Avinash Chaudhry, Ghaziabad V. ITO, Ward-1(1), Ghaziabad

ITA 2645/DEL/2018

AI Insights

The case involves Avinash Chaudhary, the appellant, who contested the additions made to his income for the Assessment Year 2009-10, which were confirmed by the CIT(A). The primary issues were the unexplained cash deposits amounting to Rs. 39,76,185 and a capital gain of Rs. 1,58,117 on the sale of land, which the assessee argued were recorded based on incorrect facts and without adhering to the principles of natural justice. The Tribunal, after considering the submissions and the records, upheld the decisions of the lower authorities, dismissing the appeal on grounds that the assessee failed to provide satisfactory explanations for the cash deposits and mischaracterized the nature of the capital gain.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113175 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-10-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence
• Section: 147

Judgement Text

I.T.A. No. 2645/Del/2018 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER आ .अ.स ं /.I.T.A No.2645/Del/2018 /Assessment Year:2009-10 Avinash Chaudhary C/o M/s Sanjeev Anand & Associates,, 77, Navyug Market, Ghaziabad, Uttar Pradesh. ब म Vs. ITO Ward 1(1) Ghaziabad, Uttar Pradesh. PAN No. AGEPC3342F अ Appellant /Respondent Assessee by None Revenue by Shri Kanv Bali, Sr. DR स ु नवाईक तारीख/ Date of hearing: 11.10.2023 उ ोषणाक तारीख/Pronouncement on 17.10.2023 आदेश /O R D E R PER C.M. GARG, J.M. This appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Noida dated 27.02.2018 for AY 2009-10. 2. When the case was called for hearing neither the assessee nor any Authorized Representative or Counsel appeared nor any adjournment application has been filed despite due service of notice several times. Therefore, we proceed to decide appeal ex I.T.A. No. 2645/Del/2018 2 parte qua the assessee after hearing the submissions of Ld. Sr. DR on behalf of the Department. 3. Though the assessee has raised as many as seven grounds in this appeal but except ground no. 3 to 6 others are argumentative and supportive to the main grounds which are as follows: - “3. That having regard to the facts and circumstances of the case, Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.39,76,185/- allegedly on the ground that the cash deposits are unexplained and that too by recording incorrect facts and findings and without observing the principles of natural justice. 4. That in any case and in any view of the matter, action of Ld.CIT(A) in confirming the addition of rs.39,76,185/- allegedly on the ground that assessee has failed to explain the cash deposit, received from his grandfather and out of cash withdrawals from the bank of assessee, is bad in law and against the facts and circumstances of the case. 5. That having regard to the facts and circumstances of the case, Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.1,58,117/- allegedly on the ground that the assessee has earned long term capital gain on sale of land and too by recording incorrect facts and findings and without observing the principles of natural justice. 6. That in any case and in any view of the matter, action of Ld.CIT(A) in confirming the addition of Rs.1,58,117/- as long term capital gain which in fact is a short term capital loss, is bad in law and against the facts and circumstances of the case.” I.T.A. No. 2645/Del/2018 3 Ground No. 3 & 4 of assessee: - 4. From the orders of the authorities below as well as grounds, we note that the assessee has contended that the Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.39,76,185/- allegedly on the ground that the cash deposits are unexplained that and that too by recording incorrect facts and findings without observing the principles of natural justice. It has also been contended that the Ld.CIT(A) has grossly erred in confirming the addition on the ground that the assessee has failed to explain the cash deposits, received from his grandfather and out of cash withdrawals from the bank account of assessee. Therefore, the orders of the authorities below are bad in law and against the facts and circumstances of the case. 5. The Ld. Sr. DR supporting the orders of the authorities below submitted that since the assessee has failed to explain the source of cash deposits to his bank account, therefore, the addition made by the AO may kindly be upheld. 6. On careful consideration of above submissions, findings and observations recorded by the AO as well as Ld.CIT(A), we note that the AO made addition of Rs.43,54,000/- on account of cash deposits I.T.A. No. 2645/Del/2018 4 to the bank account of assessee. The assessee carried the matter before the Ld.CIT(A) and the part addition of Rs.6,13,330/- was deleted extracting the disallowance of Rs.39,76,185/- in the hands of the assessee. From the orders of the authorities below, we clearly note that the Ld. CIT(A) after considering the basis taken by the AO calling remand report on the additional evidence filed by the assessee during first appellate proceedings and rejoinder of the appellant. It was held that the appellant is not engaged in the business activity and entire credits found to the bank account of assessee remained unexplained, therefore, the Ld.CIT(A) after giving part relief to the assessee uphold the remaining part of addition. We are unable to see any ambiguity, perversity or any other valid reason to interfere with the findings arrived by the Ld.CIT(A) and thus, be uphold the same. Accordingly, ground no.3 & 4 of assessee are dismissed. Ground No. 5 & 6 : 7. From the orders of the authorities below as well as grounds, we note that the second grievance of assessee is that the Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.1,58,117/- on the ground that the assessee has earned long term capital gain on sale of land that is too by recording incorrect facts I.T.A. No. 2645/Del/2018 5 and findings and without observing principles of natural justice. It has also been alleged that the Ld.CIT(A) has erred in confirming the said addition as long term capital gain which in fact is a short term capital loss, therefore, the action of the AO being bad in law and against the facts and circumstances of the case may kindly be dismissed by allowing grounds of assessee. 8. Replying to the above, the Ld. Sr. DR supported the action of the AO and submitted that the AO made addition of Rs.9,81,020/- on account of capital gain arises on the sale of property. He further contented that the Ld.CIT(A) after considering the entire facts and circumstances of the issue while adjudicating the ground no. 4 of assessee as per Form 35 rightly held that the proportionate long term capital gain in the hands of the assessee come to Rs.1,58,117/- granting major part of relief. The Ld. Sr. DR submitted that the calculation approved by the Ld.CIT(A) was given by the assessee himself, therefore, no interference is called for therein. 9. On careful consideration of above submission, we note that in para 4.27 of first appellate order the Ld.CIT(A) has restricted the addition of Rs.1,58,117/- granting major part of relief to the assessee and such amount was computed as per submissions and I.T.A. No. 2645/Del/2018 6 additional evidence filed by the assessee himself. Therefore, we are unable to see any valid reason to interfere with the findings returned by the Ld.CIT(A) on this issue. Accordingly, ground no. 5 & 6 of assessee are also dismissed. Ground No. 1& 2 of assessee : 10. Ground no. 1 & 2 of assessee are as follows: 1. “That having regard to the facts and circumstances of the case, Ld.CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned reassessment order u/s 147/144 and that too without assuming jurisdiction as per law and without complying with the mandatory conditions u/s 147 to 151 as envisaged under the Income Tax Act, 1961. 2. That in any case and in any view of the matter, action of Ld.CIT(A) in confirming the action of Ld. AO in framing the impugned reassessment order u/s 147/144, is bad in law and against the facts and circumstances of the case.” 11. Apropos these grounds it has been alleged by the assessee that the Ld.CIT(A) has erred in law and on facts in confirming the reassessment order passed u/s 147/144 of the Act which was passed by the AO without assuming valid jurisdiction and complying with the mandatory conditions as per provisions of section 147 to 151 of the Act. It has also been contended that the Ld. First Appellate Authority has erred in confirming the action of the AO in framing I.T.A. No. 2645/Del/2018 7 the impugned reassessment order which is apparently bad in law and not sustainable. 12. Replying to the above, the Ld. Sr. DR drew our attention towards para 4.7 to 4.14 of first appellate order and submitted that the Ld.CIT(A) has categorically noted that the case laws relied upon the assessee was not applicable to the facts of the present case. He also submitted that after evaluation of legal contentions of assessee the Ld.CIT(A) rightly dismissed ground no. 1 & 2 of assessee. 13. On careful consideration of submissions, we note that the Ld.CIT(A) in para 4.10 has reproduced the relevant part of the reasons recorded by the AO for initiation of reassessment proceedings u/s 147 of the Act. From the reasons, it is clear that the reason to believe was on the basis of information regarding certain cash transactions in the bank account of assessee and the assessee did not file any return of income and for the reason assessee did not file return of income for AY 2009-10. We are unable to see any valid reason to interfere with the findings recorded by the Ld.CIT(A) while dismissing the ground no. 1 & 2 of assessee and upholding the action of the AO for initiation of I.T.A. No. 2645/Del/2018 8 reassessment proceedings. Accordingly, ground no. 1 & 2 of assessee are also dismissed. 14. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 17.10.2023 Sd/- Sd/- (G.S. PANNU) (C.M. GARG) PRESIDENT JUDICIAL MEMBER Dated: 17.10.2023 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi