Manoj Kumar Sharma, Delhi V. ITO, New Delhi

ITA 3070/DEL/2013

• Counselvise Citation: 307020114 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 16-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Keywords: Business income; Business expenditure
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E, NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AN D SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 3070/DEL/2013 ASSESSMENT YEAR : 2006-07 MANOJ KUMAR SHARMA, VS. ITO, WARD 21(1), 275, NAHARPUR, NEW DELHI SECTOR-7, ROHINI, DELHI-110 085 GIR / PAN:ASWPS0153Q (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI P. DAM KANUNJHA, SR. DR DATE OF HEARING : 16.03.2015 DATE OF PRONOUNCEMENT : 25.03.2015 ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE OR DER OF LD. CIT(A) DATED 21.12.2012. 2. THE ONLY GRIEVANCE RAISED BY ASSESSEE IS AGAINST ACTION OF LD. CIT(A) BY WHICH HE HAD UPHELD THE PENALTY IMPOSED BY A.O. U/S 271(1)(C) OF THE ACT. AT THE TIME OF HEARING, NONE WAS PRESENT ON B EHALF OF ASSESSEE. HOWEVER, FROM THE MATERIAL PLACED ON RECORD, AND WI TH THE HELP OF LD. D.R., WE FIND THAT THE MATTER CAN BE DISPOSED OFF EVEN WI THOUT HEARING ASSESSEE / ASSESSEES COUNSEL. ITA NO.3070/DEL/2013 2 2. LD. D.R. SUBMITTED THAT THE ADDITION MADE BY A.O . WERE SUSTAINED BY LD. CIT(A) AND ASSESSEE WAS NOT ABLE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT AND ALSO WAS NOT ABLE TO EXPLAIN THE C REDIT CARD PAYMENTS AND, THEREFORE, LD. CIT(A) HAS RIGHTLY CONFIRMED THE PEN ALTY. 3. WE HAVE HEARD LD. D.R. AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE IS AN INDIVIDUAL AND HAS FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,33,860/-. THE A.O. MADE ADDITION ON ACCOUNT OF CREDIT CARD EXPENDITURE AND CASH DEPOSITS IN BAN K ACCOUNT AND INVESTMENT IN SHARES AS ASSESSEE WAS UNABLE TO EXPLAIN THE SOU RCE OF THESE INVESTMENTS / DEPOSITS. THE ADDITIONS MADE BY A.O. WERE CONFIRME D PARTLY BY THE ORDER OF LD. CIT(A). FROM THE ORDER OF LD. CIT(A), WE FURTH ER FIND THAT THOUGH ASSESSEE HAD FILED CASH FLOW STATEMENT DURING QUANT UM PROCEEDINGS, BUT THE SAME WAS NOT ACCEPTED BY LD. CIT(A). WE FURTHER FI ND THAT ASSESSEE IS ENGAGED IN SMALL SCALE BUSINESS WHICH IS COVERED U/ S 44AD AND WAS NOT MAINTAINING BOOKS OF ACCOUNT. WE FURTHER FIND THAT ASSESSEE, DURING APPELLATE PROCEEDINGS BEFORE LD. CIT(A) IN QUANTUM PROCEEDINGS HAD EXPLAINED THE DEPOSITS OF CASH / INVESTMENTS BY WAY OF CASH FLOW STATEMENT WHICH HAS BEEN REPRODUCED BY LD. CIT(A) IN HIS ORDE R AT PAGE 6. FOR THE SAKE OF CONVENIENCE, THE CASH FLOW STATEMENT SUBMIT TED BEFORE LD. CIT(A) AND REPRODUCED BY LD. CIT(A) IN HIS ORDER IS REPROD UCED BELOW: OPENING CASH AS ON 01.04.2005 12,542/- WITHDRAWALS FROM ICICI BANK 14,15,600/- WITHDRAWALS FROM IDBI BANK 57,000/- WITHDRAWALS FROM BOB 29,000/- RENTAL INCOME 60,000/- BUSINESS INCOME 2,27,815/- ITA NO.3070/DEL/2013 3 SUNDRY DEBTORS 16,000/- 18,17,957/- LESS: DEPOSIT IN ICICI BANK 11,03,200/- DEPOSIT IN IDBI BANK 01,29,900/- DEPOSIT IN BOB 01,37,000/- BUSINESS EXPENSES ETC. 02,31,008/- DRAWINGS 01,63,170/- CASH IN HAND AS ON 31.03.2006 53,679/- 4. FROM THE ABOVE, WE FIND THAT ASSESSEE HAD EXPLAI NED ALL THE DEPOSITS OF INVESTMENT. 5. AS REGARDS CREDIT CARD PAYMENTS, THE ASSESSEE HA D SUBMITTED BEFORE LD. CIT(A) THAT A.O. DURING REMAND PROCEEDINGS HAD VERIFIED ALL PAYMENTS WHICH WERE THROUGH CHEQUES AND THEREFORE, ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS. 6. FROM THE ABOVE FACTS AND CIRCUMSTANCES, WE FIND THAT LD. CIT(A) HAS CONFIRMED THE PENALTY BECAUSE OF THE FACT THAT IN Q UANTUM PROCEEDINGS THE ADDITIONS HAVE BEEN CONFIRMED. HOWEVER, IT IS A TR ITE LAW THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT P ROCEEDINGS AND IN PENALTY PROCEEDINGS, THE A.O. HAS TO DEMONSTRATE TH AT ASSESSEE HAS ACTUALLY CONCEALED THE PARTICULARS OF INCOME AND MERELY ON T HE BASIS THAT THERE WERE CERTAIN DEFECTS IN THE EXPLANATIONS SUBMITTED BY AS SESSEE, PENALTY FOR CONCEALMENT CANNOT BE IMPOSED. AS OBSERVED EARLIER , THE ASSESSEE IS A SMALL TIME BUSINESSMAN COVERED BY THE PROVISIONS OF SECTI ON 44AD AND IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS, THEREFORE, HIS EXPLANATIONS FOR CASH ITA NO.3070/DEL/2013 4 DEPOSITS AND OTHER CREDIT CARD EXPENSES CANNOT BE S IMPLY BRUSHED ASIDE ON ACCOUNT OF SMALL DISCREPANCIES. 7. IN VIEW OF ABOVE APPEAL FILED BY ASSESSEE IS ALL OWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAP OOR) 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 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 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