ITO, New Delhi V. Shri Jasbir Singh, New Delhi

ITA 1921/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74043 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-01-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 03-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: RAJIV BANSAL
• Keywords: Business expenditure; Accommodation entries
• Section: 148

Judgement Text

ITA NO. 1921/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1921/DEL/2013 A.Y. : 200 3 - 0 4 I.T.O. WARD-32(1), ROOM NO. 1507, DR. SPM CIVIC CENTRE, E-2, WING, J.L.N. MARG, NEW DELHI 110 002 VS. JASBIR SINGH, 429/2, MATHURA ROAD, JANGPURA, NEW DELHI 110014 (PAN: AANPS5997D) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. RAJIV BANSAL, CA DEPARTMENT BY : SH. S.N. BHATIA, DR ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XXVI), NEW DELHI DATED 31.1.2013 PERTAINING TO ASSESSMENT YEAR 2003- 04. 2. THE GROUND RAISED IN THE APPEAL IS THAT LD. CIT (A) ERRED IN HOLING THE AMOUNT OF RS. 12,00,000/- REPRESENTED TH E TRADING RECEIPTS IGNORING THE FACT THAT THIS AMOUNT WAS ACC OMMODATION ENTRY. 3. THE ASSESSEE IN THIS CASE IS AN INDIVIDUAL AND I S OWNER OF ONE TRUCK. DURING THE YEAR UNDER CONSIDERATION THE AS SESSEE DECLARED INCOME FROM HOUSE PROPERTY AND BUSINESS FROM OTHER SOURCES AMOUNTING TO RS. 86,490/-. IN THIS CASE INFORMATION WAS RECEIVED BY THE AO THAT THE ASSESSEE HAS RECEIVED BOGUS ENTRIES AMOUNTING TO ITA NO. 1921/DEL/2013 2 RS. 5,00,000/- FROM M/S SHEENU ENTERPRISES AND RS. 1,50,000/- FROM M/S UK TRADERS. THEREFORE, NOTICE UNDER SECTION 148 WAS ISSUED. FROM THE DETAILS SUPPLIED BY THE ASSESSEE, AO NOTED THAT THE ASSESSEE HAS INFACT RECEIVED RS. 9,50,000/- FROM SH EENU ENTERPRISES AND RS. 1,50,000/- FROM M/S UK TRADERS. AO HELD TH AT THE FACT IN THIS CASE ARE IDENTICAL WITH THE FACTS OF ASSESSMENT YEA R 2000-01, 2002- 03. AO TREATED THE SAID AMOUNT OF RS. 12,00,000/- AS INCOME OF THE ASSESSEE HOLDING THAT THE SAME WERE BOGUS ACCOMMODA TION ENTRY WHICH IS GIVEN IN THE RETURN OF CASH GIVEN BY THE A SSESSEE. 4. UPON ASSESSEES APPEAL LD. CIT(A) NOTED THAT M/S SHEENU ENTERPRISE AND M/S UK TRADERS ARE SISTER CONCERNS. HE NOTED THAT ASSESSEE IS A TRUCK DRIVER AND ALSO OWNER OF ONE TR UCK AND WAS EARNING INCOME FROM CARTAGE IN LIFTING THE MATERIAL . LD. CIT(A) ALSO NOTED THAT ASSESSEE HAS SUBMITTED THAT HE HAD SHOWE D INCOME FROM HIRING OF TRUCKS. IT WAS FURTHER STATED THAT ONLY S INCE 2000-2001 ONWARDS ASSESSEE STARTING SUPPLYING MATERIALS ON TH E REQUEST OF ONLY ONE CUSTOMER I.E. M/S SHEENU ENTERPRISE AND AC CORDINGLY, HE RAISED INVOICE AND RECEIVED PAYMENT BY CHEQUE BY TH E SAID PARTY. LD. CIT(A) NOTED THAT THE AO HAS NOT BROUGHT ANY AD VERSE MATERIAL ON RECORD DURING THIS YEAR WITH A COGENT EVIDENCE T O SHOW THAT THE RECEIPTS CONSTITUTED BOGUS ENTRIES. LD. CIT(A) OB SERVED THAT AO HAS SIMPLY STATED THE FACTS ARE IDENTICAL TO THE FACTS OF THE PREVIOUS YEAR WHICH WAS DISCUSSED AT LENGTH THEREIN. HOWEVER, LD. CIT(A) NOTED THAT NO SUCH DISCUSSION WAS SEEN IN THE ORDER OF T HE AO. 5. LD. CIT(A) FURTHER NOTED THAT IN ASSTT. YEAR 200 0-01, 2001-02 AND 2002-03 THE ISSUE OF ACCOMMODATION ENTRY WERE D ISCUSSED AT LENGTH BY THE CIT(A). IN THOSE YEARS THE CIT(A) H AS GIVEN A FINDING THAT AO HAS NOT MADE ANY ENQUIRY ABOUT THE NATURE O F THE TRANSACTIONS AND THE ALLEGED MODUS OPERANDI ON RECE IVING ENTRIES IN LIEU OF CASH. ITA NO. 1921/DEL/2013 3 6. LD. CIT(A) FURTHER NOTED THAT ASSESSEE HAS FURN ISHED COMPUTATION OF INCOME SHOWING RS. 48,000/- EARNED O N RS. 12,00,000/-, BUT DID NOT SUBMIT ANY PROFIT AND LOSS ACCOUNT, NOR CLAIMED ANY BUSINESS EXPENDITURE. LD. CIT(A) FURTH ER REFERRED TO THE PROVISIONS OF SECTION 44A. LD. CIT(A) OBSERVED TH AT IN THE PRESENT CASE ASSESSEE HAS DECLARED RS. 48,000/- PROFIT FOR THE YEAR WHICH MEANS IT IS RS. 4000/- PER MONTH. LD. CIT(A) CONCL UDED AS UNDER:- AFTER CONSIDERING THE ENTIRE MATERIAL, I AM OF THE OPINION THAT SINCE THE ASSESSING OFFICER HAS NO SUBSTANTIAL EVIDENCE TO FROM BELIEF THAT ENTRIES WERE BOGUSLY T AKEN FROM M/S UK TRADERS AND M/S SHEENU ENTERPRISES, TH E ADDITION MADE BY THE ASSESSING OFFICER IS NOT WARRA NTED. ALL THE PAYMENTS WERE RECEIVED AND WERE DULY SUPPOR TED BY THE COPY OF THE ACCOUNTS OF THE PARTIES, WHO HAD ENGAGED THE APPELLANT. THEREFORE, THE ADDITION MAD E BY THE ASSESSING OFFICER AMOUNTING TO RS. 12,00,000/- ON ACCOUNT OF BOGUS ENTRIES IS HEREBY DELETED. 7. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE INTIMATION HAS BEEN RECEIVED THAT ASSESSEE HAS RECEIVING BOGUS ACCOMMODATION ENTRIES. SIMILAR MATTERS ALSO AROSE IN THE PRECEDING ASSESSMENT YEARS. THE AO HA S NOT MADE ANY PROPER INVESTIGATION. LD. CIT(A) IN ALL THESE YEAR S HAVE NOTED THAT THE AO HAS NOT MADE ANY ENQUIRY ABOUT THE NATURE O F THE TRANSACTION AND THE ALLEGED MODUS OPERANDI OF RECEI VING ENTRIES IN LIEU OF CASH PAYMENT. IT IS NOT THE CASE THAT THE LD. CIT(A) HAS HIMSELF MADE THE NECESSARY INVESTIGATION. ASSESSEE HAS SIMPLY SUBMITTED THE COMPUTATION OF INCOME WHEREIN BUSINES S INCOME HAS BEEN SHOWN AS PROFIT AND SUPPLIES OF MATERIAL OF RS . 12,00,000/- ITA NO. 1921/DEL/2013 4 (RS. 48000/-). WE FIND THAT IN LIGHT OF THE FACT T HAT INFORMATION HAS BEEN RECEIVED THAT ASSESSEE IS RECEIVING BOGUS ACC OMMODATION ENTRIES, IT WAS INCUMBENT UPON THE AO TO MAKE THE P ROPER ENQUIRY IN THIS REGARD. LD. CIT(A) HAS ALSO NOTED THAT THIS AS PECT THAT PROPER ENQUIRY WERE NOT MADE BY THE AO. HENCE, HE DELETE D THE ADDITION. IT IS NOT THE CASE OF THE LD. CIT(A) HAS HIMSELF IN VESTIGATED AND FOUND THAT THE ENTRIES WERE PROPER AND JUSTIFIED. 8.1 THUS, WE FIND THAT THIS IS A CASE OF LACK OF PR OPER ENQUIRY ON THE PART OF THE AUTHORITIES BELOW. IN OUR CONSIDERE D OPINION, THE MATTER REQUIRES TO BE REMITTED TO THE FILES OF THE AO TO EXAMINE THE ISSUE PROPERLY. IN THIS REGARD, WE FURTHER FIND TH AT HONBLE APEX COURT IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT, 13 1 ITR 451, HAS HELD THAT IT IS THE DUTY OF THE APPELLATE AUTHORITY TO CORRECT THE LACUNA IN THE ORDER OF THE AUTHORITIES BELOW IF NEC ESSARY AND REMIT THE MATTER FOR RE-EXAMINATION UNLESS PROHIBITED BY LAW. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, WE REMIT THE ISSUE T THE FILE OF THE AO TO CONSIDER TH E ISSUE AFRESH, AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING H EARD. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24/1/2014. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 24/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR ITA NO. 1921/DEL/2013 5 COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. JASBIR SINGH, 429/2, MATHURA ROAD, JANGPURA, NEW DE LHI 110014 AND AT V.K. KALRA & CO., CA, 16, ABUL FAZAL ROAD, NEW DELH I 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 1921/DEL/2013 6