ITO, New Delhi V. Sh. Rakesh Aggarwal, New Delhi

ITA 2929/DEL/2011

• Counselvise Citation: 292920114 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Business income
• Section: 143(3)

Judgement Text

ITA NO. 2929/ DEL/ 2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 2929 /DEL/20 1 1 A.Y. : 200 7 - 0 8 INCOME TAX OFFICER, WARD 2 1 (1), NEW DELHI VS. SH. RAKESH AGGARWAL, D - 14/103, SECTOR - 8, ROHINI, DELHI (PAN: AFIPA0364G) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY, SR. D.R. ASSESSEE BY : NONE DATE OF HEARING : 06 - 0 1 - 201 5 DATE OF ORDER : 0 9 - 01 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XXII , NEW DELHI DATED 11.3.2011 P ERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 . 2. THE GROUNDS OF APPEAL READ AS UNDER: - THE ASSESSING OFFICER, WARD 21(1), NEW DELHI IS HEREBY DIRECTED TO FILE AN APPEAL IN THE ABOVE MENTIONED CASE BEFORE THE ITAT, NEW DELHI ON THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTR ICTING THE ADDITION ITA NO. 2929/ DEL/ 2011 2 FROM RS. 12,79,350/ - (RS. 11,53,350/ - + RS. 1,26,000/ - TO RS. 2,96,078/ - BY COMPUTING INCOME FROM 4 (FOUR) VEHICLES UNDER SECTION 44AE(7) WITHOUT COGENT REASONS AND WITHOUT GIVING FINDINGS THAT THE ASSESSEE HAD ONLY DECLARED HIS TOTAL I NCOME OF RS. 1,27,792/ - OUT OF GROSS BUSINESS RECEIPTS OF RS. 7,20,500/ - FROM THE BUSINESS OF DAIRY PRODUCTION IN THE NAME AND STYLE OF M/S AGGARWAL DAIRY IN VIOLATION OF PROVISIONS OF RULE 46A(3) OF THE INCOME TAX RULES, 1962. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND AMEND, ALTER OR ADD ANY OTHER GROUND OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT FILED HIS RETURN OF INCOME FOR THE A.Y. 2007 - 08 ON 23.10.2007 AT AN INCOME OF RS. 1,27,792/ - . THE ASSESSING OFFICER HAD RECEIVED AIR INFORMATION THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 11,53,350/ - IN HIS SAVING BANK ACCOUNT W ITH THE SOUTH INDIAN BANK LTD., ROHINI, DELHI 110 085 ON THE BASIS OF WHICH THE CASE WAS SELECTED FOR SCRUTINY. IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE, IN HIS RETURN, HAD SHOWN ONLY INCOME FROM DAIRY BUSINESS IN THE NAME OF M/S AG GARWAL DAIRY. ON BEING ASKED ABOUT THE NATURE AND SOURCE OF CASH DEPOSITED IN HIS SAVINGS BANK ACCOUNT, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAD THREE VEHICLES AND THE CASH DEPOSITED REPRESENTED THE RECEIPTS FROM RUNNING OF THE V EHICLES ON HIRE IN A BUSINESS OF TOUR AND TRAVEL. THE ASSESSING OFFICER DID NOT FIND THE EXPLANATION OF THE ASSESSEE TO BE SATISFACTORY AND MADE ADDITION U/S. 69A OF THE I.T. ACT OF RS. 11,53,350/ - TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER AL SO OBSERVED THAT THE ASSESSEE HAD NOT SHOWN ANY INCOME ITA NO. 2929/ DEL/ 2011 3 FROM THE THREE VEHICLES IN HIS RETURN OF INCOME AND MADE A FURTHER ANOTHER ADDITION @ RS. 3500/ - PER MONTH PER VEHICLE AND ADDED THE AMOUNT OF RS. 1,26,000/ - TO THE INCOME OF THE ASSESSEE. THE ASSESSM ENT PROCEEDINGS WERE COMPLETED U/S. 143(3) OF THE I.T. ACT AT AN INCOME OF RS. 14,07,310/ - . 4. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). LD. CIT(A) ELABORATELY DISCUSSED THE ISSUES IN HIS ORDER AND ACCORDINGLY, RESTRICTED TH E ADDITION FROM RS. 12,79,350/ - (RS. 11,53,350/ - + RS. 1,26,000/ - ) TO RS. 2,96,078/ - BY PARTLY ALLOWING THE ASSESSEE S APPEAL VIDE ORDER DATED 1 1 . 3 .20 11 . 5 . AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. THE CASE CAME UP FOR HEARING ON 06.1.2015 FOR WHICH REGISTERED NOTICE WAS SENT TO THE ASSESSEE, BUT NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION FOR ADJOURNMENT FILED BY THE ASSESSEE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE VI EW THAT NO USEFUL PURPOSE WILL BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE AND THEREFORE, WE ARE DECIDING THE APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR. 6.1 LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7 . WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT RECORDS, ORDERS OF THE REVENUE AUTHORITIES . WE FIND THAT THE ASSESSING OFFICER HAD RECEIVED AIR INFORMATION THAT THE ASSESSEE HAD ITA NO. 2929/ DEL/ 2011 4 DEPOSITED CASH AMOUNTING TO RS. 11,53,350/ - IN HIS SAVING BANK ACCOUNT WITH THE SOUTH INDIAN BANK LTD., ROHINI, DELHI 110 085 ON THE BASIS OF WHICH THE CASE WAS SELECTED FOR SCRUTINY. I T WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE, IN HIS RETURN, HAD SHOWN ONLY INCOME FROM DAIRY BUSINESS IN THE NAME OF M/S AGGARWAL DAIRY. ON BEING ASKED ABOUT THE NATURE AND SOURCE OF CASH DEPOSITED IN HIS SAVINGS BANK ACCOUNT, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE HAD THREE VEHICLES AND THE CASH DEPOSITED REPRESENTED THE RECEIPTS FROM RUNNING OF THE VEHICLE S ON HIRE IN A BUSINESS OF TOUR AND TRAVEL. T HE ASSESSING OFFICER DID NOT FIND THE EXPLANATION OF THE ASSESSEE TO BE SATISFACTORY AND MADE ADDITION U/S. 69A OF THE I.T. ACT OF RS. 11,53,350/ - TO THE INCOME OF THE ASSESSEE. WE FIND THAT THE ASSESSING OFF ICER ALSO OBSERVED THAT THE ASSESSEE HAD NOT SHOWN ANY INCOME FROM THE THREE VEHICLES IN HIS RETURN OF INCOME AND MADE A FURTHER ANOTHER ADDITION @ RS. 3500/ - PER MONTH PER VEHICLE AND ADDED THE AMOUNT OF RS. 1,26,000/ - TO THE INCOME OF THE ASSESSEE. 7. 1 LD. CIT(A) CONSIDERED THE FACTS OF THE CASE ALONGWITH ASSESSEE S SUBMISSIONS AND OBSERVED THAT IT IS AN UNDISPUTED FACT THAT UNTIL THE ASSESSEE WAS ASKED TO EXPLAIN THE DEPOSITS IN THE BANK ACCOUNT WITH SOUTH INDIAN BANK, HE HAD MADE NO DISCLOSURE IN HIS INCOME TAX RETURNS OF THE SECOND BUSINESS OF RUNNING OF VEHICLES ON HIRE. MOREOVE R, FROM THE DETAILS FILED BY HIM DURING THE APPELLATE ITA NO. 2929/ DEL/ 2011 5 PROCEEDINGS, IT WAS SEEN THAT THE ASSESSEE HAD PURCHASED TWO VEHICLES IN THE FY 2005 - 06, RELEVANT TO AY 2006 - 07, AND HAD FAILED TO DISCLOSE THE INCOME IN THAT YEAR TOO. THE VEHICLES PURCHASED AMOUN TING TO RS. 1,42,078/ - BY THE ASSESSEE DURING THE PREVIOUS YEAR UNDER CONSIDERATION. WE FIND LD. CIT(A) FURTHER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 44AE, THE INCOME FROM PLYING, HIRING OR LEASING OF VEHICLES, OTHER THAN HEAVY GOODS VEHICLES, IS DEEMED TO BE RS. 3500/ - FOR EVERY MONTH OR PART OF A MONTH DURING WHICH THE VEHICLE IS OWNED BY AN ASSESSEE. THUS THE COMPUTATION OF INCOME FROM THE PLYING OF THE 4 VEHICLES WORKS OUT OT RS. 42000/ - FOR EACH OF THE CARS PURCHASED IN THE FH 2005 - 06, AN D RS. 38500/ - AND RS. 31500/ - FOR THE CARS PURCHASED IN MAY AND JULY, 2006 RESPECTIVELY. THE TOTAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE U/S. 44AE WORKS OUT TO RS. 1,54,000/ - . WE FIND THAT LD. CIT(A) FURTHER OBSERVED THAT ASSESSEE CANNOT CLAIM LOWER PROFITS, HAVING FAILED TO MAINTAIN BOOKS OF ACCOUNT AND GET THEM AUDITED UNDER SECTION 44AB, AS LAID DOWN IN SECTION 44AE(7). THE AMOUNT OF RS. 1,42,078/ - IS TO BE SEPARATELY ASSESSED AS THE INVESTMENT OF THE ASSESSEE IN PURCHASING THE TWO VEHICL ES, BEING THE DOWN PAYMENTS FOR OBTAINING THE LOANS. AS THE INCOME FROM RUNNING OF THE VEHICLES ON HIRE IS COMPUTED U/S. 44AE, THE ADDITION OF RS. 11,53,350/ - , PRESUMED TO BE THE GROSS RECEIPTS OF HIRE, CANNOT BE SUSTAINED. WE FURTHER FIND THAT LD. CIT(A) AGAINST THE ADDITION OF RS. 12,79,350/ - ITA NO. 2929/ DEL/ 2011 6 (RS. 11,53,350 + RS. 1,26,000) CONFIRMED THE ADDITION OF RS. 2,96,078/ - . IN VIEW OF THE ABOVE, WE FIND THAT LD. CIT(A) HAS RIGHTLY RESTRICTED THE ADDITION FROM RS. 12,79,350/ - (RS. 11,53,350/ - + RS. 1,26,000/ - ) T O RS. 2,96,078/ - (RS. 1,42,078 + RS. 1,54,000). WE ARE OF THE VIEW THAT T HAT THE ORDER OF THE LD. CIT(A) IS A WELL REASONED ORDER WHICH DOES NOT REQUIRE ANY INTERFERENCE ON OUR PART, ACCORDINGLY, WE UPHELD THE ORDER OF THE LD. CIT(A). 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 0 9 / 0 1 /20 1 5 . SD / - S D / - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 0 9 / 0 1 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 2929/ DEL/ 2011 7