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DCIT, Central Circle-2, New Delhi Versus Daulat Ram Arora

2015 (8) TMI 757 - ITAT DELHI

Undisclosed investment - Held that:- AO in the present proceedings had incorrectly proceeded to re-consider the issues which already stood concluded by the Co-ordinate Bench. It is trite law that in the remand proceedings, the AO cannot travel beyond the directions given in the remand. Accordingly on a consideration of the same, we are of the view that the following finding of the CIT(A on facts deserves to be upheld which warrants the dismissal of the appeal of the Revenue:-

“With re .....

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essee. - I.T (SS).No.-8/Del/2013, C.O.-144/Del/2013 - Dated:- 14-8-2015 - SINGH AND SH. J.S.REDDY, JJ. For The Appellant : Sh. Ravi Jain, CIT DR For The Respondent : Sh.Rohit Jain, Adv. ORDER PER DIVA SINGH, JM The present appeal has been filed by the Revenue assailing the correctness of the order dated 07.01.2013 of CIT(A)-III, New Delhi pertaining to block period 1990-1991 to 2000-2001 on the following grounds:- 1. On the facts and in the circumstances of the case, the CIT(A has erred in delet .....

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facts and in law in confirming the action of the assessing officer in making aforesaid addition without appreciating that Tribunal vide order dated 06.06.2008 in IT(SS)A No.-218/Del/2004 had held that said investment cannot be regarded as undisclosed income . 1.2. That the CIT(A) erred on facts and in law in confirming the action of the assessing officer in making aforesaid addition without appreciating that said addition as without jurisdiction being violative of clear directions of the Tribun .....

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d addition without appreciating that onus was on the assessing officer to establish that aforesaid investment represent undisclosed income under chapter XIV-B of the Income Tax Act, 1961. 2. Right at the outset, ld.AR submitted that the issues are covered by the order of the ITAT in assessee s own case passed in the first round. Thus with the consent of the Ld. CIT DR the Ld. AR was required to make out his case which the department can address. In the said background, Ld. AR referring to the ch .....

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by a detailed finding. Inviting attention to the same, it was submitted that the tax authorities have misunderstood the directions given in the remand in para 7 by the Tribunal. It was submitted that the remand was relatable only to the issue of ₹ 2,00,952/- and not the entire issue as wrongly misunderstood. Referring to the orders of the authorities below in the first round which travelled up to the ITAT and the orders of the AO and the CIT(A) in the second round it was his submission tha .....

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inancial years 1979-80 and 1983-84 [Departmental appeal]; (c) FC of ₹ 4,99,304 in the name of others [Departmental appeal]. 4. Addressing the amount of ₹ 2,00,952/-, it was submitted that this issue had travelled to the ITAT in the first round and the issue was remanded to the AO who has proceeded to make the addition of the said amount. The said addition was not agitated further by the assessee and the remand was only on this addition by the ITAT it was submitted. 4.1. Addressing th .....

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it was submitted that the ITAT in para 5 concluded that the said amount also could not be taxed in the hands of the assessee as the assessee s name was not appearing therein. Accordingly it was his submission that the issues raised by the Revenue in the present appeal deserve to be dismissed as the AO lacked the jurisdiction to make the addition of the above stated two amount in the second round as the issues stood already concluded by the ITAT. 5. Addressing the issue arising in the assessee s .....

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ed the chart filed and elaborated as to why the issue is stated to be covered in favour of the assessee, the arguments were first advanced by the Ld.AR. In the afore-mentioned factual background as canvassed by the Ld.AR, the Ld.CIT DR on a perusal of the material available on record and on a reading of the order of the Tribunal did not raise any objections either on facts or on law to canvass a contrary view and placed reliance upon the assessment order. In the face of the departmental stand Ld .....

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ed to the by the tax authorities and also in the proceedings before us. Copy of the said order it is seen is placed at pages 15-21 of the Paper Book. Copy of the original assessment order passed in the first round dated 28.02.2002 been placed at pages 1 to 4 of the Paper Book and the order dated 31.03.2004 of the CIT(A) is at pages 5-14 of the Paper Book. The impugned order and the order of the AO pursuant to the remand have also been taken into consideration. On a consideration of the same, it .....

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e following chart would show how the undisclosed income has been arrived at by the Assessing Officer at ₹ 4,99,000/-:- FY 1989-90 to FY 1997-98 FY 1998-99 Total Investments determined by AO 708,950 324,000 345,000 1,377,950 Less:-Credit allowed by AO 705,635 125,000 125,000 Balance Undisclosed income assessed 3,315 Nil 1,99,000 1,99,000 220,000 220,000 419,000 Undisclosed income on account of investment 419,000 Add:-Cash found 80,000 499,000 Undisclosed income assessed by AO The block asse .....

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the balance towards two instalments of the construction cost. In the letter, certain notings were found to have been made showing total investment of ₹ 7,73,000/- between 2.12.1996 and 18.1.1999. The Assessing Officer would appear to have taken a part of the investment as not disclosed by the assessee. It is however contended on behalf of the assessee that all these investments have been made out of the bank account of the assessee in which his salary income is credited. In addition, the A .....

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itted that they cannot be tackled in the block assessment. That leaves us with the balance of ₹ 4,99,304/- which represent fixed deposits in the name of others, the assessee's name not figuring therein. It is the assessee's contention that this amount cannot be added in the block assessment since the fixed deposits are not in the name of the assessee either singly or jointly and in a block assessment, no inference is possible that the deposits are of the monies belonging to the ass .....

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the Hon'ble Delhi High Court in the case of CIT Vs. Mrs. Kumkum Kohli (2005) 276 ITR 589 where it was held that if the assessee had paid advance tax for the amount in question prior to the search and the return filed later was accepted by the department and the amount is also reflected in the account books, it cannot be said that the amount represents undisclosed income. Reliance is also placed on the judgment of the Rajasthan High Court in CIT Vs. Ashok Taksali (2002) 124 Taxman 45 where i .....

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4. On the other hand, the learned CIT-DR submitted that the assessee is not absolved from the duty of filing the return of income merely because tax has been deducted from the salary. It was submitted that the statute says that mere non-filing of the return of income would amount to undisclosed income, whether tax has been deducted from the salary or not. He further contended that so far as the fixed deposit receipts in the name of others are concerned, they were seized from the assessee and fu .....

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t from the following finding of the Co-ordinate Bench:- 5. We have carefully considered the facts and the rival submissions. So far as the investments are concerned, we may first take up the fixed deposits a list of which is given at page 2 of the paper book filed by the assessee. It shows a total of ₹ 9,11,074/- (Out of this figure, only a sum of ₹ 2,00,952/- is in the name of the assessee, jointly with others. The assessee has to explain the same.) However, the fixed deposits amoun .....

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he department wants to infer that the monies were provided by the assessee and these persons in whose names the receipts stood were benamidars of the assessee, it is for the department to establish the allegation by cogent evidence. No such evidence has been brought on record. The evidence found viz., the fixed deposit receipts do not by themselves show that the monies were provided by the assessee. Therefore, the amount of ₹ 4,99,304/-should also be left out of consideration of the block .....

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ed to the assessee by the society. The bank's statements filed in the paper book from pages 22 to 33A show that these amounts were paid by cheques from the bank account in which the salary received by the assessee is credited. There are a few cash deposits in the bank account but they are not of substantial amounts so as to excite suspicion. In any case, no enquiry has been made into the source of the cash deposits and they have been accepted. The only impediment in the assessee's case a .....

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aper book). No returns appear to have been filed for the other years included in the block period. The only question is whether the non-filing of the returns in the above circumstances is relevant. In CIT Vs. Mrs. Kumkum Kohli (supra), the Tribunal had held that the assessee had paid advance tax on the income by way of capital gains for the assessment year 1995-96 and though the return of income was not filed before the date of the search the amount shown in the return cannot be considered as un .....

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m Gurbani - (2001) 249 ITR 501. Upholding the Tribunal's order and dismissing the appeal filed by the department on the ground that no substantial question of law arose, the Hon'ble Delhi High Court held as under:- "From the above facts appearing on record before us, it is clear that the finding of the Tribunal does not call for any interference by this court in exercise of jurisdiction under section 260A of the Act. The provisions of section 158B of the Act would not be attracted i .....

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essee had paid the advance tax and has also shown the figure in his accounts submitted before the Assessing Officer." A perusal of the judgment of the Bombay High Court (supra) shows that the Assessing Officer treated the income of three years 1993-94 to 1995-96 as undisclosed income in the block assessment since the assessee had not filed returns for those years before the date of search. The Tribunal found that the assessee's income from interest, salary and rent was reflected in the .....

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that the same has been refunded to the assessee, there was no question of holding that the income was undisclosed income and to tax it again in the block assessment after the search. The ratio of all these judgments to our humble minds appears to be that any income which has been disclosed to the income tax department, by being subjected to TDS or by paying advance tax cannot be considered as undisclosed income merely because no assessment has been made or no return was filed. The requirement th .....

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payments have been made by cheques to the Philips Cooperative Housing Society. The salary has been subjected to TDS and it has not been shown that the TDS was inadequate to meet the real tax liability. The cheques have been issued from a disclosed source of income. In such circumstances, it will be hyper-technical to hold that the investments in the housing society represented the assessee s undisclosed income. (emphasis provided) 11. In the light of these detailed findings, it is seen that the .....

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