Shri Siddharth Gupta, New Delhi v. ACIT, New Delhi

ITA 4214/DEL/2011 | 2008-2009
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 421420114 RSA 2011
Assessee PAN AADPG5651N
Bench Delhi
Appeal Number ITA 4214/DEL/2011
Duration Of Justice 2 month(s) 10 day(s)
Appellant Shri Siddharth Gupta, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 30-11-2011
Date Of Final Hearing 21-11-2011
Next Hearing Date 21-11-2011
Assessment Year 2008-2009
Appeal Filed On 20-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 4214(DEL)/2011 ASSESSMENT YEAR: 2008-09 SHRI SIDHARTH GUPTA A SSTT. COMMISSIONER OF INCOME 4/17-B MGF HOUSE VS. TAX C ENTRAL CIRCLE -7 ASAF ALI ROAD NEW DELHI. NEW DE LHI. PAN: AADPG5651N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.K. AGGARWAL C.A. RESPONDENT BY : S HRI NIRANJAN KAULI CIT DR DATE OF HEA RING : 21.11.2011 DATE OF PRO NOUNCEMENT : 30.11.2011 ORDER PER K.G. BANSAL : AM THE FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION U/S 132 OF THE INCOME-TAX ACT 1961 (THE ACT FOR SHO RT) WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESSEE ON 12.09.2007. I N THE COURSE OF SEARCH CASH AMOUNTING TO RS. 4.09 LAKH WAS FOUND IN THE BED RO OM OF THE ASSESSEE. IN RESPECT OF THE SEARCH A JOINT PANCHNAMA WAS DR AWN IN THE NAMES OF RAJIV GUPTA SHARVAN GUPTA AND THE ASSESSEE WHICH SHOWS THAT THE CASH WAS FOUND IN THE BED ROOM OF THE ASSESSEE. OUT OF T HE AFORESAID CASH A SUM OF RS. 4.00 LAKH WAS SEIZED BY THE AUTHORIZED OFFICER. IN THE COURSE OF ITA NO. 4214(DEL)/2011 2 ASSESSMENT PROCEEDINGS OPPORTUNITIES WERE GIVE N TO THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH BUT HE FAILED TO FURNISH ANY EXPLANATION IN THIS MATTER. THE AO INVOKED THE PRESUMPTION CON TAINED IN SECTION 132(4A) OF THE ACT AND DEEMED THIS AMOUNT TO BE THE INCOME OF THE ASSESSEE IN ABSENCE OF ANY EXPLANATION FROM HIM. 2. AGGRIEVED BY THIS ORDER THE ASSESSEE MOVED A N APPEAL BEFORE CIT(APPEALS)-I NEW DELHI. IT WAS SUBMITTED T HAT THE CASH BELONGED TO MGF DEVELOPMENTS LTD. AND WAS GIVEN TO THE ASSES SEE FROM THE IMPREST FUND. AN AFFIDAVIT WAS ALSO FILED TO THIS EFFECT . HOWEVER THE LD. CIT(APPEALS) DID NOT ACCEPT THE AFFIDAVIT AS ADDITIONAL EVIDENCE AS THE REASON FOR NON-FILING THE AFFIDAVIT BEFORE THE AO WAS NOT EXPLAINED. THE SUBMISSION REGARDING THE AMOUNT BEING RECEIV ED FROM MGF DEVELOPMENTS LTD. FROM ITS IMPREST FUND WAS ALSO N OT ACCEPTED ON THE GROUNDS INTER-ALIA THAT ITS BOOKS WERE NOT FOUN D DURING THE SEARCH AND THEREFORE THE POSSIBILITY OF MANIPULATION CANNOT B E RULED OUT. THE COPIES OF ACCOUNTS FROM MGF DEVELOPMENTS LTD. HAVE NOT BE EN SIGNED BY ANY CHARTERED ACCOUNTANT AND IT HAS ALSO NOT BEEN S PECIFIED WHEN THE ANNUAL ACCOUNTS WERE PREPARED. THE ASSESSEE HAD NOT FUR NISHED ANY EXPLANATION BEFORE THE AO WHICH HE WAS BOUND TO DO LEADING TO ADDITION OF THE ITA NO. 4214(DEL)/2011 3 AMOUNT IN HIS INCOME BY INVOKING THE PROVISION C ONTAINED IN SECTION 132(4A). THUS THE APPEAL OF THE ASSESSEE WAS DIS MISSED. HIS FINDINGS CONTAINED IN PARAGRAPH NOS. 6 6.1 AND 6.2 ARE REPRODUCED BELOW:- 6. I HAVE GONE THROUGH THE SUBMISSION FILED BY THE APPELLANT AS WELL AS COPY OF THE AFFIDAVIT FIL ED BY THE APPELLANT UNDER RULE 46A. WHILE FURNISHING THE REASON FOR PRODUCING ADDITIONAL EVIDENCE IN THE FORM OF AN AFFIDAVIT THE APPELLANT HAS MERELY STATED THAT IT WAS PREVENT ED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE BEF ORE THE ASSESSING OFFICER. THIS IS NO GROUND TO ACCEPT THE AFFIDAVIT AS AN ADDITIONAL EVIDENCE BECAUSE THE APPELLANT HAS TO JUSTIFY AND EXPLAIN WHAT WAS THAT CAUSE WHICH PREVENTED IT FROM FILING THE AFFIDAVIT BEFORE THE ASSESSING OFFICER . THUS THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT I S NOT ACCEPTED UNDER RULE 46A. EVEN OTHERWISE THE A LLAHABAD HIGH COURT IN THE CASE OF SRI KRISHNA VS. CIT 142 ITR 618 HAS OBSERVED THAT AFFIDAVIT NEED NOT ALWAYS BE ACCEPTED AS CORRECT AND THE ACCEPTANCE OR DENIAL IN IT IS NOT CONCLUSIVE. A SELF SERVING DOCUMENT IN THE FORM OF AN AFFID AVIT CANNOT BE REGARDED TO HAVE ANY EVIDENTIARY VALUE. 6.1 THE CONTENTION OF THE APPELLANT THAT IT HAD RECEIVED THIS SUM AS AN IMPREST AMOUNT FROM M/S MGF DEVELOP MENT LTD. CANNOT BE ACCEPTED FOR THE APPELLANT HAS FA ILED TO EXPLAIN WHY IT HAD TAKEN IMPREST FROM M/S MGF DEVELOP MENT LTD. AN IMPREST ACCOUNT IS LIKE A PETTY CASH AMOUNT WHERE THE PERSON RECEIVING IT SPENDS THE SAME ON BEHALF OF THE OWNER AND THE SAME MAY BE REPLENISHED AFTER IT IS S PENT. THE INCOME TAX ACT PROHIBITS THE EXPENDITURE IN C ASH OF OVER RS. 20 000/- U/S 40A(3). THEREFORE THE APPELLA NT SHOULD HAVE EXPLAINED AS TO WHY IT HAS TAKEN IN CASH A HUG E AMOUNT TOTALING TO RS. 4 09 000/-. THE BOOKS OF ACCOUNT OF M/S MGF DEVELOPMENT LTD. WERE NOT FOUND DURING THE SEARC H OPERATION AND HENCE THE POSSIBILITY OF MANIPULATION CANNOT B E RULED OUT. THE APPELLANT HAS FILED COPY OF ACCOUNTS OF M/S MGF DEVELOPMENT LTD. BUT THEY ARE NOT SIGNED BY ANY CHARTERED ACCOUNTANT NOR DO THE ACCOUNTS SPECIFIED THE D ATES ON WHICH ITA NO. 4214(DEL)/2011 4 THE PROFIT AND LOSS ACCOUNT AND THE BALANCE-SHEET OF M/S MGF DEVELOPMENT LTD. WERE PREPARED. FURTHER BEFORE THE ASSESSING OFFICER THE APPELLANT DID NOT GIVE ANY EXPLANATION REGARDING THE SOURCE OF CASH WHICH IS EVIDENT FROM PARAGRAPH 5 OF THE ASSESSMENT ORDER. 6.2 THE HONBLE HIGH COURT IN THE CASE OF BR IENDRA SINGH VS. CIT (2002) 256 ITR 696 (KARN.) FOLLOWING THE PRINCIPLE IN PARIMISETTI SEETHARAMAMMA VS. CIT (1965) 57 ITR 532 (SC) OBSERVED THAT IT IS FOR THE ASSESSEE TO PROVE THE SOURCE OF CASH FOUND IN HIS RESIDENCE. WHERE TH IS AMOUNT AS WELL AS THE AMOUNT FOUND IN SONS LOCKER WERE ATTRIBUTED TO A FIRM IN WHICH HE WAS A PARTNER IT WAS F OR THE ASSESSEE TO ESTABLISH THE CLAIM. ONE CANNOT AVOID THE BURDEN OF PROOF BY ATTRIBUTING THE SOURCE TO ANOTHER ASSESSEE WHEN THE ASSETS WERE FOUND IN HIS CUSTODY AND POSSESSIO N. THE APPELLANT HAS COMPLETELY FAILED TO RE-RELATE THE POSSESSION OF THIS CASH WITH THE ALLEGED ADVANCE RECEIVED FROM M/S MGF DEVELOPMENT LTD. THEREBY ATTRACTING THE PROVISI ONS OF SECTION 132 (4A) WHICH RAISES THE PRESUMPTION TH AT IN THE ABSENCE OF ANY EVIDENCE AS TO DATE OF ACQUISI TION IT HAS TO BE PRESUMED THAT IT WAS ACQUIRED ON THE DAT E OF SEARCH AND THAT IT ALSO BELONGS TO SUCH PERSON IN WHOSE POSS ESSION IT WAS FOUND. THEREFORE THE ADDITION OF RS. 4 00 000/- MADE BY THE ASSESSING OFFICER IS UPHELD CONSIDERING THE FACTS OF THE CASE. 3. BEFORE US THE LD. COUNSEL SUBMITS THAT THE AO M ADE AN ADDITION OF RS. 4.00 LAKH OUT OF CASH AMOUNTING TO RS. 4.09 LAKH FOUND DURING THE COURSE OF SEARCH ON 12.09.2007. THE LD. CIT(AP PEALS) DID NOT FIND ANY FAULT WITH THE CONFIRMATION FURNISHED BY MGF D EVELOPMENTS LTD. WHICH CLEARLY MENTIONS THAT A SUM OF RS. 4 09 000/- W AS HANDED OVER TO THE ASSESSEE FOR BUSINESS PURPOSES ON 10.09.2007 WH ICH IS REFLECTED IN REGULAR BOOKS OF ACCOUNT SEIZED DURING THE COURSE OF SE ARCH. THE AFFIDAVIT FILED ITA NO. 4214(DEL)/2011 5 BY THE DIRECTOR OF MGF DEVELOPMENTS LTD. WAS NOT A DMITTED. HE WAS ALSO NOT EXAMINED AND IN ABSENCE OF SUCH EXAMINA TION THE AFFIDAVIT CANNOT BE REJECTED. HOWEVER THE LD. CIT(APPEAL S) REJECTED THE AFFIDAVIT BY MENTIONING THAT IT IS A SELF-SERVING DOCUMENT. THE AFFIDAVIT WAS MERELY A REITERATION OF THE SUBMISSION MADE BY T HE ASSESSEE AND THEREFORE HE WAS NOT JUSTIFIED IN REFUSING TO ADM IT THE SAME. THE ASSESSEE HAD EXPLAINED THAT THE AMOUNT WAS RECEIVED FROM MGF DEVELOPMENTS LTD. FOR BUSINESS PURPOSES FROM ITS BOOKS OF ACCO UNT. THE PANCHNAMA SHOWS THAT FOUR LAPTOPS WERE SEIZED ONE OF THE L APTOPS CONTAINED THE ACCOUNT BOOKS OF MGF DEVELOPMENTS LTD. IT IS F URTHER SUBMITTED THAT THE LD. CIT(APPEALS) REFERRED TO THE PROVISION C ONTAINED IN SECTION 40(A)(3). HOWEVER THIS SECTION DOES NOT DEAL WITH GENUINENESS OF THE IMPREST FUND. ACCORDINGLY IT IS REQUESTED THAT T HE ADDITION MAY BE DELETED. 3.1 IN REPLY THE LD. CIT DR REFERRED TO THE F INDING OF THE AO THAT NO EXPLANATION WAS FURNISHED IN THE COURSE OF ASSES SMENT PROCEEDINGS. IT IS ARGUED THAT SINCE NOTICE U/S 143(2) AND A QUEST IONNAIRE WERE ISSUED TO THE ASSESSEE ON 21.05.2009 AND 20.07.2009 THERE WA S SUFFICIENT TIME AVAILABLE TO THE ASSESSEE TO FILE HIS EXPLANATION TILL THE DATE OF FINALIZATION OF ITA NO. 4214(DEL)/2011 6 ASSESSMENT ON 29.12.2009. AS SUFFICIENT OPPORTU NITIES HAD BEEN GRANTED TO THE ASSESSEE THE LD. CIT(APPEALS) RIGHTLY RE FUSED TO ADMIT THE AFFIDAVIT AS ADDITIONAL EVIDENCE AS NO OTHER GROU ND FOR ITS ADMISSION WAS RAISED BEFORE HIM. THE ASSESSEE HAD NOT FURNISHED ANY EXPLANATION REGARDING THE CASH SEIZED ON 12.09.2007 TILL THE PASSING OF ASSESSMENT ORDER ON 29.12.2009. IN THESE CIRCUMSTANCES TH E ENTRIES IN THE BOOKS OF ACCOUNT OF MGF DEVELOPMENTS LTD. COULD ONLY BE T AKEN TO HAVE BEEN MADE WITH A VIEW TO EXPLAIN THE SEIZED CASH N OT ONLY FROM THE ASSESSEE BUT ALSO FROM SHARVAN GUPTA AND GAUTAM KELANI. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE MAY REFER TO VARIOUS DOCUMENTS P LACED IN THE PAPER BOOK. PAGE NO. 1 IS A LETTER DATED 16.05.2011 ADDRESS ED BY THE A.R. OF THE ASSESSEE TO THE LD. CIT(APPEALS) MENTIONING THAT TH E CASH BELONGS TO MGF DEVELOPMENTS LTD. THIS FACT WAS NARRATED IN T HE COURSE OF SEARCH BUT THE ASSESSING OFFICER IGNORED ALL THESE FACTS. PAGE NO. 1A IS THE UNSIGNED LETTER DATED 21.12.2009 ADDRESSED TO THE AO MENT IONING THAT THE CASH OF RS. 4 09 000/- BELONGS TO MGF DEVELOPMENTS LTD. T HIS LETTER IS NEITHER SIGNED NOR ACKNOWLEDGED. THE AO HAS NOT REFERRE D TO THIS LETTER. THEREFORE IT CANNOT BE ACCEPTED THAT THIS LETT ER WAS FILED BEFORE THE AO. ITA NO. 4214(DEL)/2011 7 PAGE NO. 2 IS THE CONFIRMATION LETTER FROM MGF DEVELOPMENTS LTD. TO THE EFFECT THAT A SUM OF RS. 4 09 000/- WAS GIVEN TO THE ASSESSEE ON 10.09.2007 AND THAT THIS CASH IS A PART OF ITS REGULAR BOOKS OF ACCOUNT. PAGE NO. 3 IS THE LETTER DATED 07.07.2011 ADDRES SED TO THE LD. CIT(APPEALS) ENCLOSING WITH IT THE COPY OF THE IMPREST ACCO UNT FROM 01.04.2007 TO 31.03.2008. PAGE NO. 8 SHOWS SEIZURE OF FOUR LAPTOPS ON 12.09.2007 FROM SHARVAN GUPTA SIDHARTH GUPTA (THE ASSESS EE) AND RAJEEV GUPTA. PAGE NO. 13 SHOWS CASH OF RS. 4 09 000/- FOUND IN THE BED ROOM OF THE ASSESSEE OUT OF WHICH RS. 4.00 LAKH WAS SEIZED. PAGE NO. 21 IS THE CASH BOOK OF MGF DEVELOPMENTS LTD. SHOWING CREDIT OF RS. 4 09 000/- ON 10.09.2007 AS IMPREST MONEY PAID TO THE ASSESS EE. PAGE NO. 26 IS THE AFFIDAVIT DATED 06.06.2011 OF SHARVAN GUPTA SON O F SHRI RAJEEV GUPTA STATING INTER-ALIA THAT THE CASH FOUND AND SEI ZED WAS GIVEN AS IMPREST FUND BY MGF DEVELOPMENTS LTD. WE MAY IN THIS BA CKGROUND EXAMINE- WHETHER THE LD. CIT(APPEALS) RIGHTLY REJECTED THE ADMISSION OF AFFIDAVIT DATED 06.06.2011? FROM THE ASSESSMENT ORDER IT IS CLEAR THAT SUFFICIENT TIME WAS GIVEN TO THE ASSESSEE TO EXPLAIN THE NA TURE AND SOURCE OF CASH AMOUNTING TO RS. 4 09 000/-. IT IS STATED BEF ORE US THAT A LETTER DATED 21.12.2009 WAS FILED BEFORE HIM. HOWEVER AS ME NTIONED EARLIER THIS LETTER IS UNSIGNED AND THERE IS NO EVIDENCE OF FI LING THE SAME BEFORE THE ITA NO. 4214(DEL)/2011 8 AO. THE AO HAS GIVEN A CLEAR FINDING THAT NO EXP LANATION HAS BEEN FURNISHED IN THE MATTER. TAKING INTO ACCOUNT THE LETTER AND THE FINDING WE HAVE NO HESITATION IN COMING TO THE CONCLUSION T HAT THIS LETTER WAS NEVER FILED BEFORE THE AO. ACCORDINGLY IT CANNOT BE A GITATED THAT THE AFFIDAVIT MERELY SUPPORTED THIS EXPLANATION AND THEREFORE IT SHOULD HAVE BEEN ADMITTED BY THE LD. CIT(APPEALS). THE LD. CIT (APPEALS) HAS GIVEN A CLEAR FINDING THAT IN SPITE OF REPEATED OPPORT UNITIES NO EXPLANATION OR EVIDENCE WAS FILED BEFORE THE AO. THEREFORE WE ARE OF THE VIEW THAT THE LD. CIT(APPEALS) RIGHTLY REJECTED THE ADMISS ION OF THE AFFIDAVIT. IN SUCH A SITUATION THE DECISION IN THE CASE OF MEHTA PARIKH & CO. VS. CIT 30 ITR 181 (SC) IS NOT APPLICABLE. 4.1 THUS THE EVIDENCE WHICH SURVIVES FOR CONSI DERATION IS THE CONFIRMATION LETTER AND THE COPY OF THE CASH BO OK. THE CONFIRMATION IS DATED 25.09.2009. IT HAS NOT BEEN EXPLAINED AS TO WHY THE CONFIRMATION AND ITS FORWARDING LETTER DATED 21.12..2009 WE RE NOT FILED BEFORE THE AO. THE CASH BOOK OF THE AFORESAID MGF DOES SHOW CREDIT OF RS. 4 09 000/- ON 10.09.2007 TWO DAYS PRIOR TO THE SEARCH. HOWEVER THIS EVIDENCE HAD NOT SURFACED FOR A LONG TIME TILL T HE COMPLETION OF THE ASSESSMENT ON 29.12.2009. IN FACT IF THE EXPLA NATION IS TRUE THE SAME ITA NO. 4214(DEL)/2011 9 SHOULD HAVE BEEN PLACED BEFORE THE AUTHORIZED OF FICERS AT THE TIME OF SEIZURE OF THE CASH ON 12.09.2007. THE EXPLANAT ION THAT ONE OF THE LAPTOPS CONTAINED THE BOOKS OF AFORESAID MGF HA S ALSO NOT BEEN SUPPORTED IN ANY MANNER EXCEPT MAKING THE AFOR ESAID STATEMENT. THUS THERE ARE VALID REASONS TO HOLD THAT THE ENTR IES IN THE BOOKS OF MGF DEVELOPMENTS LTD. ARE IN THE NATURE OF AFTERTHOUGH T MADE WITH A VIEW TO EXPLAIN THE CASH SEIZED IN THE CASE OF THE ASS ESSEE. IN SUCH A SITUATION WE HAVE NO HESITATION TO HOLD THAT THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY BURDEN REGARDING NATURE AND SOURCE OF T HE CASH FOUND IN HIS POSSESSION. THEREFORE WE DO NOT FIND ANY SUCH ERR OR IN THE ORDER OF THE LD. CIT(APPEALS) WHICH REQUIRES CORRECTION FROM US. 5. IN THE RESULT THE APPEAL IS DISMISSED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. SHRI SIDDHARTH GUPTA NEW DELHI. 2. ACIT CENTRAL CIRCLE-7 NEW DELHI. 3. CIT 4. CIT(A) 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.