SHRI S.K. BHARGAVA (HUF),NEW DELHI vs. ITO,

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ITSSA 28/DEL/2008Status: DisposedITAT Delhi01 March 20233 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee on merits. The Tribunal noted that the principal amount of Rs. 2,26,50,133/- had been settled by the Income Tax Settlement Commission (ITSC) in the case of M/s Xerox Modi Corporation Ltd. Furthermore, the net commission had been offered to tax by the assessee in its profit and loss account. Given these facts, the Tribunal held that no addition survived at that juncture. Therefore, the appeal of the assessee on ground No. 5, concerning the merits of the issue, was allowed. As the assessee received relief on merits, any adjudication on the other grounds would be academic, and hence, the Tribunal did not resort to them. The operative direction was to allow the appeal.

What were the facts?

The assessee, Sh. S. K. Bhargava (HUF), filed an appeal against the order of the CIT(A)-I, New Delhi dated 06.12.2007, which confirmed the block assessment order dated 31.08.2006. The block period under consideration was 01.04.1996 to 17.07.2002. A search and seizure action under Section 132 of the Income Tax Act, 1961, was conducted at the assessee's residence on 17.07.2002. The block assessment determined an undisclosed income of Rs. 2,26,50,133/- on account of alleged cash payments made to M/s Xerox Modi Corporation Ltd. The assessee's proprietary concern, M/s Vikram Associates, had received cheques from M/s Xerox Modi Corporation Ltd. and allegedly earned a commission. Later, M/s Xerox Modi Corporation Ltd. offered an amount before the Settlement Commission, which was determined as undisclosed income of Rs. 100.84 crores.

What were the issues?

1. Whether the block assessment order is illegal and invalid as proceedings in respect of the same matter were earlier dropped, and there is no provision for reassessment in such cases, as argued by the assessee. The revenue did not record any specific argument on this point. 2. Whether the block assessment order is barred by limitation, as contended by the assessee. The revenue did not record any specific argument on this point. 3. Whether the CIT(A) erred in confirming the block assessment order without identifying the year in respect of which undisclosed income is computed, rendering the assessment unsustainable, as argued by the assessee. The revenue did not record any specific argument on this point. 4. Whether the CIT(A) erred in confirming the block assessment order which is illegal and invalid as the lower authorities have not identified the year in respect of which undisclosed income is computed, and in the absence of this, the assessment is not sustainable under the law and requires to be quashed, as argued by the assessee. The revenue did not record any specific argument on this point. 5. Whether the receipt in question should be considered in the case of Modi Xerox Ltd., and if so, there is no case for any addition in the hands of the assessee, as argued by the assessee. The revenue did not record any specific argument on this point.

Which sections of the Income-tax Act were involved?

Section 132,Section 158BA,Section 158BC,Section 158BD,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI

For Appellant: Adv Sh. Satya Jeet Goel, Adv
Hearing: 27.02.2023Pronounced: 01.03.2023

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member IT(SS)A No.28/Del/2008 Block Period : 01.04.1996 to 17.07.2002 Sh. S. K. Bhargava (HUF), Vs ACIT, Prop. M/s. Vikram Associates, Central Circle-20, S-6/9, DLF City-III, New Delhi Gurgaon, Haryana (APPELLANT) (RESPONDENT) PAN No. ABMPV3341A Assessee by : Sh. R. S. Singhvi, Adv Sh. Satya Jeet Goel, Adv Revenue by : Sh. H. K. Chaudhary, CIT DR Date of Hearing: 27.02.2023 Date of Pronouncement: 01.03.2023

ORDER Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of the ld. CIT(A)-I, New Delhi dated 06.12.2007.

2.

The assessee has raised the following grounds of appeal:

1(i). That the order of CIT(A) confirming the block assessment order dtd. 31/8/06 is illegal and invalid as the proceedings in respect of the very same matter initiated earlier have been dropped and as per scheme of the act, there is no provision for reassessment proceedings in respect of the same matter. (ii) That there is no material or evidence in the possession of Assessing officer and in the absence of recording of satisfaction, the proceedings are illegal and without justification. (iii) That the block assessment order passed on 31/8/06 is barred by limitation. 2.(i) That CIT(A) has confirmed the assessment order on mechanical basis without recording any specific finding as required u/s 250(6) of the Income Tax Act, 1961 in respect of various grounds of appeal

(ii) That the lower authorities have failed to take into consideration our written submission dtd. 30/8/06 and as such the assessment order being without following the proper procedure as required

IT(SS)A No.28/Del/2008 Sh. S. K. Bhargava (HUF) under the law and in view of legal infirmity in the block order, the same is illegal & invalid and not sustainable under the law. 3. That there is no case of any income escaping assessment as the receipt under reference has already been considered in the regular assessment and as such proceedings u/s. 158BC/158BD are not relevant in view of specific provisions of sec. 158BA. 4. That the CIT(A) erred in confirming the block assessment order, which is illegal and invalid as the lower authorities have not identified the year in respect of which undisclosed income is computed and in the absence of same, assessment is not sustainable under the law and required to be quashed. 5. That in any case, this receipt is to be considered in the case of Modi Xerox Ltd, there is no case any addition in respect of same in the hands of the assessee. 6. That there is no case of proper opportunity or application of mind by Assessing officer and CIT(A) and as such orders of the lower authorities are highly arbitrary and against the principle of equity and justice. 7. That income computed by Assessing Officer and sustained by the CIT(A) is incorrect, arbitrary and or highly excessive. 8 That the assessee crave leave to add, amend, alter or forgo any or all of the grounds or to adduce any fresh evidence as may be necessary and in the interest of justice. 9. That orders of lower authorities are not justified on facts and same are bad in law.”

3.

21 years ago on 17.07.2002, a search & seizure action u/s 132 of the Income Tax Act, 1961 was conducted at the residence of Sh. S. K. Bhargava Karta of Sh. S. K. Bhargava (HUF) at S-6/9, DLF, City-III, Gurgoan. 4. The assessment has been completed determining undisclosed income of Rs.2,26,50,133/- on account of cash payments made to M/s Xerox Modi Corporation Ltd. after receiving the cheques from them and earning a commission @ 7.5% which was refuted by Sh. B.K. Modi, Director of M/s Xerox Modi Corporation Ltd., the alleged recipient of cash during the investigation and enquiries conducted by the revenue. 5. Later the matter travelled further and the M/s Xerox Modi Corporation Ltd. has offered the amount before the Settlement Commission and the Settlement Commission has passed an order on 24.03.2008 determining the undisclosed income of Rs.

IT(SS)A No.28/Del/2008 Sh. S. K. Bhargava (HUF) 100.84 crores consisting of Rs. 51 crores on facilitation payments and Rs. 49.80 crores on other payments in the case of M/s. Xerox Modi Corp Ltd. The AO vide letter dated 11.03.2008 has also mentioned that the disclosure made by M/s. Xerox Modi Corp Ltd group consists of the amounts of cheques given and cash received from the assessee’s proprietary concern M/s. Vikram Associates. 6. The return of assessee for the relevant years filed duly declared gross commission received, commission paid and net commission in the P&L Account which was offered to tax. 7. Since the principal amount has been of Rs.2,26,50,133/- has been settled by Hon’ble ITSC and since the net Commission stands offered to tax by the assessee we hold that no addition survives at this juncture. Appeal of the assessee on the ground No. 5 on merits is allowed. 8. Since, the assessee gets relief on merits of the issue, any adjudication on the other grounds would only be academic in nature and hence, not resorted to.

9.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 01/03/2023.

Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 01/03/2023 *Subodh Kumar/AK, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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