Income already offered for taxation cannot be taxed again as undisclosed income

ITAT DELHI BENCH ‘F
ITA No. 5070/Del/2012

Assessment Year : 2002–03

M/s Ramji Dass Darshan Kumar Ltd.

Vs.

Income Tax Officer

ORDER

PER G.D.AGRAWAL, VP:

This appeal by the assessee is directed against the order of learned CIT(A)-XVIII, New Delhi dated 19^th July, 2012 for the AY 2002- 03.

2. Ground Nos.1 to 4 of the assessee’s appeal are against the reopening of assessment under Section 147 of the Income-tax Act, 1961. In the assessment order, the Assessing Officer has recorded that in this case, the original return furnished by the assessee was processed under Section 143(1) and no regular assessment had taken place. The Assessing Officer had received the information from DIT(Investigation) that during the course of investigation, it was found that Mukesh Gupta along with his relatives and associate concerns were  in the business of providing entries by way of loans, share application money, gifts etc. As per information, the assessee was also beneficiary of the entry of 5 lakhs taken from Suma Finance Investment Ltd. In view of the above specific information, the Assessing Officer recorded the satisfaction for reopening of assessment under Section 148 and after issuing notice under Section 148, reopened the assessment.

3. At the time of hearing before us, the learned counsel for the assessee could not justify how the reopening of assessment was invalid.

4. In view of the above, we do not find any merit in ground Nos.1 to 4 of the assessee’s appeal. The same are rejected.

5. Ground Nos.5 & 6 of the assessee’s appeal are against the addition of ~16 lakhs made by the Assessing Officer as undisclosed income.

6. At the time of hearing before us, it was stated by the learned counsel that though the assessment was reopened on the ground of escapement of income of 5 lakhs being alleged entry taken from Suma Finance Investment Ltd., the Assessing Officer made the addition of ~16 lakhs on the ground that the assessee has taken the total loan of ~16 lakhs from following persons:-

 7. It is stated by the learned counsel that the assessee is in the business of real estate and the above amounts were received as advance against the booking of flats. That ultimately, those persons did not purchase the flats and, therefore, the sum of Rs. 16lakhs received as advance from them is offered as income. Once the above amount has already been offered as income by the assessee, the same cannot be taxed as undisclosed income, otherwise, it would amount to double taxation. He, therefore, submitted that the addition of Rs. 16 lakhs sustained by the learned CIT(A) should be deleted.

8. Learned DR, on the other hand, stated that before the Assessing Officer, the assessee never stated that the sum of Rs. 16 lakhs has already been offered by the assessee as its income. He, therefore, submitted that either the addition should be sustained or the matter may be set aside to the file of the Assessing Officer for verification of the fact whether the sum of Rs. 16lakhs has been offered by the assessee as its income.

9. We have carefully considered the arguments of both the sides and perused the material placed before us. It is contended by the learned counsel that the sum of Rs. 16 lakhs added by the Assessing Officer as undisclosed income has already been offered as income by the assessee by way of forfeiture of booking advance. In principle, we agree with the assessee’s contention that if the above sum is already offered as income by the assessee by way of trading receipt, the same cannot be taxed again as undisclosed income. However, whether the above sum is actually offered as income, needs verification. We, therefore, set aside the orders of authorities below on this point and restore the matter to the file of the Assessing Officer. We direct him to examine the assessee’s contention whether the sum of Rs. 16 lakhs has already been offered to tax as forfeiture of booking advance. If the amount has already been offered as income, no separate addition of the receipt of the above money shall be made as undisclosed income. Needless to mention that he will allow adequate opportunity of being heard to the assessee.

10.  In the result, the appeal of the assessee is deemed to be partly allowed for statistical purposes.

Decision pronounced in the open Court on 17^th May, 2013.