Page 1 of 9 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Wealth Tax Appeal Nos. 16 to 19/Del/2014 (Assessment Year: 2005-06 to 2008-09) Anil Arora, WCIT, B-4/48, Paschim Vihar, Central Circle-02, New Delhi New Delhi Vs. PAN:AAGPA1400L (Appellant) (Respondent) Assessee by : Sh. AK Jain, CA Revenue by: Sh. SK Jain, DR Date of Hearing 07/09/2016 Date of pronouncement 20/10/2016 4O R D E R PER PRASHANT MAHARISHI, A. M. 1. These are four appeals appeals filed by assessee against order of ld CWT (A)-XII, New Delhi dated 25.06.2014 for Assessment Year 2005-06 to 2008-09. As all these four appeals are involving common grounds and similar facts, therefore, they are disposed of by this common order. 2. assessee has raised following grounds of appeal in WTA No. 16/Del/2014 for Assessment Year 2005-06:- 1. That on facts and circumstances of case and provision of law Ld C1T(Appeal) has failed to appreciate that assessment order passed by Ld. AC) u/s 16(3) is bad in law, wrong on facts. 2. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that impugned assessment order passed by Ld. AC) is against principles of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 2 of 9 natural justice and has been passed without affording reasonable opportunity of being heard. 3. That facts and circumstances of case and provision of law CIT(Appeal) has failed to appreciate that Ld. AO has erred in initiating proceedings u/s 18(1 )(c ) of Wealth Tax Act, 1957. 4. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 25,00.000;- in taxable wealth on account of surrender of cash found in locker with Syndicate Bank, DP Gupta. Karol Bagh New Delhi. 3. brief fact of case is that search and seizure operation was carried out on 14/02/2008. During course of search Rs. 30 lakhs were found in locker No. 216 in name of assessee with syndicate bank, Karol Baug branch, New Delhi. During course of search , assessee surrendered this sum as income for assessment year 2005 06 and therefore, it was added to total income of assessee u/s 143 (3)/153A of Income Tax Act dated 30/12/2009. In wealth tax proceedings, assessee filed his return of Wealth on 16/11/2010 declaring net wealth of Rs. 5,03,300/ in response to notice under section 17 of wealth tax act. Assessee did not offer this asset in his wealth tax return. Main reason for not including this sum in his return of Wealth by assessee is that , according to him, this money does not belong to him and therefore it is not chargeable to wealth tax under wealth tax act. This contention of assessee was emerging from statement of assessee during course of search wherein he has stated in response to answer to question No. 3 that this amount belongs to parents of assessee and it was given by them, as they did not have locker in their name. Therefore , though locker was in name of assessee, but this money belonged to them as their savings. He further stated that this money was kept by his father prior to year 2000 in parts from 1998 onwards. Ld. WTO rejected contention of assessee and included above sum into total wealth of assessee. Out of sum of Rs. 30 lakhs , Ld. WTO granted deduction of Rs. 5 Lacs already disclosed by assessee and therefore net addition to net wealth of assessee of Rs. 25 Lacs was Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 3 of 9 made at time of passing assessment order under section 16 (3) read with section 17 of wealth tax act, 1957. Aggrieved by order of Ld. Wealth tax officer, Assessee preferred appeal before Commissioner of wealth tax, who in turn confirmed order of Ld. Wealth tax officer. Therefore, assessee is in appeal before us. 4. On commencement of hearing, Ld. authorized representative of assessee submitted that he does not want to press ground No. 1, 2 and 3 of appeal of assessee for this assessment year and therefore they are dismissed. 5. Therefore, only ground survived in this appeal is against addition of Rs. 25 Lacs in to taxable wealth of assessee because of surrender of cash found in locker during course of search. Ld. authorized representative submitted that this money does not belong to him and Therefore, it cannot be included into net wealth of assessee. He vehemently relied on para No. 7 of assessment order under section 143 (3) of income tax act dated 30th December 2009 wherein during course of statement assessee has submitted that this money does not belong to him, but to his parents. He further submitted that he disclosed above sum and agreed for payment of tax on this additional income of Rs. 30 lakhs only because of reason that he wanted to save penalty and prosecution on this sum. He therefore submitted that this sum is not includible into net wealth of assessee for purpose of computation of wealth tax liability of assessee. 6. Ld. departmental representative submitted that assessee has surrendered above sum. During course of search he also agreed to pay tax on this sum under income tax act. Therefore this money belongs to him and amount is added under section 69A of income tax act. Ld. departmental representative further drew our attention to para No. 7.2 of assessment order under section 143 (3) wherein it is submitted that assessee has tried to disclose above amount under voluntary disclosure of income scheme 1997 and despite this, addition Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 4 of 9 has been confirmed into hands of above cash seized from locker. He further submitted that statement of assessee was also found to be erroneous and wrong, which has been proved by Ld. assessing officer in para No. 7.1 of that assessment order where bundles of notes were having slips of bank bearing dates of year 2002 & 2003 , therefore this money could not have been given by parent of assessee as stated by assessee up to year 2000. He therefore submitted that addition of this sum is rightly been made to net wealth of assessee as money belongs to assessee and is also owned by him. 7. We have carefully considered rival contention. undisputed fact is that that assessee tried to explain amount of cash seized from locker with syndicate bank which was in name of assessee and amount of Rs. 30 lakhs was found there from. Further, explanation of assessee was also not found to be correct that money belongs to parents of assessee as they gave this sum prior to year 2000 to assessee because of slips of bank, which were bearing dates of year 2002 and 2003 and for which assessee did not offer any explanation. Further, assessee in his statement has also disclosed above sum as additional income and also paid due tax thereon. In view of these overwhelming evidence against assessee, we are of view that the above sum of Rs. 30 lakhs belonged to assessee. According to provisions of section 3 of wealth tax act every individual shall be charged tax on net wealth as at valuation date. Further, net wealth has been defined under section 2 (m) of wealth tax act to mean all assets belonging to assessee in excess of debt owed as on valuation date. According to provisions of section 2(ea) of act assets in case of individual includes cash in excess of Rs. 50,000/-. Therefore, as above sum was belonging to assessee as accepted by him as his income in income tax proceedings, now he cannot say that above sum is not includible into net wealth of assessee. In view of this we confirm order of Ld. Commissioner of wealth tax confirming addition of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 5 of 9 Rs. 30 lakhs on account of cash found in locker belonging to assessee and which was also added under section 69A of income tax act in hands of assessee. Therefore ground No. 4 of appeal of assessee is dismissed. 8. In result, WTA No. 16/del/2014 for assessment year 2005 06 preferred by assessee is dismissed. 9. assessee has raised following grounds of appeal in WTA No. 17/Del/2014 for Assessment Year 2006-07:- 1. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that assessment order passed by Ld. AC u/s 16(3) is bad in law, wrong on facts. 2. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that impugned assessment order passed by Ld. AO is against principles of natural justice and has been passed without affording reasonable opportunity of being heard. 3. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that Ld. AO has erred in initiating proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957, 4. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 25,00,000/- in taxable wealth on account of surrender of cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi. 5. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 6,54,750/- in taxable wealth on account of Industrial Plot at Narela. 10. On commencement of hearing, Ld. authorized representative of assessee submitted that he does not want to press ground No. 1, 2 and 3 of appeal of assessee for this assessment year and therefore they are dismissed. 11. 4th ground of appeal of assessee is against addition of Rs. 25 Lacs in taxable wealth on account of surrender of cash found in locker with syndicate bank, New Delhi. above, ground of appeal is identical to ground No. 4 of appeal of assessee decided by us for Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 6 of 9 assessment year 2005 06 wherein we have dismissed that ground of appeal of assessee. parties before us admitted that facts and circumstances of issue involved are same. Therefore we also dismiss ground No. 4 of appeal of assessee. 12. 5th ground of appeal of assessee was against addition of Rs. 654750/- in taxable wealth on account of industrial plot at Narela. It was submission of assessee that above is industrial plot which does not fall under definition of assets as defined under section 2 (ea)of wealth tax act. 13. Ld. authorized representative submitted before us that above asset has been included by Ld. assessing officer in computing net wealth of assessee for year because of industrial plot remaining unused beyond 2 years. He submitted that it is industrial plot. It s undisputed fact. However, Ld. assessing officer has treated it under definition of urban land and therefore charged same to total wealth of assessee. main argument of Ld. authorized representative was that industrial land cannot be charged to wealth tax. 14. Ld. departmental representative submitted that this issue does not arise from order of Ld. Commissioner of wealth tax and therefore this ground of appeal of assessee is required to be dismissed. 15. We have carefully considered rival contentions. On reading of order of Ld. Commissioner of wealth tax, we found that this ground of appeal was taken by assessee before him, vide ground No. 4 of appeal which are reproduced at page No. 2 of his order. Further, Ld. Commissioner of wealth tax reproduced this ground on last page of his order. However, while giving finding on various grounds of appeal raised by assessee before him, he has not disposed of this ground of appeal. In view of above facts we restore ground No. 5 of this appeal back to file of Ld. Commissioner of wealth tax to adjudicate on this issue on merit after providing assessee reasonable opportunity of hearing. Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 7 of 9 In result ground No. 5 of appeal of assessee is allowed accordingly. 16. In result appeal of assessee for assessment year 2006 07 is partly allowed. 17. assessee has raised following grounds of appeal in WTA No. 18/Del/2014 for Assessment Year 2007-08:- 1. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that assessment order passed by Ld. AC u/s 16(3) is bad in law, wrong on facts. 2. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that impugned assessment order passed by Ld. AO is against principles of natural justice and has been passed without affording reasonable opportunity of being heard. 3. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that Ld. AO has erred in initiating proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957, 4. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 25,00,000/- in taxable wealth on account of surrender of cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi. 5. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 6,54,750/- in taxable wealth on account of Industrial Plot at Narela. 18. On commencement of hearing, Ld. authorized representative of assessee submitted that he does not want to press ground No. 1, 2 and 3 of appeal of assessee for this assessment year and therefore they are dismissed. 19. 4th ground of appeal of assessee is against addition of Rs. 25 Lacs in taxable wealth on account of surrender of cash found in locker with syndicate bank, New Delhi. aboveground of appeal is identical to ground No. 4 of appeal of assessee decided by us for assessment year 2005 06 wherein we have dismissed that ground of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 8 of 9 appeal of assessee. parties before us admitted that facts and circumstances of issue involved are same. Therefore we also dismiss ground No. 4 of appeal of assessee in this appeal. 20. 5th ground of appeal of assessee is against addition of Rs. 654750/ in taxable wealth on account of industrial plot at Narela. above, ground of appeal is identical to ground No. 5 of appeal of assessee decided by us for assessment year 2006 07 wherein we have set aside this ground of appeal to file of Ld. Commissioner of wealth tax. parties before us admitted that facts and circumstances of case for this year remains same. Therefore we set aside this ground of appeal back to file of Ld. Commissioner of wealth tax to adjudicate afresh after providing adequate opportunity of hearing to appellant. In result ground No. 5 of appeal of assessee is allowed with above direction. 21. In result appeal of assessee for assessment year 2007 08 is partly allowed 22. assessee has raised following grounds of appeal in ITA No. 19/Del/2014 for Assessment Year 2008-09:- 1. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that assessment order passed by Ld. AC u/s 16(3) is bad in law, wrong on facts. 2. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that impugned assessment order passed by Ld. AO is against principles of natural justice and has been passed without affording reasonable opportunity of being heard. 3. That on facts and circumstances of case and provision of law Ld CIT(Appeal) has failed to appreciate that Ld. AO has erred in initiating proceedings u/s 18(l)(c ) of Wealth Tax Act, 1957, 4. That on facts and on circumstances of case and provision of law Ld CIT Appeal has erred in sustaining addition of Rs. 25,00,000/- in taxable wealth on account of surrender of cash found in locker with Syndicate Bank, DP Gupta, Karol Bagh New Delhi. 23. On commencement of hearing, Ld. authorized representative of assessee submitted that he does not want to press ground No. 1, 2 and 3 of Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Page 9 of 9 appeal of assessee for this assessment year and therefore they are dismissed. 24. 4th ground of appeal of assessee is against addition of Rs. 25 Lacs in taxable wealth on account of surrender of cash found in locker with syndicate bank, New Delhi. above ground of appeal is identical to ground No. 4 of appeal of assessee decided by us for assessment year 2005 06 wherein we have dismissed that ground of appeal of assessee. parties before us admitted that facts and circumstances of issue involved are same. Therefore we also dismiss ground No. 4 of appeal of assessee in this appeal. 25. In result appeal of assessee for assessment year 2007 08 is dismissed Order pronounced in open court on 20/10/2016. -Sd/- -Sd/- (DIVA SINGH) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:20/10/2016 K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Wealth Tax Appeal Nos. 16 to 19/Del/2014 Assessment Year: 2005-06 to 2008-09 Anil Arrora V WCIT Anil Arora v. WCIT, Central Circle-02, New Delhi