Shyam Bihari Gandhi, New Delhi V. ITO, Ward-49(5), New Delhi

ITA 1273/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4965 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 18-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Unexplained cash credit; Depreciation; Capital receipt
• Section: 143(3); 142(1); 143(2); 68

Judgement Text

PAGE 1 OF 8 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 1273/DEL/2019 A.Y.: 2013-14 SHYAM BIHARI GANDHI, VS. ITO, WARD 49(5), A-2/152, GF, JANAKPURI, NEW DELHI NEW DELHI 58 14 TH FLOOR, CIVIC CENTRE, MINTO ROAD, NEW DELHI-1 (PAN: AALPG0811A) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. AMRIT LAL, SR. DR. O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24.12.2018 OF THE LD. CIT(A)-17, NEW DELHI PERT AINING TO ASSESSMENT YEAR 2013-14 ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE LD. CIT(A) IS CONTRARY TO FACTS AND IN LAW. 2. THAT THE LD. CIT(A) HAS REJECTED THE APPEAL OF THE ASSESSEE WHICH IS HIGHLY ARBITRARY, UNJUST AND ILLEGAL. 3. THAT THE ASSESSEE HAD CLAIMED INTEREST PAYABLE TO BANK AMOUNTING TO RS. 20,38,472/- IN PROFIT AND LOSS PAGE 2 OF 8 ACCOUNT WHICH HAVE BEEN REJECTED BY THE LD. CIT(A) WHICH IS CONTRARY TO LAW AND FACTS. 4. THAT THE LD. CIT(A) HAS WRONGLY REJECTED THE APPEAL OF THE ASSESSEE ON ACCOUNT OF PAYMENT OF RS. 5,91,175/- REGARDING CREDIT CARD PAYMENT WHICH IS HIGHLY ARBITRARY AND UNJUST. IT IS PRAYED THAT THE ADDITION BE DELETED. 2. THE AFORESAID APPEAL WAS EARLIER FIXED FOR HEARING O N 01.08.2019 BY SENDING THE NOTICE THROUGH RPAD AND IN RESPONSE T O THE SAME, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR FILED AN Y APPLICATION FOR ADJOURNMENT. THEREFORE, THE BENCH ADJOURN THE CASE FOR 06.11.2019 BY DIRECTING THE REGISTRY TO ISSUE NOTICE BY RPAD FOR H EARING ON 06.11.2019. ON 06.11.2019 WHEN THE MATTER CAME UP FO R HEARING, AGAIN NONE APPEARED ON BEHALF OF THE ASSESSEE NOR FIL ED ANY APPLICATION FOR ADJOURNMENT. HENCE, I AM OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE ON THE ADDRESS GIVEN BY THE ASSESSEE IN TH E PRESENT APPEAL. SECONDLY, THE ASSESSEE HAS ALSO NOT INTIMATED ANY N EW ADDRESS TO THE TRIBUNAL. IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, I AM DECIDING THE APPEAL OF THE ASSESSEE EXPARTE, AFTER PERUSING THE RECORDS AND HEARING THE LD. DR. PAGE 3 OF 8 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILE D HIS RETURN OF INCOME AT RS. 12,01,350/- ON 28.3.2014. THE CASE O F THE ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS. THE AO ISSUED THE NOTICES U/S. 143(2) AND 142(1) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) ALONGWITH QUESTIONNAIRE TO THE ASSESSEE, WHICH WERE SERVED UPON THE ASSESSEE. IN RESPONSE TO THE SAME, THE AR OF THE AS SESSEE APPEARED FROM TIME TO TIME AND FILED THE NECESSARY DETAILS. A SSESSEE WAS RUNNING AN ULTRASOUND DIAGNOSTIC CENTRE AND A COACHING INSTITUTE. THE ASSESSEE HAS SHOWN NET PROFIT OF RS. 11,85,235/- AGA INST GROSS RECEIPTS OF RS. 48,80,933/- AS COMPARED TO NET PROFIT OF RS. 10,93,678/- AGAINST THE GROSS RECEIPTS OF RS. 51,26, 976/- IN PRECEDING YEAR. ASSESSEE HAS SHOWN CAPITAL RECEIPT OF RS. 25,19 ,787/- AND HAS INTRODUCED CAPITAL AMOUNTING TO RS. 15,90,000/- WHIC H HAS NOT BEEN CREDITED TO THE P&L ACCOUNT. ASSESSEE WAS ASKED TO EX PLAIN THE SOURCE OF THESE RECEIPTS AND THE REASONS FOR NOT CREDITING THE SAME IN THE P&L ACCOUNT AND ALSO ASKED AS TO WHY IT SHOULD NOT B E TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. IN RESP ONSE TO THE SAME, ASSESSEE FILED A LETTER DATED 14.12.2019 AND FILED I TS REPLY WHICH THE AO HAS REPRODUCED IN THE ASSESSMENT ORDER. 3.1 ACCORDING TO THE ASSESSMENT ORDER, ASSESSEE HAS A CCEPTED HIS MISTAKE AND AGREED FOR ADDITION OF RS. 8,80,406/-. A CCORDINGLY, AN PAGE 4 OF 8 ADDITION OF RS. 8,80,406/- WAS MADE IN THE HANDS OF THE ASSESSEE AND AO ALSO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1 ) OF THE ACT. 3.2 AS REGARDS THE ICICI BANK CREDIT CARD, ASSESSEE S UBMITTED HIS LETTER DATED 10.8.2015 AND STATED THAT ASSESSEE HAD BEEN USING ICICI BANK CREDIT CARD WHICH WAS BEING SHOWN IN HIS BALAN CE SHEET BUT FROM THIS YEAR THE ASSESSEE HAS SHOWN THIS IN HIS CAPITAL ACCOUNT AND HAS CREDITED RS. 4,10,447/- IN HIS CAPITAL ACCOUNT. THE AO WAS OF THE VIEW THAT ASSESSEE HAS NOT CREDITED RS. 5,90,175/ TO THE PROFIT AND LOSS ACCOUNT, THOUGH IT WAS THE PART OF HIS BALANCE SHEET IN EARLIER YEARS, HENCE, RS. 5,90,175/- WAS ADDED IN THE HANDS OF TH E ASSESSEE AND INITIATED THE PENALTY OF RS. 271(1) OF THE ACT. 3.3 AO ALSO FOUND THAT THE ASSESSEE HAS SHOWN LOAN (LIABILITY) OF RS. 1,11,73,554/- AGAINST WHICH HE HAS CLAIMED BANK INTEREST OF RS. 20,38,472/- AND ASSESSEE HAS FURTHER GIVEN INTEREST F REE LOAN TO HIS DAUGHTER MEHAK GANDHI AMOUNTING TO RS. 1,57,26,728/ -. AO ASKED THE ASSESSEE FOR HIS EXPLANATION AND IN RESPONSE TO THE SAME, THE ASSESSEE VIDE HIS LETTER DATED 10.12.2015 FILED HIS REPLY WITH THE AO WHICH IS REPRODUCED IN THE ASSESSMENT ORDER. AFTER CON SIDERING THE REPLY FILED BY THE ASSESEE, THE AO WAS OF THE VIEW THAT ON ONE HAND THE ASSESSEE HAD MADE THE BORROWALS AND PAID INTEREST ON SUCH BORROWALS AND ON THE OTHER HAND HAS PARKED SUCH INTERES T BEARING PAGE 5 OF 8 FUNDS TOWARDS ADVANCES ON WHICH NO INTEREST HAS BEEN EARNED BY HIM. SO, IT IS CLEAR THAT A SUM OF RS. 1,57,26,728/- IS C LEARLY AN AMOUNT PARKED BY THE ASSESSEE AND GIVEN TO MS. MEHAK GANDHI , DAUGHTER OF THE ASSESSEE FOR THE PURPOSE WHICH IS ADMITTEDLY NOT BUSINESS DURING THE YEAR UNDER CONSIDERATION AND ACCORDINGLY, ADDED THE ADDITION U/S. 36(1)(III) OF THE ACT AMOUNTING TO RS. 20,38,472/- IN THE HANDS OF THE ASSESSEE AND ALSO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1) OF THE ACT. 3.4 AFTER SCRUTINIZING THE CASE OF THE ASSESSEE, THE AO FOUND THAT THE ASSESSEE HAS SHOWN ADDITION OF FIXED ASSETS IN THE FORM OF COMPUTER AMOUNTING TO RS. 2,95,680/- AND ASSESSEE HA S PRODUCED SOME BILLS WHICH THE AO HAS REPRODUCED IN THE ASSESS MENT ORDER. AFTER PERUSING THE SAID BILLS, THE AO WAS OF THE VIEW THAT ASSESSEE HAS FURNISHED TWO BOGUS BILLS AMOUNTING TO RS. 76,000/- AND RS. 73,680/- PERTAINING TO KULDEEP COMPUTERS AND SL COMPUTERS AND PRI NTERS AND THESE TWO COMPUTERS BILLS DATED 1.6.2015 AND 15.7.20 15 DOES NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. ASSESSEE HAS C LAIMED DEPRECIATION OF RS. 89,808/- ON THE SAME @60%. SO, TH E EXPENSES OF RS. 1,49,680/- AS WELL AS DEPRECIATION OF RS. 89,808 /- ON THESE TWO COMPUTERS WAS DISALLOWED AND AN AMOUNT OF RS. 2,39, 488/- WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. AO ALSO INITIATED THE PAGE 6 OF 8 PENALTY PROCEEDINGS U/S. 271(1) OF THE ACT. IN THE END, THE AO ALSO INITIATED THE PENALTY U/S. 271B OF THE ACT FOR VIOLA TION OF SECTION 44AB OF THE ACT AND COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT AT NET TAXABLE INCOME OF RS. 48,00,212/- VIDE ORDER DATED 29 .01.2016. AGGRIEVED WITH THE ASSESSMENT ORDER, ASSESSEE APPEAL B EFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 24.12.2018 DISMISSED THE APPEAL OF THE ASSESSEE. AGAINST THE IMPUGNED ORDER DATED 24.12.2018, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. AS RE GARDS ADDITION OF RS. 20,38,472/- ON ACCOUNT OF PAYMENT OF INTERES T TO BANK WHICH THE ASSESSEE HAS MENTIONED IN THE PROFIT AND LOSS AC COUNT. THE REVENUE AUTHORITIES HAVE NOTICED THAT A LOAN (LIABILI TY) OF RS. 1,11,73,554/- AGAINST WHICH THE ASSESSEE HAS CLAIME D INTEREST OF RS. 20,38,472/- AND THE ASSESSEE HAS FURTHER GIVEN INTERE ST FREE LOAN TO HIS DAUGHTER MS. MEHAK GANDHI TO THE TUNE OF RS. 1,5 7,26,728 MEANING THEREBY THAT ASSESSEE HAS CLAIMED INTEREST EXPENSES OF BORROWED CAPITALS AND BY GIVING INTEREST FREE ADVANCES TO HIS DAUGHTER. IN MY VIEW THIS NOT FOR BUSINESS PURPOSES. ASSESSEE HAS CLAIMED BEFORE THE REVENUE AUTHORITIES BY NOT FILING ANY DOCUMENTARY EVIDENCE, THEREFORE, I FULLY AGREE WITH THE REASONS M ENTIONED BY THE PAGE 7 OF 8 REVENUE AUTHORITIES ESPECIALLY THE LD. FIRST APPELLAT E AUTHORITY FOR CONFIRMING THE ADDITION OF RS. 20,38,472/- ON ACCOUN T OF INTEREST ON LOAN OF RS. 1,11,73,554/-. HENCE, NO INTERFERENCE I S CALLED FOR IN THE WELL REASONED ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE, THEREFORE, I UPHOLD THE FINDING OF THE LD. CIT(A) O N THE ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY THE ASSESSEE. 4.1 AS REGARDS ADDITION OF RS. 5,90,175/- ON ACCOUN T OF CREDIT CARD PAYMENT IS CONCERNED, AFTER GOING THROUGH THE ORDERS PA SSED BY THE REVENUE AUTHORITIES AND AFTER HEARING THE LD. DR, I AM OF THE VIEW THAT EXPENSES ON ICICI CREDIT CARD AND THE CREDIT FA CILITY FROM PHOENIX ARC PVT. LTD. WAS TRANSFERRED BY THE ASSESSEE TO HIS CAPITAL ACCOUNT. SINCE THE ASSESSEE HAS HIMSELF CAPITALIZED THESE AMOUNTS BY TRANSFERRING THE SAME TO HIS CAPITAL ACCOUNT WITHOUT C REDITING THE SAME IN THE PROFIT AND LOSS ACCOUNT. IN MY VIEW AND KEEPING IN VIEW OF THE ORDERS OF THE REVENUE AUTHORITIES, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY, I A M OF THE CONSIDERED VIEW THAT THE AO HAS RIGHTLY MADE THE AD DITION IN DISPUTE AND LD. CIT(A) HAS CONFIRMED THE SAME ON THE BASIS O F THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSEE. THER EFORE, THE FINDING OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD AN D ACCORDINGLY THE PAGE 8 OF 8 GROUND RAISED BY THE ASSESSEE IS REJECTED. ACCORDINGLY , THIS APPEAL OF THE ASSESSEE IS DISMISSED. 5. AS MENTIONED ABOVE, I AM DECIDING THE APPEAL OF THE ASSESSEE EXPARTE ON MERITS, AFTER PERUSING THE RECORDS AND HEA RING THE RESPONDENT I.E. LD. SR. DR, BUT IN THE INTEREST OF JUSTICE, I AM GIVING LIBERTY TO THE ASSESSEE, IF SO, ADVISED IF THE ASSES SEE IS AGGRIEVED WITH THIS ORDER, HE CAN MOVE AN APPLICATION UNDER RULE 24 OF THE ITAT RULES, 1963 FOR RESTORING THE APPEAL AND SATISFY THE T RIBUNAL FOR SUFFICIENT CAUSE OF NON-APPEARANCE BEFORE THE TRIBUN AL ON THE DATE OF HEARING AND THE TRIBUNAL IS AT LIBERTY TO RESTORE THI S APPEAL, AFTER HEARING BOTH THE PARTIES, IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON 07-11-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE:07/11/2019 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES