Delhi High Court - Orders
Rakesh Babbar vs Acit Central Circle-16 New Delhi & Anr on 10 March, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1056/2023 & CM No.4165/2023
RAKESH BABBAR ..... Petitioner
Through: Mr Ruchesh Sinha, Ms Nivedita &
Ms Vaishali, Advocates.
versus
ACIT CENTRAL CIRCLE-16 NEW DELHI & ANR.... Respondents
Through: Mr Kunal Sharma, Sr. Standing
Counsel with Mr Zehra Khan,
Standing Counsel & Mr Subhendu
Bhattacharya, Advocate.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORDER
% 10.03.2023 [Physical Hearing/Hybrid Hearing (as per request)]
1. We have heard the matter at some length on the previous date i.e., 30.01.2023, whereupon we had recorded the broad contours of the matter. For the sake of convenience, the relevant parts of the order dated 30.01.2023 are set forth hereafter:
2. This writ petition is directed against notice dated 24.08.2021 issued under Section 153C of the Income Tax Act, 1961 [in short, "Act"]. 2.1 In addition, thereto, challenge has also been laid to the assessment order dated 27.12.2022 passed under Section 153C, read with Section 143(3) of the Act.
3. To be noted, the impugned notice and order concern Assessment Year (AY) 2018-19.
4. Mr Ruchesh Sinha, who appears on behalf of the petitioner/assessee, submits that the impugned assessment order is solely based on the statement of one Mr Rakesh Jain, recorded under Section 132(4) of the Act.
4.1. Mr Sinha goes on to submit that the record would show that the search action under Section 132 was carried on 02.11.2017, concerning the Rakesh Jain Group. It is also pointed out that similar a search operation was conducted against a person going by the name Prahlad Kumar Aggarwal.W.P.(C) 1056/2023 Page 1 of 5 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:17.03.2023 15:31:49
5. It appears, upon perusal of the record that, during the assessment proceedings carried out under Section 153A of the Act vis-à-vis Mr Prahlad Kumar Aggarwal and on examination of the seized data and documents of Rakesh Kumar Group, certain documents concerning the assessee came to light. These are aspects which have been referred to in the impugned assessment order.
6. We may note that the impugned assessment order extracts, in some detail, the statement made by Mr Rakesh Jain, on oath, on 06.11.2017.
Insofar as it is relevant for the present case, there is a reference to an excel sheet which is extracted against question no. 4 addressed to Mr Rakesh Jain.
6.1. The answer to this question has also been extracted in the impugned assessment order. Therefore, for the sake of convenience, the excel sheet and the answer given by Mr Rakesh Jain is extracted hereafter:
" Liability
Capital + Premium DX CX Total
Ved Goswami with 289,127,994 289,127,994
Jointly Kavita
Others 538,571,990.00 538,571,990.00
Loans 303,930,757.53 303,930,757.53
GDA 1,137,691,132.00 1,137,691,132.00
Creditars 70,877,813,75 70,877,813,75
+statutory
Advanced Recd.
Agt space
GP (after security 415,284,426.00 415,284,426.00
of Rs. 26 Crore)
Deepak Agrwal 126,044,706.00 298,803,990.00 424,848,696.00
Red 739,934,742,78 438,550,300.00 1,178,485,042.78
SJA 294,128,324.00 490,440,850.78 784,569,174.78
Ajay Choudhary 121,047,364.00 159,394,200.00 280,441,564.00
Lakhotia 126,027,828.00 273,274,479.22 399,302,307.22
Ved Goswami 1,000,000.00 104,000,000.00 105,000,000.00
Somani +AEZ 137,800,000.00 137,800,000.00
Shahi Realators 204,218,914.00 204,218,914,00
4,505,685,992.00 1,764,463,820.00 6,270,149,812.06
Assets
DX CX Totals
Fixed Assets 6,511,115,64 6,511,115,64
WIP 2,192,523,619,24 1,764,463,820.00 3,956,987,439.24
W.P.(C) 1056/2023 Page 2 of 5
Signature Not Verified
Digitally Signed
By:SHEHROZ ALAM
Signing Date:17.03.2023
15:31:49
Land 2,071,546,872.00 2,071,546,872.00
Stocks Jagadhary 98,132,000.00 98,132,000.00
Others 136,972,385.18 136,972,385.18
4,505,685,992.06 1,764,463,820.00 6,270,149,812.06 Ans: I acknowledge and admit that the above shown documents is found from the whatsapp record of my mobile phone which I received from Shri Prahlad Agarwal on 17.03.2017 and forwarded the same.
Page 2: Statement of Rakesh Jain U/s 132 (4) of the Income Tax Act. to Shri Devendra Kumar Gupta. This Documents is the latest balance Sheet of M/s Celebration City Projects Pvt. Ltd. as on 17.03.2017. The term 'Dx' represent the figures as it appears in books of accounts and term 'Cx' represents the figures of cash received from the customers/investors which has not been recorded in the books of accounts. In the above sheets the abbreviated terms represent the following:
1. RED: It represents money received from the customers to which shop/space has been sold through Mr. Rakesh Babbar or Rakesh Babbar himself.
