Partap Singh Verma,, v. ACIT, Range-1, Old CGO Complex,,

ITSSA 373/DEL/2005 | misc
Pronouncement Date: 19-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 37320116 RSA 2005
Bench Delhi
Appeal Number ITSSA 373/DEL/2005
Duration Of Justice 4 year(s) 6 month(s) 16 day(s)
Appellant Partap Singh Verma,,
Respondent ACIT, Range-1, Old CGO Complex,,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted G
Tribunal Order Date 19-03-2010
Date Of Final Hearing 16-03-2010
Next Hearing Date 16-03-2010
Assessment Year misc
Appeal Filed On 02-09-2005
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI R.C. SHARMA ACCOUNTANT MEMBER IT(SS) NO. 373/DEL/2005 BLOCK PERIOD: 01.04.1988 TO 16.04.1999 SHRI PRATAP SINGH VERMA 174 SECTOR - 7A FARIDABAD VS. COMMISSIONER OF INCOME TAX RANGE I FARIDABAD IT(SS) NO. 388/DEL/2005 BLOCK PERIOD: 01.04.1988 TO 16.04.1999 COMMISSIONER OF INCOME TAX RANGE I FARIDABAD SHRI PRATAP SINGH VERMA 174 SECTOR - 7A FARIDABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPT A ADVOCATE DEPARTMENT BY : SHRI GAJANAND MEENA CIT DR O R D E R PER: C.L. SETHI J.M. THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL AGAI NST THE ORDER DATED 29.07.2005 PASSED BY THE LD. CIT(A) IN THE MATTER OF BLOCK ASSESSMENT MADE U/S. 158 BD READ WITH SECTION 158 BC(C) OF THE INCOME TAX ACT 1961 (THE ACT) FOR THE BLOCK PERIOD FROM 01.04.1988 T O 16.04.1999. IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 2 OF 8 2. GROUND NO. 1 CHALLENGING THE VALIDITY OF ASSESS MENT MADE U/S. 158 BD HAS NOT BEEN PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AND HENCE THE SAME STANDS DISMISSED. 3. GROUND NO. 2 IS DIRECTED AGAINST THE CIT(A)S OR DER IN CONFIRMING THE ADDITION OF RS. 21 290/- ON ACCOUNT OF PURCHASE OF TV ON 18.01.1997 BY THE ASSESSEE. 4. DURING THE COURSE OF THE SEARCH CONDUCTED AT THE RESIDENCE OF ONE SHRI SUBHASH VERMA AND SMT. KRISHNA VERMA A CASH MEMO D ATED 18.01.1997 IN RESPECT OF PURCHASE OF 21 COLOUR TV AKAI BRAND FR OM SINGER INDIA LTD FOR RS. 21 990/- WAS FOUND. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE MONEY FOR PURCHASE OF ABOVE TV. THE ASSESSEE IN HI S REPLY SUBMITTED THAT HE PURCHASED THE TV OUT OF HIS PAST SAVING. THE AO DID NOT ACCEPT THE ASSESSEES EXPLANATION IN ABSENCE OF ANY SUPPORTING EVIDENCE. HE THEREFORE TREATED THE SUM OF RS. 21 990/- AS UNDISCLOSED INCO ME OF THE ASSESSEE ASSESSABLE DURING THE BLOCK PERIOD. 5. ON AN APPEAL THE CIT(A) CONFIRMED THE AOS ACTI ON BY OBSERVING AND HOLDING THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING EVIDENCE IN SUPPORT OF THE CLAIM THAT TV WAS PURCHASED OUT OF H IS PAST SAVINGS. 6. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 3 OF 8 7. WE HAVE HEARD BOTH THE PARTIES. THE ORDERS OF T HE AUTHORITIES BELOW HAVE BEEN CAREFULLY PERUSED. THE VARIOUS DOCUMENTS PLACED IN PAPER BOOK FILED BY THE ASSESSEE HAVE BEEN GONE THROUGH. 8. IN THE PRESENT CASE THE AO INITIATED BLOCK ASSE SSMENT PROCEEDINGS AGAINST THE ASSESSEE BY ISSUING THE NOTICE U/S. 158 BD READ WITH SECTION 158 BC OF THE ACT. IN REPLY TO THE NOTICE ISSUED U/S. 158 BD THE ASSESSEE FILED BLOCK RETURN ON 18.12.2002 DECLARING NIL UNDISCLOSE D INCOME. IN THE BLOCK RETURN THE ASSESSEE HAS SHOWN CERTAIN INCOME DURIN G THE ASSESSMENT YEARS 1990-91 TILL ASSESSMENT YEAR DURING WHICH THE SEARC H HAD TAKEN PLACE. THE TV WAS PURCHASED ON 18.01.1997 WHICH FALLS WITHIN THE PERIOD RELEVANT TO THE A.Y. 1997-98. THE ASSESSEE HAS SHOWN AMOUNTS O F RS. 17 000/- 21 000/- 21 500/- 25 000/- 28 000/- 33 000/- 36 000/- AND 38 000/- FOR THE ASSESSMENT YEARS 1990-91 TO 1997-98 RESPECTIVELY. THE INCOME EARNED BY THE ASSESSEE DURING ALL THESE ASSESSMENT YEARS DID NOT EXCEED THE MINIMUM AMOUNT LIABLE TO TAX. IN OTHER WORDS THE ASSESSEE S TOTAL INCOME DID NOT EXCEED TAXABLE LIMIT IN ALL THE ASSESSMENT YEARS A ND THEREFORE THE ASSESSEE DID NOT FILE REGULAR RETURN OF INCOME FOR ALL THESE YEARS. HOWEVER THE INCOME SHOWN IN THESE ASSESSMENT YEARS HAS BEEN ADM ITTED TO BE NOT IN THE NATURE OF ANY UNDISCLOSED INCOME CHARGEABLE TO TAX. HAVING REGARD TO AMOUNT OF INCOME SHOWN BY THE ASSESSEE IN EARLIER Y EARS AND HAVING REGARD TO THE AGE OF THE ASSESSEE AND IN THE LIGHT OF THE REALITY OF LIFE IT CAN SAFELY IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 4 OF 8 BE SAID THAT THE SUM OF RS. 21 990/- WAS SPENT BY T HE ASSESSEE OUT OF HIS SAVING FROM INCOME OF EARLIER YEARS UP TO THE INCOM E OF ASSESSMENT YEAR 1997-98. MOREOVER DURING THE SEARCH PROCEEDINGS NO INCRIMINATING MATERIALS WERE FOUND TO SHOW AND ESTABLISH THAT THE ASSESSEE HAD INCOME MORE THAN THE INCOME SHOWN BY THE ASSESSEE IN THE B LOCK RETURN FOR THE ASSESSMENT YEARS 1990-91 TO 1997-98 SO TO SHOW THA T THE PURCHASE OF THE TV WAS MADE OUT OF THE ADDITIONAL UNDISCLOSED INCOM E OF THE ASSESSEE OVER AND ABOVE WHAT HAS ALREADY BEEN DISCLOSED BY THE AS SESSEE IN THE BLOCK RETURN. IN THESE PREMISES WE THEREFORE DELETE T HE ADDITION OF RS. 21 290/- ON ACCOUNT OF PURCHASE OF TV BY THE ASSESSEE. 9. NEXT GROUND RAISED BY THE ASSESSEE IS DIRECTED A GAINST THE CIT(A)S ORDER IN CONFIRMING THE ADDITION OF RS. 5 50 000/- 10. IN THE BLOCK ASSESSMENT THE AO DETERMINED THE SUM OF RS. 5 50 000/- AS ASSESSEES UNDISCLOSED INCOME FOR BLOCK PERIOD B Y OBSERVING AS UNDER:- (IV) AS REGARDS INVESTMENT IN PROPERTIES JOINTLY WITH SH. SUBHASH VERMA AND EARNING OF COMMISSION ON SALE/PURCHASE THE ASSESSEE SUBMITTED THAT IS INCO RRECT THAT HE WAS MAKING INVESTMENT IN PROPERTIES AND EAR NING COMMISSION ON SALE/PURCHASE OF PROPERTIES WITH SH. SUBHASH VERMA AND THEREFORE THERE IS NO QUESTION OF ANY ESTIMATION OF INCOME AS MENTIONED IN THE NOTICE. T HE REPLY FILED BY THE ASSESSEE HAS BEEN CONSIDERED BU T THE SAME IS NOT ACCEPTABLE SINCE THE ASSESSEE WAS MAKIN G INVESTMENTS JOINTLY WITH SHRI SUBHASH VERMA IN THE PROPERTY DEALING WITH BUSINESS. COMMISSION INCOME IS ESTIMATED AT RS. 50 000/- PER ANNUM AND RS. 5 50 00 0/- IS IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 5 OF 8 ACCORDINGLY TREATED AS ASSESSEES UNDISCLOSED INCOM E FOR THE BLOCK PERIOD AND ASSESSED ACCORDINGLY. 11. ON AN APPEAL THE CIT(A) ALSO CONFIRMED THE ADD ITION BY OBSERVING AS UNDER:- I HAVE PERUSED THE SUBMISSION OF THE LD. COUNSEL OF THE APPELLANT AS WELL AS THE COMMENTS OF THE AO AND ALSO THE FACTS RECORDED IN THE ASSESSMENT ORDER WH EREIN IT IS STATED THAT THE ASSESSEE WAS EARNING COMMISS ION ALONGWITH SH. SUBHASH VERMA AND SHARING THE COMMISSION ON SUCH DEALS AND THEREFORE THE AO HAS RESORTED TO ESTIMATE THE COMMISSION INCOME OF RS. 50 000/- PER ANNUM. SINCE NO OTHER SOURCE OF INCO ME HAS BEEN MENTIONED BY THE ASSESSEE AND THEREFORE IN ALL PROBABILITY THIS WAS THE SOURCE OF HIS INCOME AND H AS NOT BEEN SHOWN IN HIS RETURN OF INCOME. ALTHOUGH THER E IS NO BASIS TO ESTIMATE THE COMMISSION INCOME. HOWEVE R CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE I WILL UPHELD THE AOS ACTION IN THIS REGARD. 12. AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO BASIS OR MATERIAL FOUND DURING THE COURSE OF THE SEARCH TO E STIMATE THE ASSESSEES INCOME FROM COMMISSION AT RS. 50 000/- PER ANNUM S O AS TO TREAT THE SUM OF RS. 5 50 000/- AS TOTAL UNDISCLOSED INCOME OF THE B LOCK PERIOD. THE AO HAS MADE THE ADDITION PURELY BASED UPON HIS ASSUMPTIONS AND SURMISES. THE AO HAS NOT POINTED OUT ANY IOTA OF EVIDENCE ON THE BAS IS OF WHICH IT CAN BE SAID THAT THE ASSESSEE WAS EARNING SUM OF RS. 50 000/- P ER ANNUM. FROM COMMISSION ON SALE AND PURCHASE OF CERTAIN PROPERTI ES. THE FACT THAT THERE IS NO BASIS TO ESTIMATE THE COMMISSION INCOME HAS ALSO BEEN ACCEPTED BY THE IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 6 OF 8 CIT(A) AS WOULD BE CLEAR FROM HIS ORDER WHERE HE HA S MENTIONED THAT THERE IS NO BASIS TO ESTIMATE THE COMMISSION INCOME BUT STILL THE CIT(A) HAS CHOSEN TO UPHOLD THE AOS ACTION IN MAKING THE ADDI TION. THEREFORE IN THE ABSENCE OF ANY SEIZED MATERIAL OR EVIDENCES INDICAT ING THAT ASSESSEE WAS DERIVING INCOME FROM COMMISSION AT RS. 50 000/- PER ANNUM OVER AND ABOVE HIS REGULAR INCOME IN THE YEARS FALLING WITH IN BLOCK PERIOD WE ARE NOT INCLINED TO UPHOLD THE ORDERS OF THE AUTHORITIES BE LOW ON THIS ISSUE. WE THEREFORE DELETE THE ADDITION OF RS. 5 50 000/- S O MADE BY THE AO AND FURTHER UPHELD BY THE CIT(A). THE ADDITION SO MADE BY THE AO STANDS DELETED. 13. NO OTHER GROUND OR GROUNDS WERE RAISED BY NOR A RGUED BY THE LD. COUNSEL FOR THE ASSESSEE IN THE COURSE OF HEARING O F THIS APPEAL HENCE OTHER GROUNDS TAKEN IN THE APPEAL STAND DISMISSED WHICH ARE OF GENERAL IN NATURE. 14. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. NOW WE SHALL COME TO THE APPEAL FILED BY REVENUE. 15. THE ONLY ISSUED RAISED BY THE REVENUE IS AGAINS T THE CIT(A)S ORDER IN DELETING THE ADDITION OF RS. 4 LACS MADE BY THE AO ON ACCOUNT OF PURCHASE OF BADKHAL LAND MEASURING 4 000 SQ. YDS. 16. ON THE BASIS OF A POWER OF ATTORNEY EXECUTED IN ASSESSEES FAVOUR THE AO HAD ESTIMATED THE SUM OF RS. 4 LACS AS ASSESSEE S SHARE OF INVESTMENT IN IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 7 OF 8 4 000 SQ. YDS. IN BADKHAL LAND. THIS ADDITION OF R S. 4 LACS HAS BEEN DELETED BY THE LD. CIT(A) BY HOLDING AND OBSERVING THAT NO EVIDENCE OR MATERIALS WERE BROUGHT ON RECORD BY THE AO TO SHOW THAT THE P ROPERTY OF 4 000 SQ. YDS. OF BADKHAL LAND REALLY BELONGS TO THE ASSESSEE AND MERELY ON THE BASIS OF POWER OF ATTORNEY NO ADDITION CAN BE MADE. 17. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AN D PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 18. THE ADDITION OF RS. 4 LACS HAS BEEN MADE BY THE AO MERELY BECAUSE OF THE FACT THAT A POWER OF ATTORNEY WAS EXECUTED I N THE NAME OF THE ASSESSEE. THE AO ESTIMATED THE INVESTMENT AT RS. 4 LACS BEING THE ASSESSEES SHARES OF INVESTMENT IN THE PROPERTY. THE AO HAS F AILED TO BRING OUT ANY MATERIAL ON RECORD EITHER FROM OWNER OF THE LAND OR FROM ANY OTHER SOURCE THAT THE ASSESSEE HAD ACTUALLY PURCHASED THE LAND F OR A SUM OF RS. 4 LACS. THE AO HAS MADE THE ADDITION PURELY ON ASSUMPTIONS AND BY DRAWING CERTAIN INFERENCES IN THE LIGHT OF THE POWER OF ATT ORNEY EXECUTED IN ASSESSEES FAVOUR. IT IS NOT THE CASE OF THE REVEN UE THAT THE POWER OF ATTORNEY IS EXECUTED IN THE ASSESSEES FAVOUR BY RE CEIVING THE SUM OF RS. 4 LACS BY THE ASSESSEE. NO SUCH AVERMENT FINDS PLACE IN THE POWER OF ATTORNEY EXECUTED IN ASSESSEES FAVOUR. THEREFORE THE ADDI TION MADE BY THE AO HAS IT(SS) NO. 373/DEL/2005 IT(SS) NO. 388/DEL/2005 PAGE 8 OF 8 BEEN RIGHTLY DELETED BY THE CIT(A). THE ORDER OF T HE CIT(A) IS THUS UPHELD AND THE GROUND RAISED BY THE REVENUE IS REJ ECTED. 19. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 20. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 19 TH MARCH 2010. SD/- ( R.C. SHARMA) ACCOUNTANT MEMBER SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 19 TH MARCH 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR