Referred Sections:
Section 132 (4) of the income tax act
Section 153A of the income tax act 1961
Section 143 (3)
Section 268A of the Income Tax Act,
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B": NEW DELHI
BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
AND
SHRI K.N.CHARY, JUDICIAL MEMBER
ITA No. 6898- 6900/Del/2015
Assessment Year: 2013-14
DCIT, Vs. Gulab Chand Ladhani
Central Circle-20 , W-4, D/5 Khasra No 459
Ist Floor Room No 104, Keshav Kunj ane
ARA Center W 4 Western Avenue
Jhandenwala Complex Sainik farm
New Delhi New Delhi
PAN AETPC2326L
DCIT, Vs. Paritosh Ladhani
Central Circle-20 , W-4, D/5 Khasra No 459
Ist Floor Room No 104, Keshav Kunj ane
ARA Center W 4 Western Avenue
Jhandenwala Complex Sainik farm
New Delhi New Delhi
PAN AAZPL 6041K
DCIT, Vs. Ekansh Ladhani
Central Circle-20 , W-4, D/5 Khasra No 459
Ist Floor Room No 104, Keshav Kunj ane
ARA Center W 4 Western Avenue
Jhandenwala Complex Sainik farm
New Delhi New Delhi
PAN ACDPL 4448G
(Appellant)- (Respondent)
Assessee by : Shri Kapil Goel, Advocate
Revenue by: Smt Nidhi Srivastava
CIT DR
Date of Hearing 06/08/2019
Date of pronouncement 07/10/2019
ORDER
PER PRASHANT MAHARISHI, A. M.
1. All these 3 appeals filed by The Learned Deputy Commissioner Of Income Tax,
Central Circle 20, New Delhi (the learned assessing officer) against the order of
The Commissioner Of Income Tax (Appeals) 27, New Delhi dated 30/10/2015
are emanating from the same issue in case of above 3 assesses[ father and his two
sons] , therefore they are heard together and disposed of by this common order.
2. The grounds of appeal raised by the learned assessing officer are also identical
wherein the addition deleted of INR 11,000,000 as undisclosed income in the
hands of the one assessee and rupees one crore in the hands of another to
assessee's of the same family is challenged.
3. The brief facts of the case shows that as assessee is operation u/s 132 of The
Income Tax Act was conducted in the learning group of cases on 18/12/2012.
Pursuant to the above such facts as recorded in the assessment order of Mr Gulab
Chand Ladhani shows that pursuant to search the assessee filed its return of
income on 30/7/2013 declaring total income of INR 4 0922470/. The assessee
has shown income under that income from salary and house property. During the
course of search the main allegation against the group was that, they actively
participate in land dealing in real estate investment. During the course of search a
personal diary titled as annexure A 1 was recovered and seized from the
residential premises of the assessee wherein handwritten details of various
amounts advanced for different level land deals on several dates by himself and his
two sons Paritosh and Ekansh earning profit from such land deals was found. The
learned assessing officer found eight pages of the diary and tabulated eight
transactions of the property. He also referred to the statement u/s 132 (4) of the
assessee. The learned assessing officer also took note of letter dated 21/12/2012
wherein the assessee offered INR 50,000,000 in his hands and identical sum in the
hands of his two sons as undisclosed income. He noted that the assessee has
undisclosed income of INR 135,000,000 is whereas the assessee has offered a sum
of INR 34,000,000, and INR 35,000,000 have been offered in the hands of his
sons. Therefore it was found that assessee has disclosed INR 104,000,000 again
the surrendered income of INR 135,000,000 and therefore undisclosed income
works out to INR 31,000,000 which has not been shown by the assessee despite
making a disclosure under section 132 (4) of the income tax act and also
submitting a letter to the income tax officer. Accordingly he made an addition of
INR 11,000,000 in the hands of the assessee, and rupees one crore each in the
hands of his two sons. Assessment u/s 143 (3) read with section 153A of the
income tax act 1961 was passed on 31/3/2015 wherein to the returned income of
INR 4 0922470/ a further addition of undisclosed income on account of land
advances of INR 11,000,000 was added. Accordingly the total income along with
some other minor addition was determined at INR 5 2134721/.
4. Assessee aggrieved with the order of the learned assessing officer preferred an
appeal before the learned CIT A wherein it has been challenged that the addition
of INR 11,000,000 has been made solely on the basis of amounts are rendered by
the assessee but ignoring the retraction made by him by filing the return of income
showing other income at INR 34,000,000 against the surrendered amount of INR
45,000,000. Assessee further stated that undisclosed income of INR 1 to
5250000// has been worked out based on personal diary by the assessee and the
copy of the diary is part of the assessment order. It was further stated that on
looking at the diary and the statement of the assessee the addition has been made.
It was further stated that the seized diary is a dumb document having no
evidentiary value. The learned CIT A deleted the above addition stating that no
incriminating document was found and seized which could put a light in respect of
the real estate business by the assessee in its statement. It was further held that the
statement was recorded when the search was continuing for long hours. Therefore
he held that it fact shows that the disclosure were not based on any calculation of
undisclosed income or on the basis of the seized papers or document. The
disclosure so made was also not based on any valuables. He further held that since
the assessee has already declared a sum of INR 34,000,000 and have paid the tax
thereon along with the cash seized of Rs 212250/ at the time of search.
Therefore, he held that only on the basis of the presumption that large-scale land
dealing was going on cannot be made the basis for addition. According to him the
learned assessing officer should have ascertain the investment by way of further
inquiries in this regard. As there is no incriminating evidences was found against
the assessee which could suggest to show that the lender willing to pay as he
deleted the above addition of INR 11,000,000 in the hands of the assessee and
rupees one crore each in the hands of his sons.
5. The learned AO aggrieved with the order of the learned CIT capital has preferred
this appeal before us.
6. Before the commencement of the argument by the learned departmental
representative, the learned authorised representative filed a petition under rule 27
of the income tax appellate tribunal rules to support the finding of the learned CIT
A on legal grounds. It was the argument of the learned authorised representative
that assessment is passed u/s 143 (3) of the income tax act and the jurisdictional
notice u/s 143 (2) was issued on 13/11/2014 when return was filed by the assessee
on 30/7/2013 and last date for issue of notice u/s 143 (2) in the present facts would
be only up to 30/9/2014. Therefore the impugned notice issued beyond that
particular time limit makes the assessment framed under section 143 (3) as void ab
initio. For this proposition, the learned authorised representative relied upon the
plethora of judicial precedents.
7. Apparently as per para number 2 of the assessment order it is apparent that the
assessee has filed its return of income on 30/7/2013 whereas the notice u/s 143 (2)
of the act was issued to the assessee on 13/11/2014. There is no mention in the
assessment order of issue of any notice u/s 143 (2) of the act prior to the date i.e.
13/11/2014 prior to 30/9/2014. Therefore the learned CIT A was directed to
submit whether any such notice was issued to the assessee prior to 30/9/2014 u/s
143 (2) of the income tax act. For this purpose, the time was granted of 15 days.
However till to date, no information is supplied.
8. At the time of dictation of the order it was found that this is the appeal filed by the
revenue in all the assessee where the addition contested is of INR 11,000,000 in
the hands of the assessee Shri Gulab Chand Ladhani and Rs 1,00,00,000 in the
hands of his 2 sons. Therefore, the impugned tax effect involves in all these three
appeals is less than the prescribed limit for filing of the appeal before the tribunal.
9. Now as these appeals are concerned, relief granted by the CIT(A) by way of
deletion of the above addition, tax effect involved would be less than 50.00
lakhs. This also apples to pending appeals.
10. Therefore, we are of the view that the present appeal of the Revenue falls within
the purview of the CBDT Instruction cited (supra). It is not disputed by the
Revenue that tax effect on the disputed addition is not more than 50 lakhs, and
therefore, keeping in view the above CBDT circular and provisions of section
268A of the Income Tax Act, we are of the view that the present appeal of the
Revenue deserves to be dismissed. It is dismissed.
11. However, it is observed that in case on re-verification at the end of the AO it can
be demonstrated that the tax; effect is more, or Revenue's case falls within the
ambit of exceptions provided in the Circular, then the Department will be at liberty
to approach the Tribunal for recall of this order. Such application should be filed
within the time period prescribed in the Act. In view of the above, the appeal of the
Revenue is dismissed due to low tax effect.
12. In the result, all these three appeals of the Revenue are dismissed due to low tax
effect.
Order pronounced in the open court on 07/10/2019.
-Sd/- -Sd/-
(K N CHARY ) (PRASHANT MAHARISHI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 07/10/2019
A K Keot
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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