ACIT vs. AJAY KUMAR MUKHERJEE

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 263/2013 . ACIT .... Appellant . Through Mr. Karan Khanna, Senior Standing Counsel with Ms. Asmita Kumar, Advocate. . . . versus . . . AJAY KUMAR MUKHERJEE ..... Respondent . Through None. . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE SANJEEV SACHDEVA . O R D E R . 10.07.2013 . . . The respondent/assessee is an individual whose return for Assessment Year 2007-08 was taken up for scrutiny. In the return filed on 19.11.2007, the respondent-assessee had declared income of Rs.6,08,935/-. On the basis of Annual Information Reports, Revenue came to know that cash deposits of Rs. 1,08,07,500/- had been made in eight bank accounts in the name of the respondent/assessee.The respondent/assessee was confronted with the said information and details but he denied knowledge and stated that the accounts do not belong to him. Invoking Section 68 of the Act, the Assessing officer made addition of Rs. 1,08,07,500/-. Some other additions were also made but these were deleted by the First Appellate Authority, CIT (Appeals) vide order dated 31.05.2011. Before the First Appellate Authority, the respondent/assessee had accepted that the bank accounts belonged to him. Addition of Rs.1,01,78,800/- was sustained under Section 68 of the Act. . 2. In the meanwhile, an application dated 24.06.2010 was filed by the respondent/assessee before the Settlement Commission for assessment years 2006-07, 2008-09 to 2010-2011. It was stated that the respondent/assessee was a civil engineer specializing in execution and construction of projects and had been in service with various companies for 25 years. He had earned income from interest, dividends and gains on sales and redemption of mutual fund investments. He had also sold a property at Varanasi and had credited Rs. 1,12,04,432 as agricultural income earned by his parents. He declared undisclosed income of Rs.35,00,000/- for the Assessment Year 2006-07, Rs.28,22,078/- for the Assessment Year 2008-09, Rs.17,50,000/- for Assessment Year 2009-2010 and Rs.9,50,000/- for Assessment Year 2010-2011. In this manner, the respondent-assessee tried to explain the total cash deposits in his bank accounts of Rs.1,53,10,720/-. This figure of deposits in bank accounts was calculated by the investigation wing of the Settlement Commission. . 3. The settlement application was finally disposed of vide order dated 21.09.2011. The assessee further surrendered Rs.1,12,04,432/- in addition to the amounts already surrendered/declared. This amount was added to the income of the Assessment Year 2006-07. . 4. In the meanwhile, quantum appeal filed by the assessee against the order of the CIT (Appeals) was listed and disposed by the ITAT vide order dated 13.01.2012. ITAT passed an order of remand to the first appellate authority for a fresh decision. Copy of order dated 21.09.2011 passed by the Settlement Commissioner had been placed before the ITAT. This order passed by the ITAT has been accepted by the assessee and the Revenue. The operative portion of the order dated 31.01.2012, passed by ITAT reads:- . ?We have heard both the parties and their contentions have carefully been considered. The copy of application filed by the learned counsel of the assessee dated 1st March, 2011 has already been reproduced. It was brought to the notice of CIT(A) that the assessee had already approached the Settlement Commission in respect of place. The assessee has also submitted copy of asset statement according to which there will be availability of cash balance with the assessee. Keeping in view all these facts, we consider it just and proper to restore the matter back to the file of CIT(A) with a direction to re-adjudicate the appeal filed by the assessee in the light of the submitted by the assessee in this regard. Therefore, we restore this matter back to the file of CIT(A) for re-adjudication of the issues which are agitated by the assessee in the present appeal. We direct accordingly.? . . . 5. The CIT (Appeals) on remand, noticed the order passed by the Settlement Commission and held:- . ?From the direction of ITAT, order it is clear that the availability of cash as on 31.03.2006 is Rs.1,56,10,619 ? Rs.3,72,469 = Rs.1,52,38,150/-. . In my earlier order dated 31.05.2011 in ITA No.387/09-10 for the A.Y. 2007-08, I have made addition of Rs.1,02,41,244/- as unexplained investment of the appellant during the F.Y. 2006-07 related to A.Y. 2007- 08. However, after considering ITAT order and Income Tax Settlement Commission order dated 21.09.2011, the carry forward of availability of . cash of Rs.1,52,38,150/- is to be given to the appellant for explaining the unexplained investment of Rs.1,02,41,244/-. The appellant had paid Rs.40,38,063/- on 21.06.2010 before filing application in ITSC, Delhi. After this ITSC, Delhi order, the appellant had paid Rs.35 lakhs dated 22.11.2011 and Rs.27,01,046/- on 25.02.2012. As the appellant had paid all taxes as per the order of Settlement Commission and ITAT, Delhi had directed to consider the Settlement Commission order to determine the availability of cash as on 01.04.2006 of Rs.1,52,38,150/-, I accept this cash balance and allow the appeal of the assessee for the AY 2007-08. The unexplained investment of Rs.1,02,41,244/- as sustained by me in my earlier order stands explained now, as it is from the opening balance of cash of Rs.1,52,38,150.?. . . . 6. For the purpose of clarity and record, we mention that Mr. Durga Charan Dash, Commissioner of Income Tax (Appeal), who had passed this order, was also the author of the first order confirming addition of Rs.1,02,41,244/-. . 7. In the meanwhile, the Assessing Officer imposed penalty under Section 271(1) (c) for concealment. In the first appeal, the assessee succeeded in view of the order dated 06.03.2012 passed by the CIT (Appeals) in the quantum appeal. The CIT (Appeals) deleted penalty under Section 271(1)(c) recording that the matter had been settled before the Settlement Commissioner and the respondent assessee had paid taxes. . 8. ITAT by the impugned order has upheld the order of the CIT (Appeals) deleting penalty under Section 271(1)(c) of the Act. . 9. In the fact of the present case, we do not think any substantial question of law arises. The assessee had made surrender before the Settlement Commissioner and has been taxed in terms of the order passed by them. Surrender of Rs.1,12,04,432/- was made for the assessment year 2006-07, in an addition to the total undisclosed income of Rs. 90,22,078/- for the years 2006-07, 2008-09, 2009-10 and 2010-2011, which was originally declared in the settlement application. CIT (Appeals) and the ITAT have observed that the aforesaid addition of Rs.1,12,04,432/- can be taken into consideration and is relevant. We note that the respondent-assessee has paid taxes amounting to Rs.1,02,41,244/- in terms of the order passed by the Settlement Commission. . 10. We do not think any substantial question of law arises. . 11. The appeal is accordingly dismissed. . . . SANJIV KHANNA, J . . . SANJEEV SACHDEVA, J . JULY 10, 2013 . st . . . . . $ 3 .