ITO, New Delhi V. Mr. Om Prakash Gupta, New Delhi

ITA 1129/DEL/2013

• Counselvise Citation: 112920114 RSA 2013
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Keywords: Business income; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .1129/DEL/2013 1129/DEL/2013 1129/DEL/2013 1129/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -46(1), 46(1), 46(1), 46(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. MR. OM PRAK MR. OM PRAK MR. OM PRAK MR. OM PRAKASH GUPTA, ASH GUPTA, ASH GUPTA, ASH GUPTA, B BB B- -- -15, PANCHSHEEL ENCLAVE, 15, PANCHSHEEL ENCLAVE, 15, PANCHSHEEL ENCLAVE, 15, PANCHSHEEL ENCLAVE, NEAR CHIRAG DELHI, NEAR CHIRAG DELHI, NEAR CHIRAG DELHI, NEAR CHIRAG DELHI, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 015. 110 015. 110 015. 110 015. PAN : PAN : PAN : PAN : AFWPG4972N. AFWPG4972N. AFWPG4972N. AFWPG4972N. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GUNJAN PRASHAD, CIT-DR. RESPONDENT BY : SHRI R.S. SINGHVI, ADVOCATE. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXX, NEW DELHI DATED 24 TH JANUARY, 2013 FOR THE AY 2005-06. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN I) DELETING THE ADDITION OF RS.14,82,250/- AS RIGHT LY MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH DEPOS ITS AND CASH CREDITS MADE BY THE ASSESSEE. II) DELETING THE ADDITION OF RS.14,82,250/- IGNORIN G THE FACT THAT THE ASSESSEE HAS MENS REA IN NOT DISCLOSI NG HIS CORRECT PARTICULARS WHILE FILING HIS RETURN OF THE INCOME FOR THE IMPUGNED PERIOD. III) DIRECTING THE AO TO TAKE RECOURSE TO THE PRESU MPTIVE RATE I.E. ESTIMATING THE BUSINESS INCOME @ 5% OF TH E TURNOVER U/S 44AF OF THE INCOME TAX ACT, 1961 WITHO UT APPRECIATING THE FACT THAT ASSESSEE HAS CONCEALED H IS TRUE ITA-1129/DEL/2013 2 INCOME AND DID NOT HAVE BONAFIDE INTENTION TO DISCL OSE THE TRUE FACTS. THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND, ADD OR SUBSTITUTE THE GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED DR THAT ON THE BASIS OF INFORMATION RECEIVED FROM THE CIT(CIB), IT WAS GATHERED THAT THE ASSESSEE MADE A DEPOSIT OF ` 14,55,000/- IN SAVINGS BANK ACCOUNT WITH STANDARD CHARTERED BANK. DURING ASSESSMENT PROCEEDINGS, THE SHOW CAUSE LETTER WAS ISSUED ASKIN G THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH DEPOSIT. HOWEVER, THE A SSESSEE FAILED TO FURNISH ANY SATISFACTORY EXPLANATION THERE FOR. TH EREFORE, THE ADDITION OF ` 14,55,000/- WAS MADE. THAT BEFORE THE LEARNED CIT( A), IT WAS CLAIMED BY THE ASSESSEE THAT HE WAS DOING THE TRADI NG ACTIVITY OF THE GOODS MANUFACTURED BY THE COMPANY IN WHICH HE WAS E MPLOYED. THAT DEPOSIT OF ` 14,55,000/- IS OUT OF THE SALE PROCEEDS OF THE SAID GOODS. THE CIT(A) ACCEPTED THE ASSESSEES CONTENTION IGNOR ING THE FACT THAT NO INCOME FROM THE TRADING ACTIVITY WAS DISCLOSED B Y THE ASSESSEE IN THE RETURN OF INCOME. THEREFORE, THE ASSESSEES CO NTENTION OF THE TRADING ACTIVITY IS AN AFTER-THOUGHT TO COVER UP UN EXPLAINED DEPOSIT OF ` 14,55,000/- IN THE BANK ACCOUNT. HE, THEREFORE, SU BMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE UPHELD. 4. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STATED THAT THE CIT(A) CALLED FOR THE REMAND REPORT IN RESPECT OF THE ASSESSEES CLAIM THAT IT CARRIED ON THE TRADING ACTIVITY OF TH E GOODS. THAT DURING REMAND PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE EVIDENCE IN SUPPORT OF THE TRADING ACTI VITY CARRIED ON BY HIM. THE ASSESSEE FURNISHED THE EVIDENCE IN THIS R EGARD WHICH WAS VERIFIED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER WAS SATISFIED THAT THE ASSESSEE DID CARRY ON THE TRADIN G ACTIVITY. HOWEVER, HE REQUESTED THE CIT(A) TO SUSTAIN THE ADDITION BEC AUSE THE ASSESSEE ITA-1129/DEL/2013 3 FAILED TO DECLARE THE INCOME FROM TRADING ACTIVITY IN THE RETURN OF INCOME. IT IS CONTENDED BY THE LEARNED COUNSEL THA T IF THE ASSESSEE FAILED TO DECLARE THE INCOME FROM TRADING BUSINESS, THEN THE INCOME CAN BE ASSESSED TO TAX AND NOT THE ENTIRE SALE PROC EEDS. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT( A) SHOULD BE SUSTAINED. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT LEARNED CIT(A) DISCUSSED THE ENTIRE ISSUE AND THEN RECORDED THE FINDING IN PARAGRAPH 5 OF HIS ORDER WHICH READS AS UNDER:- 5. I HAVE PERUSED THE ASSESSMENT ORDER, GROUNDS OF APPEALS, WRITTEN SUBMISSION AND DISCUSSED THE MATTE R WITH THE AR OF THE ASSESSEE VERY CAREFULLY. THE APPELLA NTS FINAL SUBMISSION IS REPRODUCED ABOVE WHICH IS EXPLAINED V ERY CLEARLY. THOUGH THE APPELLANT WAS SALARIED EMPLOYE E IN A PRIVATE FIRM, HE WAS DOING SOME SMALL TRADING BUSIN ESS OF THE GOODS OF THE COMPANY WHERE HE WAS EMPLOYED. AS PER THE AIR INFORMATION THE AO HAD MADE AN ADDITION OF RS.14,55,000/- WHICH IS CASH DEPOSITED IN HIS BANK ACCOUNT ON VARIOUS DATES AND THIS IS OUT OF SALES RECEIPTS OF THE TRADING GOODS MADE BY THE APPELLANT. THE APPELLANT HAD FORGOTTEN TO ADD THIS INCOME AS BUSINESS INCOME IN HIS RETURN. HENCE, THIS ADDITIONAL EVIDENCE WAS SENT T O AO FOR REMAND PROCEEDINGS. THE AO HAD MADE ENQUIRY AT THE REMAND STAGE AND FOUND THAT THERE IS TRADING ACTIVI TY OF THE APPELLANT. THEREFORE, I DEEM IT FIT TO ESTIMATE TH E INCOME OF THE APPELLANT FROM TRADING ACTIVITIES U/S 44AF A T 5% OF TURNOVER OF RS.14,95,000/- WHICH IS RS.74,750/-. T HE AO IS DIRECTED TO ADD THIS INCOME TO THE APPELLANTS RETU RNED INCOME AND COMPUTE THE TAX AND INTEREST ACCORDINGLY . 6. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF LEARNED CIT(A). IT IS TRUE THAT THE ASSESSEE DID NOT DISCLOSE THE T RADING ACTIVITY IN THE RETURN OF INCOME. HOWEVER, WHEN IN REMAND PROCEEDI NGS THE ASSESSEE FURNISHED THE EVIDENCE IN SUPPORT OF THE TRADING AC TIVITY CARRIED ON BY THE ASSESSEE, WHICH IS NOT FOUND TO BE FALSE, THEN THE ADDITION FOR THE ITA-1129/DEL/2013 4 ENTIRE SALE PROCEEDS CANNOT BE MADE. THE ADDITION CAN BE MADE ONLYL FOR THE INCOME FROM TRADING BUSINESS WHICH HAS ALRE ADY BEEN DONE BY THE LEARNED CIT(A). IN VIEW OF THE ABOVE, WE DO NO T FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNE D CIT(A). THE SAME IS SUSTAINED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2014. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 07.02.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -46(1), NEW DELHI. 46(1), NEW DELHI. 46(1), NEW DELHI. 46(1), NEW DELHI. 2. RESPONDENT : MR. OM PRAKASH GUPTA, MR. OM PRAKASH GUPTA, MR. OM PRAKASH GUPTA, MR. OM PRAKASH GUPTA, B BB B- -- -15, 15, 15, 15, PANCHSHEEL ENCLAVE, PANCHSHEEL ENCLAVE, PANCHSHEEL ENCLAVE, PANCHSHEEL ENCLAVE, NEAR CHIRAG DELHI, NEW DELHI NEAR CHIRAG DELHI, NEW DELHI NEAR CHIRAG DELHI, NEW DELHI NEAR CHIRAG DELHI, NEW DELHI 110 015. 110 015. 110 015. 110 015. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR