ACIT, Dehradun V. Sh J.N. Puri, Dehradun

ITA 1728/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7614 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RICHA RASTOGI
• Keywords: Unexplained investment; Depreciation; Principle of natural justice; Tangible material; Reason to believe
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 1728/DEL/2013 A.Y. : 20 10 - 1 1 ACIT, CIRCLE - 1, ANNEXIE BUILDING, 13-A, SUBHASH ROAD, DEHRADUN- 248001 VS. SH. J.N. PURI, 16-, MUNICIPAL ROAD, DEHRADUN 248001 (PANACXPP8830G) (APPELLANT) (RESPONDENT) I.T.A. NO. 2060/DEL/2013 A.Y. : 2010 - 11 SH. J.N. PURI, 16-, MUNICIPAL ROAD, DEHRADUN 248001 (PANACXPP8830G VS. ACIT, CIRCLE - 1, ANNEXIE BUILDING, 13-A, SUBHASH ROAD, DEHRADUN-248001 (APPELLANT) (RESPONDENT) REVENUE BY : MS.RICHA RASTOGI, SR. DR ASSESSEE BY : SH. SALIL AGGARWAL, ADV. & SH. SHAILESH GUPTA, CA DATE OF HEARING : 27-04-2016 DATE OF ORDER : 16-05-2016 ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 2 ORDER PER H.S. SIDHU, JM REVENUE AND ASSESSEE ARE IN CROSS APPEALS AGAINST THE COMMON ORDER DATED 02.01.2013 PASSED BY THE LD. CO MMISSIONER OF INCOME TAX (APPEALS-I), DEHRADUN RELEVANT FOR TH E ASSESSMENT YEAR 2010-11. SINCE THE ISSUES INVOLVED IN THESE A PPEALS ARE COMMON AND IDENTICAL, WE ARE THEREFORE, PROCEEDING TO DISPOSE OF THESE APPEALS BY PASSING THIS CONSOLIDATED ORDER, BY DEALING ASSESSEES APPEAL BEING ITA NO. 2060/DEL/2013 (A.Y . 2010-11) FOR THE SAKE OF CONVENIENCE. HOWEVER, WE NOTE THAT WHI LE FILING THE APPEAL, THE REVENUE IN FORM NO.36 HAS WRONGLY MENT IONED THE ASSESSMENT YEAR AS AY 2009-10, BUT THE SAME IS RELA TED TO ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND IN F ACT IN DELETING THE ADDITION OF RS. 5,67,085/- MADE ON THE BASIS OF DIFFERENCE IN OPENING CAPITAL SHOWN BY THE ASSES SEE. 2. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND IN F ACTS IN DELETING THE ADDITION OF RS. 15,31,460/- MADE ON TH E BASIS OF UNEXPLAINED ADVANCE TAX STANDING IN THE BA LANCE SHEET OF THE ASSESSEE WHICH COULD NOT BE RECONCILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. 3. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND IN F ACTS IN DELETING THE ADDITION OF RS. 25,00,000/- MADE ON TH E BASIS OF UNEXPLAINED INVESTMENT WITH M/S ANSAL HOUS ING ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 3 & CONSTRUCTION LTD. WHEREAS THIS INVESTMENT WAS NOT SHOWN IN THE BALANCE SHEET BY THE ASSESSEE. 3. THE ORIGINAL GROUNDS RAISED BY THE ASSESSEE REA D AS UNDER:- APPEAL AGAINST OF RS. 3,79,402/-. THE AFORESAID AD DITION HAS BEEN MADE BY LD. A.O. BY DISALLOWING THE EXPENDITURE OF RS. 3,79,402/- CLAIMED BY ASSESSEE I N PROFIT & LOSS ALC. THE SAID ADDITION WAS ALSO UPHEL D BY LD CIT APPEALS VIDE APPELLATE ORDER DATED 02/01/2013. EVEN AT THE COST OF BREVITY BUT FOR THE SAKE OF CLARIFIC ATION, THE GROUNDS LAID DOWN BY LD. CIT APPEALS ARE REITERATED AS UNDER: 'THE ASSESSEE SHOWED NET PROFIT OF RS. 16,79,513/- IN HIS PROFESSION. THE AO OBSERVED THAT HE HAD SHOWN PROFESSIONAL RECEIPT OF ONLY 80,000/- HE HAD SHOWN INTEREST INCOME OF RS. 20,48,915/- ALSO A~ PART OF HIS PROFESSIONAL RECEIPT. THUS, HE HAD CLAIMED DEDUCTIO N OF RS. 4,49,402/- AGAINST PROFESSIONAL RECEIPT OF RS. 80,000/- ONLY. IN OTHER WORDS, HE HAD SHOWN NET LOS S OF RS. 3,69,402/- IN PROFESSION. THE AO ASKED HIM TO PRODUCE HIS BOOKS OF ACCOUNTS WHICH HE FAILED TO DO . - HE ONLY CLAIMED THAT HE HAD TO INCUR FIXED COST IN THE FORM OF SALARY, TELEPHONE EXPENSES, ELECTRICITY CHARGES, LE GAL ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 4 BOOKS, ETC. BUT COULD NOT GENERATE MUCH INCOME DUE TO ILL HEALTH. THE ASSESSING OFFICER WAS NOT SATISFIED WIT H THE EXPLANATION. HE ALLOWED EXPENSES TO THE EXTENT OF R S. 70,000/- AND DISALLOWED THE REMAINING SUM OF RS. 3,79,402/-. THUS, HE ESTIMATED PROFESSIONAL INCOME AT RS. 10,000/-. THE INTEREST INCOME WAS SEPARATELY CHARGED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCE.' 'IN APPEAL, THE ASSESSEE REITERATED THE SUBMISSION WHICH HAS BEEN CONSIDERED. HE CLAIMS TO BE A LEGAL PROFESSIONAL. AS PER THE PROVISION OF SECTION 44AA OF THE INCOME TAX ACT, HE WAS REQUIRED TO MAINTAINED BOOKS OF ACCOUNTS. HE FAILED TO DO SO NEITHER THE FIGURE OF HIS PROFESSIONAL RECEIPT NOR THOSE OF HIS EXPENSES RELA TING TO THE SAME ARE AMENABLE TO VERIFICATION, IF DOES NOT APPEAL TO REASON THAT A SENIOR CITIZEN, WHO IS NOT KEEPING WILL AND HAS BARELY ANY PROFESSIONAL RECEIPT, SHOULD KEE P ON INCURRING HEAVY EXPENSES YEAR AFTER YEAR AND INCURR ING' LOSSES SINCE THE CLAIM OF LOSS IS NOT SUBSTANTIATED AND ALSO DOES NOT APPEAL TO REASON, THE AO' S ACTION OF DISALLOWANCE OF THE SAME IS UPHELD. THE ADDITION IS CONFIRMED ALSO CONSIDERING THAT THE INTEREST INCOME WAS ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 5 NOTHING BUT RETURN ON INVESTMENT AND THE ASSESSEE W AS NOT IN FINANCE BUSINESS IT WAS CORRECTLY TREATMENT AS INCOME FROM OTHER SOURCES. THE AO'S ACTION IS CONFI RMED. AS PER PERUSAL OF ABOVE THE ASSESSEE HUMBLY SUBMITS THAT EVEN THE LD. CIT APPEALS HAS STATED IN THE ORD ER THAT THE ADDITION IS MADE ON ESTIMATE BASIS AS LD. AO HA S ESTIMATED THE INCOME TO RS 10000/-. THE FACTS SELF EVIDENTLY AS PER PERUSAL OF FIRST PARA ON PAGE 7 WH ERE IN ON 4TH LINE, IT IS STATED THAT' THUS, HE ESTIMATED PROFESSIONAL INCOME AT RS 10000/-. EVEN AT THE COST OF BREVITY BUT FOR THE SAKE OF CLARIFICATIONS THE ASSESSEE HUMBLY SUBMITS THAT VAR IOUS JUDICIAL GUIDELINES HELD BY HON'BLE TRIBUNALS, HIGH COURT AND SUPREME COURT HAVE SPECIFICALLY RULED AGAINST A DHOC ADDITION FOR ANY SUCH ADDITION WHICH ARE ON THE EST IMATE BASIS MADE BY THE LD. AO. EVEN THE SELF EVIDENT PROVISIONS OF INCOME TAX ACT HAS BEEN GROSSLY FLOUT ED AND GREAT INJUSTICE DONE, THAT THIS IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE CRAVES INDULGENCE TO PRESENT ALL THESE AT THE TIME OF HEAR ING. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 6 THAT THE ASSESSEE HUMBLY SUBMITS THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CONCLUSION REACH ED BY CIT APPEALS IS GROSSLY WRONG THAT THE ASSESSEE WAS NO IN FINANCE BUSINESS AND HAD NOT MAINTAINED BOOKS OF ACCOUNTS WHICH IS CLEARLY SELF CONTRADICTORY IN THE ORDER ITSELF AND AGAINST THE FACTS AND CIRCUMSTANCES OF T HE CASE. THAT THE ASSESSEE HUMBLY SUBMITS THAT THE UNEXPLAINED INVESTMENT IN NSC IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND DESERVES TO BE DELETE D. THE LD. CIT (APPEALS) ERRED AS HE FAILED TO CONSIDE R THE FINANCIAL STATEMENTS OF APPELLANT THE SAID NSC AS T RULY DECLARED AND HAVE BEEN PAID THROUGH THE CASH / BANK BALANCE AVAILABLE WITH HIM. THIS ALLOWANCE IS GROSS LY UNFAIR AND AGAINST THE PRINCIPAL OF NATURAL JUSTICE . IN VIEW OF ABOVE THE APPELLANT HUMBLY SUBMITTED THAT THE ADDITION MADE IS ERRONEOUS AND SHOULD BE DELETED. THAT THE ASSESSEE HUMBLY CRAVES INDULGENCE TO SUBMI T ANY OTHER GROUNDS THAT THE LD. TRIBUNAL MAY CONSIDE R AND PERMIT TO BE RAISED OR WHICH THESE ASSESSEE MAY SUBMIT IN THE INTEREST OF JUSTICE DURING THE COURSE OF PROCEEDINGS. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 7 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE STATED THAT ASSESSEE HAS FILED APPLICATION DATED 09.1.2014 FOR PERMISSION TO RAISE ADDITIONAL GROUNDS OF APPEAL. HE REQUESTED TH AT FIRST THE ADDITIONAL LEGAL GROUNDS RAISED BY THE ASSESSEE MAY BE CONSIDERED AND DECIDED, BECAUSE THE LEGAL GROUNDS GOES TO THE ROOT OF THE MATTER AND VERY MUCH ESSENTIAL, HENCE HE REQUESTED THAT THE ADDITIONAL GROUNDS MAY BE ADMITTED IN THE INTEREST OF JUSTICE. THE CONTENTS OF THE SAID APPLICATION READ AS UNDER:- 9 TH JANUARY, 2014 BEFORE THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI IN THE MATTER OF: SH. JN PURI, ITA NO. 2060/DEL/2013 AY 2010-11 PERMISSION TO RAISE ADDITIONAL GROUND OF APPEAL HONBLE SIR(S), 1. THE APPELLANT NAMED ABOVE SEEKS THE PERMISSION OF THE HONBLE BENCH TO RAISE, URGE AND ARGUE THE FOLL OWING ADDITIONAL GROUNDS OF APPEAL, WHICH IS PURELY LEGAL IN NATURE AND, READ AS UNDER:- GROUND NO. 1 THAT THE LD. CIT(A) HAS ERRED BOTH I N LAW AND ON FACTS IN SUSTAINING THE INITIATION OF PROCE EDINGS UNDER SECTION 147 OF THE ACT AND, FURTHER COMPLETIO N OF ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT WITH OUT SATISFYING THE STATUTORY PRE-CONDITIONS FOR INITIAT ION OF THE PROCEEDINGS AND, COMPLETION OF ASSESSMENT UNDER THE ACT. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 8 GROUND NO. 2 THAT THE LD. CIT(A) FURTHER ERRED IN SUSTAINING THE PROCEEDINGS INITIATED UNDER SECTION 148 OF THE ACT PENDING PROCEEDINGS UNDER SECTION 143(2) OF THE ACT AND THUS, PROCEEDINGS SO INITIATED IS WITHOUT JURISDICTION AND THEREFORE DESERVES TO BE QUASHED AS SUCH. 2. IT IS SUBMITTED THAT AN ASSESSEE IS ENTITLED TO RAISE A LEGAL GROUND AT ANY STAGE OF THE PROCEEDINGS INCLUD ING ON A REFERENCE OR AN APPEAL BEFORE THE HONBLE HIGH CO URT. THE HONBLE SUPREME COURT, IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT REPORTED IN 229 ITR 383 HAS HELD THAT WHERE ALL THE MATERIAL FACTS ARE ON RECORD AND AN ADDITIONAL GROUND RAISED IS PURELY LE GAL IN NATURE, SUCH GROUND SHOULD BE ADMITTED AT ANY STAGE OF THE PROCEEDINGS. 5. LD. DR RAISE OBJECTION ON THE ADMISSION OF ADDIT IONAL GROUNDS AND STATED THAT ASSESSEE HAS NOT RAISED THESE LEGAL GROUNDS BEFORE THE AO AND LD. CIT(A), THEREFORE, THESE ADDITIONAL GROUNDS MAY NOT BE ADMITTED. 6. WE HAVE HEARD BOTH PARTIES ON THE ADMISSION OF ADDITIONAL GROUNDS, AS AFORESAID, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE ADDITIONAL GROUNDS RAISED BY THE ASSES SEE MENTIONED IN PARA NO. 4 AT PAGE NO. 7 & 8 OF THIS ORDER ARE PURE LY LEGAL AND DO ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 9 NOT REQUIRE FRESH FACTS WHICH IS TO BE INVESTIGATED AND GO TO THE ROOT OF THE MATTER. IN THE INTEREST OF JUSTICE, WE ADMI T THE ADDITIONAL GROUND RAISED BY THE ASSESSEE, IN VIEW OF THE DECIS ION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NTPC LIMITED 229 ITR 383 AND PROCEED TO DECIDE THE ADDITIONAL GROUNDS FIRST. ASSESSEES APPEAL NO. 2060/DEL/2013(AY. 2010-11) 7. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 20.7.2010 DECLARING TOTAL INCOME OF RS. 1 7,48,077/-. RETURN WAS PROCESSED U/S. 143(1) ON 28.12.2011. IN THIS CASE PROCEEDINGS U/S. 148 WERE INITIATED AND NOTICE U/S. 148 WAS ISSUED ON MARCH 28, 2011. THE ASSESSEES CASE WAS SELECT ED FOR SCRUTINY. NOTICES U/S. 142(1)/143(2) WERE ISSUED ON AUGUST 26 , 2011 FIXING OF DATE OF COMPLIANCE FOR SEPTEMBER 13, 2011. ON 1 3.9.2011, THE ASSESSEE ATTENDED THE PROCEEDINGS AND REQUESTED FOR ADJOURNMENT AND ACCORDINGLY THE CASE WAS ADJOURNED FOR 5.10.201 1. ON 5.10.2011, THE ASSESSEE AGAIN APPEARED AND FILED CO NFIRMATION LETTERS OF SH. BB SHARMA AND SH. RN SHARMA IN WHICH IT HAS BEEN STATED THAT HE RECEIVED BACK AMOUNT OF ADVANCE OF R S. 5,00,000/- AND RS. 4,70,000/- RESPECTIVELY. THE ASSESSEE ENJ OYS INCOME FROM PROFESSION AND INTEREST. ALONGWITH THE RETURN OF INCOME ASSESSEE ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 10 HAS FILED THE COMPUTATION OF INCOME, P&L ACCOUNT AN D BALANCE SHEET. THE WRITTEN SUBMISSIONS/ DOCUMENTS/ DETAILS WERE PRODUCED WHICH WERE EXAMINED BY THE AO. THEREAFTER, THE AO COMPLETED THE ASSESSMENT AT A TOTAL INCOME OF RS. 67,76,020/- U/S . 143(3)/147 OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 28.12.2011 AND MADE VARIOUS ADDITIONS. 8. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEA LED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 02.1.201 3 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 9. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 10. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSE HAS FILED TWO PAPER BOOKS ONE IS HAVING THE VARIOUS DECISIONS OF THE VARIOUS COURTS CONTAINING PAGES 1 TO 81 AND THE SECOND THE PAPER BOOK CONTAINING THE PAGES 1 TO 96 HAVING THE COPY OF COM PUTATION OF INCOME ALONGWITH FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 31.3.2010; COPY OF BALANCE SHEET FOR THE YEARS ENDI NG ON 31.3.2009 AND 31.3.2008; COPY OF NOTICE UNDER SECTION 148 DAT ED 28.3.2011; COPY OF REASONS RECORDED BEFORE ISSUING NOTICE U/S. 148 DATED 28.3.2011; COPY OF REPLY TO AO DATED 18.4.2011; COP Y OF REPLY TO AO AND AGAIN COPY OF REPLY TO AO; COPY OF CASH FLOW STATEMENT FILED ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 11 BEFORE THE AO; COPY OF REPLY TO AO DATED 22.12.2011 ALONGWITH ANNEXURE; COPY OF REPLY TO AO; COPY OF NOTICE FROM AO DATED 22.12.2011; COPY OF REPLY TO AO; COPY OF SUBMISSION S BEFORE CIT(A) AND COPY OF ASSESSMENT ORDER FOR AY 2007-08 IN ASSE SSEES OWN CASE. 11. LD. COUNSEL OF THE ASSESSEE STATED THAT THE LD . CIT(A) ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING THE INITIATI ON OF PROCEEDINGS UNDER SECTION 147 OF THE ACT AND, FURTHER COMPLETI ON OF ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT WITHOUT SATISFY ING THE STATUTORY PRE-CONDITIONS FOR INITIATION OF THE PROCEEDINGS AN D, COMPLETION OF ASSESSMENT UNDER THE ACT. LD. COUNSEL FOR THE ASSE SSEE STATED THAT AO HAS RECORDED HIS REASONS FOR ISSUING OF NOTICE U /S. 147 OF THE I.T. ACT ON THE SAME REASONS MENTIONED IN THE NOTICE, BU T NO FRESH MATERIAL WAS AVAILABLE WITH THE AO, EXCEPT THE MATE RIAL ALREADY FILED BY THE ASSESSEE WITH THE RETURN OF INCOME. THEREF ORE, THE ISSUANCE OF NOTICE U/S. 148 OF THE I.T. ACT IS ILLEGALLY BAD IN LAW AND WITHOUT JURISDICTION, KEEPING IN VIEW OF THE HONBLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 354 ITR 53 6 (DELHI) AND CIT VS. ATUL KUMAR SWAMI 362 ITR 693 (DELHI). LD. COUN SEL OF THE ASSESSEE REQUESTED THAT THE ASSESSMENT MAY BE QUA SHED BY RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 12 12. LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW AND REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY BE DI SMISSED. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES B ELOW. NO DOUBT THAT THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN HI S APPEAL, BUT AT THE TIME OF HEARING BEFORE US, HE MAINLY ARGUED THE GROUND RELATING TO CHALLENGING THE NOTICE ISSUED U/S. 148 OF THE I. T. ACT AND ASSESSMENT PROCEEDINGS. FOR THE SAKE OF CONVENIE NCE, THE CONTENTS OF THE NOTICE DATED 28.3.2011 ISSUED BY TH E AO AS WELL AS THE REASONS RECORDED BY THE AO ARE REPRODUCED AS UN DER:- NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1 OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1, DEHRADUN DATED: MARCH 28, 2011 TO SH. JN PURI, 16, MINISPAL ROAD, DEHRADUN WHEREAS I HAVE REASON TO BELIEVE THAT YOUR/INCOME IN RES PECT OF WHICH YOU ARE ASSESSABLE/ CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2010-11 HAS ESCAPED ASSESSMENT WITHIN THE MEAN ING OF SECTION 147 OF THE INCOME TAXACT, 1961. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 13 I THEREFORE PROPOSE TO REASSESS THE INCOME / LOSS / DEPRECIATION ALLOWANCE FOR THE SAID ASSESSMENT YEAR AND HEREBY REQUIRE YOU TO DELIVER TO ME ON OR BEFORE APRIL, 18 , 2011, A RETURN IN THE PRESCRIBED FORM OF YOUR INCOME / THE INCOME OF IN RESPECT OF WHICH YOU ARE ASSESSABLE FOR THE SAID ASSESSMENT YE AR. THIS NOTICE IS BEING ISSUED AF TER OBTAINING THE NECESSARY SATISFACTION OF THE COMMISSIONER OF INCOME TAX, DEH RADUN, ADDL. COMMISSIONER OF INCOME TAX, RANGE - I, DEHRA DUN/THE CENTRAL BOARD OF DIRECT TAXES. (SEAL) ** STRIKE OUT ITEMS NOT APPLICABLE SD/- (DR. LALITA KUMARI) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-I, DEHRADUN REASONS RECORDED SHRI JN PURI, 16, MUNISPAL ROAD, DEHRADUN AY 2010 -11 REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT - THE RETURN OF INCOME FOR THE A. Y. 20 I 0-11 WAS FI LED ON 20/07/20 10 DECLARING AN INCOME OF RS. 17 ,48,077/. ON PERUSAL OF THE CAPITAL ACCOUNT FOR THE-A.Y. 2009-2010 OF THE A SSESSEE IT WAS NOTED THAT A TOTAL CAPITAL OF RS. 53,56,673/- HA S BEEN SHOWN BY THE ASSESSEE, AND AFTER ADDING ALL THE INCOME OR TH E ASSESSEE I.E. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 14 RS. 18,63,077/- FOR THE AY 2010-11 (INCLUDING TAXAB LE AND NON TAXABLE INCOMES) THE TOTAL CAPITAL COMES TO RS. 72 ,19,750/-, FOR THE AY 2010-11. THUS THE WITHDRWAL OF THE ASSESSEE SEEM S TO BE NIL. ON THE OTHER HAND AS PER CAPITAL ACCOUNT FOR THE YE AR 2009-2010 THE CASH AND BANK BALANCES ARC AT RS. 1,02,735/- AN D RS. 34,92,360/- RESPECTIVELY, TOTALING TO RS. 35,95 ,095/- AND AFTER ADDING ALL THE INCOME OF THE ASSESSEE FOR THE AY 20 10-11 I.E. RS. 19,63,077/- (INCLUDING TAXABLE OR NON TABLES INCOME S) THE TOTAL CASH AND BANK BALANCES SHOULD BE RS. 54,58,172/-. HOWEV ER AS PER THE CAPITAL ACCOUNT FOR THE YEAR 2010-11, THE SAME IS R S. 65,90,030/-. THUS THE AMOUNT OF RS. 11,38,858/- HAS NOT BEEN DIS CLOSED IN THE RETURN OF INCOME. I HAVE THEREFORE REASON TO BELIEVE THAT INCOME TO T HE EXTENT TO RS. 11,38,858/- AS DISCUSSED ABOVE HAS ESCAPED ASSESSME NT WITHIN THE MEANING OF SECTION 147 FOR THE ABOVE ASSESSMENT YE AR. ISSUE NOTICE UNDER SECTION 148 TO REASSESS SUCH INCOME. SD/- (DR. LALITA KUMARI) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-I, DEHRADUN ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 15 13.1 AFTER GOING THROUGH THE ORDERS PASSED BY THE R EVENUE AUTHORITIES AND THE ARGUMENTS ADVANCED BY THE LD. C OUNSEL FOR THE ASSESSEE ALONGWITH THE JUDGMENTS CITED BY THE ASSES SEE IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 354 ITR 536 (DELH I) AND CIT VS. ATUL KUMAR SWAMI 362 ITR 693 (DELHI), WE FIND THAT IN ONE OF THE DECISIONS I.E. IN THE CASE OF CIT VS. ORIENT CR AFT LTD. (SUPRA), THE HONBLE DELHI HIGH COURT HAS HELD AS UNDER (HEAD NO TES):- HELD, DISMISSING THE APPEAL, THAT THE REASONS DISC LOSED THAT THE ASSESSING OFFICER REACHED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME ON GOING THROUGH THE RETURN O F INCOME FILED BY THE ASSESSEE AFTER HE ACCEPTED THE RETURN UNDER SECTION 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. THIS WAS NOTHING BUT A REVIEW OF THE EARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE ASSESSING OFFICER. THE REASONS RE CORDED BY THE AO DID CONFIRM THE APPREHENSION ABOUT THE HARM THAT A LESS STRICT INTERPRETATION OF THE WORDS REASONS TO BELIEVE VIS-- VIS AN INTIMATION ISSUED UNDER SECTION 143(1) COULD CAUSE TO THE TAX REGIME. THERE WAS NOTHING IN THE REASONS R ECORDED TO SHOW THAT ANY TANGIBLE MATERIAL HAD COME INTO THE POSSESSION OF THE AO SUBSEQUENT TO THE ISSUE OF THE INTIMATION . THE NOTICE REFLECTED AN ARBITRARY EXERCISE OF THE POWER CONFERRED UNDER SECTION 147. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 16 13.2 WHEN WE EXAMINED THE FACTS OF THE ASSESSEES C ASE IN LIGHT OF THE RATIO LAID DOWN BY THE ABOVE DECISION OF THE HO NBLE DELHI HIGH COURT, AS AFORESAID, WE FIND THAT THE ABOVE DECISI ON WOULD BE SQUARELY APPLICABLE IN THE ASSESSEES CASE. WE F IND THAT THERE WAS NOTHING IN THE REASONS RECORDED TO SHOW THAT ANY TA NGIBLE MATERIAL HAD COME INTO THE POSSESSION OF THE AO SUBSEQUENT T O THE ISSUE OF THE INTIMATION. THE NOTICE REFLECTED AN ARBITRARY EXERCISE OF THE POWER CONFERRED UNDER SECTION 147. IN THE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE, THE NOTICE ISSUED BY THE AO U/ S. 148 OF THE I.T. ACT IS BAD IN LAW AND, THEREFORE, THE ASSESSMENT IS QUASHED. 14. SINCE WE HAVE ALREADY QUASHED THE ASSESSMENT, T HE OTHER GROUNDS RAISED BY THE ASSESSEE DO NOT REQUIRE ANY A DJUDICATION ON MERITS. REVENUES APPEAL 15. SINCE WE HAVE ALREADY ALLOWED THE ASSESSEES APPEAL ON THE LEGAL GROUND ITSELF BY QUASHING THE ASSESSMENT ORD ER, AS AFORESAID, HENCE, THE REVENUES APPEAL HAS BECOME INFRUCTUOUS AND DISMISSED AS SUCH. ITA NOS. 1728 & 2060/DEL/2013 A.Y. 2010-11 17 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND ALLOWED AND APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 16/05/2016 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSITANT REGISTRAR