BRIJ RAJ SINGH RATHAUR,NEW DELHI vs. ADDL. CIT, NEW DELHI

Heard both the parties at length. Case files perused. Brij Raj Singh Rathaur

We advert to the assessee’s “lead” appeal ITA No. 1762/Del/2011 for A.Y. 2006-07 raising the following substantive grounds:

The ld. CIT(A) has erred in law and facts of the case in confirming the addition of Rs.1,74,000/- being investment in Magnum Commission Fund and Fidelity Equity Fund.

The ld. CIT(A) is not justified in confirming addition of Rs.76,000/- u/s 68 of the Income Tax Act, 1961 being deposits in Standard Chartered Bank because

It emerges during the course of hearing that the assessee/appellant herein was infact a senior officer of Delhi government on deputation with the Municipal Corporation of Delhi. The Central Bureau of Investigation (“CBI”) had carried out /conducted a search on him on 11.10.2006; after registering a regular case under the provisions of section 13(2) r.w.s. 13(1) of Prevention of Corruption Act, 1988. It was in this search that the said investigation agency found and seized a cash amount of Rs.36,50,000/- from his residence. Learned Assessing Officer took up scrutiny in the assessee’s case therefore and framed the regular assessment herein dated 30.12.2008 making impugned twin additions i.e. the alleged unexplained investment in mutual funds as well as cash Brij Raj Singh Rathaur

This leaves the assessee aggrieved.

It is in this factual backdrop that the Revenue vehemently argues in support of the impugned twin additions that the assessee has neither reconciled the source of mutual fund investments made in the relevant previous year nor he could explain source of the twin cash deposits amounting to Rs.27,000/- and Rs.49,000/- credited in his bank account on 30.01.2006 and 02.03.2006, respectively.

We have given our thoughtful consideration to the Revenue’s foregoing vehement contentions raised during the course of hearing and see no merit therein. This is for the precise reason that it is admittedly learned Assessing Officer’s case that the assessee had invested anything in cash in mutual funds so as to his capacity going by alleged past accumulated savings of Rs.76,000/- at least in light of his social economic status, could be altogether denied, respectively. We thus, conclude in this factual backdrop that the impugned twin additions of unexplained investments in mutual fund of Rs.1,74,000/- and cash deposits amounting to Rs.76,000/- deserve to be deleted therefore. Ordered accordingly. This assessee’s instant former appeal succeeds in very terms.

Next comes the assessee’s latter appeal for A.Y. 2007-08 raising the following substantive grounds:

On the facts and in the circumstances of the case and in law the CIT( A) erred in holding that proceedings had been validly initiated under section 147 in the present case.

On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 36.50 lakhs, without even confronting to the assessee any of the material on the basis of which the said addition was made.

On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 36.50 lakhs, without even bringing on record as to how the said sum was in the nature of the Assessee's income for the subject year.

On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 2,28,227 on account of short term capital gains.

On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming addition of Rs. 4,02,373 being the redemption amount in various mutual funds.

On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming additions of Rs. 9,45,049 & Rs. 3,47,100 in respect of deposits in various bank accounts.”

It is vehemently contended in light of the assessee’s pleadings that the learned CIT(A)’s herein has passed a totally non-speaking order whilst upholding the impugned addition(s) as under:

2 In view of the above, it is clear that now the proceedings before CBI Court is no more pending in the case of the appellant. Therefore, the additional grounds taken by him for stay of appellate proceedings do not survive. Moreover, the appellate proceedings under the IT Act and criminal proceedings under the Prevention of Corruption Act are distinct, separate and independent proceedings and there is no provision in the IT Act to stay the appellant proceedings on the ground that the criminal proceedings are going on in the case of the assessee in other Court, unless there are specific directions by Hon'ble Court in this regard. Here in the case of appellant, appellate proceedings are going on as per the provisions of IT Act which cannot be stayed in absence of specific directions of the Court and now the criminal proceedings, as mentioned above, have already been completed before Trial Court, hence, there is no justification on the part of appellant raising the grounds for the stay of proceedings. In view of this, the additional grounds taken by appellant are rejected and, therefore, dismissed.

3 Now, I come to the substantive grounds taken by appellant. As per these grounds, appellant has firstly challenged the validity of reassessment proceedings and secondly, on merit. However, nothing has been submitted by appellant in support of aforesaid grounds, except mentioning that the criminal proceedings before the CBI Court or the High Court are pending in his case. Contrary to this, it can be very well concluded from the assessment order of AO that- each and every of aspect of reopening of assessment proceedings has been dealt with by him satisfactorily against the superficial objections raised by appellant. At one hand, the appellant has not made statutory compliance by filing the return of income in response to notice u/s 148 of the Act, on the other hand, he raised several Brij Raj Singh Rathaur

4 Further, in respect of the merit of the case also, though the appellant has raised the objections by taking the ground but failed to submit anything in this regard. Neither during the assessment proceeding nor appellant proceedings, appellant could give any evidence or submissions to explain that the said cash amount does not belong to him or earned from disclosed sources. The judgment of the CBI Court, as mentioned above, also confirms that the amount of Rs. 30.50 lakhs belongs to appellant only from undisclosed sources for which he was convicted as per provisions of Prevention of Corruption Act. Since the cash was found from his possession at his residence, onus is on him to explain the source of this cash amount but he failed to do so. Since the appellant throughout failed to explain the source of aforesaid cash amount, the conclusion drawn by AO and addition made by him is hereby confirmed and grounds taken by appellant are dismissed.”

It is in this factual backdrop that both the learned representatives reiterate their respective stands. We are of the ITA No. 315/Del/2019 Brij Raj Singh Rathaur

So far as the assessee’s fifth, sixth and seventh substantive grounds challenging short term capital gains of Rs.2,28,227/-, redemption from mutual funds of Rs.4,02,373/- and cash deposits of Rs.9,45,049/- and Rs.3,47,100/-; respectively, are concerned, we note from a perusal of the assessment discussion dated 29.12.2009 (page 16 para 4.1) onwards that he could not rebut the corresponding clinching facts of having derived the said short term capital gains, redemption of the corresponding mutual fund as well as the cash deposits in the bank accounts. We make it clear that he has not even filed his cash flow statement before us explaining source of the cash deposits made in the bank account. We are of the considered view that the learned lower authorities have rightly made all these additions in assessee’s hands. The same stand confirmed therefore. His instant latter appeal ITA No. 315/Del/2019 fails therefore.

No other ground or argument has been pressed before us. Brij Raj Singh Rathaur