Chander Pal Aggarwal, New Delhi V. ITO, New Delhi

ITA 2329/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98374 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 09-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUSTAINED LD CITA IS A
• Section: 68

Judgement Text

1 ITA NO. 2329/DEL/2011 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 2329/DEL/2011 (ASSESSMENT YEA R-2006-07) CHANDER PAL AGGARWAL 3611, RAJA PARK, SHAKUR BASTI, RANI BAGH NEW DELHI ADNPA1455D (APPELLANT) VS ITO WARD-25(2), D BLOCK VIKAS BHAWAN NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT(A), XXIV, NEW DELHI PASSED ON 1/03/2011. 2. THE GROUNDS OF APPEAL IS AS FOLLOWS:- 1. THAT THE ADDITION OF RS.10,55,497/- MADE BY TH E ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRM ING THE ADDITION MADE BY THE A.O. APPELLANT BY SH. R.S. ADLAKHA, ADV RESPONDENT BY SH. AMRIT LAL, SR. DR DATE OF HEARING 09.12.2015 DATE OF PRONOUNCEMENT 29.12.2015 2 ITA NO. 2329/DEL/2011 3. THAT THE CASH DEPOSIT OF RS.13,12,500/- ON VARIO US DATES IN THE BANK ACCOUNT REPRESENTED THE JOB WORK RECEIP T OF RS.8,48,000/- AND AMOUNT RECEIPT FROM OTHER TENANTS , TOWARDS CONSUMPTION OF ELECTRICITY. 4. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE AMOUNT OF RS.10,55,497/-WAS NOT RECEIPT FROM VARIOU S TENANTS, WHEREAS THE DEPOSIT IN THE BANK ACCOUNT TO THE EXTEND OF RS.8,48,000/- WERE RECEIVED FROM JOB WORK . 5. THAT THE SOURCES OF CASH DEPOSIT IN THE BANK ACC OUNT WERE DULY EXPLAINED BY THE ASSESSEE. 6. THAT THE ASSESSING OFFICER AS WELL AS LD. CIT(A ) WERE NOT JUSTIFIED IN NOT ACCEPTING THE EXPLANATION OF SOURC E OF DEPOSIT IN BANK ACCOUNT. 7. THAT THE LD. CIT(A) HAD NOT PROPERLY APPRECIATED THE FACTS OF THE CASE IN NOT ACCEPTING THE CONTENTS OF THE ST ATEMENTS OF VARIOUS TENANTS RECORDED BY ASSESSING OFFICER . 8. THAT THE ASSESSING OFFICER AS WELL AS THE LD. C IT(A) WERE NOT JUSTIFIED IN NOT ACCEPTING THAT THE ASSESSEE WA S DOING JOB WORK AND THE RECEIPTS THERE FROM WERE DEPOSITED IN THE BANK ACCOUNT ON VARIOUS DATES. 9. THAT WHILE COMPLETING THE ASSESSMENT THE ASSESSI NG OFFICER HAD ACCEPTED THE TOTAL INCOME OF RS.92,748 /- AS PER THE COMPUTATION OF THE INCOME, WHICH CLEARLY IN DICATES THAT THE ASSESSEE WAS DOING JOB WORK AND THE INCOME WAS DECLARED AS PER THE PROVISION OF SECTION 44AF OF TH E INCOME TAX ACT. 10. THAT NO INTEREST U/S 234(A), 234(B), IS LEVIABL E. IT IS PRAYED THAT THE ADDITION OF RS.10,55,497/- BE ING UNJUSTIFIED AND ARBITRARY, MAY KINDLY BE DELETED. 3. DURING THE COURSE OF SCRUTINY THE ASSESSING OFFI CER ASKED THE ASSESSEE FOR CLARIFICATION ABOUT THE SOURCE OF RS.1 3,12,500/- DEPOSITED IN CASH IN HIS SAVING BANK ACCOUNT WHICH WAS REFLECTED IN 3 ITA NO. 2329/DEL/2011 YEARLY INFORMATION DURING THE ASSESSMENT PROCEEDING S. THE AMOUNT OF RS.13,12,500/- WHICH WAS DEPOSITED IN HIS BANK A CCOUNT IS JOB RECEIPT OF RS.8,48,000/- AND THE AMOUNT IS RELATED TO ELECTRICITY BILL AMOUNT RECEIVED FROM OTHER TENANTS. DURING THE REL EVANT YEAR, THERE WERE 5 TENANTS INCLUDING HIM WHO USED ONLY ON E COMMON ELECTRICITY METER THE ASSESSEE ALSO CLAIMED THAT DU RING THE RELEVANT YEAR HE HAS PAID AN AMOUNT OF RS.13,26,910/- NDPL O UT OF WHICH RS.10,55,497/- BELONGS OR RELATED TO THE ELECTRICIT Y BILL OF CONCERNED TENANTS. THE ASSESSING OFFICER ASKED FOR CERTAIN CLARIFICATIONS BUT THE ASSESSEE FAILED TO GIVE CLARIFICATION ON THE SA ME. HENCE, THE ASSESSING OFFICER INCLUDED THE AMOUNT OF RS.10,55,4 97/- IN HIS INCOME WHICH WAS DEPOSITED IN HIS SB ACCOUNT CLAIMI NG THE SAME HAVING RECEIVED FROM THE OTHER TENANTS. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) OBSER VED THAT THE ASSESSEE HAD TAKEN A SHOP FOR DOING BUSINESS IN C-1 5/1 VAZIRPUR INDUSTRIAL AREA, NEW DELHI. THIS SHOP WAS ON RENT THE ELECTRICITY BILL FOR THE ABOVE SAID BUILDING WAS IN THE NAME OF SHRI SHYAM SONS INDUSTRIES. THE ASSESSEE PAID THE ELECTRICITY OF R S. 13,12,500/- OUT OF WHICH ACCORDING TO HIM, HE SHARES STANDS OF RS.2 ,71,413/- AND THE SHARE OF OTHER FOUR TENANTS AT RS.10,55,497/-, THE ASSESSEE TOOK THE PLEA DURING THE ASSESSMENT PROCEEDING THAT THE ASSESSEE USED TO COLLECT THE MONEY IN CASH FOR ELECTRICITY BILL F ROM OTHER TENANTS AND DEPOSITED IN THE BANK ACCOUNT. THE LD. CIT(A) DURING THE 4 ITA NO. 2329/DEL/2011 APPELLATE PROCEEDINGS DIRECTED THE ASSESSING OFFICE R TO MAKE INVESTIGATION U/S 250(4) OF THE INCOME TAX ACT. TH E ASSESSING OFFICER SUBMITTED REMAND REPORT DATED 8/2/2010 THE FACTS WHICH EMERGES FROM THIS REPORT WAS AS UNDER:- A) ALONG WITH THE ASSESSEE A TOTAL NO OF SIX PERSO N ARE RESIDING AT H. NO. C-15/1, WAZIRPUR INDUSTRIAL AREA , NEW DELHI. THESE PERSON ARE SHRI RAKESH AGGARWAL, SH. SALIM KHAN, SHRI MOHAMMAD BADRE ALAM, SH. MANJOOR AND SHRI SATISH AGGARWAL. (THE FULL ADDRESS OF THE SE FIVE PEOPLES ARE GIVEN IN THE POINT NO. 5 PAGE-3 OF THE REMAND REPORT). B) THE ASSESSEE PRODUCED THREE PERSON OUT OF FIVE P ERSON BEFORE THE ASSESSING OFFICER AND THEIR STATEMENT W ERE RECORDED. C) SHRI RAKESH HAS SAID IN HIS STATEMENT THAT HE LE FT THIS COMMERCIAL COMPLEX IN 2009 AND DURING THE YEAR. HE WAS WITH SHRI SALIM, SHRI MANJOOR AND SHRI SATISH AGGARWAL AS TENANTS, HE DOESNT REMEMBER THE NAME O F ALL OTHERS TENANTS. (IN REFERENCE TO THE ANSWER OF QUESTION NO. 6 & 7) A COPY OF AFORESAID STATEMENT IS ATTACHE D AS ANNEXURE C. D) SHRI SALIM KHAN IN HIS STATEMENT HAS SAID THAT H E LEFT THE COMMERCIAL COMPLEX IN 2008 BUT DURING THE YEAR HE WAS WITH ANOTHER TENANTS NAMING SHRI RAKESH, SHRI 5 ITA NO. 2329/DEL/2011 CHANDER PRAKASH AGGARWAL AND HE DOESNT REMEMBER TH E OTHERS NAME. (IN REFERENCE TO THE ANSWER OF QUEST ION NO. 6) A COPY OF AFORESAID STATEMENT IS ATTACHED AS ANN EXURE D. E) SHRI SATISH HAS SAID IN HIS STATEMENT THAT HE LE FT THE COMMERCIAL COMPLEX IN 2007 AND DURING THE YEAR HE W AS WITH ANOTHER TENANTS NAMING SHRI CHANDER PRAKASH AGGARWAL, SHRI BADRE ALAM, SHRI RAKESH AND SHRI SAL IM MANJOOR &, HE DOESNT REMEMBERS OTHERS NAME, (WITH REFERENCE TO ANSWER OF QUESTION NO. 6 &) A COPY OF AFORESAID STATEMENT IS ATTACHED AS ANNEXURE E. F). ALL AFORESAID THREE PERSON HAVE GIVEN A CHART T O THE ASSESSING OFFICER WHICH SHOWED THEIR INCOME CALCULA TION. IT SHOWED THEIR TOTAL INCOME AFTER DEDUCTIONS OF GR OSS RECEIPTS AND OTHER EXPENSES, WHICH WAS SHOWN BELOW TAXABLE LIMIT. 5. THE CIT(A) IN PARA 4.2 OF THE ORDER OBSERVED THA T DURING THE ASSESSMENT AND REMAND PROCEEDINGS SHRI SHYAM & SONS INDUSTRIES NEVER MENTIONED THAT THE ELECTRICITY BILL IS BEING PAID BY THE ASSESSEE. THE FOUR PERSONS NAMED SHRI SURENDER KUM AR JAIN, SUSHIL KUMAR JAIN, SHRI SANJAY KUMAR AND SHRI CHANC HAL KUMAR WERE WORKING IN THE SAID COMMERCIAL COMPLEX. ONLY THREE PERSONS NAMELY SHRI SURENDER KUMAR, SHRI SANJAY KUMAR AND S HRI 6 ITA NO. 2329/DEL/2011 CHANCHAL KUMAR PRODUCED BEFORE THE ASSESSING OFFICE R / INSPECTOR. THE SAID PERSONS WERE WORKING IN THIS COMMERCIAL CO MPLEX FOR LAST TWO YEARS WHILE COMMENTING ON THE REMAND REPORT. T HE ASSESSEE MENTIONED THAT THE AMOUNT OF INCOME THAT HAS BEEN A DDED BY THE A.O CANNOT BE TREATED AS INCOME U/S 68 THE AMOUNT D EPOSITED IN THE BANK ACCOUNT IS OUT OF THE PURVIEW OF SECTION 6 8 OF THE INCOME TAX ACT AS THE BANK ACCOUNT IS NOT AN ACCOUNT LEDGE R OF THE ASSESSEE. THE ASSESSEE MENTIONED THAT THREE TENANT S OUT OF 5 SERVED THIS FACT IN FRONT OF ASSESSING OFFICER THA T THEY PAID CASH TO THE ASSESSEE FOR THEIR ELECTRICITY BILL WHICH IS RE LATED TO THEM. THEREFORE, THE FACTS AND EVIDENCES PRODUCED DURING THE ASSESSMENT PROCEEDINGS BY THE ASSESSEE ARE TRUE AND RIGHT. TH E ASSESSEE SUBMITTED THE STATEMENTS OF SHRI RAKESH AGGARWAL, S HRI SALIM KHAN AND SATISH CHAND CO-TENANTS OF THE ASSESSEE AN D GIVEN A DETAIL THAT THEY HAVE PAID ALMOST 6,59,225/- TOWARD S THE ELECTRICITY BILL TO THE ASSESSEE. THE OTHER TENANTS WHOSE STAT EMENT WAS NOT RECORDED HAD PAID 3,96,272/- BUT THERE WAS NO RECOR D TO SHOW THAT THEY HAVE PAID THIS LARGE AMOUNT. THERE WAS NOTHIN G TO SHOW ON THE RECORD THAT SHYAM & SONS HAS VERIFIED THIS FACT . THEREFORE, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 6. THE AR SUBMITTED THAT THE A.O AS WELL AS THE CIT (A) HAS IGNORED THAT THREE CO-TENANTS HAVE SPECIFICALLY SAI D THAT THEY HAVE MADE PAYMENT TO THE ASSESSEE FOR 4185 UNITS CONSUME D BY THEM. 7 ITA NO. 2329/DEL/2011 FOR THE FINANCIAL YEAR 2005-06 BY SHRI RAKESH AGGRA WAL 41077 BY SHRI SALIM KHAN AND 48974 BY SATISH CHAND. 7. THE DR RELIED ON THE ORDER OF THE ASSESSING OFFI CER AS WELL AS OF THE CIT(A) AND SUBMITS THAT THE ASSESSES CASE H AS BEEN PROPERLY DEALT BY BOTH THE AUTHORITIES. 8. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES THE FINDING GIVEN BY THE LD. CIT(A) AS RELATED TO T HE STATEMENT OF THE THREE CO-TENANTS CANNOT BE IGNORED. IT IS AN ADMITT ED POSITION THAT THEY HAVE GIVEN THE MONEY FOR ELECTRICITY CHARGES T O BE PAID ON THEIR BEHALF BY THE ASSESSEE. THOSE STATEMENTS ARE PROPE R AND THAT SHOULD HAVE BEEN TAKEN INTO ACCOUNT BY THE ASSESSIN G OFFICER AS WELL AS CIT(A). THEREFORE, THE ADDITION OF RS.6,59 ,225/- CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. AS RELATES TO OTHER TENANTS WHOSE STATEMENTS AS WELL AS WHEREABOUTS HAVE NOT BE EN PRODUCED BY THE ASSESSEE, THE SAME WAS PROPERLY DEALT BY THE ASSESSING OFFICER AS WELL AS THE CIT(A). WHEN THERE IS NO E VIDENCE GIVEN BYTE TO THE EXTENT OF RS.3,96,272/- FOR ALLEGED ELECTRIC ITY CHARGES THE SAID AMOUNT IS PROPERLY ADDED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). IN LIGHT OF THIS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. AS RELATES TO GROUND NO. 9 & 10, THE ASS ESSEE DID NOT PRESS THE SAME. THEREFORE, THE SAME ARE DISMISSED. 8 ITA NO. 2329/DEL/2011 9. IN RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH OF DECEMBER 2015. SD/- SD/- ( S.V. MEHROTRA) (SUCHI TRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/12/2015 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 09.12.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 10.12.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .12.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. .12.2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 30.12.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON .12.2015 PS 7. FILE SENT TO THE BENCH CLERK 30.12.2015 PS 9 ITA NO. 2329/DEL/2011 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.