Income Tax Appellate Tribunal - Delhi
Anil Arora, New Delhi vs Assessee on 20 October, 2016
Page 1 of 9 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "A": NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Wealth Tax Appeal Nos. 16 to 19/Del/2014 (Assessment Year: 2005-06 to 2008-09) Anil Arora, WCIT, B-4/48, Paschim Vihar, Central Circle-02, New Delhi New Delhi Vs. PAN:AAGPA1400L (Appellant) (Respondent) Assessee by : Sh. AK Jain, CA Revenue by: Sh. SK Jain, DR Date of Hearing 07/09/2016 Date of pronouncement 20/10/2016 4O R D E R PER PRASHANT MAHARISHI, A. M.
1. These are the four appeals appeals filed by the assessee against the order of the ld CWT (A)-XII, New Delhi dated 25.06.2014 for the Assessment Year 2005-06 to 2008-09. As all these four appeals are involving common grounds and similar facts, therefore, they are disposed of by this common order.
2. The assessee has raised the following grounds of appeal in WTA No. 16/Del/2014 for the Assessment Year 2005-06:-
"1. That on the facts and circumstances of the case and the provision of law the Ld C1T(Appeal) has failed to appreciate that the assessment order passed by the Ld. AC) u/s 16(3) is bad in law, wrong on facts.
2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AC) is against the principles of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 2 of 9 natural justice and has been passed without affording reasonable opportunity of being heard.
3. That the facts and circumstances of the case and the provision of law the CIT(Appeal) has failed to appreciate that the Ld. AO has erred in initiating the proceedings u/s 18(1 )(c ) of Wealth Tax Act, 1957.
4. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 25,00.000;- in the taxable wealth on account of surrender of the cash found in locker with Syndicate Bank, DP Gupta. Karol Bagh New Delhi."
3. The brief fact of the case is that search and seizure operation was carried out on 14/02/2008. During the course of search Rs. 30 lakhs were found in the locker No. 216 in the name of the assessee with syndicate bank, Karol Baug branch, New Delhi. During the course of search , assessee surrendered this sum as income for the assessment year 2005 - 06 and therefore, it was added to the total income of the assessee u/s 143 (3)/153A of the Income Tax Act dated 30/12/2009. In the wealth tax proceedings, assessee filed his return of Wealth on 16/11/2010 declaring net wealth of Rs. 5,03,300/- in response to notice under section 17 of the wealth tax act. Assessee did not offer this asset in his wealth tax return. Main reason for not including this sum in his return of Wealth by the assessee is that , according to him, this money does not belong to him and therefore it is not chargeable to wealth tax under the wealth tax act. This contention of the assessee was emerging from the statement of the assessee during the course of search wherein he has stated in response to answer to question No. 3 that this amount belongs to the parents of the assessee and it was given by them, as they did not have locker in their name. Therefore , though locker was in the name of the assessee, but this money belonged to them as their savings. He further stated that this money was kept by his father prior to the year 2000 in parts from 1998 onwards. The Ld. WTO rejected the contention of the assessee and included the above sum into the total wealth of the assessee. Out of the sum of Rs. 30 lakhs , Ld. WTO granted a deduction of Rs. 5 Lacs already disclosed by the assessee and therefore net addition to the net wealth of the assessee of Rs. 25 Lacs was Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 3 of 9 made at the time of passing an assessment order under section 16 (3) read with section 17 of the wealth tax act, 1957. Aggrieved by the order of the Ld. Wealth tax officer, Assessee preferred appeal before the Commissioner of wealth tax, who in turn confirmed the order of the Ld. Wealth tax officer. Therefore, assessee is in appeal before us.
4. On commencement of the hearing, the Ld. authorized representative of the assessee submitted that he does not want to press ground No. 1, 2 and 3 of the appeal of the assessee for this assessment year and therefore they are dismissed.
5. Therefore, the only ground survived in this appeal is against the addition of Rs. 25 Lacs in to the taxable wealth of the assessee because of surrender of the cash found in locker during the course of search. The Ld. authorized representative submitted that this money does not belong to him and Therefore, it cannot be included into the net wealth of the assessee. He vehemently relied on the para No. 7 of the assessment order under section 143 (3) of the income tax act dated 30th December 2009 wherein during the course of statement the assessee has submitted that this money does not belong to him, but to his parents. He further submitted that he disclosed the above sum and agreed for payment of the tax on this additional income of Rs. 30 lakhs only because of the reason that he wanted to save penalty and prosecution on this sum. He therefore submitted that this sum is not includible into the net wealth of the assessee for the purpose of computation of wealth tax liability of the assessee.
6. Ld. departmental representative submitted that the assessee has surrendered the above sum. During the course of search he also agreed to pay tax on this sum under the income tax act. Therefore this money belongs to him and the amount is added under section 69A of the income tax act. Ld. departmental representative further drew our attention to the para No. 7.2 of the assessment order under section 143 (3) wherein it is submitted that the assessee has tried to disclose the above amount under the voluntary disclosure of income scheme 1997 and despite this, the addition Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 4 of 9 has been confirmed into the hands of above cash seized from the locker. He further submitted that the statement of the assessee was also found to be erroneous and wrong, which has been proved by the Ld. assessing officer in para No. 7.1 of that assessment order where the bundles of notes were having slips of the bank bearing dates of year 2002 & 2003 , therefore this money could not have been given by the parent of the assessee as stated by assessee up to year 2000. He therefore submitted that the addition of this sum is rightly been made to the net wealth of the assessee as the money belongs to the assessee and is also owned by him.
7. We have carefully considered the rival contention. The undisputed fact is that that assessee tried to explain the amount of cash seized from the locker with syndicate bank which was in the name of the assessee and the amount of Rs. 30 lakhs was found there from. Further, the explanation of the assessee was also not found to be correct that money belongs to the parents of the assessee as they gave this sum prior to year 2000 to the assessee because of the slips of the bank, which were bearing the dates of the year 2002 and 2003 and for which assessee did not offer any explanation. Further, the assessee in his statement has also disclosed the above sum as additional income and also paid due tax thereon. In view of these overwhelming evidence against the assessee, we are of the view that the the above sum of Rs. 30 lakhs belonged to the assessee. According to the provisions of section 3 of the wealth tax act every individual shall be charged tax on the „net wealth‟ as at the valuation date. Further, the „net wealth‟ has been defined under section 2 (m) of the wealth tax act to mean all the assets belonging to the assessee in excess of the debt owed as on the valuation date. According to the provisions of section 2(ea) of the act „assets‟ in case of individual includes cash in excess of Rs. 50,000/-. Therefore, as the above sum was belonging to the assessee as accepted by him as his income in income tax proceedings, now he cannot say that the above sum is not includible into the net wealth of the assessee. In view of this we confirm the order of the Ld. Commissioner of wealth tax confirming the addition of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 5 of 9 Rs. 30 lakhs on account of cash found in the locker belonging to the assessee and which was also added under section 69A of the income tax act in the hands of the assessee. Therefore ground No. 4 of the appeal of the assessee is dismissed.
8. In the result, WTA No. 16/del/2014 for assessment year 2005 - 06 preferred by the assessee is dismissed.
9. The assessee has raised the following grounds of appeal in WTA No. 17/Del/2014 for the Assessment Year 2006-07:-
"1. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the assessment order passed by the Ld. AC u/s 16(3) is bad in law, wrong on facts.
2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AO is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard.
3. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the Ld. AO has erred in initiating the proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957,
4. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 25,00,000/- in the taxable wealth on account of surrender of the cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi.
5. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 6,54,750/- in the taxable wealth on account of Industrial Plot at Narela."
10. On commencement of the hearing, the Ld. authorized representative of the assessee submitted that he does not want to press ground No. 1, 2 and 3 of the appeal of the assessee for this assessment year and therefore they are dismissed.
11. The 4th ground of the appeal of the assessee is against the addition of Rs. 25 Lacs in the taxable wealth on account of surrender of the cash found in locker with syndicate bank, New Delhi. The above, ground of appeal is identical to the ground No. 4 of the appeal of the assessee decided by us for Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 6 of 9 assessment year 2005 - 06 wherein we have dismissed that ground of appeal of the assessee. The parties before us admitted that the facts and circumstances of the issue involved are the same. Therefore we also dismiss ground No. 4 of the appeal of the assessee.
12. The 5th ground of the appeal of the assessee was against the addition of Rs.
654750/- in the taxable wealth on account of industrial plot at Narela. It was the submission of the assessee that the above is an industrial plot which does not fall under the definition of „assets‟ as defined under section 2 (ea)of the wealth tax act.
13. The Ld. authorized representative submitted before us that above asset has been included by the Ld. assessing officer in computing the net wealth of the assessee for the year because of the industrial plot remaining unused beyond 2 years. He submitted that it is an industrial plot. It‟s an undisputed fact. However, the Ld. assessing officer has treated it under the definition of „urban land‟ and therefore charged the same to the total wealth of the assessee. The main argument of the Ld. authorized representative was that the industrial land cannot be charged to the wealth tax.
14. Ld. departmental representative submitted that this issue does not arise from the order of the Ld. Commissioner of wealth tax and therefore this ground of the appeal of the assessee is required to be dismissed.
15. We have carefully considered the rival contentions. On reading of the order of the Ld. Commissioner of wealth tax, we found that this ground of appeal was taken by the assessee before him, vide ground No. 4 of the appeal which are reproduced at page No. 2 of his order. Further, the Ld. Commissioner of wealth tax reproduced this ground on the last page of his order. However, while giving the finding on the various grounds of appeal raised by the assessee before him, he has not disposed of this ground of appeal. In view of the above facts we restore ground No. 5 of this appeal back to the file of the Ld. Commissioner of wealth tax to adjudicate on this issue on merit after providing assessee a reasonable opportunity of hearing.
Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 7 of 9 In the result ground No. 5 of the appeal of the assessee is allowed accordingly.
16. In the result appeal of the assessee for assessment year 2006 - 07 is partly allowed.
17. The assessee has raised the following grounds of appeal in WTA No. 18/Del/2014 for the Assessment Year 2007-08:-
1. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the assessment order passed by the Ld. AC u/s 16(3) is bad in law, wrong on facts.
2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AO is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard.
3. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the Ld. AO has erred in initiating the proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957,
4. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 25,00,000/- in the taxable wealth on account of surrender of the cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi.
5. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 6,54,750/- in the taxable wealth on account of Industrial Plot at Narela."
18. On commencement of the hearing, the Ld. authorized representative of the assessee submitted that he does not want to press ground No. 1, 2 and 3 of the appeal of the assessee for this assessment year and therefore they are dismissed.
19. The 4th ground of the appeal of the assessee is against the addition of Rs. 25 Lacs in the taxable wealth on account of surrender of the cash found in locker with syndicate bank, New Delhi. The aboveground of appeal is identical to the ground No. 4 of the appeal of the assessee decided by us for assessment year 2005 - 06 wherein we have dismissed that ground of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 8 of 9 appeal of the assessee. The parties before us admitted that the facts and circumstances of the issue involved are the same. Therefore we also dismiss ground No. 4 of the appeal of the assessee in this appeal.
20. The 5th ground of the appeal of the assessee is against the addition of Rs.
654750/- in the taxable wealth on account of industrial plot at Narela. The above, ground of appeal is identical to the ground No. 5 of the appeal of the assessee decided by us for assessment year 2006 - 07 wherein we have set aside this ground of appeal to the file of the Ld. Commissioner of wealth tax. The parties before us admitted that the facts and circumstances of the case for this year remains same. Therefore we set aside this ground of appeal back to the file of the Ld. Commissioner of wealth tax to adjudicate afresh after providing adequate opportunity of hearing to the appellant. In the result ground No. 5 of the appeal of the assessee is allowed with above direction.
21. In the result appeal of the assessee for assessment year 2007 - 08 is partly allowed
22. The assessee has raised the following grounds of appeal in ITA No. 19/Del/2014 for the Assessment Year 2008-09:-
"1. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the assessment order passed by the Ld. AC u/s 16(3) is bad in law, wrong on facts.
2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AO is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard.
3. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the Ld. AO has erred in initiating the proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957,
4. That on the facts and on the circumstances of the case and the provision of law the Ld CIT Appeal has erred in sustaining an addition of Rs. 25,00,000/- in the taxable wealth on account of surrender of the cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi."
23. On commencement of the hearing, the Ld. authorized representative of the assessee submitted that he does not want to press ground No. 1, 2 and 3 of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 9 of 9 the appeal of the assessee for this assessment year and therefore they are dismissed.
24. The 4th ground of the appeal of the assessee is against the addition of Rs. 25 Lacs in the taxable wealth on account of surrender of the cash found in locker with syndicate bank, New Delhi. The above ground of appeal is identical to the ground No. 4 of the appeal of the assessee decided by us for assessment year 2005 - 06 wherein we have dismissed that ground of appeal of the assessee. The parties before us admitted that the facts and circumstances of the issue involved are the same. Therefore we also dismiss ground No. 4 of the appeal of the assessee in this appeal.
25. In the result appeal of the assessee for assessment year 2007 - 08 is dismissed Order pronounced in the open court on 20/10/2016.
-Sd/- -Sd/-
(DIVA SINGH) (PRASHANT MAHARISHI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated:20/10/2016
A K Keot
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
Wealth Tax Appeal Nos. 16 to 19/Del/2014
Assessment Year: 2005-06 to 2008-09
Anil Arrora V WCIT