ITO, New Delhi V. Shri Mohan Malhotra, New Delhi

ITA 254/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87060 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 17-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Keywords: Gift; Opportunity of being heard; Accommodation entries; Onus to prove; Reassessment proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E, NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.254/DEL/2012 ASSESSMENT YEAR : 2003-04 ITO, WARD 31(3), VS. MOHAN MALHOTRA, NEW DELHI A-1502, STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI GIR / PAN:AAKPM7438A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. DAM KANUNJHA, SR. DR RESPONDENT BY : NONE DATE OF HEARING : 18.03.2015 DATE OF PRONOUNCEMENT : 25.03.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LD. CIT(A) DATED 28.11.2011. THE REVENUE IS AGGRIEVED WITH TH E ACTION OF LD. CIT(A) BY WHICH HE HAD DELETED THE ADDITION OF RS.35,28,83 2/- MADE BY A.O. U/S 68 OF THE ACT FOR UNEXPLAINED DEPOSITS N THE BANK ACCO UNT OF THE ASSESSEE. 2. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOW EVER, WITH THE ASSISTANCE OF LD. D.R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, WE OBSERVED THAT THE MATTER CAN BE DISPOSED OFF EX-PAR TE QUA ASSESSEE. 3. LD. D.R. AT THE OUTSET SUBMITTED THAT THE A.O. H AD CLEARLY HELD THAT DEPOSITS MADE IN VARIOUS BANK ACCOUNTS OF ASSESSEE WAS UNEXPLAINED AND ASSESSEE HAD NOT EXPLAINED THE SOURCE OF DEPOSITS A ND LD. CIT(A) HAD ALSO ITA NO.254/DEL/2012 2 NOT DISCUSSED ABOUT THE MERITS OF THE CASE AND HAD SIMPLY ALLOWED RELIEF BY JUST STATING THAT ASSESSEE HAD DISPOSED OFF THE BUR DEN OF PROOF BY STATING THAT AMOUNTS WERE RECEIVED BY HIM AS GIFTS THEREFORE, I T IS A FIT CASE FOR RESTORING THE SAME TO A.O. FOR RE-ADJUDICATION. 4. WE HAVE HEARD LD. D.R. AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE A.O. ON THE BASIS OF SPEC IFIC INFORMATION FROM INVESTIGATION WING OF THE DEPARTMENT HAD REOPENED T HE CASE OF ASSESSEE AND DURING REASSESSMENT PROCEEDINGS; THE A.O. OBSERVED THAT BESIDES THOSE ACCOMMODATION ENTRIES THE ASSESSEE HAD DEPOSITED CA SH WITH PUNJAB & SINDH BANK IN CURRENT ACCOUNT NO.29 AND SAVING BANK ACCOU NT NO.10001. VARIOUS AMOUNTS ON VARIOUS DATES WERE DEPOSITED FOR WHICH NO EXPLANATION WAS SUBMITTED BY ASSESSEE DESPITE THE FACT THAT A.O . HAD PROVIDED SUFFICIENT NUMBER OF OPPORTUNITIES TO THE ASSESSEE. LD. CIT(A ) HAS ALLOWED RELIEF BY HOLDING AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER, WRITTEN SUBMISSIONS AND CASE LAWS REFERRED BY AR. P RIMA FACIE, THE APPELLANT HAS DISCHARGED THE BURDEN OF PROOF BY STA TING THAT GIFTS WERE RECEIVED BY HIM. HOWEVER, THE ASSESSING OFFICER HAS NOT MADE AN ATTEMPT TO GO BEYOND THE EVIDENCE FURNISHED BY THE APPELLANT AND DID NOT BRING ANY MATERIAL CONTRARY ON RECORD IN CONTEN TION TO THE APPELLANT'S PLEA. I HAVE ALSO CALLED FOR THE ASSESS MENT RECORD FOR THE YEAR UNDER CONSIDERATION AND FOUND THAT THE ASSESSI NG OFFICER HAS NOT ASKED FOR THE PRODUCTION OF BOOKS OF ACCOUNT, INSPI TE OF THE FACT THAT THE APPELLANT BEING A PROPRIETOR OF A CONCERN BY NA ME M/S. LINK ESTATE AGENCY FROM WHERE HE DECLARED COMMISSION REC EIPTS IN HIS RETURN. IN THE COURSE OF THE APPELLATE PROCEEDINGS, IT IS OBSERVED THAT THE APPELLANT IS NOT MAINTAINING ANY BOOKS OF ACCOU NTS. I FIND FORCE IN THE CONTENTION OF THE AR THAT FOR MAKING AN ADDITIO N U/S 68, THE CONDITION FOREMOST AND PRECEDENT IS THE EXISTENCE O F BOOKS OF ACCOUNT. SECTION 68 OF THE IT ACT 1961 CLEARLY STIPULATES AS UNDER: ITA NO.254/DEL/2012 3 'WHETHER ANY SUM IS FOUND CREDITED IN THE BOOKS OF ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR'. HENCE TO ATTRACT SECTION 68, EXISTENCE OF BOOKS OF ACCOUNT IS A PREREQUISITE CONDITION AND IF THE BOOKS OF ACCOUNTS ARE NOT MAINTAINED OR REQUIRED NOT TO BE MAINTAINED, SECTION 68 CANNOT BE PRESSED INTO OPERATION. IN MY OPINION, IN THE PRESENT CASE, AN I NFORMATION GIVEN HAS NOT BEEN UTILIZED TO ENQUIRE OR INVESTIGATE GIV EN HAS NOT BEEN UTILIZED TO ENQUIRE OR INVESTIGATE TO BRING MATERIA L ON RECORD TO SUPPORT SUCH INFORMATION. THE INFORMATION WAS MEREL Y PICKED UP AS IT IS AND WAS SUBJECTED TO AN ADDITION TO THE INCOME O F THE APPELLANT WITHOUT ANY BASIS. ALSO SINCE THE APPELLANT DID NOT MAINTAIN BOOKS OF ACCOUNT, IN MY OPINION AND VIEW, THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 CANNOT SUSTAIN AS A VALID ONE. IN TH E PRESENT CASE, I RELY ON THE JUDICIAL PRONOUNCEMENTS CITED IN THE FOLLOWI NG CASES: I) MS. MAYAWATI VS. DCIT (2008) 19 SOT 460 (DEL) II) SAMPAT AUTOMOBILE VS. ITA (2005) 96 TIJ 368 (JODH) III) SHERTON APPARELS VS. CIT (2002) 256 ITR 20 (MU M) III) CIT VS. BHAI CHAND H. GANDHI (1983) 141 ITR 67 (BOM ) IV) DY. CIT. VS. MS MAYAWATI (2010) 42 SOT 74 (DEL) V) SMT. MADHU RAITANI VS. ACIT (2011) 10 ITR (TRIB.) 91 (GUAHATI) IN VIEW OF ABOVE DISCUSSION AND ALSO ON THE BASIS O F FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE AD DITION U/S 68 MADE BY THE AO IS INVALID IN LAW AND RESPECTFULLY FOLLOW ING THE DECISION OF THE HON'BLE ITAT, DELHI AND THE HON'BLE HIGH COURTS CITED SUPRA THE ADDITION MADE U/S 68 AMOUNTING TO RS.35,28,832/- IS HEREBY DELETED. 5. FROM THE ABOVE FINDINGS OF LD. CIT(A), WE FIND T HAT LD. CIT(A) HAS NOT DISCUSSED ANYTHING ABOUT MERITS OF THE CASE AND SIMPLY HAS ALLOWED THE RELIEF BY HOLDING THAT SECTION 68 CANNOT BE ATTRACT ED WHERE BOOKS OF ACCOUNTS WERE NOT MAINTAINED. THE ASSESSEE NEITHER BEFORE A.O. NOR BEFORE LD. CIT(A) HAD SUBMITTED ANY EXPLANATION. BEFORE A .O. AND LD. CIT(A), THE ASSESSEE HAD SUBMITTED THAT CERTAIN AMOUNT WERE RECEIVED AS GIFTS FROM ITA NO.254/DEL/2012 4 FRIENDS AND RELATIVES AND THE SUBMISSIONS BEFORE LD . CIT(A) HAS ALSO NOT BEEN CONFRONTED TO A.O., THEREFORE, IN OUR OPINION, THE MATTER NEEDS TO BE RE- ADJUDICATED BY A.O. AND ACCORDINGLY, WE REMIT THE C ASE TO THE OFFICE OF A.O. FOR RE-ADJUDICATION. NEEDLESS TO SAY THAT ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. IN VIEW OF ABOVE, APPEAL FILED BY REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOO R) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 25 TH MARCH, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 19/3 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 19,20,23 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 25/3 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 25/3 SR. PS/PS 7 FILE SENT TO BENCH CLERK 25/3 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER