The Commissioner of Income Tax Delhi Xiii v. R.K.Mittal

M.L. MEHTA, J.

MARCH 25, 2011

A.K. SIKRI, J. Dev/AK

* IN THE HIGH COURT OF DELHI AT NEW DELHI + Order reserved on: 02.02.2011 % Date of Decision: 25.03.2011 ITA No.1277/2007 The Commissioner of Income Tax – XIII …. Appellant Through: Mr.Sanjeev Sabharwal and Ms.Suruchi Aggarwal, Sr. Standing Counsel Versus M/s.Mittal Consul & Co. …. Respondent Through: Mr.C.S. Aggarwal, Sr. Advocate with Mr.Prakash Kumar, Advocate AND ITA No.572/2008 The Commissioner of Income Tax – VI …. Appellant Through: Mr.Sanjeev Sabharwal and Ms.Suruchi Aggarwal, Sr. Standing Counsel Versus Tushar Stock & Share Brokers (Pvt.) Ltd. …. Respondent Through: Mr.C.S. Aggarwal, Sr. Advocate with Mr.Prakash Kumar, Advocate AND ITA No.928/2008 The Commissioner of Income Tax – XIII …. Appellant Through: Mr.Sanjeev Sabharwal and Ms.Suruchi Aggarwal, Sr. Standing Counsel Versus R.K. Mittal …. Respondent Through: Mr.C.S. Aggarwal, Sr. Advocate with Mr.Prakash Kumar, Advocate CORAM: HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE M.L. MEHTA 1. Whether reporters of Local papers may be allowed to see the judgment? Yes. 2. To be referred to the reporter or not? Yes. 3. Whether the judgment should be reported in the Digest? Yes. M.L. Mehta, J. * 1. By this common judgment we propose to dispose of the aforesaid three appeals, arising out of separate orders dated 30th May, 2005 and 31st October, 2007 of the Income Tax Appellate Tribunal (hereinafter, referred to as ‗the Tribunal'). All these three appeals are interrelated. The respondents/assessees were assessed separately for the block periods. Vide common order dated 3rd December, 2004, their appeals against the orders of the Assessment Officers were rejected by the Commissioner of Income Tax (Appeals) [hereinafter, referred to as ‗CIT(A)']. The assessees filed separate appeals before the Tribunal. Vide the impugned order dated 30th May, 2005, the Tribunal allowed the appeal of the assessee M/s Mittal Consul & Company (hereinafter, referred to as ‗MCC') which is under challenge in ITA No. 1277/2007. Similarly vide separate orders dated 31st October, 2007, the Tribunal also allowed the appeal of the assessee M/s.Tushar Stock and Share Brokers (Pvt.) Ltd. (in short ―Tushar‖) which is under challenge in ITA No. 572/2008 and the appeal of R.K. Mittal (hereinafter, referred to as ‗Mittal') which is under challenge in ITA No.928/2008. 2. A raid was conducted on assessee Tushar by the Enforcement Directorate (hereinafter, for short ‗ED'), which lead to discovery of cash as well as other documents relating to all the respondents/assessees. Relevant proceedings were initiated by the Department against the respondents. Since the impugned order of the Tribunal dated 30th May, 2005 (in case of MCC) came to be passed prior in time and was also relied upon by the Tribunal in their subsequent impugned orders of 31st October, 2007 with respect to the other respondents/assessees (Tushar and Mittal), we can safely rely upon the facts as noted by the Tribunal in its impugned order of 30th May, 2005 and also by the CIT(A) in its order dated 3rd December, 2004 without any fear of contradiction. We, therefore, refer to the facts from the said orders. 3. Search and seizure operation was conducted by ED in the premises of Tushar on 12th December, 1995. During the course of search, thirty cheque books as well as cash worth `2,41,000/- were found besides other documents. A notice under Section 132A of the Income Tax Act (hereinafter, referred to as ‗the Act') was issued requisitioning the cash and other documents which were seized by the ED at the time of search. During the course of search, statement of Mittal, Director of Tushar and partner of MCC was recorded by the ED. Mittal had stated that the cheque books found and seized during the course of search, either belonged to his clients, he being a Chartered Accountant, or to the company/firms in which his relatives/friends were directors/partners. The MCC was also found to be operating from the premises of M/s Tushar which was searched by the