ACIT, NEW DELHI vs. SHRI RAJIV GUPTA, NEW DELHI

This appeal is preferred by Revenue against impugned appellate order dated 21.03.2016 passed by the Ld. CIT (Appeals)-24, New Delhi for assessment year 2008-09. Following grounds of appeal have been raised in this appeal : “1. The order of Id. CIT(A) is not correct in law and on facts.

2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 30,000/- as unaccounted expenditure.

3. On the facts and circumstances of the case, the CIT(A) has erred in holding that once the receiving company has admitted the unaccounted income, it is automatically explained in the hands of the giver i.e. assessee.

4. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 1,85,88,600/- as unaccounted expenditure.

5. On the facts and circumstances of the case, the CIT(A) has erred in holding that once the source of receipts are explained, it is not to be taxed in the hands of the receiver.

6. On the facts and circumstances of the case, the CIT(A) has erred in holding that unexplained credits and unaccounted receipts are one and the same.

2. Search action u/s 132 of IT Act was carried out on M/s. Satya Prakash & Brothers Pvt. Ltd. group of cases on 28.10.2010. The assessee’s premises were also searched u/s 132 of IT Act as part of aforesaid search action. Assessment order u/s 153A read with section 143(3) of IT Act was passed on 28.03.2013 wherein additions of Rs. 1,85,88,600/- and Rs. 30,000/- (totaling Rs. 1,86,18,600/-) were made. The aforesaid addition of Rs. 1,85,88,600/- was made on the basis of seized records (Party CN, Annexure A- 72 page 16 to 20). The aforesaid addition of Rs. 30,000/- was made on the basis of seized records (party CN, Annexure A-72 page 133). The assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 21.03.2016 of the Ld. CIT(A) both the aforesaid additions of Rs. 1,85,88,600/- and Rs. 30,000/- were deleted. The relevant portion of the aforesaid impugned appellate order dated 21.03.2016 is reproduced as under :-

(2.1) This present appeal has been filed by Revenue against the aforesaid impugned appellate order dated 21.03.2016 of the Ld. CIT(A). At the time of hearing before us, both sides were in agreement that the entries in the aforesaid seized documents vide (Party CN, Annexure A-72 page 16 to 20) and (party CN, Annexure A-72 page 133) have been owned up before Settlement Commission by M/s. Satya Prakash & Brothers Pvt. Ltd., Sh. Satya Prakash Gupta and Smt. Abha Gupta and offered for taxation in the settlement applications. However, neither side (neither Revenue nor the Assessee) has filed copy of final order(s) passed by Settlement Commission u/s 245D(4) of Income Tax Act in the cases of aforesaid M/s. Satya Prakash & Brothers Pvt. Ltd., Sh. Satya Prakash Gupta and Smt. Abha Gupta. Consequently, the outcome of the aforesaid M/s. Satya Prakash & Brothers Pvt. Ltd. Sh. Satya Prakash Gupta and Smt. Abha Gupt owning up the entries in the aforesaid seized documents (Party CN, Annexure A-72 page 16 to 20) and (party CN, Annexure A-72 page 133) is not available in the records of ITAT. Thus, information is not available as to the extent to which income has been eventually taxed in the hands of the aforesaid persons as a result of order(s) of Settlement Commission u/s 245D(4) of I.T.Act. It is also not known from perusal of records of ITAT, whether order(s) of Settlement Commission u/s 245D(4) of I.T.Act in the case of aforesaid persons has attained finality having regard to proceedings, if any, in High Court or Supreme Court and having regard to statutory provisions, such as S. 245D(6), S. 245D(6B), S. 245D(7), S. 245E of I.T.Act. Moreover, on perusal of the impugned appellate order dated 21.03.2016 of the Ld. CIT(A), we find that although the Ld. CIT(A), in paragraph 4.2.5 of his impugned appellate order has stated, “No reply has been received from A.O.”; the order of the Ld. CIT(A) is silent on how much opportunity was given by the Ld. CIT(A) to the Assessing Officer, after admission of additional evidences under Rule 46A of Income Tax Rules having regard to Rule 46A (3) of Income Tax Rules whereby the Ld. CIT(A) was duty bound to allow a reasonable opportunity to the Assessing Officer (a) to examine the evidence or document or to cross examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttable of the additional evidence produced by the appellant. In view of foregoing; and after perusal of materials on record, and moreover after hearing both sides we set aside the impugned appellate order dated 21.03.2016 of the Ld. CIT(A) and restore all the disputed issues to the file of the Assessing Officer with the direction to pass fresh assessment order as per law, after providing due opportunity to the assessee, and taking due consideration of the order(s) passed by Settlement Commission u/s 245D(4) of I.T.Act in the cases of aforesaid M/s. Satya Prakash & Brothers Pvt. Ltd., Sh. Satya Prakash Gupta and Smt. Abha Gupta. We further direct the Assessing Officer to ensure that double addition of same income is avoided; and also that income assessed and taxed in the hands of the aforesaid M/s. Satya Prakash & Brothers Pvt. Ltd., Sh. Satya Prakash Gupta and Smt. Abha Gupta, in consequence of order(s) of Settlement Commission u/s 245D(4) of I.T.Act in their cases, is not taxed again in the hands of the assessee if 877777the orders of Settlement Commission in the cases of aforesaid M/s. Satya Prakash & Brothers Pvt. Ltd., Sh. Satya Prakash Gupta and Smt. Abha Gupta have attained finality. (3) The appeal is partly allowed, for statistical purposes. Order pronounced in the open court on 31/01/2020.