Lovnish Bhatia, Delhi V. ITO ward 47(1), New Delhi

ITA 2288/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1976 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 14-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; TDS
• Section: 68

Judgement Text

1 ITA NO. 2288/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C-1 NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 2288/DEL/2019 ( A.Y 2013-14) LOVNISH BHATIA BT-14 BLOCK, SHALIMAR BAGH, NEW DELHI, PIN: 110088 AQXPB7672C (APPELLANT) VS ITO WARD-47(1) NEW DELHI (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. PRADEEP SINGH GAUTAM, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 14/01/2019 PASSED BY CIT(A)-16, NEW DELHI FOR ASSESSMENT YEAR 2017-18. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A )] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALLOW ANCE OF RS.12,00,000/- MADE BY THE LD. AO WITHOUT CONSIDERING THAT THE PAY MENT HAS BEEN MADE THROUGH BANKING CHANNEL, TDS WAS DEDUCTED ON SAID P AYMENTS , LEDGER DATE OF HEARING 05.03.2020 DATE OF PRONOUNCEMENT 12.05.2020 2 ITA NO. 2288/DEL/2019 CONFIRMATION HAS ALSO BEEN FILED ALONG WITH BILLS O F COMMISSION AGENTS. 3. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN PARTLY DISALLOWING OF RS. 5,71,697/- ON AC COUNT OF CESSATION OF TRADING LIABILITY U/S 41(1) OF THE ACT. 4. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) ERRED IN PARTLY DISALLOWING OF RS. 16,20,000/- ON A CCOUNT OF CESSATION OF TRADING LIABILITY U/S 41(1) OF THE ACT. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRAD ING OF DRY FRUITS, KIRANA ITEMS ETC. RETURN OF INCOME WAS FILED ON 30/09/2013 DECLARING AN INCOME OF RS. 9,66,700/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER MADE AN ADDITION OF RS.9,49,856/- BEING LO SS TREATED AS CESSATION OF LIABILITY U/S 41(1) OF THE INCOME TAX ACT. THE ASS ESSING OFFICER RECORDED A FINDING THAT THERE WAS A MISAPPROPRIATE INCREASE IN COMMISSION AND IN THE ABSENCE OF DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE THAT COMMISSION HAD BEEN GENUINELY PAID. THE ASSESSING OFFICER DISALLOWED RS. 12,00,00/- OF THE COMMISSION. THE ASSESSING OFFICE R ALSO EXAMINED THE FRESH LOANS OF RS. 17,40,000/- REFLECTED IN THE BOOKS OF ASSESSEE AND CONCLUDED THAT THE ASSESSEE HAD NOT DISCHARGED HIS ONUS REGARDING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF LENDER AND ADDED THE SAME T O THE INCOME OF THE ASSESSEE BY INVOKING SECTION 68 OF THE ACT. THE AS SESSING OFFICER ALSO MADE A DISALLOWANCE ON ACCOUNT OF MISCELLANEOUS EXPENSES. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE AND THER E IS NO ADJOURNMENT APPLICATION ON BEHALF OF THE ASSESSEE. THE NOTICE HAS BEEN DULY SERVED TO THE ASSESSEE. THEREFORE, WE ARE TAKING THE SUBMISSIONS OF THE ASSESSEE BEFORE THE 3 ITA NO. 2288/DEL/2019 CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER AS CONTENTIONS/ARGUMENTS BEFORE US. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). THE LD. DR FURTHER SUBMITTED THAT AS REGARDS GROUND NO. 1, THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE LOAN AMOUNT WA S OUTSTANDING FOR MORE THAN 2 YEARS AND NO INTEREST WAS PAID ON THE SAID LOANS. THE SAID LOAN WAS ALSO WITHIN THE FAMILY AND THUS THERE IS A CLEAR LACK OF INTENTION TO PAY BACK THESE LOANS. THEREFORE, THE ASSESSING OFFICER RIGHTLY TR EATED THESE TWO LOANS AS CESSATION OF LIABILITY. AS REGARDS GROUND NO.2, T HE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN A REMAND REPORT TO THE CIT(A) AND ADMITTED THE ADDITIONAL EVIDENCE. THEREFORE, THE ASSESSING OFFI CER AS WELL AS THESE CIT(A) RIGHTLY HOLD THAT THE ASSESSEE FAIL TO DISCHARGE IT S ONUS AS REGARDS IDENTITY, GENUINENESS AND CREDIBILITY OF THE PARTIES. AS REGA RDS GROUND NO. 3, THE LD. DR SUBMITTED THAT THE CIT(A) RIGHTLY HELD THAT SINCE N O EVIDENCE WHATSOEVER TO PROVE THE GENUINENESS OF THE LOAN AMOUNT WAS GIVEN BY THE ASSESSEE AND THE CREDITWORTHINESS OF THE LENDER WAS ALSO NOT PROVE, THEREFORE, THE ADDITION OF RS. 17,40,000/- WAS RIGHTLY MADE BY THE ASSESSING OFFIC ER . 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. AS REGARDS GROUND NO.1, THE CIT(A) HAS GIVEN A DETA ILED FINDING AND THERE IS NO PRIMA FACIE EVIDENCE THAT THESE LOANS AMOUNTS WILL BE PAID IN FUTURE. THEREFORE, THE ASSESSING OFFICER RIGHTLY TREATED IT AS CESSATION OF LIABILITY. GROUND NO. 1 IS DISMISSED. 8. AS REGARDS GROUND NO.2, THE CIT(A) HAS GIVEN A C ATEGORICAL FINDING THAT THE COMMISSION EXPENSES WERE NOT AT ALL PROVED BY T HE ASSESSEE FROM THE EVIDENCE SUBMITTED BEFORE IT. BUT THERE IS A CONFI RMATION OF LEDGER ACCOUNTS WHICH WAS BEFORE THE CIT(A) UPON WHICH THE ASSESSIN G OFFICER HAS ALSO NOT COMMENTED IN THE REMAND REPORT. THEREFORE, IT WILL BE APPROPRIATE TO REMAND 4 ITA NO. 2288/DEL/2019 BACK THIS ISSUE TO THE FILE OF THE CIT(A) FOR PROPE R ADJUDICATION. GROUND NO. 2 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 9. AS REGARDS GROUND NO.3, THOUGH THE CIT(A) HAS TA KEN A COGNIZANCE OF THE EVIDENCE AT THE SAME TIME, THE COMMENT UPON THE EVI DENCE IS LACKING. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK TH IS ISSUE TO THE FILE OF THE CIT(A) FOR PROPER ADJUDICATION. GROUND NO. 3 IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. 10. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS 12TH DAY OF MAY, 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 12/05/2020 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 2288/DEL/2019 ATE OF DICTATION 12.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 3 . 5 . 2 0 2 0 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER