DCIT Vs Jugal Kishore Garg (Derewala) (ITAT Jaipur)
The ld. CIT(A) observed that it is evident that the surplus being referred to by the Ld. AO is not profit from the projects but the receipts of ‘on money’ credited to the capital accounts of the partners which has been considered in the additional income offered by MBDL and accepted by the Hon’ble Settlement Commission.
Thus on merits also since the amounts had already been added by the AO and the same had already been subjected to tax in the hands of MBDL and related entities, therefore, the ld. CIT(A) after considering all those facts had correctly deleted the addition made in various assessment years. The Bench also noted that no new facts have been brought by the Revenue in controverting the order of the ld. CIT(A) to the issue in question. In this view, of the matter, we find no reason to interfere with the order of the ld. CIT(A). Thus the appeal of the Revenue for the assessment year 2014-15 is dismissed.
As regards the appeals of the Revenue for the assessment year 2015-16 to 2017-18, the Bench noted that the grounds raised by the Revenue are similar and the facts are also similar to the case of the Revenue for the assessment year 2014-15 wherein the appeal of the Revenue for the assessment year 2014-15 is dismissed, hence taking into consideration the similar facts and circumstances of the case, the decision taken by the Bench for the assessment year 2014-15 shall be applicable mutatis mutandis in the appeals of the Revenue for the assessment year 2015-16 to 2017-18. Thus the appeals of the Revenue are dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
These four appeals have been filed by the Revenue against common order of ld.CIT (A)-4, Jaipur dated 07.10.2019 passed under section 143(3) r.w.s. 153C for the Assessment Year 2014-15 to 2016-17 and 143(3) for the Assessment Year 2017-18 of the Income Tax Act, 1961 (in short the ‘’Act”). Due to prevailing COVID-19 pandemic condition, the hearing of the appeals are concluded through video conference.
The Department has raised the following grounds of appeals in the respective Assessment Years.
ITA No. 34/JP/2020 – A.Y. 2014-15
‘’1. The ld. CIT(A) has erred in law and on facts (independently & severally) in granting relief to the assessee.
2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs.70,94,000/- made by the AO on account of on money received by the assessee.
3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the fact that the entries pertaining to unaccounted capital and advances were found in the ‘’N Trading” on Cloud Data and thus addition of unexplained unaccounted capital, advances, interest and surplus profit earned were on the basis of incriminating seized data.
4. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in giving relief to the assessee on the ground that Manglam Group had owned up the entire in the ‘’N Trading” on Cloud Data before the ISTC. The order of the Hon’ble ISTC has already been challenged in writ before the Hon’ble High Court.
ITA No. 35/JP/2020 – A.Y. 2015-16
‘’1. The ld. CIT(A) has erred in law and on facts (independently & severally) in granting relief to the assessee.
2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs. 2,82,97,500/- made by the AO on account of unaccounted surplus profit earned by the assessee from various projects of Manglam Group.
3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs. 1,00,00,000/- made by the AO on account of undisclosed interest earned on cash loan/capital.
4. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the fact that the entries pertaining to unaccounted capital and advances were found in the ‘’N Trading” on Cloud Data and thus addition of unexplained unaccounted capital, advances, interest and surplus profit earned were on the basis of incriminating seized data.
5. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in giving relief to the assessee on the ground that Manglam Group had owned up the entire in the ‘’N Trading” on Cloud Data before the ISTC. The order of the Hon’ble ISTC has already been challenged in writ before the Hon’ble High Court.
ITA No. 36/JP/2020 – A.Y. 2016-17
‘’1. The ld. CIT(A) has erred in law and on facts (independently & severally) in granting relief to the assessee.
2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs.1,50,00,000/- made by the AO on account of unaccounted capital deployed by the assessee
3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs. 25,89,900/- made by the AO on account of unaccounted surplus profit earned by the assessee from various project of Manglam Group.
4. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs. 14,24,800/- made by the AO on account of undisclosed interest earned on cash loan/capital.
5. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the fact that the entries pertaining to unaccounted capital and advances were found in the ‘’N Trading” on Cloud Data and thus addition of unexplained unaccounted capital, advances, interest and surplus profit earned were on the basis of incriminating seized data.
6. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in giving relief to the assessee on the ground that Manglam Group had owned up the entire in the ‘’N Trading” on Cloud Data before the ISTC. The order of the Hon’ble ISTC has already been challenged in writ before the Hon’ble High Court.
ITA No. 37/JP/2018 – A.Y. 2017-18
‘’1. The ld. CIT(A) has erred in law and on facts (independently & severally) in granting relief to the assessee.
2. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the transactions found on Cloud Data and deleting the addition of Rs.70,94,000/- made by the AO on account of on money received by the assessee.
3. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in ignoring the fact that the entries pertaining to unaccounted capital and advances were found in the ‘’N Trading” on Cloud Data and thus addition of unexplained unaccounted capital, advances, interest and surplus profit earned were on the basis of incriminating seized data.
4. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in giving relief to the assessee on the ground that Manglam Group had owned up the entire in the ‘’N Trading” on Cloud Data before the ISTC. The order of the Hon’ble ISTC has already been challenged in writ before the Hon’ble High Court.”
2.1 First of all, we take up the appeal of the Revenue for the assessment year 2014-15 for adjudication.
3.1Brief facts of the case are that the assessee is a partner in the firms M/s. J.K. Jewellers (3.3.34% shares), M/s. JK Jewellers International (20% shares), M/s. JK Jewells (50% shares), M/s. Upasand Colonizers (50% shares) , M/s. JK International (33.33% shares), M/s. Neemrana Developers (40% shares) and M/s. Precious Buildcon (50% shares) respectively. The assessee has declared income from house property, capital gain and interest from parties during this year. The original returns were filed as per details as under:-
