Sh. Sheetal Prasad Jaiswal, New Delhi V. ITO, New Delhi

CO 124/DEL/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7172 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 23-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTY
• Keywords: Additional evidence
• Section: 144

Judgement Text

[1] IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.1261/DEL/2011 ASSESSMENT YEAR: 2007- 2008 INCOME TAX OFFICER, VS. SHRI SHEETAL PRASAD JAISWAL, WARD-27(4), ROOM NO. 214, W-112, MAYA PURI IND. A REA, D-BLOCK, VIKS BHAWAN, PHASE-II, NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) C. O. NO.124/DEL/11 (IN ITA NO.1261/DEL/11) ASSESSMENT YEAR: 2007-2008 SHRI SHEETAL PRASAD JAISAL, VS. INCOME TAX OFFIC ER, NEW DELHI. WARD-27(4), NEW DELHI. (OBJECTOR) (RESPONDENT) REVENUE BY : SMT. SURJANI MOHANTY, SR. D. R. ASSESSEE BY : NONE ORDER PER I. P. BANSAL, JUDICIAL MEMBER THE APPEAL IS FILED BY THE REVENUE AND THE CROSS O BJECTION IS FILED BY THE ASSESSEE AND BOTH ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) DATED 16/01/2011 [2] FOR ASSESSMENT YEAR 2007-2008. IN ITS APPEAL THE R EVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS.24,31,5 02/- BY ADMITTING ADDITIONAL EVIDENCE IN CONTRAVENTION OF R ULE 46A OF THE I.T. RULES, 1962. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE REMAND REPORT O F THE ASSESSING OFFICER WHERE IT HAS BEEN CATEGORICALLY P OINTED OUT THAT THE SOURCES OF CASH DEPOSITS REMAIN UNEXPL AINED. 2. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN CONSIDERING THE AGGREGATE O F THE DEPOSITS IN THE AXIS BANK ACCOUNT NO. 4091 AND AXIS BANK ACCOUNT NO. 0417 AS RS.32,05,000/- WHEREAS THE ACTU AL AGGREGATE OF DEPOSITS IN THE SAID BANK ACCOUNTS AMO UNTS TO RS.17,23,200/-. 3. IN APPEAL, THE IMPUGNED ASSESSMENT ORDER DATED 3 0/12/2009 IS PASSED U/S 144 OF THE I.T. ACT, 1961 (ACT). THE RETURN OF INC OME WAS FILED BY THE ASSESSEE AT RS.1,10,073/-. IN THE PROFIT & LOSS ACCOUNT THE AS SESSEE HAS SHOWN SALE OF SCRAP AT RS.5,99,197/- OUT OF WHICH NET PROFIT WAS EARNED AT RS.1,77,523/- AND THUS NET PROFIT EARNED BY THE ASSESSEE FROM SALE OF SCRAP WA S 29.62%. THE ASSESSING OFFICER INITIATED ASSESSMENT PROCEEDINGS, IN RESPON SE TO WHICH THE CHARTERED ACCOUNTANT OF THE ASSESSEE ATTENDED ONLY ON 30 TH OCTOBER, 2009. THE ASSESSEE REMAINED ABSENT ON ALL OTHER NOTICES. AS THE ASSES SMENT PROCEEDINGS WERE GOING TIME BARRED, THE ASSESSING OFFICER COMPLETED THE AS SESSMENT EX-PARTE, QUA THE ASSESSEE U/S 144 OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE [3] COULD NOT EXPLAIN THE SOURCE OF DEPOSITS IN THE BAN K ACCOUNTS MAINTAINED BY HIM. THE AGGREGATE OF THIS AMOUNT WAS FOUND BY THE ASSES SING OFFICER TO THE SUM OF RS.32,03,300/- WHICH WAS ADDED TO THE RETURNED INCO ME OF RS.1,10,073/- AND IN THIS MANNER THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.33,13,373/-. THE ADDITION MADE BY THE ASSESSING OFFICER WAS AGITATED IN APPEAL FILED BY THE ASSESSEE BEFORE THE CIT(A). THE ASSESSEE EXPLAINED THAT HOW HE COULD NOT REPRESENT BEFORE THE ASSESSING OFFICER AND THESE RE ASONS HAVE BEEN REPRODUCED IN THE ORDER OF LEARNED CIT(A) IN PARA 32. CERTAIN ADDITIONAL EVIDENCES WERE FILED BEFORE THE LEARNED CIT(A) WHICH WERE FORWARDED TO T HE ASSESSING OFFICER. THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE. HOWEVER, LEARNED CIT(A) PROCEEDED TO DECIDE THE APPEAL OF TH E ASSESSEE . HE FOUND THE FACT THAT THE ASSESSEE IS CARRYING ON BUSINESS ACTI VITY OF SCRAP SALE WHICH CANNOT BE DISPUTED. THE ASSESSEE MADE CERTAIN WITHDRAWALS FROM ATM AT DIFFERENT STATIONS AND FROM THE PATTERN OF THOSE WITHDRAWALS IN THE BANK ACCOUNT, THE LEARNED CIT(A) HAS CONCLUDED THAT THE ASSESSEE WAS CARRYING ON SALE AND PURCHASE OF SCRAP AND THE AMOUNT DEPOSITED ON VARIO US DATES IN THE BANK ACCOUNTS MAINTAINED BY THE ASSESSEE WITH AXIS BANK REPRESENTED HIS TURNOVER. TAKING CLUE FROM THE NET PROFIT SHOWN BY THE ASSESS EE, THE LEARNED CIT(A) HAS APPLIED 29.62% NET PROFIT RATE TO THE DEPOSITS MADE BY THE ASSESSEE IN THE BANK ACCOUNT WHICH HAVE BEEN DETERMINED AT RS.32,03,300/ - AND IN THIS MANNER ADDITIONAL INCOME HAS BEEN DETERMINED BY LEARNED CI T(A) AT RS.7,71,798/- REDUCING THE SAID INCOME FROM THE DEPOSITS OF RS.32 ,03,300/-, HE HAS DELETED THE ADDITION OF RS.24,31,502/-. [4] 4. THE DEPARTMENT IS AGGRIEVED WITH THE SAID DELETI ON. THE DELETION HAS BEEN AGITATED BY THE REVENUE ON THE GROUND OF NON APPLIC ABILITY OF RULE 46A OF THE I.T. RULES, 1962 ON THE GROUND THAT IN THE REMAND REPORT THE ASSESSING OFFICER HAS CATEGORICALLY POINTED OUT THAT THE SOURCE OF CASH D EPOSITS REMAINED UNEXPLAINED. 5. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, TH E ASSESSEE IS OBJECTING TO THE DECISION OF LEARNED CIT(A) ONLY TO THE EXTENT T HAT THE AGGREGATES OF DEPOSITS IN THE BANK ACCOUNT HAS NOT BEEN CORRECTLY COMPUTED BY THE LEARNED CIT(A) AT RS.32,05,000/- AS ACTUALLY IT IS RS.17,23,200/-. I T IS IN THIS MANNER THE DEPARTMENT AS WELL AS ASSESSEE BOTH HAVE AGITATED TO THE ORDER OF LEARNED CIT(A). 6. NOTICE OF HEARING WAS SENT TO THE ASSESSEE, HOWE VER, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. WE, THEREFORE, PROCEED TO DECIDE THE APPEAL FILED BY THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASS ESSEE BOTH ON MERITS AFTER HEARING LEARNED D.R., EX-PARTE QUA THE ASSESSEE. 7. THE LEARNED D. R. AFTER NARRATING THE FACTS VEHE MENTLY PLEADED THAT THE LEARNED CIT(A) HAS WRONGLY DELETED THE ADDITION OF RS.24,31,502/- BY ADMITTING THE ADDITIONAL EVIDENCE. SHE SUBMITTED THAT IN THE REMAND REPORT THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT SOURCE OF CAS H DEPOSITS IN THE BANK ACCOUNT REMAINED UNEXPLAINED. THEREFORE, SHE PLEADED THAT THE RELIEF GRANTED BY THE LEARNED CIT(A) SHOULD BE SET ASIDE AND ORDER PASSED BY THE ASSESSING OFFICER SHOULD BE RESTORED. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LEARNED D. R. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS ORDER PASSED BY THE [5] LEARNED CIT(A). THE LEARNED CIT(A) UPON APPRECIATI ON OF FACTS SUBMITTED BEFORE HIM HAS CONCLUDED A FINDING THAT THE CASH DEPOSITED IN THE BANK ACCOUNT IS ORIGINATED FROM THE BUSINESS ACTIVITY OF THE ASSESS EE OF SALE AND PURCHASE OF SCRAP. THIS POSITION HAS NOT BEEN CONTROVERTED BY BRINGING ANY MATERIAL ON RECORD TO SUGGEST THAT THE ASSESSEE WAS INVOLVED IN ANY OT HER ACTIVITY. THE EACH OF THE DEPOSITS IN THE BANK ACCOUNT IS ALSO BELOW RS.50,00 0/-. THEREFORE, IN OUR OPINION, THERE BEING NO MATERIAL ON RECORD TO CONTROVERT THE FACTS THAT THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WERE SOURCED BY SOMETH ING ELSE I.E. OTHER THAN HIS BUSINESS ACTIVITY OF SALE AND PURCHASE OF SCRAP, WE DECLINE TO INTERFERE IN THE FINDINGS RECORDED BY THE LEARNED CIT(A) THAT AMOUNT DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT HAD ORIGINATED FROM HIS BUSINESS A CTIVITY OF SALE AND PURCHASE OF SCRAP. SINCE THE ASSESSEE IS NOT DISPUTING THE APP LICATION OF NET PROFIT RATE IN HIS CROSS OBJECTION, THE ONLY OBJECTION OF THE ASSESSEE IS REGARDING THE QUANTUM OF THE DEPOSITS IN BOTH THE ACCOUNTS, WE CONSIDER IT J UST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A L IMITED DIRECTION TO EXAMINE THIS CONTENTION OF THE ASSESSEE AND TURNOVER OF THE ASSE SSEE SHOULD BE CONSIDERED ONLY TO THE EXTENT OF CASH DEPOSITS IN THESE TWO BA NK ACCOUNTS WHICH HAVE BEEN MENTIONED BY THE LEARNED CIT(A) AND IN THE CROSS OB JECTION FILED BY THE ASSESSEE. WE HAVE ALREADY MENTIONED THAT APPLICATI ON OF NET PROFIT RATE AT 29.62% HAS NOT BEEN DISPUTED BY THE ASSESSEE IN HIS CROSS OBJECTION, THEREFORE, FOR THE LIMITED PURPOSE, AS MENTIONED ABOVE, THE MA TTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO TAKE THE TURNOVER OF TH E ASSESSEE ONLY TO THE EXTENT OF CASH DEPOSITS IN BOTH THE BANK ACCOUNTS OF THE ASS ESSEE AND REDUCING THEREFROM [6] THE SALES ALREADY SHOWN AND NET PROFIT BE DETERMI NED ON THAT TURNOVER. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED F OR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/2012 ) SD/. SD/. ( SHAMIM YAHYA ) ( I. P. BANSAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:27/04/2012 *SINGH 2304 COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR