Ita/923/2017 Of Commissioner Of Income Tax v. Rakeshmohan

$~32 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 923/2017COMMISSIONER OF INCOME TAX..... AppellantThroughMr. Ashok M. Manchanda with Mr.Raghvendra K. Singh and Mr. AnandK. Chaudhuri, Advocates. versus CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE SANJEEV SACHDEVAO R D E R %01.11.2017 CM No.39262/2017 (exemption) Exemption is allowed subject to all just exceptions. ITA 923/2017 1.The Revenue states that a substantial question of law has arisen dueto deletion of Rs.2,86,86,270/-, which was assessed in the hands of therespondent. 2.The respondent is a former Chief Executive Officer in the Delhi JalBoard and was charged with having manipulated the award of contract. Hewas prosecuted.The contract was awarded to one M/s. KaveriInfrastructure Pvt. Ltd. and M/s. Pipeway Ltd., a New Zealand based entity.The subject matter of the addition was a loan of US Dollar 6,59,000/- givento one Mr. Vijay Kumar Kataria, who had executed the power of attorneyin favour of the assessee’s Son-in-law Sh. Mohit Mehra. 3.These amounts were sought to be included in the assessment in thehands of the respondent as Benami and brought to tax under Section 69. 4.The CIT(A) reversed the AO’s findings, holding as follows:- “7.The above FIR mentions that the contractor Sh. Vijay KumarKataria had executed power of attorney in favour ofappellants son-in-law Shri. Mohit Mehra on 23.05.2005 andSh. Mohit Mehra signed various documents to obtain bankloan of $3,29,500 on 23.05.2005. The only link between theappellant and the property is the above power of attorney infavour of the appellant’s son in law and the documents signedby the son in law to obtain the bank loan.This evidencementioned in the FIR is not adequate to conclude that theappellant have property in USA valued at Rs.2,86,86,270/- asdone in the assessment order by the A.O.The assessmentorder also mentions that if the CBI files no charge sheet afterthe completion of the investigations the appellant can obtainsuitable relief from appellate authorities. In the final chargesheet filed by the CBI there is no mention about the propertytransactions in USA. The charge sheet is only about bookingair tickets for the appellant and his family members by someof the contractors. The CBI court in its decision passed on26.03.2013 had stated that the appellant was not found guiltyof even on this charge.Since, the assessment order wasbased on the FIR filed by the CBI and as the CBI itself hadnot found any material to pursue the matter regarding theproperty transaction in USA against the appellant in thecharge sheet, the addition of Rs.2,86,86,270/- is sustainableas the addition was not made on the basis of any evidence.Even on the basis of the FIR the addition can be made at beston the son in law only, who is a permanent resident of USAand assessed to tax in USA, and not on the appellant.Moreover,theappellant’sARduringtheappellateproceedings had informed that the same property in USA wasadded in the hands of Shri Vijay Kumar Kataria, the actualpurchaser of the property in USA by DCIT Central Circle-11in his order u/s 153A passed on 27.03.2009.Since theaddition of Rs.2,86,86,270/- made by the AO in hand of theappellant is not a protective assessment and the departmentcannot tax the same property twice on the appellant and onthe actual purchaser of property. Therefore, I am of the viewthat the addition of Rs.2,86,86,270/- made by the AO as thevalue of property in USA is not sustainable as the addition isnot based on any evidence that the appellant was the owner of the above property. It is mentioned clearly even in the FIRthat the property was purchased by Sh. Vijay Kumar Katariaonly and therefore it cannot become the income for theappellant on the premise that the appellant’s son in law haspower of attorney over the above property for some period oftime. Therefore, ground no.2 is allowed and the addition ofRs.2,86,86,270/- is deleted.” 5.The ITAT affirmed the findings after noticing that the assessee hadbeen acquitted by the competent court. the above property. It is mentioned clearly even in the FIRthat the property was purchased by Sh. Vijay Kumar Katariaonly and therefore it cannot become the income for theappellant on the premise that the appellant’s son in law haspower of attorney over the above property for some period oftime. Therefore, ground no.2 is allowed and the addition ofRs.2,86,86,270/- is deleted.” 5.The ITAT affirmed the findings after noticing that the assessee hadbeen acquitted by the competent court. 6.Having regard to the circumstances, the findings and the facts, theRevenue has not been able to premise its claim upon its link through powerof attorney under the provisions of the Act or any other related enactments.The Court is of the opinion that no substantial question of law arises. 7.The appeal is, therefore, dismissed. S. RAVINDRA BHAT, J NOVEMBER 01, 2017/st SANJEEV SACHDEVA, J