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Income Tax Appellate Tribunal, DELHI BENCH “H”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI L.P. SAHU
Date of Hearing: 09-02-2016 Date of Order : 12-02-2016
ORDER
PER H.S. SIDHU, JM
1. This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-XXX, New Delhi dated 28.11.2006 pertaining to assessment year 2003-04 on the following grounds:-
“1. On the fact and circumstances of the case the Ld. CIT(A) has erred in confirming the order of AO by confirming an addition of Rs. 25,59,500/- for unexplained source of investment in property and ignoring all the documentary evidences produced by the assessee in support of his contention. In our opinion, the addition made may be deleted from the income of the assessee.
2. On the facts and circumstances of the case the ld. CIT(A) has erred in confirming the order of AO by confirming an addition of Rs. 4,90,950/- which were claimed towards HRA exemption by the assessee in his Form 16, in our opinion, the same may be allowed to the asessee.
Detailed submission will be submitted at the time of hearing.
The assessee craves leave to add, delete, amend, modify or substitute any or all grounds of appeal.
2. At the time of hearing, the Assessee filed an Application to take an additional grounds of appeal. The contents thereof read as under:-
“1. That the present appeal is fixed for hearing before this Hon’ble Bench today i.e., 09.2.2016 for final hearing. That the facts and circumstances of this case require that the matter may be remanded back to the AO as the appellant did not have adequate opportunity to place its evidence before the AO during assessment proceedings as he was in judicial custody during the relevant period of the assessment proceedings.
In the circumstances, the appellant humbly seeks to raise an additional ground of appeal, which is as follows: “On the facts and in the circumstances of the case, the present case is a fit case for setting aside of the assessment order and remanding it back to the AO as the assessee was not able to place any evidence on record because also the AO did not have adequate opportunity to examine the assessee.”
3. That the present application is bonafide and in the interest of justice and gross harm and irreparable damage would be caused to the appellant if the present
application is not allowed and the present ground is not admitted and heard and allowed.
4. Under the above facts and circumstances, it is most respectfully prayed that this Hon’ble Tribunal may most graciously be pleased to allow the present application and admit and hear and allow the present ground of appeal of the appellant.”
In this case, the appeal of the assessee was dismissed in limine on 16.2.2010 for non-prosecution and the order dated 16.2.2010 was recalled on 21.10.2011 with a view to decide the appeal on merits.
3.1 The facts of the case are that the assessee had filed his return on 3.10.2003 declaring total income of Rs. 33,75,384/-. The return was processed u/s. 143(1). Thereafter, the case was taken up for assessment by issuing notice u/s. 143(2) on 28.10.2004. It was found that assessee was an employee of M/s Samsung Electronics India Information and Telecommunication Ltd. In this year, he purchased a plot of land admeasuring 450 sq.mtrs. for consideration of Rs. 60,50,750/-. The consideration included stamp duty of Rs. 4,48,250/-. He was required to state the nature and source of investment. It was submitted that a sum of Rs. 34,91,250/- was taken as loan from ICICI Bank. Further, an amount of Rs. 25,59,500/- was paid out of personal loan, gift and savings. However, no evidence was filed regarding personal loan, gift and savings. Therefore, it was held by the AO that the amount of Rs. 25,59,500/- represents investment from undisclosed sources. According, this amount was included in the total income, which was computed at Rs. 64,25,830/-. Aggrieved, by the Assessment order, assessee appealed before the Ld. CIT(A) who vide impugned order dated 28.11.2006 dismissed the Appeal of the Assessee. Against the order of the Ld. CIT(A), Assessee appealed before the Tribunal and Tribunal vide order dated 20.1.2012 dismissed the appeal of the Assessee. Aggrieved with the Tribunal’s order dated 20.1.2012, assessee filed Misc. Application No. 10/Del/2013 seeking rectification of that order and the Tribunal vide order dated 09.5.2014 partly allowed the said Misc. Application by holding as under:-
“3. The first issue raised by the assessee in the present Application is that in our aforesaid order, the Bench has not taken into consideration the affidavit filed by the assessee, which was filed along with the Application under Rule 29 of the ITAT Rules, 1963 for admission of the said affidavit. The affidavit is an affidavit of the assessee, deposing that he had taken a personal loan of Rs. 23,80,000/- from one Mr. Prabodh Gupta on 27.06.2002; that the assessee had requested Shri Gupta to issue him a demand draft of Rs. 23,80,000/-, directly in the name of one Mr. R. Srinivasan, with whom the assessee was negotiating to buy a plot of land situated at Noida, representing his wife Mrs. Uma Srinivasan through a Power of Attorney; that Shri Gupta had issued DD NO.656998 dated 27.06.2002 to the assessee, in the name of Shri R. Srinivasan, for a sum of ~ 23,80,000/-; that this demand draft was personally handed over by the assessee to Mr. R. Srinivasan, as part consideration for the sale of the land; and that the assessee could not file the requisite details before the AO during the assessment proceedings, since he (the assessee) was in judicial custody from 08.12.2005 to 12.09.2006 and during that time neither he (the assessee), nor his CA had access to any documents as evidence seized by the Police under FIR NO.253/2005 of PS. Kalkaji.
4. A perusal of our aforesaid order dated 20.01.2012 shows this contention of the assessee to be correct. Our order does not evince the said affidavit having been taken into consideration. The department does not oppose the assertion on behalf of the 4
assessee that said affidavit had, in fact, been filed before the Tribunal at the time of hearing of the appeal. This affidavit along with the Application under Rule 29 of the ITAT Rules exists on the appeal record. As such, a mistake apparent from record has occurred in our order, calling for rectification. This grievance of the assessee is, therefore, accepted.
As per the second contention of the assessee, in our order, the submission of the assessee with regard to the setting aside of the assessment order, as also the judgement relied by the assessee have not been considered.
This contention of the assessee, however, is found to be incorrect. In fact, at page 3, para (ii) (a), the assessee has himself contended that:
"(a) The second mistake apparent from the record is that, while passing the impugned order, the Hon'ble Bench has referred to the judgment relied upon by the appellant in the case of Kapurchand Srimal Vs. CIT 131 ITR 451 (A.P.), however, the same was not considered/discussed by the Hon'ble Bench in the impugned order."
7. Now, once, the judgement cited by the assessee has been admittedly referred to in our order, it cannot be said that the same has not been considered. The further contention is that 'ITO vs. Omega Biotech Ltd.', 4 ITR (Trib) 72 (Del) though cited, has also not been considered. In para (ii) (d), at page 3 of the Application, however, it has been contended by the assessee himself, that in the said case, 'Kapurchand Srimal' (supra) was followed to remand the matter to the lower authority. Now, since 'Kapurchand Srimal' (supra) has itself been considered in our order, this argument of the assessee or loses significance .
In paras (ii) (b) and (c) at page 3 of the Application, the assessee has contended that it had been pleaded before the Tribunal on his behalf that since the examination of Mr. Prabodh Gupta and of Mr. Srinivasan by the AO was important to ascertain the correct facts of the case and the CIT (A)'s order was erroneous as it had been passed without affording any opportunity to the AO, the matter be set aside to the file of the AO for passing a fresh assessment order after examining all the concerned parties and pertaining the complete facts. However, in our order, there is nothing to show that such an averment had been made before the Bench at the time of the hearing of the appeal. The Id. Counsel for the assessee has also not been able to substantiate the averment of such pleading having been made at the time of hearing of the appeal. Therefore, this submission of the assessee is rejected.
As per the third grievance of the assessee, in our order, the submissions of the assessee with regard to a gift of Rs. 2.5 lac received by the assessee from his brother and with regard to payment of house rent and claim of house rent allowance, have not been considered. The Ld. Counsel for the assessee, has, however, stated at the bar that this contention of the assessee is not pressed. Rejected as not pressed.
The fourth contention of the assessee states that the assessee's submissions in respect of violation of Rule 46A of the IT Rules, 1962, by the CIT (A) and the judgements relied on by the assessee in this regard, have also not been considered in our order. This contention has also been stated to be not pressed by the Id. Counsel for the assessee. Rejected as not pressed.
The last contention of the assessee is that the findings contained in our order are contrary to the record and the submissions made by the assessee. However, the Id. Counsel for the assessee has remained unable to substantiate this assertion also. Para (v), contained at page 6 of the Application reads as follows:-
"(v) Findings contrary to the record and the submissions made by the appellant:
(a) The fifth mistake apparent from the record is that, the Hon'ble Bench in Para 6 at page 16 of the impugned order has observed that the appellant has paid an amount of RS.23.80 Lakhs to Mrs. Uma Srinivasan in addition to the payment of Rs.23.80 Lakhs made to Mr. R. Srinivasan.
(b) It is respectfully submitted that the Hon'ble Bench has observed that the whole of the consideration for the purchase of plot of land has been paid to Mrs. Uma Srinivasan and only a part of which (Rs.23.80 Lakhs) has been paid to Mr. R. Srinivasan. The Hon'ble Bench has on this basis reached a conclusion that the sum of Rs. 23.80 Lakhs was paid independently to both Mrs. Uma Srinivasan and Mr. R. Srinivasan and, therefore, the Hon'ble Bench has applied section 69A of the Act to the sum allegedly paid to Mrs. Uma Srinivasan.
(c) It is respectfully submitted that the Hon'ble Bench has failed to appreciate that the entire consideration for purchase of the residential plot of land was paid by the appellant to Mr. R. Srinivasan, who was representing her wife Mrs. Wma Srinivasan through a power of attorney. It is respectfully submitted that the Hon'ble Bench has overlooked the Bank draft of Rs.34,91,250/- from ICICI Home Finance Company Limited (enclosed at page 42 of the paper book filed by the appellant in the appeal proceedings), which was also in the name of Mr. R. Srinivasan. It is submitted that not a single penny was paid by the appellant directly to Mrs. Uma Srinivasan on account of purchase of property.
(d) It is, therefore, respectfully submitted that the aforesaid incorrect observation of the Hon'ble Bench, being contrary to the record and the submissions of the appellant, is a mistake apparent from the record, which has rendered the impugned order illegal and liable to be set-aside and recalled."
A perusal of the above contention shows that it has nowhere been asserted on behalf of the assessee that any such submission was, in fact, made before the Tribunal at the time of hearing of the appeal. Therefore, in this regard also, there is no mistake apparent from record in our order dated 20.1.2012. Accordingly, this contention of the assessee stands rejected.
In view of the above discussion, our order dated 20.1.2012 is recalled for the limited purpose of considering the affidavit of the assessee, filed with the Application under Rule 29 of the ITAT Rules. Ordered accordingly. For this limited purpose, the appeal is fixed for hearing on 08th September, 2014. No fresh notice shall issue, since this date was announced at the time of hearing of the Application in the Open Court.”
Since 08.9.2014 the case was adjourned on various occasions on one pretext or the other. Finally, the case was fixed before the Bench on 09.02.2016 and heard. As it is clear from the finding of the Tribunal given vide Order dated 09.05.2014 vide para no. 12 that there is no mistake apparent from record in our order dated 20.1.2012. Accordingly, this contention of the assessee was rejected. However, vide para no. 13 of the Tribunal’s order dated 09.5.2014 it was held that the Tribunal order dated 20.1.2012 was recalled for the limited purpose of considering the affidavit of the assessee, filed with the Application under Rule 29 of the ITAT Rules. Therefore, now the case is fixed before us only for the limited purpose of considering the affidavit of the assessee, filed with the Application under Rule 29 of the ITAT Rules. For the sake of clarity, we are reproducing herewith the Applciation under Rule 29 of the ITAT Rules alongwith Affidavit attached therewith as under:-
“BEFORE THE HON'BEE INCOME - TAX APPELLATE TRIBUNAL - BENCH - 'H'
ITANO. 82I/DEL/09 ASSESSMENT YEAR - 2003-2004 IN THE MATTER OF: - MR. VIVEK PRAKASH 6314, F-6. ALOK VIHAR - 2, SECTOR-50, NOIDA,U.P. APPELLANT.
VS.
INCOME TAX OFFICER, WARD - 48(4), NEW DELHI. RESPONDENT.
Application under Rule 29 of the Income Tax Appellate Tribunal Rules,1963 for admission of Affidavit of the appellant in the above captioned appeal Most Respectfully Showeth:
That the above captioned appeal is listed for hearing for today i.e. 10.01.2012 before the Hon'ble Bench.
2. That the main issue in the present appeal is in respect of addition of Rs. 25,59,500/- on account of unexplained investment in the property purchased by the appellant during the year under consideration. 3. It is respectfully submitted that the addition has been sustained by the learned CIT(A) by disbelieving the submissions of the appellant with respect to the source of the investment. It was submitted by the appellant before the learned CIT(A) that he had taken a loan of Rs. 23,80,000/- from his friend Mr. Prabodh Gupta for the purchase of the property. However, the appellant was unable to get a confirmation of the same from Mr. Prabodh Gupta, who initially denied having given any loan to the appellant but admitted that he issued a DD bearing No. 656998 dated 27.06.2002 for a sum of Rs. 23,80,000/- in the name of Mr. R Srinivasan from whom the appellant had bought the property. It is submitted that even Mr. R. Srinivasan in his statement to the police has stated that the statement of Mr. Prabodh Gupta was wrong and that of the appellant was correct. 4. That the appellant duly submitted before the learned CIT(A) the new stand taken by Mr. Prabodh Gupla and relied upon the statement of Mr. R. Srinivasan and prayed that his appeal may be allowed on the basis of other circumstantial evidence which proved beyond doubt that the source of investment in the property was loan from Mr. Prabodh Gupta.
5. It is submitted that the learned CIT(A), on the contrary, subjectively opined that the money belonging to the company M/s Samsung Electronic India Pvt. Ltd. had changed hands for the personal benefit of the appellant. It is respectfully submitted that it was improper for the learned CIT(A) to opine subjectively when neither the company was an appellant nor was it a witness before the learned CIT(A).
6. It is submitted that the learned CIT(A) should have, as per the correct settled legal position, either remanded the matter back to the learned 10
Assessing Officer or should have summoned Mr. Prabodh Gupta and cross verified from him by examining him. It is respectfully submitted that the learned CIT(A) did not take any of the above recourses available to him under the law. On the contrary, the learned CIT(A) disallowed the appeal of the appellant and sustained the addition of Rs. 25,59.000/- on account of unexplained investment in the property.
In the circumstances, the appellant hereby seeks leave of the Hon'ble Tribunal to place his affidavit, which is annexed herewith, on the record duly testifying on oath that the appellant took a personal loan of Rs. 23,80,0007- from Mr. Prabodh Gupta which formed one of the sources of investment in the property purchased by the appellant.
8. Under the aforesaid facts and circumstances, the Hon'ble Tribunal may be pleased to: -
(a) Take the affidavit of the appellant on record in terms of Rule 28 of the Income Tax Appellate Tribunal Rules, 1963; (b) And pass other orders/ directions which it may deem fit in the facts and circumstances of the case and in the interest of justice. It is Prayed Accordingly.