Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘F’ NEW DELHI
PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
The present appeal is preferred by the assessee against the impugned order dated 12.12.2013 passed by the Ld. CIT(A)-VI, New Delhi confirming the imposition of penalty of Rs. 8,72,243/- u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter called ‘the Act’).
The facts in brief are that an action u/s 132 was carried out on 26.07.2006. The appellant filed his return of income on 31.10.2008 for the A.Y. 2007-08 u/s 153A showing net income of Rs. 66,58,040/- against which the assessee’s income was Assessment Year 2007-08 assessed at Rs. 7,46,58,035/- vide order dated 31.12.2008 passed u/s 153A/143(3) of the Income Tax Act, 1961. As a result of appeal filed by the assessee against the assessment order dated 31.12.2008, the addition of Rs. 20,00,000/- was deleted.
However, the Ld. CIT (A) upheld the addition of Rs. 27,58,000/- and the AO imposed a penalty of Rs. 8,72,243/- u/s 271(1)(c) of the Income Tax Act, 1961 against the said upheld amount of Rs.27,58,000/-.
Aggrieved by the penalty order, the assessee filed an appeal before the CIT (A)- VI. The Ld. CIT (A), however, dismissed the appeal. The assessee has approached the Tribunal against the confirmation of the penalty. The Ld. AR submitted that in this case, certain loose papers were seized which were in the nature of dumb document. The total amount in such loose paper worked out at Rs.47,58,000/-. The appellant had disclosed Rs.20,00,000/- in the return against these loose papers and other evidences found during search. The A.O. had made an addition of Rs. 47,58,000/-based on these loose papers. The Ld. CIT (A) deleted the addition to the extent of Rs. 20,00,000/- but wrongly upheld the addition of Rs. 27,58,000/- against which an appeal had been filed before the ITAT wherein the ITAT had Assessment Year 2007-08 sustained the additions only to the extent of Rs. 7,90,000/-. The Ld. AR also submitted a chart containing details of the loose papers seized during the search and the same is being reproduced as under-
S. No. Cut figures Total Annexure and Date Uncut Page Mentioned figures No Date 5,40,000.00 2,50,000.00 7,90.000.00 1. Annexure-6, Page 77 2. 13.05.2005 6,50,000.00 - 6,50,000.00 Annexure-6, Page 79 3. 12.05.2005 7,00,000.00 7,00,000.00 Annexure-6, Page 80 10.12.2005 9,00,000.00 9,00,000.00 4. Annexure-6, Page 81 - 14.05.2005 8,40,000.00 8,40,000.00 Annexure-6, 5. Page 82 24.12.2003 - 8,78,000.00 8,78,000.00 Annexure-16, 6. Page 143 Total 36,30,000/- 11,28,000/- 47,58,000/- The Ld. AR submitted that as per the above chart, the figure of Rs.36,30,000/- has already been cut. The figure of Rs.8,78,000/- falls in A.Y. 2004-05, as mentioned in A16, Page 143. On the basis of such dates, if at all the addition was required to be made, the same could have been made for A.Y. 2004-05 and 2006-07 and not in the year consideration i.e. AY 2007-08.
The Ld. AR also submitted that in view of the findings of the ITAT ‘E’ Bench, New Delhi in the quantum proceedings wherein Assessment Year 2007-08 additions have been sustained to the extent of Rs. 7,90,000/- only, the penalty should be worked out afresh. He also submitted on merits that the issue was a debatable one and therefore no penalty was imposable in view of the decision of the Hon'ble Delhi High Court in the case of DCIT vs Rahul Siemseen Eng. Pvt. Ltd. 140 Taxman 100 (Delhi).
The Ld. DR, on the other hand, supported the order of the Ld. CIT (A) but in all fairness admitted that the penalty amount has to be reworked.
We have heard the rival submissions and also perused the material before us. The ITAT ‘E’ Bench, New Delhi in its order dated 30.9.2014 in and 5375/Del/2010 has discussed the quantum additions in paragraph nos. 12-15 of the order which are being reproduced for ready reference:-
“12. Shri Pawan Kumar Bansal is an individual who is not carrying on any business in his individual capacity. The business is carried on by Capital Group of Companies including Capital Power Systems Ltd. whose CEO is Shri Pawan Kumar Bansal, i.e., the assessee. The original disclosure made vide letter dated 1st September, 2006 was Assessment Year 2007-08 for and on behalf of Capital Power Sytems Ltd. The assessee signed the above letter in his capacity as CEO of the said company. In the statement dated 8th September, 2006, he deposed before the Revenue authorities in which he affirmed the voluntary disclosure of additional income of Rs.7 crores on behalf of Capital Group of companies. Thus, even in the statement dated 8th September, 2006, there was no disclosure in the individual capacity of Shri Pawan Kumar Bansal. In another statement dated 12th September, 2006, he reiterated his earlier statement vide letter dated 1st September, 2006 and statement dated 8th September, 2006. Thus, the disclosure of income was by Capital Group of companies. However, in reply to another question in his statement dated 12th September, 2006, he disclosed the income of Rs. 3,55,00,000/- in his individual capacity and the income of Rs. 3,45,00,000/- in the name of Shri Mahesh Kumar Gupta. The Revenue authorities who recorded the statement did not bother to point out the contradiction between the reply to question No.2 and question No.4. In reply to question No.2, he reiterated his letter dated 1st September, 2006 and statement dated 8th September, 2006 wherein no income was disclosed in the individual names of Shri Pawan Kumar Bansal and Shri Mahesh Kumar Gupta. But, in reply to question No.3, the income was disclosed in the individual names. It is a settled law that the statement has to be considered as a whole and Revenue cannot chose to rely upon only one part of the statement ignoring the other statements. Moreover, statement dated 12th September, 2006 is not the only statement but it is only one part of the series of letter/statements. In the statement dated 8th September, 2006, Shri Pawan Kumar Bansal has stated that the details of the disclosure would be given after going through the seized material. Therefore, the statement has a relevance with the seized material and statement is made by him to disclose the income as represented by the seized material. No other corroborative evidence to support the income of Rs.7 crores in the hands of the assessee and Shri Mahesh Kumar Gupta is found. In the above circumstances, after considering the cumulative effect of the letter dated 1st September, 2006 and both the statements, the proper course would be to determine the undisclosed income on the 5 Assessment Year 2007-08 basis of loose papers found and seized at the time of search. The CIT(A) did the same.
We, therefore, uphold the order of learned CIT(A) to the extent wherein he held that the income of the assessee i.e. Shri Pawan Kumar Bansal is to be determined on the basis of undisclosed income as per the noting on the loose papers. With this remark, the Revenue’s appeal vide is dismissed. However, the assessee in his appeal vide ITA No.5201/Del/2010 has also disputed the correctness of the income determined on the basis of the loose papers. The brief description of the transactions of various pages of seized material is given by the Assessing Officer at page 4 of the assessment order which reads as under: “Annexure A-6: Page 77 details of different figures in different names showing Rs.7.90 lacs, and the back side is share transaction details of G.S. Control Pvt. Ltd. Page 80 slip contains the details of names and payments of Rs.7 lacs made on 12.05.05. Page 81 slip contains the details of names and payments of Rs.9 lacs made on 10.12.05. Page 82 slip contains the details of names and payments of Rs.8.40 lacs made on 14.05.05. Annexure A-16 Page 143 details of Indore & Jabalpur regarding cash security deposit of Rs.8,78,000/- and other monetary details and back side is name and address.”
From the above, it is evident that pages 80, 81& 82 do not belong to the year under appeal. The accounting year relevant to the assessment year under consideration is 1.4.2006 to 31.3.2007 while all the three documents i.e., pages 80, 81 & 82 pertain to the accounting year 1.4.2005 to 31.3.2006. Therefore, the addition sustained by the learned CIT(A) vide pages 80, 81 & 82 is directed to be deleted.
So far as page 77 is concerned, the Assessing Officer has not given the date of the said transaction. However, the copy of the loose paper is given at page 46 of the 6 Assessment Year 2007-08
assessee’s paper book from which we find that various names are written, amount is written and no date is given on any of the transactions. The total of such transactions was Rs. 7,90,000/-. No explanation relating to nature of those transactions is given by the assessee’s counsel at the time of hearing before us. Therefore, in our opinion, the addition of Rs. 7,90,000/- in the hands of assessee due to various transactions recorded at page 77 of Annexure A-6 is required to be made”
It is seen that the quantum addition has been curtailed to Rs. 7,90,000/- only by the ITAT and we concur with the submissions of the Ld. AR that the penalty should also be reworked on this amount finally sustained. The Ld. AR has also submitted a chart showing details of figure in seized material (produced elsewhere) and has submitted that out of the amount of Rs. 7,90,000/- sustained by the ITAT, Rs. 5,40,000/- is to be excluded as it is the cut amount and the remaining amount of Rs. 2,50,000/- is covered by the already disclosed amount of Rs. 20,00,000/-. In view of the submissions made by the Ld. AR, we set aside the order of the Ld. CIT(A) and restore the issue to the file of the Assessing Officer for a de novo consideration of the issue after giving due opportunity to the assessee to present his case. Assessment Year 2007-08
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 29th April, 2016.