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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI
PER SHAMIM YAHYA, ACCOUNTANT MEMBER :
This appeal is by the assessee against the order of the ld. CIT (Appeals) dated 21.11.2017 for the assessment year 2014-15.
The assessee has raised the following grounds of appeals :-
“1. That the Id. CIT(A) had erred in not adjudicating the ground of appeal bearing no.2 (relating to validity of assessment order passed by the ld. AO u/s 153A), particularly when during the course of appellant proceedings, the assessee had categorically pointed out that the Panchnama was not drawn in his name.
./2018 The ld. CIT(A) had simply mentioned that this ground is general in nature and therefore, it is not been adjudicated separately and treated as dismissed.
2. That on the facts of the case and under the law, the ld. CIT(A) had erred in sustaining the addition of Rs.44,00,000/-, which was made by the ld. AO on the ground that there were contradictions in the explanation given by the assessee during the course of assessment proceedings and the explanation given by the assessee's wife -Mrs. Anju Jakhmola during the course of search & seizure operation carried out u/s 132. The ld. CIT(A) had failed to appreciate that the assessee had categorically stated that he (being the Senior Vice President of M/s Shubhkamna Buildtech Private Limited) had brought such cash belonging to M/s Shubhkamna Buildtech Private Limited, to his house for the purpose of safe keeping, and also that credit of such seized cash was not claimed by the assessee.
3. That on the facts of the case and under the law, the addition of Rs.44,00,000/- ought to had been deleted by the ld. CIT(A).”
The assessee has also filed additional grounds. The application in this regard reads as under :-
“3. That in the appeal filed by appellant, the following additional grounds may kindly be allowed to be included in the memo of appeal: I. That the assumption of jurisdiction u/s 153C without recording of any Satisfaction Note by the AO of the person searched upon that any books of account or documents or money or bullion or jewellery or any other valuable article or thing belongs to the impugned Assessee is illegal and unjustified and, therefore, the resultant Assessment order u/s 153C r.w.s 143(3) deserves to be quashed. II. That the Assessment Order made under section 153C r.w.s. 143(3) dated 28/03/2015 without issuance of any notice u/s 143(2) after the return filled by the Assessee u/s 153C on 04/12/2013 is illegal and thus deserves to be quashed. III. That the Assessment Order passed under section 153C r.w.s. 143(3) without obtaining mandatory approval of the Joint Commissioner u/s 1530 is illegal and thus order deserves to be quashed.
./2018 IV. That the addition of Rs.32,79,468/- made by the AO without any reference to any incriminating material seized during the course of search upon any person is illegal and unjustified and deserves to be deleted. V. That the only basis of the sole addition made in the Assessment Order is part disallowance of depreciation, which as clearly stated by the AO at paragraph no. 3 of the Assessment Order, is perusal of Balance Sheet. Thus, addition has no relevance or nexus with any material seized during the course of search upon any person and, therefore, deserves to be deleted.
4. That the abovesaid Grounds were not included in the Grounds of Appeal
filed by appellant and, therefore, the appellant hereby requests for allowing the same as additional grounds.
5. The appellant hereby requests your honours to kindly permit him to raise the additional Grounds of Appeal which are obviously on legal issues as set out above under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 keeping in view especially the judgement rendered by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. v/s CIT (1998) 229 ITR 383 (SC) and by the Hon'ble Delhi High Court in the case of Gedore Tools (P) Ltd. v/s CIT (1999) 238 ITR 268 (Del) in which it was held that undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But, where the Tribunal is only required to consider a question of law arising from the facts which are on record and which have a bearing on the tax liability of the assessee, the same should be allowed to be raised by the Tribunal. The relevant extract of the order reads as under:
6. In view of the Grounds of appeal comprised in the Memo of Appeal and above mentioned Additional Grounds, the combined Grounds of Appeal are being renumbered as per Annexure- 1.
7. Hence, the appellant hereby requests, your honour, to kindly permit him to raise the abovesaid additional Grounds of Appeal under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963.”
Brief facts of the case are that a search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on 09.10.2013 on the premises of the assessee comprising Shubhkamna Buildtech Pvt. Ltd Group of cases. The lockers covered u/s 132 operation were locker no. Bank, Sector - 44, Noida. In view of search operation, the group cases were centralized to Central Circle, Noida. The jurisdiction order u/s 127 of the Income Tax Act, 1961, in this case, was passed by the Ld. Pr.
Commissioner of Income Tax, Delhi - 22, New Delhi communicated vide F.No. Pr. CIT-22/1/Centralization/2015-16/1194 dated 06.08.2015.
Subsequently, notice u/s 142(1) was issued on 18.08.2015. The assessee filed return of income on 10.09.2015 declaring total income of Rs.23,91,330/- in pursuance to the notice u/s 142(1) of the Income tax Act, 1961.. Notice u/s 143(2) was issued on 10/09/2015. Notice u/s 142(1) along with questionnaire was issued on 28.12.2015.
4.1 During the course of search and seizure operation of the residence at B-402, Kartik Kunj Sector-44, Noida cash amounting to Rs.44,22,000/- was found. The assessee was asked to explain the source of the said cash found during the course of search and seizure operation, the assessee submitted a written reply stating therein as under :-
“It is submitted that [ was working with M/s Shubnkamna Buildtech Pvt. Ltd., as Senior Vice President and used to take care of surplus cash of the said M/s Shubhkcmna Buildtech Pvt. Ltd. and was brought in by me in the house for the purpose of safe keeping. And accordingly, the assessee had no connection with the said cash. Hence, no adverse inference is drawn against the assessee.”
4.2 The AO noted that it is worthwhile to mention that during the course of search and seizure operation at the residence B-402, Kartik Shri Harish Kumar was recorded and she was asked to explain the source of the said cash. It was stated by her that the amount of Rs.14 lacs belongs to her which she received from her brother and the remaining amount of Rs.30 lacs belongs to her husband Shri Harish Kumar.
4.3 Hence, AO opined that from the above discussion, it is quite clear that the assessee is changing the stand. That moreover it is also worthwhile to mention that the case of M/s Shubhkamna Buildtech Pvt. Ltd. is also assessed to tax in this Circle and there is no evidence on record in support of claim of assessee. Hence, AO held that in these circumstances, the submission of Shri Harish Kumar that the said money belongs to the company cannot be believed and in view of this an addition of Rs.44,00,000/- is being added to the income of the assessee.
Upon assessee’s appeal, ld. CIT (A) confirmed the addition as under:-
“5.1 The undersigned has carefully gone through the assessment order, written submission filed as well as verbal argument of the ld. A.R. It is seen from the assessment order that cash of Rs.44,22,000/- was found and seized from the premises of the assessee during the search u/s 132 of the Act on 09.10.2013 at the time of search. No cogent explanation was offered by the assessee and further, during the assessment proceedings, assessee came with submission that this cash belongs to M/s. Shubhkamna Buildtech Private Limited for whom appellant is working as Senior Vice President. The AO found that there was no evidence on the record of M/s. Shubhkamna Buildtech Private Limited for this cash, therefore, AO disbelieved the submission of the assessee and added Rs.44,00,000/- to the income of the assessee.
./2018 Before the undersigned, the Id. A.R. of the appellant has repeated the same explanation and submitted a copy of confirmation of M/s. Shubhkamna Buildtech Private Limited. during the course of hearing, Id. A.R. was asked to explain that why this confirmation letter filed before the AO by M/s. Shubhkamna Buildtech Private Limited when cash is actually pertained to them. Further, ld. AR. could not explain the following:-
1. 1. The purpose of keeping in huge cash with the appellant at his residence.
2. Nature of work performed by the appellant in M/s. Shubhkamna Buildtech Private Limited being Senior Vice President.
3. Details of day to day cash handled by the appellant for company in which appellant.
4. Copy of debit note/credit note issued by the company, if any, when appellant used to keep cash with him or deposit to companies cash book.
5. In absence of any debit note/credit note, if appellant used to deal with cash of company then how appellant kept the record of cash with him. All above questions remained unanswered at the end of the appellant. Further, during the course. of search Ms. Anju Jakhmola in her statement has stated that cash of Rs.14,00,000/- belongs to her and remaining Rs.30,00,000/- belongs to the appellant. However, no evidence could be submitted to substantiate her claim. Therefore, undersigned is of the opinion that the cash found and seized is nothing but undisclosed income of the appellant. Therefore, addition made by AO is confirmed and grounds of appeal are dismissed.”
Against the above order, the assessee has come up in appeal before us.
We have heard the ld. DR for the Revenue and perused the record.
None appeared on behalf of the assessee for the past several occasions.
Hence, we adjudicate the appeal by hearing the ld. DR and perusing the record.
The additional ground raised pertains to jurisdiction under section 153C and the procedure thereof as per the assessee has not been followed.
We note that this assessment order passed by the assessing officer is under section 143(3) of the Income-tax Act, 1961 (for short ‘the Act’).
The search was conducted on 09.10.2013. The assessment year in this case is 2014-15 and the previous year being 2013-14. Hence the search was conducted during the financial year itself. In this view of the matter, the provisions of section 153C are not at all attracted.
The issue raised by the assessee is totally misplaced and not at all applicable in this case. In this regard, we may gainfully refer to the provisions of section 153C which provide that assessment under this section shall be done for 6 assessment years immediately preceding the assessment year relevant to the assessment year in which search is conducted. Hence, the present assessment year is relating to the year of search and hence, assessment procedure for section 153C is not at all applicable. Moreover the provisions of these sections provide that pending assessments shall abate. In this case, since the financial year was itself not over there is no question of assessee having filed a return and assessment proceedings being abated. In this view of the matter, the ./2018 additional ground raised
by the assessee is frivolous without any legal basis and hence the same is dismissed.
11. As regards the merits of the case, the addition has been made on the basis of seizure of cash amounting to Rs.44,22,000/- at the residence of the assessee and the assessee’s submission is that the same belongs to company is totally self-serving statement de hors any cogent evidence. Hence, we do not find any infirmity in the well reasoned order of the Revenue authorities in this regard. Therefore, the ground raised by the assessee stands dismissed
12. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on this 30th day of May, 2022.