Rakhi Parihar, Noida V. ITO, Ward-1(3), Noida

ITA 1660/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9348 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S THOINGALENG
• Keywords: Business income
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1660/DEL/2018 ASSESSMENT YEAR: 2009-10 RAKHI PARIHAR, A-56, SECTOR-16, NOORPUR, UTTAR PRADESH. PAN: AHAPP0752H VS. ITO, WARD-1(3), NOIDA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE REVENUE BY : SHRI P.S. THOINGALENG, SR.DR DATE OF HEARING : 10.12.2018 DATE OF PRONOUNCEMENT : .12.2018 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH NOVEMBER, 2017 OF THE CIT(A)-I, NOIDA RELATING TO ASSESSMENT YEAR 2009-10. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN SUSTAINING THE ADDITI ON OF RS.3,60,364/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPTS. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 2 ND DECEMBER, 2009 DECLARING TOTAL INCOME OF RS.3,47,9 10/-. ITA NO.1660/DEL/2018 2 DURING THE COURSE OF PROCESSING OF THE RETURN U/S 1 43(1), IT WAS FOUND THAT THE ASSESSEE HAD SHOWN NIL RECEIPTS IN COLUMN 1 OF THE P&L ACCOU NT OF ITR-4. HOWEVER, THE COPY OF FORM 26AS GENERATED FROM THE SYSTEM REVEALED THA T THE ASSESSEE HAS RECEIVED RS.16,05,263/- DURING THE FINANCIAL YEAR 2008-09 ON WHICH TDS OF RS.1,72,043/- HAD BEEN MADE BY THE RESPECTIVE TAX DEDUCTORS. ACCORDI NGLY, THE ASSESSING OFFICER REOPENED THE ASSESSMENT AFTER RECORDING REASONS AND NOTICE U/S 148 OF THE IT ACT WAS ISSUED TO THE ASSESSEE ON 8 TH AUGUST, 2011. SUBSEQUENTLY, DETAILED NOTICE U/S 1 42(1) WAS ALSO ISSUED TO THE ASSESSEE ASKING HIM TO EXPLA IN THE DIFFERENCE IN GROSS RECEIPTS AS SHOWN IN THE RETURN OF INCOME AND AS APPEARING IN F ORM NO.26AS. THE ASSESSEE, IN HER REPLY, SUBMITTED THE FOLLOWING EXPLANATION:- '4. THE ITR-4 FILED FOR THE YEAR ENDED 31/03/2009. THE PROFIT BEFORE TAX OF RS. 3,47,905/- IS DULY SHOWN WITH ALL THE DETAILS FOR E XPENSES, TDS AND ASSETS AND LIABILITIES EXCEPT DUE TO CLERICAL ERROR, TURNOVER OF RS. 12,44,899/- OMITTED TO BE SHOWN. THIS IS A MISTAKE APPARENT ON OUR PART. WITHOUT TUR NOVER, THE PROFIT CANNOT ARISE, WHICH IS BEING REFLECTED BY THE ITR AND TAX PAID IS RS. 2 2,230/-. 5. AS PER BOOKS OF ACCOUNTS OF THE FIRM FOR THE YEA R ENDED 31/03/2009, TURNOVER OF RS. 12,44,899/- IS BEING SHOWN, WHICH IS INCLUDING SERV ICE TAX @ 10%. TOTAL SALES INCLUDING SERVICE TAX IS RS. 14,07.486/-. FORM 26AS IS SHOWIN G PAYMENTS OF RS. 6,31,750/- REALIZED AGAINST SALES MADE IN FY 2007-08, WHICH IS REALIZED IN CURRENT YEAR ENDED 31/03/2009 IS RECEIVABLE FROM DEBTORS AS OPENING BA LANCE. 4. THE ASSESSING OFFICER, THEREAFTER, ASKED THE ASS ESSEE TO PRODUCE THE ORIGINAL COPIES OF THE BILLS RAISED DURING FINANCIAL YEAR 20 07-08 FOR WHICH THE PAYMENTS WERE RECEIVED IN F.Y. 2008-09. THE ASSESSEE WAS ALSO AS KED TO FURNISH THE CONFIRMATIONS FROM ALL THE DEBTORS FROM WHOM THE PAYMENTS WERE OU TSTANDING DURING F.Y. 2007-08. THE ASSESSEE FILED THE REPLY. HOWEVER, THE ASSESSI NG OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND HELD THAT THE ASSESSEE IS NOT SHOWING THE ITA NO.1660/DEL/2018 3 INCOME ON ACCRUAL BASIS AS CLAIMED AND IS SHOWING T HE SAME ON RECEIPT BASIS. FURTHER, THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR ASS ESSMENT YEAR 2008-09, THEREFORE, THE ASSESSING OFFICER HELD THAT THE GROSS RECEIPTS AS A PPEARING IN FORM NO.26AS ARE TO BE CONSIDERED FOR ASSESSMENT PURPOSE DURING THE YEAR U NDER CONSIDERATION. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSESSEE, THE ASSE SSING OFFICER MADE ADDITION OF RS.3,60,364/- BEING THE DIFFERENCE BETWEEN RS.15,06 ,263/- AND RS.12,44,899/-, AFTER RECORDING THE FOLLOWING FACTS:- (I) THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE, WH ICH COULD SUBSTANTIATE PAYMENT OF SERVICE TAX. (II) AT ONE HAND, THE ASSESSEE IS CLAIMING THAT THE GROSS RECEIPTS APPEARING IN FORM 26AS INCLUDE THE AMOUNT OF RS.6,31,750/-, WHIC H PERTAINS TO FY 2007-08. ON THE OTHER HAND, THE ASSESSEE IS SHOWING GROSS RE CEIPTS OF RS. 14,07,486/- (INCLUDING SERVICE TAX) DURING THE YEAR UNDER CONSI DERATION. THE GROSS RECEIPTS AS PER FORM 26AS IS RS.16,03.263/- (INCLUDING SERVICE TAX). IF THE RECEIPTS OF RS.6,31,750/- PERTAINS TO THE PAYMENTS PERTAINING T O PRECEDING YEAR, THE ASSESSEE SHOULD HAVE DISCLOSED GROSS RECEIPTS OF ONLY RS.9,7 3,513/-. THE ASSESSEE HAS FAILED TO RECONCILE THE DIFFERENCE. (III) DURING THE PRECEDING YEAR, THE ASSESSEE DID NOT FILE THE RETURN OF INCOME. AS PER HER OWN VERSION, SHE RECEIVED GROSS RECEIPTS OF RS.6,31,750/-. COPY OF FORM 26AS FOR FY 2007-08 SHOWS THAT SHE RECEIVED GR OSS RECEIPTS OF RS.2,88,464/-. IT MEANS THAT THE TOTAL GROSS RECEIP TS OF THE ASSESSEE FOR FY 2007- 08, AS PER HER OWN CALCULATION WAS RS.9,20,214/-. T HE ASSESSEE HAS SHOWN NP @ 27.94% DURING THE YEAR UNDER CONSIDERATION. APPLYIN G THE SAME NP RATIO FOR AY 2008-09, THE NP SHOULD HAVE BEEN 2,57,107/-, WHICH WAS WELL ABOVE THE TAXABLE LIMIT FOR FY 2008-09. HAD THE ASSESSEE SHOWING RECE IPTS ON ACCRUAL BASIS, SHE WOULD HAVE DEFINITELY FILED THE RETURN OF INCOME AN D HAD SHOWN THE CORRECT RECEIPTS. (IV) ALTHOUGH THE ASSESSEE IS CLAIMING THAT OUT O F THE GROSS RECEIPTS OF RS. 16,05,263/-, THE AMOUNT OF RS.6,31,750/- PERTAINS T O THE PRECEDING YEAR, SHE HAS CLAIMED THE TDS OF RS. 1,84,770/-, WHICH IS EVEN MO RE THAN THE TDS OF RS. 1,72.043/- APPEARING IN FORM 26AS AGAINST THE GROSS RECEIPTS OF RS.16,05,263/-. ITA NO.1660/DEL/2018 4 5. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF TH E ASSESSING OFFICER BY OBSERVING AS UNDER:- 3. THE LD. A.O. HAS FOUND THAT THERE WAS DISCREPAN CY BETWEEN THE GROSS INCOME AS DEDUCTIBLE FROM THE INFORMATION AVAILABLE ON FORM 26AS AND THAT DECLARED BY THE APPELLANT IN THE RETURNED OF INCOME . THE APPELLANT IS CONTESTING THE SAME. 4. ALTHOUGH THE APPELLANT HAS FURNISHED VOLUMINOUS RECORDS AND DOCUMENTS THE DISCREPANCY BETWEEN THE GROSS INCOME DEDUCTIBLE FROM FORM 26AS AND THAT RETURNED BY THE APPELLANT IN THE RETURN OF INCOME D OES NOT GET RESOLVED BY THE VOLUMINOUS DOCUMENTS PLACED ON RECORD. 5. THERE IS NO INFIRMITY IN THE IMPUGNED ASSESSMENT ORDER AND NO INTERFERENCE IS CALLED FOR IN THE SAME. 6. BY IMPUGNED ASSESSMENT ORDER IS THEREFORE CONFIR MED. THE APPEAL OF THE APPELLANT FAILS AND IS DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, REFERRED TO PAGE 6 OF THE PAPER BOOK AND DREW MY ATTENTION TO THE LIST OF SUNDRY DE BTORS WHERE THE OPENING BALANCE WAS SHOWN AT RS.6,31,750/- IN RESPECT OF SEVEN DEBT ORS. REFERRING TO PAGES 44,59,63,68,73,74 AND 81 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE OPENING BALANCES AS SHOWN IN THE LEDGER ACCOUNT OF THE ABOVE PARTIES. REFERRING TO PAGE 3 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE PROFIT & LOSS ACCOUNT WHERE THE ASSESSEE HAS SHOWN INCOME OF RS.1 2,44,899/- FOR THE PERIOD ENDED 31 ST MARCH, 2009. REFERRING TO PAGE 13 AND 14 OF THE P APER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE RECONCILIATION OF THE RECEIPTS AS PER BOOKS OF ACCOUNT OF THE F.Y. 2009-10 WITH FORM NO.26AS. REFERRING TO P AGE 82-83 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE PROFIT & LOS S ACCOUNT AND BALANCE SHEET OF THE ITA NO.1660/DEL/2018 5 ASSESSEE FOR THE PERIOD ENDING 31 ST MARCH, 2008. HE SUBMITTED THAT THE ENTIRE RECONCILIATION WAS FILED BEFORE THE CIT(A). HOWEVE R, THE LD.CIT(A) IN A CRYPTIC ORDER DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THAT D ISCREPANCY BETWEEN THE GROSS INCOME DEDUCTIBLE FROM FORM NO.26AS AND THAT RETURN ED BY THE ASSESSEE IN THE RETURN OF INCOME DOES NOT GET RESOLVED BY THE VOLUMINOUS D OCUMENTS PLACED ON RECORD. HE ACCORDINGLY SUBMITTED THAT THE ISSUE MAY BE DECIDED IN FAVOUR OF THE ASSESSEE SINCE THE ASSESSEE HAS PROPERLY RECONCILED THE DIFFERENCE IN THE FORM NO.26AS AND THE INCOME SHOWN BY THE ASSESSEE. 8. THE LD.DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND CIT(A). 9. I HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH TH E SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE ASSESSING OFFICER MADE ADDITION OF RS.3,60,364/- ON THE GROUND THAT THE ASSESSEE COULD NOT RECONCILE THE DIFFERENCE BETWEEN RS.16,05,263 AS PER FORM NO.26AS AND THE IN COME OF RS.12,44,899/- SHOWN IN THE P&L ACCOUNT TOWARDS DIRECT INCOME. I FIND F ROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE IN THE PAPER BOOK THAT THE LD. COUN SEL FOR THE ASSESSEE HAS SUCCESSFULLY RECONCILED THE DIFFERENCE BETWEEN THE FORM NO.26AS AND THE INCOME SHOWN BY THE ASSESSEE. ALTHOUGH THESE DETAILS WERE FURNISHED BEF ORE THE CIT(A), HOWEVER, I FIND THE LD.CIT(A) IN A VERY CRYPTIC ORDER, REJECTED THE VOL UMINOUS DETAILS FILED BEFORE HIM ON THE GROUND THAT THE ISSUE OF DIFFERENCE BETWEEN THE TWO FIGURES DOES NOT GET RESOLVED. THIS TYPE OF ACTION ON THE PART OF THE CIT(A), IN M Y OPINION, IS NOT JUSTIFIED ESPECIALLY ITA NO.1660/DEL/2018 6 WHEN THE ASSESSEE HAS SUBMITTED THE REQUISITE DETAI LS BEFORE HIM SUBSTANTIATING THE DIFFERENCE AND RECONCILIATION THEREOF. I, THEREFOR E, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDI TION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY, ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 9.12.2018. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 19 TH DECEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI