO A-22 INDICATE THE UN ACCOUNTED SUPPRESSED SALES. SUCH SALES HAVE BEEN WORKED OUT AT RS.76 99 234 IN ASSESSMENT YEAR 2001-02. THIS SALE WAS CLAIMED BY THE ASSESSEE IN H IS HANDS ON THE GROUND THAT HE WAS INDEPENDENTLY DOING CATERING BUSINESS. THE PLEA OF THE ASSESSEE HOWEVER WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HE PROTECTIVELY 3 ASSESSED THE INCOME IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF THE PROFIT EARNED ON SUCH SALES. ASSESSING OFFICER HAS SUBSTAN TIVELY INCLUDED THIS SALE IN THE HANDS OF M/S. DANGSONS HOTEL. 4. LEARNED CIT(APPEALS) HAS CONFIRMED THIS ACTION O F THE ASSESSEE IN THE CASE OF M/S. DANGSONS HOTEL. FINDINGS OF THE LEARNE D CIT(APPEALS) IN ASSESSMENT YEAR 2001-02 IN THE CASE OF M/S. DANGSON S HOTELS READ AS UNDER: AS FAR AS INCLUSION OF TURNOVER OF RS.76 99 234 RE LATING TO SH. KALYAN DAS IS CONCERNED I AM OF THE OPINION THAT T HE CONTENTION OF THE ASSESSEE DOES NOT MERIT ANY CONSIDERATION. SH. KALYAN DAS IS A WHOLE TIME EMPLOYEE OF THE ASSESSEE AND INVOLVED IN DAY TO DAY AFFAIRS RELATING TO THE CATERING BUSINESS BELONGING TO THE ASSESSEE. IT IS VERY DIFFICULT TO ACCEPT THE THEORY THAT AN EMPLOYE E CAN ALSO CARRY CATERING BUSINESS UTILIZING THE TOTAL INFRASTRUCTUR E REQUIRED TO CARRY SUCH CATERING BUSINESS. IT IS TOTALLY UNBELIEVABLE TO KNOW THAT AN EMPLOYEE IS PERMITTED TO BE ITS OWN COMPETITOR. HE DOES NOT OWN ANY SUCH AMENITIES OF HIS OWN AND HE SHOULD DEPEND SOLE LY AND WHOLLY ON THE FACILITIES OF THE ASSESSEE COMPANY. SUCH CONTEN TION IS ONLY A PLOY TO DIVERT A PART OF THE INCOME BELONGING TO THE ASS ESSEE COMPANY. THIS TURNOVER ALSO HAS BEEN ACCRUED BY UTILIZING VARIOUS FACILITIES OF THE ASSESSEES COMPANY AND THE MATERIAL FOUND IS IN CON TINUATION OF THE TRANSACTIONS BELONGING TO THE ASSESSEE COMPANY. HEN CE THERE CANNOT BE ANY OTHER VIEW THAN TO HOLD THAT THIS BUSINESS A LSO BELONGS TO THE ASSESSEE BUT NOT TO THE EMPLOYEE OF THE ASSESSEE CO MPANY. IT IS ALTOGETHER A DIFFERENT STORY IF SUCH EMPLOYEE CARRI ED THE BUSINESS IN A 4 DIFFERENT LOCATION USING HIS OWN INFRASTRUCTURE AND HAVING A SEPARATE MARKETING FACILITIES AS A PART TIME JOB. ALL THE BO OKINGS ARE SAID TO BE RELATING TO SH. KALYAN DASS ALSO TAKEN PLACE IN THE ASSESSEES PREMISES AND BY USING INFRASTRUCTURE OF THE ASSESSEE. HENCE I HAVE NO REASONS TO INTERFERE WITH THE ACTION OF THE A.O. TO INCLUDE TH E TURNOVER OF RS.76 99 234 ALLEGED TO BE BELONG TO SH.KALYAN DASS AS TURNOVER OF THE ASSESSEE. MERE FACT THAT SH. KALYAN DAS HAS INC LUDED THIS AMOUNT IN HIS RETURN DOES NOT PRECLUDE THE A.O. TO ASSESS IT IN ASSESSEES HANDS. IT IS BY NOW ESTABLISHED LAW THAT SIMPLY B ECAUSE SOME WRONG PERSON IS ASSESSED TO TAX ON PARTICULAR INCOME THE RIGHT PERSON CANNOT BE SPARED FROM TAXATION. REFERENCE IS INVITED TO TH E DECISION OF APEX COURT IN THE CASE OF CH. ATCHIAH 218 ITR 239 109 I TR 7 ( P&H) AND SPECIAL BENCH DECISION OF DELHI ITAT IN THE CASE OF M/S. PRADEEP AGENCIES (JV). IN THE INSTANT CASE IT IS VERY CLEAR THAT AGRICULTURAL LAND THE TRANSACTIONS ARE RELATED TO ASSESSEE ONLY AND B Y DESIGN THE SAID INCOME IS DECLARED IN MANAGERS HANDS. ACCORDINGLY THE SAID ACTION OF A.O.IS CONFIRMED. 5. THE APPEALS OF THE ASSESSEE M/S. DANGSONS HOTELS HAVE BEEN DISMISSED BY THE ITAT. LEARNED COUNSEL FOR THE ASSE SSEE PLACED ON RECORD COPY OF THE ITATS ORDER IN ITA NO.2943 TO 2948/DEL /08 PASSED FOR ASSESSMENT YEARS 2001-02 TO 2006-07. ALONG WITH THE SE APPEALS THE I.T.A.T. HAS ALSO DECIDED THE CROSS-APPEALS OF THE REVENUE F OR THESE ASSESSMENT YEARS. SINCE THE VIEW OF THE LEARNED CIT(APPEALS) IN THE C ASE OF M/S. DANGSONS 5 HOTELS FOR THE INCLUSION ALLEGED SUPPRESSED SALES I N THE TOTAL SALES OF M/S. DANGSONS HOTELS HAS BEEN UPHELD BY THE ITAT. THE SA ME AMOUNT CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE SHRI KALYAN DASS . ASSESSING OFFICER HAS ONLY MADE A PROTECTIVE ADDITION IN THE PRESENT CASE . LEARNED CIT(APPEALS) RELYING UPON HIS ORDER IN THE CASE OF M/S. DANGSONS HOTELS (SUPRA) DELETED THE PROTECTIVE ADDITION FROM THE HANDS OF THE ASSES SEE. THE FACTS AS FAR AS IN ASSESSMENT YEARS 2002-03 AND 2003-04 ARE CONCERNED THEY ARE SIMILAR IN THESE YEARS ALSO. ASSESSING OFFICER HAS WORKED OUT CERTAIN SUPPRESSED SALES ON THE BASIS OF ANNEXURES A-14 TO A-22 WHICH HE INC LUDED IN THE HANDS OF M/S. DANGSONS HOTELS INSTEAD OF THE CLAIM MADE BY T HE ASSESSEE IN HIS HANDS. ON DUE CONSIDERATION OF ALL THESE FACTS AND CIRCUMSTANCES WE DO NOT FIND ANY MERIT IN THESE APPEALS. THESE ARE DISMISSE D. 6. IN THE RESULT ALL THE THREE APPEALS FILED BY TH E REVENUE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 23.07.2010 ( G.E. VEERABHADRAPPA) ( RAJPAL YADAV ) VICE-PRESIDENT JUDICIAL MEMBER DATED: 23/07/2010 MOHAN LAL 6 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR