ITO, New Delhi V. Smt. Mithlesh Goel, New Delhi

ITA 1634/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9855 (ITAT-DELHI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 05-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: B B BHAGAT
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : I : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 1634/DEL/2009 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, WARD 35(3), H BLOCK, VIKAS BHAWAN, NEW DELHI. VS. SMT. MITHLESH GOEL, H-10, VIJAY CHOWK, KRISHNA NAGAR, DELHI. PAN: ADVPG 3776-L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.B. BHAGAT, ADVOCATE REVENUE BY : SMT. ANUSHA KHURANA, SR. DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 28 TH NOVEMBER, 2008 FOR ASSESSMENT YEAR 2005-06. GROUND S OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) HAS ERRED IN DELETING ADDITION OF RS.12,34, 000/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68 OF T HE ACT, 1961, ESPECIALLY WHEN AIR INFORMATION IS ON RECORD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITIONS BY GIVI NG BENEFIT OF PROVISION OF U/S 44AF OF THE IT ACT THOUGH ASSESSEE HAS NOT FILED ANY INCOME TAX RETURN FOR THE TRANSACTION PER IOD. SINCE ASSESSEE HAS NOT FILED ANY RETURN SHE WAS NOT ENTIT LED TO THIS BENEFIT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. ITA NO.1634/DEL/2009 2 CIT (A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT FOLLOWING THE REQUIREMENT OF RULE 46A (2) AND NOT S PECIFYING AS TO UNDER WHICH EXCEPTION (A TO D) OF RULE 46A (1 ) THE ASSESSEES CASE IS COVERED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS FURTHER ERRED IN TERMS OF RULE 46A (3) BY NOT SUPPLYING THE EVIDENCE PRODUCED BY THE ASSESSEE AND NOT ALLOWING A REASONABLE OPPORTUNITY TO THE A.O. TO EX AMINE THE SAME. 2. THE IMPUGNED ASSESSMENT ORDER IS AN ORDER PASSED UNDER SECTION 144 OF IT ACT, 1961 DATED 24 TH DECEMBER, 2007. THE INCOME OF THE ASSESSEE HAS BE EN SHOWN AT A SUM OF RS.12,34,000/- ON THE BASIS OF IN FORMATION RECEIVED THROUGH AIR IN WHICH IT WAS SHOWN THAT A DEPOSIT WAS THERE IN THE SAVING BANK ACCOUNT OF THE ASSESSEE OF A SUM OF RS.12,34,000 WITH UTI BANK LTD. AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT (A) IN WHICH IT WAS STATED THAT NO NOTICE WHATSOEVER WAS EVER RECEIVED BY THE ASSESSEE FROM T HE ASSESSING OFFICER AND, THEREFORE, THE ASSESSING OFFICER WAS WRONG IN FRAMI NG THE ASSESSMENT UNDER SECTION 144 OF THE IT ACT, 1961. FURTHER, IT WAS S UBMITTED THAT ALL THE DEPOSITS IN THE ABOVE-MENTIONED SAVINGS ACCOUNT WERE DEPOSITED RELATING TO THE RETAIL BUSINESS CARRIED ON BY THE ASSESSEE OF PAINTS. IT WAS SUBMITTED THAT ALL THE DEPOSITS AND WITHDRAWALS MADE IN THE SAID BANK ACCO UNT RELATES TO THE TRADE OF THE ASSESSEE. COPY OF BANK ACCOUNT, COPY OF PROFIT & LOSS ACCOUNT AND OTHER RELATED EVIDENCE WAS PRODUCED TO SHOW THAT THE SAID SAVINGS BANK ACCOUNT PERTAINED TO THE BUSINESS OF THE ASSESSEE AND BUSIN ESS INCOME OF THE ASSESSEE WAS ASSESSABLE U/S 44AF OF THE ACT AND IF CALCULATE D THE INCOME OF THE ASSESSEE IN VIEW OF SECTION 44AF APPLYING THE NET PROFIT RAT E OF 5%, THE NET PROFIT EARNED BY THE ASSESSEE FROM THE SAID BUSINESS WILL BE A SUM O F RS.61,700/- WHICH WILL BE BELOW THE TAXABLE LIMIT, HENCE, NO RETURN WAS LIABL E TO BE FILED AND, IN THIS MANNER, NO RETURN WAS FILED BY THE ASSESSEE. AS AS SESSEE DID NOT REPRESENT BEFORE THE ASSESSING OFFICER AND CERTAIN EVIDENCES WERE FILED BEFORE THE LD. CIT (A), THE LD. CIT (A) FORWARDED THE SUBMISSIONS OF T HE ASSESSEE AND THE RELATIVE EVIDENCE TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER HAS SUBMITTED HIS REPORT VIDE LETTER DATED 25 TH NOVEMBER, 2008 AND COPY OF WHICH ITA NO.1634/DEL/2009 3 WAS GIVEN TO US DURING THE COURSE OF HEARING IN WHI CH THE ASSESSING OFFICER HAS OFFERED NO COMMENT UPON THE SUBMISSIONS MADE BY THE ASSESSEE AND EVIDENCE PRODUCED IN SUPPORT OF THAT, BUT HE REQUESTED THE L D. CIT (A) NOT TO ADMIT ANY ADDITIONAL EVIDENCE AT THE APPELLATE STAGE. HOWEVE R, THE LD. CIT (A) AFTER EXAMINING THE DETAILS AND AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE AND ALSO AFTER CONSIDERING THE EVIDENCES PLACED ON RECO RD HAS OBSERVED THAT THE INCOME ASSESSED BY THE ASSESSING OFFICER OF THE ASS ESSEE AT A SUM OF RS.12,34,000/- WAS NOT MAINTAINABLE AS THE ASSESSEE WAS RUNNING A BUSINESS OF RETAIL SALE OF PAINTS AND THE TRANSACTIONS IN THE B ANK ACCOUNT WERE IN RELATION TO SUCH BUSINESS FOR WHICH THE ASSESSEE COULD BE ASSES SED U/S 44AF OF THE ACT AND IF COMPUTED PROFIT OF THE ASSESSEE AS PER 44AF, THEN, THE INCOME SO COMPUTED WILL BE LESS THAN THE TAXABLE LIMIT. IT H AS BEEN MENTIONED THAT THE DETAILS OF SALES AND PURCHASES ARE AVAILABLE WITH T HE ASSESSEE AND ASSESSEE WAS ALSO MAINTAINING THE BOOKS OF ACCOUNT. THUS, T HE LD. CIT (A) HAS ARRIVED AT A CONCLUSION THAT THE INCOME ASSESSED BY THE ASSESS ING OFFICER WAS NOT JUSTIFIED. AGAINST THESE FINDINGS OF THE LD. CIT (A) THE DEPAR TMENT IS AGGRIEVED, HENCE, IN APPEAL. 3. IT WAS SUBMITTED BY LD. DR THAT THE ASSESSING OF FICER GRANTED THE PROPER OPPORTUNITY TO THE ASSESSEE AND THE ASSESSEE DID NO T REPRESENT BEFORE HIM, THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN MAKIN G ASSESSMENT UNDER SECTION 144 OF THE ACT. SHE FURTHER SUBMITTED THAT THE ASS ESSEE HAD NO REASONS TO FILE ADDITIONAL EVIDENCE BEFORE THE LD. CIT (A) AS PROPE R OPPORTUNITY WAS GIVEN BY THE ASSESSING OFFICER TO THE ASSESSEE. SHE FURTHER SUB MITTED THAT EVIDENCE WAS ACCEPTED BY THE LD. CIT (A) IN CONTRAVENTION OF PRO VISIONS OF SECTION 46A OF INCOME-TAX RULES, 1962. THUS, IT WAS SUBMITTED BY LD. DR THAT THE ADDITION DELETED BY THE LD. CIT (A) IS CONTRARY TO THE PROVI SIONS OF LAW AND THE ORDER OF THE ASSESSING OFFICER SHOULD BE MAINTAINED. 4. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR TH AT IT HAS BEEN CLEARLY STATED BY THE ASSESSEE BEFORE LD. CIT (A) THAT NO N OTICE WAS SERVED UPON THE ITA NO.1634/DEL/2009 4 ASSESSEE BY THE ASSESSING OFFICER AND, THUS, THE AS SESSEE WAS NOT ABLE TO PRODUCE ANY EVIDENCE BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT BEFORE THE LD. CIT (A) IT WAS STATED THAT NO NOTICE WAS SE RVED BY THE ASSESSING OFFICER AND THE ASSESSEE HAS ALL THE EVIDENCES TO SUPPORT H IS CASE THAT ASSESSEE WAS RUNNING RETAIL BUSINESS OF PAINTS THE TURNOVER OF W HICH WAS WITHIN THE PERMISSIBLE LIMITS LAID DOWN IN SECTION 44AF. ALL THE TRANSACT IONS IN BANK ACCOUNT RELATED TO THE SAID BUSINESS OF THE ASSESSEE AND THE INCOME IF COMPUTED ACCORDING TO THE PROVISIONS OF SECTION 44AF WILL BE WITHIN THE TAXAB LE LIMIT. THEREFORE, ALSO THE ASSESSEE WAS NOT UNDER AN OBLIGATION TO FILE THE RE TURN OF INCOME AND THESE FACTS WERE STATED AND WERE SUPPORTED BY DOCUMENTARY EVIDE NCE PLACED ON RECORD. HE SUBMITTED THAT ALL THESE EVIDENCES WERE FORWARDED T O THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NOT ADVERSELY COMMENTED U PON THE SAID EVIDENCE AND AGITATED BEFORE THE LD. CIT (A) FOR ADMISSION OF TH E SAID ADDITIONAL EVIDENCE. HE CONTENDED THAT ADDITION OF RS.12,34,000/- HAS RIGHT LY BEEN DELETED BY THE LD. CIT (A) AND HIS ORDER SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. IT HAS NOT BEEN SHOWN B Y THE DEPARTMENT THAT THE FACTS STATED BY THE ASSESSEE BEFORE LD. CIT (A) THA T NO NOTICE WAS EVER SERVED UPON HIM BY THE ASSESSING OFFICER IS INCORRECT. IF IT IS SO, THE ASSESSEE HAD NO OCCASION TO PLACE EVIDENCE ON RECORD WITH THE ASSES SING OFFICER TO STATE THAT SUCH ADDITION COULD NOT BE MADE. THE OPPORTUNITY W HICH ASSESSEE GOT AT FIRST WAS BEFORE THE LD. CIT (A) ONLY. BEFORE LD. CIT (A ) ALL THE EVIDENCES ALONG WITH THE WRITTEN SUBMISSIONS WERE FURNISHED. THEREFORE, LD. CIT (A) WAS RIGHT IN ADMITTING THOSE EVIDENCES AND HE WAS ALSO RIGHT IN CONFRONTING THE SAME TO THE ASSESSING OFFICER. WE HAVE CAREFULLY GONE THROUGH THE REMAND REPORT. THE ASSESSING OFFICER HAS NOT COMMENTED UPON THE SUBMIS SIONS OF THE ASSESSEE AND HE HAS SIMPLY REQUESTED THE LD. CIT (A) NOT TO ENTERTAIN SUCH ADDITIONAL EVIDENCE. IF THERE IS NO CONTRARY MATERIAL ON RECO RD BROUGHT BY THE REVENUE TO SHOW THAT WHAT WAS STATED BY THE ASSESSEE IS INCORR ECT, THEN, THE CONTENTION OF THE ASSESSEE HAS TO BE ACCEPTED THAT THE SAVINGS BA NK ACCOUNT RELATED TO THE ITA NO.1634/DEL/2009 5 RETAIL TRADE OF THE ASSESSEE. WE HAVE ALSO GONE TH ROUGH THE COPY OF BANK ACCOUNT WHICH IS ALSO PLACED ON OUR RECORD WHICH SH OWS THAT IT RELATED TO THE RETAIL BUSINESS OF THE ASSESSEE. IN THESE CIRCUMST ANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (A) VIDE WHICH THE IMPUGNE D ADDITION HAS BEEN DELETED. WE, THEREFORE, DECLINE TO INTERFERE AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. . 7. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.08. 2009. [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 21.08.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES