TaxTMI 
TaxTMI 
2018 (1) TMI 1616
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....l the 11 appeals which merely support the 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.....
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....mpany 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. 10.29 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 ex....
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....ioner 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." 8. (a) The order of the CIT(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....
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....ryan Group. Pursuance to our letters deated 24.04.2012, 14.05.2012, 28.05.2012 abd 11.06.2012 we are hereby submitting a summary of additional income offered till date vide Annexure-A, It may be noted that all additional income offered for taxation in terms of seized documents, has been included in break up given vide our various letters referred to 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 Solarik....
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....nted; either wholly or partly, by way of any money, bullion or jewellery or other valuable article or thing found during the course of search in the books of account or other documents maintained in the normal course relating to the assessment year or otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search, I am satisfied that the provisions of 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 delete....
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....ed. (ix) That on the basis of same offer letter whole group has disclosed Additional Income in different entities. On account of afore stated purported "Reasons" the Ld AO rejected the contention of the Appellant raised vide his letter dated 20.3.2015 and added the amount of Rs. 1029.48 lacs and Rs. 3.20 Crs as Income from undisclosed sources in the hands of the Appellant in AY 2012-13 and 2013-14 respectively. 7. Findings of the Assessing Officer The Ld Assessing Officer, in para 5 pages 2 to 5 of his assessment order has mentioned 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 i....
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....the time of making the initial offer of disclosing additional income of Rs. 150 crores the Appellants had very much included the issue of waiver of Loan by Lehman Bros as part of the total offer. Since the nature, head of income, the document on the basis of which such income was offered and the purported manner in which such income was earned remained still to be finally settled, the Appellants had stated the Head of Income as "Income from other Sources/ Undisclosed Income/ Undisclosed Investments. " (vii) This is not an afterthought because the amount of Loan written-off was Rs. 86 crores and precisely Rs. 86 crores had been included 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 o....
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....vs. Ch. Atchiah * 238 ITR 461 (SC) UOI vs. Banwari Lai Aggarwal 245 ITR 102 (AT) (Chd) Baldev Krishan Kapoor vs. ACIT 255 ITR 69 (AT) ACIT v Satya Narain Aggarwal 278 ITR 454 (All) CIT vs. Radha Kishan Goel Finding 9. I have considered the written submissions of the appellant, case laws and have gone through the assessment order passed u/s 143(3) r.w.s. 153A of the Act. I have also examined the submissions of the ARs regarding verification of assessment records, which were requisitioned from the AO and verified during the course of appeal proceedings. It is seen that the offer of declaring additional income of Rs. 10,29,48,000/- (A.Y. 2012-13) and Rs. 3,20,00,000/- (201314) was given on behalf of the 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 ta....
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....herefore, aggrieved with the order of the ld CIT (A) revenue has preferred this appeal. The revenue submitted written submission on that issue wherein, after stating reasons given by the ld AO and CIT(A), she relied on several decision :- "The Revenue is aggrieved by the order of the CIT(A) who has deleted an addition of Rs. 11.90 cr (A.Y 2012-13) and Rs. 5.00 cr (A.Y 2013-14) made on account of retraction of additional income disclosed in a statement under section 132(4). The CIT(A) has wrongly deleted the addition accepting the submission of the assessee during the course of appellate proceedings without offering an opportunity to the AO to counter or cross-examine. The CIT(A) also ignored the fact that the issue of disclosure of additional income pertains to A.Y 2012-13 & 2013-14 and 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 ....
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....crores and I along with my brothers & Capt K.S Solanki 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 loan) Capt RS Sindhu 1684.08 Sh. Vir Sen Sindhu 1905.18 Sh. Vrit Pal Sindhu 1690.00 Sh.Satya pal Sindhu 1390.3 Sh. Dev Suman Sindhu 1349.48 Capt K S Solanki 630.50 Total 8649.57 * The assessee submitted that during post search proceedings, the group has taken legal advice regarding waiver of loan of Lehman Brothers and it has been advised that the same is not taxable in the hands of any individual or group since: The waiver of USD 18.70 millions of Loan of Lehman Brothers is not taxable in the hands of above individuals. Further, the same is also not taxable in the hand of M/s Cellcap Securities Ltd. in FY 2009-10. Since the investment has not been sold during FY 2009-10, this waiver has been credited to 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 offe....
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.... and the Case Laws cited by the ARs clearly establish that mere letter given during search proceedings alone cannot be the basis of making addition. Such admission/ letter should be supported by incriminating seized material/ documents. In the instant case, the AO has not brought on record any material/ evidence in support of this addition. The CIT(A) has deleted the addition without considering the following: [A] Evidence to be produced by assessee before AO to substantiate claim. No such evidence produced before AO. The AO based on statement under section 132(4) required the assessee to explain why additional income disclosed under section 132(4) was not reflected in return of income and why taxes were not paid on such disclosed income.  Apex Court in the case of Keshav Mills & CO 56 ITR 365 (SC) has held so.  Section 114(g) of the Indian Evidence Act sates that: Central Government Act Section 114(g) in The Indian Evidence Act, 1872 (g) That evidence which could be and is not produced would, if produced, be unfavorable to the person who withholds it; A perusal of the statement of disc....
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....urt had also not been drawn to any material on record to establish that any attempt was made on behalf of the appellant to prove the allegation of inducement, threat or coercion through the witnesses. Having examined the impugned orders rendered by the Tribunal with the reasonings in support of its finding against the complaint of threat, inducement or coercion, no good and sufficient reason was found to differ from it. In the facts and circumstances of the case, having regard to the materials on record, the appellant had failed to establish that the statements of its partner had been recorded in the course of the search by using coercion, threat or inducement. Hence, the contentions advanced by the appellant in that regard were dismissed and the conclusion of the Tribunal on that count was affirmed." [Para 9] 6. Rai Hans Towers (P.) Ltd. Vs CIT (56 taxmann.com 67. 230 Taxman 567, 373 ITR SM (Copy Enclosed) where Hon'ble Delhi High Court held that where assessee had not offered any satisfactory explanation regarding surrendered amount being not bona fide and it was also not borne out in any contentions raised before lower authorities, additions so made after a....
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.... expenditure. The CIT(A) has accepted the submissions of the assessee at face value and not made any fresh inquiry or verifications in all the cases of this group. The order of CIT(A) to that extent are non-speaking orders. (Ref ACIT vs Shukla /& Bros (SC in SLP 4666 of 2009 dated 15.04.2010) In the light of the written/oral submissions the issue may be decided in favour of Revenue." 12. She further submitted that the order of the ld CIT (A) shows non application of mind. She further referred to the consolidated paper book of 104 pages submitted by the assessee referring of statement of Shri Rudra Sen Sindhu and letter dated 24.04.2012 written to Addll. Director of Income Tax wherein, disclosure of Rs. 150 crores was made. At that particular time it was submitted by Shri RS Sindhu that he will submit the break up persons, entities, Assessment Year and heads of income where these additional income is to be booked. She further referred to letter dated 11.06.2012 submitted by the Shri RS Sindhu wherein with respect to he has mentioned post search proceedings group has taken legal advice regarding waiver of loan of layman brothers and he has been advised that such ....
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..... Certain cash receipts and payment were found recorded in some of the seized documents and on enquiry, Capt RS Sindhu, has accepted the same to be unrecorded. 2. Subsequent to the above, the Group, vide letter dated 24.04.2012 offered an adhoc estimated additional income of Rs. 150 crores on tentative basis (Copy of Letter dated 24.04.2012 is attached as page 23-24 of the paper book). The said offer was made in order to cover the errors or mistakes in the records of the business owned and controlled by varied/diverse group units. They were also made to cover any discrepancies arising out of seized documents, jewellery, cash etc. 3. Next, the Assessee, vide letter dated 11.06.2012 submitted the breakup of the Rs. 150 crores which was offered as the Additional Income. The names of the various Individuals under whose name and under which A.Ys the Additional income was offered was all charted out vide Annexure A to the said Letter. However, since the nature, head of income, the document on the basis of which such income was offered and the purported manner in which such income was earned remained still to be finally settled, the Assessee had in the said lett....
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....us the group tentatively offered for tax. the additional income of Rs. 86 crores on account of waiver of loan of Lehman Bros as part of total additional income of Rs. 150 crores. 4.3 Further, it is stated, as was also stated in the above letter, that during post search proceedings, after the advise by the Investigation Wing, a legal advise regarding the taxability of the loan waiver was taken by the assessee group. In the said advice it is opined that the Waiver of Loan was not taxable in the hands of any individual or group since:- (Copy of said Legal Opinion dated 15.05.2012 is attached as pages 33-36 of the paper book) The waiver of USD 18.70 millions of loan of Lehman Brothers is not taxable in the hands of above individuals. Further, the same is also not taxable in the hand of M/s Cellcap Securities Limited in F.Y. 2009-10. Since the investment has not been sold during FY 2009-10, this waiver has been credited to capital reserve, to be adjusted against the investment at the time of disposal of Investment. CSL is a BVI resident company, both in form and substance and also in view of the commercial objective for which it was set up. CSL is, thus,....
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....etter dated 11.06.2012 excluding however Rs. 86 crores relating to the waiver of loan of Lehman Bros as was also duly submitted by Capt. R.S. Sindhu vide his second letter dated 11.06.2012 that the group would take the 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 Act. 7. Pursuant to the above returns, summons u/s 131 of the Act were issued by the ld AO on 09.02.2015 for not offering Rs. 86 crores in ITRs of the individuals promoters. The summons were issued to Sh. Vir Sen Sindhu. Sh. Vrit Pal Sindhu, Sh. Dev Suman Sindhu and Sh. Ashok Mrig. Hearings pursuant to summons were made on 26.02.2015, wherein the statement of Sh. Dev Suman Sindhu and Sh. Vir Sen Sindhu were recorded. It was submitted and explained by them that the said disclosure of Rs. 86 crores was made under the erroneous impression that the waiver of loan of Lehman Bros was taxable in the hands of promoters. It was stated that subsequently, legal opinion was obtained and the group was advised that the same was in the nature of capital receipt and therefore not taxable. Further it was submitted that the....
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....the subsequent Cross Objection was filed. SUBMISSION OF THE ASSESSEE: 1. Based on all the above detailed facts of the case of the Assesee, on the basis of the allegations made vide the grounds raised by the department, it is submitted before you Honors that the first ground in connection with the said addition, that the assessee in its statement u/s 132(4) had 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 was an afterthought is absolutely incorrect and not based on proper appreciation of the casts of the case of the assessee. 1.1. With respect to the above, it is submitted that that the issue of taxability of waiver of loan of LBCCA in CSL was raised by Investigation Wing during the search proceedings itself and it was advised by the department that the group should disclose Rs. 86 crores on that account. Accordingly the group offered additional income of Rs. 150 crores including Rs. 86 crores on account of waiver of loan. This fact is evident from second letter filed by Capt. R.S. Sindhu on 11.06.2012 wherein it has clearly been mentioned by the Assessee t....
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....d 11/06/2012 is dated 15.05.2012, which further reconfirms that the issue of the Rs. 86 crores waiver of loan was deliberated upon and discussed even before the actual disclosure of any Additional Income by the Assessee group. This also confirms the fact which was pointed out by the Asssee that the issue of the Rs. 86 crore was discussed also in the search proceedings. 1.4. Thus, from all the above, it stands proved that the disclosure of the Rs. 86 crores was not at all an afterthought. 2. Next it is seen that the Department has alleged that the issue of waiver of loan by M/s Lehman Brothers pertained to the AY 2010-11 whereas the issue of disclosure of additional income pertained to AY 2012-13 and AY 2013-14 and therefore the same could not be linked. With respect to the above, firstly the assessee would like to submit that the reason for disclosing the waiver of loan in Assessment Year 2012-13 and Assessment Year 2013-14 was to avail the benefit of non levy of penalty u/s 271AAA. The same was mentioned in the letter dated 13.07.2012, filed by the AR of the assessee. Secondly it is submitted that the waiver of loan by Lehman Bros, is a ca....
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....erefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidence/ materials gathered during the course search/ survey operations or thereafter while framing the relevant assessment orders. Yours Faithfully Sd/- (S. R. Mahapatra] Under Secretary (Inv. II) GovernmertTdflndia Ministry of Finance Department of Revenue Central Board of Direct Taxes Room No. 254, North Block New Delhi, the 18th December, 2014 To 1. All Principal Chief Commissioners of Income Tax 2. All Chief Commissioners of Income Tax 3. All Directors General of Income Tax (Inv.) 4. Director General....
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....corded u s 132(4) in detail. The same is presented here-under for your ready reference:- "In our considered view, no addition can be made merely on the basis of surrender without existence of any corroborative evidence found against the assessee. For this propositions, reliance is placed on the following case law "a. Kailashben Mangarlal Chokshi Vs CIT (2008) 174 Taxmann 466 (Guj.) / (2008) 14 DTR 257 (Guj.) Merely on the basis admission, the assessee could not have been subjected to additions, unless and until some corroborative evidence was found in support of such admission. Further statement recorded at such odd hours (at midnight) could not be considered to be voluntary statement, it was subsequently retracted and necessary evidence was led contrary to such admission. Addition was deleted. b. Arun Kumar Bhansali Vs DCIT (2006) 10 SOT 46 (Bang) (URO) Block period 1990-91 to 1999-2000 - Whether while computing undisclosed income of assessee, Assessing Officer should take cognizance of such correct income as depicted in books of account as well as in seized material, and should not adopt a figure merely as per admission of assessee - Held, yes. ....
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....orrect on facts or in law or having being obtained by threat or coercion, the same shall be considered on the basis of following position as per the above cited judicial precedents:- * Statement recorded at the time of search cannot be used as an evidence against the assessee until and unless the same is supported by any other incriminating material discovered in the course of search. * Further the statement if retracted the same cannot be used as an evidence against the assessee until and unless there are strong materials on record to prove other-wise. 4.3 The above discussion clearly brings out that a statement recorded u/s 132(4) of the Income Tax Act, 1961, if retracted, cannot be used as evidence against the assessee until and unless the same was supported by any incriminating material discovered in the course of search. Therefore the Ld. AO should have pointed out atleast some incriminating material that could have any link with the undisclosed income of Rs. 86 crores assessed by him. Thus the allegation made by the department is without any evidence based on mere presumptions, conjectures and surmises." 14. The ld AR s....
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....followed at the time of the passing order. In nutshell, he submitted that Rs. 86 crores if chargeable to tax at all because of waiver of loan of Lehman brothers in Cellcap Securities who has taken such loan, shall be chargeable into the hands of that company only and not in the hands of individual assesses. He further submitted that even if there is admission by the assessee but admission is found to be erroneous it cannot form basis for an assessment. He submitted that it is always open for the assessee to demonstrate and satisfy that a particular income is not chargeable to tax in his hands but is offered under an erroneous impression of law. He relied heavily on the decision of Hon'ble Allahabad High Court in Abdul Qayume Vs. CIT for above proposition. He further submitted that as it is evident from the statement of Shri R. S. Sindhu where the details of loan of Lehman Brothers and its waiver is mentioned therefore, it cannot be said that it is an afterthought. He submitted that based on the statement as well as the letter dated 11.06.2012 if read together clearly shows that a disclosure of Rs. 150 crores includes Rs. 86 crores of Lehman Brothers loan waiver. He stated that exce....
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....nal income of Rs. 150 crores and promised to pay the amount of tax subject to no levy of interest, penalty or prosecution. It was further stated that he would submit the break-up of person and entities and Assessment Years wherein such disclosure is to be booked after going through the relevant records and documents. Further, on 11.06.2012 the assessee addressed another letter wherein, the break-up of total disclosure of Rs. 150 crores was given as per annexure A to the Assistant Director of Income Tax wherein, the disclosure was bifurcated in 13 assessees and starting from Assessment Year 2007-08 to AY 2013-14. The disclosure was made as income from other sources from undisclosed income and undisclosed investment. Vide letter dated 11.06.2012 referring to letter dated 24.04.2012, 14.05.2012 and 11.06.2012, it was submitted that at the time of search and during the post search proceedings the taxability of waiver of loan of Lehman Brothers Commercial Corporation Asia Ltd in Cellcap Securities Ltd was raised by the Investigation Wing and it was advised by the department that the group should disclose Rs. 86 crores on that account. it was further stated that accordingly, group disclo....
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....150 crores. On 11.06.2012, he gave the breakup of the respective assesses. Further on 11.06.2012 the assessee informed that out of above disclosure of Rs. 150 crores Rs. 86 crores pertains to the issue of taxability of waiver of loan of Lehman Brothers Commercial Corporation Asia Ltd in Cellcap Securities Ltd which is a BVI Company and therefore, the above is not taxable in India. Hence, it would not be shown in the individual hand but it would be tested while filing 153A return in case of Cellcap Securities Ltd only. The above letter was addressed to the Asstt. Director of Income Tax (Investigation), New Delhi. The opinion of the lawyer also shows that the above income is not taxable in the hands of Cellcap Securities also. It is undisputed that the impact of waiver of loan of Lehman Brothers would be in the hands of M/s. Cellcap Securities Ltd only. Such fact were also scrutinized by the revenue by reopening the cases of M/s. Cellcap Securities Ltd where the cases were reopened by issue of notice u/s 147 from assessment years 2008-09 to 2014-15. Subsequently, the assessment orders for all these years were passed u/s 143(3) of the Act read with Section 147 of the Act holding as un....
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.... the hands of Cellcap Securities. Further, though waiver happened to be in Assessment Year 2010-11, whereas the disclosure was made by assessee in Assessment Year 201213 and 2013-14 cannot be the basis for making the addition because as such there is no material available to tax anything else other than what is owned by the assessee. In absence of any positive material, mere the confessional statement which is corrected/ retracted with plausible explanation, cannot be a basis for making an addition when it is retracted with evidence. The instruction issued by CBDT also shows that disclosure in statement u/s 132(4) of the Act if not backed by credible evidence would be difficult to sustain. The board has further stated that need to focus on gathering the evidences during search should be made so that such disclosure become sustainable. Admittedly, in the above disclosure there is no evidence is available to sustain the above addition. The ld CIT (A) has deleted the above addition holding that there was a linkage of waiver of loan to the additional income of Rs. 150 crores offered initially. She further held that revenue has also tested the taxability of the above sum in the hands of....
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.... of contrary evidence and explanation as to why such statement was not reliable. In the present case, the assessee has shown the amount not taxable in India at all. Further, the reliance on Pr. CIT Vs. Avinsash kumar Setia ( Supra) the Hon'ble Delhi High Court held that when the assessee has surrendered income by ways of declaration and withdrew the same after two years without any satisfactory explanation such retraction could not be bonafide. In the present case assessee disclosed Rs. 150 crores and immediately after that retracted Rs. 86 crores based on legal advise that above sum is not chargeable to tax in India. In view of this the decision relied upon by the revenue cannot help its case. Furthermore, the Hon'ble Allahabad High Court in 184 ITR 404 has held that erroneous admission by the assessee cannot be a foundation for the assessment whereas it was offered under erroneous impression or misconception of law. It is always possible for assessee to demonstrate and satisfy the authorities that particular income was not taxable and it was offered under erroneous impression. In the present case before us the revenue also could not bring forth any material to show that d....
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.... supporting evidence was furnished by the appellant and his family members is factually incorrect as they had furnished the evidence during post search enquiries as well as during assessment proceedings. 14.3 In the case of Sh. Rudra Sen Sindhu also it is seen that he had furnished before the Investigation Wing as well as the Assessing Officer, copy of a wealth tax return for A.Y. 2011-12 which was filed prior to the date of search, copies of bank statements and working of cash in hand on 12.4.2012 for himself and his wife Smt. Saroj Sindhu based on the position of cash in hand as on 1.4.2011 as shown in WT Return and as modified by withdrawals from bank and other transaction upto the date of search. Thus, the cash in hand found at the residence of Sh. Rudra Sen Sindhu stands explained. In view of this, the addition of Rs. 40,00,000/- in the case of Sh. Rudra Sen Sindhu for the A.Y.2013-14 is deleted." 20. The ld CIT DR vehemently relied on the order of the ld Assessing Officer. 21. The ld AR relied upon the order of the ld CIT(A) and further submission was made which is as under :- "II. ADDITION MADE U/S 69A OF THE ACT AS UNEXPLAINED CASH (i) Sh. D....
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....indhu 4,72,749.12 Mrs. Saroj Sindhu (Retained with Maj Satya Pal Sindhu) 24,00,000.00 Total 1,03,82,601.98 2.1. The assessees along with their family members had also submitted various documents such as Wealth Tax Return, bank statements, computation of cash in hand as on 12.04.2012 and other documentary evidences corroborating other cash transaction as evidences in support of their claim for position of cash in hand as on 12.04.2012. 3. Next, in response to the questionnaire issued by the ACIT on 26.12.2014, the Assessee filed another letter on 19.03.2015 which was annexed with the copy of submission dated 10.07.2012 along with entire supporting evidences. (Copy of said letter is attached in pages 50- 79 of the paper book). 4. However the Ld. AO neither considered nor rejected the evidence submitted by the assessees Sh. Dev Suman Sindhu, Sh Vrit Pal Sindhu and Sh. Satya Pal Sindhu in his assessment order dated 30.03.2015/31.03.2015 and made following additions in their respective hands on account of unexplained cash in hand u/s 69A of the Act:- 1. Sh. Satya Pal Sindhu Rs. 46,73,000 2. Sh. Vrit Pal Sindhu Rs. 2,05,50....
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....ssing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year." 2.1. In view of the above section it is humbly submitted that Section 69A of the Act can only be invoked in two cases: (i) where the assessee offers no explanation about the nature and source of the money, or (ii) where explanation offered by the Assessee is not, in the opinion of the Assessing Officer, satisfactory. 3. With respect to point no. (i), it is submitted that all the individual assessees had submitted before the Investigation Wing full working of cash in hand of various family members as on 12.04.2012. The position of cash in hand was arrived at after taking into account the position of cash in hand as at 31.03.2011 as declared in the Computation of Net Wealth filed along with Wealth tax return of the assessee and other family members. These Wealth Tax Returns were filed for Assessment Year 2011-12 and 28.12.211 which was nearly 4 months prior to the date of search. This position of cash in hand was increased/ decreased/ modified in accordance with t....
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....planation 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 Arundeep Singh Prop vs. JCIT (2016) 48 CCH 272, wherein it was held that where explanation of assessee was reasonable and there was nothing on record to show that amount was utilized by assessee in any other manner than one which was represented by assessee, onus would lie on department to show that explanation of assessee should not be accepted and in absence of same, assessee's appeal was justified to be allowed". 6. In view of the above, it is submitted that CIT(A) has rightly deleted the addition made by Assessing Officer u/s 69A of the I.T. Act as unexplained cash." 22. We have carefully considered the rival contentions. During the course of search a sum of Rs. 5060986/- was found from Smt Parmeshwari Devi for which the assessee has submitted the cash flow statement in her hand wherein, the above sum was explained. The same was also supported by the return of income as well as the bank statement. It was further stated that the above sum were received as an advance for sale of land.....
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.... * 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 the case of the above assessee, it would be pertinent to note that the department placing reliance on the judgement of Hon'ble Delhi High Court in case of The Commissioner of Income Tax-II vs Jansampark Advertising and Marketing (P) Ltd (Copy of the said judgement is enclosed as pages 92-104 of the paper book) has raised the ground "that the Commissioner of Income Tax (Appeal) 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". 2. The decision of the said judgement in the case of The Commissioner of Income Tax-II vs Jansampark Advertising and Marketing (P) Ltd (375ITR 373) Del H.C. is quoted as under: The objective behind section 68 of the Income-tax Act, 1961, is to hold the assessee accountable for each ....
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....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 were returned undelivered with the postal remarks "left/no such person ". In this fact situation, the Assessins Officer called upon the assessee to produce the parties/persons in question which direction was not complied with. The Assessing Officer, thus, treated the amount of Rs. 71 lakhs as unexplained credit in terms of the provisions contained in section 68 . The Commissioner (Appeals) deleted the addition and this was upheld by the Tribunal. On appeal to the High Court: Held, allowing the appeal, that the Assessing Officer might have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But the Commissioner (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions ma....
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....tion 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 admission made by Capt. R.S. Sindhu in his statement made under oath u/s 132(4) which was subsequently retracted. * Addition made u/s 69A of the Act as unexplained cash on account of cash found during search from the premises of the assessee. 5. Thus the ground taken by the department that the CIT(A) has erred in law and on facts by ignoring judgement of Hon'ble Delhi High Court in case of The Commissioner of Income Tax-II vs Jansampark Advertising and Marketing (P) Ltd, is not correct and bad in law. 26. We have carefully considered the rival contentions and perused the orders of the lower authorities. In the present case the additions are involved based on statement u/s 132 (4) of the act as well as cash found during....
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....an 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 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." 29. The assessee has raised the following ground of appeal in CO No. 178/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. 119000000/- 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. 11.90 crores as the amount in question was waiver of loan in the case of Cel....
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....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. 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 t....
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....d 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 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.T(A) is correct in law and on facts of the case, and in accordance with the provisions of the Act." 32. 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. The....
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....de 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 create an income in his hand chargeable to tax under the income tax act." 35. In 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 foray 2012-13 is supportive in nature. Therefore for the reasons given by us in Appeals of revenue in case of Mr. Dev Suman Sidhu, we dismiss the appea....
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....s 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 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....
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.... 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 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 c....
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....r 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 do with the appellant. 3. That the Ld. C.I.....
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....come Tax (Appeals) has erred 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 ....
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....or 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 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 o....
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....f 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. 10.70 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. 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 resp....
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....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. 7. 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." 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 impugn....