Gunpreet Singh, New Delhi V. ITO, Ward-1(5), Gurgaon

ITA 2731/DEL/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7850 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: R S AHUJA
• Keywords: Salary income; Accommodation entries
• Section: 142(1); 133(6); 147; 148; 144

Judgement Text

1 ITA NO. 2731/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D+ SMC NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 2731/DEL/2018 ( A.Y 2011-12) GUNPREET SINGH C-353, DEFENCE COLONY, NEW DELHI BDEPS3018Q (APPELLANT) VS ITO WARD-1(5) GURGAON HARYANA (RESPONDENT) APPELLANT BY SH. R. S. AHUJA, CA RESPONDENT BY SH. SURENDER PAL, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 29/03/2018 PASSED BY CIT(A)-1, GURGAON, FOR ASSESSMENT YEAR 20 11-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE THE L EARNED ITO & CIT (A) ERRED IN (A) MAKING AN ADDITION OF RS.5,48,000/- TO THE INCO ME OF THE ASSESSEE. (B) NOT GIVING THE REASONS RECORDED FOR THE REOPENI NG OF THE CASE. (C) NOT SERVING THE NOTICE ON THE ASSESSEE AT THE A DDRESS INTIMATED TO THE ITO. (D) THAT THE ADDITION IS AGAINST THE PRINCIPLE OF N ATURAL JUSTICE AND NEEDS TO BE QUASHED BECAUSE THE ASSESSEE HAS NOT BEEN ALLOWED T HE OPPORTUNITY TO SEE THE MATERIAL EVIDENCE AGAINST HIM AND HAS NOT GOT T HE OPPORTUNITY TO CONTEST THE SAME OR CROSS EXAMINE THE PERSON IF ANY WHO GAV E INFORMATION. THIS REQUEST WAS MADE TO CIT(A) ALSO THAT SINCE HE HAS T HE POWERS WHICH ARE CO- TERMINOUS WITH THAT OF INCOME TAX OFFICER HOWEVER N O ACTION HAS BEEN TAKEN DATE OF HEARING 19.09.2018 DATE OF PRONOUNCEMENT 27.09.2018 2 ITA NO. 2731/DEL/2018 BY THE CIT(A) ALSO. (E) NOT EXERCISING HIS POWERS U/S 133(6) TO GET CON FIRMATION FROM M/S KARISHMA DIAMOND P. LTD. WHICH IS A PRIVATE LIMITED COMPANY. MERE SUSPICION CANNOT LEAD TO ADDITION. (F) NOT CONSIDERING THE FACT THAT THE ASSESSEE IS A YOUNG QUALIFIED GEMOLOGIST WHO IS 29 YEARS OF AGE TODAY & WAS 22 YEARS OLD DUR ING THIS A.Y. HIS FINANCIAL AND ACCOUNTING AFFAIRS WERE BEING LOOKED AFTER BY HIS FATHER MR. J. P. SINGH. HE HAD ABSOLUTELY NO IDEA OF ACCOUNTS AND FI NANCE. THERE IS ALSO A DISPUTE NOW BETWEEN THE FATHER AND THE ASSESSEE AND ASSESSEE HAS NO ACCESS TO HIS ACCOUNTS. 3. THE RETURN OF INCOME DECLARING INCOME OF RS.6,10 ,670/- WAS FILED BY THE ASSESSEE FOR A.Y. 2011-12. THE ASSESSING OFFICER RE CEIVED INFORMATION THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY IN THE FORM OF BOGUS BILLS AMOUNTING TO RS.5,48,000/- FROM M/S KRISHMA DIAMOND PVT. LTD. DURING THE F.Y. 2010- 11. THE ASSESSING OFFICER ACCORDINGLY RECORDED REAS ONS AND ISSUED NOTICE UNDER SECTION 148 AFTER TAKING APPROVAL OF THE COMP ETENT AUTHORITY. THERE WAS NO COMPLIANCE FROM THE ASSESSEE. THE ASSESSING OFFI CER, THEREAFTER, ISSUED NOTICE UNDER SECTION 142(1) ALONG WITH QUESTIONNAIR E. ONCE AGAIN THERE WAS NO COMPLIANCE. THE ASSESSING OFFICER ISSUED A SHOW CAU SE NOTICE PROPOSING ADDITION OF RS. 5,48,000/-. THERE WAS NO COMPLIANCE TO THE SHOW CAUSE NOTICE ALSO. THE ASSESSING OFFICER ACCORDINGLY, ADDED AMOU NT OF RS. 5,48,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER ACTED ONLY ON THE INFORMATION MENTIONED IN THE RE-OPENING. THE LD. AR FURTHER SUBMITTED THAT LAYERING OF THE FUNDS DISCUSSED BY THE ASSESSING OF FICER IS TOTALLY CONTRADICTORY TO THE DOCUMENTS/AUDITED ACCOUNTS PRODUCED BEFORE T HE ASSESSING OFFICER. THE LD. AR POINTED OUT FROM THE PAPER BOOK THAT THE REA SONS AND RE-OPENING IS ON TOTALLY DIFFERENT FOOTINGS. THERE WAS NO DETAIL OF INFORMATION GIVEN BY THE 3 ITA NO. 2731/DEL/2018 ASSESSING OFFICER AND THERE IS NO APPLICATION OF MI ND ON PART OF THE ASSESSING OFFICER. THE LD. AR FURTHER SUBMITTED THAT THERE IS NO ALLEGATION IN REASONS RECORDED THAT THERE WAS FAILURE ON PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT U/S 147 OF THE ACT. THE LD. AR SUBMITTED THAT THIS PRESENT ASSESSMENT YEAR IS THE FIRST YEAR OF BUSINESS THEREFORE THERE IS NO OPENING STOCK DESCRIBED IN TH E BALANCE SHEET AND THE ASSESSING OFFICER HAS TAKEN THE FIGURES OF THE SALE S, BUT OVERLOOKED THE BALANCE SHEET SHOWING THAT THE OPENING STOCK IS NIL. THE LD . AR RELIED UPON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN CASE OF RAJMANDIR ESTATES PVT. LTD. VS. PR. CIT (2016) 386 ITR 162 (CAL) AND HONB LE DELHI HIGH COURTS DECISION IN CASE OF NDTV VS. DCIT & ANR. (2017) 298 CTR 230. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE REASONS RECORDED BY THE AS SESSING OFFICER ARE AS UNDER: ANNEXURE SHRI GUNPREET SINGH, C/O M/S GREEN CARRIER AND CONT RACTORS PVT. LTD., H. NO.51, SAINI FARM, KHANPUR MEHRAULI BADARP UR ROAD, DELHI-110062. ASSESSMENT YEAR 2011-12 PAN-BDEPS3018Q RETURN DECLARING AN INCOME OF RS. 6,02,450/- WAS F ILED BY THE ASSESSEE ON 2809.2011 AND THE SAME WAS PROCESSED U/S 143(1) OF I. T. ACT, 1961 AS SUCH. LATER ON, IT HAS COME TO NOTICE THAT THE ASSESSEE H AS TAKEN ACCOMMODATION ENTRIES IN THE FORM OF BOGUS BILLS FROM M/S KARISHM A DIAMOND PVT. LTD. AMOUNTING TO RS.5,48,000/-. FROM THE PERUSAL OF RETURN OF INCOME OF THE ASSESS EE FOR THE ASSESSMENT 2011-12, IT IS SEEN THAT THE ASSESSEE HAS SHOWN OPE NING STOCK OF RS. 4,14,86,563/- WHEREAS IN THE IMMEDIATELY PRECEDING YEAR, THE ASSESSEE HAD 4 ITA NO. 2731/DEL/2018 DECLARED INCOME FROM SALARY IN SARAL FORM AND NO BU SINESS HAS BEEN DISCLOSED. IN THE CIRCUMSTANCES, THERE IS A MISMATCH IN OPENIN G STOCK TO THIS EXTENT. THEREFORE, I HAVE REASONS TO BELIEVE THAT THE INCO ME OF THE ASSESSEE HAS ESCAPED ASSESSMENT TO THE EXTENT OF RS.4,20,34,563/ - FOR THE ASSESSMENT YEAR 2011-12 WITHIN THE MEANING OF SECTION 147 OF THE IN COME-TAX ACT, 1961. SD/- (PRAVEEN K. SHARMA) INCOME TAX OFFICER, WARD-1(4), GURGAON. THUS, IN THE ABOVE MENTIONED REASONS IT WAS CLEARLY MENTIONED THAT THE ASSESSEE WAS IN EMPLOYMENT IN EARLIER ASSESSMENT YE AR AND DRAWING SALARY. THEREFORE, THE FACT THAT THE ASSESSEE STARTED BUSIN ESS IN THIS YEAR ONLY IS REITERATED. FROM THE PERUSAL OF THE BALANCE SHEET, IT CAN BE SEEN THAT THE FIGURE OF RS.4,14,86,563/- IS A AMOUNT FOR PURCHASES WHICH WAS NOT CORRECTLY TAKEN BY THE ASSESSING OFFICER. THUS, THE ASSESSING OFFIC ER HAS TOTALLY IGNORED THE BALANCE SHEET OF THE ASSESSEE, DESPITE FILING THE A UDITED BOOKS OF ACCOUNT. THEREFORE, THE REASONS RECORDED ITSELF ARE INCORREC T AND DOES NOT SUBSTANTIATE THE RE-OPENING/REASSESSMENT. THUS, THE RE-OPENING I TSELF IS BAD IN LAW AND NEEDS TO BE QUASHED. BESIDES THAT THE ASSESSEE WAS NOT GIVEN THE OPPORTUNITY OF HEARING BEFORE THE ASSESSING OFFICER. THE ASSESS ING OFFICER WITHOUT LOOKING INTO THE DOCUMENTS FILED BY THE ASSESSEE PASSED AN EX-PARTE ORDER U/S 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961. THEREFORE, THE ASSESSEE SUCCEED IN THE PRESENT APPEAL. 5 ITA NO. 2731/DEL/2018 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH SEPTEMB ER, 2018. SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 27/09/2018 R.N* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 2731/DEL/2018 DATE OF DICTATION 19.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.09.2018 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 2 8 .09.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 8 .09.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 8 .09.2018 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