ITO, New Delhi v. Anil Kumar Bansal, New Delhi

ITA 4581/DEL/2009 | 2001-2002
Pronouncement Date: 16-04-2010 | Result: Allowed

Appeal Details

RSA Number 458120114 RSA 2009
Bench Delhi
Appeal Number ITA 4581/DEL/2009
Duration Of Justice 4 month(s) 12 day(s)
Appellant ITO, New Delhi
Respondent Anil Kumar Bansal, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-04-2010
Assessment Year 2001-2002
Appeal Filed On 04-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI K.G. BANSAL AND SHRI GEORGE MATHAN I.T.A.NO. 4581(DEL)/2009 ASSESSMENT YEAR: 2001-02 INCOME-TAX OFFICER SHRI ANIL KUMAR BANSAL WARD-28(2) NEW DELHI. VS. M/S RAM KISHORE & SONS 4032 CHAWRI BAZAR DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK PANDEY CIT DR RESPONDENT BY: SHRI V.D. AGGARWAL C.A. ORDER PER K.G. BANSAL ; AM THIS APPEAL OF THE REVENUE EMANATES FROM THE ORDER OF CIT(APPEALS)-XXV NEW DELHI PASSED ON 25.9.20 09 IN APPEAL NO. 282/08-09 PERTAINING TO ASSESSMENT YEAR 2001-02. THE REVENUE HAS TAKEN THREE GROUNDS THAT ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) ERRED IN (I) HOLD ING THAT THE AO WAS NOT JUSTIFIED IN OBJECTING TO THE REQUEST OF THE AS SESSEE TO PROVIDE A COPY OF REASONS ON THE BASIS OF WHICH THE ASSESSMENT WAS REOPENED; (II) HOLDING THAT ADEQUATE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE WHILE COMPLETING THE ASSESSMENT U/S 147 READ WITH SECTION 144 OF THE INCOME- ITA NO.4581(DEL)/2009 2 TAX ACT 1961; AND (III) DELETING THE ADDITIO N OF RS.3 08 81 696/- MADE BY THE AO ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. 2. THE FACTS MENTIONED IN THE ASSESSMENT ORDER ARE THAT THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 4 04 710/- WAS FILED ON 30.10.2001. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 26.3.2004 AT THE TOTAL INCOME OF RS. 4 04 710/-. SUBSEQUENTLY INFORMATIO N WAS RECEIVED THROUGH THE ADDITIONAL COMMISSIONER OF INCOME-TAX RANGE-2 8 NEW DELHI THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT TH E PREMISES OF SHRI BRIJ MOHAN GUPTA 2281 GALI HINGA BEG KHARI BAOLI DEL HI-6 IN WHICH DIARIES AND LOOSE PAPERS REGARDING LOANS AND AD VANCES WERE FOUND. THIS DIARY ALSO CONTAINED THE NAME OF SHRI NAGAR MAL WITH THE ADDRESS OF M/S RAM KISHORE & SONS. THESE DOCUMENTS CONTAINED DETAILS OF ADVANCES MADE BY THE AFORESAID SHRI NAGAR MAL TO SHRI BRI J MOHAN GUPTA. SUCH ADVANCES IN FINANCIAL YEAR 2000-01 AMOUNTED TO ABOUT RS. 3.00 CRORE. ACTING ON THIS INFORMATION REASONS WERE RECO RDED FOR REOPENING THE ASSESSMENT AND THE APPROVAL WAS TAKEN FOR ISSUE OF NOTICE U/S 148 FROM THE COMPETENT AUTHORITY. THEREAFTER THE NOTIC E U/S 148 WAS SERVED ON THE ASSESSEE ON 25.3.2008 CONTAINING PROPOSAL TO RE-ASSESS THE TOTAL INCOME OF THIS YEAR. THE ASSESSEE SUBMITT ED THAT THE ORIGINAL RETURN ITA NO.4581(DEL)/2009 3 FILED ON 30.10.2001 MAY BE TAKEN AS A RETU RN U/S 148 OF THE ACT. THE ASSESSEE ALSO SOUGHT REASONS FOR REOPENING TH E ASSESSMENT. THESE WERE FURNISHED TO THE ASSESSEE ALONG WITH THE NOTICE U/S 142(1) AND A QUESTIONNAIRE DATED 21.11.2008. THEREAFTER ASSESSMENT PROCEEDINGS WERE INITIATED. IT WAS ASCERTAINED FROM THE DOCUMENTS SEIZED FROM THE PREMISES OF SHRI BRIJ MOHAN GUPTA THAT THE AMOU NT ADVANCED TO HIM IN THIS YEAR AMOUNTED TO RS. 3.05 CRORE. INTEREST OF RS. 3 47 852/- WAS EARNED ON THE AFORESAID AMOUNT. BROKERAGE WAS ALSO PAID TO SHRI BRIJ MOHAN GUPTA WHICH WAS COMPUTED AT RS. 33 834/- . THE ASSESSEE WAS GIVEN OPPORTUNITY TO STATE AS TO WHY THE SUM OF RS. 3 08 81 696/- BEING THE AGGREGATE OF THE AFORESAID THREE AMOUNTS SHOULD NOT BE TAXED IN THE HANDS OF THE ASSESSEE AS INCOME FROM UNDISCLOS ED SOURCES. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION IN THE MATTER. THEREFORE IT WAS HELD THAT HE HAD NOTHING TO SAY IN THE MATTER. ACCORDINGLY THE AFORESAID AMOUNT WAS ADDED TO THE INCOME RETU RNED BY THE ASSESSEE AND THE TOTAL INCOME WAS COMPUTED AT RS. 3 12 86 410/-. 2.1 BEFORE PROCEEDINGS FURTHER IT MAY BE MENTI ONED THAT THE BUSINESS OF SHRI BRIJ MOHAN GUPTA WAS CONDUCTED BY SHRI RAJIV GUPTA THE SON AND SHRI RAM AVTAR THE ACCOUNTANT. TH EIR STATEMENTS WERE ITA NO.4581(DEL)/2009 4 RECORDED AT THE TIME OF SEARCH IN WHICH IT WAS INTER-ALIA DEPOSED THAT THE AMOUNTS MENTIONED IN THE DOCUMENTS WERE TO BE RE AD IN LAKHS AND THE CORRESPONDING INTEREST AND BROKERAGE HAD BEEN S HOWN IN COLUMNS 3 AND 4. THE INTEREST PAID TO SHRI NAGAR MAL SHO WN IN COLUMN 3 WAS RECORDED AFTER DEDUCTING THE COMMISSION AMOUNT. COPIES OF THESE STATEMENTS WERE ALSO SUPPLIED TO THE ASSESSEE. IT MAY ALSO BE MENTIONED THAT THE DOCUMENTS AND THE DIARIES WERE WRITTE N IN THE HAND WRITING OF EITHER SHRI RAJIV GUPTA OR SHRI RAM AVTAR. 2.2 AGGRIEVED BY THIS ORDER THE ASSESSEE MOVED AN APPEAL BEFORE THE LD. CIT(APPEALS). A NUMBER OF GROUNDS WERE T AKEN REGARDING THE REOPENING OF THE ASSESSMENT ERRORS IN THE PROCE DURE FOLLOWED IN RE- ASSESSMENT PROCEEDINGS AND THE ADDITION TO THE INCOME RETURNED BY THE ASSESSEE. AS WE SHALL SEE WE ARE ONLY CONCE RNED WITH THE MERITS OF THE CASE REGARDING THE ADDITION OF RS. 3 08 81 69 6/-. IN THIS CONNECTION IT IS MENTIONED IN THE APPELLATE ORDER THAT THE A O COMPLETELY FAILED TO ESTABLISH ANY CASE AGAINST THE ASSESSEE. FU RTHER ENQUIRY WAS REQUIRED TO BE CARRIED OUT ON THE INFORMATION GIVEN BY D EPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 19 NEW DELHI PASSED ON THROUGH THE ADDITIONAL COMMISSIONER RANGE-28. HOWEVER NO WO RTHWHILE ENQUIRY ITA NO.4581(DEL)/2009 5 WAS MADE TOWARDS THIS END. NO CORROBORATIVE EV IDENCE WAS FOUND DURING THE SEARCH OF SHRI BRIJ MOHAN GUPTA IN RE GARD TO THE ASSESSEE. THE AO MERELY REPRODUCED THE COMMUNICATION W ITH THE ASSESSEE AND SUMMARIZED THE NOTABLE FEATURE OF ASSESSMENT IN THE CASE OF SHRI BRIJ MOHAN GUPTA. FINALLY THE ADDITION WAS MADE. LOOKING TO THE AFORESAID FACTS IT WAS HELD THAT THE AO WAS NOT JUSTIF IED IN MAKING SUCH AN ADDITION. 3. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE D ID NOT CONTEND THE GROUNDS REGARDING FURNISHING OF THE REASONS AND GRANT OF PROPER OPPORTUNITY BEFORE COMPLETING THE RE-ASSESSMENT P ROCEEDINGS. HE ARGUED THE CASE ON THE BASIS OF MERITS ONLY. IN THIS BAC KGROUND GROUND NOS. 1 AND 2 ARE TREATED AS ALLOWED FOR STATISTICAL PURP OSE. 3.1 COMING TO THE MERITS OF THE ADDITION THE LD . DR DREW OUR ATTENTION TOWARDS THE FINDINGS OF THE AO AND THE LD. CIT(A PPEALS) WHICH HAVE ALREADY BEEN SUMMARIZED BY US. IT WAS SUBMITT ED THAT THE ADDITION WAS DELETED BY THE LD. CIT(A) ON ACCOUNT OF LACK OF CORROBORATIVE EVIDENCE. HOWEVER SHE FAILED TO TAKE INTO ACCOUNT THE NON-COMPLIANCE OF THE ASSESSEE IN THE COURSE OF RE-ASSESSMENT PROCEEDIN GS. THEREFORE AT THE ITA NO.4581(DEL)/2009 6 WORSE SHE COULD HAVE RESTORED THE MATTER TO THE FILE OF THE AO FOR GRANTING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 3.2 IN REPLY THE LD. COUNSEL FURNISHED THE BRI EF BACKGROUND OF THE CASE. IT WAS SUBMITTED THAT THE ASSESSEE IS SON OF LATE SHRI NAGAR MAL AND THE ASSESSMENT HAS BEEN FRAMED ON HIM AS A LEGAL HEIR. SEARCH WAS CONDUCTED IN THE CASE OF SHRI BRIJ MOHAN GUPTA IN WHICH DIARIES AND LOOSE PAPERS WERE FOUND REGARDING THE BUSINESS O F MONEY-LENDING. THE NAME OF THE ASSESSEE APPEARED IN THE DIARY. HOW EVER AT NO STAGE OF THE PROCEEDINGS THE ASSESSEE ADMITTED THAT THE TRANSACTIONS RECORDED IN THE AFORESAID DOCUMENTS WERE RELATING TO THE ASSE SSEE. THE EVIDENCE WAS PURELY A THIRD PARTY EVIDENCE. RECORDING OF THE NAME OF THE ASSESSEE IN THE DOCUMENTS OF A THIRD PARTY BY ITSELF CAN NOT LEAD TO ANY ADDITION IN THE CASE OF THE ASSESSEE UNLESS AUTHENTICIT Y OF THE EVIDENCE IS ESTABLISHED BY GRANTING AN OPPORTUNITY OF CRO SS-EXAMINATION. THE ASSESSMENT FOR ASSESSMENT YEAR 2005-06 WAS ALSO MADE U/S 143(3) IN WHICH THE ASSESSEE HAD FULLY COOPERATED WITH THE AO. HOWEVER SUCH ADDITIONS WERE DELETED BY THE TRIBUNAL IN ITA NO. 1156(DEL)/2009 DATED 11.9.2009. THEREFORE IT WAS AGITATED THA T THE ADDITION DESERVES TO BE DELETED ON THE BASIS OF THE AFORESAID ORDER O F THE TRIBUNAL. ITA NO.4581(DEL)/2009 7 3.3 THE LD. COUNSEL ALSO DREW OUR ATTENTION TOW ARDS THE ORDER OF THE LD. CIT(APPEALS) IN WHICH IT IS MENTIONED THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE BY THE AO IN THE RE- ASSESSMENT PROCEEDINGS. IT WAS ARGUED THAT THE ADDITION DESERVES TO BE DEL ETED ON THIS GROUND ALSO. 3.4 IN THE REJOINDER THE LD. DR SUBMITTED THAT THE ORDER FOR ASSESSMENT YEAR 2005-06 WAS PASSED BY THE TRIBUNAL ON ERRONEOUS ASSUMPTION OF FACT THAT THE AO MISERABLY FAILED TO ESTABLI SH RELATIONSHIP BETWEEN SHRI NAGAR MAL AND SHRI ANIL KUMAR BANSAL. THE FACT IS THAT SHRI NAGAR MAL IS THE FATHER OF SHRI ANIL KUMAR BANSAL AN D THE ASSESSMENT HAS BEEN MADE IN THE NAME OF SHRI ANIL KUMAR BANSAL A S HEIR AND LEGAL REPRESENTATIVE OF SHRI NAGAR MAL. THE ORDER BAS ED UPON WRONG FACTS CANNOT BE RELIED UPON FOR DELETING THE ADDITION AS IT WILL AMOUNT TO PERPETUATING A SERIOUS MISTAKE OF FACT. IT W AS FURTHER SUBMITTED THAT IN THE PROCEEDINGS FOR ASSESSMENT YEAR 2005-06 THE ENTRIES MADE IN THE DIARIES OF SHRI RAM AVTAR WERE ACCEPTED TO BE GENUINE BY THE ASSESSEE WHICH PERTAINED TO THE LOANS TAKEN BY THE ASSESS EE. THEREFORE IT WILL NOT LIE IN HIS MOUTH TO SAY NOW THAT A PART OF E VIDENCE IS TRUE AND CORRECT AND THE OTHER PART IS FALSE AND INCORRECT. ITA NO.4581(DEL)/2009 8 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D RIVAL SUBMISSIONS. THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF SHR I RAM AVTAR. IN THE SEARCH DIARIES AND LOOSE PAPERS WERE FOUND SHOWING THA T HE WAS CARRYING ON THE BUSINESS OF MONEY-LENDING. THE NAME OF SHRI NA GAR MAL HIS ADDRESS AND TRANSACTIONS OF BORROWINGS LENDING WITH INTEREST AND BROKERAGE WERE FOUND MENTIONED IN THE DOCUMENTS. THESE DOCU MENTS WERE WRITTEN IN THE HAND WRITING OF THE SON AND THE ACCOUNTANT OF SHRI BRIJ MOHAN GUPTA WHO WERE FOUND IN THE CONTROL OF THE BUSIN ESS PREMISES. THEY DEPOSED TO THE EFFECT THAT THE TRANSACTIONS WERE OF BORROWINGS AND LENDING AND DETAILS OF INTEREST AND BROKERAGE WERE AL SO SHOWN THEREIN. THE RELEVANT DOCUMENTS AND THE STATEMENTS WERE FUR NISHED TO THE ASSESSEE. HOWEVER OPPORTUNITY OF CROSS-EXAMINING THESE PE RSONS WAS NOT GRANTED TO THE ASSESSEE. THE STATEMENT ALSO CONTAINED DEPOSITION TO THE EFFECT THAT THE PERSON WHO WANTS TO LEND HIS MONEY CO MES TO THEM AND DIRECTS THEM TO DEPOSIT THE MONEY IN THE NAME HE WANT S. THIS STATEMENT RAISES A QUESTION WHETHER THE MONEY SHOWN TO HAVE BEEN ADVANCED TO THEM IN THE NAME OF THE ASSESSEE REPRESENTS THE CORR ECT STATE OF AFFAIRS IN TOTALITY INCLUDING THE NAME? AS AGAINST THE AFO RESAID IT IS ALSO A FACT THAT ITA NO.4581(DEL)/2009 9 THE ASSESSEE HAS ACCEPTED THE ENTRIES IN FINA NCIAL YEAR 2004-05 TO BE RELATING TO HIM. THEREFORE THE CONTENTS OF THE DIARIES AND DOCUMENTS CANNOT BE ACCEPTED OR REJECTED IN A SUMMARY MA NNER AS DONE BY THE LD. CIT(APPEALS). IN THIS CONNECTION IT MAY BE MENT IONED THAT ONE OF HER FINDINGS IN PARAGRAPH 10.2 IS THAT WHILE IT IS CLEAR FROM THE FACTS NARRATED ABOVE THAT THE ASSESSEE WAS PLAYING TRUANT IT IS EQUALLY TRUE THAT THE AO REMAINED INACTIVE FOR ALMOST EIG HT MONTHS AND THEREAFTER ISSUED NOTICES ETC. IN A QUICK SUCCESSION IN TH E MONTH IN WHICH IT WAS GETTING BARRED BY LIMITATION. UNDER THESE CIRC UMSTANCES THE AO CANNOT BE SAID TO HAVE PROVIDED ADEQUATE OPPORTUNITY TO THE ASSESSEE. WHILE THIS CONCLUSION MAY BE TRUE IT IS ALSO EQUALLY TRUE THAT THE ASSESSEE WAS PLAYING TRUANT BEFORE THE AO. THEREFORE THE W HOLE OF THE BLAME CANNOT BE LAID AT THE SHOULDERS OF THE AO. 4.1 IN THE CASE OF CIT VS. SMC SHARE BROKERS LT D. (2007) 288 ITR 345 (DEL) THE HONBLE HIGH COURT BY REFERRIN G TO THE DECISION OF ONE- UP SHARES AND STOCK BROKERS (P) LTD. VS R.R. SING H COMMISSIONER OF INCOME-TAX (2003) 262 ITR 275 (BOM.) HELD TH AT ALTHOUGH THE STATEMENT OF SHRI MANOJ AGGARWAL HAS EVIDENTIARY VALUE BUT WEIGHT COULD NOT BE GIVEN TO IT IN PROCEEDINGS AGAINST THE ASSESSE E WITHOUT IT BEING TESTED ITA NO.4581(DEL)/2009 10 UNDER CROSS-EXAMINATION. IN THE ABSENCE OF TH E STATEMENT BEING TESTED IT CANNOT BE SAID THAT IT SHOULD BE BELIEVED C OMPLETELY TO THE PREJUDICE TO THE ASSESSEE. THUS THE DECISION OF THE JUR ISDICTIONAL HIGH COURT IS THAT FOR COMPLETELY BELIEVING IN THE STATEMENT OF A THIRD PARTY AGAINST THE ASSESSEE THE LATTER MUST BE GIVEN AN OPPORTUNI TY OF CROSS-EXAMINATION. THE ASSESSEE HAS ALSO RELIED ON A NUMBER OF O THER DECISIONS ON THE SAME POINT. SINCE WE HAVE GUIDANCE FROM THE JURISDICTIONAL HIGH COURT IN THE MATTER WHICH IS BINDING IN NATURE WE DO NOT THINK IT NECESSARY TO DISCUSS THOSE CASES. IT IS OBVIOUS THAT THE ASSESSEE HAS NOT BEEN ALLOWED AN OPPORTUNITY TO CROSS-EXAMINE SHRI RAJIV GUPTA AND SHRI RAM AVTAR. AT THE SAME TIME THERE IS A FIRM I NDICATION THAT THE ENTRIES MADE IN THE DOCUMENTS REPRESENT THE TRUE STATE OF AFFAIRS IN SO FAR AS THE ENTRIES ARE CONCERNED FOR FINANCIAL YEAR 2004-05. HOWEVER THIS CONDUCT OF THE ASSESSEE COULD BE TAKEN AS INDICATIVE AND NOT CONCLUSIVE IN REGARD TO THIS YEAR FOR THE REASON THAT THE ST ATEMENTS OF SHRI RAJIV GUPTA AND SHRI RAM AVTAR INDICATE THAT THE NAME IS E NTERED ON THE BASIS OF DIRECTION GIVEN BY THE BEARER OF THE MONEY. THE REFORE THESE ISSUES REQUIRE TO BE RESOLVED BY MAKING FURTHER ENQ UIRY. WE HAVE ALREADY MENTIONED THAT THE LD. CIT(APPEALS) DELETED THE ADDITION FOR LACK OF CORROBORATIVE EVIDENCE WHICH IS ALREADY THERE ON THE RECORD BY WAY OF ITA NO.4581(DEL)/2009 11 ADMISSION OF ENTRIES FOR ASSESSMENT YEAR 2005- 06. THEREFORE IT IS HELD THAT HER ORDER DELETING THE ADDITION IS NOT THE CORRECT DECISION ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 4.2 COMING TO THE DECISION OF THE TRIBUNAL FOR ASSESSMENT YEAR 2005- 06 THE LD. DR HAS RIGHTLY POINTED OUT THAT IT IS BASED ON AN ERRONEOUS CONCLUSION OF FACT THAT RELATIONSHIP BETWEEN L ATE SHRI NAGAR MAL AND SHRI ANIL KUMAR BANSAL HAS NOT BEEN ESTABLISHED. AS A MATER OF FACT IT IS ADMITTED BY THE LD. COUNSEL THAT THEY ARE FAT HER AND SON AND THE ASSESSMENT HAS BEEN MADE ON SHRI ANIL KUMAR BANSAL AS A LEGAL HEIR OF LATE SHRI NAGAR MAL. IN THESE CIRCUMSTANCES NO USEFUL PURPOSE WILL BE SERVED BY FOLLOWING THIS ORDER. 4.3 LOOKING TO THE FACT OF NON-COMPLIANCE BY THE ASSESSEE BEFORE THE AO ADMISSION OF CORRECTNESS OF ENTRIES IN ASS ESSMENT YEAR 2005-06 AND FAILURE TO AUTHENTICATE THE ENTRIES OF THIS YEA R BY THE AO AS PER REQUIREMENTS OF THE DECISION IN THE CASE OF SMC SHARES BROKERS LTD. (SUPRA) WE ARE OF THE VIEW THAT THE INTEREST O F JUSTICE WILL BE SERVED IF THE MATTER IS RESTORED TO THE FILE OF THE AO WI TH A VIEW TO EXAMINE THE MATTER FURTHER AND DECIDE THE ISSUE OF AUTHENT ICITY OF THE ENTRIES OF THIS ITA NO.4581(DEL)/2009 12 YEAR. NEEDLESS TO SAY THAT THE DE-NOVO ORDER SHALL BE PASSED AFTER GIVING THE ASSESSEE AN ADEQUATE OPPORTUNITY O F BEING HEARD. 5. IN THE RESULT THE APPEAL IS TREATED AS ALLO WED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16 APRIL 2010. SD/- SD/- (GEORGE MATHAN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 16.04.2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. SHRI ANIL KUMAR BANSAL L/H OF LATE SHRI NAGAR MAL DELHI-6. 2. ITO WARD-28(2) NEW DELHI. 3. CIT(A) 4. CIT NEW DELHI. 5. DR ITAT NEW DELHI. ASSISTANT REGISTRA R.