SHRI SURYA KANT JAIPURIA,NEW DELHI vs. ACIT, NEW DELHI

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.

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: “

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

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

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

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

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.

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)