2. GP: It represent to money received from myself and my group of companies. GP stands from Green Park.
3. Deepak Agrawal: The figures mentioned against Shri Deepak Agrawal represent the amounts he spent in constructing this mall.
4. SJA: It stands for Sanjeev J Aeren. The figure in mentioned against Shri Sanjeev J Aeren represent money received from the customers to which shop/space has been sold through for Sanjeev J Aeren.
5. Ajay Choudhary: It represents either money received from the customers to which shop/space has been sold through Shri Ajay Choudhary or Ajay Choudhary himself.
6. Lakhotia: The figure mentioned against shri Lakhotia represent money received from the customers which shop/space has been sold through Shri Lakhotia or shri Lakhotia himself.
7. Ved Goswami: The figure mentioned against Shri Ved Goswami represent money received from the Shri Ved Goswami.W.P.(C) 1056/2023 Page 3 of 5 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:17.03.2023 15:31:49
8. Somani +AEZ: The figure mentioned against Somani +AEZ represent money received from the customers to which shop/space has been sold through Shri Sajeev J Aeren . I am not aware of that somani represents.
9. Shahi Realators: The figure mentioned against Shahi Realators represent money received from the Shahi Realators.
10. Jagadhary: This is a piece of land in a colony developed by Mr. Kailash J Aeren."
[Emphasis is ours]
7. Briefly, it appears that what was put to Mr Rakesh Jain, is as to, what was the significance of the symbols "Dx" and "Cx". 7.1. Mr Rakesh Jain seems to have indicated that Dx adverted to transactions which were reflected in the books of accounts, while Cx concerned cash transactions.
8. Furthermore, Mr Rakesh Jain was also asked as to the significance of the word „Red‟ in the Excel Sheet.
8.1. Mr Rakesh Jain stated that „Red‟ indicated transactions vis-à-vis sale of shops in the concerned Mall which had been entered into with the petitioner/assessee i.e., Mr Rakesh Babbar. 8.2. To be noted, against this transaction, if Mr Rakesh Jain‟s version is to be accepted, he received Rs 438,550,300/- in cash.
9. Given these broad facts, Mr Sinha has made the following submissions:
(i) First, there is no incriminating material found vis-à-vis the petitioner/assessee.
(ii) Second, there is no reference, by name, to the petitioner/assessee.
(iii) Third, the statement of Mr Rakesh Jain shows that the excel sheet referred to the transactions which were appearing in its balance sheet as on 17.03.2017. In other words, if this date is to be taken into account, the relevant AY for which the petitioner/assessee could have been proceeded with, would have been AY 2017-18 and not AY 2018-19.
(iv) Fourth, no opportunity for cross-examination of Mr Rakesh Jain has accorded, although, the addition made vis-à-vis petitioner/assessee is solely based on the statement made by Mr Rakesh Jain.
(v) Fifth, a perusal of the impugned assessment order seems to indicate that addition has been made in the name of Mr Rakesh Jain‟s company i.e., Celebration City Projects Pvt. Ltd. [in short, "CCPL"], which, supposedly, entered into the impugned transactions with the petitioner/assessee.
W.P.(C) 1056/2023 Page 4 of 5 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:17.03.2023 15:31:4910. Mr Kunal Sharma, senior standing counsel, who appears on behalf of the respondents/revenue, says that CCPL has entered into several transactions and therefore, it is not possible that additions would have been made in its income, with regard to the other transactions and not vis-à-vis the petitioner/assessee.
10.1 Mr Sharma also says that the additions, in law, could have been made both qua the income of CCPL, as well as the petitioner/assessee.
11. However, apart from anything else, having regard to the fact that the assessment order has already been passed, we require Mr Sharma to return with instructions as to whether assessment in the petitioner‟s/assessee‟s case can be made in the AY in issue i.e., AY 2018-19, in view of the statement made by Mr Rakesh Jain that the transactions that appear in his balance sheet.
2. Mr Kunal Sharma, senior standing counsel, who appears on behalf of the respondents/revenue, says that he has instructions to file a counter- affidavit in the matter.
2.1. Accordingly, six weeks are granted to file the counter-affidavit. 2.2 Rejoinder thereto, if any, will be filed before the next date of hearing.
3. In the meanwhile, there shall be a stay on the impugned notice and order passed under Section 153C of the Income Tax Act, 1961 concerning Assessment Year 2018-19.
4. List the matter on 12.10.2023.
5. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J MARCH 10, 2023/ ha Click here to check corrigendum, if any W.P.(C) 1056/2023 Page 5 of 5 Signature Not Verified Digitally Signed By:SHEHROZ ALAM Signing Date:17.03.2023 15:31:49