9911796707
TMI Blog2018 (1) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the ld CIT(A). 2. The only issue involved in these appeals are as under:- i. Addition because of admission made by Capt. R.S. Sindhu in his statement u/s 132(4) of the Act which was subsequently retracted. The ld Assessing Officer made addition based on the statement whereas, the ld CIT (A) deleted the above addition. Therefore, this issue is contested by revenue and assessees have filed the cross objections supporting the order of the ld CIT(A). ii. Addition u/s 69A of the Act on account of unexplained cash of Rs. 9873500/- out of cash found of Rs. 10379300/-. The ld Assessing Officer made the addition which was deleted by the ld CIT (A) and therefore, revenue is in appeal. 3. First, we take up the ITA No. 02/Del/2016 in case of Shri Dev Suman Sindhu for AY 2012-13. In this appeal, the issue No. 2(i) is involved. Further in appeal for AY 2013-14 both the issues mentioned in para no 2 are involved. We submit the facts of the case and then decide the issue for that assessee and apply to all other appeals covered by this order. 4. The revenue has raised the following grounds of appeal:- "1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of search in regard to sum of Rs. 10.29 crores was directly in contradiction to CBDT Instruction Nos. F.No.286 2 2 33-IT(Inv) dated 10.03.2003 and F.No. 286/ 98/2013-IT(Inv.II) dated 18.12.2014 and. therefore, merely because in a statement u/s. 132(4) appellant admitted the impugned sum as undisclosed income will go to create an income in his hand chargeable to tax under the Income Tax Act 5. That the Ld. C.I.T.(A) rightly considered the facts brought on record by the respondent. 6. That the Ld. C.I.T.(A) correctly relied on the workings submitted by the respondent, and since such workings and explanations provided by respondent were sufficient, there was no need for cross examination of the same. 7. That although the respondent had offered additional income, it had been clearly stated that its taxability will be submitted subsequently. 8. That the respondent had disclosed complete linkage of waiver of loan to the additional income through various correspondences with the Revenue authorities, thus such explanation was not an afterthought. 9. That the Ld. C.I.T.(A) rightly held that AO had access to the entire seized material, and was unable to show any document/ evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) is erroneous and not tenable in law and on facts." 7. The assessee has raised the following ground of appeal in CO No. 134/Del/2016 for Assessment Year 2013-14:- 1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 3,20,00,000/- on account of retraction of additional income disclosed under the head income from other sources/undisclosed income/undisclosed investment. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 9,95,000/- on account of unexplained cash in hand u/s 69A of the IT Act, 1961 without appreciating the fact that the assessee has not been able to explain the same after due opportunities. 3. That the Ld. CIT(A) has erred in ignoring the admission made by Capt RS Sindhu in his statement made under oath u/s 132(4) and other individual members of the group not once but at least twice and the same can't be retracted by bald and wrong statement. 4. That the Ld. CIT(A) has erred in relying on the wrong statement made by the assessee without offering an opportunity to the Assessing Officer to counter and cross examine the same. 5. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here in above. As per above offer letter Sh. Dev Suman Sndhu has offered Rs. 1029.48 lacs, Rs, 320 lacs for the A.Y. 2012-13 and A.Y. 2013-14 respectively. A perusal of return shows that no income has been offered as additional income for A.Y 2012- 13 as against Rs. 10.29 Crores. Vide his letter dated 20.03.2015, he has explained his retraction as under;- "At the time of search and during the post search proceedings, the issue of taxability of waiver of loan of Lehman Brothers Commercial Corporation Asia Limited (LBCCA) in Cellcap Securities Limited in BVI(CSL) was raised by the Investigation Wing and it was advised by the Department that Group should disclose Rs. 86 Crore on that account. Accordingly group offered for additional income of Rs. 150 crores and I alongwith my brothers & Capt K. S Solariki stick to the offer of additional income of Rs. 86 Crore in their hands as per details give hereunder:- Name of the persons Amount (Rs. In Lacs) Capt R S Sindhu 1684.08 Sh. Vir Sen Sindhu 1 905.18 Sh. Vrit Pal Sindhu 1690.00 Sh. Satya Pal Sindhu 1390.3 Sh. Dev Suman Smdhu 1349.48 Capt K S Solanki 630,50 Total 8649.57 During post search proceedings, the group has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section u/s 271AAA of the Act is applicable in the case of the assessee for the AY in respect of the addition made under this head. Accordingly penalty proceedings under the said section are being initiated separately. (Addition: Rs. 10,29,48,000/-) 9. The Assessing Officer noted that along with the above letter incorporated in above para 4 the assessee submitted Annexure-A wherein, for the assessee disclosure of Rs. 1029.48 lacs was offered in the hands of assessee for Assessment Year 2012-13 and Rs. 320 lacs for Assessment Year 2013-14. The above sum was not offered in the return of income and therefore, the addition was made. 10. Against the order of the ld Assessing Officer assessee preferred appeal before the ld CIT(A), who deleted the above addition as under:- "5. AY 2012-13 and 2013-14 This Ground relates to Addition of Rs. 10,29,48,000/- and Rs. 3,20,00,000/- on account of Retraction of Additional Income disclosed in Asst Yr 2012-13 and 2013-14 respectively. 6. Background and facts of the case are as under:- Appellant in an Individual and derived income under the heads Salary, House Property, Business & Profession, Capital Gains and Other Sources. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned fchat:- "The amount of Rs. 10,29,48,000/- and Rs. 3,20,00,000/- were not offered as additional income in return for A.Y 2012-13 and 2013-14 respectively. It is pertinent to maintain here that the issue of waiver of loan by M/s Lehman brothers pertains to A.Y 2010-11 whereas the assessee had offered undisclosed income for A.Y 200809 and A.Y 2012-13. Apparently the issue of waiver of loan by M/s Lehman brothers is not related to the undisclosed income offered by the assessee under heads of income from other sources/ undisclosed income / undisclosed investment. The linking of undisclosed income offered earlier is purely an afterthought since there was several incriminating documents which were seized and on the basis of which the assessee has offered additional income as mentioned in earlier paras. The reason for earlier offer must have been in his special knowledge on the basis of which the undisclosed income was offered for taxation and later on retracted. Moreover, on the basis of same offer letter whole group has disclosed additional income in different entities. Accordingly , the contention of the assessee is hereby rejected and the balance amount of Rs. 10,29,48,000/- an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded by the Appellant's in the break-up attached to Capt R.S.Sindhu's letter dated 11/6/2012. This linking was further clarified vide second letter of Capt R. S. Sindhu to ADI also dated 11. 6.2012 and ARs letter dated 13.7.2012 enclosed as Ann-J and Ann-K above and statement of Promoters recorded u/s 131 of the Act on 26.2.2012. Assuming though not admitting that the allegation of there being several incriminating documents that were seized on the basis of which the Appellant had offered the additional income then the Ld AO should have pointed out atleast one incriminating document lying seized with him that could have been linked to undisclosed income of Rs. 86 crores. The fact is that the entire seized material is still lying with the Ld AO. The onus is on the Ld AO to atleast show the incriminating document other than those relating to CSL, that could have been linked with Appellants disclosure of Rs. 86 crores. The allegations made by Ld AO are without any basis. Mere presumptions, conjectures and surmises not supported by any cogent material/ evidence. (ix) This allegation too is factually incorrect. The reasons for earlier offer were not in Appellants' special knowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant before the ADI vide letter dated 11.6.2012. It is seen that this offer of additional income was in respect of and represented the waiver of loan by Lehman Brothers. This linkage of additional income with the amount of additional income was made known to the Investigation Wing vide second letter dated 11.6.2012 wherein it was stated as under:- "In view of above facts and circumstances, the group will take final call regarding the taxability of CSL and the-year of taxability at the time of filing of ITR in response to notice u/s 153A ofithe-Income Tax Act, 1961 and accordingly the payment of balance taxes on additional income as per chart/ details of even date shall therefore be made at the time of filling oflTRs u/s 153A." 9.1.1 The Investigation Wing was again apprised of the linkage of additional income with the amount of additional income vide Note accompanying ARs letter dated 13.7.2012 wherein it was stated as under:- "Though the additional income on account of CSL pertains to AY 2010-11, the same was offered in specified previous year as defined in section 271 AAA of the Income Tax Act, 1961 i.e, AY 2012-13 and AY 2013-14 instead of AY 2010-11 to avail the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has no link with the issue of waiver of loan by M/s Lehman Bros which pertains to A.Y 2010- 11 and on the basis of which CIT(A) has deleted the said addition. The CIT(A) has also ignored the principle enunciated by Delhi High Court in the case of M/s Jansampark Advertizing & Marketing Ltd. 375 ITR 373(Delhi). Submissions of Revenue Facts of the Case * Search & seizure and survey operation under section 132/133A of the Income Tax Act, 1961 were conducted on 12.04.2012 in the Case of assessee. * Sh. R.S. Sindhu is the main promoter and controller of the Aryan Sainik Group. He on behalf of the Aryan Sainik Group and other family members offered total additional income of Rs. 150 Crs. for taxation. His letter of surrender reads as under: The Assistant Director Of Income Tax (Inv.) Unit-II(3) Room No.274, ARA Centre Jhandewalan Extn. New Delhi; Ref: Our Earlier letters dated. 24-04-2012, 14-05-2012, 28-05-2012 & 11-062012 Sub: Search and Seizure Proceeding on SAINIK- ARYAN Group Respected Sir, Perusing to our letters dated .24 -04-2012, 14-05-2012, 28-05-2012 & 11-062012, we are hereby submitting a summary of additional income offered till date vide Annexure A. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital reserve, to be adjusted against the investment at the time of disposal of the Investment." Finding Of AO (Ref Page 5/AO) The amount of Rs. 11,90,00,000/- (Rs. 5,00,00,000/- for A.Y 2013-14) was not offered as additional income in return of A.Y. 2012-13. It is pertinent to mention here that the issue of waiver of loan by M/s Lehman Brothers pertains to A.Y.2010-11 whereas the assessee had offered undisclosed income for A.Y.201213 and A.Y.2013-14. Apparently, the issue of waiver of loan by M/s Lehman Brothers is not related to the undisclosed income offered by the assessee under heads of income from other sources/ undisclosed income/undisclosed investment. The linking of undisclosed income offered earlier is purely an afterthought since there were several incriminating documents which were seized and on the basis of which the assessee has offered additional income as mentioned in earlier paras. The reason for earlier offer must have been in his special knowledge on the basis of which the undisclosed income was offered for taxation and later on retracted. Moreover, on the basis of same offer letter whole group has disclosed additional income in different entities. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not produced would, if produced, be unfavorable to the person who withholds it; A perusal of the statement of disclosure (Ref Annexure A to letter of disclosure) clearly shows that disclosure under section 132(4) was made on account of the following: * Income from other sources * Undisclosed Income * Undisclosed investment Revenue relies on following case laws on the issue of retraction 1. Kishore Kumar Vs CIT (62 taxmann.com 215. 234 Taxman 771 (Copy Enclosed) Where Hon'ble Supreme Court dismissed SLP against High Court's order where it was held that since assessee himself had stated in sworn statement during search and seizure about his undisclosed income, tax was to be levied on basis of admission without scrutinizing documents. B Kishore Kumar Vs CIT (52 taxmann.com 449) Madras High Court confirmed (Copy Enclosed) 2. Bhaairath Aaaarwal Vs CIT (31 taxmann.com 274. 215 Taxman V 229. 351 ITR 1431 (Copy Enclosed where Hon'ble Delhi High Court held that an addition in assessee's income relying on statements recorded during search operations cannot be deleted without proving statements to be incorrect. 3. Smt Dayawanti Vs CIT [20161 75 taxmann.c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usting expenditure were justified (SURVEY CASE) 7. PCIT Vs Avinash Kumar Setia T20171 81 taxmann.com 476 (Delhi) (Copy Enclosed) Where Hon'ble Delhi High Court held that Where assessee surrendered certain income by way of declaration and withdraw same after two years without any satisfactory explanation, it could not be treated as bona fide and, hence, addition would sustain (SURVEY CASE) For retraction to be valid, threat or coercion has to be proved which has not been done in the present case: Manoharlal Kasturchand Chokshi V s ACIT (ITAT, Ahd) 61 ITD55 ParamAnandBuilders Vs ITO (ITAT, Mum) 59 ITD 29 Works of Art (P) Ltd, Vs ACIT (ITAT, Jp) 65 ITD 40 Amritlal Bhagwandas Soni V s DCIT (ITAT, Ahd) 59 TT d418 Hiralal Maganlal & Co. V s DCIT (ITAT, Mum) 96 ITD 113 Airport Authority of India V s CBEC (Del) 207 CTR 196 Ravindra D. Trivedi Vs CIT (Raj) 215 CTR313 When statement was made voluntarily and was not alleged to have been obtained under threat or coercion, onus was on assessee to prove that said declaration was made under any misconception of facts - Since assessee had not taken any steps to rectify its declaration before authorities before whom such decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will take the final call regarding the above sum in Cellcap Securities Pvt. Ltd and the year of taxability only at the time of filing of income tax returns u/s 153A. She further stated that along with that the opinion of Dr. RN Dash was also attached wherein, it was stated that no taxable event had occurred within India in case of Cellcap Securities Pvt. Ltd which as taken loan from layman brothers. Therefore, her arguments was that assessee constantly confirming about the disclosure but later on after three years same is retracted. She further stated that at the time of disclosure no coercive action was proved by the assessee and therefore, the shelter under the circular of CBDT is not available. She further submitted that ld CIT(A) has blindly accepted the submission of the assessee and has not looked in to the various factors and surrounding circumstances in which the assessee has made disclosure. She further relied upon the decision of Hon'ble Delhi High Court in case of CIT Vs. Jansampark Advertisement 375 ITR 373. Therefore, she submitted that assessee has disclosed the above sum in statement u/s 132(4) of the Act and therefore, retraction after three years is bad. She f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s attached as pages 25-30 of the paper book). 4. Following the above offer of the Rs. 150 crores, the Assessee, immediately, filed another letter dated 11 June 2012 (copy enclosed at pages 31-32 of the paperbook) wherein explaining the source of the Rs. 86 crores (out of the Rs. 150 crores so offered) in the individual's hands, it was explained that the same arose on account of Waiver of Loan taken by Cellcap Securities Ltd (CSL) from Lehman Brothers Commercial Corporation Asia Limited (LBCCA). It was duty stated that the above tentative offer of additional income of Rs. 150 crores was inclusive of the said Rs. 86 crores on account of Loan waiver. 4.1. The 86 crores (included in the 150 crore disclosure) was offered as under: S. No Name of the Persons Rs. (Lacs) AY 12-13 Rs. (Lacs) AY 13-14 Rs. (Lacs) TOTAL 1. Capt R S Sindhu 1234.08 450.00 1684.08 2. Sh. Vir Sen Sindhu 1484.97 420.21 1905.18 3. Sh. Vrit Pal Sindhu 1190.00 500.00 1690.00 4. Sh. Satya Pal Sindhu 1070.33 320.00 1390.33 5. Sh. Dev Suman Sindhu 1029.48 320.00 1349.48 6. Capt K S Solanki 630.50 - 630.50 Total 6639.36 2010.21 8649.57 4.2. In connection to the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of the Legal Opinion that Capt. R. S. Sindhu filed the immediate second letter dated 11.06.2012 with the Ld. ADI wherein he put forth the above narrated legal advice 4.4. Lastly, in the said letter it was also put forth to the ADI that, in view of the legal Opinion so taken, even though the said offer of the Rs. 86 crores was made, the final taxability of the said sum would however be taken at the time of filing of the 153A Returns. The concluding para of the said letter is reproduced as under :- "In view of above facts and circumstances, the group will take final call regarding the taxability of CSL and the year of taxability at the time of filing of ITR in response to notice u/s 153A of the Income Tax Act, 1961 and accordingly the payment of balance taxes on additional income as per chart/ details of even date shall therefore be made at the time offiling oflTRs u/s 153 AT 5. Next, in response to the query raised by the ADI in the Order Sheet dated 18.06.2012, the Assessee filed another letter 13.07.2012 before the Ld. ADI. Along with the letter, Note on loan taken from Lehman Bros was also annexed. In the said letter, Sh. R.S. Sindhu reiterated that the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted (Copy of Letter is attached in page 43-44 of the paper book). 9. Further, another letter dated 20.03.2015 was filed with the Ld AO as he was not satisfied with the mere reiteration of transaction (Copy of Letter is attached in page 45 of the paper book). In this second letter, the Promoters explained the circumstances and sequence of events starting from including the amount of Rs. 86 crores in the total additional income of Rs. 150 crores initially offered and ending with the reasons for their non-inclusion of this amount of Rs. 86 crores in their ITRs. The said letter contained copies of submissions filed by ARs before the Ld ADI on 13.7.2012, copy of second letter of Capt R.S. Sindhu dated 11.6.2012 and copy of the "Opinion" obtained from Sh R.N.Dash (former DG International Taxation) dated 15.5.2012. 10. However, completing the assessment proceedings, the Ld. AO in his Assessment Orders dated 30.03.2015/31.03.2015 for AY 2012-13 & AY 2013-14 in the case of all the individuals made the addition on account of waiver of loan in the hands of individual assesses, totalling to Rs. 86 crores. Here it is pointed out that the Ld AO, on perusal of the letter submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the letter that, based on the Legal Opinion, the group would take final call regarding the taxability of CSL at the time of filing of ITR in response to notice u/s 153A of the Act. The relevant portion is also quoted above. 1.2. In fact it is here brought to your Honours notice that the Statement u/s 132(4) nowhere contained any disclosure of any amount as Additional Income. The first disclosure by the Assesee Group came vide the first letter dated 11/06/2012 which contained the disclosure of Rs. 150 crores along with breakup of the same, very much included in it the Rs. 86 crores disclosure. The said first letter contained the breakup of the additional income as to the name of the Individual assesses in whose names they were to be offered. The nature, head of income, the document on the basis of which such income was offered and the purported manner in which such income, remaining to be finally settled, the Assessee had in the said letter stated the Heads of Income broadly as "Income from other Sources/ Undisclosed Income/ Undisclosed Investments. However, since the source of the Rs. 86 crores was seemingly known to the Assessee, the Assessee , immediately vide a second l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted the impugned sum. 3. It is then alleged by the department that an opportunity of cross examination was not given to them. In this regard it is submitted that, neither any statement was given by the assessee behind the back of the Assessing Officer nor any additional evidence was produced before CIT(A). All the evidences produced before the Ld. CIT(A) were provided to the AO during the assessment proceedings. Therefore the question of cross examination by the Ld. AO does not arise and the ground taken by the department has no substance. 4. It is further alleged by the department that admission made by Capt. R.S. Sindhu in his statement u/s 132(4) can't be retracted by bald and wrong statement and thus such Retraction is invalid. 4.1. In connection to the above, attention is sought to the following two circulars issued by the CBDT:- > F. No. 286/2/2003-IT (Inv) GOVERNMENT OF INDIA MINISTRY OF FINANCE & COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delhi, the 10th March, 2003 To All Chief Commissioners of Income Tax, (Cadre Contra) & All Directors General of Income Tax Inv. Sir Subject: Confession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Sear ch/survey/Other proceeding under the IT. Act, 1961 and/or recording a disclosure of undisclosed income under undue pressure/coercion shall be viewed by the Board adversely. 4. These guidelines may be brought to the notice of all concerned in your Region for strict compliance. 5. I have been further directed to request you to closely observe/oversee the actions of the officers functioning under you in this regard. 6. This is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s just and fair - Conduct of affairs by the revenue authorities shows that good amount of psychological pressure was built on the assessee to make the said statement, which was retracted - Further, the addition was illegal as while the assessee spoke of earning the said income over a period of 10 years, total addition was made in two asst. yRs. 1999-2000 and 2000-2001 - All material found during search was duly explained by assessee on which no adverse comment was made by AO - Assessee to be assessed on the income returned by him for the block period. Further reliance is also placed whether no addition can be made simply on the basis of surrender without any cogent and valid reasons and which the assessee has subsequently retracted. For this proposition, the reliance is placed on the following case laws :- "a. India Seed House V s Asstt. CIT (2000) 69 TT J (Delhi) (TM) 241 In case of block assessment no addition can be made merely on the basis of statement recorded at the time of search which stands fully proved to be incorrect in view of the material itself which was seized at the time of search. b. Pranav Construction Co. Vs Asstt. CIT (1998) 3 DTC 719 (Mum-Trib) (1998) 61 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the tax jurisdiction of India. It was further opined that the effective control and management of the above company remained always with Lehman Brothers by virtue of shareholder agreement and loan agreements. Therefore, it was opined that by the waiver of loan by the Lehman Brother no taxable event has occurred within India Tax jurisdiction. In the end, he submitted that assessment orders in case of Cellcap Securities Ltd for AY 008-09 to 2014-15 wherein, it has been held by the ld Assessing Officer himself while framing assessment u/s 143(3) read with section 147 of the Income Tax Act passed on 30.12.2016 that it is a foreign company having its control and management outside India and is not having any income accruing or arising to it from India and is thus not taxable in India. Therefore, he submitted that the case of that company was reopened for the purpose of taxing waiver of Lehman Brothers but it was not taxable same was dropped. He further submitted that except the above sum of waiver of Rs. 86 crores there were no material found during the search proceedings where any addition can be made. In nutshell he submitted that there was not a single material was found during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Lehman brothers cannot be related to the individual shareholders and therefore, the assessee is wrongly including it with the disclosure of Rs. 150 crores. She further stated that CBDT circular is only on coercion etc as not on the issue of disclosure or retraction. Therefore, reliance on that is misplaced. She therefore, submitted that argument of the ld AR are not relevant. 16. We have carefully considered the rival contentions and perused the orders of the lower authorities. The brief facts of the case are that the search and seizure in case of the above group took place on 12.04.2012 and statement of Shri RS Sindhu was recorded u/s 132(4) of the Act on 13.04.2012. On 24.04.2012, the assessee submitted a letter before Additional Director of Income Tax. According to that letter, it was mentioned that cash, jewellery, computer hard disk and other papers were found and seized. It was further submitted that the companies of the assessee group are not engaged in any activity, which gives rise to any undisclosed income. However, there may be certain errors or there may be some variation in jewellery and cash as well as there may be some parties may also not give the replies etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h assessee owned the balance disclosure of Rs. 64 Crores out of Rs. 150 crores, but Subsequently, the above income of Rs. 86 crores was not offered in the return of income of all those persons. Therefore, ld Assessing Officer has made the addition in the hands of all those persons including the assessee. On careful perusal of the order of the ld Assessing Officer it is apparent that the whole addition has been made on account of letter dated 11.06.2012 of Shri R. S. Sindhu wherein, he has given break up of Rs. 150 crores in the hands of 13 assessee of his family. It was mentioned that above disclosure also includes the waiver of loan of Lehman Brothers. In answer to Question No. 4 it is mentioned that because of the investment by the Lehman Brothers which meant financial unstable subsequently wanted to withdraw from the project of the group and the stake of Lehman Brothers was bought over. Further in answer question No. 5 the details of the above loan and its settlement was discussed. In all such questions, the assessee referred to the CSL i.e. Cellcap Securities Ltd. Such questions were asked up to Question No. 12 of his statement. Thereafter, it was evident that there is income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigation Wing firstly in the statement and secondly, from the letter dated 11.06.2012 filed before the Investigation Wing. Subsequently, The assessee submitted on 13.07.2012 before the ADI wherein, a note was annexed about the taxability of above sum and discussed in detail. On that basis, the assessee did not offer out of Rs. 150 crores Rs. 86 crores pertaining to the above waiver. During the course of assessment proceedings the summons were also issued where the assessee has stated that disclosure was erroneously made as definitely on waiver of the above loan such income arises to the group but same is not taxable in India as the loan is taken by Cellcap Securities Ltd BVI which is a foreign company. There is no whisper either from the Investigation Wing or from the ld Assessing Officer on this issue throwing back any evidence to show that the total disclosure of Rs. 150 crores is based on seized documents or evidences. Further, no such other material was also referred to or produced during the assessment proceedings by revenue to show that out of Rs. 150 crores the disclosure amount of Rs. 86 crores is not pertaining to the loan waived by Lehman Brothers. In view of this, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be the income but same is not taxable. Further in the case the seized paper were shown which showed that assessee was giving cash loan to the several persons. In the present case before us there is no reference of any seized material. The second decision relied upon is in case of Bhagirath Aggarwal Vs. CIT 351 ITR 143. In that particular case the original statement made was further confirmed by the assessee by another letter. Further, there was no retraction of the statement. The courts have further held that the assessee has not produced any evidence to show that the admission made by him were incorrect. In the present case before us the assessee has demonstrated that waiver of Rs. 86 crores is not chargeable to tax in the hands of the individual assesses but in case of Cellcap Securities only. Further such company being a foreign company same is not taxable in India. The revenue on the above information reopened the case of that particular company for several years. In view of this in the present case, assessee has demonstrated that his admission was incorrect. In case of Smt. Dayavanti Vs. CIT (supra) there was statements as well as incriminating materials also. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hands of Satya Pal Sindhu Rs. 4673000/-, Mr. Vrit Pal Sindhu Rs. 205500/-, Shri Dev Suman Sindhu Rs. 995000/- and in case of Shri Rudra Sen Sindhu of Rs. 40 lacs. On appeal the ld CIT(A) deleted the above addition vide para No. 14 as under:- "Findings 14. This is a fact that the appellant and his family members were staying together in their family home in Rohtak. This is also a fact that they were assessed to Wealth Tax and had filed their Wealth Tax Returns for AY 2011-12 on 28.12.2011 about 4 months prior to the date of Search. The appellant and his family members furnished copies of WTRs giving position of opening cash in hand as on 1.4.2011 along with Bank Statements and other documents relating to the period 1.4.2011 till 12.4.2012. After increasing/ decreasing the cash in hand as per these documents, the appellant and his family members gave the position of cash in hand as on 12.4.2012. As per this working, the cash in hand available with the appellant and his family members was Rs. 1,03,82,601.98 whereas the cash found during search was,Rs. 1,03,79,300/-. 14.1 It is also a fact that the appellant and has family members were not maintaining day to day books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1.1 During the course of search, following amount of cash was found at the Rohtak premises of the above named assessee and their family members:- Description Cash Bedroom of Sh. Satva Pal 46,73,000 Bedroom of Sh. DevSuman 9,95,000 Sindhu Bedroom of Sh. Abhimanyu 42,76,500 Bedroom of Sh. Vrit Pal 2,05,500 SindhuBedroom of Mrs. 2,29,300 Total 1,03,79,300 1.2. The statement of family members were also recorded u/s 132(4) during the course of search proceedings on 12.04.2012. They were asked about the source of cash found during search. It was stated in the statement that they would be submitting the details regarding the source of the cash found at a later date. 2. Subsequently, assessee and his family members vide their submission dated 10.07.2012 submitted before the Investigation Wing, the breakup and details of cash in hand of various family members as on 12.04.2012 (i.e. the date of search). Breakup of cash in hand is as under:- Details of cash in hand at Rohtak Dt. 12/04/2012 Particulars Am Smt. Parmeshwari Devi 50,60,986.37 Capt. Abhimanyu Sindhu 84,256.41 Mrs. Ekta Sindhu 35,269.17 Maj. Satya Pal Sindhu 1415,673.94 Mrs. Anika Sindhu 9,13,66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de addition on account of unexplained cash in hand u/s 69A of the Act in the hand of the assessee in his assessment order dated 30.03.2015. SUBMISSION OF THE ASSESSEE 1. The ground taken by the department that the Ld. CIT(A) has erred in law and on the facts in deleting the addition on account of unexplained cash in hands u/s 69A of the Act without appreciating the fact that the assessee has not been able to explain the same after due opportunities is not correct. 2. In this regard, it is first relevant to quote and analyse section 69A, which read as under:- ] Unexplained money, etc. "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Vrit Pal Sindhu and Sh. Satya Pal Sindhu. 3.2. Thus, a complete working of cash in hand was given to the Ld. AO. Also the position of cash in hand was duly supported by documentary evidences filed along with the working of cash in hand. So in the instant case, the assessee had offered full explanation regarding the nature and source of cash found. Therefore the allegation of the department that assessee has not been able to explain the cash found is not correct and bad in law. 4. Coming on to point no. (ii), it is submitted that the Ld. Assessing Officer can be invoke addition u/s 69A where explanation offered by the assessee is not satisfactory in the opinion of the Assessing Officer. In the instant case, the Ld. AO has neither given any reason whatsoever to reject the working of cash in hand nor pointed out any mistake in the working of cash in hand submitted by the assessee. Therefore Section 69A cannot be invoked even on the basis of this reason as the Ld. AO has not alleged that the explanation offered by the assessee is not satisfactory. 5. Substantiating its contention, the assessee would like to place reliance on the judgement of Chandigarh ITAT in case of Arund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consequently if AO has failed to do some inquiry etc, then Ld CIT (A) should have doen it or ITAT should remand it back to the AO. 24. The Ld CIT DR reiterated those arguments. 25. The LD AR vehemently objected the same and also made following submission. .III. DEPARTMENT RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF "THE COMMISSIONER OF INCOME TAX-II VS. M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD 375ITR 373" (i) Sh. Dev Suman Sindhu A.Y. 2012-13 :Grd 6 of Departmental appeal A.Y. 2013-14 : Grd 7 of Departmental appeal (ii) Sh. Vir Sen Sindhu A.Y. 2012-13 :Grd 6 of Departmental appeal A.Y. 2013-14 : Grd 6 of Departmental appeal (iii) Sh. Vrit Pal Sindhu * A.Y. 2012-13 :Grd 6 of Departmental Appeal * A.Y. 2013-14 :Grd 7 of Departmental Appeal (iv) Sh. Rudra Sen Sindhu * A.Y. 2012-13 :Grd 6 of Departmental Appeal * A.Y. 2013-14 :Grd 7 of Departmental Appeal (v) Sh. Satya Pal Sindhu * A.Y. 2012-13 :Grd 6 of Departmental Appeal * A.Y. 2013-14 :Grd 7 of Departmental Appeal (vi) Sh. Kuldeep Singh Solanki * A.Y. 2012-13 :Grd 6 of Departmental Appeal 1. Before concluding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory for the right of hearing to be afforded not only to the assessee but also the Assessing Officer, the first appellate authority is given the liberty to make, or cause to be made, further inquiry in terms of sub-section (4). The further inquiry envisaged under section 250(4) is generally what is known as a "remand report". The purpose of this enabling clause is essentially to ensure that the matter of assessment reaches finality with the requisites facts found. The assessee filed its return for the assessment year 2004-05 declaring an income of Rs. 3,180. The original return was accepted. Sometime in 2007, the Assessing Officer was in receipt of information from the Director of Income-tax that the assessee had been in receipt of accommodation entries from the entry providers. Notice was issued under section 148 . It was found that share capital had been received from certain operators who were allegedly engaged in the business of giving accommodation entries. In order to verify the genuineness of the claim of receipt of the share application money, summons were issued under section 131 of the Act to those entities in response to which, no one appeared and some of the processes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oked. (iii) The assessee preferred an appeal against the assessment order before CIT(A) which was allowed by the Ld. CIT(A) deleting the addition made by the AO relying upon CIT vs. Lovely Exports Pvt. Ltd., (2008) 216 CTR 195 (SC). (iv) The Revenue preferred appeal (to which the assessee had also filed counter objection) was unsuccessful before ITAT. (V) High Court held that the AO had failed to discharge his obligations to conduct a proper inquiry. Also CIT(A) did not make further inquiry in terms of section 250(4) and closed the chapter simply by deleting the addition made by AO. Again ITAT upheld the order of CIT(A) without making proper enquiry. (vi) Thus in High Court, the question of law was answered in favour of the Revenue with a direction that the matter of assessment arising out of notice u/s 148 of IT Act in respect of the assessee would remitted to the CIT(A) for fresh consideration in accordance with law. 4. As is evident from the above judgement, the facts and circumstances of the assessee's case is totally different from that of the case relied upon by the department. The assessee's case is based on two grounds as stated below: * Addition on account of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urces/undisclosed income/undisclosed investment. 2. That the Ld. CIT(A) has erred in ignoring the admission made by Capt RS Sindhu in his statement made under oath u/s 132(4) and other individual members of the group not once but at least twice and the same can't be retracted by bald and wrong statement. 3. That the Ld. C1T(A) has erred in relying on the wrong statement made by the assessee without offering an opportunity to the Assessing Officer to counter and cross examine the same. 4. That the Ld. CIT(A) has erred in ignoring the fact that the assessee in its statement u/s 132(4) has nowhere stated that the additional income was offered on account of waiver of loan by M/s Lehman Brothers to Cellcap Securities Ltd. and the same is an afterthought to retract the surrender of additional income. 5. That the Ld. CIT(A) has erred in ignoring the fact that the issue of waiver of loan by M/s Lehman Brothers pertains to AY 2010-11 whereas the issue of disclosure of additional income pertains to AY 2012-13 and AY 2013-14 and the same cannot be linked by any stretch of imagination. 6. That the commissioner of Income Tax (Appeals) has erred in law and on facts by ignoring Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to tax, then the same would have been taxed in the hands of the alleged beneficiary i.e. Cellcap Securities Ltd. 11. That the order of Ld. C.I.T(A) is correct in law and on facts of the case, and in accordance with the provisions of the Act." 30. The revenue has raised the following grounds of appeal in ITA No. 05/Del/2016 for the Assessment Year 2013-14:- "1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 50000000/- on account of retraction of additional income disclosed under the head income from other sources/undisclosed income/undisclosed investment. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs. 205500/- on account of unexplained cash in hand u/s 69A of the IT Act, 1961 without appreciating the fact that the assessee has not been able to explain the same after due opportunities. 3. That the Ld. CIT(A) has erred in ignoring the admission made by Capt RS Sindhu in his statement made under oath u/s 132(4) and other individual members of the group not once but at least twice and the same can't be retracted by bald and wrong statement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he family members,. their W.T. Returns showing position of cash-inhand, bank statements and other documents etc has rightly deleted the addition of Rs. 2.05.500/- made u/s. 69A of the Act as unexplained hence no interference on the issue is called for. 6. That the Ld. C.l.T.(A) rightly considered the facts brought on record by the respondent. 7. That the Ld. C.I.T.(A) correctly relied on the workings submitted by the respondent, and since such workings and explanations provided by respondent were sufficient, there was no nee; cross examination of the same. 8. That although the respondent had offered additional income, it had been clearly stated that its taxability will be submitted subsequently. 9. That the respondent had disclosed complete linkage of waiver of loan to the additional income through various correspondences with the Revenue authorities, thus such explanation was not an afterthought. 10. That the Ld. C.I.T.(A) rightly held that AO had access to the entire seized material, and was unable to show any document/ evidence that could have been treated as incriminating or unexplained. 11. That the Ld. C.I.T.(A) rightly held that even if the waiver of loan was lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34. The assessee has raised the following ground of appeal in CO No. 137/Del/2016 for Assessment Year 2012-13:- "1) That the Ld. C.I.T.(A) on the facts of the case and in law has rightly deleted the addition of Rs. 6,30,50,000/- as income from undisclosed sources and the same should be upheld. 2. That the Ld. C.I.T.(A) rightly deleted the addition of Rs. 6,30,50,000/- made in assessment year 2012-13 as the amount in question was waiver of loan in the case of Cellcap Securities Ltd. and have nothing to do with the appellant. 3. That the Ld. C.I.T.(A) correctly appreciated the impugned sum of Rs. 6,30,50,000/- was disclosed loan of Lehman Bros, in favour of Cellcap Securities Ltd. and its waiver in the hands of the said company cannot be subject of surrender as undisclosed income in the hands of the appellant. 4. That the disclosure so obtained in course of search in regard to sum of Rs. 6,30,50,000/- was directly in contradiction to CBDT Instruction Nos. F.No. 286/2/2003-IT(Inv) dated 10.03.2003 and F.No. 286/ 98/2013-IT(Inv.II) dated 18.12.2014 and, therefore, merely because in a statement u/s 132(4) appellant admitted the impugned sum as undisclosed income will go to creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts in deleting the addition of Rs. 14,84,97,000/- on account of retraction of additional income disclosed under the head income from other sources/undisclosed income/undisclosed investment. 2. That the Ld. CIT(A) has erred in ignoring the admission made by Capt RS Sindhu in his statement made under oath u/s 132(4) and other individual members of the group not once but at least twice and the same can't be retracted by bald and wrong statement. 3. That the Ld. CIT(A) has erred in relying on the wrong statement made by the assessee without offering an opportunity to the Assessing Officer to counter and cross examine the same. 4. That the Ld. CIT(A) has erred in ignoring the fact that the assessee in its statement u/s 132(4) has nowhere stated that the additional income was offered on account of waiver of loan by M/s Lehman Brothers to Cellcap Securities Ltd. and the same is an afterthought to retract the surrender of additional income. 5. That the Ld. CIT(A) has erred in ignoring the fact that the issue of waiver of loan by M/s Lehman Brothers pertains to AY 2010-11 whereas the issue of disclosure of additional income pertains to AY 2012-13 and AY 2013-14 and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same should be upheld. 2. That the Ld. C.I.T.(A) rightly deleted the addition of Rs. 4.20 crores as the amount in question was waiver of loan in the case of Cellcap Securities Ltd. and have nothing to do with the appellant. 3. That the Ld. C.I.T.(A) correctly appreciated the impugned sum of Rs. 4.20 crores was disclosed loan of Lehman Bros, in favour of Cellcap Securities Ltd. and its waiver in the hands of the said company cannot be subject of surrender as undisclosed income in the hands of the appellant. 4. That the disclosure so obtained in course of search in regard to sum of Rs. 4.20 crores was directly in contradiction to CBDT Instruction Nos. F.No.286 2 2 33-IT(Inv) dated 10.03.2003 and F.No. 286/ 98/2013-IT(Inv.II) dated 18.12.2014 and. therefore, merely because in a statement u/s. 132(4) appellant admitted the impugned sum as undisclosed income will go to create an income in his hand chargeable to tax under the Income Tax Act 5. That the Ld. C.I.T.(A) rightly considered the facts brought on record by the respondent. 6. That the Ld. C.I.T.(A) correctly relied on the workings submitted by the respondent, and since such workings and explanations provided by respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others to Cellcap Securities Ltd. and the same is an afterthought to retract the surrender of additional income. 5. That the Ld. CIT(A) has erred in ignoring the fact that the issue of waiver of loan by M/s Lehman Brothers pertains to AY 2010-11 whereas the issue of disclosure of additional income pertains to AY 2012-13 and AY 2013-14 and the same cannot be linked by any stretch of imagination. 6. That the commissioner of Income Tax (Appeals) has erred in law and on facts by ignoring Hon'ble Delhi High Court direction in the case of "The Commissioner of Income Tax-II Vs M/s Jansampark Advertising and Marketing (P) Ltd." 7. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts." 42. The assessee has raised the following ground of appeal in CO No. 171/Del/2016 for Assessment Year 2012-13:- "1) That the Ld. C.I.T.(A) on the facts of the case and in law has rightly deleted the addition of Rs. 12,34,08,000/- as income from undisclosed sources and the same should be upheld. 2. That the Ld. C.I.T.(A) rightly deleted the addition of Rs. 12.34 crore as the amount in question was waiver of loan in the case of Cellcap Securities Ltd. and had nothing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law and on the facts in deleting the addition of Rs. 40,00,000/- on account of unexplained cash in hand under section 69A of the IT Act, 1961 without appreciating the fact that the assessee has not been able to explain the same after due opportunities. 3. That the Ld. CIT(A) has erred in ignoring the admission made by Capt RS Sindhu in his statement made under oath u/s 132(4) and other individual members of the group not once but at least twice and the same can't be retracted by bald and wrong statement. 4. That the Ld. CIT(A) has erred in relying on the wrong statement made by the assessee without offering an opportunity to the Assessing Officer to counter and cross examine the same. 5. That the Ld. CIT(A) has erred in ignoring the fact that the assessee in its statement u/s 132(4) has nowhere stated that the additional income was offered on account of waiver of loan by M/s Lehman Brothers to Cellcap Securities Ltd. and the same is an afterthought to retract the surrender of additional income. 6. That the Ld. CIT(A) has erred in ignoring the fact that the issue of waiver of loan by M/s Lehman Brothers pertains to AY 2010-11 whereas the issue of-disclosure of additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that its taxability will be submitted subsequently. 9. That the respondent had disclosed complete linkage of waiver of loan to the additional income through various correspondences with the Revenue authorities, thus such explanation was not an afterthought. 10. That the Ld. C.I.T.(A) rightly held that AO had access to the entire seized material, and was unable to show any document/ evidence that could have been treated as incriminating or unexplained. 11. That the Ld. C.I.T.(A) rightly held that even if the waiver of loan was liable to tax, then the same would have been taxed in the hands of the alleged beneficiary i.e. Cellcap Securities Ltd. 12. That the order of Ld. C.I.I.(A) is correct in law and on facts of the case, and in accordance with the provisions of the Act." 45. In both the appeal of the revenue, similar issue as decided by this order in case of Shri Dev Suman Sidhu has been raised. The CO of the assessee for both the years are supportive in nature. Therefore for the reasons given by us in Appeals of revenue in case of Mr. Dev Suman Sidhu we dismiss the appeal of the revenue and allow the co of the assessee. Mr. Satya Pal Sidhu A Y 2012-13 and 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Securities Ltd. and its waiver in the hands of the said company cannot be subject of surrender as undisclosed income in the hands of the appellant. 4. That the disclosure so obtained in course of search in regard to sum of Rs. 10.70 crores was directly in contradiction to CBDT Instruction Nos. F.No.286/2/2003-IT(Inv) dated 10.03.2003 and F. NO. 286/98/2013- IT (Inv.II) dated 18.12.2014 and therefore, merely because in a statement u/s. 132(4) appellant admitted the impugned sum as undisclosed income will go to create an income in his hand chargeable to tax under the Income Tax Act. 5. That the Ld. C.I.T.(A) rightly considered the facts brought on record by the respondent. 6. That the Ld. O.I.T.(A) correctly relied on the workings submitted by the respondent, and since such workings and explanations provided by respondent were sufficient, there was no need for cross examination of the same. 7. That although the respondent had offered additional income, it had been clearly stated that its taxability will be submitted subsequently. 8. That the respondent had disclosed complete linkage of waiver of loan to the additional income through various correspondences with the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as erred in law and on facts by ignoring Hon'ble Delhi High Court direction in the case of "The Commissioner of Income Tax-II Vs M/s Jansampark Advertising and Marketing (P) Ltd." 8. (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts." 49. The assessee has raised the following ground of appeal in CO No. 174/Del/2016 for Assessment Year 2013-14:- 1) That the Ld. C.I.T.(A) on the facts of the case and in law has rightly deleted the addition of Rs. 3,20,00,000/- as income from undisclosed sources and the same should be upheld. 2) That the Ld. C.I.T.(A) rightly deleted the addition of Rs. 3.20 crore as the amount in question was waiver of loan in the case of Cellcap Securities Ltd. and had nothing to do with the appellant. 3) That the Ld. C.I.T.(A) correctly appreciated the impugned sum of Rs. 3.20 crore was disclosed loan of Lehman Bros, in favour of Cellcap Securities Ltd. and its waiver in the hands of the said company cannot be subject of surrender as undisclosed income in the hands of the appellant. 4) That the disclosure so obtained in course of search in regard to sum of Rs. 3.20 crores was directly in contradiction to CBDT Instruction ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
