ACIT, DELHI vs. PAWAN KUMAR BANSAL, DELHI

Facts in brief are that u/s 153C of the Act on 25/03/2023, 24/03/2023 and 24/03/2023 respectively for the years under consideration by making certain additions. The Ld. CIT(A) vide orders impugned dated 31/08/2024, deleted certain additions. Aggrieve by the orders of the Ld. CIT(A), the Revenue preferred the captioned Appeals. 3. ACIT Vs. Pawan Kumar Bansal

Since all the three Appeals filed by the Revenue are against the single assessee, for the sake of convenience the Appeals of the Revenueare heard together and decided in this common order. We have heard both the parties and perused the material available on record and our findings and the conclusion are as under:-

The Ld. CIT(A) vide order dated 31/08/2024, deleted the protective addition of Rs. 2,40,00,000/- made in the hands of the Assessee by invoking the provision of Section 69A of the Act on the ground that the substantive addition made in the case of M/s Capital Power System Ltd. for Assessment Year 2017-18 has been confirmed by the Ld. CIT(A). Since, the said substantial addition made in the case of Capital Power System Ltd. has been set aside for Assessment Year 2017-18 in ITA No. 55/Del/2024 on the ground of invalid approval accorded u/s 153D of the Act, the protective addition made in the hands of the Assessee will not survive. Accordingly, we find no merits in the grounds of Appeal of the Revenue, accordingly, Grounds of appeal of the Revenue are dismissed.

The Ld. CIT(A) vide order dated 31/08/2024 deleted the protective addition of Rs. 83,00,000/- made in the hands of the Assessee on the ACIT Vs. Pawan Kumar Bansal ground that the substantive addition made in the case of M/s Capital Power System Ltd. for Assessment Year 2017-18 has been confirmed by the Ld. CIT(A). Since, the said substantial addition made in the case of Capital Power System Ltd. has been set aside for Assessment Year 2018- 19 in ITA No. 651/Del/2024 on the ground of invalid approval accorded u/s 153D of the Act the protective addition of Rs. 83,00,000/-made in the hands of the Assessee will not survive.

In so far as substantive addition of Rs. 40,00,000/- made u/s 69A of the Act, the Ld. CIT(A) while deleting the said addition held as under:- “11. The substantive addition of Rs 40,00,000/- were made on the basis of chat mentioned above at serial no 1 and 2. 12. On the basis of chat mentioned above at serial no 2 the addition of Rs 15,00,000/- were made. In the said chat mentioned at serial no 2 "Rs 15 transferred in your account" is mentioned and is related to banking transaction and is with regard payment to VA traders. On perusal of the accounts, it is seen that on 23.03.2018 payment of Rs. 15,00,000/- was made by Capital Power Systems Ltd. to M/s. VA traders. The message "Rs 15/- transferred in your account" clearly establishes that it was not in respect of any cash tranasaction. Further the amount was transferred by the company on 23.03.2018 and intimation in this regard was made on the same day. There no mention of any cash against such transfers through banking channel. Therefore, no adverse inference can be drawn in respect of such chat. Accordingly, addition of Rs. 15,00,000/- is liable to be deleted. 13. As such substantive addition of Rs 15,00,000/- is directed to be deleted. 14. The other substantive addition is of Rs. 25,00,000/-. The substantive addition of Rs 25,00,000/- were made on the basis of chat mentioned above at serial no 1 and in the said chat, "Ref Pueshji, please deliver 25" is mentioned. 15. On perusal of the chat, it is evident that there is demand to transfer the amount from one Shri RupeshJi In other chats, 15 has been used for Rs. 15,00,000/-. Therefore, the Assessing Officer concluded that 25 means Rs. 25,00,000/-. The chats reproduced above does not indicate that the demand of payment of Rs. 25,00,000/- was fulfilled. 17. It has also been found that in some chat, in response to the request to transfer the amount, there is confirmation message from receiver of the chat with regard to execution of the transaction. However, in this case no confirmation chat from the receiver of the chat has been found during search. As such from the whats up chat, it is not established that financial transaction of Rs 25,00,000/- was actually been carried out.

The demand has made in the chat could have been basis for making further investigation to establish the actual receipt of money. It is also a matter of fact that no party in the chat has confirmed the actual receipt of money.

Therefore, it is apparent that the money was not actually received even though there was demand for the same. In the instant case, the Assessing Officer has treated the amount of undisclosed income on the basis of demand for the same. However, the undisclosed income cannot be taxed on due basis. The principle of real income applies to unaccounted and undisclosed income. Unaccounted income in order to be taxed as to be actually earned by the appellant. In the instant case, there is no evidence to establish that any unaccounted income was actually earned/received by the appellant. In the absence of any evidence to establish the actual receipt of money, it is held that the Assessing Officer could not have made addition of Rs. 25,00,000/-.

Therefore, substantive addition of Rs 25,00,000/- is directed to be deleted.”

The Ld. CIT(A) has observed that the amount of Rs. 15,00,000/- has already been added in the hands of Capital Power Systems Ltd., therefore, the same cannot be added in the hands of the Assessee which amounts to taxing the very same income for second time. Further, in so far as addition of Rs. 25,00,000/- is concerned, the Ld. CIT(A) observed that the document I.T.A. No. 4801/DEL/2024 (A.Y 2019-20)

The Ld. CIT(A) vide order dated 31/08/2024, deleted the protective addition of Rs. 95,55,000/- made in the hands of the Assessee on the ground that the substantive addition made in the case of M/s Capital Power System Ltd. for Assessment Year 2017-18 has been confirmed by the Ld. CIT(A). Since, the said substantial addition made in the case of Capital Power System Ltd. has been set aside for Assessment Year 2019- 20 in ITA No. 652/Del/2024 on the ground of invalid approval accorded u/s 153D of the Act the protective addition of Rs. 95,55,000/- made in the hands of the Assessee will not survive.

In so far as substantive addition of Rs. 20,00,000/- made u/s 69A of the Act, the Ld. CIT(A) while deleting the said addition held as under:- “14. The substantive addition of Rs 20,00,000/- were made on the basis of chat mentioned above at serial no 1 and 2. at 15. It has been submitted that chat mentioned at serial no 1, 2 and 3 are on account of one single transaction of Rs 10,00,000/-. On the basis of chat mentioned above serial no 3, the protective addition of Rs 10,00,000/- were made in the impugned order. As such it was pointed out by the appellant that there has been duplication in the computation of substantive unaccounted income of Rs 20,00,000/-. It was pointed out that same message was adopted thrice for computing the unaccounted income by the Assessing Officer. 16. The chats are as under:-

The first chat is regarding receipt of money of Rs. 10,00,000/- by Shri Pawan Bansal from Shri Sanjay. The Assessing Officer has made addition of Rs. 10,00,000/- on account of first chat in the case of the appellant.

The second chat is regarding receipt of money of Rs. 10,00,000/- by Shri Pawan Bansal from Shri Sanjay. The Assessing Officer has made addition in the case of the appellant on this chat. It has been pointed out by the appellant that the same addition has also been made in the case of M/s. Capital Power System Pvt. Ltd. On this ground the appellant argued that the addition of Rs. 10,00,000/- cannot be made in the case of the appellant on the basis of second chat.

The third chat is regarding confirmation of either the first or the second chat. Therefore, no separate addition is required on the basis of third chat. me Tax

On the basis of second chat, the addition has already been made and confirmed the case of M/s. Capital Power System Pvt. Ltd. Therefore, no addition is required to Appeals)-23, New Delhi be made in the case of the appellant for Rs. 10,00,000/- based on the second chat. Accordingly, the appellant gets relief for Rs. 10,00,000/-. Thus addition of Rs. 10,00,000/- based on the second chat is deleted.

The next issue to be adjudicated is addition on account of the first chat. The appellant argued that the first chat and the second chat are the same because 23. The appellant could not furnish any explanation regarding the receipt of money of Rs. 10,00,000/- in either assessment proceedings or the appellate proceedings.

The appellant argued that "10" mentioned in the chat actually refers to 10,000 that was with Shri Ashanand Sharma an employee of the company looking after petty cash. The same argument was made during the course of appellate proceedings in the case of M/s. Capital Power Systems Pvt. Ltd. On the issue, the findings of the undersigned CIT(A) is as under:-

In the impugned order, it has been alleged by AO that Shri Ashanand Sharma given the statement that "10" means Rs 10,00,000/-. The said observation was made by AO on the basis of question no 15 of statement which is pertaining to 18th May 2018. However said statement has not been relied upon by AO as no addition has been made in order for A Y 2019-20 on the basis of question no 15. The appellant requested AO that before relying on the statement of Shri Ashanand Sharma opportunity of cross examination may please be given. However the opportunity of cross examination was not provided to appellant.

I have gone through the statement of Ashanand Sharma and Shri Pawan Bansal recorded during search. The contents of the chat have not been disputed by anyone. The only dispute in appeal is regarding the quantum mentioned in the chat. While the appellant states that the figures are in thousands, the Assessing Officer states that these are in lakhs.

Therefore, the figure of 75 mentioned in the chat has been taken by the Assessing Officer as Rs. 75,00,000/- whereas the appellant states it to be Rs.75,000/-.

In his statement under oath during the course of search on 21.07.2018, in respect of other chats dated 19.07.2018, 05.06.2018 and 18.05.2018, Shri Ashanand Sharma has stated (Q.NO.12, 13 and 15) that 10 stands for Rs.10,00,000/- and so on. Thus, on being confronted the contents of the chat, it was confirmed by Shri Ashanand Sharma that the figures were in lakhs. contentsommissioneb (Appeals)-23, 63. It is very unlikely that the amount of Rs.3000/- would be transferred via Hawala Channels involving some other person. There is no requirement of giving note no. for petty amount in thousands. This petty amount need not even be transferred because it can always be carried by the truck drivers of the appellant. The preponderance of probability suggest that actually Rs.3,00,000/- were transferred. It is only for higher amounts that hawala transactions are required."

Thus, it is held that in the chat there was mention of Rs. 10,00,000/- and not Rs. 10,000/- as claimed by the appellant.

From the chat it is evident that the appellant received Rs. 10,00,000/- and was the owner of Rs. 10,00,000/-. The appellant has not been able to explain as to whether or not the amount received has been disclosed by him as his income for the year. 27. The provisions of Section 69A are reproduced as under:-

The Ld. CIT(A) has observed that the amount of Rs. 10,00,000/- has already been added in the hands of Capital Power Systems Ltd., therefore, the same cannot be added in the hands of the Assessee which amounts to taxing the very same income for second time. Further, in so far as addition of Rs. 10,00,000/- is concerned, the Ld. CIT(A) has confirmed the said addition in the hands of the Assessee and the Assessee has not preferred any Appeal.

In the absence of any contrary material on record, brought by the revenue, we find no reason to interfere with the findings and the conclusion of the Ld. CIT(A). Accordingly, we dismiss the Grounds of Appeal of the Revenue as devoid of merit.

In the result, Appeal of the Revenue in ITA No. 4799/Del/2024,4800/DEL/2024 and 4801/Del/2024 are dismissed.