Sh. Umesh Arora, Noida V. ACIT, New Delhi

ITA 2401/DEL/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8322 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Source of fund
• Section: 143(3); 142(1); 143(1); 143(2)

Judgement Text

ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 1 OF 17 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: E: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 2401/DEL/2015 ( ASSESSMENT YEAR: 2009-10) UMESH ARORA, C/O CA ANOOP KUMAR JAIRATH, NOIDA. VS. ACIT, CIRCLE- 24(1), NEW DELHI. PAN NO: AAAPA4832A APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS. RAKHI VIMAL, SR. DR ORDER PER ANADEE NATH MISSHRA, AM [A]. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST THE IMPUGNED APPELLATE ORDER DATED 30/01/2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-11, NEW DELHI, [LD. CIT(A),FOR SHORT] PERTAINING TO ASSES SMENT YEAR 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE EVIDENCES FURNISHED BY THE ASSESSEE A PROPOS THE SOURCES OF THE FUNDS TO THE TUNE OF RS. 32,75,000/-, OUGHT TO HAD BEEN CONSIDERED BY THE LD. CIT(A) AND MADE THE BASIS OF THE APPELLATE ORDE R. 2. THAT THE LD. CIT(A) HAD ERRED IN ARBITRARILY REJ ECTING THE EVIDENCES FURNISHED BY THE ASSESSEE ON THE GROUND THAT THE NOTICE U/S 1 33(6) ISSUED TO M/S MAHINDRA ENTERPRISES HAD RETURNED UNDELIVERED, THER EBY OVERLOOKING THE FACTS THAT (I) THE ASSESSEE HAS SUBSEQUENTLY PAID T HE PURCHASE CONSIDERATION TO IT THROUGH BANKING CHANNEL; AND (I I) THE POSTAL AUTHORITIES ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 2 OF 17 REMARK WAS ADDRESSEE MOVED AND NOT THAT NO SUCH PARTY AT THIS ADDRESS. 3. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. CIT(A) HAD ERRED IN DISBELIEVING THE EXPLANATION REGARDING SOURCE OF TH E FUNDS TO THE TUNE OF RS. 32,75,000/-. 4. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. CIT(A) HAD ERRED IN UPHOLDING THE ADDITION OF RS. 32,75,000/-, AS ARBIT RARILY MADE BY THE LD. AO. [B]. VIDE ASSESSMENT ORDER DATED 20/12/2011 PASSED BY ASSESSING OFFICER (AO, FOR SHORT) U/S 143(3) OF THE INCOME TAX ACT, 1961 ( I. T.ACT IN SHORT), INCOME OF THE ASSESSEE WAS DETERMINED AT RS.67,21,750 (ROUNDED OF F)/-. THE RELEVANT PORTION OF THE ASSESSMENT ORDER 20/12/2011 IS REPRODUCED AS UNDER: - THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009- 10 WAS FILED ON 09.3.2010 DECLARING AN INCOME OF RS.34,21,610/- WHICH WAS PRO CESSED UNDER SECTION 143(1) ON RETURNED INCOME. THE CASE WAS SELECTED FOR SCIUT INY UNDER CASS AS PER GUIDELINES/PROCEDURE FOR SELECTION OF CASES FOR SCR UTINY. 2. ACCORDINGLY NOTICE UNDER SECTION 143(2) WAS ISSU ED BY ITO WARD 24(4), NEW DELHI ON 20.8.2010 AND SERVED UPON THE ASSESSEE FIX ING FOR HEARING ON 03.9.2010. THEREAFTER CASE WAS TRANSFERRED TO THIS CIRCLE AND MY PREDECESSOR ISSUED NOTICES U/S 143(2) AND 142(1) ON 09.6.2011 CALLING FOR INFO RMATION ON AIR AND SOURCES OF INCOME. THEREAFTER, AFTER TAKING OVER THE CHARGE OF THIS CIRCLE, THE UNDERSIGNED ISSUED NOTICES U/S 142(1.) ON 03.11.2011 WHICH WAS COMPLIED WITH. SHRI ANOOP KUMAR JAIRATH. CA APPEARED ON BEHALF OF THE ASSESSE E AND THE INFORMATION CALLED FOR HAS BEEN FILED AND THE SAME WAS VERIFIED AND PL ACED ON RECORDS. - 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RENDE RING CONSULTANCY RELATING TO LIAISON CONSULTANCY SERVICES. THE AR FOR THE ASSESS EE APPEARED FROM TIME TO TIME ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 3 OF 17 AS PER ENTRIES IN THE ORDER SHEET. ACCOUNTS RELATIN G TO THE INCOME PRODUCED/COPIES FILED WHICH WERE PLACED ON RECORDS AFTER VERIFICATI ON. 4. THE ASSESSEE WAS ASKED TO FILE DETAILS OF AIR IN FORMATION AND IN RESPONSE TO THE SAME THE ASSESSEES COUNSEL FILED REPLY DURING THE COURSE OF HEARING ON 17.12.2011 ON BEHALF OF THE ASSESSEE WHICH IS REPRODUCED AS UN DER: 'PLEASE REFER TO THE AIR INFORMATION PROVIDED BY YO U OF THE ASSESSEE. AS PER AIR ASSESSEE HAS DEPOSITED RS. 27,75,000/- IN HIS SAVIN G A/C WITH ICICI BANK. NO. 003101000099 AND HDFC BANK A/C NO. 06511930000145. ASSESSEE HEREBY ADMIT THAT THE AMOUNT MENTIONED ABOVE WAS UNDISCLOSED SAL E PROCEEDS EARNED BY THE ASSESSEE DURING THE COURSE OF ITS BUSINESS ACTIVITY . ASSESSEE ALSO ADMIT THAT THE INVESTMENT IN BIRLA SUN LIFE MUTUAL FUND FOR RS. 5, 00,000/- WAS ALSO MADE OUT OF THE SALE PROCEEDS. ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS OF TRADIN G OF CLOTHS. ASSESSEE SOLD THE CLOTHS TO THE VARIOUS PETTY STREET VENDORS. COPIES OF SOME SALE AND PURCHASE BILLS ALONGWITH BANK STATEMENTS ARE ENCLOSED FOR YOUR REF ERENCE. ASSESSEE ALSO ADMITS THAT HE HAS EARNED APPROX. 4% TO 5% PROFIT ON THE S ALE. ASSESSEE SUOMOTO OFFER THE SAID PERCENTAGE OF PROFIT ON SALE FOR THE TAXAB LE BY THE DEPARTMENT. 5. THE ASSESSEE HAS ACCEPTED THAT HE WAS DOING CLOT H SELLING BUSINESS WHICH WAS NEVER DISCLOSED IN THE RETURN OF INCOME. THE AMOUNT OF INVESTMENT IN THE PURCHASE OF CLOTH HAS NOT BEEN EXPLAINED INSTEAD THE AMOUNT EARNED OUT OF SALE OF THE CLOTH STATED TO HAVE BEEN DEPOSITED IN THE BANKS AND IN B IRLA SUN LIFE MUTUAL FUND. FROM THE ABOVE FACTS IT IS ESTABLISHED THAT THE ENTIRE A MOUNT OF DEPOSIT IN THE BANK AND MUTUAL FUND WAS HIS INCOME FROM UNDISCLOSED SOURCES . THE ASSESSEE IN HIS LETTER FILED ON THROUGH HIS COUNSEL, HAS STATED THAT HE AD MITS THAT HE HAS EARNED APPROX., 4% TO 5% PROFIT ON THE SALE. ASSESSEE SUOMOTO OFFER THE SAID PERCENTAGE OF PROFIT ON SALE FOR THE TAXABLE BY THE DEPARTMENT. WHEN CON FRONTED TO EXPLAIN THE INVESTMENT MADE IN THE PURCHASE OF CLOTH AND THE SO URCE OF DEPOSIT IN THE BANKS AND BIRLA SUN LIFE MUTUAL FUND AMOUNTING TO RS.27,7 5,000/- AND RS,5,00,000/- RESPECTIVELY, THE COUNSEL FOR THE ASSESSEE COULD NO T EXPLAIN ANY THING ELSE EXCEPT WHATEVER STATED IN HIS LETTER. ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 4 OF 17 6. IN VIEW OF THE ABOVE,'IT IS HELD THAT THE ASSESS EE WAS DOING THE BUSINESS OF SALE OF CLOTHS TO THE PETTY VENDORS AND THE SOURCE OF DE POSIT/INVESTMENT IN THE BANK/MUTUAL FUND AND PURCHASE OF CLOTHS HAS ALSO NO T EXPLAINED. THE ASSESSEE VIDE HIS LETTER HAS HIMSELF ACCEPTED THAT THE AMOUN T DEPOSITED IN THE BANKS IS OUT OF UNDISCLOSED SALE PROCEEDS OF CLOTH, AND THE DEPO SIT IN MUTUAL FUNDS AMOUNTING TO RS.5,00,000/- IS ALSO FROM THE SALE PROCEEDS OF UNDISCLOSED CLOTH ACTIVITIES. THE ASSESSEE COULD NOT EXPLAIN THE INVESTMENT IN PURCHA SE OF CLOTH FOR SALE AND STATED THAT SALE PROCEEDS HAVE BEEN DEPOSITED IN THE BANK/ MUTUAL FUND WHICH IS NOT ACCEPTABLE. HENCE THE ENTIRE AMOUNT OF RS.27,75,000 /- + RS.5,00,000/- TOTALING RS.32,75,000/- IS CONSIDERED ASSESSEES OWN INCOME FROM UNDISCLOSED SOURCES AND THE SAME IS ADDED IN THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. I AM SATISFIED THAT ASSESSEE HAS CONCEALED THE TAXABLE INCOME BY FURNISHING INACCURATE PARTICULARS OF HIS INCOME, PE NALTY PROCEEDINGS UNDER SECTION 271 (L)(C) ARE INITIATED SEPARATELY. B.1] AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED APPEAL BEFORE THE LD. CIT(A). VIDE AFORESAID AFORESAID IMPUGNED APPEL LATE ORDER DATED 30/01/2015, THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL. THE REL EVANT PORTION OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED AS UNDER: ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 5 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 6 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 7 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 8 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 9 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 10 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 11 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 12 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 13 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 14 OF 17 ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 15 OF 17 [C] THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATED 30/01/2015 OF THE LD . CIT(A). AT THE TIME OF HEARING, REVENUE WAS REPRESENTED BY MS. RAKHI VIMAL, THE LEA RNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR. DR, FOR SHORT). HOWEVER, NONE WAS PRESENT FROM THE ASSESSEES SIDE. IN THE ABSENCE OF ANY REPRESENTATI ON FROM ASSESSEES SIDE, AT THE TIME OF HEARING BEFORE US, WE HEARD THE LD. SR. DR; WHO RELIED UPON THE ORDER DATED 20.12.2011 OF THE ASSESSING OFFICER AND THE AFORESA ID IMPUGNED ORDER DATED 30.01.2015 OF THE LD. CIT(A). AFTER PERUSAL OF THE MATERIALS ON RECORD, INCLUDING THE ORDER OF THE AO AND THE AFORESAID IMPUGNED ORDER DA TED 30.01.2015 OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS PASSED SPEAKING ORD ER ON MERITS. RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. CIT(A) HAS ALREADY BE EN REPRODUCED IN FOREGOING PARAGRAPH [B.1] OF THIS ORDER. WE FIND THAT THE LD. CIT(A) HAS GIVEN DETAILED REASONS FOR HIS DECISION ON MERITS IN THE AFORESAID IMPUGNE D APPELLATE ORDER DATED 30.01.2015 OF LD. CIT(A). DURING APPELLATE PROCEEDINGS IN INC OME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) NO MATERIAL HAS BEEN BROUGHT FOR OUR CON SIDERATION TO PERSUADE US TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY THE LD. CIT(A ) IN THE IMPUGNED ORDER ON MERIT. AFTER HEARING THE LD. DR AND AFTER PERUSAL OF MATER IALS ON RECORD, AND FURTHER, IN VIEW OF THE FOREGOING DISCUSSION, WE DECLINE TO INTERFER E WITH THE AFORESAID IMPUGNED APPELLATE ORDER DATED 30.01.2015 OF LD. CIT(A). [D] IN VIEW OF THE FOREGOING DISCUSSION, THE APPEAL FILED BY ASSESSEE IS DISMISSED. BEFORE WE PART; WE EXPLICITLY CLARIFY THAT THE ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THE APPEAL IN ACCO RDANCE WITH PROVISO TO ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 16 OF 17 RULE 24 OF INCOME TAX (APPELLATE TRIBUNAL), RULES, 1963. IF THE ASSESSEE DOES APPROACH ITAT FOR RESTORATION OF THE APPEAL IN ITAT, THE MATTER WILL BE CONSIDERED IN ACCORDANCE WITH LAW HAVING REGARD TO THE FACTS AND CIRCUMSTANCES. [E] IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/ 19 SD/- SD/- (AMIT SHUKLA ) (ANAD EE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 04/10/19 POOJA/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 2402/DEL/2015. SH. UMESH ARORA VS. ACIT PAGE 17 OF 17 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 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 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