Sh. Rajneesh Chanana, New Delhi V. ITO, New Delhi

ITA 1209/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58895 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 07-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAMTA KOCHAR
• Assessee Lawyers: VK SABHARWAL
• Keywords: Business income; Revised return
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 1209/DEL/2010 ASSESSMENT YEAR: 2006-07 SHRI RAJNEESH CHANANA, VS. INCOME-TAX OFFICER, B-3/10, GROUND FLOOR, WARD 46(1), PASCHIM VIHAR, NEW DELHI NEW DELHI-1100 63 (PAN: AAFPC2710E) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VK SABHA RWAL, ADV. RESPONDENT BY: SMT. MAMTA KOCHA R, SR.DR DATE OF HEARING : 07.03.2012 DATE OF PRONOUNCEMENT : 15.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 06.02.2010 PASSED FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEALS TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTIVE AND ARGUM ENTATIVE IN NATURE. IN BRIEF, HIS GRIEVANCE REVOLVES AROUND THREE ISSUES. IN THE FIRST ISSUE, HE HAS PLEADED THAT LEARNED FIRST APPELLATE AUTHORITY HAS DECIDED HIS APPEAL WITHOUT CONFRONTING HIM WITH THE REMAND REPORT RECE IVED FROM THE ASSESSING OFFICER. IN THE SECOND ISSUE, HE ALLEGED THAT LEARN ED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.30,20,000 ON ACCOU NT OF UNEXPLAINED CASH 2 DEPOSITED IN THE BANK ACCOUNT AND UNDER THE THIRD I SSUE HE PLEADED THAT ASSESSING OFFICER HAS ERRED IN CHARGING INTEREST UN DER SEC. 234B OF THE INCOME-TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF PURCHASE AND SALES OF FRUITS AND VE GETABLES IN AZADPUR MANDI. HE HAS FILED HIS RETURN OF INCOME ON 26.7.20 06 DECLARING AN INCOME OF RS.1,44,000. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) WAS ISSUE D ON 20.7.2007. DURING THE SCRUTINY PROCEEDINGS, ASSESSEE FILED A REVISED RETURN WHEREBY HE DISCLOSED A LOSS OF RS.9797.39 FROM HIS BUSINESS. H OWEVER, THIS RETURN WAS NOT ENTERTAINED BY THE ASSESSING OFFICER ON THE GRO UND THAT IT WAS NOT FILED WITHIN THE STATUTORY PERIOD. ON SCRUTINY OF THE ACC OUNTS, IT REVEALED THAT ASSESSEE WAS MAINTAINING AN ACCOUNT WITH HDFC BANK, KG MARG, CONNAUGHT PLACE, NEW DELHI WHERE A SUM OF RS.32,40, 000 ALLEGED TO HAVE BEEN DEPOSITED ON VARIOUS DATES DURING THE FINANCIA L YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07. HE CONFRONTED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS. ACCORDING TO THE ASSESSEE, HE WAS IN T HE BUSINESS OF PURCHASE AND SALES OF FRUITS AND VEGETABLES. THE ACTUAL AMOU NT DEPOSITED IN THE ACCOUNT IS RS.30,20,000 AND NOT RS.32,40,000. OUT O F THIS AMOUNT, A SUM OF 3 RS.12,02,000 WAS DEPOSITED OUT OF THE FUNDS WITHDRA WN EARLIER AND AVAILABLE WITH THE ASSESSEE. THE REMAINING AMOUNT WAS DEPOSIT ED BY THE ASSESSEE OUT OF BUSINESS RECEIPTS. THE ASSESSEE FURTHER CONTENDE D THAT HE HAS A BUSINESS RECEIPT OF RS.31,60,120. HE IS A RETAIL TRADER, NOT MAINTAINING ANY BOOKS OF ACCOUNT. HIS INCOME DESERVES TO BE ASSESSED AT 5% O F THE GROSS RECEIPTS IN ACCORDANCE WITH SECTION 44AF OF THE INCOME-TAX ACT, 1961. 3. ASSESSING OFFICER HAS REJECTED THE CONTENTIONS O F THE ASSESSEE ON THE GROUND THAT ASSESSEE FAILED TO BRING DEMONSTRATIVE EVIDENCE EXHIBITING THE CARRYING OUT OF ANY REAL BUSINESS IN THE LINE OF PU RCHASE AND SALE OF FRUITS. IN THE OPINION OF THE ASSESSING OFFICER, THE INCOME EA RNED BY THE ASSESSEE IS FROM OTHER SOURCES WHICH HAS NOT BEEN DISCLOSED TO THE DEPARTMENT. HOWEVER, IN PARAGRAPH NO.4 OF THE ASSESSMENT ORDER, HE QUANTIFIED THE BUSINESS INCOME ALSO AT RS.1,58,006 WHICH IS 5% OF THE TOTAL RECEIPTS AMOUNTING TO RS.31,60,120. THIS INCOME HAS BEEN ASS ESSED UNDER SEC. 44AF OF THE INCOME-TAX ACT, 1961. 4. DISSATISFIED WITH THE ACTION OF THE ASSESSING OF FICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED FIRST APPEL LATE AUTHORITY. LEARNED FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION OF RS.1,58,006 ON THE 4 GROUND THAT BY ASSESSING THIS AMOUNT AS AN INCOME O F THE ASSESSEE, LEARNED ASSESSING OFFICER TOOK CONTRADICTORY STAND, BECAUSE ON THE ONE HAND HE HAS ALLEGED THAT ASSESSEE WAS NOT CARRYING OUT ANY BUSI NESS ACTIVITIES BUT ON THE OTHER HAND HE HAS ASSESSED THE BUSINESS INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDER OF THE LEARNED F IRST APPELLATE AUTHORITY SUBMITTED THAT THE CASE OF THE ASSESSEE FOR ASSESSM ENT YEAR 2008-09 WAS SELECTED FOR SCRUTINY ASSESSMENT. A NOTICE UNDER SE C. 143(2) OF THE ACT WAS ISSUED ON 11.8.2009. THE ASSESSEE HAS FILED THE APP EAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY IN THE PRESENT ASSESSMENT YEAR ON 15.1.2009. LEARNED FIRST APPELLATE AUTHORITY HAS CALLED FOR A REMAND REPORT. WHEN ASSESSING OFFICER HAS REMITTED THE REMAND REPORT AT THAT POINT OF TIME, HE WAS ALSO SCRUTINIZING THE ASSESSMENT FOR ASSESSMENT YEAR 2008-09. IN THAT ASSESSMENT YEAR, ASSESSING OFFICER HAS ACCEPTED THA T THE ASSESSEE WAS IN THE BUSINESS OF PURCHASE AND SALES OF FRUITS AND VEGETA BLES. THIS FACTOR HAS TOTALLY BEEN IGNORED IN THE REMAND REPORT AS WELL A S BY THE LEARNED CIT(APPEALS). REMAND REPORT WAS NOT CONFRONTED TO T HE ASSESSEE BUT LEARNED FIRST APPELLATE AUTHORITY HAS TAKEN COGNIZA NCE OF THIS REPORT ON PAGE NOS. 6 & 7 OF THE IMPUGNED ORDER. THE LEARNED COUNSEL FOR THE ASSESSEE PRAYED THAT IN VIEW OF THE ABOVE, ASSESSEE SHOULD B E GRANTED ONE MORE OPPORTUNITY TO EXPLAIN HIS CASE AND THE CASE BE SET ASIDE TO THE FILE OF THE 5 ASSESSING OFFICER. ON THE OTHER HAND, LEARNED DR SU BMITTED THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE. HE FAILED TO BRING ANY EVIDENCE INDICATING THE FACT THAT HE WAS TRADING IN FRUITS A ND VEGETABLES. THEREFORE, THERE IS NO NEED TO SET ASIDE THIS ISSUE TO THE FIL E OF THE ASSESSING OFFICER. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. ASSESSING OFFICER IN PARAGRAPH NO .3.5 HAS STATED IN TWO LINES THAT ASSESSEE FAILED TO ESTABLISH THE FACT TH AT HE WAS DOING ANY BUSINESS IN THE PURCHASE AND SALES OF FRUITS. APART FROM THI S OBSERVATION, THERE IS NO REFERENCE TO ANY MATERIAL WHETHER HE HAS CALLED FOR ANY DETAILS OF HIS SHOP OR ANY PLACE OF DOING SUCH BUSINESS. THE ASSESSEE WAS ALLEGING THAT SINCE HIS GROSS RECEIPTS DID NOT EXCEED RS.40 LACS, HE WAS NO T SUPPOSED TO MAINTAIN BOOKS OF ACCOUNT. IN SUCH SITUATION, ASSESSING OFFI CER COULD HAVE CALLED FOR THE INFORMATION FROM THE SPOT, WHERE ASSESSEE WAS D OING THE BUSINESS OR COULD HAVE VERIFIED HIS PURCHASES BY CALLING THE IN FORMATION FROM THE PERSON FROM WHOM ASSESSEE HAD MADE PURCHASES BUT NO SUCH I NQUIRY WAS CONDUCTED. SIMILARLY, LEARNED FIRST APPELLATE AUTHO RITY HAS ALSO NOT CONSIDERED THIS ASPECT BEFORE REJECTING THE PLEA OF ASSESSEE THAT HE WAS TRADING IN FRUITS AND VEGETABLES. IN THE ASSESSMENT YEAR 2008-09, THOUGH, THERE IS NO DETAILED FINDING BUT ASSESSING OFFICER HAS ACCEPTED THE STAND OF 6 ASSESSEE. THIS ORDER HAS BEEN PASSED ON 7.12.2010 A ND SCRUTINY PROCEEDINGS WERE INITIATED ON 11.8.2009. AT THAT POINT OF TIME, THE APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY IN ASSESSMENT YEA R 2006-07 WAS ALSO PENDING. CONSIDERING THIS DEVELOPMENT, WE DEEM IT A PPROPRIATE TO SET ASIDE THE ISSUES TO THE FILE OF THE LEARNED ASSESSING OFF ICER FOR REINVESTIGATION. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 15.03.2012 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/03/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR