PUSHPA RANI,DELHI vs. ACIT CENTRAL CIRCLE-9, DELHI

ORDER PER BENCH : This bunch of 11 (eleven) appeals filed by the assessee wherein 06 (six) appeals are related to quantum proceedings pertaining to Assessment Years 1 | P a g e 2011-12, 2010-11, 2009-10, 2008-09 & 2007-08, filed against the different orders of Ld.CIT(A)-31, New Delhi dated 16.08.2021 and remaining 05 (five) appeals are related to penalty proceedings for the Assessment years 2012-13, 2011-12, 2010-11, 2009-10, 2008-09, 2007-08, filed against the different orders of Ld.CIT(A)-31, New Delhi dated 29.07.2021. Since identical grounds have been raised, all 11 (eleven) appeals were taken up together for hearing and are being disposed off by way of consolidated order for the sake of brevity.

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming addition of Rs.3,50,000/- on estimation. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2006-07. The Hon’ble CIT(A) has arbitrary estimated income at Rs.3,50,000/- without any evidence or information which is wrong and denied. Ground No.4 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.” BRIEF FACTS OF THE CASE

7. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A)-31, New Delhi who vide order dated 29.07.2021, partly allowed the appeal of the assessee. Thereby, he restricted the addition to the tune of Rs.3,50,000/- related to receipt from school activity and deleted the other additions in respect of rent received by the assessee and interest income earned.

Apropos to Ground No.2, Ld.AR of the assessee submitted that he does 9. not wish to press this ground hence, this ground is rejected.

Ground No.4 raised by the assessee in this appeal is general in nature, 10. needs no separate adjudication.

Ground Nos.1 & 3 raised by the assessee are inter-connected, hence are 11. being disposed off together.

10.2.6. “From the ledger account of Shemrock School in the books of M/s Golden Education and Welfare Trust, which shows a total franchise fees payment of Rs.3,09,277/- to M/s Golden Education and Welfare Trust during the year, it emerges that it is firstly not confirmed by the above stated third party and also not supported by any evidence such as ITR or bank account statement of the said third party. In fact, it does not even give the PAN of the said party and has not been signed by an identified competent person giving the designation. The AO in his letter dated 06.03.2020 has already pointed out that such printouts can be taken out by anybody at any time and therefore carry no authenticity. It is further noted 5 | P a g e that the appellant has not been able to submit any corroborating evidence for payment of franchise fees, which is claimed to be through banking channel. During the appellate proceedings, the appellant was asked to give her bank account statement and also to give the service tax challans and service tax returns as a proof of having made the franchise fees payment. However, the appellant was not able to give the said crucial substantiating evidences. It is also noted that the appellant has not maintained any books of account or even any record of the number of students, fees structure etc. in the absence of which it is not possible to accurately determine the fee receipts as well as the net income derived from the school. In the absence of any possible evidence or books of accounts, the statement of Sh. O.P Kukreja remains the only authentic source for determining the income derived from the school. In his statement u/s 132(4), it has been stated by him that income of approximately Rs. 6 lacs per annum (Rs. 50,000/- per month) was being derived by the appellant in the year 2012. Accordingly the year wise income of the appellant from Shemrock School is estimated as follows:- A.Y. Income from Shemrock School 2007-08 Rs. 3,50,000/- 2008-09 Rs. 4,00,000/- 2009-10 Rs. 4,50,000/- 2010-11 Rs. 5,00,000/- 2011-12 Rs. 5,50,000/- 2012-13 Rs. 6,00,000/- 10.2.7. The income of appellant for A.Y. 2007-08 from running of Shemrock School is hereby assessed at Rs. 3,50,000/-. Accordingly, the appellant gets a relief of Rs. 4,00,000/- in the income determined from running of the school. Ground no. 1 is partly allowed.”

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming additions of Rs.4,00,000/- on estimation. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2007-08. The Hon’ble CIT(A) has arbitrary estimated income at Rs.4,00,000/- without any evidence or information which is wrong and denied.

Ground No.4 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.”

18. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.365/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. As the facts are identical and no change into the facts and circumstances has been pointed by the assessee. Thus, grounds raised in this appeal filed by the assessee are dismissed.

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming addition of Rs.4,50,000/- on estimation of school income and Rs.75,00,000/- on account of undisclosed payment for flat. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 8 | P a g e

Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2008-09. The Hon’ble CIT(A) has arbitrarily estimated income at Rs.4,50,000/- without any evidence or information which is wrong and denied. Ground No.4 The Hon’ble CIT(A) has erred in law and on facts by confirming addition of Rs.75,00,000/- to the income of the assessee by relying on the computer prints-outs of the builders which were taken from his hard disk without any corroleative evidence on record. Ground No.5 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.”

21. Ground No.1 is general in nature, needs no separate adjudication.

22. Apropos to Ground Nos. 2 & 3 raised by the assessee, Ld. Representatives of the parties have adopted the same argument as were addressed in for identical grounds raised therein.

24. Now coming to Ground No.4 raised by the assessee. It is against sustaining the addition of Rs.75,00,000/- made on account of unexplained investment made into immoveable property i.e. Flat at Gurugram in a project namely Aloha Project constructed by M/s AEZ Group.

25. Ld. Counsel for the assessee reiterated the submissions made before the Ld.CIT(A). He contended that the impugned addition was made purely on the basis of statement of husband of the assessee which was recorded at the back of the assessee and no cross examination was granted. He further contended that evidence found at the premise of Third party and statement of Third party should not be the sole basis for making additions without giving opportunity to the assessee for rebutting the same.

26. Per contra, Ld.CIT DR opposed these submissions and strongly supported the orders of the authorities below. He contended that undisputedly the assessee had purchased a flat so also her husband. The flats were of same size except the number allotted to such flat. He contended that in the statement, husband of the assessee has admitted cash amounting to Rs.75,00,000/- was paid for each flat. This fact is also supported by the Agreement to Sell found during the source of search related the flat in question. He contended that it is wrong to say that the assessee was not given opportunity to rebut the evidence. However, the assessee failed to substantiate its contention that no cash was paid. Even the assessee did not opt for cross- examination of her husband.

9.4.4. “The appellant subsequently during the assessment as well as the appellate proceedings, made several attempts to discredit the statement of Sh. O.P. Kukreja, Including the contentions made regarding the statement having been made under tremendous pressure requiring the need for medical attention at the time of search. This contention has already been discredited and rejected at para 9.2.2. above. The further contention regarding no cross- examination opportunity being given to the appellant to cross- examine her husband, has also been dealt with at para 9.2.1. above, and It is noteworthy that the appellant failed to avail the opportunity to cross examine her husband, when the said opportunity was given during the instant appellate proceedings. Further, as stated earlier the appellant filed an affidavit dated 24.03.2021 contending, among other things, that the appellant had not made the cash investment of Rs. 75,00,000/- as stated by her husband in his statement u/s 132(4). It is further assorted in the affidavit that her husband is a separate entity and that his statement was without the appellant’s knowledge and consent It is significant that the affidavit only contains assertions without any substantiating evidence and as such has already been rejected as noted at para 9.2.2. above. Further the lack of any evidence to support the contentions made in the affidavit, is also evident from the fact that the appellant failed to cross examine her husband. 9.4.5. The appellant has further taken the contentions that the details mentioned in the documents seized from the residence of the appellant are draft documents for proposed investments which was never executed upon. It is further contended that had the document been executed, the stamp duty would have been paid. It is also contended that the document la on a Ra. 50 stamp paper and as such docs not convey any title or ownership to the parties. It is further contended that only photocopies of such proposed documents were found and no original document was found as it was never acted upon. 11 | P a g e

9.4.6. I have considered the .submissions of the appellant. Regarding the contention that the seized document at Annexure A1 pages 24 to 29 were only draft documents, it is noted that the said seized document la an agreement between M/s AEZ Infratech Pvt Ltd and the appellant, which is duly signed by both the parties and also notarized as well as attested by two witnesses. The agreement lays down that M/s AEZ has agreed to sell and the appellant has agreed to purchase flat no. D-5/803 in the Aloha Project at Gurgaon, for a total consideration of Rs. 78,00,000/-, out of which Rs. 75,00,000/- ban been acknowledged by both parties as advance money given and received in furtherance of the said agreement to sell. It is further stated that the balance cum of Rs. 3,00,000/- will be paid by the appellant at the time of possession of the sold flat. When this seized document is seen In conjunction with the statement of Sh, O.P. Kukreja, husband of the appellant, it becomes amply dear that the said amount of Rs. 75,00,000/- was indeed paid on behalf of the appellant for acquiring die said flat. Further, the failure of appellant to cross- examine her husband, as noted earlier, gives finality to the statement under oath of Sh. O.P. Kukreja, which has never been retracted and has been rendered voluntarily. As noted earlier at para 9.2.1, above, it was Sh. O.P. Kukreja who was handling the entire financial matters of the family and was privy to all such transactions made In the name of all family members. It is further pertinent to examine the seized agreement from the point of view of the rebuttable presumption regarding its correctness as raised u/s 292C, which is reproduced below for ready reference: 292C.(1) (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed— (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.”

28. We do not find any fault in the above finding on facts recorded by the Ld.CIT(A) as it is evident that the assessee was also provided opportunity to cross-examine her husband which the assessee failed to avail. Moreover, the Revenue has brought on record Agreement to Sell executed by the assessee and duly notarized where figures of Rs.75,00,000/- in cash is clearly mentioned. The assessee has not denied the signature appended on this Agreement. It is not the case where document does not bear signature of the assessee. Therefore, in our considered view, when the Revenue has brought direct evidences against the assessee now the assessee cannot take shelter under lame excuses just to avoid tax liability. We therefore, do not see any merit in the argument of the Ld. Counsel for the assessee, the same is hereby rejected. Thus, Ground No.4 raised by the assessee is dismissed.

23. Now we take up filed by the assessee pertaining to Assessment Year : 2010-11. The assessee has raised following grounds of appeal:-

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming addition income of Rs.5,00,000/- on estimation. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2009-10. The Hon’ble CIT(A) has arbitrarily estimated income at Rs.5,00,000/- without any evidence or information which is wrong and denied. Ground No.4 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.”

24. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.365/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, 14 | P a g e grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming additions of Rs.5,50,000/- on estimation. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2010-11. The Hon’ble CIT(A) has arbitrary estimated income at Rs.5,50,000/- without any evidence or information which is wrong and denied. Ground No.4 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.”

27. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.365/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.

Year : 2012-13] [QUANTUM PROCEEDINGS] 29. Now we take up filed by the assessee pertaining to Assessment Year : 2012-13. The assessee has raised following grounds of appeal:-

Ground No.1 “The Honourable CIT(A) has not followed the law and natural justice while confirming additions of Rs.6,00,000/- as income for school and Rs.6,51,845/- on account of undisclosed jewellery. Ground No.2 That on the facts and in law the Ld.AO erred in proceeding to make assessment u/s 153(A) of the IT Act is arbitrary, illegal and bad in law and in violation of rudimentary principles of contemporary jurisprudence. Ground No.3 Income from school: The Hon’ble CIT(A) has erred in law and on facts by making addition to the income of the assessee by taking income from school on estimated basis. Sir, the assessee started play school in financial year 2011-12. The Hon’ble CIT(A) has arbitrarily estimated income at Rs.6,00,000/- without any evidence or information which is wrong and denied.

Ground No.4 The Hon’ble CIT(A) has erred in law and on facts by sustaining additions in tune of Rs.6,51,845/- on account undisclosed jewellery without taking cognizance of her social background, tradition, years of married life etc. Ground No.5 The appellant craves leave to add, alter, amend, modify or delete any or all the grounds of appeal before or at the time of hearing.”

30. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.365/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.

ITA No.359/Del/2022 [Assessment Year : 2007-08] [PENALTY PROCEEDINGS] 32. Now we take up penalty appeal in filed by the assessee pertaining to Assessment Year : 2007-08. The assessee has raised following grounds of appeal:-

Ground No.1 “The Ld. Honourable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts by giving direction for enhancement and recomputation of penalty to Ld.A.O. whereas no penalty should have been imposed as per settled law.

Ground No.2 That the Appellant craves leave to add/ alter any/all grounds of appeal before at the time of hearing of the appeal.”

