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Income Tax Appellate Tribunal, DELHI BENCHE ‘E’, NEW DELHI
Before: Sh. R. K. Panda & Sh. Kuldip Singh
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHE ‘E’, NEW DELHI Before Sh. R. K. Panda, Accountant Member And Sh. Kuldip Singh, Judicial Member Asstt. Year: 2007-08 Sh. Surya Kant Jaipuria, Vs Asstt. Commissioner of Income S-25, Green Park Main Market, Tax, Central Circle-7, New Delhi-110016 New Delhi (APPELLANT) (RESPONDENT) PAN No. AAIPJ6008K Assessee by : Sh. P. C. Yadav, Adv. Revenue by : Smt. Pramita M. Biswas, CIT DR Date of Hearing :01.04.2019 Date of Pronouncement : 01.07.2019 ORDER Per R. K. Panda, Accountant Member:
This appeal filed by the assessee is directed against the order dated 29.02.2016 of ld. Commissioner of Income Tax (Appeals)-24, New Delhi relating to assessment year 2007-08.
Facts of the case, in brief, are that the assessee is an individual. The original return of income was filed on 31.07.2007 declaring total income of Rs.44,36,953/-. A search & seizure operation u/s 132 of the Income Tax Act, 1961 was carried out on M/s Jaipuria Group of cases on 27.03.2012. Warrant of authorization u/s 132 of the Act was also issued in the name of Sh. Surya Kant Jaipuria, 7, Aurangzeb Road, New Delhi. In response to notice u/s 153A of the Act dated 08.04.2013, the assessee filed his return of income on 18.07.2013 declaring an income of Rs.65,37,410/-. The Surya Kant Jaipuria Assessing Officer during the course of assessment proceedings noted that during the course of search & seizure operation various incriminating materials/documents were found and seized. The details of which are as under: Sl. Page No. Annexure Premise Address Amount A.Y. No. No. 1. 2-35 A-3 S-25, Green Park, 62,44,962 2006-07 Main Market, New Delhi 2. 87-93, A-5 S-25, Green Park, 18,10,821 2006-07 97-101 & Main Market, New 104-111 Delhi 80,55,783 3. During the post search investigation, above transaction were confronted to Sh. S. K. Jaipuria vide summons dated 20.07.2012 and he was asked to furnish the detail regarding mode of payment, source of the fund and its accountability in the books of accounts. The assessee submitted that the above document contains bills etc. for repair carried out at his residence which was met out from the withdrawals of the family members of the assessee.
During the assessment proceedings, the Assessing Officer again asked the assessee to furnish details regarding nature of transaction, mode of transaction and whether they are entered into books of account with supporting evidences. The assessee in its reply submitted as under: “In this regard, it is humbly submitted that the alleged document were bills and vouchers, rough calculation of measurement etc and pertains to repair and maintenance work carried out at residential house at 7 Aurangzeb Road, New Delhi. The complete detailed chart of these documents duly showing the date reference/item page no., name of the party amount and remark is enclosed herewith. The total value of the transaction comes out Rs. 25,01,379/- of all these documents as against Rs. 63,04,462/- & 18,52,306/- shown by your honour in the Surya Kant Jaipuria notice. It appears in the notice sum total of all the documents has been taken which is not correct. In the remarks column it is clearly stated that repeatedly the same amount has been added towards payment, invoices, measurement sheet, duplicate sheet etc. and thus there is no relevance of figure of Rs. 63,04,462- and Rs. 18,52,306/- On going through with the details chart your honour will find that the transactions pertains to F.Y. 2006-07 & 2007-08 details is as under: F.Y. 2006-07 Rs. 22,00,454/- F.Y. 2007-08 Rs. 3,00,925/-“ 5. However, the Assessing Officer was not satisfied with the explanation given by the assessee and made addition of Rs.80,55,783/- to the total income of the assessee on the ground that the assessee failed to furnish the required details and did not provide the source of cash paid.
6. The Assessing Officer further made addition of Rs.28,38,370/- being unaccounted cash transaction on the basis of certain document seized from the residence of the assessee, the details of which are as under: Sl. Page No. Annexure Premise Address Amount A.Y. No. No. (in Rs.) 1. 166 A-1 7, Aurangzeb Road, 19,28,370 2006-07 New Delhi 2. 167 A-1 7, Aurangzeb Road, 9,10,000 -------- New Delhi 7. After considering the additional income disclosed at Rs.22,00,454/-, the Assessing Officer determined the total income of the assessee at Rs.1,52,31,110/-.
8. In appeal, the ld. Commissioner of Income Tax (Appeals) restricted the addition to Rs.15,60,197/- out of the addition of Rs.88,55,783/- made by the Assessing Officer by treating the same as unexplained expenditure incurred on repairs and Surya Kant Jaipuria maintenance of residential house. So far as the addition of Rs.28,38,370/- being the unaccounted cash transaction is concerned, the ld. Commissioner of Income Tax (Appeals) deleted an addition of Rs.9,10,000/- and sustained addition of Rs.19,28,370/-.
Aggrieved with such order of the ld. Commissioner of Income Tax (Appeals), the assessee is in appeal before the Tribunal by raising the following grounds: “
1. That on facts and circumstances of the case, the order passed by the Ld . CIT (Appeal) is bad both in the eyes of law and on facts.
2. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 15,60,197/- (Rs. 13,32,910/- plus Rs.2,27,287/-) by treating the same as unexplained expenditure incurred on repair and maintenance of residential house.
3. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 15,60,197/- (Rs.l3,32,910/-plus Rs.2,27,287/-)by treating the same as unexplained expenditure incurred on repair and maintenance of residential house relying on rough papers/estimations and rough measurements.
4. Without prejudice to the above grounds the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 19,28,370/- by relying on rough paper not supported by any corroborative material.
5. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.
6. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”
10. The assessee has also filed the following additional grounds:
Surya Kant Jaipuria “On the facts and circumstances of the case the Assessment Order passed under section 153A of the I.T. Act, 1961 is bad in law as the assessment was not pending at the time of search and there is no incriminating material found during the search of assessee.
It is well settled that an assessee can raise a legal additional ground or even fresh legal plea at any stage of the proceedings. In support the appellant seeks to rely on the judgments of Apex Court in the case of CIT Vs Varas International reported in 284 ITR 80(SC) and NATIONAL THERMAL POWER CO. LTD vs. CIT reported in 229 ITR 383(SC). Special Bench decision in the case of DHL operators reported in 108 TTJ 152(SB).
It is further relevant to mention here that the assessee had not raise this ground categorically at the time of filing of appeal since the judgment of Kabul Chawala was not there. Therefore the delay in raising this ground may kindly be condoned. Since it is settled principle of law that unless the malafides writ large the delay should be condoned and justice should be done, as held by Apex Court in the case of Improvement Trust vs. Ujagar Singh (2010) 6 SSC 786 / (2010) 6 Scale 173 (Supreme Court).
The appellant shall be highly grateful if the aforesaid ground is permitted to be urged which had not been raised due to incorrect legal advice.”
The ld. Counsel for the assessee submitted that the above additional ground is purely legal ground and it can be raised at any stage of the proceedings. For the above proposition, he relied on the decisions of Hon’ble Supreme Court in the case of CIT Vs Varas International Ltd. reported in 284 ITR 80 and National Thermal Power Co. Ltd. Vs CIT reported in 229 ITR 383 and the decision of the Special Bench of the Tribunal in the case of DHL Operators reported in 108 TTJ 152 (SB). He submitted that the assessee had not raised this ground categorically at the time of filing of the appeal since the decision of Hon’ble Delhi High Court in the case of CIT Vs
Surya Kant Jaipuria Kabul Chawala reported in 380 ITR 573 was not available. Therefore, the delay in raising this ground should be condoned. He submitted that it is the settled proposition of law that unless the malafides writ large the delay should be condoned and justice should be done. For the above, proposition he relied on the decision of Hon’ble Apex Court in the case of Improvement Trust Vs Ujagar Singh (2010) 6 SSC 786.
After hearing the arguments of the ld. Departmental Representative and considering the facts narrated in the petition for raising the additional ground by the assessee, the additional ground so raised by the assessee is admitted for adjudication.
The ld. Counsel for the assessee submitted that the original return of the assessee was filed on 31.07.2007 and the time limit for issue of notice u/s 143(2) of the Act was 30.09.2008. A search & seizure operation in the instant case took place on 27.03.2012. Referring to the copy of the panchnama dated 28.03.2012, he submitted that the name of the assessee does not appear in the search warrant. Further, the warrant of search was in the premises at S-25, Main Market, Green Park, New Delhi whereas the residence of the assessee is at 7, Aurganzeb Road, New Delhi. Further, the statement of the assessee has also not been recorded u/s 132(4) of the Act. He submitted that the Assessing Officer made an addition of Rs.80,55,783/- on account of unaccounted cash transaction being the repairs carried out at his residence out of which the ld. Commissioner of Income Tax (Appeals) sustained an amount of Rs.15,60,197/-. So far as the other
Surya Kant Jaipuria addition of Rs.28,38,370/- is concerned, the ld. Commissioner of Income Tax (Appeals) sustained an amount of Rs.19,28,370/-. He submitted that since the residential premises of the assessee was not searched and no incriminating materials were found during the search from the premises of the assessee, therefore, no addition u/s 153A of the Act could have been made when the return was not pending. For the above proposition, he relied on the decision of Hon’ble Delhi High Court in the case of CIT Vs Kabul Chawla reported in 380 ITR 573 and various other decisions.
13.1 Referring to page 2 of the assessment order, he submitted that the Assessing Officer himself mentions that the documents were found and seized from S-25, Green Park, Main Market, New Delhi. So far as the addition of Rs.28,38,370/- is concerned the same consists of page no. 166 and 167 of Annexure A-1. Page No. 167 Annexure A-1 containing the details of Rs.9,10,000/- has already been deleted by the ld. Commissioner of Income Tax (Appeals) and the Revenue is not in appeal. So far as Rs.19,28,370/- as per page no. 167 Annexure A-1 is concerned, he submitted that the same is a dumb document and no addition should have been made on the basis of such dumb document.
So far as the addition of Rs.15,60,197/- is concerned, he submitted that the documents were found from the premises of other persons and the Assessing Officer could have assumed jurisdiction over the assessee only under the provisions of Section 153C or 147 of the Act as the case may be after taking proper course of action. Referring to provisions of Section Surya Kant Jaipuria 132(4A) of the Act, he submitted that the seized documents are presumed that they belong to the person from whom they were found. Therefore, the Assessing Officer ought to have taken recourse of provisions of Section 153C instead of 153A of the Act in the case of the other person. Referring to the decision of the Tribunal in the case of Jindal Steels Vs ACIT reported in 120 ITD 301, he submitted that the Tribunal in the said decision has held that provisions of Section 153A and 153C of the Act are materially different in as much as the later requires the recording of satisfaction before assuming jurisdiction and Revenue cannot contend that Section 153C of the Act can be replaced by Section 153A of the Act. Since, in the instance case, no assessment for the impugned assessment year was pending on the date of search and the documents were seized from the premises of the company and not from the residence of the assessee, therefore, no addition in the instant case is called for.
Referring to the decision of Hon’ble Delhi High Court in the case of Pr. CIT Vs Subhash Khattar vide order dated 25.07.2017, he submitted that the Hon’ble High Court in the said decision has held that if something relatable to assessee has been found from some other person then no action is permissible u/s 153A of the Act, even if, there is a search in the premises of the assessee. He submitted that the assessee under misconception of law and facts had offered an amount of Rs.22,00,454/- in his return of income as additional income on the basis of those documents which were found from the premises of the other person. However, the surrender was made in order to avoid unnecessary litigation and that too at Surya Kant Jaipuria the end of assessment proceedings, which means the assessee has not blocked the investigation till the end and Revenue failed to corroborate its version with some independent material. Referring to various other decisions, he submitted that it is settled proposition of law that there is no estoppel against the statute and if assessee has offered something under wrong assumption of facts and law then the same cannot be taxable if the jurisdiction is bad in law.
So far as the addition of Rs.19,28,370/- is concerned, he submitted that page 166 of Annexure A-1 is a dumb document and therefore, no addition can be made on the basis of such dumb document. Further, when assessee gives some explanation, then such explanation has either to be accepted in full or rejected in full and it is not permissible to accept part of the same as true and the other part as untrue. Further, so far as the documents pertaining to repairs and maintenance of house is concerned, the assessee has already surrendered an amount of Rs.22,00,454/- in assessment year 2007-08 and Rs.3,00,925/- in assessment year 2008-09. So far as the addition of Rs.19,28,370/- is concerned, he submitted that it is a dumb document and there is no date or signature of the author on this document and the Assessing Officer has never examined the author of the document before making the addition. Relying on various other decisions as mentioned in the synopsis, the ld. Counsel for the assessee submitted that no addition is called for on account of both the additions.
The ld. Departmental Representative, on the other hand, heavily relied on the order of the Commissioner of Income Tax
Surya Kant Jaipuria (Appeals) on account of various additions sustained by him. So far as the argument of the ld. Counsel for the assessee that no addition can be made in absence of any incriminating material found during the course of search is concerned, the ld. Departmental Representative referring to the decision of Hon’ble Kerala High Court in the case of E.N. Gopakumar Vs CIT reported in 75 Taxmann.com 215 submitted that assessment proceedings generated by issuance of a notice u/s 153A(1)(a) of the Act can be concluded against interest of assessee including making additions even without any incriminating material being available against the assessee in search u/s 132 of the Act on the basis of which notice was issued u/s 153A(1)(a) of the Act. He submitted that the Hon’ble Kerala High Court while deciding this issue has considered the decision of Hon’ble Delhi High Court in the case of CIT Vs Kabul Chawala reported in 380 ITR 573 and various other decisions. Referring to the decisions of Hon’ble Allahabad High Court in the case of CIT Vs Raj Kumar Arora reported in 367 ITR 517 and in the case of CIT Vs Kesarwani Zarda Bhandar Sahson Alld. vide of 2014, he submitted that the Hon’ble Allahabad High Court in the above decision has held that the Assessing Officer has power to reassess returns of assessee not only for undisclosed income found during search operation but also with regard to material available at time of original assessment. She also relied on the following decisions: � CIT Vs St. Francis Clay Décor Tiles 385 ITR 624 � Smt. Dayawanti Vs CIT (2017) 390 ITR 496 � CIT Anil Kumar Bhatia 352 ITR 493 � Filatex India Ltd. Vs CIT 49 taxmann.com 465
Surya Kant Jaipuria 18. We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. Before adjudicating the grounds on merit, we would like to adjudicate first the legal ground raised by the assessee. We find from page no. 4 of the assessment order that the Assessing Officer has clearly mentioned that the documents are seized from the premises at 7, Aurangzeb Road, New Delhi. Perusal of seized documents marked as page 166 of Annexure A-1 shows that it contains clear cut amount with date and names of persons. Therefore, the arguments of the ld. Counsel for the assessee that no search has taken place in the premises of the assessee and that no incriminating material was found is not correct and misleading. Therefore, the additional ground raised by the assessee is dismissed being devoid of any merit.
So far as the addition of Rs.15,60,197/- sustained by the ld. Commissioner of Income Tax (Appeals) out of the addition of Rs.80,55,783/- made by the Assessing Officer is concerned, we find the addition was made on the basis of seized documents found from the premises S-25, Main Market, Green Park, New Delhi as per para 4 of the assessment order. We find the Revenue is not in appeal before the Tribunal against the relief granted by the ld. Commissioner of Income Tax (Appeals). So far as the addition of Rs.15,60,197/- sustained by the ld. Commissioner of Income Tax (Appeals) is concerned, we find the assessee during the course of hearing before the ld. Commissioner of Income Tax (Appeals) had explained that the vouchers pertain to repairs and maintenance of his
Surya Kant Jaipuria residential house at 7, Aurangzeb Road, New Delhi. The assessee had given a tabular representation of the entries before the ld. Commissioner of Income Tax (Appeals). Although the ld. Commissioner of Income Tax (Appeals) had given substantial relief to the assessee out of the addition of Rs.80,55,783/- by sustaining Rs.15,60,197/- only, we find the addition so sustained by the ld. Commissioner of Income Tax (Appeals) is not justified under the facts and circumstances of the case. Assessee had categorically submitted that repair and maintenance expenses in the property at 7, Aurangzeb Road, New Delhi was out of the drawings of the family members. Assessee had given date wise, item wise explanation, which the ld. Commissioner of Income Tax (Appeals) has reproduced in the order and remand report of the Assessing Officer was also obtained. Therefore, we find merit in the argument of the ld. Counsel for the assessee that the addition so sustained by the ld. Commissioner of Income Tax (Appeals) on the ground that assessee could not explain satisfactorily the amount of Rs.15,60,197/- is not correct. We, therefore, set aside the order of the ld. Commissioner of Income Tax (Appeals) on this issue and direct the Assessing Officer to delete the addition of Rs.15,60,197/-. The ground nos. 2 & 3 of the appeal are allowed.
So far as ground no. 4 of the appeal is concerned, we find the addition was based on the basis of seized document page 166 of Annexure A-1 found from 7, Aurangzeb Road, New Delhi. A perusal of the said seized document shows that it contains date wise receipts and payments with clear cut amount and names. Therefore, the arguments of the ld.
Surya Kant Jaipuria Counsel for the assessee that it is a dumb document is not correct. Since, the assessee had not explained properly the entries appearing in the seized document to the satisfaction of the Assessing Officer or the ld. Commissioner of Income Tax (Appeals) or before us, therefore, the addition so made by the Assessing Officer and sustained by the ld. Commissioner of Income Tax (Appeals) is justified. The ground no. 4 of the appeal is accordingly dismissed.
So far as the arguments of the ld. Counsel for the assessee that the documents were seized from the premises at S-25, Main Market, Green Park, New Delhi and therefore, in view of the decision of Hon’ble Delhi High court in the case of Subash Khattar (supra), Assessing Officer should have taken recourse u/s 153C or 147 of the Act and not u/s 153A of the Act is concerned, we find the same is not correct. In that case search & seizure operation was conducted in Aerenes group of cases on 17.08.2011 and search operation was conducted at the premises of the assessee on 10.02.2012. In other words, two searches took place on different dates. However, in the instance case, the search took place on the same day on the residence as well as business premises of the assessee. The documents seized from the business premises of the assessee which were belonging to the assessee was not denied by him. The assessee had categorically admitted that the documents found from the business premises were the bills and vouchers for repair expenses of his residential premises. On these circumstances, the decision relied on by the ld. Counsel for the assessee that Assessing Officer could have taken recourse u/s Surya Kant Jaipuria 153C or 147 of the Act and addition could not have been made u/s 153A of the Act is not correct.
To sum up, out of the addition of Rs.88,55,783/- made by the Assessing Officer, the ld. Commissioner of Income Tax (Appeals) had sustained only an amount of Rs.15,60,197/- which is deleted. So far as the addition of Rs.19,28,370/- sustained by the ld. Commissioner of Income Tax (Appeals) is concerned, the same is upheld. Since, the assessee had declared additional income of Rs.22,00,454/- which is more than the amount sustained by us amounting to Rs.19,20,370/-, therefore, no further addition is called for and the Assessing Officer is directed to accept the returned income of Rs.65,37,410/-. The grounds raised by the assessee are accordingly partly allowed.
In the result, the appeal of the assessee is partly allowed. (Order Pronounced in the Open Court on 01/07/2019)