IN THE HIGH COURT OF DELHI AT NEW DELHI
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ITA 263/2013
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ACIT .... Appellant
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Through Mr. Karan Khanna, Senior
Standing Counsel with Ms.
Asmita Kumar, Advocate.
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versus
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AJAY KUMAR MUKHERJEE ..... Respondent
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Through None.
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CORAM:
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HON'BLE MR. JUSTICE SANJIV KHANNA
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HON'BLE MR. JUSTICE SANJEEV SACHDEVA
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O R D E R
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10.07.2013
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The respondent/assessee is an individual whose return for
Assessment Year 2007-08 was taken up for scrutiny. In the return filed
on 19.11.2007, the respondent-assessee had declared income of
Rs.6,08,935/-. On the basis of Annual Information Reports, Revenue came
to know that cash deposits of Rs. 1,08,07,500/- had been made in eight
bank accounts in the name of the respondent/assessee.The
respondent/assessee was confronted with the said information and details
but he denied knowledge and stated that the accounts do not belong to
him. Invoking Section 68 of the Act, the Assessing officer made addition
of Rs. 1,08,07,500/-. Some other additions were also made but these were
deleted by the First Appellate Authority, CIT (Appeals) vide order dated
31.05.2011. Before the First Appellate Authority, the respondent/assessee
had accepted that the bank accounts belonged to him. Addition of
Rs.1,01,78,800/- was sustained under Section 68 of the Act.
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2. In the meanwhile, an application dated 24.06.2010 was filed by the respondent/assessee before the Settlement Commission for assessment years
2006-07, 2008-09 to 2010-2011. It was stated that the respondent/assessee
was a civil engineer specializing in execution and construction of
projects and had been in service with various companies for 25 years. He
had earned income from interest, dividends and gains on sales and
redemption of mutual fund investments. He had also sold a property at
Varanasi and had credited Rs. 1,12,04,432 as agricultural income earned
by his parents. He declared undisclosed income of Rs.35,00,000/- for the
Assessment Year 2006-07, Rs.28,22,078/- for the Assessment Year 2008-09,
Rs.17,50,000/- for Assessment Year 2009-2010 and Rs.9,50,000/- for
Assessment Year 2010-2011. In this manner, the respondent-assessee tried
to explain the total cash deposits in his bank accounts of
Rs.1,53,10,720/-. This figure of deposits in bank accounts was
calculated by the investigation wing of the Settlement Commission.
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3. The settlement application was finally disposed of vide order
dated 21.09.2011. The assessee further surrendered Rs.1,12,04,432/-
in addition to the amounts already surrendered/declared. This amount was
added to the income of the Assessment Year 2006-07.
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4. In the meanwhile, quantum appeal filed by the assessee against the
order of the CIT (Appeals) was listed and disposed by the ITAT vide order
dated 13.01.2012. ITAT passed an order of remand to the first appellate
authority for a fresh decision. Copy of order dated 21.09.2011 passed by
the Settlement Commissioner had been placed before the ITAT. This order
passed by the ITAT has been accepted by the assessee and the Revenue.
The operative portion of the order dated 31.01.2012, passed by ITAT
reads:-
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?We have heard both the parties and their contentions have carefully been
considered. The copy of application filed by the learned counsel of the
assessee dated 1st March, 2011 has already been reproduced. It was
brought to the notice of CIT(A) that the assessee had already approached
the Settlement Commission in respect of place. The assessee has also
submitted copy of asset statement according to which there will be
availability of cash balance with the assessee. Keeping in view all
these facts, we consider it just and proper to restore the matter back to
the file of CIT(A) with a direction to re-adjudicate the appeal filed by
the assessee in the light of the submitted by the assessee in this
regard. Therefore, we restore this matter back to the file of CIT(A) for
re-adjudication of the issues which are agitated by the assessee in the
present appeal. We direct accordingly.?
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5. The CIT (Appeals) on remand, noticed the order passed by the
Settlement Commission and held:-
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?From the direction of ITAT, order it is clear that the availability of
cash as on 31.03.2006 is Rs.1,56,10,619 ? Rs.3,72,469 = Rs.1,52,38,150/-.
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In my earlier order dated 31.05.2011 in ITA No.387/09-10 for the A.Y.
2007-08, I have made addition of Rs.1,02,41,244/- as unexplained
investment of the appellant during the F.Y. 2006-07 related to A.Y. 2007-
08. However, after considering ITAT order and Income Tax Settlement
Commission order dated 21.09.2011, the carry forward of availability of
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cash of Rs.1,52,38,150/- is to be given to the appellant for explaining the unexplained investment of Rs.1,02,41,244/-. The appellant had paid
Rs.40,38,063/- on 21.06.2010 before filing application in ITSC, Delhi.
After this ITSC, Delhi order, the appellant had paid Rs.35 lakhs dated
22.11.2011 and Rs.27,01,046/- on 25.02.2012. As the appellant had paid
all taxes as per the order of Settlement Commission and ITAT, Delhi had
directed to consider the Settlement Commission order to determine the
availability of cash as on 01.04.2006 of Rs.1,52,38,150/-, I accept this
cash balance and allow the appeal of the assessee for the AY 2007-08.
The unexplained investment of Rs.1,02,41,244/- as sustained by me in my
earlier order stands explained now, as it is from the opening balance of
cash of Rs.1,52,38,150.?.
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6. For the purpose of clarity and record, we mention that Mr. Durga
Charan Dash, Commissioner of Income Tax (Appeal), who had passed this
order, was also the author of the first order confirming addition of
Rs.1,02,41,244/-.
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7. In the meanwhile, the Assessing Officer imposed penalty under
Section 271(1) (c) for concealment. In the first appeal, the assessee
succeeded in view of the order dated 06.03.2012 passed by the CIT
(Appeals) in the quantum appeal. The CIT (Appeals) deleted penalty under
Section 271(1)(c) recording that the matter had been settled before the
Settlement Commissioner and the respondent assessee had paid taxes.
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8. ITAT by the impugned order has upheld the order of the CIT
(Appeals) deleting penalty under Section 271(1)(c) of the Act.
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9. In the fact of the present case, we do not think any substantial
question of law arises. The assessee had made surrender before the
Settlement Commissioner and has been taxed in terms of the order passed
by them. Surrender of Rs.1,12,04,432/- was made for the assessment year
2006-07, in an addition to the total undisclosed income of Rs.
90,22,078/- for the years 2006-07, 2008-09, 2009-10 and 2010-2011, which
was originally declared in the settlement application. CIT (Appeals) and
the ITAT have observed that the aforesaid addition of Rs.1,12,04,432/-
can be taken into consideration and is relevant. We note that the
respondent-assessee has paid taxes amounting to Rs.1,02,41,244/- in terms
of the order passed by the Settlement Commission.
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10. We do not think any substantial question of law arises.
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11. The appeal is accordingly dismissed.
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SANJIV KHANNA, J
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SANJEEV SACHDEVA, J
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JULY 10, 2013
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$ 3
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