Uday Shankar Shah, New Delhi V. ITO, Ward-50(1), New Delhi

ITA 1561/DEL/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1083 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 13-07-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 26-10-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 147; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDCIAL MEMBER ITA No.1561/Del/2021 Assessment Year: 2011-12 Sh. Uday Shankar Shah, H-35, 1 st Floor, Jangpura Extension, New Delhi Vs. ITO, Ward-50(1), New Delhi PAN :BUFPS0241F (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 01.09.2021 passed by National Faceless Appeal Centre (NFAC) for the assessment year 2011-12. 2. At the outset, learned counsel appearing for the assessee, on instruction, did not press ground nos. 1, 2 and 3. Accordingly, these grounds are dismissed as not pressed. 3. In ground no. 4, the assessee has challenged the addition of Rs.14,41,642/-. Briefly the facts are, the assessee is a resident individual engaged in the business of manufacturing and trading Appellant by Sh. Ravi Pratap Mall, Advocate Respondent by Sh. Om Parkash, Sr. DR Date of hearing 14.07.2022 Date of pronouncement 12.10.2022 ITA No.1561/Del/2021 AY: 2011-12 2 | Page of mobile chargers. On the basis of information received that in the year under consideration, the assessee has deposited cash in his bank account and has also earned interest income, the Assessing Officer reopened the assessment under section 147 of the Act. Since, in course of assessment proceeding, the assessee did not appear and comply with queries raised by the Assessing Officer, he proceeded to complete the assessment under section 144 of the Act, to the best of his judgment. While doing so, he treated the cash deposit of Rs.14,05,800/- as income from undisclosed sources and added to the income of the assessee. Further, he added an amount of Rs.35,842/- representing interest earned on FDR. Contesting the aforesaid additions, assessee preferred an appeal before the first appellate authority. However, the additions made by the Assessing Officer were sustained. 4. I have heard the parties and perused the materials on record. As regards the addition of Rs.14,05,800/- representing the cash deposit made in the bank account, it is the contention of the assessee that it was made out of business receipts. In this regard, it is observed that though, in course of assessment proceedings the assessee did not file any evidence, however, ITA No.1561/Del/2021 AY: 2011-12 3 | Page before the first appellate authority the assessee did file additional evidences to prove the source of cash deposit. The additional evidences furnished by the assessee were forwarded to the Assessing Officer for examination. After examining the evidence furnished by the assessee, the Assessing Officer furnished a remand report dated 15.07.2020 to the first appellate authority. On a perusal of the aforesaid remand report, a copy of which is at page 56 of the paper-book, it is observed that the Assessing Officer after verifying the evidences such as sales invoices of the purchasing parties and conducting necessary inquiry has observed that in response to notices issued under section 133(6) of the Act, the concerned parties have furnished confirmation accounts. He has further observed that the dealer’s credentials were also verified on line from the DVAT website through TIN number and the transactions mentioned in the sales invoices were found to be correct. This being the factual finding of the Assessing Officer after inquiry, it has to be accepted that assesee’s contention that the deposits were made out of business receipts, which during the year was to the tune of more than 28 lakhs, appears plausible. Therefore, in my view, the source of ITA No.1561/Del/2021 AY: 2011-12 4 | Page cash deposits of 14,05,800/- in the bank account stands explained. Accordingly, I delete the addition of Rs.14,05,800/-. 5. As regards the addition of interest income of Rs.35,842/-, on perusal of the computation of income stated to have been filed by the assessee along with return of income for the impugned assessment year, it is observed that the assessee has offered interest income of Rs.8,630/-. The Assessing Officer is directed to verify the actual interest income earned by the assessee and, in case, it is found that the amount of interest income earned by the assessee during the year is more than what has been offered to tax, the differential amount may be added to the income of the assessee. 6. In the result, the appeal is partly allowed. Order pronounced in the open court on 12 th October, 2022 Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 12 th October, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi