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Facts
The assessee's appeal stemmed from an addition of Rs. 18 crores made by the Assessing Officer for AY 2011-12, based on a surrender letter filed by the assessee under Section 132(4) of the Income Tax Act during a search and seizure operation. The assessee had challenged the CIT(A)'s order confirming this addition, arguing lack of corroboration for the statement made by the assessee's brother. The appeal had been languishing for 10 years, with the assessee not appearing for hearings, leading the Tribunal to adjudicate it based on available records.
Held
The Tribunal noted that the assessee failed to pursue the appeal or provide any material to controvert the findings of the CIT(A). Consequently, the Tribunal found no reason to interfere with the First Appellate Authority's order. The appeal of the assessee was dismissed, and the impugned order was upheld.
Key Issues
Whether the CIT(A) erred in confirming an addition of undisclosed income based on a statement from the assessee's brother and a surrender letter under Section 132(4) without proper corroboration.
Sections Cited
132, 132(4), 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH “F”, DELHI
ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-–III, New Delhi [in short ‘the CIT(A)’] dated 28.02.2014, for assessment year 2011-12.
This appeal was first listed for hearing on 12.01.2017. On the said date, the appeal was adjourned to 03.04.20217 on written request of the counsel for the assessee. Thereafter, the appeal was adjourned from time to time on the written request of the assessee/counsel for the assessee on one pretext or the other. On some occasions Department had also sought adjournment but significantly the appeal was adjourned over the period of time at the behest of assessee. On various dates, none appeared to represent the assessee. The notice was sent to the assessee through RPAD on the address mentioned in Form No. 36. The notices sent to the assessee were returned back un-served from postal authorities with remarks ‘left’. This appeal is languishing for the last 10 years in the Tribunal and has been orphaned by the assessee. It seems that the assessee is not keen to pursue this appeal any more. Therefore, we take up this appeal for adjudication with the assistance of Departmental Representative and on the basis of documents already on record.
The assessee in appeal has raised following grounds:-
1. That on the fact and circumstances of the case the order passed by Ld. CIT(A)-Ill is bad in law and nature and therefore it is liable to be quashed.
2. Because the CIT (A)-Ill erred in confirming the addition on account of undisclosed income a) The Ld. A.O. has made the addition on account of merely statement made by the brother of the assessee without corroborating with the evidences found in the search and without confirming the same with the assessee and without any statement of assessee; and b) That the Ld. CIT(A)-Ill failed to appreciate the fact that the Ld. A.O. has not corroborated the statement made by the brother of assessee vis-à-vis the income generated through the stock exchange allegedly stated by the brother of assessee in his statement made u/s 132(4) of the Act; and c) The Ld. CIT(A)-III also failed to appreciate that neither the authorized officer corroborated the statement made by the brother of assessee vis-à-vis the earning of the income at the appraisal of the search period nor the Assessing officer during assessment proceedings; and d) Because the Ld. CIT(A)-III failed to appreciate the fact that no stock exchange settles the transaction in cash and that contents of the diary was a forceful writing of the diary disclosing the income that never existed.
3. The appellant craves leave for addition, modification, alteration, amendment of any of the grounds of appeal
4. Shri. P.N. Baranwal, representing the Department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR has also furnished written submissions and has placed reliance on various decisions some of them are as under:- i. B Kishore Kumar vs. CIT [2015](62 taxmann.com 2015) (SC); ii. Bhagirath Aggarwal vs. CIT [2013](31 taxmann.com) 274 (Delhi); iii. Smt Dayawanti vs. CIT [2016] 75 taxmann.com 308 (Delhi); iv. Raj Hans Tower (P.) Ltd. vs. CIT [2015] 56 taxmann.com 67 (Delhi); and v. PCIT (C)-2 vs. Avinash Kumar Setia [2017] 81 taxmann.com 476 (Delhi).
5. We have heard the submissions made by ld. DR and have examined the orders of authorities below. A search & seizure operation u/s. 132 of the Act was carried out in the case of Surya Vinayak Group on 03.03.2011. The assessee was also covered under the said search. The Assessing Officer (AO) vide assessment order dated 28.03.2013 passed u/s. 143(3) of the Act made addition of Rs. 18 crores on the basis of surrender letter dated 10.03.2011 filed by the assessee u/s. 132(4) of the Act.