BRIEF FACTS OF THE CASE

6.4. “I have considered the submissions of the appellant. It is noted that the notice for penalty enhancement is not on account of discovery of any new source of income, nor is it without the grant of proper opportunity of hearing. The said enhancement notice is merely to correct the faulty method of computation of penalty on the part of the AO. The judicial pronouncements cited by the appellant are therefore not applicable in the case at hand. Explanation 5A is a deeming provision, whereby an assessee is deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income if he has not filed any return of income, before search, showing such income. In this regard, the Hon’ble Apex Court, in the case of Prasanna Dugar vs CIT (2016) 70 taxmann.com 175 (SC), has held that even if the assessee voluntarily disclosed a sum subsequent to search and offered said sum to tax, penalty levied u/s 271(1)(c) was justified. Accordingly, the AO is directed to compute penalty u/s 271(1)(c) without giving any set off for the income from school as disclosed by the assessee after the search.

“Heard the learned counsel for the petitioner and perused the relevant material. We do not find any legal and valid ground for interference. The special leave petition is dismissed.” In view of the above, we do not see any reason to interfere in the finding of Ld.CIT(A), the same is hereby rejected. Thus, grounds raised by the assessee are dismissed.

Ground No.1 “The Ld. Honourable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts by giving direction for enhancement and recomputation of penalty to Ld.A.O. whereas no penalty should have been imposed as per settled law. Ground No.2 That the Appellant craves leave to add/ alter any/all grounds of appeal before at the time of hearing of the appeal.”

42. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.359/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.

43. In the result, the appeal of the assessee is dismissed. [Assessment Year : 2009-10] [PENALTY PROCEEDINGS]

Ground No.1 “The Ld. Honourable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts by giving direction for enhancement and recomputation of penalty to Ld.A.O. whereas no penalty should have been imposed as per settled law. Ground No.2 That the Appellant craves leave to add/ alter and/all grounds of appeal before at the time of hearing of the appeal.”

5.3. “Secondly, regarding the unexplained cash investment of Rs.75,00,000/- as sustained in appeal relating to quantum additions, it is clear that the said amount constitutes concealment of income within the meaning of section 271(1)(c). The appellant has not stated anything in defence of non livability of penalty u/s 271(1)(c) thereon. The said concealment of income on account of unexplained cash investment is fully established from documents seized from the residence of the appellant as well as the statement u/s 132(4) of the assessee’s husband, whom the assessee has declined to cross examine in the appellate proceedings. It is therefore held that the appellant has concealed her income within the meaning of section 271(1)(c) and is liable for levy of penalty thereunder.” The assessee has not rebutted the finding of Ld.CIT(A). As per Ld.CIT(A), the assessee had not stated anything in defence of non-leviability of penalty u/s 271(1)(c) of the Act. We are in agreement to the finding of Ld.CIT(A) as the amount ex-facie constitutes concealed income of the assessee. Therefore, it would certainly attract the penalty u/s 271(1)(c) of the Act. The assessee has not brought any material to support the contention that the penalty is not leviable. In the absence of such material, we do not see any reason to interfere the findings of Ld.CIT(A), the same is hereby affirmed. Thus, grounds raised by the assessee are dismissed.

ITA No.356/Del/2022 [Assessment Year : 2010-11] [PENALTY PROCEEDINGS] 47. Now we take up filed by the assessee pertaining to Assessment Year : 2010-11. The assessee has raised following grounds of appeal:- Ground No.1 “The Ld. Honourable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts by giving direction for enhancement and recomputation of penalty to Ld.A.O. whereas no penalty should have been imposed as per settled law. Ground No.2 That the Appellant craves leave to add/ alter any/all grounds of appeal before at the time of hearing of the appeal.”

48. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in ITA No.359/Del/2022 [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.359/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.

49. In the result, the appeal of the assessee is dismissed. [Assessment Year : 2011-12] [PENALTY PROCEEDINGS]

Ground No.1 “The Ld. Honourable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts by giving direction for enhancement and recomputation of penalty to Ld.A.O. whereas no penalty should have been imposed as per settled law. Ground No.2 That the Appellant craves leave to add/ alter any/all grounds of appeal before at the time of hearing of the appeal.”

51. We have heard Ld. Authorized representatives of the parties and perused the material available on record. We find that the facts and issues are similar and identical as were in [AY 2007-08]. Ld. Representatives of the parties have adopted the same arguments in respect of grounds of appeal. Our decision in ITA No.359/Del/2022 [AY 2007-08] would apply Mutatis Mutandi in this appeal filed by the assessee as well. Thus, grounds raised in this appeal filed by the assessee for the same reasoning, are dismissed.