ACIT, New Delhi v. Sh. J.K. Singh, New Delhi

ITSSA 11/DEL/2010 | misc
Pronouncement Date: 30-04-2010 | Result: Dismissed

Appeal Details

RSA Number 1120116 RSA 2010
Assessee PAN AAUPS3147A
Bench Delhi
Appeal Number ITSSA 11/DEL/2010
Duration Of Justice 2 month(s) 25 day(s)
Appellant ACIT, New Delhi
Respondent Sh. J.K. Singh, New Delhi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-04-2010
Date Of Final Hearing 05-04-2010
Next Hearing Date 05-04-2010
Assessment Year misc
Appeal Filed On 04-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : D NEW DELHI) BEFORE SHRI R.P. TOLANI J UDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD : 1987-88 TO 97-98) ACIT CEN. CIRCLE 7 VS. SHRI J.K. SINGH NEW DELHI. MESCOT TOWER H-1 ZAMROODPUR COMMUNITY CENTRE KAILASH COLONY NEW DELHI. (PAN/GIR NO.AAUPS3147A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGGARWAL/GAUTAM JAIN REVENUE BY : SMT. KAVITA BHATNAGAR CIT(DR) ORDER PER K.D. RANJAN AM THIS APPEAL BY THE REVENUE FOR BLOCK PERIOD 1987- 88 TO 1997-98 ARISES OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-I NEW DELHI. THE EFFECTIVE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED AS UND ER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.22 60 000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN PURCHASE OF NDSE SHOPS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.21 89 530/ - MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT MADE IN PURCHASE OF SHARES OF M/S SHRUSTI SHOES LTD. FOR AY 1995-96. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN LAW AND FACTS IN DIRECTING NOT TO CHARGE INTEREST U/S 1 58BFA(1) EVEN THOUGH THE ASSESSEE HAD FILED THE RETURN OF INCOME BEYOND THE DATE MENTIONED IN THE NOTICE. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO DE LETING THE ADDITION OF RS.22 60 000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN THE PURCHASE OF NDSE IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 2 SHOPS. THE FACTS OF THE CASE STATED IN BRIEF ARE T HAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED ON 26.4.1999 ON THE BASIS OF SEIZED M ATERIAL FOUND DURING THE COURSE OF A SEARCH AND SEIZURE OPERATION CONDUCTED ON 31.2.1997 . DURING THE SEARCH AND SEIZURE OPERATION CERTAIN DOCUMENTS WERE SEIZED WHICH SHOWE D THAT THE ASSESSEE ALONG WITH 5 OTHER CO-OWNERS MADE PAYMENT OF RS.90 LAKHS IN CASH TO BUY PROPERTY SHOP NO. N-30 SOUTH EXTENSION PART-I NEW DELHI. THE AO MADE PR OPORTIONATE ADDITION OF RS.22.60 LAKH IN RESPECT OF UNDISCLOSED INVESTMENT IN NDSE S HOPS. 3. THE CIT(A) VIDE ORDER DATED 28.3.2002 DIRECTED T HE AO TO MAKE FURTHER ENQUIRY AS HE NOTICED THAT THE ASSESSEE MADE PART PAYMENT B Y CHEQUES. ACCORDINGLY THE ASSESSEE WAS REQUIRED TO FILE NECESSARY EVIDENCE VIDE LETTER DATED 12.12.2006. DURING THE COURSE OF SEARCH A LETTER DATED 24.08.1994 WRITTEN BY SHR I R.K. GUPTA TO THE MANAGING DIRECTOR WAS FOUND ON THE BASIS OF WHICH ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SP WAS MADE. THE AO ASKED THE ASSESSEE TO PRODUCE SHRI R. K. GUPTA. THE ASSESSEE FAILED TO PRODUCE SHRI R.K. GUPTA FOR CROSS EXAMINATION. THE AO FURTHER NOTED THAT ENQUIRIES WERE NOT CONDUCTED FROM SMT. SUSHILA RANI THE SELL ER OF SHOP DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THE AO DEPUTED HI S INSPECTOR TO CONDUCT ENQUIRIES FORM SMT. SUSHILA RANI WHO CONTACTED SHRI RAKESH K UMAR S/O SMT. SUSHILA RANI. ACCORDING TO HIM SMT. SUSHILA RANI WAS RESIDING IN RAJASTHAN. IT WAS ALSO STATED THAT PROPERTY IN QUESTION WAS CONSTRUCTED AND SOLD BY ON E SHRI SATINDER SINGH. IT WAS REPORTED BY THE INSPECTOR THAT SMT. SUSHILA RANI BE LONGED TO A MIDDLE CLASS FAMILY AND COULD NOT HAVE MADE INVESTMENTS. HE ALSO MADE ENQU IRY FROM SATINDER SINGH WHO HAS STATED THAT PROPERTY WAS CONSTRUCTED AND SOLD IN 19 94. HOWEVER HE COULD NOT RECOLLECT ANY OTHER DETAIL. THEREFORE HE PROCEEDED TO DECID E THE ISSUE ON THE BASIS OF DOCUMENT SEIZED DURING THE COURSE OF SEARCH. HE ALSO NOTED THAT GENUINENESS OF THE PAPERS HAD BEEN ESTABLISHED BY THE CONDUCT OF THE ASSESSEE AND HER ASSOCIATES. SHRI J.K. SINGH HAD DECLARED THAT HE MADE PAYMENT OF RS.8 LAKH IN CASH. THE PAYMENT BY CHEQUE WAS MADE OF RS.50 LAKH. THE AO FOR THE REASONS RECORDED IN THE ASSESSMENT ORDER MADE PROPORTIONATE ADDITION OF RS.22 60 000/-. 4. ON APPEAL THE CIT(A) RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF MS NATASHA SINGH VS. ACIT IN IT(SS)A NO.73/DEL./07 FOR BLOCK PERIOD 1.4.1986 TO 28.2.1997 IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 3 AND SHRI J.K. SINGH (HUF) VS. DCIT IN IT(SS)A NO.39 /DEL./2006 FOR BLOCK AY 1987-88 TO 97-98 DATED 31.8.2009 DELETED THE ADDITION OF R S.22 60 000/-. 5. BEFORE US LD.AR OF THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT IN THE CASE OF MS NATASHA SINGH AN D SHRI J.K. SINGH (HUF) (SUPRA). ON THE OTHER HAND LD.CIT(DR) SUPPORTED THE ORDER O F AO. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE PROPERTY WAS PURCHASED BY THE ASSESSEE ALONG WITH OTHER CO- OWNERS. WE FIND THAT ITAT IN THE CASE OF MS. NATAS HA SINGH & J.K. SINGH (HUF) (SUPRA) HAS DELETED THE ADDITION OF RS.22 60 000/- BY OBSERVING AS UNDER: 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE MATERIAL AVAILABLE ON RECORD AND ALSO THE EARLIER ASSESSMENT ORDER AND EARLIER ORDER OF LD CIT(A). WE FIND THAT IN THE FIRST ROUND THIS ISSUE HAS BEEN RESTORED BACK TO THE FILE OF ASSESSING OFFICER BY THE LD CIT(A) FOR A FR ESH DECISION AFTER MAKING COMPLETE INVESTIGATION INTO THE AFFAIRS RELATING TO THIS TRANSACTION. AS PER THE IMPUGNED ORDER OF THE ASSESSING OFFICER DATED 28.3. 2002 WE FIND THAT AFTER THE ORDER OF LD CIT(A) IN THE FIRST ROUND ON 22.9.1999 THE ASSESSING OFFICER HAS ISSUED FIRST LETTER ON 9.1.2002 FOR FIXING THE CASE ON 18.1.2002 AND THE SECOND LETTER WAS ISSUED BY HIM TO THE ASSESSEE ON 21.1.20 02 FIXING THE CASE ON 29.1.2002 AND WHEN THE ASSESSEE DID NOT APPEAR BEFORE HIM HE HAS PASSED THE ASSESSMENT ORDER ON 28.3.2002 BY REPEATING THE SAME ADDITION W ITHOUT MAKING ANY FRESH INVESTIGATION OR WITHOUT MAKING ANY OTHER EFFORT AS DIRECTED BY LD CIT(A). THEREAFTER WHEN THE LD CIT(A) IN SECOND ROUND ASKE D HIM FOR A REMAND REPORT IT IS REPORTED BY HIM THAT THE ASSESSEE HAS NOT PRODUC ED THE SELLER AND IT WAS FOUND BY HIM THAT WHO HAS SOLD THE SHOP WAS NOT AVAILABLE ON THE AVAILABLE ADDRESS AND SHE WAS REPORTED TO BE IN RAJASTHAN WITHOUT ANY CL UE REGARDING THE PRESENT WHEREABOUTS IN THE RAJASTHAN. IT IS NOTED BY LD CI T(A) ON PAGE NO.14 OF HIS ORDER THAT INSPECTOR WAS DEPUTED FOR ON THE SPOT EN QUIRY AND HE HAS FOUND SHRI RAKESH KUMAR WHO IS THE SON OF SAID SELLER AND HE H AS CONFIRMED THAT THE PROPERTY IN QUESTION WAS CONSTRUCTED AND SOLD BY SH RI SATINDER SINGH. IT IS ALSO NOTED THAT SHRI SATINDER SINGH EXPRESSED HIS INABIL ITY IN PROVIDING THE DETAIL SINCE THE PROPERTY WAS SOLD IN 1994. AFTER NOTING THESE F ACTS IT IS OBSERVED BY LD CIT(A) THAT THE ASSESSING OFFICER HAS CORRECTLY GIV EN HIS REPORT THAT IN ANY CASE FOR ASSESSMENT YEAR 1994-95 NO ACTION REGARDING RE OPENING OF ASSESSMENT ETC. U/S 147 OF THE ACT CAN BE TAKEN AGAINST SMT. SUSHIL A RANI. THEREFORE THE OPINION OF THE LD CIT(A) WAS THAT THE ASSESSING OFFICER WAS PERFECTLY JUSTIFIED IN HIS REMAND REPORT SUGGESTING THAT THE ISSUE HAS TO BE D ECIDED ON THE BASIS OF DOCUMENTS SEIZED DURING THE SEARCH AND SEIZURE OPER ATION. WE ARE NOT IN AGREEMENT WITH THE LD CIT(A) ON THIS ISSUE BECAUSE THE ORDER OF LD CIT(A) IN THE FIRST ROUND WAS PASSED ON 22.9.1999 AND AT THAT POI NT OF TIME OF ACTION UNDER SECTION 147 WAS VERY MUCH POSSIBLE IN THE CASE OF S ELLER ALSO. BUT WE ARE NOT CONCERNED WITH THE ACTION TAKEN OR NOT TAKEN IN THE HANDS OF SELLER BUT WE FIND THAT IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 4 EVEN WHEN THE ASSESSING OFFICER COULD LOCATE THE SO N OF THE SELLER I.E. SHRI RAKESH KUMAR IT CANNOT BE SAID THAT SMT. SUSHILA RANI TH E SELLER WHO WAS REPORTED TO BE IN RAJASTHAN WITHOUT ANY CLUE REGARDING THE PRESENT WHEREABOUTS IN RAJASTHAN. ONCE THE SON OF THE SELLER HAS BEEN LOCATED THE CO MPLETE ADDRESS OF THE SELLER CAN BE OBTAINED EASILY FROM THE SON OF THE SELLER. EVEN IF IT IS AGREED THAT NO ACTION COULD HAVE BEEN TAKEN IN THE CASE OF THE SELLER BE CAUSE OF EXPIRY OF LIMITATION PERIOD IT WAS MORE NECESSARY FOR THE ASSESSING OFF ICER TO OBTAIN CORRECT DETAILS FROM THE SELLER ABOUT THE ACTUAL TRANSACTION IN THI S CASE BECAUSE ONCE IT IS CLEAR THAT NO ACTION CAN BE TAKEN IN THE HANDS OF THE SELLER THE SELLER CAN EASILY COME OUT WITH THE TRUTH SINCE SELLER WILL NOT BE WORRIED ABO UT THE CONSEQUENCES IN HER OWN CASE BUT STILL THE ASSESSING OFFICER DID NOT OBTAIN THE STATEMENT OF THE SELLER EVEN AFTER LOCATING HER SON. 9. REGARDING THE EXPLANATION GIVEN BY THE ASSESSEE WITH REGARD TO THE SEIZED DOCUMENTS AS PER WHICH RS.50 LAKHS WAS PAYABLE IN C HEQUE AND RS.90 LAKHS WAS PAYABLE IN CASH WE FIND THAT THE EXPLANATION MAY N OT BE CONVINCING BUT THE SAME CANNOT BE IGNORED PARTICULARLY WHEN THE SAME IS BEI NG CORROBORATED BY THE REPORT OF THE DEPARTMENTAL VALUATION OFFICER. THE EXPLANAT ION OF THE ASSESSEE IS THAT AFTER THE PAYMENT OF ADVANCE AND FURTHER PAYMENT OF RS.8 LAKHS ON3.9.1994 THE ACTUAL MARKET PRICE OF THE PROPERTY IN QUESTION WAS ENQUIRED INTO AND IT WAS FOUND THAT THE SAME IS ABOUT RS.50 LAKHS THEREFORE FRESH NEGOTIATIONS WERE MADE AND ULTIMATELY THE DEAL WAS SETTLED FOR RS.50 LAKHS BY CHEQUE AND RS.8 LAKHS BY CASH. AGAINST THIS CONTENTION OF THE ASSESSEE THE OBJECTION OF LD DR IS THAT THIS CONTENTION REGARDING ORAL AGREEMENT IS NOT SUPPORTE D BY ANY EVIDENCE. WE ARE IN AGREEMENT WITH LD DR OF THE REVENUE THAT THIS IS AN ORAL AGREEMENT AND NOT SUPPORTED BY ANY EVIDENCE BUT THIS CLAIM IS BEING C ORROBORATED BY THE REPORT OF THE DVO APPOINTED BY THE ASSESSING OFFICER HIMSELF AND AS PER THE DVOS REPORT THE VALUE OF THE PROPERTY IN QUESTION WAS RS.58 49 820/-. AS AGAINST THIS THE CONSIDERATION PAID BY THE ASSESSEE IS OF RS.50 LAKH S BY CHEQUE AND RS.8 LAKHS BY CASH TOTALING RS. 58 LAKHS. REGARDING THIS CONTENTI ON OF LD DR OF THE REVENUE THAT THE REPORT OF THE DVO IS NOT BINDING ON THE ASSESSI NG OFFICER WE FEEL THAT IN ORDER TO IGNORE THE DVOS REPORT THE ASSESSING OFF ICER HAS TO GIVE SOME BASIS AND REASONS. NOTHING OF THAT SORT HAS BEEN DONE BY THE ASSESSING OFFICER AND NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSIN G OFFICER TO CONTRADICT THE DVOS REPORT AND THE ASSESSEES CONTENTION THAT THE VALUE OF THE PROPERTY IN QUESTION WAS AROUND RS.58 LAKHS. THE ASSESSING OFFI CER COULD HAVE BROUGHT ON RECORD ANY COMPARABLE CASE. THE ASSESSING OFFICER C OULD HAVE OBTAINED THE STATEMENT OF ANY OTHER PERSON OF THE LOCALITY SUGGE STING THAT THE PRICE OF PROPERTY IN SIMILAR AREA WAS NOT RS.50/58 LAKHS BUT AROUND RS.140 LAKHS. THE ASSESSING OFFICER SHOULD HAVE OBTAINED THE STATEMENT OF THE S ELLER AND SINCE AS PER THE ASSESSING OFFICER THE TIME PERIOD FOR TAKING ACTIO N IN THE HANDS OF SELLER HAD EXPIRED IT WAS VERY MUCH POSSIBLE THAT THE SELLER COULD HAVE COME OUT WITH CORRECT FACT EVEN IF THE SAME WAS AGAINST HER BUT T HIS WAS NOT DONE BY THE ASSESSING OFFICER IN SPITE OF THE FACT THAT HE COUL D LOCATE THE SON OF THE SELLER. UNDER THESE FACTS WE ARE OF THE CONSIDERED OPINION THAT THE CONTENTION OF THE ASSESSEE MAY NOT BE CONVINCING BUT STILL IT CANNOT BE IGNORED BECAUSE THE SAME IS IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 5 BEING CORROBORATED BY THE REPORT OF DVO AND NO CONT RARY MATERIAL EXCEPT THE SEIZED MATERIAL HAS BEEN BROUGHT ON RECORD BY THE A SSESSING OFFICER. THE ASSESSING OFFICER HAD THREE OPPORTUNITIES TO BRING RELEVANT FACTS ON RECORD. FIRST OPPORTUNITY WAS DURING THE FIRST ASSESSMENT PROCEE DINGS AND THE SECOND OPPORTUNITY WAS WHEN LD CIT(A) IN THE FIRST ROUND RESTORED BACK THE MATTER TO HIM AND THIRD OPPORTUNITY WAS WHEN THE PRESENT CIT( A) ASKED HIM TO SUBMIT REMAND REPORT BUT IN SPITE OF THESE THREE OPPORTUNI TIES THE ASSESSING OFFICER HAS DONE NOTHING TO BRING ANY ADVERSE MATERIAL ON RECOR D PARTICULARLY WHEN THE DVOS REPORT WAS FAVOURING THE ASSESSEE. UNDER THIS FACTUAL POSITION WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE ON THE BASIS OF SEIZED LETTER PARTICULARLY WHEN THE ASSESSEE IS CONTENDING THAT F RESH NEGOTIATIONS AT LESSER PRICE AND THIS CONTENTION OF THE ASSESSEE IS CORROBORATED BY THE DVOS REPORT OBTAINED BY THE ASSESSING OFFICER HIMSELF. WE THEREFORE DE LETE THIS ADDITION OF RS.15.30 LAKHS. GROUND NO.4 IS ALLOWED. 7. SINCE THE ISSUE BEFORE US IS IDENTICAL TO THE IS SUE INVOLVED IN THE CASE OF NATASHA SINGH & J.K. SINGH (HUF) AND SINCE NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO DISTINGUISH THE FACTS WE THEREFORE HA VE NO ALTERNATIVE BUT TO FOLLOW THE DECISION OF ITAT. RESPECTFULLY FOLLOWING THE DECIS ION OF THE TRIBUNAL THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED EXPENDITURE HAS TO BE DELETED. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE C IT(A) DELETING THE ADDITION. 8. THE NEXT ISSUE FOR CONSIDERATION RELATES TO DELE TING THE ADDITION OF RS.21 89 530/- ON ACCOUNT OF UNDISCLOSED INVESTMENTS IN PURCHASE O F SHARES. DURING THE COURSE OF HEARING IT WAS BROUGHT TO OUR NOTICE BY LD.AR OF T HE ASSESSEE THAT THIS ISSUE ALSO STANDS DECIDED BY THE DECISION OF ITAT IN THE CASE OF NATA SHA SINGH VS. ACIT IN IT(SS)A 73/DEL./2007 FOR BLOCK PERIOD 1.4.1986 TO 28.2.1997 WHEREIN IT WAS OBSERVED AS UNDER: 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY LD.A R OF THE ASSESSEE. WE FIND THAT IN THE PRESENT CASE BOTH THE ASSESSEE AND THE ALLEGED RECIPIENT SHRI V.S. CHAUDHARY ARE DENYING ABOUT ANY CASH TRANSACTION. THE AUTHOR OF THE SEIZED DOCUMENT SHRI VENKATARAMAN WAS NEVER EXAMINED BY TH E ASSESSING OFFICER. LD.DR OF THE REVENUE HAS LAID DOWN MUCH STRESS ON T HE STATEMENT OF SHRI D.K. SINGH. WE FIND THAT THE STATEMENT OF SHRI D.K. SIN GH IS APPEARING ON PAGE NOS.188 TO 201. IN THIS STATEMENT SHRI D.K. SINGH HAS STATED THAT REGARDING TAKEOVER DEAL OF SHARES OF M/S SHRUSTI SHOES LTD. ( SSL) HE HAS NO PERSONAL KNOWLEDGE SINCE THE WHOLE DEAL WAS DONE AT THE HEAD OFFICE AT DELHI. REGARDING PAYMENT OF ANY MONEY TO SHRI V.S. CHAUDHARY INTHIS CONNECTION IT WAS STATED BY HIM THAT SHRI VENKATARAMAN AND SHRI PALIWAL PAID RS .30 LAKHS TO SHRI V.S. CHAUDHARY BUT HE DOES NOT KNOW IN WHAT REGARD. IT IS ALSO STATED BY HIM THAT HE IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 6 HAS NO IDEA WHETHER SHRI VENKATARAMAN AND SHRI PALI WAL GOT THE RECEIPT OR NOT. REGARDING SOURCE OF THIS FUND OF RS.30 LAKHS IT IS STATED BY HIM THAT HE HAD MADE THE CHEQUE FOR RS.30 LAKHS AND HANDED OVER TO SHRI VENKATARAMAN WHO HAS WITHDRAWN RS.30 LAKHS FORM THE BANK. REGARDING PUR POSE IT WAS SAID BY HIM THAT RS.30 LAKHS WAS WITHDRAWN AND HANDED OVER TO SHRI V .S. CHAUDHARY BUT HE DID NOT KNOW FOR THE PURPOSES. THIS STATEMENT OF SHRI D.K. SINGH GOES TO SHOW THAT HE HAS NO IDEA WHATSOEVER REGARDING PURPOSE OF PAYM ENT OF RS.30 LAKHS BY SHRI VENKATARAMAN AND SHRI PALIWAL TO SHRI V.S. CHAUDHAR Y. REGARDING THE SOURCE OF THIS FUND OF RS.30 LAKHS IT WAS STATED BY HIM THAT THE SAME WAS WITHDRAWN FORM BANK AGAINST CHEQUE. HE WAS RESIDENTIAL DIRECTOR A T CHENNAI OF MESCO GROUP AND HENCE THE SOURCE OF MONEY IS ALSO EXPLAINED AND HEN CE NO ADVERSE INFERENCE CAN BE DRAWN SIMPLY ON THE BASIS OF THIS STATEMENT OF S HRI D.K. SINGH. 14. IN THE LIGHT OF THIS FACTUAL POSITION NOW WE EXAMINE THE APPLICABILITY OF JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN TH E CASE OF CIT V. VED PRAKASH CHAUDHARY (SUPRA). FACTS OF THIS CASE ARE THAT IN THE COURSE OF SEARCH TWO MEMORANDUMS OF UNDERSTANDING (MOU) DATED IST MARCH 1993 WERE FOUND. THESE MOUS WERE ENTERED INTO BETWEEN THE ASSESSEE A ND SHRI RAVI TALWAR AND MADHU TALWAR AND AS PER THESE MOUS THE ASSESSEE HA S PAID RS.25 LAKHS EACH TO SHRI RAVI TALWAR AND MADHU TALWAR TOWARDS PART CONS IDERATION FOR THE PURCHASE OF AGRICULTURAL LAND VALUED AT RS.123.30 LAKHS. ON THE BASIS OF THESE MOUS THE ASSESSING OFFICER CONCLUDED THAT RS.50 LAKHS WERE P AID BY THE ASSESSEE TO THESE TWO PERSONS AND HE MADE AN ADDITION OF RS.50 LAKHS IN THE HANDS OF THE ASSESSEE U/S 69 OF THE INCOME TAX ACT 1961 AS UNEXPLAINED E XPENDITURE. THIS VIEW TAKEN BY THE ASSESSING OFFICER WAS NOT ACCEPTED BY THE LD CIT(A) AND ALSO BY THE TRIBUNAL AND IT WAS HELD THAT THERE WAS NO VALID EV IDENCE TO ADD THE AMOUNT IN THE HANDS OF THE ASSESSEE. IT IS NOTED BY HON'BLE DELHI HIGH COURT THAT THE ASSESSEE AS WELL AS SHRI RAVI TALWAR AND MADHU TALWAR DENIED TH E MONEY TRANSACTION. UNDER THESE FACTS IT WAS HELD THAT THE ASSESSEE AS WELL AS SHRI RAVI TALWAR AND MADHU TALWAR HAD DENIED THE CASH TRANSACTION AND IN THE FACE OF THESE DENIALS THERE OUGHT TO HAVE BEEN CORROBORATIVE EVIDENCE TO SHOW THAT THERE WAS IN FACT SUCH A TRANSFER OF MONEY. IT IS NOTED THAT BOTH THE CIT(A) AS WELL AS THE TRIBUNAL HAD COME TO THE CONCLUSION THAT THERE WERE NO SUCH MATERIAL ON RECORD AND UNDER THESE FACTS IT WAS HELD THAT ADDITION MADE BY THE ASSESSING OFFICER CANNOT BE UPHELD. IN THE PRESENT CASE ALSO THE ONLY MATERIA L AVAILABLE IS AN INTER OFFICE MEMO FROM SHRI VENKATARAMAN TO CHAIRMAN AS AVAILABL E ON PAGES 176 TO 178 OF THE PAPER BOOK. THE ASSESSEE AS WELL AS SHRI CHAUDH ARY HAD DENIED ABOUT ANY CASH TRANSACTION IN THIS REGARD. THE STATEMENT OF S HRI CHAUDHARY IS AVAILABLE ON PAPER BOOK PAGES 181 TO 193 AND IN REPLY TO QUESTIO N NO.26 ON PAGE NO.185 IT WAS STATED BY HIM THAT NO CASH WAS RECEIVED BY HIM ON THIS ACCOUNT AND INTER OFFICE MEMO IS TOTALLY FALSE DOCUMENT AND FABRICATE D BY MS. RITA SINGH. MUCH STRESS WAS LAID ON THE STATEMENT OF SHRI DK SINGH B UT WE HAVE SEEN ABOVE THAT NOTHING IS FORTH COMING FROM THE STATEMENT OF SHRI DK SINGH REGARDING ANY CASH PAYMENT ON THIS ACCOUNT BY THE ASSESSEE TO SHRI CHA UDHARY ON ACCOUNT OF PURCHASE OF SHARES OF M/S SHRUSTI SHOES LTD. THE A UTHOR OF THIS INTER OFFICIAL MEMO WAS NOT EXAMINED BY THE ASSESSING OFFICER. IT HAS BEEN CONTENDED THAT THE IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 7 ASSESSEE HAS FAILED TO PRODUCE SHRI VENKATARAMAN IN THE COURSE OF REMAND PROCEEDINGS. IN DECEMBER 2006 BUT WE FAIL TO UNDE R STAND THAT WHY SHRI VENKATARAMAN WAS NOT EXAMINED IN THE COURSE OF ORIG INAL ASSESSMENT COMPLETED BY THE ASSESSING OFFICER ON 24.2.1999 AND AGAIN WHE N SET ASIDE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER ON 28.3.2002. WE ALSO FAIL TO UNDERSTAND AS TO WHEN IN THE FIRST ROUND THE LD CIT(A) HAS SET ASID E THE ASSESSMENT TO THE ASSESSING OFFICER VIDE HIS ORDER DATED 12.9.1999 W HY THE ASSESSING OFFICER HAS STARTED THE PROCEEDINGS SO LATE BY ISSUING OF FIRST LETTER TO THE ASSESSEE ON 9.1.2002. THE ASSESSING OFFICER HAS WASTED PRECIOUS TIME AND THEREAFTER BLAMING THE ASSESSEE FOR NOT PRODUCING THE KEY WITNESSES. CONSI DERING ALL THESE FACTS AND RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE DEL HI HIGH COURT RENDERED IN THE CASE OF SHRI VED PRAKASH (SUPRA) WE HOLD THAT IN TH E PRESENT CASE THERE IS NO ENOUGH MATERIAL ON RECORD TO HOLD THAT THERE WAS AN Y CASH PAYMENT BY THE ASSESSEE TO SHRI CHAUDHARY ON ACCOUNT OF PURCHASE O F SHARES OF M/S SHURSTI SHOES LTD. WE THEREFORE DELETE THIS ADDITION. GROUND N O.5 IS ALSO ALLOWED. 9. SINCE THE ISSUE BEFORE US IS IDENTICAL TO THE IS SUE INVOLVED IN THE CASE OF NATASHA SINGH & J.K. SINGH (HUF) AND NO MATERIAL HAS BEEN B ROUGHT ON RECORD BY THE REVENUE TO DISTINGUISH THE FACTS WE THEREFORE HAVE NO ALTER NATIVE BUT TO FOLLOW THE DECISION OF ITAT. RESPECTFULLY FOLLOWING THE DECISION OF THE T RIBUNAL IT IS HELD THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT MADE IN PURCHASE OF SHARES OF M/S SHRUSTI SHOES LTD. FOR AY 1995-96 WAS NOT JUSTIFIED . ACCORDINGLY WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE CIT(A) DELETIN G THE ADDITION. 10. THE THIRD ISSUE FOR CONSIDERATION RELATES TO CH ARGING OF INTEREST U/S 158BFA(1) OF THE I.T. ACT. THIS ISSUE IS ALSO COVERED BY THE DE CISION OF THE ITAT IN THE CASE OF M/S MESCO AIRLINES LTD. VS. ACIT IN IT(SS)A NO.34/DEL./ 2007 FOR BLOCK PERIOD 1992-93 TO 97-98 WHEREIN THE INTEREST HAS BEEN DELETED BY OBS ERVING AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN CO NSIDERING THE FACTS OF THE PRESENT CASE IT HAS TO BE NOTICED THAT ONCE A SEAR CH UNDER SECTION 132 HAS BEEN CONDUCTED ON THE ASSESSEE THE PROVISIONS OF CHAPTE R XIV-B COME INTO PLAY. THE PROVISIONS OF CHAPTER XIV B MAKE IT COMPULSORY FOR A NOTICE TO BE ISSUED UNDER SECTION 158BC WHEN AN ASSESSMENT IS TO BE DONE IN C ONSEQUENCE OF A SEARCH. THE PROVISIONS OF SECTION 158BC ALSO SPECIFY THE TIME L IMIT WITHIN WHICH THE RETURN OF INCOME IS TO BE FILED BY THE ASSESSEE. THE MAXIMUM TIME LIMIT SPECIFIED FOR THE PURPOSE OF FILING THE RETURN IN TIME LIMIT WITHIN W HICH THE RETURN OF INCOME IS TO BE FILED BY THE ASSESSEE. THE MAXIMUM TIME LIMIT SPECI FIED FOR THE PURPOSE FOR FILING THE RETURN IN RESPONSE TO THE NOTICE UNDER SECTION 158BC IS 45 DAYS. THE PROVISO TO SECTION 158BC SPECIFIED THAT THE ASSESSEE DOES N OT HAVE THE LIBERTY TO FILE A REVISED RETURN. THUS THE ASSESSEE CAN FILE ONLY ONE RETURN. WHEN THIS PROVISION IS READ ALONG WITH THE PROVISION OF SECTION 158BB IT IS NOTICED THAT THE RETURN OF INCOME IS TO BE FILED IN RESPECT OF THE SEARCH INIT IATED FOR THE BOOKS OF ACCOUNTS IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 8 ASSETS DOCUMENTS REQUISITIONED UNDER SECTION 132A. WHEN A RETURN IS CALLED FOR FROM THE ASSESSEE IT IS EXPECTED THAT THE ASSESSEE WILL FILE ITS CORRECT INCOME. IT IS MORE OF A LAST CHANCE GIVEN TO AN ASSESSEE TO COME CLEAN IN REGARD TO HIS TAX MATTERS. THIS WOULD BE THE REASON WHY THE PROVISO I S MADE AVAILABLE IN SECTION 158BC WHEREIN IT IS SPECIFIED THAT THE ASSESSEE SHA LL NOT BE ENTITLED TO FILE A REVISED RETURN. IF THE RETURN FILED BY THE ASSESSEE IS FOUND TO BE FALSE PENALTY UNDER SECTION 158BFA(2) MAY BE LEVIED. WHEN AN ASSE SSEE IS REQUIRED TO FILE HIS CORRECT RETURN OF INCOME AND HE HAS ONLY ONE CHANCE TO DO IT THAT OBVIOUSLY THE ASSESSEE SHOULD ALSO HAVE THE DOCUMENTS ON THE BASI S OF WHICH BE ABLE TO PREPARE SUCH RETURN. THIS IS BECAUSE AS PER THE PROVISIONS OF SECTION 158BB THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IS TO BE THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERI OD COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT ON THE BASIS OF TH E EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT AND OTHER DOCUMENTS ETC. AS REDUCED BY THE AGGREGATE OF THE TOTAL INCOME OR AS A CASE MAY BE AS INCREASED BY THE AGGREGATE OF THE LOSSES OF SUCH PREVIOUS YEARS DET ERMINED. THUS FOR THE PURPOSE OF COMPUTING UNDISCLOSED INCOME IN THIS CASE THE SA ME SHOULD BE ON THE BASIS OF THE EVIDENCES FOUND IN THE COURSE OF SEARCH OR RELA TABLE TO THE EVIDENCES FOUND IN THE COURSE OF SEARCH. IF THE ASSESSEE DOES NOT HAVE THE COPIES OF THE DOCUMENTS/EVIDENCES WHICH HAVE BEEN SEIZED IN THE COURSE OF SEARCH OBVIOUSLY THE ASSESSEE WOULD BE AT A SUBSTANTIAL DISADVANTAGE . THE PRINCIPLES OF NATURAL JUSTICE ALSO DEMAND THAT THE ASSESSEE SHOULD HAVE T HE COPIES OF THE DOCUMENTS SEIZED IF HE IS TO FILE A TRUE AND COMPLETE RETURN AS PER THE PROVISIONS OF SECTION 158BC READ WITH SECTION 158BB. THE COMPUTATION AS P ROVIDED IN SECTION 158BB BEING MANDATORY AND NO DISCRETION HAVING BEEN MADE AVAILABLE TO THE ASSESSEE OR THE REVENUE TO APPLY ANY OTHER METHOD OF COMPUTATIO N OF UNDISCLOSED INCOME SEIZED MATERIAL PLAY A VERY IMPORTANT ROLE IS TO BE CONSIDERED AS CORE EVIDENCE FOR THE PURPOSE OF COMPUTING THE UNDISCLOSED INCOME UND ER THE PROVISIONS OF CHAPTER XIV. IN THESE CIRCUMSTANCES IT CAN ONLY BE HELD TH AT THE ASSESSEE CAN FILE ITS RETURN OF INCOME AS REQUIRED UNDER SECTION 158BC ON LY AFTER OBTAINING THE COPIES OF ALL SUCH SEIZED MATERIALS WHICH THE ASSESSEE FEE LS IS IMPORTANT FOR THE PURPOSE OF COMPUTING HIS UNDISCLOSED INCOME AND FOR WHICH H E HAS MADE THE NECESSARY APPLICATION TO THE ASSESSING OFFICER. THE PROVISION S OF SECTION 158BFA(1) SPECIFIED 2 TIME LIMITS FOR THE PURPOSE OF LEVY OF INTEREST. UNDER CLAUSE (A) THE LEVY OF INTEREST UNDER SECTION 158BFA(1) TERMINATES ON THE DATE OF FURNISHING THE RETURN OF INCOME WHEN SUCH RETURN HAS NOT BEEN FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 158BC. UND ER CLAUSE (B) THE INTEREST RUNS TILL THE COMPLETION OF THE ASSESSMENT UNDER SECTION 158BC(C) WHEN A RETURN AS REQUIRED UNDER SECTION 158BC HAS NOT BEEN FILED. IN THE PRESENT CASE THE ISSUE FALLS IN CLAUSE (A). THIS IS A CASE WHERE RETURN HAS BEEN FURNISHED AFTER THE EXPIRY OF THE TIME PRESCRIBED UNDER THE PROVISIONS OF SECTION 158 BC. IT IS FURTHER TO BE NOTICED THAT THE WORD USED IS SECTION 158BC. IT IS FURTHER TO BE NOTICED THAT THE WORD USED IN SECTION 158BFA(1) IS SHALL. ONCE IT IS HELD TH AT THERE WAS A DELAY IN FILING THE RETURN NECESSARY CONSEQUENCES IF ANY COME INTO P LAY. THE LANGUAGE OF THE STATUTE IS VERY CLEAR AND UNAMBIGUOUS AND GIVES NO POWER TO ANY OF THE AUTHORITIES IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 9 TO EXERCISE DISCRETION AND WAIVE INTEREST AS CONTEM PLATED UNDER SECTION 158BFA IN APPELLATE PROCEEDINGS. THEREFORE THE MOMENT THE RE IS A DELAY IN FILING THE RETURN AND DELAY IS ATTRIBUTABLE TO THE ASSESSEES CONDUCT THE PROVISIONS OF SECTION 158BFA(1) COME INTO OPERATION. THIS PROPOSITION OF OURS FIND SUPPORT FROM THE DECISION OF THE INCOME TAX APPELLATE TRIBUNAL DELH I BENCH IN THE CASE OF RATI RAM GOTEWALA REPORTED IN 89 ITR 14. ONCE IT IS HELD THAT THE INTEREST UNDER SECTION 158BFA IS TO BE LEVIED THE DELAY IS ATTRIBU TABLE TO THE ASSESSEE THE ISSUE OF INTEREST OF JUSTICE WOULD COME INTO PLAY TO VERI FY AS TO WHETHER THE DELAY IS ATTRIBUTABLE TO THE ASSESSEE. IN THE PRESENT CASE IT IS NOTICED THAT THE SEARCH HAD BEEN CONCLUDED ON 27.03.1997 AND THE NOTICE UNDER S ECTION 158BC HAS BEEN SERVED ON 22.08.1997. THE ASSESSEE HAS WITHIN REASO NABLE TIME REQUESTED THE ASSESSING OFFICER TO GRANT THE ASSESSEE THE COPIES OF THE SEIZED MATERIAL. IN THE LETTER DATED 1.11.1997 THE ASSESSEE HAS SPECIFICALL Y ALSO CLARIFIED THAT WITHOUT THE SEIZED MATERIAL THE ASSESSEE WOULD NOT BE ABLE TO F ILE THE BLOCK RETURN. FURTHER FROM THE LETTER DATED 20.11.1998 WHICH IS THE ACKNO WLEDGEMENT OF HAVING TAKEN ALL THE PHOTOCOPIES REQUIRED IT IS NOTICED THAT TH E GROUP COMPANIES DETAILS ARE IN RELATION TO 10 PERSONS. IT IS FURTHER NOTICED THAT AFTER OBTAINING THE SEIZED MATERIAL ON 20.11.1998 WITHIN 40 DAYS ON 11.11.1999 THE ASSE SSEE HAS FILED ITS BLOCK RETURN. THIS BEING SO IT WOULD HAVE TO BE HELD THA T THE DELAY IN FILING BLOCK RETURN WAS NOT ON REASONS WHICH ARE ATTRIBUTABLE TO THE AS SESSEE. FURTHER THE REVENUE HAS ALSO NOT BEEN ABLE TO PLACE BEFORE US ANY EVIDE NCE TO SHOW THAT THE ASSESSEE HAD BY ITS ACTION DELAYED THE OBTAINING OF THE COPI ES OF THE SEIZED MATERIAL. THIS BEING SO THE DELAY IN FILING THE RETURN CANNOT BE ATTRIBUTABLE TO THE ASSESSEE. THE DELAY IN FILING THE RETURN HAVING BEEN HELD TO BE N OT ATTRIBUTABLE TO THE ASSESSEE THE LEVY OF INTEREST UNDER SECTION 158BFA(1) CANNOT BE HELD TO BE LEVIABLE FOR SUCH PERIOD WHICH WAS REQUIRED BY THE ASSESSEE FOR THE PURPOSE OF OBTAINING THE SEIZED MATERIAL FROM THE REVENUE. FURTHER THE ASSES SEE HAVING FILED ITS RETURN OF INCOME WITHIN THE REASONABLE TIME OF 40 DAYS OF OBT AINING THE SEIZED MATERIAL FROM THE REVENUE IT CANNOT BE SAID THAT THERE IS A NY DELAY ATTRIBUTABLE TO THE ASSESSEE TO WHICH INTEREST UNDER SECTION 158BFA(1) COULD BE LEVIED. IN THE CIRCUMSTANCES THE ASSESSING OFFICER IS DIRECTED TO DELETE THE LEVY OF INTEREST UNDER SECTION 158BFA(1) LEVIED. IN THE CIRCUMSTANCE S ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE STANDS REVERSED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 11. SINCE THE ISSUE BEFORE US IS IDENTICAL TO THE ISSUE INVOLVED IN THE CASE OF M/S MESCO AIRLINES LTD. VS. ACIT(SUPRA) AND NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO DISTINGUISH THE FACTS. WE THEREFORE H AVE NO ALTERNATIVE BUT TO FOLLOW THE DECISION OF ITAT. RESPECTFULLY FOLLOWING THE DECIS ION OF THE TRIBUNAL IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO CHARGE INTER EST U/S 158BFA(1) WHEN THE ASSESSEE HAD FILED RETURN OF INCOME WITHIN REASONABLE TIME O F 40 DAYS. ACCORDINGLY WE DO NOT IT(SS)A NO.11/DEL./2010 (BLOCK PERIOD 1987-88 TO 97-98) 10 FIND ANY INFIRMITY IN THE ORDER PASSED BY THE CIT(A ) DELETING THE LEVY OF INTEREST U/S 158BFA(1) OF THE ACT. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. 12. ORDER PRONOUNCED IN OPEN COURT ON 30.04.2010. SD/- SD/- (R. P. TOLANI) (K.D. R ANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED APRIL 30 2010 SKB COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-I NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. AR/ITAT NEW DELHI.