I J PAINT INDUSTRIES, DELHI V. INCOME TAX OFFICER WARD 29(5), DELHI

ITA 2467/DEL/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5171 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-11-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 29-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131; 144; 2; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.2467/DEL/2023 Assessment Year 2017-18 I J Paint Industries, A-93, Okhla Industrial Area, Delhi. Vs. ITO, Ward-29(5), Delhi. TAN/PAN: AAAFI9884Q (Appellant) (Respondent) Appellant by: Shri Nitin Gulati, Adv. Respondent by: Shri Om Parkash, Sr.DR Date of hearing: 23 11 2023 Date of pronouncement: 23 11 2023 O R D E R PER PRADIP KUMAR KEDIA-A.M. : T he c a p t i o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f t h e Co m mi ssi on er o f I nc o m e Ta x (A p pe al s) , N at i on al F ac e l es s A pp e a l C e n tr e, D e lh i ( ‘ C IT ( A ) ’ in sh or t ) da t e d 0 8. 08 . 20 2 3 a ri si n g fr o m t h e a sse ss me nt or de r da t ed 0 7. 1 2 . 20 1 9 p a s se d by t h e A sse s si n g O ff i ce r ( A O ) un de r S e c t i on 14 3 (3 ) o f t he I n c o m e T a x A c t , 19 6 1 ( t h e A c t ) c on c e rn in g A Y 20 17- 18 . 2. T h e a s se ss e e ha s fi le d c o nc i se g r ou n d s o f ap pe al i n t he c ap ti on e d a p pe a l w h ic h i s r e p r od uc e d he r e u n d e r : “ 1 . T h a t t h e a s s e s s m e nt o r d e r i s b ad i n l a w a n d a g ai n s t t he p r i n c ip a l of n at u r a l j u s t i c e r e q ui r i n g r e c t i f i c at io n / s e t a s i d e of a d di t i on s , a n d i n t e r e s t , p e n a l ty t h e r e o n a nd l d . CI T ( A ) h a s e r r e d i n up h ol d i ng t he s am e . 2 . T h at t h e N o t i c e un de r s e c ti o n 1 4 3 ( 2 ) d at e d 22 / 09 / 20 1 8 o f t he i n c om e t ax ac t w a s m ai l e d t o A p p e l l an t f o r c o m p ut er a i d e d s c r u t in y r e g a r d i ng l a r g e c a s h d e p os i t e d d u r i n g de m on e ti z at i on t he s am e w a s r e p l i e d v i d e e -p r o c e e d i n g r e s po ns e as un der . (i ) A pp e l l an t f ir m h a s m ai n t ai n e d p r o p e r bo ok s of ac c ou nt s a n d a r e du l y a u d it e d I.T.A. No.2467/Del/2023 2 (i i ) A p p e l la n t fi r m a r e c ov e r e d u nd e r t he p r o v i s i o n s o f v at . (i i i ) A p p e ll a n t fi r m s a l e ha s i n c r e a s e d n e ar D i w a l i. (i v ) A pp e l l a n t f i r m s ' de p o s i t i n a c c ou n t ar e al s o su p po r t e d by pa y m e n t of t a x a t i o n o f v at . (v ) an y o th e r i n f or m at i o n f r o m u s i s m os t w e l c o m e . Th e s a id f a c t s w e r e i g no r e d by th e A s s e s s i n g o f f i c er a nd a n d L d . C I T ( A ) h a s e r r e d i n u ph o l di n g t h e s a m e . 3. Th a t n ot i c e u/ s 1 4 2 (1 ) d a te d 07 / 02 / 2 0 1 9 a nn e x i ng t h e an n e x u r e c al l i ng f o r t he i n f or m at i o n f r o m A p p e l l a nt h a s be e n r e p l ie d b y m ai l do w n l o ad i ng t h e r e q u i s i t e p a ge s o f l e d ge r b a n k s t ate m e n t s e t c . N o de f i c i e nc y i n s ai d pa p e r s h a v e be e n po i nt e d ou t i n t h e or d e r ju s t i f y i n g t he a d d i ti o ns t h e r e by . Th e f a c t h as b e en o v e r l o o k e d by th e A s s e s s i n g of f i c e r a nd L d . C I T ( A ) h as e r r e d i n up h ol d i ng t he s am e . 4. T h a t Ap p e l l a n t ' s c as e w a s s e l e c t e d f o r s c r u t i ny t h r o u g h c a s e s fo r l i m i t e d s c r u t in y f or l a r g e c as h d e p o s i t e d d ur ing de m o n e ti z a t i o n of R s . 3 4 , 0 9, 0 0 0/ - i nc o m e h a s b e e n a s s e s s e d to R s . 34 ,6 5, 1 3 0 / - (r e t u r n e d i n c o m e R s . 56 1 30 / - a dd i t i on R s . 3 4 , 0 9 , 0 0 0/ - ) i n c om p u t at i o n s he e t i n c o m e f r o m ot h e r s o ur c e s h as be en s h o w n R S 68 , 1 8 , 0 00 / - an d t he ad d it i o n of t he s am e t o i nc o m e f r om b u s i n e s s as p e r i nc o m e t ax r e t u r n R s . 56 1 31 h a s be e n s um m e d up a n d in c r e a s e d t h e to t a l i n c om e t o R s 1 3 6 , 3 6, 0 0 0/ - in t he a s s e s s m e nt or d e r a n d Ta x p ay a bl e R s 1 , 0 5 , 51 , 15 4 /- i s c a l c ul a t e d, w h i c h i s ag ai n s t t h e l i m i t e d s c r u t i ny p r o c e e di n gs an d t he add i t i o n o f 68 , 1 8 , 0 00 a s ab o v e n o w h e r e e x pl a i ne d i n t h e or de r . T hi s i s f u r t h e r ag ai n s t t h e l a w an d e r r o ne o us . T hi s al s o s h ow s c o m pl e t e n o n ap pl i c a t i on of m i n d b y t he A s s e s s i n g o f f ic e r an d L d. C I T (A ) h a s e r r e d i n u ph o ld i n g t h e s a m e . 5. Th a t N o n o t i c e r e c e i v e d u / s 1 4 2 (1 ) d a t e d n il a nd s h ow c au s e no t i c e u / s 1 4 4 of t he a c t a s m e nt i o ne d i n a s s e s s m e nt o r d e r u / s 14 3 ( 3 ) d at e d 0 7 /1 2 / 2 0 19 . E v e n p e r us al of s i t e of i nc o m e t a x p or t al no s u c h n ot i c e e x i s t s . Th e s a i d f a c t h a s be e n i gn o re d b y t he A s s e s s i n g of f i c e r a n d Ld . C I T ( A ) h a s e r r e d i n u p h o ldi n g t h e s a m e 6. T ha t P ay m e n t of s a i d de p os i t i s n o w h e r e s h ow n as a d d i t i on s /d e p os it s i n ba l an c e s h e e t e x c e pt t o a d d i t i o n of s al e f i g ur e i n t he pr o f i t l o s s ac c o un t a n d t he A pp e l l a n t i s c ov e r e d unde r t a x a t i on of v at t h e a d di t i o ns as s ai d i s w i t h o u t . 7 . Th at t he ap p e l l a n t r e s e r v e s t h e r i gh t t o a d d a lt e r a nd a m e n d o r t o de l e t e a n y o r al l t he g r o u n ds o f a p pe a l o n o r be f o r e t he d a t e of h e ar i ng . ” 3. When the ma tte r w as cal led f or he arin g, the ld. cou ns el at the ou tse t s ubmi t te d t hat the assess ee is enga ge d in t he busi ness of I.T.A. No.2467/Del/2023 3 ma nufactu ri ng of pai nt, pu tt y and t hinne r. T he re t urn filed by the assessee decla ring to ta l inco me at R s. 1, 23, 760/- was s ubjecte d t o limite d scr ut in y assess me nt. In t he c ours e of the scruti ny assess me nt, the AO called for t he deta ils of cas h deposits du ri ng the de mo nizat ion period w hich de tai ls we re dul y fi led as can be seen from the o bservations in pa ra gra ph 3 of t he assess me nt o rde r. The A O how ever therea fter invoke d provis ions of Section 1 44 all eg in g n on subm issi on of c omplete de tails. T he A O ul ti ma tel y passed t he o rde r under Secti on 143 (3) of the A ct which i mpl ies that the deta ils were f il ed as ca lle d for. T he AO ma de an additi on of Rs. 34, 09, 00 0/- deposit ed i n cas h during de monet iza ti on pe ri od all eg in g la ck of ge nuinene ss towa rds sou rc e of such deposit. 4. A gg rieve d, the ass essee pre fe rre d appeal be for e the C IT(A). 4. 1 T he CIT (A ) b y a cr yptic findi ng disl od ged al l ar guments place d b y t he asse ssee t o s upport its case. The ld. c ounsel po in te d out that fi ndings of th e C IT (A ) are base d w ith pal pa bl e dis cr epa nc ies ; f ir s tl y, he has obs erved th at t he assess me nt w as co mple te d unde r Sect io n 144 of t he A ct w hi ch is untrue o n the face of i t; se condl y, t he addit io ns have be en c onfirmed on the gro und that co mpara tive anal ys is o f deposits dur ing the same pe ri od in las t t hree yea rs were not p rovided. In t his regard, the ld. counse l submi tted tha t no details w ere ever ca ll ed f or a nd ther ef ore, no o pportunit y w as made ava il able to t he a ssessee t o justi f y the so urce of de posi ts ; t hirdl y, the ld. C IT (A ) has f ai led t o appl y hi s mind t o the fact t ha t the c ash de posi t is s ourced ou t of cash sales w hic h is alread y t axe d in the ord in ar y cours e and impug ned a ddi tio n h as th e ef fect of double a ddi tio n. T he l d. counse l t hus s ou ght approp riate r el ief in the ma tt er. I.T.A. No.2467/Del/2023 4 5. T he ld. D R for the Revenue, on the ot he r ha nd, supported the order of th e C IT (A ) a nd that of A O and sub mi tted that faul t l ies at the doorste ps of t he assess ee fo r non fu rnis hi ng of re lev ant detai ls. T he l d. D R thus s ubmi tted tha t no inte rfe re nc e is cal le d for. 6. I h ave c are fu ll y consi de red the releva nt s ubmissions and pe rus ed t he mat eri al avai lable on record. 7. I find me rit in t he pl ea of the as sessee towards la ck of opportunit y t o jus tif y the bona fides of cas h de posi ts. O n perus al, it a ppears that th e assesse e did fi le certa in docu me nts, le dge r accounts, bank s tat e me nts, cas h book etc. to expla in t he sour ce of depos it. Ostensibly, the C IT (A ) has no t dea l t with the doc uments in proper p er spect ive. 8. U nder t he ci rcums tances, wit hout expressing a ny opini on on me rits, I cons ide r i t expe di ent to res t ore the ma tter ba c k to t he file of the A ssess ing O ffi cer for fra mi ng assess me nt afresh in accorda nce w ith law after gi vi ng pro per oppor tunit y to the assessee. It s ha ll be op en to the asses see t o explai n its ent i re case af res h and pl ace al l argu me nts and adduce s uch evidences as ma y be nec essa r y for pr ope r deter mi nat ion of ta xa ble inc ome. 9. In the r esu lt, the appeal of t he a ssessee is allow ed f or sta tis ti ca l purpos es . Order was pronounced and dictated in the open Court on 23/11/2023 Sd/- [PRADIP KUMAR KEDIA] ACCOUNTANT MEMBER DATED: /11/2023 Prabhat