Sanjay Bhatia, Faridabad V. ITO, Ward-2(3), Faridabad

ITA 1001/DEL/2020

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5172 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-11-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 05-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1001/DEL/2020 Assessment Year 2011-12 Sanjay Bhatia, House No.25/BL, New Colony Palwal-121102, Faridabad. Vs. ITO, Ward-2(3), Faridabad. TAN/PAN: AHBPB4435A (Appellant) (Respondent) Appellant by: Shri Rohit Tiwari, Adv. Ms. Tanya, Adv. Ms. Shivani, Adv. Shri Jaind Kumar Jaiswal, Adv. Respondent by: Shri Om Prakash, Sr.DR Date of hearing: 23 11 2023 Date of pronouncement: 23 11 2023 O R D E R PER PRADIP KUMAR KEDIA-A.M. : T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the orde r of t he Commiss ioner of Income T ax (A ppe als ), Far idaba d (‘C IT (A )’ i n s hor t) date d 30. 12. 20 19 a rising f rom the assess me nt orde r dat ed 17. 12. 20 18 pass ed by th e Assessing O fficer (A O ) under Sect i on 143( 3) r. w . Secti on 147 o f the Income Tax A ct, 1961 (t he A ct) conce rni ng A Y 2011-12. 2. T he ld. c ounse l fo r the asses see s ubmits t hat t he asses see i s engag ed in the bus ine ss of trad ing in buil ding ma teria l a nd ha vi ng re ga rd t o nat ur e of busines s recei ve d cash agains t t ra di ng bus iness and d epos it ed t he sa me in the bank acc ount fro m t i me t o ti me. Simila rl y, cash has bee n w it hdraw n to be uti lized in t rading I.T.A. No.1001/Del/2020 2 bus iness and f or pe rso nal need s. T he Assess in g O fficer has re opene d the asses s me nt f or Assess ment Ye ar 2 011- 12 in ques ti on for the re aso n t ha t assess ee h as n ot fi led t he return of income des pi te cash de pos its o f Rs. 30, 09,000/ - in ag gre gate in t he ba nk account ma inta in ed w ith A xi s Ba nk and Un ion B ank of Indi a. The ld. co unsel s ubmit te d t hat in pursuance of the re opening of assess me nt, t he as sessee file d ret urn of in come a nd decla red a n amount of Rs. 1, 59, 650/-. T he asses s ee has decla red t urn ove r of Rs. 28, 05,500/- on suc h tradi ng a nd decla re d a book profit of Rs. 2, 24, 450/ - be in g 8% of th e turn ove r und er the presumpt ive taxat io n sc heme avai lable under Se cti on 44A D of the A ct. In this backg round, t he ld. counsel s ubmits that the asse ssee fi led obj ecti on b efore the A ssess ing O ffi cer tha t w hile takin g i nto account th e cas h depos its, the cas h withdraw al also nee ds to be consi dered wh ic h has be en recycl ed an d re -c ircu la ted in the trad in g ope rati ons and peak c re di t a t any point of t ime i n the bank account does not exce ed Rs. 3 lakh. T he ld. couns el s ubmits t hat the asses see is a v er y small trade r a nd the fa cts ne ed to be se en i n pros pec tive t o de te rmine t he ta xa bl e i ncome. 3. T he l d. D R for the Reven ue rel ied upon the firs t appellate order a nd s ubmi t ted t hat the asses see has fail ed t o j ustif y its trad in g bus ine ss and has not file d an y V AT re turn or a n y contempora ne ous cog en t doc ument to s uppor t ongoin g t radi ng bus iness as cla imed. T he l d. D R als o submi tt ed that the onu s is upon t he assess ee to j usti fy t he sour ce of cas h de pos i t w hich w as not dis cha rge d and there fore no other re course was ava ilable wit h the D epar tment i n the matter. 4. I have carefull y c onsi de re d th e riva l submi ssi ons. I.T.A. No.1001/Del/2020 3 5. T he o bjec ti on s of the as sessee are tw o f old : fi rst l y, the assessee see ks to chal le nge the proce edin gs unde r Sec tion 148 a nd the ass u mpti on of j urisdicti on; a nd secondl y, merits of the addi ti ons. 5. 1 A s regar ds f irst chal leng e, I do not see any meri t f or the simple reason tha t the ret urn w as fi led pu rs ua nt to n ot ice iss ue d under Sect ion 148 of the A ct and in t he w a ke of la rge cas h depos its, the AO was w ell wi thin i ts r igh t t o form prim a f ac ie belie ve towa rds es capement o f c ha rgeab le inc ome. N o re turn was fi led pr ior t o is sua nce of not ice unde r Sec t ion 1 48 of the A ct. The assessee has a lso a rg ued that d isposal of obj ecti on t o su ch rea sons are not sa tis facto ry w h ich is agai n a su bj ective e xe rc is e and s ha ll be exa mi ne while adj ud icat ing the me ri ts. 5. 2 T urn in g to t he merits of the case, it is the case o f the assessee t ha t hav ing re ga rd t o the nature of tradi ng busi ness, the assessee conti nuo usl y d epos its a s well as w it hdraw s the cas h w hich is se l f ev ident fro m th e bank stateme nts. The l d. counsel submits t ha t, at a ny p oi nt of ti me, the bank balance does not exce ed Rs. 3 lakh w hic h i tsel f underl ine s s mall na ture o f bus iness. The ld. c ounsel f or t he assess ee al so pointe d out tha t obj ecti on tow ard s non fu rni shi ng of V A T returns etc. is not just ified, as suc h, co mpl ex rul es and require me nts of fi li ng returns a re not appl icable to s ma ll traders. 6. In the tota li t y of ci rc ums tance s, I fi nd mer it in t he plea of the ass essee. T he assess ee has a lr ead y declared Rs.2, 24,4 40/ - under p res umpti ve taxa t ion on the turno ver. The cash depos its for m integra l part of t he t ra ding busi ness and therefore, cannot be seen in is olat ion. T he assess ee has bro adl y jus ti fie d the sou rce of I.T.A. No.1001/Del/2020 4 cash depos it whi ch is s tated to be rec yc led fr om e ar lie r w ithdraw als. Such fact e me rges f rom t he bank sta tement too. The plea of the a ssessee t hus a ppears co nvincing. T he refor e, the fi rst appel late or der is set as ide an d t he A O is directed to re ve rse a nd canc el t he addit ion made on t his sc ore on mer it s. 7. In the res ul t, the appeal of t he asses see is pa rt l y al low ed. Order was pronounced and dictated in the open Court on 23/11/2023 Sd/- [PRADIP KUMAR KEDIA] ACCOUNTANT MEMBER DATED: /11/2023 Prabhat