NIRAJ KUMAR,GHAZIABAD vs. ITO, WARD-2(5), GHAZIABAD

common order.

2.0 The brief facts of the case are that search and seizure proceedings were carried out in the case of AMQ group of cases and a resultant search was also conducted in the case of one Shri Aditya Sharma who was employed with Shri Moin Akhtar Qureshi (the person having controlling interest in AMQ group). During thecourse of search and post search proceedings warrant numbers 4537 and 4539 were executed on Shri Aditya Sharma and Smt. Sujata Sharma and Shri Aditya Sharma and Shri Neeraj Kumar on 15.02.2014 vide which Locker Nos. D-855 and G-2123, U & I Vaults Ltd. F-41 South Extension Part-I Ring Road, New Delhi were searched. During the course of this search cash amounting to Rs.1,15,00,000/- was found and seized from the locker number D-855 which was co-owned by Shri Aditya Sharma and Smt. Sujata Sharma and cash amounting to Rs. 78,15,500/- and jewellery worth Rs. 10,91,868/- were found in locker number G-2123 which was co-owned by Shri Aditya Sharma and Shri Niraj Kumar.

2.1 Thereafter, in the case Sh. Niraj Kumar, the return of income was filed declaring an income of Rs. 1,85,400/-,whereas, in the case of Smt.

Sujata Sharma, the return of income was filed declaring income of Rs. 32,64,510/-. Sh. Niraj Kumar is the brother of ShriAditya Sharma, whereas, Smt. Sujata Sharma is wife of Sh. Aditya Sharma. Both the captioned assessees were issued separate notices u/s 142(1) of the Income Tax Act, 1961 (in short 'the Act') and both the assessees were required by the Assessing officer to show cause as to why the cash found in the lockers not be treated as unexplained and added to their income.

2.2 In response to the queries raised by the Assessing officer, the reply of the ShriNiraj Kumar was as under:- i. The said locker was held by the assessee jointly with his brother (Mr. Aditya Sharma), being first name as Aditya Sharma and jointly holder name as Niraj Kumar ii. Though the locker was held in joint name but it was being operated by Mr. Aditya Sharma. iii. The statements of Mr. Aditya Sharma (assessee's brother) was recordedat the time of search in which Mr. Aditya Sharma accepted that this cashbelongs to him and received by him as an incentive for assisting hisemployer in meat business.. iv. Mr. Aditya Sharma (assessee's brother) has also filed a settlementpetition with income-tax settlement commission in this regard. v. Mr. Aditya Sharma (assessee's brother) had deposited total tax andinterest amounting to Rs. 2,19,45,000/- on additional income surrenderedfor taxation amounting to Rs. 5,13,20,000/- during the A.Y. 2008-09 toA.Y. 2013-14. vi. Mr. Aditya Sharma (assessee's brother) had also surrendered this cashamount for taxation during the A.Y. 2014-15 in his name and accordinglydeposited the tax stating additional income of Rs. 2,16,25,000/-(whichincludes this Cash) for the A.Y. 2014-15.. The assessee's brother had alsodeposited additional tax & interest ofRs. 86,85,000/- for the A.Y. 2014-15 on this additional income surrendered for taxation. The copy ofrevised computation along with tax deposit challan, which has beensubmitted with settlement commission, is enclosed for your reference(annexure-3). vii. It is evident from above said matter that this cash did not belong to theassessee and the same has been taxed in assessee's brother (Mr. AdityaSharma) name. The tax on this cash amount has also been deposited byassessee's brother. viii. Hence, we urge that this cash amount should not be included inassessee's income as this will lead to taxation of the same income in twodifferent hands 2.3 Similarly, in response to the query by the Assessing officer, Smt.Sujata Sharma submitted as under:- i. The said locker was held by the assessee jointly with her husband's (Mr. Aditya Sharma), being first name as Aditya Sharma and jointly holder name as Sujata Sharma. ii. Though the locker was held in joint name but it was being operated by Mr. Aditya Sharma.

5 & 377/Del/2018 Sh. Niraj Kumar & Smt. Sujata Sharma, Ghaziabad iii. The statements of Mr. Aditya Sharma (assessee's husband) was recorded at the time of searsch in which Mr. Aditya Sharma accepted that this cash belong to him and received by him as an incentive for assisting his employer in meat business. iv. Mr. Aditya Sharma (assessee's husband) has also filed a settlement petition with income-tax settlement commission in this regard. v. Mr. Aditya Sharma (assessee's husband) had deposited total tax and interest amounting to Rs. 2,19,45,000/- on additional income surrendered for taxation amounting to Rs. 5,13,20,000/- during the A.Y. 2008-09 to A.Y. 2013-14. vi. Mr. Aditya Sharma (assessee's husband) had also surrendered this cash amount for taxation during the A. Y. 2014-15 in his name and accordingly deposited the tax stating additional income of Rs. 2,16,25,000/- (which includes Rs. 1.15 cr. Cash) for the A. Y. 2014- 15. The assessee's husband had also deposited additional tax & interest of Rs. 86,85,000/- for the A.Y. 2014-15 on this additional income surrendered for taxation. The copy of revised computation along with tax deposit challan, which has been submitted with settlement petition, is enclosed for your reference (annexure-3). vii. It is evident from above said matter that this cash did not belong to the assessee and the same has been taxed in assessee's husband (Mr. Aditya Sharma) name. The tax on this cash amount has also been deposited by assessee's husband. viii Hence, we urge that this cash amount should not be included in assessee's income to avoid double taxation of the same income in two hands. 2.4 The assessees also filed the charts before the Assessing officer showing the break- up of additional income of Rs. 2,16,25,000/- which was surrendered by Sh. Aditya Sharma for assessment year 2014-15.

This chart is also being reproduced herein under for a ready reference:-

Particulars & name of concern Amount (Rs.) SL No. 1. Rs. 78,18,500/- Cash at locker no. G-2123, U & I Vaults Ltd., F-41 South Extension, Part-I, Ne~w Delhi (Aditya Sharma &Niraj Kumar) 2. Rs. 1,15,00,000/- Cash at locker no. D-855, V & I Vaults Ltd., F-41 South Extension Part-I, New Delhi (Aditya Sharma &Sujata Sharma) 3. Rs. 4,67,810/- Cash at 121-Niti Khand-I, Indirapuram Ghaziabad (Aditya Sharma) 4. Rs. 18,38,690/- Various Assets created (Aditya Sharma)

2.5 However, the Assessing officer did not find the contentions and submissions of the assesses satisfactory and proceeded to add an amount of Rs. 89,07,368/- to the income of Shri Niraj Kumar (being Rs. 78,15,500/- found from the locker jointly owned by the assessee with his brother Shri Aditya Sharma and Rs. 10,91,868/- pertaining to the jewellery). Similarly, in the case of Smt. Sujata Sharma, an amount of amount found in the locker, which was jointly owned by the assessee along with her husband ShriAdiyta Sharma.

2.6 Aggrieved, both the assessees preferred appeals before the Ld. First Appellate Authority. However, here again, the contentions of the assessees did not find favour with the Ld. CIT(A) and both the appeals were dismissed.

2.7 Now, both the assessees have approached this Tribunal and have challenged the impugned orders by raising the following grounds of appeal:-

1. The order dated 10.10.2017 passed by the Learned Commissioner of Income - tax (Appeals) [hereinafter referred to “Ld. CIT (A)”] under section 153A read with section 143(3) of the Act, is bad in law and in facts.

2. That on the facts and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in law in sustaining the total addition of Rs.89,07,368/- (Rs.78,15,500 + Rs.10,91,868/-) under section 69A of the Act.

3. That on the facts and in law the Ld. CIT (A) has erred in law in sustaining the addition of Rs.78,15,500/- to the income of the assessee on 8 & 377/Del/2018 Sh. Niraj Kumar & Smt. Sujata Sharma, Ghaziabad account of cash found in locker (co-owned with his brother Mr. Aditya Sharma) by rejecting the claim of the assessee that this income pertains to Mr. Aditya Sharma.

4. That the same addition is made in the hands of the 3 persons i.e. Mr. Aditya Sharma (brother of the assessee), Mr. Niraj Kumar (assessee or brother of Mr. Aditya Sharma) and Mr. MoinAkhtarQureshi (Employer of Mr. Aditya Sharma).

5. That on the facts in law the Ld. CIT(A) has erred in law in sustaining the addition of Rs.10,91,868/- to the income of the assessee on account of jewellery by ignoring the factum of its holding and CBDT circular no.1916 dated 11.05.1994.

1. The order dated 10.10.2017 passed by the Learned Commissioner of Income - tax (Appeals) [hereinafter referred to “Ld. CIT (A)”] under section 143(3) of the Act, is bad in law and in facts.

2. That on the facts and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in law in sustaining the total addition of Rs.1,15,00,000/- under section 69A of the Act.

9 & 377/Del/2018 Sh. Niraj Kumar & Smt. Sujata Sharma, Ghaziabad 3. That on the facts and in law the Ld. CIT (A) has erred in law in sustaining the addition of Rs.1,15,00,000/- to the income of the assessee on account of cash found in locker (co-owned with her husband Mr. Aditya Sharma) by rejecting the claim of the assessee that this income pertains to Mr. Aditya Sharma.

6. The appellant craves leave to alter, amend or add any other ground of appeal either before or during the course of hearing.”

3.0 The Ld. Authorised Representative (AR) submitted that in the case of Shri Niraj Kumar, facts are that the assessee’s elder brother Shri Aditya Sharma was an employee of Shri Moin Akhtar Qureshi and since the search operation u/s 132 of the Act was conducted in the case of Moin Akhtar Qureshi Group headed by Shri Moin Akhtar Qureshi,search operation were also conducted on assessee’s brother Shri Aditya Sharma.

During the course of search proceedings, cash amounting to Rs. 78,18,500/- and jewellery amounting to Rs. 10,91,868/- were found in locker which was co-owned by Mr. Aditya Sharma and the assessee Shri Niraj Kumar which was added in the hands of the assessee Shri out that this cash and jewellery was also added in the hands of Shri Aditya Sharma on protective basis and in the hands of Sh. Moin Akhtar Qureshi on substantive basis. It was further submitted by the Ld. AR that the Ld. CIT(A),thereafter, deleted the additions in the hands of Sh.

Moin Akhtar Qureshi and confirmed the same on substantive basis in the hands of Shri Aditya Sharma. Our attention was drawn to the order of the Ld. CIT(A) dated 26.3.2019 wherein the Ld. CIT(A) has confirmed the additions in the hands of the assessee’s brother Shri Aditya Sharma on substantive basis. The Ld. AR submitted that, therefore, since the impugned amounts, has been added on substantive basis in the hands of the assessee’s brother, the same cannot bebrought to tax twice and therefore, the addition in the case of assessee Shri Niraj Kumar needs to be deleted. It was also brought to the notice of the Bench that Shri Aditya Sharma had surrendered the impugned cash of Rs. 78,18,500/- for tax during the assessment year 2014-15 in his name and had also deposited the tax and interest thereon. Our attention was also drawn to copy of the ITR acknowledgement, revised computation and challans of Shri Aditya Sharma in this regard. same belonged to the assessee’s mother and bhabi who had been married long ago. It was submitted that the jewellery found in the locker was only 339.20 gms which was lower than the quantity of jewellery mentioned in CBDT Circular No. 1916 dated 11.05.1994, which directed the tax authorities not to seize jewellery and ornaments found during the search to the extent of 500 gms per married lady. It was submitted that accordingly, both the additions in the hands of ShriNiraj Kumar deserved to be deleted.

4.0 With respect to the facts in the case of Smt. Sujata Sharma, it was submitted that a search was also conducted in the locker which was co- owned by the assessee alongwith her husband ShriAditya Sharma and cash of Rs. 1,15,00,000/- was seized. It was further submitted that this cash seizure was added in the hands of Shri Aditya Sharma (husband of the assessee)on protective basis and in the hands of Sh. Moin Akhtar Qureshi on substantive basis. It was further submitted that the Ld. CIT(A) deleted this addition in the hands of Sh. Moin Akhtar Qureshi and confirmed the same on substantive basis in the hands of Shri Aditya Sharma vide order dated 26.03.2019. Our attention was also drawn to the relevant findings contained in the order of the CIT(A) as mentioned aforesaid. The Ld. AR further submitted that, therefore, this amount has ShriAditya Sharma which was against the provisions of the Income Tax Act, 1961. The Ld. AR also drew our attention to the revised computation and ITR acknowledgement and copy of challans in the case of ShriAditya Sharma for assessment year 2014-15 wherein this amount of Rs. 1,15,00,000/- has already been included in the additional income surrendered to the tune of 2,16,25,000/-. It was submitted that therefore, double taxation of the same income in the hands of the two assessees deserved to be deleted.

5.0 Per contra, the Ld. Sr. DR placedreliance on the orders of the authorities below.

6.0 We have heard the rival submissions and have also perused the material on record. The facts of the case are not in dispute. In the case of Shri Niraj Kumar, it is very much apparent that the cash seized from thelocker jointly owned by Shri Niraj Kumar and Shri Aditya Sharma to the tune of Rs. 78,15,500/- has been taxed on substantive basis in the hands of the assessee’s brother. We have gone throughthe order of the Ld. CIT(A) in the case of Shri Aditya Sharma for assessment year 2014- 15, wherein, vide order dated 26.03.2019, in para 10.3.1, the Ld. CIT(A) considered the discussion in the case of Sh. Moin Akhtar Qureshi and is tobe taxed in the hands of ShriAditya Sharma on substantive basis instead of protective basis. Therefore, as per the settled law, the same amount cannot be taxed twice in the hands of two different assesses.

Therefore, we have no option but to direct the Assessing officer to delete this addition.

6.1 Similarly, in the case of Smt. Sujata Sharma, we have gone through para 11.3.1 of the order of the Ld. CIT(A) dated 26.03.2019 in the case of ShriAditya Sharma and we note that here also the Ld. CIT(A) has returned the finding that this amount of Rs. 1,15,00,000/- is to be taxed in the hand of Sh. Aditya Sharma on substantive basis instead of protective basis. Therefore, this addition has also been confirmed in the hands of ShriAditya Sharma. Accordingly, there is no reason to bring the seized cash to tax for the second time in the hands of Smt. Sujata Sharma. Accordingly, we direct the Assessing officer to delete this addition also.

6.2 As far as jewellery of Rs. 10,91,868/- found in the locker of ShriNiraj Kumar is concerned, we have gone through the ‘Panchnama’ relating to the search of lockerNo. G-2123 which was co-owned by ShriAditya Sharma and ShriNiraj Kumar and have also considered the the contention of the Ld. AR that since the jewellery found in the locker was only 339.20 gms and which is being claimed to be belonging to assessee’s bhabi and mother, (both married ladies), the benefit of CBDT Circular No. 1916 dated 11.05.1994 should have been given to the assessee.Accordingly, we direct the Assessing officer to delete this addition also.

7.0. In the final result, both the appeals of the assessee stand allowed.

Order pronounced on 07.02.2022