Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI J.S. REDDY
Date of Hearing : 15-03-2016 Date of Order : 28-04-2016 ORDER
PER H.S. SIDHU : JM
The Department has filed these Appeals against the separate impugned Orders both dated 23.1.2009 of Ld. CIT(A)-XV, New Delhi pertaining to assessment years 2003-04 & 2006-07 respectively. Since the issues involved in these appeals are common and identical, hence, heard together and are being disposed of by this common order for the sake of convenience.
The grounds raised in (AY 2003-04) read as under:-
i) On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 91 lacs on account of income from undisclosed sources. 1 ii) On the facts and circumstances of the case and in law, the CIT(A) has erred in directing to amend the return after verification filed by the assessee for AY 2006-07 when the issue did not arise out of appeal for AY 2003-04. iii) On the facts and circumstances of the case and in law, the CIT(A) has erred in directing that income of AY 2006-07 be modified when the ground of appeal for present assessment year have been duly dismissed. iv) The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing.
The brief facts of the case are that the assessee company is engaged in the construction of business. In this case, a search u/s. 132 of the I.T. Act was carried out on 28.3.2006 at the business premises of the assessee as well as residential premises of the Directors namely Sh. Gireesh Chaudhary and Smt. Ira Chaudhary were also covered. The assessee company as well as the proprietorship concerns have undertaken various projects in Defence Colony and surrounding localities. During the course of search, certain incriminating documents / papers were found and seized.
Since the premises of the assessee was covered u/s. 132 of the I.T. Act, notices u/s. 153A of the I.T. Act were issued for six assessment years on 6.11.2006 and served on the assessee. In response thereto, the assessee furnished the return of income on 30.8.2007 showing the total income of Rs. 1,54,270. The assessee filed the original return on 4.11.2003 showing the total income at Rs. 1,54,270/-. The assessee did not offer any additional income in the return filed in response to the notice u/s. 153A of the I.T. Act. Thereafter, notice u/s. 143(2) of the I.T. Act was issued on 5.9.2007 and served on the assessee on 7.9.2007 and in response to notices u/s. 143(2) and 142(1) of the I.T. Act, Assessee’s Authorised Representative attended the proceedings and filed the details. Thereafter, the AO assessed the total income at Rs. 94,54,270/- by making additions vide order dated 31.12.2007 passed u/s. 143(3) read with section 153A of the I.T. Act.
Aggrieved by the aforesaid order of the Assessing Officer dated 31.12.2007, assessee filed an appeal before the Ld. First Appellate Authority, who vide impugned Order dated 23.1.2009 has partly allowed the appeal of the Assessee.
Aggrieved with the aforesaid finding of the Ld. CIT(A), Revenue is in appeal before the Tribunal.
Apropos Ground No. 1 relating to deletion of addition of Rs. 91 lacs on account of income from undisclosed sources is concerned.
6.1 On this issue, Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal filed by the Revenue.
6.2 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld.
We have heard both the parties and perused the records, especially the Orders of the revenue authorities. We find that the payments have been made as per Collaboration Agreement and ledger account shows the amount of Rs. 21 lacs paid to the owner Sh. Hanwantbir Singh and the copy of construction account of the property No. C-550, Defence Colony, New Delhi in the books of M/s IG Builders and Promoters Pvt. Ltd. The assessee has not purchased this property directly from the owner but has only entered into collaboration agreement for construction of said property and thereby became the owner of 2nd floor and terrace on the 2nd floor of the said property C-550, Defence Colony, New Delhi. As the entire construction cost and amount of Rs. 21 lacs paid to the owner of the said property have been duly reflected in the books of accounts of the assessee. Therefore, Ld. CIT(A) has rightly held that AO was not justified in making the addition of Rs. 91 lacs as income from undisclosed sources and accordingly deleted the addition. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same on this issue and dismiss the ground No. 1 raised by the Revenue.
7.1 Since we have already upheld the order of the Ld. CIT(A) on the ground no. 1 i.e. deletion of addition of Rs. 91 lacs, hence, the issue involved in ground no. 2 and 3 have become academic, therefore, we are not adjudicating the same. In the result, this Appeal filed by the Revenue stands dismissed.
ITA NO. 1407/DEL/2009 (AY 2006-07)
The grounds raised in (AY 2006-07) read as under:-
i) On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 60 lacs on account of income from undisclosed sources. ii) On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 82.50 lacs on account of income from undisclosed sources. iii) The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing.
The brief facts of the case are that the assessee company is engaged in the construction of business. In this case, a search u/s. 132 of the I.T. Act was carried out on 28.3.2006 at the business premises of the assessee as well as residential premises of the Directors namely Sh. Gireesh Chaudhary and Smt. Ira Chaudhary were also covered. The assessee company as well as the proprietorship concerns have undertaken various projects in Defence Colony and surrounding localities. During the course of search, certain incriminating documents / papers were found and seized.
Since the premises of the assessee was covered u/s. 132 of the I.T. Act, notices u/s. 153A of the I.T. Act were issued for six assessment years on 6.11.2006 and served on the assessee. In response thereto, the assessee filed the return of income on 13.12.2006 showing the total income of Rs. 1,04,52,360/-. The returned income included the sum of Rs. 85,00,000/- being the disclosure made at the time of search.
The disclosure has been included in the total income which has resulted in increase of the reserves. The disclosure was on account of expenses. Thereafter, notice u/s. 143(2) of the I.T. Act was issued on 5.9.2007 and served on the assessee on 7.9.2007 and in response to notices u/s. 143(2) and 142(1) of the I.T. Act, Assessee’s Authorised Representative attended the proceedings and filed the details. Thereafter, the AO assessed the total income at Rs. 1,68,66,260/- by making various additions 5 vide order dated 31.12.2007 passed u/s. 143(3) read with section 153A of the I.T.
Act.
Aggrieved by the aforesaid order of the Assessing Officer dated 31.12.2007, assessee filed an appeal before the Ld. First Appellate Authority, who vide impugned Order dated 23.1.2009 has allowed the appeal of the Assessee.
Aggrieved with the aforesaid finding of the Ld. CIT(A), Revenue is in appeal before the Tribunal.
Apropos Ground No. 1 relating to deletion of addition of Rs. 60 lacs on account of income from undisclosed sources is concerned.
12.1 On this issue, Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal filed by the Revenue.
12.2 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld.
We have heard both the parties and perused the records, especially the Orders of the revenue authorities, we find that on this issue AO’s contention was that the front part of Page 8 of A-7 contains entries in lacs and hence in the same manner of interpretation should be made to interpret the reverse side of the same page. This view could have been sustained on the happening of two possibilities. First, if there was indeed a link between the entries made in the front side and the back side of page 8. Second, if at all the payment or even the receipt on the reverse side of page 8 could be deciphered as being unaccounted payment or receipt with reference to the assessee’s regular books of accounts and with reference to the seized documents. The front side of page 8 is as regards a property at D-431, Defence Colony. The assessee has not undertaken any development work on D-431, Defence Colony as per its work in progress account or purchase account for A.Y. 03-04, 04-05, 05-06 or 06-07. The import of page 8 of A-7 is therefore not relevant for deciphering the contents of the entries on the reverse side of page 8. The second possibility under which the entries in the reverse side of page 8 could have been taxed as income from undisclosed sources is if a reasonable view could be taken on such connotation of the entry from the available facts. The entries simply stated is "paid to Bedhi 10 + 50, Dis to KB regd. – ½ - ½“. There are no dates available to indicate the timing of the entry. Neither is there any evidence to indicate as to whether the entries pertain to receipt or expenditure. Finally there is no correlation between the entries in the reverse of page 8 of A- 7 and the entries on the front side of the said page. as also the assessee’s projects from A.Y. 03-04 to 06-07. Therefore, the ld. CIT(A) has rightly held that the entries on the reverse side of page 8 of A-7 could not have been deciphered as any income from undisclosed sources. Thus the ground was rightly allowed. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same on this issue and dismiss the ground No. 1 raised by the Revenue.
Apropos Ground No. 2 relating to deletion of addition of Rs. 82.50 lacs on account of income from undisclosed sources is concerned.
14.1 On this issue, Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal filed by the Revenue.
14.2 On the other hand, Ld. Counsel of the Assessee relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference and the same may be upheld.
We have heard both the parties and perused the records, especially the Orders of the revenue authorities, we find that on this issue AO’s has included the entire set of entries totaling Rs. 82.50 lacs in page 11 of A-7 as the assessee’s income from undisclosed sources for AY 2006-07 on the basis that the entire set of transaction is unrecorded and there was no evidence to substantiate that the relevant deal did not materialize. However, the facts earlier stated indicate that as per the entries in page 11 of A-7 that apart from the specific dated entries on 12.9.04 and 20.9.04, none of the other entries is dated. There is a reference of cheque (10), on S Floor slab (20L) and possession (22.5L) in the said page, with no reference of date available on any of those entries. Neither there is any mention that the said amounts have been paid in cash. Going by the dates of entries in the seized document alone, the entries therein do not fall for consideration for determining income for AY 2006-07. Therefore, the ld. CIT(A) has rightly allowed the ground. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same on this issue and dismiss the ground No. 2 raised by the Revenue.
In the result, both the Revenue’s Appeals stand dismissed.
Order pronounced in the Open Court on 28/04/2016.