Ram Singhare Yadav ,, Kanpur vs Assessee

Ram Singhare Yadav, Vs. D.C.I.T.- Central Circle - II, 51/56, Shakkarpatti, Kanpur. Kanpur PAN:AAVPY3890M (Appellant) (Respondent) ITA No.504/LKW/2013 Assessment year:2005-2006

Rajjan Lal Vinod Gupta (HUF), Vs. D.C.I.T.- Central Circle - II, 51/56, Shakkarpatti, Kanpur. Kanpur PAN:AAFHR7820C (Appellant) (Respondent) ITA No.505 & 506/LKW/2013 Assessment year:2001 - 02 & 2005-2006

Rajjan Lal Neeraj Gupta (HUF), Vs. D.C.I.T.- Central Circle - II, 51/56, Shakkarpatti, Kanpur. Kanpur PAN:AAFHR7820C (Appellant) (Respondent)

ITA No.507 & 508/LKW/2013 Assessment year:2001 - 02 & 2005-2006

Maya Devi Vinod Neeraj Gupta Vs. D.C.I.T.- Central Circle - II, (HUF), Kanpur. 51/56, Shakkarpatti, Kanpur PAN:AADHM5077J (Appellant) (Respondent) 2

ITA No.509 & 510/LKW/2013 Assessment year:2001 - 02 & 2005-2006

Rajjan Lal Vinod Neeraj Gupta (HUF), Vs. D.C.I.T.- Central Circle - II, 51/56, Shakkarpatti, Kanpur. Kanpur PAN:AAEHR1540N (Appellant) (Respondent)

ITA No.511 & 512/LKW/2013 Assessment year:2001 - 02 & 2005-2006

Vinod Kumar Neeraj Gupta (HUF), Vs. D.C.I.T.- Central Circle - II, 51/56, Shakkarpatti, Kanpur. Kanpur PAN:AACHV7436H (Appellant) (Respondent)

Appellant by Shri Ashish Jaiswal, Advocate Respondent by Shri Anand Kumar Agarwal, CIT DR Date of hearing 19/03/2015 Date of pronouncement 26/03/2015

ORDER

PER A. K. GARODIA, A.M.

Out of this bunch of 10 appeals, all appeals are filed by different assesses for different years but since the issues involved are common, all these appeals were heard together and are being disposed of by this common order for the sake of convenience.

2. First, we take up the appeal in the case of Sri Ram Singhare Yadav for A.Y. 2005 - 06 in ITA No. 503/Lkw/2013.

3. As per Ground No. 1, the assessee has raised the issue regarding satisfaction recorded by the A.O. u/s 153C. This is the case of the assessee that the satisfaction is not proper and correct. Learned AR of the assessee reiterated the contentions raised before CIT (A). He also placed reliance on the following judicial pronouncements:-

a) Pepsi Foods (P) Ltd. vs. ACIT, 52 Taxman.com 220 (Delhi)

b) DSL Properties (P) Ltd. vs. DCIT, 60 SOT 88 (Del Trib.) 3

c) Natural Products BioTech Ltd.vs.DCIT,53Taxmann.com400(Del Trib.)

d) ACIT vs. Global Estate 142 ITD 740 (Agra Trib.)

e) CIT vs. Gopi Apartment 365 ITR 411 (Allahabad)

f) DCITvs.QualitronCommodities(P) Ltd.,54Taxmann.com295(Del Trib.)

g) Pepsi India Holdings (P) Ltd. vs. ACIT, 228 Taxman.com 116 (Delhi)

4. Learned D.R. of the Revenue supported the orders passed by the authorities below.

5. We have considered the rival submissions. We find that in the case of Pepsi Food (Supra) , Hon'ble Delhi High Court has considered a judgment of Hon'ble Jurisdictional High Court rendered in the case of CIT vs. classic Enterprises, 358 ITR 465 (All.). Hon'ble Delhi High Court has observed in Para 7 that this judgment of Hon'ble Allahabad High Court is in context of section 158 BD and therefore this judgment does not come to aid of the revenue in a case u/s 153C. But when we gone through this judgment of Hon'ble Allahabad High Court, we found that in that case also, the issue in dispute in that case was also regarding validity of assessment u/s 153C and not u/s 158BD. In fact, as question no. iii raised before Hon'ble Allahabad High Court, reference was made to another judgment of Hon'ble Allahabad High Court rendered in the case of Digvijay Chemicals Ltd. vs. ACIT, 248 ITR 381 and in that case, the issue involved was requirement of recording satisfaction u/s 158BD and it was held that even recording of satisfaction in writing is not mandatory.

6. In the case of CIT vs. classic Enterprises, 358 ITR 465 (All.), It was held by Hon'ble Allahabad High Court that since at this stage the proceedings are at the very initial state, the satisfaction is neither to be firm or conclusive. In the present case, learned CIT (A) has reproduced the satisfaction note of the A.O. in Para 4.2 of his order and as per the same, it is seen that it is noted by the A.O. that certain loose documents were found in course of search in Kadak Family Tea Group of cases and these belong to this assessee. Hence, it is seen that in the present case, satisfaction was recorded by the A.O. of the searched person and the case is covered against the assessee by the judgment of Hon'ble Jurisdictional High Court rendered in the case of CIT vs. classic Enterprises (Supra). Since this judgment is of Hon'ble Allahabad High Court, it is binding on us and therefore, we are not discussing various judgments cited by learned AR as noted above except CIT vs. Gopi Apartment 365 ITR 411 (Allahabad) because these are not binding. In that case, it is noted by Hon'ble Allahabad High Court that as per categorical finding recorded by Commissioner (Appeals) and the Tribunal, there is no material 4

showing the recording of satisfaction by the A.O. of the searched person. Because satisfaction was recorded by the A.O. of the searched person in the present case as reproduced by the Commissioner (Appeals), this judgment is not applicable. Hence, by respectfully following the judgment of Hon'ble Jurisdictional High Court rendered in the case of CIT vs. classic Enterprises (Supra), we decide this issue against the assessee.

7. The second issue as per Ground No. 2 is regarding validity of addition of Rs. 438,500 made by the A.O. on the basis of offer made by the assessee in petition before Settlement Commission.

8. It was submitted by learned AR of the assessee regarding this issue that the offer was made by the assessee before Settlement Commission to avoid botheration and buy peace but later on, the assessee got legal advice that there was no need to offer additional income before Settlement Commission and to pay tax thereon because in fact, there was no additional income. He submitted that the petition was held invalid by Settlement Commission for want of payment of admitted tax. He also submitted that no incriminating material was found in search and there is no basis of offer before Settlement Commission and therefore, the addition made by the A.O. and confirmed by learned CIT (A) on the basis of mere offer before Settlement Commission is not justified. Learned D.R. of the Revenue supported the orders passed by the authorities below.

9. We have considered the rival submissions. We find that as per sub section (3) to section 245HA, the A.O. can use all material and other information produced by the assessee before the Settlement Commission. This is not in dispute that the assessee provided this information before Settlement Commission about his additional income. Since, the assessee did not provide the detail about the year in which, this income was earned by the assessee, the A.O. made substantive addition in A.Y. 2005 - 06 being search year and made protective addition in 1999 - 2000 to 2004 - 05 on protective basis. It is noted by learned CIT (A) in Para 5.2 and 5.2.1 of his order that the learned AR of the assessee himself made an offer before him that if the addition is confirmed, the same be confirmed in A.Y. 2005 - 06 on substantive basis. Learned CIT (A) accepted the same and accordingly confirmed the addition on substantive basis in A.Y. 2005 - 06 being search year. We do not find any infirmity in the same.

10. A connected issue raised by the assessee as per ground No. 4 is this that if this addition in A.Y. 2005 - 06 is confirmed than also, the amount of such addition in this year should be reduced by the amount of other additions confirmed by CIT (A) in earlier years as per same order by allowing 5

telescoping those additions confirmed in earlier years. Learned AR of the assessee submitted that since the offer before Settlement Commission was without year wise and other break up, telescoping should be allowed. Learned DR of the revenue submitted that telescoping cannot be allowed.

11. We have considered the rival submissions. We find that this is admitted position that offer before Settlement Commission as reproduced in written submissions was a combined offer for A.Y. 1999 - 2000 to A.Y. 2005

- 06 without any year wise break up or item wise break up. No such detail could be filed by the assessee and the revenue also could not find any material in spite of search to pin point the year of earning of this income or nature of this income and therefore, addition was made in each year on protective basis and in A.Y. 2005- 06 on substantive basis. Learned CIT (A) has confirmed an addition of Rs. 16,500 in A.Y. 1999 - 2000, Rs. 10,500 in A.Y. 2000 - 2001, Rs. 22,000 in A.Y. 2001 - 2002, Rs. 20,500 in A.Y. 2002 - 2003 and Rs. 25,000 in A.Y. 2003 - 2004 on different account apart from confirming the addition on substantive basis in A.Y. 2005 - 06 being offer before Settlement Commission. Total of all these additions comes to Rs. 94,500 only which is much less that the addition confirmed in A.Y. 2005 - 06. In view of peculiar facts of the present case where the addition is made and confirmed on the basis of offer before Settlement Commission, which is not specific, it has to be accepted that part of such income might have been earned in these earlier years and hence, in view of these peculiar facts, we grant telescoping and direct the A.O. that the additions confirmed by learned CIT (A) in A. Y. 1999 - 2000 to 2003 - 04 as noted above should be considered as part of surrender before Settlement Commission and therefore, the net addition in this year is confirmed to the extent of Rs. 344000 only (Rs. 438500 - 94500).

12. In the result, the appeal of the assessee stands partly allowed.

13. Now, we take up the appeal in the case of Sri Rajjan Lal Vinod Gupta (HUF) for A.Y. 2005 - 06 in ITA No. 504/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have also allowed telescoping in that case. On same line, in this case also, all three issues are decided and net addition of Rs. 407,500 is confirmed in A.Y. 2005 - 06 on substantive basis being Rs. 420,000 Offer before Settlement Commission Less the addition of Rs. 10,000 in A.Y. 1999 - 2000 and Rs. 2,500 in A.Y. 2001 - 02 confirmed by Learned CIT (A).

6 14. In addition to this, there is one more issue in this case regarding confirming of addition of Rs. 8,000 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A).

15. In the result, the appeal of the assessee stands partly allowed.

16. Now, we take up two appeals in the case of Sri Rajjan Lal Neeraj Gupta (HUF) for A.Y. 2001 - 02 in ITA No. 505/Lkw/2013 and for A.Y. 2005 - 06 in ITA No. 506/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have also allowed telescoping in that case. On same line, in this case also, all three issues are decided and net addition of Rs. 212,000 is confirmed in A.Y. 2005 - 06 on substantive basis being Rs. 422,000 offered before Settlement Commission Less the addition of Rs. 10,000 in A.Y. 1999 - 2000 and Rs. 200,000 in A.Y. 2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of Rs. 200,000 is allowed in A.Y. 2005 - 06, the appeal in A.Y. 2001 02 is dismissed.

17. In addition to this, there is one more issue in this case regarding confirming of addition of Rs. 5,000 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A).

18. In the result, the appeal of the assessee for A.Y. 2001 - 02 is dismissed and for A.Y. 2005 - 06 is partly allowed.

19. Now, we take up two appeals in the case of Maya Devi Vinod Neeraj Gupta (HUF) for A.Y. 2001 - 02 in ITA No. 507/Lkw/2013 and for A.Y. 2005 - 06 in ITA No. 508/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have also allowed telescoping in that case. On same line, in this case also, all three issues are decided and net addition of Rs. 317,500 is confirmed in A.Y. 2005 - 06 on substantive basis being Rs. 421,000 offered before Settlement Commission Less the addition of Rs. 5,000 in A.Y. 1999 - 2000 and Rs. 103,500 in A.Y. 7

2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of Rs. 103,500 is allowed in A.Y. 2005 - 06, the appeal in A.Y. 2001 02 is dismissed.

20. In addition to this, there is one more issue in this case regarding confirming of addition of Rs. 7,500 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A).

21. In the result, the appeal of the assessee for A.Y. 2001 - 02 is dismissed and for A.Y. 2005 - 06 is partly allowed.

22. Now, we take up two appeals in the case of Rajjan Lal Vinod Neeraj Gupta (HUF) for A.Y. 2001 - 02 in ITA No. 509/Lkw/2013 and for A.Y. 2005 - 06 in ITA No. 510/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have also allowed telescoping in that case. On same line, in this case also, all three issues are decided and net addition of Rs. 214,250 is confirmed in A.Y. 2005 - 06 on substantive basis being Rs. 422,500 offered before Settlement Commission Less the addition of Rs. 7,500 in A.Y. 1999 - 2000 and Rs. 200,750 in A.Y. 2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of Rs. 200,750 is allowed in A.Y. 2005 - 06, the appeal in A.Y. 2001 02 is dismissed.

23. In addition to this, there is one more issue in this case regarding confirming of addition of Rs. 12,500 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A).

24. In the result, the appeal of the assessee for A.Y. 2001 - 02 is dismissed and for A.Y. 2005 - 06 is partly allowed.

25. Now, we take up two appeals in the case of Vinod Kumar Neeraj Gupta (HUF) for A.Y. 2001 - 02 in ITA No. 511/Lkw/2013 and for A.Y. 2005 - 06 in ITA No. 512/Lkw/2013. It was agreed by both sides that the facts and dispute in this case are identical to the facts and dispute in the case of Sri Ram Singhare Yadav in ITA No. 503/Lkw/2013 and this appeal can be decided on same line. In that case, we have approved the validity of Notice u/s 153C and have also upheld the addition on substantive basis in A.Y. 2005 - 06 in respect of offer before Settlement Commission. We have also allowed 8

telescoping in that case. On same line, in this case also, all three issues are decided and net addition of Rs. 213,000 is confirmed in A.Y. 2005 - 06 on substantive basis being Rs. 421,500 offered before Settlement Commission Less the addition of Rs. 8,500 in A.Y. 1999 - 2000 and Rs. 200,000 in A.Y. 2001 - 02 confirmed by Learned CIT (A). Since telescoping of addition confirmed in A.Y. 2001 - 02 of Rs. 200,000 is allowed in A.Y. 2005 - 06, the appeal in A.Y. 2001 02 is dismissed.

26. In addition to this, there is one more issue in this case regarding confirming of addition of Rs. 10,000 in A.Y. 2005 - 06 by estimating the receipts. On this issue, we find no infirmity in the order of learned CIT (A).

27. In the result, the appeal of the assessee for A.Y. 2001 - 02 is dismissed and for A.Y. 2005 - 06 is partly allowed.

28. In the combined result, all Four appeals for A.Y. 2001 - 02 are dismissed and remaining Six appeals for A. Y. 2005 - 06 are partly allowed.

(Order was pronounced in the open court on the date mentioned on the caption page)

Sd/. Sd/.

(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member

Dated: 26/03/2015 *C.L.Singh

Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar