Shri Deshpal Singh & Sons (HUF), New Delhi V. ITO, Dehradun

CO 79/DEL/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9381 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Business income
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI) BEFORE SHRI U. B. S. BEDI, JUDICIAL MEMBER AND SHRI B. C. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 5699 /DEL/2012 (ASSESSMENT YEAR 2009-10) ITO, WARD 2(1), VS. DESHPAL SINGH & SONS (HUF), NEW DELHI 28, SAHARANPUR ROAD, DEHRADUN PAN/GIR NO.:AABHD1224J C.O. NO.79/DEL/2013 (IN I.T.A. NO. 5699/DEL/2012 ASSESSMENT YEAR 2009-1 0) DESHPAL SINGH & SONS (HUF), VS. ITO, WARD 2(1), 28, SAHARANPUR ROAD, NEW DELHI DEHRADUN (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI SOMIL AGARWAL, CA DEPARTMENT BY: SMT. NIDHI SRIVASTAVA, SR. DR ORDER PER U B S BEDI, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE AND THE C.O. OF THE ASS ESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) (I), DEHRADU N DATED 14.08.2012 RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE DEPARTMENT HAS RAISED SINGLE GROUND CHALLENG ING LD. CIT(A)S ORDER TO SET ASIDE THE ASSESSMENT PASSED BY THE A.O . AFTER 01.06.2001 (FINANCE ACT 2001). I.T.A. NO. 5699/DEL/2013 C.O. NO.79/DEL/2013 2 3. THE ASSESSEE IN THE C.O. HAS RAISED OBJECTION IN REGARD TO CIT(A)S ORDER IN ACCEDING THE JURISDICTION IN DIRECTING THE A.O. TO MAKE SUCH INQUIRY AS HE DEEM FIT. MORE SO, WHEN LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION, THE ASSESSEE HAS SOUGHT DIRECTION GIVEN BY LD. CIT(A) TO BE EXPUNGED. 4. AT THE VERY OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE WAS RAISED IN THE CASE OF ITO VS SURJEET SING H & SONS (HUF) IN I.T.A. NO. 5698/DEL/2012 FOR ASSESSMENT YEAR 2009-10 AND G BENCH OF THE TRIBUNAL VIDE ITS ORDER DATED 18.01.2013 HAS DECIDE D THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE WHICH NOT ONLY COVERS THE DE PARTMENTAL APPEAL BUT ALSO COVERS C.O. OF THE ASSESSEE, THEREFORE, BY FIL ING THE COPY OF THE SAID ORDER AND FOLLOWING THE SAID DECISION, APPEAL OF TH E REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE SHOULD BE ALLOWED. 5. LD. D.R. COULD NOT RAISE ANY SERIOUS OBJECTION I N REGARD TO PLEA AS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE AND SIMP LY RELIED UPON THE ORDER OF THE A.O. 6. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AND FIND THAT SIMILAR ISSUE AS RAISED IN THE CASE OF SU RJEET SINGH & SONS (HUF (SUPRA) WHICH WAS DISCUSSED AND DECIDED BY G BENC H OF THE TRIBUNAL VIDE ORDER DATED 18.01.2013 FROM PARA 1 TO 10 AS UNDER: THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSE SSMENT YEAR 2009- 10 AGAINST THE ORDER DATED 26.12.2011 PASSED BY THE CIT(A)-I, DEHRADUN. THE ONLY GROUND RAISED IS THATS HE LD. CIT(A) IS NOT EMPOWERED TO SET ASIDE THE ASSESSMENT PASSED BY THE A.O. AFTER 01.06.2001. 2. THE FACTS ARE THAT THE ASSESSEE FURNISHED RETURN OF INCOME SHOWING TOTAL INCOME OF RS.5,01,099/- AGAINST GROSS RECEIPT OF I.T.A. NO. 5699/DEL/2013 C.O. NO.79/DEL/2013 3 RS.39,50,000/- IN CONTRACT WORK. THE A.O. NOTED TH AT THE TOTAL OF THE CREDIT SIDE IN THE ASSESEES BANK ACCOUNT WAS OF RS .1,94,18,100/-. THE A.O. WAS OF THE OPINION THAT THIS REPRESENTED THE A SSESSEES GROSS TURNOVER OF BUSINESS AND IT SHOULD HAVE MAINTAINED REGULAR BOOKS OF ACCOUNT AND GOT THEM AUDITED. HE REQUIRED THE ASSE SSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT. THE ASSESSEE EXPLA INED THAT THE CASH DEPOSITS WERE MADE OUT OF THE VARIOUS CASH WITHDRAW ALS WHICH WERE MADE FORM TIME TO TIME, AS AVAILABLE WITH THE ASSES SEE IN THE FORM OF CASH IN HAND. REJECTING THIS EXPLANATION OF THE AS SESSEE, THE A.O. TREATED THE ENTIRE CASH DEPOSITS OF RS.33,60,000/- AS UNEXPLAINED. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) PARTLY ALLOWED THE ASSESSEES APPEAL, OBSERVING AS FOLLOWS:- 1.3 THE SUBMISSION HAS BEEN CONSIDERED. UNLESS TH E A.O. IS ABLE TO SHOW THAT THE CASH WITHDRAWN BY THE ASSESSEE FROM I TS BANK ACCOUNT OR RECEIVED BY IT FROM ANY OTHER VERIFIABLE SOURCE WAS SPENT BY IT ELSEWHERE, THE ASSESSEES CONTENTION THAT IT WAS AV AILABLE WITH IT AS CASH AT HAND CANNOT BE REJECTED. THE ASSESSEES CO NTENTION THAT, CONSIDERING ITS TURNOVER, IT WAS ENTITLED TO PRESUM PTIVE DETERMINATION OF ITS INCOME U/S 44AD AND 44AE OF THE I. T. ACT, 1 961 HAS NOT BEEN CONTROVERTED OR FOUND AS FALSE BY THE A.O. THEREFO RE, NO ADVERSE INFERENCE SHOULD BE DRAWN IF THE ASSESSEE DID NOT M AINTAIN REGULAR BOOKS OF ACCOUNT. 1.4 IN SUCH CASES, ACCRETION TO ASSETS IN COURSE OF THE PREVIOUS YEAR IS A GOOD GUIDE TO ESTIMATE THE ASSESSEES INCOME. THE ASSESSEE HAS FURNISHED ITS STATEMENT OF AFFAIRS AS ON 31.03.2008 AS WELL AS 3.103.2009, SHOWING THATS THE ACCRETION TO ITS CAP ITAL ACCOUNT AND ASSETS DURING THE PREVIOUS YEAR WAS EXPLAINABLE WIT H REFERENCE TO THE INCOME SHOWN BY IT IN THE RETURN OF INCOME. THIS S UGGESTS PRIMA FACIE THAT THE A.O.S ALLEGATION OF THE CASH DEPOSITS IN THE BANK ACCOUNTS AND THE FIRM BEINGS UNEXPLAINED IS NOT SUSTAINABLE. NEVERTHELESS, IN ORDER TO SATISFY HIMSELF, HE MAY EXAMINE THE DETAIL S SUBMITTED BY THE ASSESSEE AND CAUSE SUCH INQUIRY AS HE DEEMS FIT IN THIS REGARD. IF HE IS ABLE TO REACH ANY POSITIVE FINDING ABOUT CASH WITHD RAWN FROM THE BANK GOING ELSEWHERE OR FOR ANY OTHER REASON, THE C ASH AVAILABLE ON A PARTICULAR DATE BEING LESS THAN THE CASH DEPOSITED IN THE ACCOUNT ON THAT DAY, HE WILL BE ENTITLED TO HOLD SUCH DEPOSIT AS UNEXPLAINED AND ADDITION TO THAT EXTENT WILL BE SUSTAINED. I.T.A. NO. 5699/DEL/2013 C.O. NO.79/DEL/2013 4 1.5 WITH THIS END IN VIEW, THE ASSESSEE IS DIRECTED TO PRODUCE ITS CASH STATEMENT AND EXPLAIN THE AVAILABILITY OF CASH AS THE SOURCE OF THE DEPOSITS IN QUESTION. THE A.O. IS ENTITLED TO CAUS E SUCH INQUIRY AS HE THINKS FIT TO VERIFY THE CORRECTNESS OF THE SAME. H E WOULD BE ENTITLED TO HOLD A CASH DEPOSIT OR PART THEREOF AS UNEXPLAINED IF HE IS ABLE TO ESTABLISH THAT: I) THE CASH SHOWN AS RECEIVED BY THE ASSESSEE HAD N O EXPLAINED SOURCE, OR II) THE CASH WITHDRAWN FROM BANK OR RECEIVED BY THE ASSESSEE FROM ANY OTHER VERIFIABLE SOURCE WHICH IS CLAIMED TO BE AVAILABLE AS A SOURCE OF SUBSEQUENT CASH DEPOSIT WAS ACTUALLY SPEN T BY THE ASSESSEE AND WAS NOT AVAILABLE FOR THE DEPOSIT, OR III) THE CASH APPLIED (BY WAY OF IMPUGNED DEPOSIT O R OTHERWISE) ON ANY OCCASION EXCEEDED THE CASH AVAILABLE ON THAT DA TE. IT IS CLARIFIED THAT THE FINDING IS BASED ON THE PR EMISE THAT CONSIDERING ITS TURNOVER, THE ASSESSEE WAS ENTITLED TO PRESUMPT IVE DETERMINATION OF ITS INCOME. IF, IN COURSE OF HIS EXAMINATION, THE A .O. IS BALE TO GIVE A POSITIVE FINDING THAT THE ASSESSEES TURNOVER EXCEE DED WHAT IS CLAIMED BY IT OR THAT THE ASSESSEE HAS CAPITALIZED PROFIT I N EXCESS OF WHAT HAS BEEN OFFERED TO TAX BY IT, HE WILL BE ENTITLED TO D ENY THE BENEFIT OF PRESUMPTIVE DETERMINATION OF INCOME AND/OR ASSESSEE THE EXCESS INCOME THUS CAPITALIZED BY IT. 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. BEFORE US, THE LD. D.R. HAS CONTENDED THAT THE L D. CIT(A) HAS ERRED IN SETTING ASIDE THE ASSESSMENT AND RESTORING IT TO THE A.O., SINCE AFTER 01.06.2001, THE CIT(A) IS NOT EMPOWERED TO DO SO. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS STRONGLY SUPPORTED THE IMPUGNED ORDER, CONTENDING T HAT THE LD. CIT(A) HAS, IN FACT, ACCEPTED THE CONTENTION OF THE ASSESSEE AND HAS DELETED THE ADDITION MADE BY THE A.O.; THAT HE LD. CIT(A) HAS, IN FACT, ENABLED THE A.O. TO MAKE SUCH INQUIRY AS HE DEEMS F IT TO VERIFY THE CASH STATEMENT TO BE PRODUCED BY THE ASSESSEE; AND THAT AS SUCH, THERE BEING NO MERIT THEREIN, THE APPEAL FILED BY THE DEP ARTMENT BE DISMISSED. 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. WE FIND THAT INDEED, THE LD. CIT(A) HAS DE LETED THE ADDITION MADE BY THE A.O. AND IT IS NOT A CASE OF SET6ING AS IDE THE ASSESSMENT I.T.A. NO. 5699/DEL/2013 C.O. NO.79/DEL/2013 5 AND REMITTING THE MATER TO THE A.O. IT IS SEEN THA T THE DIRECTIONS GIVEN BY THE LD. CIT(A) WERE NOT REQUIRED TO BE GIVEN AND THE SAME ARE LIABLE TO BE EXPUNGED. 8. IN VIEW OF THE ABOVE, THE DIRECTIONS GIVEN BY TH E LD. CIT(A) IS EXPUNGED. THERE IS NO OTHER GRIEVANCE RAISED BEFO RE US BY THE DEPARTMENT AGAINST THE ORDER UNDER APPEAL. 9. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER PASSED BY THE LD. CIT(A). HOWEVER, THE DIRECTION GIVEN BY THE LD. CI T(A) IS EXPUNGED. 10. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. 7. SINCE, NEITHER THERE IS ANY CHANGE OF FACTS AND THE ISSUE INVOLVED IS THE SAME, THEREFORE, FOLLOWING THE SAID PRECEDENT, WE U PHOLD THE ORDER OF LD. CIT(A) TO THE EXTENTS IT WAS ACCEPTED BY ITAT AND D ISMISS THE APPEAL OF THE REVENUE WHILE ACCEPTING THE CROSS OBJECTION OF THE ASSESSEE AND DIRECTION OF LD. CIT(A) IS EXPUNGED. 8. AS A RESULT, APPEAL OF THE REVENUE GETS DISMISSE D WHEREAS C.O. OF THE ASSESSEE GETS PARTLY ACCEPTED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEB., 2014. SD./- SD./- (B. C. MEENA) (U.B.S.BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 21 ST FEB., 2014. SP. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI AR, ITAT, 5. CIT(ITAT), NEW DELHI NEW DELHI