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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ NEW DELHI
Before: SHRI I.C. SUDHIR & SHRI L.P. SAHU
Per L.P. Sahu, Accountant Member:
This is an appeal by the Revenue against the order dated 17.02.2014 of ld. CIT(A)-III, New Delhi for the assessment year 2006-07 on the following grounds :
“1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.9,50,00,000/- made by the A.O. on account of undisclosed income from sale of shares, as the shares were sold on 23.02.2006, which pertain to the year under consideration.
2. The order of the CIT(A) is erroneous and is not tenable on facts and in law.”
The brief facts of the case are that the assessee filed his return of income on 01.08.2006 declaring an income of Rs.12,45,477/-. The case was processed u/s. 143(1)(a) on 25.06.2007 at returned income. A search and seizure operation was conducted on Gopal Zarda Group of cases and it was noticed that the assessee has transferred 500 shares of Rs.100/- each of M/s. Penguin Farms Pvt. Ltd. in favour of Shri Dinesh Jain and Smt. Lata Jain on 23.02.2006 and during the search operation it was noticed that the total property was taken over for a consideration of Rs.20 crores, out of which Rs. 1.00 crore was recorded in regular accounts and the balance amount of Rs.19 crores was paid by cash by M/s. DJ Sons Securities to the assessee family Shri Kamal Jeet Singh Bakshi and Smt. Minu Bakshi. Further, it was found that Gopal Zarda Group in their settlement application had admitted before the Settlement Commission that they paid Rs.20 crores for the purchase of shares of Penguin Farms Pvt. Ltd. On the basis of above information, the appellant’s case was reopened u/s.
While the reassessment proceedings were in progress, a search was conducted on the appellant on 10.12.2012 in which sum of Rs.19 crores on account of sale of shares of Penguin Farms Pvt. Ltd. was surrendered by the appellant and her husband to Gopal Zarda Group. Both the appellant and her husband who was holding 50% shares, each surrendered a sum of Rs.9.5 crores in their cases in assessment year 2007-08. The re-assessment was in progress for the assessment year 2006-07 and by the time, return was not filed u/s. 153A pursuant to search dated 10.12.2012. Therefore, the Assessing Officer made protective assessment for the assessment year 2006-07 in the hands of the assessee and made addition of Rs.9.50 crores. Aggrieved by the order of the Assessing Officer the assessee appealed before the CIT(A) and the appellant submitted before the CIT(A) by letter dated 08.03.2013 that the return of income u/s. 153A for the assessment year 2007-08 has been filed and necessary tax and interest on the capital gain amounting to Rs.3,76,000/- has been paid on the sale of shares. On being satisfied, the ld. CIT(A) deleted the addition on protective basis for the assessment year 2006-07 and for the assessment year 2007-08, he issued direction to the Assessing Officer to verify from the bank statement as to whether due tax has been paid to the government treasury. Aggrieved by the order of the ld. CIT(A), the Revenue is in appeal before the ITAT.
The ld. DR relied on the order of the Assessing Officer.
On the other hand, the ld. AR relied on the order of the CIT(A) and submitted that the declared amount on search u/s. 153A of Rs.9.50 crores have been offered for taxation as capital gain for sale of shares in the assessment year 2007-08 and necessary proof of payment of tax was produced before the ld. CIT(A). He further submitted that the same amount cannot be taxed twice.
After hearing both the parties and perusing the material on record, we find that the Settlement Commission in the case of Dinesh Jain/Lata Jain has held that the cash component had taken place only after receipt of certified copy of order of Collector (South West) in the month of June, 2006 and the assessee had filed affidavit that these amounts were surrendered for the assessment year 2007-08. Therefore, the same amount cannot be taxed twice.
For the sake of convenience, we are reproducing the order of the CIT(A) as under :-
“6. I have gone through the above submission of the appellant, evidence and facts placed on record and have also perused the AO’s order. On going through the details submitted during the course of assessment as well as during the appellate proceedings, it is seen that the shares of Penguin Farms Pvt. Ltd. were sold to the Gopal Zarda Group in Assessment Year 2006-07. However, the money was received in June, 2006 from the Gopal Zarda Group which relates to Assessment Year 2007-08.
Since at the time of the passing of the order the appellant had not filed the return of income under Section 153A thereby disclosing Rs.9,50,00,000 as additional "undisclosed income" and had also not given any proof/evidences about the proof of taxes having paid on the amount of Rs.9,50,00,000 surrendered, accordingly, the AO made the addition. As now, the appellant has filed before me the proof of filing the return of income under Section 153A for assessment year 2007-08 from which it is found that a sum of Rs.9,50,00,000 has duly been declared on account of surrender made during the search operation and taxes have also been paid on the said amount, accordingly, the said sum of Rs.9,50,00,000 cannot be assessed again in Assessment Year 2006-07. AO is, therefore, directed to verify from the bank statement as to whether the due taxes have been received in the Government treasury and if yes, then the addition made in the present order stands deleted.”
In view of the above findings, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 23.01.2017.