New Age Overseas, New Delhi V. ITO, New Delhi

CO 385/DEL/2011

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0019 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-08-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 30-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K GOEL
• Assessee Lawyers: MANOJ KUMAR CHOPRA
• Keywords: Unexplained investment; Business income; Accommodation entries
• Section: 142(1); 147; 68; 69; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI J.S.REDDY , ACCOUNTANT MEMBER I.T.A .NO. - 3333/DEL/2010 ( ASSESSMENT YEAR - 2001 - 02 ) CO - 385/DEL/2011 (IN I. T.A .NO. - 3333/DEL/2010) ( ASSESSMENT YEAR - 2001 - 02 ) NEW AGE OVERSEAS, PROP. SHRI DALJIT SINGH, 130 - D, KAMLA NAGAR, DELHI. PAN - ALVPS1043H (APPELLANT) VS. ITO, WARD - 20(1) , NEW DELHI (RESPONDENT) APPELLANT BY: SH. MANOJ KUMAR CHOPRA, SR. DR RESPONDENT BY: SH. V.K.GOEL, CA ORDER PER DIVA SINGH, JM T H E PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 30.04 .201 0 OF CIT(A) - XX II , NEW DELHI PERTAINING TO 200 1 - 0 2 ASSESSMENT YEAR AND THE ASSESSEE ALSO IS BEFORE US IN THE CROSS OBJECTION FILED. THE GROUNDS RAISED BY THE DEPARTMENT READ AS UNDER : - 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,08,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UN - EXPLAINED CREDIT U/S 68 OF I.T.ACT. ITO, WARD - 20(1) , NEW DELHI (APPELLANT) VS NEW AGE OVERSEAS, PROP. SHRI DALJIT SINGH, 130 - D, KAMLA NAGAR, DELHI. PAN - ALVPS1043H (RESPONDENT) 2 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.6,65,815/ - MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF UN - EXPLAINED INVESTMENT. 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.10,89,423/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PROFIT ESTIMATE BASIS. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALT ER ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND ADD ANY OTHER GROUND OF APPEAL. 2. THE ASSESSEE HAS FILED ITS CROSS OBJECTION ON THE FOLLOWING GROUNDS: - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ACTED AGAINST THE LAW IN NOT QUASHI NG THE REASSESSMENT ORDER. 2. THAT THE CIT(A) WAS NOT CORRECT IN LAW IN NOT HOLDING THE IMPUGNED ASSESSMENT TO BE ILLEGAL SPECIFICALLY WHEN HE HAD GIVEN THE FINDING OF FACT NOT CHALLENGED BY THE REVENUE THAT THERE WERE TWO ASSESSMENTS FRAMED IN THE CASE OF TH E ASSESSEE AND THE IMPUGNED ASSESSMENT FRAMED WAS THE LATER ASSESSMENT. 3. THAT THE CIT(A) WAS WRONG BY NOT HOLDING THAT ASSESSMENT IN THE NAME OF M/S NEW AGE OVERSEAS AS AN INDIVIDUAL IS INVALID AND ILLEGAL. 4. THAT THE CIT(A) HAS ACTED AGAINST THE LAW BY NOT C ANCELING THE IMPUGNED ASSESSMENT SPECIALLY WHEN HE HAD HELD THAT THE ASSESSMENT HAS BEEN MADE IN THE NAME OF NEW AGE OVERSEAS WHICH IS NOT A HUMAN BEING. M/S NEW AGE OVERSEAS CANNOT BE HELD TO BE AN INDIVIDUAL. THE REVENUE HAS NOT CHALLENGED THESE FINDIN GS. 5. THAT THE CIT(A) WAS NOT CORRECT IN NOT CANCELLING THE ASSESSMENT WHEN THE PROCEEDINGS INITIATED U/S 147 ARE INVALID AND ILLEGAL AS THE REASONS RECORDED ARE UNDATED AND NOT BONAFIDE ONE AND CANNOT BE SAID TO HAVE BEEN RECORDED PRIOR TO THE ISSUE OF THE NOTICE U/S 148. 6. THAT THE CIT(A) SHOULD HAVE CANCELLED THE REASSESSMENT SPECIFICALLY WHEN HE TOOK THE VIEW THAT THE NOTICES WERE NOT SERVED AT THE PRESENT ADDRESS OF THE ASSESSEE AND NO NOTICE WAS SENT IN ACCORDANCE WITH RULE 19A OF ORDER V OF CPC. EVEN TH E APPEAL MUST BE DISMISSED AS THE ADDRESS OF THE ASSESSEE WAS NOT CORRECTLY MENTIONED. SERVICE OF THE NOTICE ON THE ASSESSEE IS ESSENTIAL PREREQUISITE FOR THE VALID PROCEEDINGS U/S 147/148. 7. THAT THE CIT(A) UNDER THE LAW AND FACTS CORRECTLY DELETED THE ADD ITION OF RS.108000/ - MADE BY THE AO U/S 68 OF THE INCOME TAX ACT.] 8. THAT THE CIT(A) UNDER THE LAW AND FACTS CORRECTLY DELETED THE ADDITION OF RS.665815/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT. 9. THAT THE CIT(A) UNDER THE LAW AND FACTS CORRECTLY DELETED THE ADDITION OF RS.1089423/ - MADE BY THE AO TOWARDS THE PROFIT ON ESTIMATE BASIS. 10. ANY OTHER GROUND WHICH MAY BE TAKEN SUBSEQUENTLY. 3 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 3. RIGHT AT THE OUTSET, LD. SR. DR WAS REQUIRED TO ADDRESS WHETHER THE DEPARTMENT HAS ANY OBJECTION TO ANY DOCUME NT FILED ON RECORD. ATTENTION OF THE LD. SR. DR WAS INVITED TO THE PAPER BOOK AVAILABLE ON RECORD CONSISTING OF 128 PAGES FILED ON 30.11.2011 AND THE LD. SR. DR WAS ALSO REQUIRED TO ADDRESS WHETHER HE WAS P R E P A R E D TO ALSO A G R E E THE GROUNDS IN THE CROSS OBJECTION FILED BY THE ASSESSEE. THE SAID QUERY WAS NECESSITATED AS IN THE PAST IT HAS BEEN F O U N D THAT FREQUENTLY AFTER DEVOTING TIME TO THE ARGUMENT HEARING HAS TO BE ADJOURNED AS THE CONCERNED DR BEING ON ROTATIONAL DUTY WAS NOT FULLY PREPARED TO ARGUE. IN RESPONSE T O THE SAME, LD. SR. DR SUBMITTED THAT HE HAS GONE THROUGH THE PAPER BOOK AND ALSO THE C.O. AND HAS NO OBJECTION TO ANY DOCUMENT PLACED ON RECORD AND WAS READY TO ARGUE. CONSIDERING THE SAID STATEMENT THE HEARING COMMENCED. BEFORE WE ADDRESS THE ARGUMENTS O F THE 4 . THE RELEVANT FACTS OF THE CASE ARE THAT THE AO PASSED THE ORDER U/S 14 4 ON THE BASIS OF INFORMATION RECEIVED THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES IN HIS BANK ACCOUNT WITH VIJAYA BANK, KAMLA NAGAR, DELHI OF RS.1,08,000/ - . IN VIEW O F THE SAME TAKING NOTE OF THE FACT THAT THE SAID BANK ACCOUNT PERTAINED TO M/S. NEW AGE OVERSEAS, 130 - D, KAMLA NAGAR, NOTICES WERE SENT AND ADDITION OF RS.18,63,238/ - WAS MADE BY AN ORDER U/S 144 AS NONE APPE ARED ON BEHALF OF THE ASSESSEE . 5. IN APPEAL BEF ORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE PLACED THE FOLLOWING FACTS ON RECORD: - 4. FACTS OF THE CASE THE APPELLANT MR. DALJIT S INGH IS AN INDIVIDUAL AND HE IS ASSESSED TO INCOME TAX FROM LAST MORE THAN 15 YEARS AT PAN - ALVPSI043H, WARD 19(2) NEW DELHI FROM HIS RESIDENTIAL ADDRESS OF B - 1/17, PHASE - II, ASHOK VIHAR, DELHI - 110052. THE APPELLANT HAS FILED HIS INCOME TAX RETURNS IN WARD 19(2) AT ABOVE PAN TILL ASSESSMENT YEAR 2006 - 07. HOWEVER DUE TO SHIFTING OF RESIDENCE AT B - 7, GREEN PARK EXTENSION, NEW DELHI, THE APPELLANT HAS FILED HIS INCOME TAX RETURNS OF ASSESSMENT YEAR 2007 - 08 AND 2008 - 09 IN 4 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) WARD 24(1) NEW DELHI BY MENTIONING HIS EXISTING PAN ONLY. THE APPELLANT WAS THE PROPRIETOR OF M/S NEW AGE OVERSEAS 130/131 - D, KAMLA NAGAR, D ELHI - 110007. WITH EFFECT FROM 07.07.2004, THE ADDRESS OF THE FIRM WAS CHANGED TO 96 - D KAMLA NAGAR, DELHI - L10007. THIS CONCERN WAS CLOSED ON 31.03.2007. THE SALES TAX NUMBER WAS ALSO SURRENDERED W.E.F 31.03.2007. THE CORRECT DETAILS OF THE PROPRIETOR OF T HE FIRM, NEW ADDRESS OF THE FIRM AND PAN OF THE PROPRIETOR WERE AVAILABLE WITH THE BANKER OF THE FIRM M/S VIJAYA BANK, KAMLA NAGAR, DELHI - 110007 WHERE THE PROPRIETARY FIRM HAD ITS CC A/C NO. 9811 FROM WHICH THE ASSESSING OFFICER COLLECTED ALL THE INFORMAT ION. THE APPELLANT HAS FILED HIS INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2001 - 02 IN WARD 19(2) NEW DELHI AS ON 05.07.2001 BY DECLARING NET TAXABLE INCOME AT RS. 2,78,410/ - . THE ACCOUNTS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2001 - 02 WERE AUDITED BY T HE AUDITORS U/S 44AB OF THE INCOME TAX ACT. LATER ON ITO WARD 20(1) NEW DELHI ON THE BASIS OF INFORMATION FROM ADDITIONAL DIT (INVESTIGATION) VIDE LETTER DATED 26.03.2008 THAT M/S NEW AGE OVERSEAS HAS RECEIVED A CHEQUE OF RS. 1,08,000/ - FROM SUNITA BHAGCHANDKA ON 25.10.2000 WHO HAS BEEN INVOLVED IN PROVIDING ACCOMMODATION ENTRIES, ISSUED NOTICE U/S 148 ON 28.03.2008 AND SERVED THE NOTICE THROUGH AFFIXTURE ON 31.03.2008. SUBSEQUENT NOTICES U/S 143(2) AND 142(1) WERE ALSO SERVED THROUGH AFFIXTURE. NON E APPEARED ON BEHALF OF THE APPELLANT THEREFORE ASSESSMENT WAS COMPLETED U/S 144 OF THE INCOME TAX ACT DETERMINING THE INCOME AT RS. 18,63,240/ - . 5.1 . ON THE BASIS OF THE SAME THE ACTION OF THE AO WAS ASSAILED. APART FROM THE ABOVE IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS TO BE A PERSON AS DEFINED U/S 2(7). REFERRING TO THE DEFINITION OF PERSON U/S 2(31) OF THE ACT IT WAS SUBMITT ED THAT NEITHER THE ASSESSEE NOR M/S NEW OVERSEAS WAS IN EXISTENCE AT 130/13 - D, KAMLA NAGAR, DELHI - 110007 THE ADDRESS AT WHICH THE AO IS CLAIMING TO HAVE SERVE D THE NOTICE TO THE ASSESSEE BY AFFIXTURE . THE COPY OF THE AFFIXTURE PROVIDED T O THE ASSESSEE WAS ALSO ASSAILED IN THE APPELLATE PROCEEDINGS ON THE GROUND THAT IT NEITHER CARRIED SIGNATURES NOR MENTIONED ANY DETAIL S OF THE PERSONS WHO IDENTIFIED THE PLACE OF AFFIXTURE AS THE ASSESSEE S PLACE . IT WAS SUBMITTED THAT IN THIS BACKGROUND THE NOTICE STATED TO BE SERVED ON 24.03.2008 BY THE AO CANNOT BE SAID TO BE A VALID SERVICE. IT WAS FURTHER SUBMITTED THAT THE BUSINES S HAD CLOSED DOWN ON 5 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 31.03.2007 AND IF IT IS SO HELD THAT NOTICES WERE IF SENT THEN AT BEST THEY WERE AFFIXED AT THE WRONG PLACE. ACCORDINGLY RELYING ON THE JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS ESHAAN HOLDINGS PVT. LTD. VIDE ORDER DATED 31.08.2009 IN ITA NO - 1171/2008 (2009 TIOL - 494 - HC - DELHI) AND THE JUDGEMENT IN THE CASE OF CIT VS HOTLINE INTERNATIONAL P. LTD. 296 ITR 333 IT WAS SUBMITTED THE ACTION OF THE AO WAS BAD IN LAW. IT WAS FURTHER SUBMITTED THAT THERE CANNOT BE TWO ASSESSMENTS A GAINST THE SAME ASSESSEE SINCE M/S NEW OVERSEAS IS THE PROPRIETORSHIP CONCERN OF MR. DALJIT SINGH WHO IN HIS INDIVIDUAL CAPACITY AS PROPRIETOR OF M/S NEW AGE OVERSEAS HAD VOLUNTARILY RETURNED HIS INCOME FOR THE YEAR UNDER CONSIDERATION NAMELY 2001 - 02 ASSE SSMENT YEAR ON 05.07.2001 AS WOULD BE EVIDENT FROM ACKNOWLEDGEMENT NO.0253 WITH WARD 19(2). IT WAS SUBMITTED THAT NO NOTICE U/S 143(2) IN RESPECT OF THE SAID RETURN HAD BEEN RECEIVED TILL DATE. ACCORDINGLY THE SAID RETURN IT WAS SUBMITTED IS DEEMED TO BE ASSESSED. RELYING UPON THE DECISION OF CIT VS DHAMPUR SUGAR MILLS LTD. 170 ITR 449 (ALL.), IT WAS SUBMITTED THAT UNDER THE PROVISIONS OF THE INCOME TAX ACT ONLY ONE ASSESSMENT ORDER IS CONTEMPLATED FOR A GIVEN YEAR. ACCORDINGLY IT WAS SUB MITTED THAT THE SECOND ASSESSMENT ORDER PASSED BY THE AO IS A NULLITY AS WITHOUT RE - OPENING THE FIRST ASSESSMENT ANOTHER ORDER CANNOT BE PASSED . REFERRING TO THE REASONS RECORDED IT WAS SUBMITTED THAT NO DATE HAS BEEN MENTIONED THEREIN AND THE FACT REMAIN S THAT ACTION IS CONTEMPLATED IN THE NAME OF FIRM WHICH WA S NOT IN EXISTENCE ON THE SAID DATE AND AFFIXED AT THE ADDRESS WHERE IT WAS NOT IN EXISTENCE. APART FROM VARIOUS OTHER SUBMISSIONS MADE ON MERITS I T WAS SUBMITTED THAT THE AO DID NOT CARE TO SEND NOTICE AT THE ADDRESS DU LY DISCLOSED IN THE ASSESSEE S BANK ACCOUNTS ON THE BASIS OF WHICH HE HAD SOUGHT TO MA K E ADDITIONS AND HAD THE ASSESSEE RECEIVED THE NOTICE THE ASSESSEE WOULD HAVE BEEN IN A POSITION TO EXPLAIN THIS FACT TO THE AO HIMSELF . 6 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 5.2. THE RECORD SHOWS THAT THESE SUBMISSIONS WERE REMANDED TO THE AO BY THE CIT(A) FOR HIS COMMENT S . CONSIDERING THE OBJECT ION S OF THE AO AND THE RE - JOINDER OF THE ASSESSEE THE CIT(A) PROCEEDED TO DECIDE THE ISSUE VIDE PARAS 8.1 TO 8.4 DEALING WITH THE ADDITIONS ON MERIT AND ALSO ON FACTS IN THE AFORE - SAID MANNER: - 8. DETERMINATION 8.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT ALONG WITH THE REMAND REPORT OF THE ASSESSING OFFICER. THIS IS A FACT THAT THE ASSESSMENT HAS BEEN MADE IN THE NAME OF M/S NEW AGE OVERSEAS IN THE STATUS OF AN INDIVIDUAL WHILE M/S NEW AGE OVERSEAS IS NOT A HUMAN BEING BUT IS A PROPRIETARY CONCERN OF MR DALJIT SINGH. MR DALJIT SINGH IS A REGULAR ASSESSEE HAVING THE PAN ALVPS 1043H. THE RETURN OF THE IMPUGN ASSTT.YEAR 2001 - 02 WAS FILED BY THE APPELLANT IN WARD 19(2) NEW DELHI AS ON 05.07.2001 ALONG WITH COPY OF DULY AUDITED ACCOUNTS U/S 44AB OF THE INCOME TAX ACT THE COPY OF WHICH HAS BEEN FILED BEFORE ME. THE INCOME DECLARED IS RS. 2,78,410/ - WHICH INCLUDED RS. 2,31,187/ - INCOME FROM THE PROPRIETARY FIRM M/S NEW AGE OVERSEAS. THE APPELLANT SUBSEQUENTLY SHIFTED TO B - 7, GREEN PARK EXTENSION, NEW DELHI AND SUBMITTED HIS SUBSEQUENT RETURNS IN WARD 24(1) NEW DELHI. THE FIRM M/S NEWAGE OVERSEAS 130 - 131 D, KAMLA NAGAR, DELHI WAS ALSO SHIFTED TO 96 - D, KAMLA NAGAR, DELHI W.E.F. 07.07.2004 AND LATER ON IT WAS CLOSED DOWN ON 31.03.2007 BY SURRENDERING THE SALES TAX NUMBER ALSO. THE NECESSARY EVIDENCES FILED BY THE APPELLANT IN THIS REGARD WERE DULY CONSIDERED BY ME AND WERE ALSO SENT TO THE ASSESSING OFFICER FOR WHICH REMAND REPORT HAS BEEN RECEIVED A ND WERE NOT DENIED BY HIM. THE SERVICE OF ALL THE NOTICES WAS CARRIED OUT THROUGH AFFIXTURES FROM 31.03.2008 TO 28.11.2008 ON THE PREMISES THAT IS 130D KAMLA NAGAR FROM WHERE APPELLANT HAS ALREADY SHIFTED HIS BUSINESS W.E.F. 07.07.2004 AND SUBSEQUENTLY THE BUSINESS WAS CLOSED DOWN W.E.F. 31.03.2007. IT IS APPARENT, THAT THE NOTICES WERE NOT SERVED AT THE PRESENT ADDRESS OF THE APPELLANT. THE ASSESSING OFFICER COULD HAVE OBTAINED THE ADDRESS OF THE APPELLANT FROM THE BANKER FROM WHERE HE OBTAINED THE STATEME NT OF THE APPELLANT'S BANK ACCOUNT. I EVEN DID NOT FIND ANY EVIDENCE SHOWING THAT THE NOTICE HAS BEEN SENT TO THE APPELLANT THROUGH REGISTERED POST IN ACCORDANCE WITH RULE 19A ORDER OF CPC ALONG WITH THE AFFIXTURE OF THE NOTICE. THUS THERE HAD BEEN TWO AS SESSMENTS ONE IN THE NAME OF MR. DALJIT SINGH PROPRIETOR OF M/S NEW AGE OVERSEAS BY ITO WARD19(2) NEW DELHI AND THE OTHER IN THE MANE OF M/S NEW AGE OVERSEAS BY THE ITO WARD 20(1) NEW DELHI. FOR THE ASSESSMENT YEAR 2001 - 02 THERE ARE TWO ASSESSMENTS RESTING WITH THE DEPTT. IN THE CASE OF APPELLANT. 7 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 8.2. GROUND NO.9 RELATES TO THE ADDITION OF RS.108000/ - . THE ASSESSING OFFICER MADE THIS ADDITION MERELY ON THE BASIS OF INFORMATION OF THE INVESTIGATION WING AS MENTIONED IN THE ASSESSMENT ORDER. I HAVE NOTE D THAT THE APPELLANT HAS RECEIVED THE SAID AMOUNT ON THE SALE OF FURNITURE IN WHICH THE APPELLANT WAS DEALING. THE AMOUNT WAS CREDITED IN HIS BANK ACCOUNT ON 25.10.2000. THE APPELLANT HAS ALREADY INCLUDED THE SAID SUM IN THE TOTAL SALE DISCLOSED IN HIS AUD ITED ACCOUNTS FILED WITH INCOME TAX RETURN WITH ITO WARD 19(2) NEW DELHI AS ON 05.07.2001. THE TOTAL SALES SHOWN BY THE ASSESSEE WAS RS. 1,30, 41,354/ - . THE ASSESSING OFFICER TREATED THIS RECEIPT TO BE CASH CREDIT U/S 68 OF THE INCOME TAX ACT. THE APPELLANT HAS SUBMITTED COPY OF THE SALES BILL AND CONFIRMATION FROM SMT. SUNITA BHAGCHANDKA ALONG WITH HER PERMANENT ACCOUNT NUMBER WHICH WERE SENT TO THE ASSESSING OFFICER FOR REMAND REPORT. THE ASSESSING OFFICER WITHOUT BRINGING ANY CONTRARY MATERIAL ON RECORD S IMPLY STATED THAT THIS IS MERELY AN AFTER THOUGHT AS THIS WAS NOT PRODUCED BY THE ASSESSEE DURING ASSESSMENT PROCEEDING. THIS IS A FACT THAT SINCE NOTICES WERE SENT THROUGH AFFIXTURE NEITHER APPELLANT NOR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE A SSESSING OFFICER. UNDER THESE FACTS AND CIRCUMSTANCES I DO NOT AGREE WITH THE ASSESSING OFFICER THAT THIS IS AN AFTER THOUGHT SUBMISSION. SINCE THE AMOUNT DON'T REPRESENT THE CASH CREDIT I THERE FORE DELETE THE ADDITION OF RS. 1, 08,000/ - . 8.3. GROUND NO. 10 RELATE TO ADDITION OF RS. 6,65,815/ -- AS AN UNEXPLAINED INVESTMENT. AFTER CAREFULLY EXAMINING THE SUBMISSIONS OF THE APPELLANT AS WELL AS REMAND REPORT OF THE ASSESSING OFFICER I FIND THAT THE SUM OF RS. 6,65,815/ - IS IN FACT CLOSING BALANCE OF THE BA NK ACCOUNT AS ON 14.11.2000. THIS BANK ACCOUNT STAND DULY DISCLOSED BY THE APPELLANT IN HIS REGULAR BOOKS AS IS APPARENT FROM THE AUDITED ACCOUNTS OF THE ASSESSEE WHICH WERE DULY FILED BY HIM WITH HIS RETURN OF THE IMPUGN ASSESSMENT YEAR WITH ITO WARD 19(2 ) AS ON 05.07.2001. THIS AMOUNT DOES NOT REPRESENT THE DEPOSIT MADE BY THE APPELLANT ON A PARTICULAR DATE SO AS TO APPLY THE PROVISIONS OF SECTION 69 OF THE INCOME TAX ACT, 1961. IT MERELY REPRESENT BALANCE IN THE BANK GENERATED OUT OF THE TRADING TRANSACT IONS OVER A PERIOD. THUS THIS ADDITION ALSO STANDS DELETED. 8.4. GROUND NO. 11 RELATE TO THE ADDITION OF RS. 10,89,423/ - . AFTER CAREFULLY EXAMINING THE SUBMISSIONS OF THE APPELLANT AND REMAND REPORT OF THE ASSESSING OFFICER I NOTED THAT THE ASSESSING O FFICER MADE THIS ADDITION ON THE BASIS OF ESTIMATION OF PROFIT @ 5% ON RS. 2,17,88,467/ - . THIS FIGURE OF RS. 2,17,88,467/ - REPRESENT THE TOTAL CREDIT IN THE BANK ACCOUNT OF THE APPELLANT EXCLUDING THE SUM OF RS. 1,08,000. AND RS. 6,65,815 FOR WHICH SEPARAT E ADDITIONS WERE MADE BY THE ASSESSING OFFICER. THIS IS A FACT THAT THE APPELLANT IS A REGULAR 8 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) ASSESSEE AND WAS MAINTAINING REGULAR BOOKS OF ACCOUNTS THE ACCOUNTS WERE DULY AUDITED U/S 44 AB AND THE RETURN FOR THE IMPUGN ASSESSMENT YEAR WAS FILED IN WARD 1 9(2) NEW DELHI AS ON 05.07.2001 ALONG WITH THE AUDITED ACCOUNTS IN WHICH THE IMPUGN BANK ACCOUNT WAS ALSO SHOWN IN THE BALANCE SHEET. THE ASSESSING OFFICER MERELY PRESUMED ALL THE CREDITS IN THE BANK TO BE SALES OF THE APPELLANT AND ESTIMATED THE PROFIT @ 5% AT THE BACK OF THE APPELLANT. THE APPELLANT HAS DULY SUBMITTED THE DETAIL OF COMPLETE BANK ACCOUNT ALONG WITH RECONCILIATION OF THE SALES FIGURE SHOWN IN THE AUDITED AMOUNTS AND ESTIMATED BY THE ASSESSING OFFICER WHICH HAS BEEN EXAMINED BY ME. THE AO WA S AT LIBERTY TO EXAMINE THE CREDITS IN BANK ACCOUNT FOR ALLEGED SALES DURING THE REMAND REPORT, HOWEVER, NO COGENT FINDINGS HAVE BEEN GIVEN BY THE AO. THE ADDITION IS MERELY BASED ON SUSPICION. THIS IS A SETTLED LAW THAT NO ADDITION CAN BE MADE ON MERELY S USPICION HOWEVER STRONG IT MAY BE. ACCORDINGLY I DELETE THE ADDITION OF RS. 10, 89,423/ - . THE OTHER GROUNDS OF APPEAL ARE EITHER GENERAL OR CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 6 . AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL . THE LD. SR. DR SPECIFICALLY READING PARA 8.4 WHICH IS REPRODUCED ABOVE WAS UNABLE TO ADDRESS AS TO HOW WITHOUT A CHALLENGE TO THESE FINDINGS THE DEPARTMENT CAN ARGUE THE GROUNDS ON MERIT THAT TOO IN THE FACE OF THE SPEAKING GROUNDS RAISED IN THE CROSS - OBJECTIONS FILED BY THE ASSESSEE . A PERUSAL OF THE SAME SHOWS THAT THE IMPUGNED ORDER HAS BEEN ASSAILED FOR NOT QUASHING THE RE - ASSESSMENT VIDE GROUND NOS.1 TO 4 . SPECIFIC ATTENTION WAS INVITED OF THE LD. SR. DR TO GROUND NO - 4 IN THE CO. T HE LD. SR. DR ON FACTS DID NOT REBUT THE FINDINGS IN PAGE NO - 8.1 AND FOR THE DELETION OF THE ADDITIONS ON MERIT PLACE D RELIANCE UPON THE ASSESSMENT ORDER. 7. THE LD. AR ON THE OTHER HAND REFERRING TO GROUND NOS.7 TO 9 IN THE C.O. FILED PLACED HEAVY RELIANC E ON PARA 8.2 TO 8.4 AND QUA THE FINDINGS ARRIVED IN PARA 8.1 WHICH AS PER GROUND NO - 4 RAISED IN THE C.O. WHICH HAS NOT BEEN ASSAILED BY THE REVENUE SUBMITTED RELYING UPON GROUND NOS.1 TO 6 OF THE C.O. FILED THAT THE ASSESSMENT ON FACTS SHOULD HAVE BEEN QU ASHED AND CIT(A) ERRED ON FACTS IN NOT QUASHING THE SAME . 9 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT THAT THE ASSESSEE WAS THE SOLE PROPRIETOR OF M/S NEW AGE OVERSEAS AND FILED THE RETURN FOR THE YEAR UN DER CONSIDERATION ON 05.07.2001 DECLARING AN INCOME OF RS,2,78,410/ - HAS NOT BEEN DISPUTED BY THE REVENUE. SIMILARLY THE FINDING OF FACT THAT THIS INCOME INCLUDED THE INCOME OF RS. 2,31,187/ - FROM THE PROPRIETARY FIRM M/S NEW AGE OVERSEAS HAS ALSO NOT BEE N REBUTTED. IT IS ALSO A FACT ON RECORD THAT AGAINST THIS RETURN FILED ON 05.07.2001, NO NOTICE U/S 143(2) HAS BEEN ISSUED TO THE ASSESSEE. THE EVIDENCE IN REGARD TO THE SHIFTING OF THE FIRM M/S NEW AGE OVERSEAS 130 - 131 - D, KAMLA NAGAR, DELHI TO 96 - D, KAM LA NAGAR, DELHI W.E.F 07.07.2004 AND ULTIMATELY THE SAID PROPRIETORSHIP WAS CLOSED ON 31.03.2007 BY SURRENDERING THE SALES TAX NUMBER ALSO HAS BEEN CONFRONTED BY THE AO BY WAY OF A REMAND REPORT AND HAS NOT BEEN REBUTTED AS PER THE FINDING ON FACT AVAILABL E ON RECORD AND HAS ALSO NOT BEEN REBUTTED BEFORE US IN THE PRESENT PROCEEDINGS. SIMILARLY THE FACT THAT THE ASSESSEE SPECIFICALLY SHIFTED TO B - 7, GREEN PARK EXTENSION, NEW DELHI AND SUBMITTED HIS RETURN IN WARD - 24(1), NEW DELHI IS THE FINDING OF THE FACT RECORDED IN THE IMPUGNED ORDER WHICH ALSO HAS BEEN CONFRONTED TO THE AO AND NOT DENIED BY HIM AND ALSO NOT REBUTTED BEFORE US BY THE REVENUE IN THE PRESENT PROCEEDINGS . 8.1 . IT IS FURTHER SEEN THAT THE SERVICE OF NOTICE BY WAY OF AFFIXTURES FROM 31.03.200 8 TO 28.11.2008 ON THE PREMISES I.E. 130D, KAMLA NAGAR HAS BEEN TAKEN COGNIZANCE BY THE CIT(A) TO HOLD THAT THE NOT IC ES WERE NOT SERVED AT THE CORRECT ADDRESS . WE HAVE SEEN THAT THE CIT(A) ALSO PROCEEDS TO CONSIDER THE FACT THAT THE AO COULD HAVE OBTAIN ED THE CORRECT ADDRESS FROM THE BANK ACCOUNT OF VIJAYA BANK AS THE COMPLETE ADDRESS WAS AVAILABLE THERE. THIS FACT ALSO STANDS UNREBUTTED ON RECORD. 10 CO - 385/DEL/2011 (IN I.T.A .NO. - 3333/DEL/2010) 8.2 . ACCORDINGLY IN THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND THAT ON FACTS THE CIT(A) OUGHT TO HAVE QUASHED THE PROCEEDINGS AND THERE WAS NO NEED TO PROCEED TO ADJUDICATE UPON THE ADDITIONS ON MERIT. WE ALSO FIND THAT THE REASONING TAKEN BY THE CIT(A) ON MERITS ALSO HAS NOT BEEN ASSAILED BY THE REVENUE EITHER BY REFERRING TO ANY FACT OR EVIDENCE. ACCORDINGLY ON A CONSIDERATION OF THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE AND ALLOW THE C.O. FILED BY THE ASSESSEE WHEREBY THE PROCEEDINGS ARE QUASHED FOR THE DETAILED REASONS GIVEN HER EIN ABOVE. 9 . IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMISSED AND C.O. FILED BY THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 7 T H OF OCTOBER 2014. S D / - S D / - (J. S. REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: - 1 7 /10 /2014 *AMIT KUMAR/SUBODH KUMAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI