ITO, New Delhi V. Deepti Sahay, New Delhi

ITA 1402/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0327 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO. 1402(DEL)2010 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER, DEEPTI SAHAY , B-4/72 AZAD APARTMENTS, WARD 24(1), NEW DELHI. V. SRI AUROBINDO MAR G, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI H.K. LAL, SR. DR RESPONDENT BY: SHRI AMAR JEET SIN GH, CA ORDER PER A.D. JAIN, J.M. THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2006-07, TAKING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E ADDITION OF ` 7,72,029/- AND ` 54,494/- ON ACCOUNT OF ESTIMATING 25% OF THE NET PROFIT OF THE FIRMS RUN BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF ` 3,61,164/- MADE ON ACCOUNT OF UNVERIFIABLE DEPOSITS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A)HAS ERRED IN LAW AND ON FACTS IN ADMITTING TH E ADDITIONAL EVIDENCE IN VIOLATION OF PROVISIONS LAID DOWN UNDER RULE 46A(1) OF THE ITA 1402(DEL)2010 2 I.T. RULES AND ALSO THE LD. CIT(A) HAS FAILED TO IN VOKE THE PROVISIONS OF SECTION 250(4) OF THE I.T. ACT. 2. THE ASSESSEE, INDIVIDUAL, FOR THE YEAR UNDER CON SIDERATION, RETURNED AN INCOME OF ` 3,05,939/-. THE ASSESSMENT WAS COMPLETED U/S 144 OF THE I.T. ACT, VIDE ORDER DATED 29.12.2008. THE ASSESSEE, A S PER THE ASSESSMENT ORDER, DERIVED INCOME FROM TWO CONCERNS, I.E., DEEP TI SAHAY AND DEEPTI CREATIONS. DEEPTI SAHAY WAS ENGAGED IN STITCHING OF CLOTHES AND GARMENTS. THE PROFIT DECLARED WAS ` 3,54,651/-. IN DEEPTI CREATIONS, THE PROFIT DECLAR ED WAS ` 26,288/-. IN THE ASSESSMENT ORDER, THE AO OBSERVE D THAT THE PROFIT SHOWN AGAINST RECEIPT WAS LOW AND THE EXPENSES HAD BEEN INFLATED. THE AO ESTIMATED NET PROFIT AT 25% OF THE RECEIPTS. THI S CAME TO ` 7,72,029/-. PROFIT IN THE CASE OF JOB WORK WAS ALSO ESTIMATED A T 25% OF THE GROSS RECEIPTS. THIS CAME TO ` 54,494/-. FURTHER, DEPOSITS MADE IN THE TWO FIRMS FROM SHRI ARUN SAHAY, HUSBAND OF THE ASSESSEE, AMOU NTING TO ` 3,61,164/-, WERE ALSO ADDED. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ESTIMATION OF 25% NET PROFIT IN DEEPTI SAHAY AND DEEPTI CREATI ONS, AS WELL AS THE ADDITION OF ` 3,61,164/-. 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. ITA 1402(DEL)2010 3 5. BEFORE US, THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF ` 7,72,029/- AND ` 54,494/- ON ACCOUNT OF ESTIMATION OF NET PROFIT AT 25% OF THE FIRMS RUN B Y THE ASSESSEE AND IN DELETING THE ADDITION OF ` 3,61,164/- MADE ON ACCOUNT OF UNVERIFIABLE DEPOSITS. IT HAS BEEN CONTENDED THAT THE LD. CIT(A ) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE AT THE BACK OF THE AO. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS STRONGLY RELIED ON THE IMPUGNED ORDER. 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. 8. APROPOS THE NET PROFIT ESTIMATION AND ADDITION, THE AO DID NOT BRING ON RECORD ANY EVIDENCE SO AS TO JUSTIFY ARRIVAL AT AN ESTIMATE OF 25% OF THE NET PROFIT IN BOTH THE FIRMS OF THE ASSESSEE, AS RI GHTLY OBSERVED BY THE LD. CIT(A). THE BEST JUDGMENT U/S 144 OF THE ACT CANN OT BE MADE ON MERELY CONJECTURES AND SURMISES. HERE, NO ENQUIRY WHATSOE VER WAS CONDUCTED BY THE AO AND THE ESTIMATION WAS ENTIRELY BASELESS. THAT BEING SO, THE ADDITIONS OF ` 7,72,029/- AND ` 54,494/-, WERE ALSO BASELESS AND WERE RIGHTLY DELETED BY THE LD. CIT(A). 9. APROPOS THE ADDITION OF ` 3,61,164/-, REPRESENTING UNVERIFIABLE DEPOSIT, THE ASSESSEE HAD, VIDE LETTER DATED 30.12. 2008, TRIED TO EXPLAIN THE SOURCES OF DEPOSITS BEING SHRI ARUN SAHAY, HER HUS BAND . THE ASSESSEE HAD ITA 1402(DEL)2010 4 ALSO GIVEN THE DATE OF WITHDRAWAL FROM HER ACCOUNT, FOR RETURNING THE MONEY. THE ASSESSEE HAD ALSO FILED DETAILS WITH REGARD TO REDEMPTION OF MUTUAL FUND UNITS. BEFORE THE LD. CIT(A), THE ASSESSEE HAD A LSO SUBMITTED BANK STATEMENTS, FROM WHICH, IT WAS FOUND THAT THE SOURC E OF FUND WAS, INDEED, THE HUSBAND OF THE ASSESSEE, SHRI ARUN SAHAY. SHRI AR UN SAHAY WAS ASSESSED TO TAX IN THE SAME WARD AS THAT OF THE ASSESSEE. OBV IOUSLY, SINCE THE INCOME HAD BEEN DISCLOSED BY SHRI ARUN SAHAY AND IT HAD BE EN ACCEPTED AS SUCH, IT COULD NOT BE TAXED AGAIN IN THE HANDS OF THE ASSESS EE AND THAT TOO, WITHOUT ANY EVIDENCE. 10. THERE IS NO FORCE IN THE GRIEVANCE OF THE DEPAR TMENT REGARDING ADMISSION OF ADDITIONAL EVIDENCE AT THE BACK OF THE AO. THE ASSESSMENT U/S 144 OF THE ACT HAD BEEN COMPLETED IN THE FOLLOWING CIRCUMSTANCES, AS ENUMERATED BY THE LD. CIT(A):- 4. I HAVE CONSIDERED THE ORDER OF THE LEARNED AO . IT IS NOT IN DISPUTE THAT THE AO HAD ISSUED THE NOTICE U/S 142(1 ) ON 26.12.2008. THIS WAS A FRIDAY. FROM THE PERUSAL OF THE COPY O F ENVELOPE CONTAINING THE ALLEGED NOTICE, THIS WAS DISPATCHED BY SPEED POST ON 27.12.2008(SATURDAY) AT 2.16 P.M. FROM I.P. ESTATE POST OFFICE. 28.12.2008 WAS SUNDAY, AND THEREFORE, THE ENVELOPE CONTAINING THE NOTICE COULD NOT HAVE BEEN RECEIVED BY THE ASSESSEE . FURTHER, IT IS CRYSTAL CLEAR FROM THE STAMP OF THE POSTAL AUTHORIT IES, AS EVIDENT FROM THE PHOTO COPY OF THE ENVELOPE THAT THE ENVELOPE CO NTAINING THE NOTICE WAS RECEIVED BY THE ASSESSEE ON 30.12.2008 (TUESDAY ). IN SHORT, THE ENVELOPE DISPATCHED ON 27.12.2008 WAS RECEIVED BY T HE ASSESSEE ON 30.12.2008 (TUESDAY). THE DATE OF HEARING WAS FIXE D FOR 29.12.2008(MONDAY). THE DATE OF IMPUGNED ORDER, I S ALSO DATED ITA 1402(DEL)2010 5 29.12.2008. AS SUCH, THE CONTENTION OF THE ASSESS EE IS CORRECT THAT SHE DID NOT GET SUFFICIENT OPPORTUNITY TO EXPLAIN H ER CASE. 11. MOREOVER, THE FACTUM OF THE INCOME HAVING BEEN DECLARED BY ARUN SAHAY, IS A MATTER OF RECORD. ARUN SAHAY WAS ASSE SSED TO TAX IN THE SAME WARD AS THAT OF ASSESSEE. 12. IN VIEW OF ABOVE, FINDING NO MERIT THEREIN, TH E GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT BY WAY OF GROUNDS OF APPE AL NOS. 1 TO 3, IS REJECTED. 13. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.03.2011. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03.03.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR