ACIT, New Delhi V. Sh. Chetan Gupta, New Delhi

ITA 2390/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9548 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SATPAL GULATI
• Keywords: Peak credit; Set aside
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. K.NARASIMHA CHARY, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.1789 & 1790/DEL/2016 ASSESSMENT YEAR: 2006-07 & 2007- 08 CHETAN GUPTA 118, ANSAL BHAWAN 16, KUSTARBA GANDHI MARG, NEW DELHI PAN NO. AATPG9580E VS DCIT CENTRAL CIRCLE -7 NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.2390 & 2391/DEL/2016 ASSESSMENT YEAR: 2006-07 & 2007- 08 ACIT CENTRAL CIRCLE -7 NEW DELHI VS CHETAN GUPTA 118, ANSAL BHAWAN 16, KUSTARBA GANDHI MARG, NEW DELHI PAN NO. AATPG9580E (APPELLANT) (RESPONDENT) APPELLANT BY SH. ASHWANI KUMAR, CA SH. RAHUL CHAURASIA, CA SH. BHAVNESH JINDAL, CA RESPONDENT BY SH. SATPAL GULATI, CIT DR DATE OF HEARING: 28/07/2021 DATE OF PRONOUNCEMENT: 28/07/2021 2 ORDER PER N. K. BILLAIYA, AM: ITA NO.1789/DEL/2016 AND 2390/DEL/2016 ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE PREFERRED A GAINST THE ORDER OF THE CIT(A)-23, NEW DELHI DATED 23.02.2016 PERTAINING TO A.Y.2006-07 AND ITA NO.1790/DEL/2016 AND 2391/DEL/2 016 ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE PREFE RRED AGAINST THE VERY SAME ORDER OF THE CIT(A). 2. SINCE ALL THESE APPEALS RELATE TO THE CONSOLIDAT ED ORDER OF THE CIT(A) FOR A.Y.2006-07 AND 2007-08, THESE APPEALS W ERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. 3. WE FIRST TAKE UP THE CROSS APPEALS FOR A.Y.2006- 07. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT RE TURN IN RESPONSE TO NOTICE U/S 148 WAS FILED ON 01.11.2012 DECLARING INCOME AT RS.13,36,644/-. ASSESSMENT U/S 143(3)/147 WAS FRAMED VIDE ORDER DATED 07.03.2014 COMPUTING TOTAL INCOME AT RS. 108,09,83,210/-. THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) VIDE ORDER DATED 23.12.2016, WORKED OUT P EAK AT RS.2,95,51,279/- AND FURTHER ADDED AN AMOUNT ON ACC OUNT OF OPENING BALANCE AT RS. 24,11,467/- THE LEARNED COMM ISSIONER OF 3 INCOME TAX (APPEALS) WORKED OUT THE PEAK BY SLIGHTL Y DIFFERENT METHOD AS COMPARED TO THE WORKING OF PEAK DONE BY T HE APPELLANT AND AS UPHELD BY THE HONBLE TRIBUNAL. BOTH THE REV ENUE AND THE ASSESSEE ARE IN CROSS APPEALS BEFORE THE HONBLE BE NCH AS A RESULT OF ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). SIMILAR ISSUE AROSE IN APPELLANT'S OWN CASE FOR A/Y 2005-06 AND THE HONBLE BENCH VIDE ORDER DATED 07.06.2018 IN IT A NO.1788/DEL/2016 AND ITA NO. 2389/DEL/Z016 DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. 5. THE DR FAIRLY CONCEDED THAT THE IMPUGNED ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE. 6. WE HAVE CAREFULLY PERUSED THE DECISION OF THIS T RIBUNAL IN ITA NO.1788/DEL/2016 AND 2389/DEL/2016 ORDER DATED 07.06.2018. THE RELEVANT FINDINGS OF THE COORDINAT E BENCH READ AS UNDER :- 13.1 THE ASSESSEE HAS FILED STATEMENT OF PEAK IN TH E PAPER BOOK FROM PAGES 15 TO 75 OF THE PAPER BOOK. THE PEAK AS ON 10.04.2004 IS CALCULATED AT RS. 1,82,59,248/-. IT IS NOT IN DI SPUTE THAT WORKING OF THE PEAK FOR THIS YEAR IS SAME AS HAVE BEEN COMP UTED BY THE ASSESSEE IN PRECEDING AY 2001-02 TO 2004-05. 14. THE LD. CIT (DR), HOWEVER, CONTENDED THAT IN TH IS YEAR THE AO RECOMPUTED THE PEAK AND FILED THE REMAND REPORT IN WHICH IT IS STATED THAT THE DEBIT ENTRIES ON ACCOUNT OF EXPENSE S MAY BE EXCLUDED. HOWEVER, THERE IS NOTHING IN THE ORDER OF THE TRIBUNAL FOR EARLIER YEARS TO EXCLUDE THE DEBITS OF THE PEAK. IT IS NOT IN DISPUTE THAT PEAK IS WORKED OUT IN ALL PRECEDING ASSESSMENT YEARS AND IN 4 ASSESSMENT YEAR UNDER APPEAL ON THE BASIS OF ENTRIE S FOUND IN THE PEN DRIVE RECOVERED FROM THE POSSESSION OF THE ASSE SSEE. THE PRINT OUT FROM THE PEN DRIVE HAVE BEEN BROUGHT ON RECORD, THEREFORE, ALL THE ENTRIES CONTAINED IN THE SEIZED PEN DRIVE SHALL HAV E TO BE TAKEN INTO CONSIDERATION FOR WORKING OUT THE PEAK. THE PROCESS AND METHODOLOGY ADOPTED BY THE ASSESSEE IN EARLIER YEAR S HAVE BEEN ACCEPTED BY THE ITAT IN TWO ORDERS FOR ASSESSMENT Y EARS 2001-02 TO 2004-05. THEREFORE, THE AUTHORITIES BELOW ARE BOUND TO FOLLOW THE ORDERS OF THE TRIBUNAL AND SHOULD NOT HAVE REWORKED OUT THE PEAK IN THEIR OWN WAY. SINCE THE PEAK CREDIT STATEMENT IS P REPARED BY THE ASSESSEE ON THE BASIS OF THE ENTRIES FOUND IN THE P EN DRIVE AND ACCEPTED BY THE TRIBUNAL IN EARLIER YEARS, THEREFOR E, SAME METHOD SHALL HAVE TO BE FOLLOWED IN ASSESSMENT YEAR UNDER APPEAL. THEREFORE, THERE WAS NO JUSTIFICATION FOR THE AO TO SUBSTITUTE THE PEAK FOR ASSESSMENT YEAR UNDER APPEAL FROM RS.1,82, 59,248/- TO RS. 5,10,51,972/-. THE ASSESSES COUNSEL HAS ALSO R IGHTLY CONTENDED THAT THE TRIBUNAL HAS GIVEN BENEFIT OF OPENING BALA NCE OF THE EARLIER YEARS AND THAT ASSESSEE HAD PAID TAX ON THE PEAK CR EDIT FOR AY 2003-04 OF RS.46,16,387/-. THEREFORE, SUCH AMOUNT S HALL HAVE TO BE REDUCED FROM THE PEAK CALCULATED BY THE ASSESSEE AN D BENEFIT OF THE SAME SHALL HAVE TO BE GRANTED TO THE ASSESSEE. THER EFORE, AS PER THE DECISIONS OF THE TRIBUNAL IN THE CASE OF THE ASSESS EE REPRODUCED ABOVE, THE NET ADDITION SHALL HAVE TO BE MADE AGAIN ST THE ASSESSEE IN A SUM OF RS.1,36,42,861. THE ISSUE OF THE PEAK I S, THEREFORE, FULLY COVERED BY THE EARLIER YEARS ORDERS OF THE TRIBUNAL . IN THOSE ORDERS ALSO THE TRIBUNAL HAS DISMISSED THE GROUND OF APPEA L OF THE ASSESSEE AS REGARDS REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT. THEREFORE, THESE GROUNDS OF APPEAL OF THE ASSE SSEE ARE DISMISSED. 15. CONSIDERING THE ABOVE DISCUSSION AND FOLLOWIN G THE REASONS FOR DECISIONS OF ITAT IN THE CASE OF THE SAME ASSESSEE FOR ASSESSMENT 5 YEARS 2001-02 TO 2004-05, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND DIRECT THE AO TO MAKE AN ADDITION OF RS.1 ,36,42,861/- ON ACCOUNT OF PEAK CREDIT. 7. RESPECTFULLY FOLLOWING THE FINDINGS OF THE COORD INATE BENCH (SUPRA) APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 8. WE NOW ADDRESS TO THE CROSS APPEALS FOR A.Y. 200 7-08. BRIEFLY STATED THE FACTS OF THE CASE ARE AS UNDER : - RETURN FOR A/Y 2007-08 WAS FILED ON 30.10.2007 DECLARING INCOME AT RS. 2,34,750/-. IN RESPONSE TO NOTICE U/S 148, IT WAS SUBMITTED VIDE LETTER DATED 22,11.2 012 THAT THE RETURN ORIGINALLY FILED MAY KINDLY BE TREA TED AS THE RETURN IN RESPONSE TO NOTICE U/S 148. ASSESSMEN T FOR A/Y 2007-08 WAS FRAMED BY THE LEARNED ASSESSING OFFICER COMPUTING TOTAL INCOME AT RS. 40,71,59,483/ -. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DECIDED THE ISSUE VIDE ORDER DATED 23.02.2016 AND WORKED OUT THE PEAK AFTER EXCLUDING THE DEBITS AT R S 4,53,00.394/-. THE ASSESSEE WORKED OUT THE PEAK AT RS. 40,01,569/- AS ON 12.04.2006. 9. IT CAN BE SEEN THAT THE UNDERLYING FACTS ARE IDE NTICAL TO THE FACTS DISCUSSED IN A.Y.2006-07 (SUPRA) WHEREIN WE HAVE FOLLOWED THE DECISION OF THIS TRIBUNAL IN ITA 6 NO.1788/DEL/2016 RELEVANT FINDINGS OF THE COORDINAT E BENCH HAVE BEEN EXTRACTED ELSEWHERE. 10. FOR THE DETAILED REASONS GIVEN THEREIN APPEAL O F THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISM ISSED. 11. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 12. DECISION ANNOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE REPRESENTATIVES ON 28.07.2021. SD/- SD/- ( K.NARASIMHA CHARY ) (N. K. BILLAIYA) JUDICIAL MEMBER A CCOUNTANT MEMBER *NEHA* DATE:-28.07.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI 7 DATE OF DICTATION 2 8 .07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 8 .07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 2 8 .07.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 2 8 .07.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 2 8 .07.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 2 8 .07.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 8 .07.2021 DATE ON WHICH THE FILE GOES T O THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER