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Anilesh Ahuja vs Union Of India & Anr on 20 March, 2023

Author: Rajiv Shakdher

Bench: Rajiv Shakdher

                          $~34
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                          +      W.P.(C) 3409/2023 & CM APPL. 13175-13176/2023

                                 ANILESH AHUJA                           ..... Petitioner
                                              Through:             Mr Kumar Visalaksh, Mr Arihant
                                                                   Tater & Mr Udit Jain, Advocates.

                                                     versus

                                 UNION OF INDIA & ANR.                   ..... Respondents
                                               Through:            Mr Ashish Batra, Sr. Panel Counsel
                                                                   for R-1/UOI.
                                                                   Mr Aseem Chawla, Sr. Standing
                                                                   Counsel with Mr Rishabh Nangia &
                                                                   Ms Anuja Pethia, Advocates.

                                 CORAM:
                                 HON'BLE MR. JUSTICE RAJIV SHAKDHER
                                 HON'BLE MS. JUSTICE TARA VITASTA GANJU
                                               ORDER

% 20.03.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM APPL. 13176/2023

1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing. W.P.(C) 3409/2023 & CM APPL. 13175/2023 [Application filed on behalf of the petitioner seeking interim relief].

2. This writ petition assails the assessment order dated 27.01.2023 and consequent demand notice of even date i.e., 27.01.2023. Challenge is also laid to the notice dated 31.01.2023 seeking to impose penalty.

3. Via the impugned assessment order, the Assessing Officer (AO) has sought to tax INR 13,22,40,752/- on the ground that this amount constitutes unexplained money. In this context, Section 69A of the Income Tax Act, 1961 [in short „the Act‟] is taken recourse to by the AO.

4. The petitioner has not only challenged the impugned assessment order, but also the interest levied and penalty imposed by the AO.

5. Counsel for the petitioner says that the petitioner is a non-resident and that he has been residing in the USA for quite some time.

6. It is the stand of the petitioner that he had remitted a part of the consideration, i.e., Rs 13,22,40,752, to Lodha Developers Private Limited [in short, "Lodha"] for the purposes of purchasing two immovable properties, i.e., flats located in Mumbai, via an account maintained with CITI Bank in USA.

6.1 It appears that the said amount was remitted by the petitioner in the backdrop of two separate agreements to sell of even date, i.e., 09.12.2016, executed between him and Lodha.

6.2 It is the petitioner‟s case that the transaction did not go through, and accordingly, two cancellation deeds dated 27.12.2018 were executed between the petitioner and Lodha.

6.1 It is also the petitioner‟s case that after certain amount was forfeiting Rs 3,00,00,000, the rest was remitted to the petitioner. The fact that the transaction did not go through, according to the counsel for the petitioner, is evident from the response that the AO received upon notice being issued to Lodha under Section 133(6) of the Act.

7. Mr Aseem Chawla, learned Senior Standing Counsel, will place on W.P.(C) 3409/2023 Page 2 of 4 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:25.03.2023 02:37:29 record the response received from Lodha, pursuant to notice issued under Section 143(6) of the Act.

7.1 For this purpose, list the matter on 03.05.2023.

8. We may also note that the petitioner had filed objections against the draft assessment order dated 29.03.2022, with the Dispute Resolution Panel (DRP). The DRP disposed of the objection via order dated 29.12.2022. In its order, the DRP, inter alia, made the following observations:

"4.2.2 The assessee vide letter dated 05.12.2022, has filed a rejoinder and stated inter alia as under:

"....In this regard, as already explained earlier, the Assessee submits that the bank account of the assessee with CITI Bank, USA through which wire transfer payments were made to Lodha Developers Private Limited was closed in 2018. Therefore, obtaining bank statement of 2016 (which were more than 5 years old) from CITI Bank, USA was taking time and the said fact was clearly mentioned by the Assessee in its letter dated March 17, 2022 (Kindly refer to Page no. 27 to 28 of the Paper Book filed).

14. Thus, it is not a case where the Assessee had the documents and did not furnish the same purposefully to stall the assessment proceedings. As soon as tile bank statements were received by the Assessee on March 31, 2022 from CITI Bank, USA, the same were filed with the AO vide letter dated March 31, 2022 (Kindly refer to Page no. 42 to 47 of the Paper Book filed).

17. Without prejudice to the above, the Assessee submits that the bank statements of CITI Bank, USA are only corroborative evidence to support of the return of income filed in USA, the claim of the Assessee that the payment was made to Lodha Developers Private Limited from foreign income source which were duly declared in the return of income filed in USA and the statements made by Lodha Developer Private Limited in response to notice under Section 133(6) of the IT Act.

18. Therefore, even without considering the said bank statements, the Assessee had clearly established his creditworthiness and the sources of income for investment which was in USA. It is certainly not a case where payments for investment in immovable properties are made out of unaccounted / undisclosed money and therefore the proposed addition unwarranted.

Prayer

19. In view of the above submissions, the Assessee humbly prays to the Hon'ble DRP that:

a) Kindly admit and consider the bank statements of the account maintained by the Assessee with CITI Bank, USA;

b) Kindly issue directions to the AO under Section 144C(5) of the IT Act to delete the variations proposed to the total income of the Assessee in the Draft Order passed for AY 2017- 18........ "

4.3 The Panel has carefully considered the rival averments as above. The Panel takes a note that the assessee's objection are filed before the Panel at the draft stage of the assessment proceedings after the assessing officer makes a proposal for additions, as the case may be; hence, the DRP is considered to be a superior extension of the % of the AO. Provisions of Rule 46A are not applicable in terms of admitting the additional evidence to the DRP and in fact, DRP proceeding are governed by Income Tax (Dispute Resolution Panel) Rules, 2009. The AO vide the remand report, has on various occasions, taken a plea that the assessee did not furnish the requisite details and evidences before the AO despite providing ample opportunity given to him. The Panel further takes a note of the assessee's contention that obtaining the requisite details and documents was taking time and as soon as same were filed vide letter dated 31.03.2022. In view of above, the AO is directed to consider and verify the assessee's contentions in light of submissions made as above including the assessee's rejoinder as observed by the Panel at para no 4.2.2 above by passing a speaking and reasoned order within the ambit of law and facts of the case. The Panel hastens to clarify that the AO shall not conduct any fresh inquiry in this regard; the verification shall be made on the basis of documents/submissions available on the records. The assessee's objections made at all grounds of objections in this regard, are hereby, disposed off accordingly."

9. In the meanwhile, no precipitate action will be taken against the petitioner.

10. Parties will act based on digitally signed copy of the order.

RAJIV SHAKDHER, J TARA VITASTA GANJU, J MARCH 20, 2023/ ha Click here to check corrigendum, if any W.P.(C) 3409/2023 Page 4 of 4 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:25.03.2023 02:37:29