ITO, Roorkee V. Shri Sukkhan Singh, Haridwar

ITA 2000/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7146 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: N O N E
• Keywords: Unexplained investment; Additional evidence
• Section: 40A(3); 143(3)

Judgement Text

ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCHES : G NEW DELHI ] BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I. T. APPEAL NO. 2000 (DEL) OF 2015 ASSESSMENT YEAR : 2010-11. INCOME TAX OFFICER, WARD : 2, ROORKEE. VS. SHRI SUKKHAN SINGH, S/O. LATE BABU RAM, VILL. KHEDI KALAN, LAKSAR, DISTT. HARIDWAR. PAN : BILPS 3395 G A N D C. O. NO. 8 (DEL) OF 2016. [ I. T. APPEAL NO. 2000 (DEL) OF 2015 ] ASSESSMENT YEAR : 2010-11. SHRI SUKKHAN SINGH, S/O. LATE BABU RAM, VILL. KHEDI KALAN, LAKSAR, DISTT. HARIDWAR. VS. INCOME TAX OFFICER, WARD : 2, ROORKEE. PAN : BILPS 3395 G (APPELLANTS) (RESPONDENTS) ASSESSEE BY : N O N E; DEPARTMENT BY : SHRI S. S. RANA, CIT [DR]; DATE OF HEARING : 02.07.2018; DATE OF PRONOUNCEMENT : 05.07.2018. O R D E R . PER PRASHANT MAHARISHI, A.M . : THIS APPEAL IS FILED BY THE INCOME TAX OFFICER, WAR D : 2, ROORKEE (HEREINAFTER REFERRED TO LEARNED AO) AGAINST THE OR DER OF COMMISSIONER ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 2 OF INCOME TAX (APPEALS), DEHRADUN [LEARNED CIT (APP EALS)] DATED 27.01.2015, FOR ASSESSMENT YEAR 2010-11. THE REVEN UE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- !. THAT THE LD. CIT (APPEALS) HAS ERRED IN LAW A ND ON FACTS IN DELETING THE ADDITION OF RS.5.76.000/- WITHOUT EXAM INING THE CREDITWORTHINESS OF LOANER AND GENUINENESS OF TRANS ACTION AND IGNORING THE FACT THAT NONE OF THE LOANER APPEARED DESPITE I SSUE OF SUMMONS BEFORE THE ASSESSING OFFICER. 2. THE LD. CIT (APPEALS) HAS ERRED IN LAW AND MI FACTS IN DELETING THE ADDITION OF RS.20,69,782/- IGNORING THE FACTS THAT SEC. 40A(3) OF THE I. T. ACT 1961 AND RULE 6DD OF IT RULES, 1962 DO NO T ALLOW CASH PAYMENT EXCEEDING RS.20,000/- IN CASE OF THE PAYEE INSISTS FOR CASH PAYMENT AND NOT OPENING A BANK ACCOUNT IN THE TOW N W HERE BRANCH OF BANK IS AVAILABLE. 3. THAT LD. CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE APPEAL OF THE ASSESSES' BY ACCEPTING THE ADDITI ONAL EVIDENCES WITHOUT CONFRONTING THE AO OR SEEKING REMAND REPORT IN VIOLATION OF RULE 46A OF IT RULES, 1962. 4. THE LD. CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.46,11,840/- MERELY ON THE BASIS OF W RONG QUOTING OF SECTION BY AO IGNORING THE FACTS THAT HIS POWER IS COTERMINOUS WITH THAT OF THE AO AND CAN DIRECT ASSESSING OFFICER TO QUOTE CORRECT SECTION AND CAN SUSTAIN THE ADDITION. 5. THE ORDER OF THE LEARNED CIT (APPEAL), BY SET -ASIDE AND THAT OF ASSESSING OFFICER BY RESTORED. ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 3 2. GROUND NO. 1 IS REGARDING DELETION OF THE ADD ITION OF RS.5.76 LAKHS BY THE LEARNED CIT (APPEALS) OF LOANS. THE B RIEF FACTS SHOWS THAT ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS OF TRADING OF COUNTRY LIQUOR. HE FILED HIS RETURN OF INCOME ON 3 0.10.2010 FOR RS.1,47,508/-. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 5.03.2013 AT RS.76,60,440/-. THE FIRST G ROUND OF APPEAL WAS AGAINST THE ADDITION OF RS.5,76,000/- BEING LOANS R AISED BY THE ASSESSEE AND SQUARED UP DURING THE YEAR ITSELF. FROM 12 PERS ONS ASSESSEE HAS BORROWED RS.19,500/- AND FROM 15 PERSONS RS.19, 000/- AND FROM ONE PERSON RS.18,500/-. THE ASSESSEE SUBMITTED THE CONFIRMATION OF THOSE PARTIES. THE SUMMONS WERE ISSUED BY THE INCO ME TAX OFFICER AND NONE ATTENDED AND, THEREFORE, ADDITION WA S MADE. 3. THE LEARNED CIT (APPEALS) DELETED THE ADDITI ON HOLDING THAT THE ASSESSEE HAS FILED THE CONFIRMATION ALONG WITH PROOF OF IDENTITY AND SOME PROOF OF INCOME SUCH AS I. T. RETURNS, KHA TUNIS, KISSAN BAHI, SALE DEEDS PAN CARDS ETC. HE FURTHER HELD TH AT THE ASSESSING OFFICER DID NOT VERIFY ALL THESE EVIDENCES AND MERE LY RELIED UPON NON- ATTENDANCE OF THE SUMMONS. ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 4 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE ORDERS OF THE LEARNED ASSESSING OFFICER. HE SUBMIT TED THAT THE LEARNED CIT (APPEALS) HAS NOT EXAMINED THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. 5. DESPITE NOTICE NONE APPEARED ON BEHALF OF TH E ASSESSEE AND, THEREFORE, THIS APPEAL IS DECIDED ON THE BASIS OF THE MERITS OF THE CASE AS PER INFORMATION AVAILABLE ON REC ORD. 6. THE LEARNED CIT (APPEALS) HAS EXAMINED WITH R ESPECT TO 28 PARTIES LOSS OF RS.5,76,000/- HOLDING THAT ASSESSEE HAS SUB MITTED CERTIFIED COPIES OF THE CONFIRMATIONS ALONG WITH SOME PROOF O F IDENTITY AND PROOF OF INCOME SUCH AS VOTER I. D. CARDS, INCOME TAX RET URNS, KHASRA, KHATUNIS, KISAN BAHI, SALE DEED ETC. IN VIEW OF TH IS IT IS APPARENT THAT ASSESSEE HAS PROVED THE IDENTITY AND LOOKING A T THE SMALLNESS OF THE AMOUNTS AND CREDITWORTHINESS. WITH RESPECT TO THE GENUINENESS OF THE PARTIES ASSESSEE HAS SUBMITTED THE COMPLETE DETAILS. HOWEVER, THE LEARNED ASSESSING OFFICER DID NOT VERIFY THE IN FORMATION SUBMITTED, BUT MERELY THE CAUSE OF NON-ATTENDANCE OF SUMMONS THE ADDITIONS WERE MADE. AS ASSESSEE HAS GIVEN ADEQUAT E DETAILS ABOUT THE IDENTITY AND CREDITWORTHINESS OF THE TRANSACTIO N OF CASH LOAN ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 5 ACCEPTED FROM THE PARTIES AND SQUARED UP DURING THE YEAR AND AS ADEQUATE SOURCES HAVE BEEN EXPLAINED BY THE ASSESSE E, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APP EALS) IN DELETING THE ABOVE ADDITION. 7. THE SECOND GROUND IS WITH RESPECT TO THE DIS ALLOWANCE UNDER SECTION 40A(3) OF THE ACT OF RS.20,74,929/-. THE ASSESSEE PURCHASED LIQUOR FROM M/S. INDIA GLYCOLS LTD., WHER EIN ASSESSEE WAS FOUND TO HAVE PURCHASED THE LIQUOR WORTH RS.20,74,9 29/-. AS THE SALE PROCEEDS WERE RECEIVED IN CASH, THE AMOUNT WAS ALSO DEPOSITED IN CASH, BUT PAYMENTS ARE BELOW RS.20,000/- PER DAY. H OWEVER, THE LEARNED AO DISALLOWED THE ABOVE AMOUNT UNDER SECTIO N 40A(3) OF THE ACT. THE LEARNED CIT (APPEALS) DELETED THE ADDITIO N FOR THE REASON THAT THE CASH PAYMENT HAS BEEN MADE AT THE REQUEST OF BU YER. IT WAS ALSO NOTED BY HIM THAT LD. AO HAS NOT GIVEN ANY INSTANCE THAT PAYMENT HAS EXCEEDED RS.20,000/- IN VIOLATION OF SECT ION 40A(3) OF THE ACT. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELI ED UPON THE ORDER OF THE ASSESSING OFFICER. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTE NTIONS AND FIND THAT THE DISTILLERY IS OBTAINED FROM THE WHOLE-SELL ER AND MRP OF THE ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 6 COUNTRY LIQUOR IS FIXED BY THE EXCISE COMMISSIONER. HOWEVER, IN THE PRESENT CASE, THE LEARNED ASSESSING OFFICER COU LD NOT POINT OUT ANY INSTANCE WHERE THE PAYMENT FOR THE PURCHASE IS MORE THAN RS.20,000/- ON ANY DAY. IN VIEW OF THIS WE ARE OF THE OPINION THAT AS NO INSTANCES WERE POINTED OUT BY THE LEARNED ASSESS ING OFFICER OF PAYMENT EXCEEDING RS.20,000/-, PROVISIONS OF SECTIO N 40A(3) OF THE ACT DOES NOT APPLY. 10. IN THE RESULT, GROUND NO. 2 OF THE APPEAL O F THE LEARNED ASSESSING OFFICER IS DISMISSED. 11. GROUND NO. 3 IS WITH RESPECT TO THE ADMISSI ON OF ADDITIONAL EVIDENCE BY THE LEARNED CIT (APPEALS) WITHOUT CONFR ONTING THE ASSESSING OFFICER AND, THEREFORE, IT IS IN VIOLATIO N OF RULE 46A OF INCOME TAX RULES, 1962. 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE COU LD NOT SHOW THAT ANY ADDITIONAL EVIDENCES HAVE BEEN ADMITTED BY THE LEARNED CIT (APPEALS) VIOLATING PROVISIONS OF RULE 46A OF T HE INCOME TAX RULES. HENCE, THE GROUND NO. 3 OF THE APPE AL IS DISMISSED. ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 7 13. THE GROUND NO. 4 OF THE APPEAL IS WITH RESP ECT TO THE DELETION OF ADDITION OF RS.46,11,840/- BY THE LEARNED CIT (A PPEALS). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE HAD PAID EXCISE DUTY OF RS.45,81,420/- AND LICENSE FEES OF RS.5,80,000/-. THE LEARNED ASSESSING OFFICER NOTED THAT ASSESSEE HAS BOOKED SALES IN CASH IMMEDIATELY BEFORE THE DATE OF PAYMENT. THEREFORE, HE MADE AN ADDITION OF RS.46,11,840/- HOLDING THAT THE SOURCE OF THE PAYMENT IS UNEXPLAINED INVESTMENT. THE LEARNED CIT (APPEALS) DELETED THE ADDITION STATING THAT THE ASSESSEE HAD DISCLOSED THE SALES AND FROM THE SALES, HE HAS MADE THE PAYMENT. THERE FORE, THERE CANNOT BE ANY ADDITION ON THAT ACCOUNT. 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE REL IED UPON THE ORDER OF THE ASSESSING OFFICER. 15. WE HAVE CAREFULLY CONSIDERED THE ISSUE. IN THE PRESENT CASE, ALL THE PAYMENTS OF EXCISE DUTY HAVE BEEN MADE BY T HE ASSESSEE FROM HIS CASH BOOK AND WHERE CASH SALES HAVE BEEN R ECORDED. WHEN CASH SALES HAVE BEEN OFFERED AS INCOME, THE PAYMENT OF EXCISE DUTY IS THIS APPLICATION AS EXPENDITURE. IN VIEW OF THI S, WE DO NOT FIND ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 8 ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPE ALS) AS NO PAYMENT OF EXCISE DUTY WAS FOUND NOT RECORDED IN THE BO OKS OF ACCOUNTS. 16. IN THE RESULT, GROUND NO. 4 OF THE APPEAL IS DISMISSED. C. O. NO. 8 (DEL) OF 2016 (ASSESSMENT YEAR : 201 0-11) 17. NOW WE COME TO THE CROSS OBJECTION FILED BY THE ASSESSEE, RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE LEARNED CIT (APPEALS) ERRED TO ACCEPT THE SERVICE OF NOTICE U/S 143 (2) ISSUED ON 23/09/11 WHEREAS THE A SSESSEE WAS SERVED THE NOTICE UNDER SECTION 143(2) ON 04/10/11 AND DEPT. WAS INFORMED WHILE APPEARING IN RESPONSE TO NOTICE U/S 142 (1) THAT THE CASE IS TIME BARRED. 2. THAT THE LEARNED CIT (APPEALS) SEEMS TO HAVE N OT NOTICED THAT THE NOTICE WAS SERVED ON 04/10/11 AND HENCE THE ASS ESSMENT WAS LIABLE TO BE QUASHED AND VOID-AB-INITIO. 3. THAT THERE SHOULD BE CONSISTENCY IN APPROACH A ND LEARNED CIT (APPEALS) IN APPEAL NO. 126 CIT (A)/D.DUN/13-14 DATED 20/03/15 IN CASE OF REENA VERMA OF LHAKSAR WHERE NOTICE WAS ALSO SERVED ON 04/10/11 AND IN APPEAL HELD IT TIME BARRED VOID AB INITIO. 4. THAT THE LEARNED CIT (APPEALS) UPHELD THE ADD ITION OF RS.219160/- ON ACCOUNT OF CAPITAL INVESTMENT OF RS. 260000/- ON THE VERY 1 ST DAY ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 9 OF THIS BUSINESS WHEREAS THESE WERE THE SAVINGS OF THE LAST YEARS BUSINESS AND OUGHT TO HAVE BEEN ALLOWED. 5. THAT ALL OTHER DELETIONS ARE BASED ON SETTL ED LAW AND FACTS OF THE CASE. 17.1 IN THE CROSS OBJECTION THE ASSESSEE HAS C HALLENGED THE ISSUE OF NOTICE AS WELL AS THE ADDITION OF RS.2,1 9,160/-. 18. THE ABOVE ADDITION HAS BEEN CONFIRMED BY TH E LEARNED CIT (APPEALS) FOR THE REASON THAT ASSESSEE HAS INTRODUC ED CAPITAL OF RS.2,60,000/-. FURTHER NO OPENING CASH BALANCE WAS ALSO REFLECTED IN THE CASH BOOK. ONLY CASH BALANCE OF RS.40,840/- WA S SHOWN AND, THEREFORE, THE LEARNED ASSESSING OFFICER MADE THE A DDITION OF RS.2,19,160/-, WHICH WAS CHALLENGED BEFORE THE LEAR NED CIT (APPEALS), WHO CONFIRMED THE SAME. 19. THE LEARNED DEPARTMENTAL REPRESENTATIVE REL IED UPON THE ORDERS OF THE LEARNED ASSESSING OFFICER AND C IT (APPEALS). 20. WE HAVE CAREFULLY CONSIDERED THE CONTENTION S RAISED IN THOSE ORDERS. APPARENTLY ASSESSEE INTRODUCED CAPITAL OF RS.2,60,000/-. HOWEVER, THE SOURCE OF THE FUND COULD BE EXPLAINED ONLY UP TO ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 10 RS.40,840/- AND, THEREFORE, THE ADDITION WAS MADE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (APPE ALS) IN CONFIRMING THE ADDITION TO RS.2,19,160/-. 21. IN THE RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. 22. IN THE RESULT, THE APPEAL OF THE REVENUE AN D THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON : 05 TH JULY, 2018 . SD/- SD/- ( H. S. SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : THE 05.07.2018 . *MEHTA* COPY OF THE ORDER FORWARDED TO :- 1. APPELLANTS; 2. RESPONDENTS; 3. CIT; 4. CIT (APPEALS); ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 11 5. DR, ITAT, ND. //TRUE COPY// BY ORDER ASSISTANT REGISTR AR UP-LOADED ON WEBSITE ON: 5.07.2018 DATE DRAFT DICTATED ON 04.07.2018 DRAFT PLACED BEFORE AUTHOR 05.07.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 05.07.2018 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 05.07.2018 APPROVED DRAFT COMES TO THE SR.PS/PS 05.07.2018 KEPT FOR PRONOUNCEMENT ON 05.07.2018 FILE SENT TO THE BENCH CLERK ON : 05.07.2018 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. ITA.2000(D)/2015 & CO 8(D)/16 SHRI SUKKHAN SINGH, H ARIDWAR. 12