Income Tax Appellate Tribunal - Delhi
Pawan Kumar Bansal , New Delhi vs Assessee on 30 September, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'E
'E' : NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
SHRI CHANDRA MOHAN GARG,
GARG, JUDICIAL MEMBER
ITA No.
No.5201/Del/2010
Assessment Year : 2007-
2007-08
Shri Pawan Kumar Bansal, Vs. Deputy Commissioner of
A-156, First Floor, Income Tax,
New Friends
Friends Colony, Circle-
Circle-16,
New Delhi - 110 019. New Delhi.
PAN : AAMPB1879C.
(Appellant) (Respondent)
ITA No.5375/Del/2010
No.5375/Del/2010
Assessment Year : 2007-
2007-08
Assistant Commissioner of Vs. Shri Pawan Kumar Bansal,
Income Tax, A-156, First Floor,
Central Circle
Circle-
rcle-16, New Friends Colony,
New Delhi. New Delhi - 110 019.
PAN : AAMPB1879C.
(Appellant) (Respondent)
ITA No.5374/Del/2010
No.5374/Del/2010
Assessment Year : 2007-
2007-08
Assistant Commissioner of Vs. Shri Mahesh Kumar Gupta,
Income Tax,
Tax, 85, Rajdhani Enclave,
Central Circle-
Circle-16, Delhi - 110 092.
New Delhi. PAN : AAAPG8231D.
(Appellant) (Respondent)
Assessees by : Dr. Ram Samujh, Advocate.
Revenue by : Shri Gunjan Prashad, CIT-DR.
ORDER
PER G.D. AGRAWAL, VP :
ITA Nos.5201/Del/2010 & 5375/Del/2010 - Cross appeals in the case ofShri Pawan Kumar Bansal :-
These cross appeals are directed against the order of learned CIT(A)-II, Delhi dated 23rd September, 2010 for the AY 2007-08.
2 ITA-5201/Del/2010 & 2 others
2. In assessee's appeal i.e. ITA No.5201/Del/2010, following grounds have been raised:-
"1. That on the facts and circumstances of the case, the ld.CIT(Appeals) had erred in law and on facts by not allowing the full relief for which appellant was legally entitled.
2. That on the facts and circumstances of the case, the ld.CIT(Appeals) had erred in law and on facts by upholding the addition of Rs.27.58 lacs (47.58-20 lacs disclosed) on adhoc basis by ignoring the fact that it was proved before him that in loose papers Annexures A-6 and 16 totaling to Rs.47.58 lacs no nature of payment and relation with appellant was mentioned.
3. That on the facts and circumstances of the case, the ld.CIT(Appeals) had erred in law as well as on facts by upholding the addition of Rs.27.58 lacs by ignoring the facts that it was proved before him that the dates of payments mentioned in loose papers of Annexures 6 and 16 were 13.5.2005, 12.5.2005, 10.5.2005 and 14.5.2005 which pertained to A.Y. 2006-07. Hence, the ld.CIT(Appeals) decision for upholding the addition of Rs.27.58 lacs based on such loose papers in A.Y. 2007- 08 is totally illegal.
4. The assessee prays leave to add, alter, amend, modify or delete all or any of the grounds of appeal on or before the date of hearing of appeal."
3. In the Revenue's appeal, i.e. ITA No.5375/Del/2010, following grounds have been raised:-
"1. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.3,07,00,000/- on account of undisclosed income admitted by Shri Pawan Kumar Bansal in his statement recorded during the course of search.
2. The CIT(A) has erred in law in deleting the addition of Rs.3,45,00,000/- made on protective basis in his hand on account of Shri Mahesh Kumar Gupta and also 3 ITA-5201/Del/2010 & 2 others deleted the addition of Rs.3,45,00,000/- made substantive in the hands of Shri Mahesh Kumar Gupta.
3. The CIT(A) has erred in law in not confirming the addition in any hands.
4. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts.
(b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal."
4. At the time of hearing before us, it is submitted by the learned CIT-DR that there was search and seizure operation under Section 132 of the Income-tax Act, 1961 in the case of M/s Capital Meter group of cases. The assessee belonged to the said group. The search had taken place at the assessee's premises on 26th June, 2006. That on 1st September, 2006, a letter was filed duly signed by the assessee in which an income of `7 crores was disclosed. Such letter is at page 59 of the paper book. The letter is on the letter head of the company in which assessee is a director. The letter filed by the assessee is a voluntary act by which the additional income of `7 crores was disclosed by the assessee. That in the case of a surrender by way of filing the letter, it cannot be claimed by the assessee that the surrender was obtained under coercion, pressure or inducement because the submission of the letter is purely a voluntary act of the assessee. That on 8th September, 2006, the statement of the assessee was recorded in which he reiterated the surrender made vide letter dated 1st September, 2006. Again, the statement was recorded on 12th September, 2006 in which again the assessee reiterated and affirmed the voluntary disclosure and also furnished the breakup of the disclosure in two names partly in the name of the assessee and partly in the case of Mahesh Kumar Gupta. Thus, the surrender of income was by voluntary filing of a letter and which was reaffirmed in two consecutive statements. The assessee and Shri Mahesh Kumar Gupta 4 ITA-5201/Del/2010 & 2 others filed the return of income. In the return of income, the assessee disclosed an additional income of only `20 lakhs which was in fact for unexplained cash. No additional income was disclosed by Shri Mahesh Kumar Gupta. No satisfactory explanation was given by the assessee for non-disclosure of the income as per surrender made. Therefore, the Assessing Officer made an addition of `3,35,00,000/-(`3,55,00,000 disclosed as per statement dated 12th September, 2006 minus `20,00,000/- disclosed in the return of income). The Assessing Officer also added `3,45,00,000/- on protective basis in the hands of the assessee for the income of `3,45,00,000/- disclosed by the assessee in the statement dated 12th September, 2006 in the name of Shri Mahesh Kumar Gupta. In the assessment of Shri Mahesh Kumar Gupta, the sum of `3,45,00,000/- was added on substantive basis. He submitted that the CIT(A), without properly considering the facts of the case and the legal position, sustained the addition at `27.58 lakhs being the income as per Annexure A-6 to A-16 found and seized at the time of search. Accordingly, he allowed the relief of `3,07,42,000/- to the assessee. He also deleted the addition of `3,45,00,000/- made in the hands of the assessee on protective basis. The addition made in the case of Shri Mahesh Kumar Gupta on substantive basis was also deleted by the CIT(A).
5. It is submitted by the learned CIT-DR that there was no formal retraction of the disclosure of the income by the assessee but impliedly, by not disclosing the income in the return of income, the disclosure was retracted. He submitted that the filing of the return was almost after two years of the surrender made by the assessee and, therefore, the retraction after such a huge time gap cannot be and should not be accepted as a proper retraction of the statement given at the time of search. In support of this contention, he relied upon the following decisions:-
5 ITA-5201/Del/2010 & 2 others
1. Carpenters Classics (Exim) (P.) Ltd. Vs. DCIT - [2007] 108 ITD 142 (Bang.).
2. DCIT, Circle-2(1) Vs. Bhogilal Mulchand - [2005] 96 ITD 344 (Ahd.).
3. Hiralal Maganlal & Co. Vs. DCIT - [2005] 96 ITD 113 (Mum.).
4. Greenview Restaurant Vs. ACIT - [2003] 263 ITR 169 (Gauhati).
5. V. Kunhambu and Sons Vs. CIT - [1996] 219 ITR 235 (Kerala).
6. MDLR Resorts (P) Ltd. & Ors. Vs. CIT & Ors. - [2014] 265 CTR (Del) 356.
6. He further submitted that the Revenue is not required to bring the evidence for corroborating the income surrendered by the assessee in the statement recorded at the time of search. He, therefore, submitted that the order of learned CIT(A) should be reversed and that of the Assessing Officer may be restored.
7. Learned counsel for the assessee, on the other hand, stated that the search had taken place at the assessee's premises on 26.07.2006 and the panchnama was drawn. However, the search was not completed and one bank locker was sealed. The department was not concluding the search and was pressurizing the assessee company to disclose huge income. That Shri Pawan Kumar Bansal in his capacity as CEO of Capital Power Systems Ltd. filed a letter dated 1st September, 2006 surrendering the additional income of `7 crores to avoid litigation and buy peace of mind subject to non-initiation of penalty proceedings or prosecution. Thereafter, the statement was recorded in which also, the assessee clarified that the income is being surrendered on behalf of Capital group of companies. In the final statement dated 12th September, 2006, the bifurcation of the income was given as Shri Pawan Kumar Bansal - `3,55,00,000/- and Shri Mahesh Kumar Gupta - `3,45,00,000/-. Thereafter, immediately on next day, the bank locker was opened and the search was formally 6 ITA-5201/Del/2010 & 2 others concluded. That though the assessee does not have any direct evidence of coercion or pressure for disclosure of income but the fact that the initial search took place on 26th July, 2006 and the same was not concluded till the assessee made the surrender of the income, it gives sufficient circumstantial evidence that there was pressure on the assessee to disclose the income. He further submitted that when the assessee consulted his counsel while filing the return of income, it came to the knowledge of the assessee that the surrender made by him on behalf of the company is not binding on him because it was neither a voluntary surrender of income by the assessee nor it was during the course of statement recorded under Section 132(4). Moreover, since the assessee was not carrying on any business in his individual capacity, there was no income belonging to the assessee. He, therefore, did not disclose any additional income in his return of income except the sum of `20 lakhs which was on account of cash found at the residence of Vikram Bansal amounting to `20 lakhs. He, therefore, submitted that the addition made by the Assessing Officer on the basis of statement dated 12th September, 2006 was rightly deleted by the CIT(A). To that extent, the order of learned CIT(A) should be sustained.
8. We have carefully considered the submissions of both the sides and perused relevant material placed before us. The undisputed facts are that there was search and seizure operation under Section 132 of the Act in the case of Capital Meter group. The assessee is a director and CEO of Capital Power Systems Ltd., one of the companies in Capital Meter group. It is stated by the learned counsel that substantially, the search was concluded the very day and panchnama was also drawn. That a restraint order was issued on the said day i.e. 26th July, 2006 in respect of locker No.133 maintained with State Bank of Patiala, New Friends Colony, New Delhi in the name of Smt. Madhuri Bansal. The said locker was opened on 13th September, 2006 and the 7 ITA-5201/Del/2010 & 2 others panchnama was drawn and restraint order was also vacated. That the surrender of `7 crores was made by a letter dated 1st September, 2006, copy of which is placed at page 59 of the assessee's paper book. Since the entire basis of the disputed addition before us is this letter dated 1st September, 2006, the same is reproduced below for ready reference:-
"Capital Power Systems Ltd.
Corporate Office & Works :
B-40, Sector-IV, Noida - 201301 (U.P.) India, Ph : 0120- 2542904/5/6/7 Fax : 0120-2520708 CPS/IT/General/2006-07 1st September, 2006 The Additional Director of Income Tax (Investigation), Unit-II, ARA Centre, Jhandewalan, New Delhi.
Sub : Surrender of Income.
Dear Sir, With reference to search on 26th & 27th July which is yet to be concluded at our various premises, we Capital Power Systems Limited hereby agree to voluntarily surrender Additional Income of Rs.7,00,00,000.00 (Rs. Seven Crores Only) to avoid litigation and buy peace of mind subject to non-initiation of penalty or prosecution or other coercive actions as per provisions of law, on behalf of the company, its Directors, Senior Executives, their spouse, family members and relatives including other companies, firms in which such persons are partners, directors or interested. The detailed letter and specific assessee-wise details shall be submitted to your goodself after going through seized material.
Thanking you, Yours truly, for Capital Power Systems Ltd.
Sd/-
(Pawan Kumar Bansal) C.E.O."
9. From the above letter, it is evident that the letter was written on the letter head of Capital Power Systems Ltd. In the body of the letter, it is mentioned "we Capital Power Systems Limited hereby agree to voluntarily surrender additional income of Rs.7,00,00,000/-". The letter 8 ITA-5201/Del/2010 & 2 others is signed by Shri Pawan Kumar Bansal as CEO of Capital Power Systems Ltd. Thus, the disclosure of `7 crores was by Capital Power Systems Ltd. and not by Shri Pawan Kumar Bansal in his individual capacity. That on 8th September, 2006, the statement of Shri Pawan Kumar Bansal was recorded. The entire statement is related to the disclosure of `7 crores, therefore, the same is reproduced below:-
"Q-1: Please identify yourself?
Ans. I Pawan Kumar Bansal S/o Sh. Nihal Chand Kejriwal R/o A-156, New Friends Colony, New Delhi.
Q-2: During the course of search proceedings in the Capital Group of cases on 26-7-2006, a number of incriminating documents/diaries/papers have been found and seized, which indicate that you have undisclosed income, which is not recorded in the regular book of a/cs. Do you want to offer any explanation regarding these documents and the transactions enumerated therein?
Ans. I have already filed a letter dated 1-9-06 vide, which I on behalf of the Capital Group of companies has voluntarily offered an additional income of Rs.7 (seven) crores. As the search proceedings in our group of cases are yet to be concluded as a number of restraints are yet to be lifted and this statement being recorded u/s 132(4) of the I.T. Act 1961, I would like to take the benefit of explanation 5 to section 271C and I once again reiterate my earlier statement made vide letter dated 1-9-06 and voluntarily offered an additional income of Rs.7 crore (seven crores) to avoid litigation and buy peace of mind subject to non initiation of penalty or prosecution or other coercive actions as per provision of law, on behalf of the company, its directors, senior executives, their spouse, family members and relatives including other companies, firm in which such persons are partners, directors or interested.
Q-3: Kindly give the assessee wise details of this disclosure?
Ans: The same will be provided after go through the seized material.
Q-4: Kindly give the source of generation of this Rs.7 crores of additional income?
9 ITA-5201/Del/2010 & 2 others Ans: The detailed explanation regarding the source of this additional income of Rs.7 crore will be submitted later on after going through the seized material. In general this additional income of Rs.7 crores have been generated through different transactions conducted outside the regular books of accounts.
Q-5: Do you want to say anything else?
Ans: No. The above statement has been given by me voluntarily out of my free will without any pressure, force, coercion, undue influence. I have read over the above statement and found that it is correctly recorded and I stand by the above statement."
10. From the above, it is evident that in response to question No.2, it has been stated by the assessee that Shri Pawan Kumar Bansal disclosed the income on behalf of Capital Group of companies. In response to question No.8, it was also mentioned that the details of the disclosure can be given by the assessee only after going through the seized material. The same was reiterated in response to question No.4 also. Thus, from the entire statement, it is evident that the disclosure was made by Shri Pawan Kumar Bansal for an on behalf of the Capital Group of companies due to undisclosed income as may be represented by the seized material. As per this statement also, the disclosure is not in the individual capacity of Shri Pawan Kumar Bansal. Again, the statement of Shri Pawan Kumar Bansal was recorded on 12th September, 2006. This statement is also reproduced below for ready reference:-
"Q-1: Please identify yourself?
Ans: I Pawan Kumar Bansal S/o Sh. Nihal Chand Kejriwal aged about 45 years and r/o A-156, New Friends Colony, New Delhi.
Q-2: During the course of search action u/s 132(1) of the I.T. Act 1961, on 26-7-2006, at your business as well as residential premises, a number of documents/loose papers etc. have been seized. These documents are being duly perused by you. You are hereby given an opportunity to describe and explain the contents pertaining to the undisclosed income of the group?
10 ITA-5201/Del/2010 & 2 others Ans: Yes, I have gone through very carefully all the seized papers and documents. I reiterate my earlier submission stated vide letter dated 1.9.2006 and the statement subsequently given u/s 132(4) on 8.9.06 and voluntarily after an additional income of Rs.7,00,00,000/- (Rs. Seven crores).
Q-3: Give the details of these additional income of Rs.7,00,00,000/- (Rs. Seven crores), i.e. the details of the source of this money and the details of its investment? Ans: This additional income of Rs.7 crores was generated in different years during the block period from undisclosed/or unaccounted dealings in various property transactions and the said income of Rs.7 crores has been earned by me and Sh. Mahesh Kumar Gupta (Director-Capital Power Systems Ltd.). The bifurcation is as under:-
Name Undisclosed income
1. Sh. Pawan Kumar Bansal Rs.3,55,000,00/-
2. Sh. Mahesh Kumar Gupta Rs.3,45,000,00/-
Total Rs.7,00,000,00/-
The above money of Rs.7 crores, received on account of undisclosed income from unaccounted property dealings have been invested in share capital/cash found. The investment have been made by me and Sh. Mahesh Kumar Gupta and the details are as follows:-
Name Undisclosed investment
1. Sh. Pawan Kumar Bansal A. Cash found at the residence of
Sh. Vikram Bansal amounting to
Rs.20,000,00/-.
B. Investment in share capital of
various companies amounting to
Rs.3,35,000,00/-
----------------------------------------------- Rs.3,55,000,00/-
2. Sh. Mahesh Kumar Gupta Investment in share capital of various companies amounting to Rs.3,45,000,00/-
-------------------------------------------------
Total Rs.3,45,000,00/-
Total of 1 and 2 = Rs.7,00,000,00/-
Q-4: Do you want to say anything else?
Ans: This statement given by me is final and I understand that
no penalty or prosecution proceedings against me and the group will be initiated in relation to the afore stated voluntarily disclosure of additional income of Rs.7 crores.
The above statement has been given by me voluntarily out of my free will without any pressure, force, coercion, undue influence. I have read over the above statement and found that it is correctly recorded and I stand by the above statement."
11 ITA-5201/Del/2010 & 2 others
11. In response to question No.2, Shri Pawan Kumar Bansal stated "I reiterate my earlier submission stated vide letter dated 1.9.2006 and the statement subsequently given u/s 132(4) on 8.9.06". In response to question No.3, he submitted that the additional income of several years was generated in different years in various property transactions and the said income of `7 crores has been earned by him and Shri Mahesh Kumar Gupta. The bifurcation is given at `3,55,00,000/- in the name of Shri Pawan Kumar Bansal and `3,45,00,000/- in the name of Shri Mahesh Kumar Gupta. Thus, the income in the individual capacity of Shri Pawan Kumar Bansal is disclosed for the first time by the statement dated 12th September, 2006. In this statement also, he does not say that the income of `3,55,00,000/- is the income of AY 2007-08 but says that it is the additional income of different years during the block period. Further, in paragraph 2, he had stated that he reiterated his earlier statement stated vide letter dated 1st September, 2006 and statement given on 8th September, 2006. Therefore, the cumulative effect of the letter dated 1.9.2006 and statements dated 8.9.2006 and 12.9.2006 is to be seen and whether as per the cumulative effect of all the above three documents can it be said that the undisclosed income of `7 crores is required to be assessed in the hands of the assessee i.e. Shri Pawan Kumar Bansal for AY 2007-08. As we have already stated that the original disclosure of income was by letter dated 1st September, 2006. From a perusal of the above letter, the only inference that can be drawn is that the income of `7 crores was disclosed by Capital Power Systems Ltd. In the first statement dated 8th September, 2006, Shri Pawan Kumar Bansal affirmed his letter dated 1st September, 2006 with the little modification that instead of declaring the entire income of `7 crores in the hands of Capital Power Systems Ltd., he stated that the disclosure of `7 crores was on behalf of Capital Group of companies. In another statement dated 12th September, 2006, he reiterated his letter dated 1st September, 2006.
12 ITA-5201/Del/2010 & 2 others However, while giving bifurcation, he disclosed the income partly in his hands and partly in the hands of Shri Mahesh Kumar Gupta. In our st opinion, after taking into account the letter dated 1 September, 2006 and the two statements recorded by the Revenue, it cannot be said that the income of `7 crores is liable to be assessed in the hands of the assessee for the assessment year under appeal. On these facts, in our opinion, learned CIT(A) adopted the right course of action i.e., to determine the undisclosed income on the basis of loose papers found and seized from the assessee's premises. When the income of `7 crores was not disclosed by the assessee in his individual capacity in the year under appeal, therefore, in our opinion, the Assessing Officer was wholly unjustified in relying upon only the last portion of the second statement i.e. 12th September, 2006 ignoring the letter dated 1st September, 2006, first statement dated 8th September, 2006 and reply to question No.2 of the statement dated 12th September, 2006 and even the first portion of the reply of question No.3 in the statement dated 12th September, 2006. When we see the cumulative effect of all the facts as well as the statements, following position emerges:-
12. Shri Pawan Kumar Bansal is an individual who is not carrying on any business in his individual capacity. The business is carried on by Capital Group of Companies including Capital Power Systems Ltd.
whose CEO is Shri Pawan Kumar Bansal, i.e., the assessee. The original disclosure made vide letter dated 1st September, 2006 was for and on behalf of Capital Power Sytems Ltd. The assessee signed the above letter in his capacity as CEO of the said company. In the statement dated 8th September, 2006, he deposed before the Revenue authorities in which he affirmed the voluntary disclosure of additional income of `7 crores on behalf of Capital Group of companies. Thus, even in the statement dated 8th September, 2006, there was no disclosure in the individual capacity of Shri Pawan Kumar Bansal. In 13 ITA-5201/Del/2010 & 2 others another statement dated 12th September, 2006, he reiterated his earlier statement vide letter dated 1st September, 2006 and statement dated 8th September, 2006. Thus, the disclosure of income was by Capital Group of companies. However, in reply to another question in his statement dated 12th September, 2006, he disclosed the income of `3,55,00,000/- in his individual capacity and the income of `3,45,00,000/- in the name of Shri Mahesh Kumar Gupta. The Revenue authorities who recorded the statement did not bother to point out the contradiction between the reply to question No.2 and question No.4. In reply to question No.2, he reiterated his letter dated 1st September, 2006 and statement dated 8th September, 2006 wherein no income was disclosed in the individual names of Shri Pawan Kumar Bansal and Shri Mahesh Kumar Gupta. But, in reply to question No.3, the income was disclosed in the individual names. It is a settled law that the statement has to be considered as a whole and Revenue cannot chose to rely upon only one part of the statement ignoring the other statements. Moreover, statement dated 12th September, 2006 is not the only statement but it is only one part of the series of letter/statements. In the statement dated 8th September, 2006, Shri Pawan Kumar Bansal has stated that the details of the disclosure would be given after going through the seized material. Therefore, the statement has a relevance with the seized material and statement is made by him to disclose the income as represented by the seized material. No other corroborative evidence to support the income of `7 crores in the hands of the assessee and Shri Mahesh Kumar Gupta is found. In the above circumstances, after considering the cumulative effect of the letter dated 1st September, 2006 and both the statements, the proper course would be to determine the undisclosed income on the basis of loose papers found and seized at the time of search. The CIT(A) did the same.
14 ITA-5201/Del/2010 & 2 others
13. We, therefore, uphold the order of learned CIT(A) to the extent wherein he held that the income of the assessee i.e. Shri Pawan Kumar Bansal is to be determined on the basis of undisclosed income as per the noting on the loose papers. With this remark, the Revenue's appeal vide ITA No.5375/Del/2010 is dismissed. However, the assessee in his appeal vide ITA No.5201/Del/2010 has also disputed the correctness of the income determined on the basis of the loose papers. The brief description of the transactions of various pages of seized material is given by the Assessing Officer at page 4 of the assessment order which reads as under:-
"Annexure A-6:
Page 77 details of different figures in different names showing Rs.7.90 lacs, and the back side is share transaction details of G.S. Control Pvt.Ltd.
Page 80 slip contains the details of names and payments of Rs.7 lacs made on 12.05.05.
Page 81 slip contains the details of names and payments of Rs.9 lacs made on 10.12.05.
Page 82 slip contains the details of names and payments of Rs.8.40 lacs made on 14.05.05.
Annexure A-16 Page 143 details of Indore & Jabalpur regarding cash security deposit of Rs.8,78,000/- and other monetary details and back side is name and address."
14. From the above, it is evident that pages 80, 81 & 82 do not belong to the year under appeal. The accounting year relevant to the assessment year under consideration is 1.4.2006 to 31.3.2007 while all the three documents i.e., pages 80, 81 & 82 pertain to the accounting year 1.4.2005 to 31.3.2006. Therefore, the addition sustained by the learned CIT(A) vide pages 80, 81 & 82 is directed to be deleted.
15 ITA-5201/Del/2010 & 2 others
15. So far as page 77 is concerned, the Assessing Officer has not given the date of the said transaction. However, the copy of the loose paper is given at page 46 of the assessee's paper book from which we find that various names are written, amount is written and no date is given on any of the transactions. The total of such transactions was `7,90,000/-. No explanation relating to nature of those transactions is given by the assessee's counsel at the time of hearing before us. Therefore, in our opinion, the addition of `7,90,000/- in the hands of assessee due to various transactions recorded at page 77 of Annexure A-6 is required to be made.
16. Page 143 of Annexure A-16 is given at page 52 of the assessee's paper book. The relevant portion of the page where the sum of `8,78,000/- is mentioned reads as under:-
"I Jabalpur (EZ) (1) PO No :- CMD/EZ/P-II/39 dtd 24/12/03 PO completed Rs.8,78,000 = Recd. towards security deposit in cash -
Release of this amount to be pursued."
17. From the above, it is evident that the above entry relates to some transaction dated 24th December, 2003. Therefore, this transaction cannot be said to be pertaining to the accounting year relevant to the assessment year under consideration. In view of the above, in our opinion, the only addition which can be sustained on the basis of loose papers found and seized during the course of search is `7,90,000/-. We, therefore, sustain the addition of `7,90,000/- in the case of the assessee i.e. Shri Pawan Kumar Bansal and partly allow the assessee's appeal.
ITA No.5374/Del/2010 - Revenue's appeal in the case of Shri MaheshKumar Gupta:-
16 ITA-5201/Del/2010 & 2 others
18. In this appeal by the Revenue, following grounds have been raised:-
"1. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.3,07,00,000/- on account of undisclosed income admitted by Shri Pawan Kumar Bansal in his statement recorded during the course of search.
2. The CIT(A) has erred in law in deleting the addition of Rs.3,45,00,000/- made on protective basis in his hand on account of Shri Mahesh Kumar Gupta and also deleted the addition of Rs.3,45,00,000/- made substantive in the hands of Shri Mahesh Kumar Gupta."
19. So far as ground No.1 is concerned, the same is misconceived because the only addition made by the Assessing Officer in the case of the assessee was the addition of `3,45,00,000/-. No addition of `3,07,00,000/- was made in the hands of the assessee and therefore, the question of any deletion of such addition by the CIT(A) does not arise. Accordingly, ground No.1 of the Revenue's appeal is rejected being conceived.
20. So far as ground No.2 is concerned, we have already discussed this issue at length while deciding the similar addition in the case of Shri Pawan Kumar Bansal and have arrived at the conclusion that from the cumulative effect of the letter dated 1st September, 2006 and two statements of Shri Pawan Kumar Bansal, it cannot be accepted that the income of `7 crores has been disclosed in the individual name of Shri Pawan Kumar Bansal and Shri Mahesh Kumar Gupta for AY 2007-08. We have further held that on the facts of the assessee's case, the right course is to make the addition as per the transactions recorded in the loose papers found and seized at the time of search and we have already made the addition in respect of the loose paper in the hands of Shri Pawan Kumar Bansal. So far as Shri Mahesh Kumar Gupta is concerned, admittedly, there is no statement by him or there is no 17 ITA-5201/Del/2010 & 2 others loose paper found or seized from his premises. Therefore, in addition to whatever has been discussed in paragraph Nos.8 to 14 while deciding the appeal of Shri Pawan Kumar Bansal, Shri Mahesh Kumar Gupta is not bound by any statement given by Shri Pawan Kumar Bansal. Therefore, even if while giving bifurcation, Shri Pawan Kumar Bansal has bifurcated the income of `3,45,00,000/- in the name of Shri Mahesh Kumar Gupta, Shri Mahesh Kumar Gupta cannot be made liable to pay the tax thereon. Admittedly, at the time of search and during post-search enquiry, no statement of Shri Mahesh Kumar Gupta was recorded. In view of the above, we do not find any infirmity in the order of learned CIT(A) wherein he has deleted the addition of `3,45,00,000/- made by the Assessing Officer on account of alleged disclosure of income in his name by Shri Pawan Kumar Bansal.
21. In the result, the appeals of the Revenue are dismissed while the appeal of the assessee in the case of Shri Pawan Kumar Bansal is partly allowed.
Decision pronounced in the open Court on 30th September, 2014.
Sd/- Sd/-
(CHANDRA MOHAN GARG)
GARG) (G.D. AGRAWAL)
AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 30.09.2014
VK.
Copy forwarded to: -
1. Appellant : Shri Pawan Kumar Bansal,
A-156, First Floor, New Friends Colony,
New Delhi - 110 019. And
Shri Mahesh Kumar Gupta,
85, Rajdhani Enclave, Delhi - 110 092.
2. Revenue : Assistant Commissioner of Income Tax,
Central Circle-
Circle-16, New Delhi.
18 ITA-5201/Del/2010 &
2 others
3. CIT
4. CIT(A)
5. DR, ITAT
Assistant Registrar