Rajinder Prasad Arora, New Delhi vs Department Of Income Tax

ACIT, Central Circle 2, vs. Shri Rajinder Prasad Arora, New Delhi. B - 4/48, Paschim Vihar, New Delhi.

(PAN : AAGPA1401M)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Shri Anil Jain, CA REVENUE BY : Shri Vivek Wadekar, CIT DR

ORDER

PER B.C. MEENA, ACCOUNTANT MEMBER :

This appeal filed by the revenue emanates from the order of CIT

(Appeals)-III, Delhi dated 17.02.2011 for the assessment year 2007-08.

2. A search and seizure operation was carried out at the Wings

Pharmaceuticals Pvt. Ltd. group of cases on 14.02.2008. The assessee was

also covered in the search operation. The assessment was finalized u/s

143(3) and 153A of the Income-tax Act, 1961 on 30.12.2009. The

assessee's appeal was allowed on various grounds by the CIT (A) against

which the revenue is in appeal by taking the following grounds :-

"1. On the facts and in the circumstances of the case, the CIT (A) has erred in law and on facts in deleting the addition of 2 ITA No.2296/Del./2011

Rs.56,93,200/- made by the Assessing Officer u/s 69B of the Income Tax Act, 1961.

2. On the facts and in the circumstances of the case, the CIT (A) has erred in law and on facts in deleting the addition made by the Assessing Officer u/s 69B of the Income Tax Act, 1961 on the ground of absence of any actual evidence alleging or establishing that any extra investment was made by the assessee, as it places an unfair burden on the Department because availability of direct evidence is impossible in such type of cases where both parties gain by understating the real consideration of immovable property which is transferred?

3. On the facts and in the circumstances of the case, the CIT (A) has erred in law and on facts in deleting the addition of Rs.4,25,600/- made by the Assessing Officer on account of fair rental value.

4. On the facts and in the circumstances of the case, the CIT (A) has erred in law and on facts in deleting the addition of Rs.2,79,690/- made by the Assessing Officer on account of unexplained expenditure during foreign travel.

5. The order of Ld. CIT(A) is erroneous and is not tenable on facts and in law.

6. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal."

3. In the ground nos.1 & 2, the issue involved is deleting the addition

of Rs.56,93,200/- made u/s 69B of the Act.

4. The assessee has purchased property bearing no.10/78, Punjabi Bagh

(West), New Delhi from Shri S.K. Sachdeva on 22.01.2007 along with

other three co-owners for a consideration of Rs.1,05,00,000/- and stamp

duty was paid of Rs.8,40,000/-. The assessee's share in this property was

1/4th and the other co-owners were his brothers. The Assessing Officer 3 ITA No.2296/Del./2011

referred the issue to the District Valuation Officer for valuation and he has

valued the property at Rs.6,47,72,800/-. One-fourth of the share of the

assessee comes to Rs.1,61,93,200/-. Accordingly, difference of

Rs.56,93,200/- (Rs.1,61,93,200/- minus Rs.1,05,00,000/-) was added to the

income of the assessee. The CIT (A) deleted the addition.

5. At the outset of the hearing, ld. AR submitted that this issue has

been considered by the ITAT, Bench 'F', New Delhi in its order dated

08.08.2014 in ITA No.2293/Del/2011 and relief has been granted in the

co-owners case. He relied on the order of the ITAT on this issue.

6. We have heard both the sides on the issue. The issue is covered in

favour of the assessee by the aforesaid decision of the ITAT. Relevant

portion of the order is reproduced hereunder :-

"11. We have heard the rival parties and have gone through the material placed on record. We find that Ld. CIT (A) has deleted the additions on account of difference in market prices of properties as compared to declared values following certain judicial pronouncements and by elaborating the facts clearly. Therefore, we do not see any reason to interfere with his findings. His order on other additions is also very elaborate and merits no intervention."

Since the addition has been deleted in the case of co-owners of the

property on the similar facts and circumstances, therefore, we dismiss

these two grounds of assessee's appeal relating to the addition made u/s

69B of the Income-tax Act, 1961. Accordingly, ground nos.1 & 2 are

dismissed.

4 ITA No.2296/Del./2011

7. In the ground no.3, the issue involved is deleting the addition of

Rs.4,25,600/- made on account of fair rental value.

8. On this issue also, ld. AR submitted that the fair rental value

estimated in the case of shop at Bhagirath Place, New Delhi has been dealt

with in the case of ACIT vs. Anil Arora in ITA No.2293/Del./2011 by the

ITAT, Bench 'F', New Delhi in its order dated 08.08.2014. On the similar

facts and circumstances, the addition was deleted. It was also pleaded that

the flat at Kailash Vihar, Baddi was incomplete and inhabitable during the

relevant period. It was subsequently let out to M/s. Wing Pharmaceuticals

Pvt. Ltd. in the financial year 2007-08 and the rental income of

Rs.3,50,000/- of the same was offered for taxation. Therefore, in this year,

there was no justification for estimating the rental income from this

property. He pleaded to sustain order of CIT (A) on this issue.

9. We have heard both the sides on the issue. This issue is partly

covered by the aforesaid decision of ITAT in respect of rental estimated

for Bhagirath Place, Chandni Chowk, New Delhi shop. The flat at Kailash

Vihar, Baddi was not habitable during the relevant period. In the

subsequent years, it was let out and the rent has been declared in the

income of assessee. In view of these facts, we find no merits in this

ground of revenue's appeal and the same is dismissed.

10. In the ground no.4, the issue involved is deleting the addition of

Rs.2,79,690/- on account of unexplained expenditure during foreign travel. 5 ITA No.2296/Del./2011

11. The Assessing Officer has dealt this issue in para 7 which is

reproduced as under :-

"7. During the year under consideration the assessee has undertaken foreign travel to Europe. The assessee was asked to furnish details of such expenses along with details of countries visited, period of travel, ticket expenses, boarding and lodging expenses etc. The assessee has submitted that foreign travel has been undertaken during the year but the expenditure of the foreign travel has been borne by assessee's HUF. The assessee has filed the details regarding foreign travel undertaken during the year and submitted that package tour was taken through SOTC and a certificate to the same effect has been filed from SOTC that the tours include cost of air tickets, accommodation, fooding, transfer and sight seeing. In absence of details of expenditure incurred on other related activities, such as place, period of stay, expenditure on gifts/souvenirs and shopping etc., the expenditure so claimed was not treated to be adequate and accordingly estimated at Rs.10,00,000/- out of which Rs.7,20,310/- has been claimed to have been incurred by the HUF. As such an addition of Rs.2,79,690/- is being made in the hands of the assessee being expenditure made out of undisclosed sources. ... (Addition Rs.2,79,690/-)."

The CIT (A) has granted the relief by holding as under :-

"7. Ground of Appeal No. XII:

That on the facts and the circumstances of the case and the provisions of the law, the learned assessing officer has erred in making an addition of Rs.279690/- on account of foreign travelling.

The Ld AO on mere presumption and assumption estimated total expenditure on foreign traveling to Europe at Rs.10 Lacs. And the assessee has already disclosed expenditure of Rs.720310/-, he has made an addition of Rs.279690/- on this account.

It is an undisputed fact that the said tour was a package tour arranged by SOTC which includes all the things i.e cost of air tickets, accommodation, foodings, transfers, sight scene etc. No question of any unexplained expenditure in this regard arises.

6 ITA No.2296/Del./2011 Thus there is no justification for making any addition on this account. Accordingly AO is directed to delete the addition of Rs.279690/- made on this account."

12. We have heard both the sides on the issue. Ld. AR submitted that

the deletion of addition has been sustained in the case of ACIT, Central

Circle 2, New Delhi vs. Rakesh Kumar Arora in ITA No.2295/Del/2011 by

the ITAT, Delhi Bench 'F', New Delhi vide its order dated 08.08.2914.

Respectfully following the aforesaid decision of ITAT, we sustain the

order of the CIT (A) on this issue and delete this ground.

13. Ground Nos.5 & 6 are general in nature and do not require any

adjudication.

14. In the result, the appeal of the revenue is dismissed.

Order pronounced in open court on this 23rd day of February, 2015.

Sd/- sd/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated the 23rd day of February, 2015 TS

Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-III, Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.