Sh. Anil Vashist, New Delhi V. ACIT, New Delhi

ITA 127/DEL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3396 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-04-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 06-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHARI
• Keywords: Business income; Business expenditure
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER I.T.A .NO.-127/DEL/2017 (ASSESSMENT YEAR-2012-13) ANIL VASHIST, 189/1, DEVLI ROAD, KHANPUR, NEW DELHI-110062. PAN-AGHPV3157E ( APPELLANT) VS ACIT, CIRCLE-23(1), NEW DELHI (RESPONDENT) ASSESSEE BY SH.RANJAN CHOPRA, CA REVENUE BY MS. BEDOBANI CHAUDHARI, SR.DR DATE OF HEARING 06.04.2017 DATE OF PRONOUNCEMENT 21.04.2017 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD.CIT(A)-11, NEW DELHI DATED 08.11.2016 FOR A.Y.20 12-13. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NOS.1, 4 & 5 ARE GENERAL AND NEED NOT ADJ UDICATION. 4. GROUND NO.2, THE ASSESSEE CHALLENGED THE ORDER O F THE LD.CIT(A) IN RESTRICTING THE ADDITION MADE BY THE AO OF RS.5,75, 000/- TO RS2,38,479/- U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) ON ACCOUNT OF THE CASH DEPOSITS IN THE BANK ACCOUNT. IT IS NOTED THAT TH ERE ARE CASH DEPOSITS IN THREE BANK ACCOUNTS OF THE ASSESSEE TOTALING TO SUM OF RS.5,75,000/-. THE ASSESSEE EXPLAINED THAT HE IS COVERED U/S 44AD OF T HE ACT AND DECLARED PAGE 2 OF 5 PROFIT @ 8% ON BUSINESS RECEIPTS. DURING THE YEAR, THE ASSESSEE HAS GROSS RECEIPTS OF RS.2,31,844/- ON WHICH PROFIT HAVE BEEN DECLARED AT RS.54,548/-. IN ADDITION TO THIS, THE ASSESSEE HAS RENTAL RECEIPT OF RS.4,20,000/- AND NET JOB CHARGES OF RS.2,53,107/-. IT WAS, THEREFORE, SUBMITTED THAT THESE AMOUNTS ARE SUFFICIENT TO MAK E CASH DEPOSITS IN THE BANK ACCOUNT. THE LD.CIT(A) CONSIDERING THE EXPLAN ATION OF THE ASSESSEE NOTED THAT THE ASSESSEE HAS RENTAL RECEIPT, GROSS RECEIPT FROM BUSINESS, JOB WORK CHARGES. THE LD.CIT(A) FURTHER NOTED THAT RS. 1,26,000/- HAS BEEN SPENT ON INTEREST ON BORROWED CAPITAL AND TAX PAID AT RS.242,430/- IS NOT AVAILABLE TO THE ASSESSEE. THUS, TOTAL CASH AVAILA BLE TO THE ASSESSEE WAS FOUND IN A SUM OF RS.7,36,521/-. IN THE ABSENCE OF FURTHER DETAILS, IT WAS PRESUMED THAT THE ASSESSEE HAS UTILIZED APPROXIMATE LY RS.4 LACS FOR MEETING OUT HIS VARIOUS BUSINESS RELATED EXPENSES A ND PERSONAL EXPENSES INCLUDING HOUSEHOLD EXPENSES ETC. THEREFORE, A SUM OF RS.3,36,521/- WAS AVAILABLE TO THE ASSESSEE TO MAKE DEPOSIT IN CASH IN VARIOUS BANK ACCOUNTS, THEREFORE, THE SOURCE OF RS.3,36,521/- WA S FOUND EXPLAINED AND BALANCE AMOUNT OF RS.2,38,479/- REMAINED UNEXPLAINE D, ADDITION OF WHICH WAS CONFIRMED. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE ADDITION IS EXCESSIVE. LD. COUNSEL FOR THE ASSESSE E REFERRED TO PAPER BOOK PAGE 2 WHICH IS COMPUTATION OF INCOME FOR ASSESSMEN T YEAR UNDER APPEAL IN WHICH RS.1,26,000/- HAVE BEEN REDUCED ON ACCOUNT OF STATUTORY PAGE 3 OF 5 REDUCTION U/S 24(A) OF THE ACT AND RS.42,430/- HAVE BEEN DEPOSITED AS TAX ON 30.03.2013, THEREFORE, IT IS AVAILABLE TO THE AS SESSEE. THUS, THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT A SUM OF RS.1,68,43 0/- IS AVAILABLE TO THE ASSESSEE. I FIND THE EXPLANATION OF THE ASSESSEE T O BE CORRECT BECAUSE RS.1,26,000/- IS NOT INTEREST AS NOTED BY THE AUTHO RITIES BELOW AND THAT TAX OF RS.42,430/- WAS NOT PAID IN ASSESSMENT YEAR UNDE R APPEAL. THEREFORE, THESE AMOUNTS ARE AVAILABLE TO THE ASSESSEE IN CASH FOR THE PURPOSE TO EXPLAIN CASH DEPOSITS IN THE BANK ACCOUNTS OF THE A SSESSEE. THE ORDERS OF THE AUTHORITIES BELOW TO THE EXTENT ARE MODIFIED AN D THE AO IS DIRECTED TO GRANT FURTHER BENEFIT TO THE ASSESSEE IN A SUM OF R S.1,68,430/- OUT OF THE ADDITION OF RS.2,38,479/- MAINTAINED BY THE LD.CIT( A). THE ADDITION SHALL BE REDUCED TO THE EXTENT OF RS.1,68,430/-. THIS GR OUND OF APPEAL OF THE ASSESSEE IS ALLOWED PARTLY. 6. ON GROUND NO.3, THE ASSESSEE CHALLENGED THE ORDE R OF LD.CIT(A) IN CONFIRMING THE ADDITION OF RS.5,30,000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT. THIS ISSUE RELATES TO ADDITION OF RS.5 ,30,000/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN CONSTRUCTION OF HOUSES IN DEHRADUN. THE ASSESSEE WAS ASKED TO EXPLAIN SOURCE OF INVESTMENT. THE DETAILS OF INVESTMENT IN CONSTRUCTION OF PLOT NO.56, DEHRADUN IS NOTED IN THE ORDERS OF AUTHORITIES BELOW. ULTIMATELY IT WAS FOUND THAT THE ASSESSEE HAS DISCLOSED AN INVESTMENT OF RS.5,30,000/- FOR PURCHA SE OF MATERIAL OUT OF CURRENT YEAR INCOME. SINCE THE AMOUNT OF RS.5,30,0 00/- WAS NOT PAGE 4 OF 5 EXPLAINED, THEREFORE, ADDITION TO THAT EXTENT WAS M ADE. THE LD.CIT(A) CONFIRMED THE ADDITION. THE SOURCE OF THE SAME WAS NOT EXPLAINED. 7. LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAPER B OOK PAGE 7 WHICH IS DETAIL OF INCOME AVAILABLE TO THE ASSESSEE AS IS EX PLAINED ON GROUND NO.2 I.E RENTAL INCOME, INCOME RETURNED U/S 44AD AND JOB CHARGES. IT IS ALSO CLAIMED THAT THE ASSESSEE HAS AVAILABILITY OF CASH SEIZED OF RS.3,00,000/- WHICH WERE SEIZED FROM THE ASSESSEE DURING THE STAT E ASSEMBLY ELECTION. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I DO NO T FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BEL OW. LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT AMOUNT OF RS.3,00,000/- WAS SEIZED FROM THE ASSESSEE IS AVAILABLE TO THE ASSESSEE ALONGWITH OTH ER INCOME. WHILE CONSIDERING GROUND NO.2, THE LD.CIT(A) HAS CONSIDER ED ALL SOURCE OF INCOME OF THE ASSESSEE AND GRANTED SUBSTANTIAL BENE FIT TO THE ASSESSEE IN WHICH ALSO, I HAVE REDUCED THE ADDITION BY RS.1,68, 430/-. THE LD.CIT(A) ON THIS GROUND ALSO NOTED THAT THE AMOUNT OF RS.3,0 0,000/- SEIZED FROM THE ASSESSEE AND TREATED AS HIS INCOME FROM UNDISCL OSED SOURCE WAS NOT AVAILABLE TO THE ASSESSEE FOR INVESTMENT AS THE SAM E WAS SEIZED BY THE AUTHORITIES. THE PERSONAL EXPENSES WERE ALSO ESTIM ATED ALONGWITH OTHER BUSINESS EXPENSES, THEREFORE, OUT OF THE KNOWN SOUR CE OF THE ASSESSEE, NOTHING HAS LEFT WITH THE ASSESSEE SO AS TO EXPLAIN THE INVESTMENT MADE IN THE CONSTRUCTION OF HOUSE AT DEHRADUN. FURTHER, WH EN CASH OF RS.3,00,000/- WAS ALREADY SEIZED BY THE POLICE AUT HORITIES DURING ELECTION, PAGE 5 OF 5 IT WOULD NOT BE AVAILABLE TO THE ASSESSEE FOR MAKIN G INVESTMENT IN CONSTRUCTION OF PROPERTY. IN THE ABSENCE OF ANY SU FFICIENT AND COGENT EVIDENCE AVAILABLE ON THIS ISSUE, I DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW, ON THIS G ROUND. THIS GROUND OF THE APPEAL IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- (BHAVN ESH SAINI) JUDICIAL MEMBER DATE:- 21 ST APRIL, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI