9911796707
TMI Blog2021 (1) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... er and decide the grounds of appeal no. 35, i.e. all the receipts and payments have been considered as undisclosed income and peak amount should have been considered. 3. The ld. CIT(A) failed to consider and decide the grounds of appeal no. 36, i.e. the undisclosed income has been determined even on the basis of documents seized from Ms. Asmita Aggarwal and Easan India Ltd. without there being any evidence to show the satisfaction of their respective AOs, as required by section 158BD of the Income Tax Act, 1961 (hereinafter referred to as "the Act") and handing over of the documents to the Ld. DCIT, Central Circle-12, New Delhi. 4. The assessment being time barred is null and void ab initio and deserve to be quashed. 5. Any valid notice u/s. 143(2) of the Income Tax Income Tax Act, 1961 (hereinafter referred to as "the Act"), 1961 was neither issued not served upon the assessee. 6. The Ld. Assessing Officer, who purportedly issued the various notice under the provisions of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), and made the assessment was not authorized to exercise power and perform functions of the Assessing Officer and therefore the said notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue authorities are that a search and seizure action as per provisions of Section 132 of the Income Tax Act, 1961 (in short "Act") was carried out at the residential premises of the assessee on 23.3.1999. The search was completed on 17.7.1999. The search as per the provisions of Section 132 of the Act was also conducted at the business premises of the assessee M/s Esam India Ltd. on 23.3.1999 which was concluded on 14.3.2000. Notice u/s. 158BC of the Act was issued to the assessee on 30.11.2000 requiring assessee to file block period return within 15 days of receipt of notice. The notice was served upon the assessee on 01.12.2000 through registered post. The letter containing notice u/s. 158BC of the Act was received back undelivered. Thereafter a notice was served at the then residential address of the assessee i.e. 141, North Avenue, New Delhi on 21.12.2000 through Notice Server. 3.1 In response to the same the assessee filed the reply dated 21.12.2000 through his Authorised Representative stating that assessee was being tried in the Court of ACMM, Patiala House, New Delhi in the case titled Enforcement Directorate vs. Abhishek Verma, in which the question whether Sh. Abhishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized documents. These summons were served on the assessee on 09.7.2001. Assessee did not attend at the given date and time nor any reply has been filed by the assessee stating reasons for his non-attendance. On 9.7.2001 assesee made another request through his letter dated 6.7.2001 requesting for returning the original seized material and assessee was allowed the opportunity to inspect and photocopies of seized material. But assessee did not inspect any seized material and filed another letters dated 10.7.2001 and 13.7.2001 stating that seized documents should be returned to the assessee. On 16.7.2001 assessee filed the Petition u/s. 144A of the Act before the Additional CIT, Central Range-3, New Delhi requesting for directions to AO to return in original seized material and without prejudice to this supply the certified copies of the seized material. The case was heard by the Addl. CIT, Central Range-3, on 18.7.2001. As per the directions of the Addl. CIT, Central Range-3, New Delhi assessee through his counsel gave a list in respect of which photocopies was required by him and the photocopies of those documents were provided to the assessee on 20.7.2011. On 24.7.2001 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 13 Undisclosed payment made to Rita Luther 2,00,000 14 Undisclosed payment to Sh. Sandeep Puri 1,00,000 15 Undisclosed profits of M/s Delhi Exports 2,77,00,000 16 Undisclosed profits of M/s Globetrotters 3,34,00,000 17 Undisclosed cash expenditure 1,05,250 18 Undisclosed income received through M/s Vino Veritas 7,67,30,400 19 Undisclosed income received through M/s European Capital Ltd. 1,33,00,000 20 Undisclosed cash payments received 8,06,800 21 Undisclosed receipts from Sh. SC Bharjatia 75,00,000 22 Bogus purchases 17,39,40,857 23 Undisclosed deposits made in General Credits Finance Ltd. 54,00,000 24 Undisclosed income as per 24 above. 1,19,03,000 25 Undisclosed income on account of payment made to Sh. Arjun Amla 3,20,40,000 26 Undisclosed income as per documents seized from Ms. Asmita Aggarwal. 11,00,42,100 Total undisclosed income 63,40,87,243 Tax @ 60% on the above 38,04,52,346 Interest u/s. 158BFA(1) [for 8 months @ 2%] 6,08,72,375 Total Demand 44,13,24,721 Penalty proceedings u/s. 158BFA(2) of the I.T. Act, 1961 has been initiated separately. The order has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o search and seizure are applicable to searches and seizure u/s. 132 of the Act, do not define the said word, however it prescribes the format in which the panchnama is required to be drawn. Ld. Counsel for the assessee stated that in the case of the assesse authorization / warrant of search was given on 22.3.1999, but in consequence thereof 03 panchnamas were drawn on three different dated at the same residential premises of the assessee i.e. dated 23.03.1999; 21.5.1999 and 16.7.1999. He stated that according to the Department the search was concluded on 16.7.1999, the date of limitation for passing the assessment order u/s. 158 BC of the Act was treated as 31.7.2001 and accordingly the order u/s. 158 BC of the Act was passed on 25.7.2001 i.e. within limitation period. But according to the assessee search in the case of the assessee was initiated u/s. 132 of the Act after drawing 1st panchnama itself, and therefore the limitation to complete the assessment was to be counted from the 1st panchnama and as a result the limitation for framing assessment would be 31.3.2001 i.e. 2 years from the end of the month in which the last panchnama for search u/s. 132 of the Act was executed. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the assessee, which is not permissible in law and therefore the assessment passed u/s. 158BC of the Act dated 25.7.2001 is time barred. In support of these arguments advanced by the Ld. Counsel for the assessee, he cited various judgments rendered by the Hon'ble High Courts which includes CIT vs. Sandhya P. Naik : 253 ITR 534 (Hon'ble Bombay High Court); CIT vs. Sarb Consultate Marine Products Pvt. Ltd. 294 ITR 444 (Hon'ble Delhi High Court); CIT vs. SK Katyal reported in 221 CTR 310 of the Hon'ble Delhi High Court; A Rakesh Kumar Jain vs. JCIT in ITA no. 1240/2016 of the Hon'ble Madras High Court; CIT vs. TS Chandrashekar : 221 CTR 385 of the Hon'ble Karnataka High Court; DCIT vs. Adolf Patric Pinto 284 ITR (AT) 207 of the ITAT, Mumbai Bench; Pr. CIT vs. PPC Business and Products (P) Ltd. 398 ITR 71 (Delhi); CIT vs. DD Axles P ltd. 323 ITR 558 (Delhi); C. Ramaiah Reddy vs. ACIT 339 ITR 210 (Karnataka); DR. C.Balakrishnan Nair vs. CIT 237 ITR 70 (Kerala); ACIT vs. Vijay Kumar Raichand ITA No. 6437 to 6442/Del/2012 and Capt. Vijay KumarRaichand vs. ACIT ITA No. 102 to 107/Del/2013 (ITAT, Delhi);' SVIL Mines Ltd. vs ACIT (ITA No. 832 and 833/De/2014) (ITAT, Delhi) and Nandlal M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ann-4, prepared at the time of drawing the 3rd and final panchnama dated 16.7.1999. But the comparison of the names of these annexures with the annexures prepared at the time of drawing the 1st panchanama dated 23.3.1999 which has been placed by the AR at page 1-4, alongwith the annexure 1 to 14 in assessee's paper book page 5 to 22 will reveal that above stated Annexures Ann-2 to Ann- 4, prepared at the time of drawing of third and final panchnama dated 16.7.1999 were entirely different than the Annexure Ann-1 to Ann-14, prepared at the time of drawing of first panchnama dated 23.3.1999. Ld. CIT(DR) stated that at the time of drawing of 1st panchanama dated 23.3.1999 no inventory was prepared in respect of mobiles and foreign visits, and such valuable were found only at the time of drawing of third and final panchama dated 16.7.1999. As regards the credit cards, while the credit cards found at the time of drawing of first panchanama dated 23.3.1999 were listed / inventorised at Annexure-7 which the assessee has attached as APB page 12, the credit card found at the time of drawing of third and final panchanama dated 16.7.1999 were listed / inventorised at Annexure-2. Ld. CIT(DR) fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as documentary evidences filed by the assessee and the Revenue especially three panchnamas as referred by both the parties in their written submissions. We are of the view that as pointed out by both the parties that 1st panchnama in pursuance of section 132 of the I.T. Act was drawn on 23.03.1999 at the searched premises of the assessee. Assessee has enclosed the same at pages 1-4 of the Paper Book Volume -I. As per the 1st panchnama various documents and books of accounts were found and seized by the Department that are Annexure A(A-1 to A-11); Annexure (A-2 to A- 14) which at page no. 6 to 21 of the Assessee's paper book Volume- 1. According to the second panchnama dated 21.5.1999 which is at pages 23-26 of the assessee's paper book volume no. 1 at the same searched premises of the assessee. According to the assessee no fresh document or material was found / seized from the residential premises of the assessee. But restrained order dated 21.5.1999 was passed u/s. 132(3) of the Act in respect of Rolls Royce car NO. DL1CE1233 parked in the garage and (ii) front door of the room of the assessee, were continued (placed at paper book vol. 1 at pages 27-28). The period of vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ached in the paper book at page no. 29, but at column no. 5(b)(i) following issues were found:- (i) Ann-2, Inventory of Credit Cards. (ii) Ann-2, Inventory of Foreign Visits. (iii) Ann-4, Inventory of Mobile. 8.2 At the time of drawing the 1st panchnama dated 23.3.1999 no inventory was prepared in respect of the mobile and foreign visits and such valuables were found only at the time of drawing of 3rd panchnama dated 16.7.1999. As the assessee himself admitted in the documentary evidences filed by the assessee that in three panchnamas the search team has taken in possession various valuables items which clearly establish the search carried out in the month of July, 1999 i.e. the last panchnama dated 16.7.1999 and various valuable items were taken into possession were not seized. Merely because no seizure was effected on the new valuables found in the search carried out just to extend the time limit to pass the assessment order. Keeping in view of the facts and circumstances explained above, after examining the three panchnamas dated 23.3.1999; 21.5.1999 and 16.7.1999, we are of the considered view that search was validly concluded only in July, 1999 and assessment was separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 seized from 4, Safdarjung Lane, New Delhi on 23.3.1999, mentioned by the AO. No doubt that assessee has denied these deposits, but as per the finding of the revenue authorities below supported by the seized material M/s Esam India Ltd. was incorporated on 10.1.1990.The assessee is No. 1 of the original subscriber to the Memorandum of Association of the company. The name of M/s Esam Trading Co. Ltd. was changed to M/s Esam India Ltd. and to M/s Alta Vista (India) Ltd. The assessee was the director of M/s Esam Trading India Ltd. till 21.11.1993, the balance sheet and profit and loss account for the year ending on 31.3.1993 signed by the assessee in the capacity of Director filed with the Registrar of Companies, New Delhi shows that M/s Esam Trading India Ltd. has outstanding loan of Rs. 37 lacs as on 31.3.1993 received from the Directors. During the search operation in the case of the assessee on 23.3.1999 are supported by the cash book of M/s Esan Trading India Ltd. wherein these deposits have been recorded in the name of Abhishek Verma (Assessee). The assessee was the Director at that time as the audited balance sheet of M/s Esam Trading Company Ltd. as on 31.3.1993 filed with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 16640 + 89465 + 226652 + 69800 totaling to Rs. 402557/- on account of foreign travel expense has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), because the assessee has not produced any documentary evidences supporting his claim. Hence, we uphold the impugned order on this issue. 9.5(i). As regards addition of Rs. 29,88,526/- on account of deposit in the bank. The Assessing Officer has provided opportunity to the assessee to explain this deposits, but the assessee has not availed the same and has not filed any evidence, even no explanation regarding this deposit has been given by the assessee. Therefore, the revenue authorities have rightly treated the same as undisclosed income of the assessee, hence, we uphold the order of the Ld. CIT(A) on this issue. 9.5(ii) As regards the addition of Rs. 1,19,41,051/- made on account of expenditure on repair and renovation on the accommodation owned by the Central Government of India. The AO has given opportunity to the assessee to explain the expenditure on repair and renovation on the accommodation. But after perusing the orders passed by the revenue authorities, we are of the view that revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to the assessee at the time of seized of these documents. After giving opportunity to the assessee and on the basis of the documentary evidence filed by the assessee alongwith the explanation, the Ld. CIT(A) in para no. 12.3 at page no. 53-54 of the impugned order held that opportunity given by the AO was not availed by the assessee and due to lack of evidences supporting the claim of the assessee, the Ld. CIT(A) has given the relief of Rs. 2,20,940/- and the balance of Rs. 36,53,504/- was rightly been upheld by the Ld. CIT(A) as undisclosed income of the assessee for this block period. In spite of the fact that the assessee remained non-cooperative before the revenue authorities, sufficient relief has been given to the assessee, hence, no interference is called for in the well reasoned order of the Ld. CIT(A) on this issue, therefore, we uphold the finding of the Ld. CIT(A) on this issue. 9.9. As regards the addition of Rs. 7,24,71,120/- on account of deposits in the Bank of Maharastara and treating the same as undisclosed income of the assessee. According to the assesssee, the AO has not considered the detailed reply filed by the assessee and wrongly made the addition in disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply filed by the assessee and detailed discussions, the AO has made the addition in dispute on the basis of documentary evidences as referred by the AO in the assessment order and the Ld. CIT(A) in the impugned order elaborately and finally upheld the addition on the ground that this addition has been made on the basis of the diary which was handed over to the Department by the wife of the assessee Mrs. Asmita Aggarwal. This addition has been made by the revenue authorities on the basis of documentary evidences and especially to the assessee who remained non-cooperative with the revenue authorities and for lack of evidence. Assessee has not discharged his burden of his onus laid upon him to prove that this diary did not belong to him, but he failed to prove the same and in the absence of any valid explanation and evidence, the AO has rightly made the addition of Rs. 1,42,10,625/- found recorded in the diary and which has been rightly been upheld by the Ld. CIT(A). We are of the view that no interference is called for in the well reasoned order passed by the Ld. CIT(A) on this issue, hence, we uphold the finding of the Ld. CIT(A) on this issue. 9.11 The assessee has challenged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,77,00,000/- on account of profit of M/s Delhi Exports and treated the same as undisclosed income of the assessee. According to the assessee, the AO has failed to appreciate the provisions of Income Tax Act, 1961 and particularly of Section 2(31) which defines person and further failed to appreciate that the income of partnership firm is separately assessable and without prejudice the assessee has submitted that AO has not in possession of any evidence or material to establish that M/s Delhi Exports earned a profit of Rs. 2,77,00,000/- and considered this profit for the block period upto 23.3.1999. The AO had made the addition in dispute on the basis of questionnaire dated 18.6.2001 asking the assessee to explain the page no. 76-77 of Annexure A-29 seized from M/s Esam India Ltd. during the search operation on 23.3.1999. As pr this papers M/s Delhi Exports earned this profit. In reply to the question raised by the AO the asessee has not furnished any proof of having filed the income tax return of his concern M/s Delhi Exports, hence, Assessing Officer has made the addition in dispute. Ld. CIT(A) has also upheld the impugned addition on the basis of the finding given by the AO. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on 23.3.1999 showing that the cash expenditure of Rs. 1,05,250/- was not booked in the books of M/s Delhi Exports. Assessee denied the same but without any evidence. Ld. CIT(A) has also upheld the same. After perusing the orders passed by the Revenue Authorities, we are of the view that the addition of Rs. 1,05,200/- made to the taxable income on account of expenditure incurred by M/s Delhi Exports. Assessee has not given any evidence or plausible explanation to controvert the version of the Assessing Officer. Therefore, the Ld. CIT(A) has rightly upheld the same, hence, we uphold the order of the Ld. CIT(A) on this issue. 9.18. As regards to the undisclosed income of Rs. 7,67,30,400/- on account of receipt by M/s Vino Veritas. The Assessing Officer made the addition on account of seized documents. Assessing Officer has also asked the assessee vide questionnaire dated 18.6.2001 for the explanation from the assessee and requested that Annexure A-48 seized from D-4/2, Vasant Vihar, New Delhi, assessee has transferred funds totaling US$ 21,31,000/- from M/s Esam India ltd. to M/s Vino Veritas, a concern of assessee operated in the name of Mr. John Feritas. The amount of Rs. 7,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Infocom Digital Systems Ltd.. After going through the orders of the revenue authorities, we are of the view that this addition has been made on the basis of the seized material Annexure A-48 from M/s Esam India Ltd. on 23.3.1999. No explanation has been given by the assessee to the revenue authorities. Therefore, this addition has rightly been made by the Assessing Officer and upheld by the Ld. CIT(A), hence, no interference is called for in the impugned order on this issue and we uphold the same. 9.21 The addition of Rs. 75,00,000/- on account of receipts from Sh. SC Bharjatia. According to the Assessing Officer M/s Infocom Digital Systems Ltd. to be a concern of the assessee and mode and manner in which the assessee was actually benefitted. The questionnaire dated 18.6.2001 issued by the assessee regarding this amount requested the assessee to explain this amount received from by him through M/s Infocom Digital Systems ltd. In the reply dated 24.7.2001 assessee has denied having received any payment of Rs. 75,00,000/- from Sh. SC Bharjatia. Two cheques worth Rs. 50,00,000/- and Rs. 25,00,000/- were deposited into the account of M/s Infocom Digital Systems Ltd. their ABN Amr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6.2001 to the assessee asking him to explain the undisclosed deposits. Assesee has denied the same and has not filed any evidence supporting his denial, hence, the Assessing Officer has made the addition in dispute and ld. CIT(A) has upheld the same by holding that the assessee had submitted in his statement recorded on 16.7.1999 that he has made the deposits of Rs. 54 lacs in the bank and that bank had gone into the liquidation and a claim had been lodged through the Bank of England and assessee has filed declaration under VDIS declaring such deposits, but has not made the payment of tax thereon. His application was not entertained and no certificate was issued. The Assessing Officer on the basis of documents no. 1-3 of Annexure A-3 seized from the residence of Mrs. Asmita Aggarwal, Ex-wife of the assessee also shows that such payments were made by the assessee for depositing in the bank beginning from October, 1991 till July, 1992. Assessee has not explained the source of this amount by filing any documentary evidences, therefore, the Assessing Officer has rightly made the addition and Ld. CIT(A) has also rightly upheld this addition. We are fully agree with the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on no. 39(c) of Questionnaire dated 7.6.2001 Assessing Officer asked the assessee to explain the transfer of money from account no. 520062 made by him as per pages 30 to 46 of Annexure A-1 seized from the residence of Ms. Asmita Aggarwal during search operations on 23.3.1999. Assessee has not furnished any explanation of the amount in dispute and the Assessing Officer has made the addition of Rs. 3,58,60,300/- as undisclosed income of the assessee. Similarly, vide question no. 39(d) of questionnaire dated 7.6.2001 assessee was asked to explain the payment of totaling USD 5,00,000 to KD USA. Vide his reply dated 24.7.2001 assessee has stated that the pages relied upon are the photocopies of some typed matter and do not carry the name and signatures of the assessee, but assessee has not given any explanation to the same and Assessing Officer has made the addition in dispute. Exactly, on similar facts and circumstances of the case the total amount of Rs. 11,00,42,000/- was added as undisclosed income of the assessee has been made on the basis of documentary evidences by giving the opportunity to the assessee for explaining the same, but assessee raised the question on the questionnair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the Assessee. In the result, the IT(SS)A NO. 2/DEL/2011 filed by the assessee is dismissed. 11. The Revenue has raised the following grounds in IT(SS)A No. 03/Del/2011:- 1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 1,19,03,000/- made by the AO on the basis of seized documents without appreciating facts on record. 3. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 11.1 At the time of hearing, Ld. Counsel for the assessee stated that the tax effect involved in the appeal filed by the Revenue is below the prescribed tax limit of Rs. 50 lacs, in view of the latest CBDT circulated vide Circular No.17/2019 Dated 08.08.2019, hence the appeal of the Revenue may be dismissed. 11.2 Ld. CIT(DR) has not raised any objection on the request of the assessee's counsel. 11.3 Keeping in view the addition in dispute challenged by the Revenue in the present appeal and in view of the latest CBDT's instructions, as aforesaid, the appeal of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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