ACIT Central circle-16, New Delhi V. Mohit Garg, New Delhi

ITA 3193/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9662 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 10-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(2)

Judgement Text

1 ITA no. 3193/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI NARENDER KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 3193/DEL/2019 [Assessment Year: 2013-14 ACIT, Central Circle-16, New Delhi. Vs Mohit Garg, 156, 2 nd Floor, Bank Enclave, Delhi-110092. PAN-AYEPG4314M APPELLANT RESPONDENT Assessee represented by None Department represented by Shri Jeetender Chand, Sr. DR Date of hearing 08.09.2022 Date of pronouncement 29.09.2022 O R D E R PER KUL BHARAT, JM: This appeal by the Revenue is directed against the order of learned CIT(Appeals)- 27, New Delhi dated 20.12.2018 pertaining to the assessment year 2013-14. The Revenue has raised following grounds of appeal: “1. In the facts and circumstances of the case, the Ld. CIT(A) has erred by reducing the addition made by Assessing Officer on account of undisclosed commission income and profit on bank deposits from Rs. 84,74,789/- to Rs. 14,21,536/-. 2. In the facts and circumstances of the case, the Ld. CIT(A) has erred in increasing the rate of Aluminum @ Rs. 180/- per kg. From Rs. 166/- per kg. As taken by the AO based on invoiced rate. 2 ITA no. 3193/Del/2019 3. In the facts and circumstances of the case, the Ld. CIT(A) has erred in reducing the net income earning estimated at Rs. 0.40 per kg. On other sales by the Assessing Officer to Rs. 0.30 per kg. As net profit margin. 4. That the Ld. CIT(A) has erred in law and facts in holding that on the credit entries are basically sales only without any documentary evidence and reasons. 5. The appellant craves leave to add, amend and/ all the grounds of appeal before or during the course of hearing of the appeal.” 2. Facts giving rise to the present appeal are that the assessee filed his return of income declaring net taxable income of Rs. 21,32,220/- on 06.01.2014. The case of the assessee was selected for scrutiny through CASS. Thereafter a notice u/s 143(2) of the Income-tax Act, 1961 (the Act) was issued and served upon the assessee. In response to the statutory notices the learned Authorized Representative of the assessee attended the proceedings. The Assessing Officer recorded that in the case of the assessee survey operation was conducted u/s 133(A) of the Act on 18.02.2013 and undisclosed stock of aluminium sheet and aluminium foil of Rs. 2,78,76,060/-was found and surrendered for taxation in the assessment year 2013-14. The AO thus made addition on account of surrendered stock of Rs. 2,78,76,060/-. The Assessing Officer further recorded that during the course of survey, statement of Shri Mohit Garg was recorded and it was stated that there was a margin of 0.10% after deducting various expenses. The contention of the assessee was not found acceptable by the AO. Therefore, he made addition of Rs. 30,05,652/-, assuming that the assessee might have earned net income of Rs. 40 paise per kg. The Assessing Officer further made addition on account of profit earned on sales of Rs. 54,99,227/-. Thus, the Assessing Officer assessed income at R.s 3,84,83,160/- against the returned income of Rs. 21,32,220/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions partly allowed the appeal. Thereby the learned CIT(Appeals) confirmed the action of the AO regarding addition on account of surrendered stock of Rs. 2,78,76,060/-. However, in respect of remaining addition of Rs. 84,74,879/- the learned CIT(Appeals) sustained the addition to the extent of Rs. 14,21,936/-. Aggrieved against this the Revenue is in appeal before us. 3 ITA no. 3193/Del/2019 3. At the time of hearing no one attended the proceedings on behalf of the assessee. It is seen from the record that notices were issued to the assessee. Despite issue of notices, no one attended the proceedings. Therefore, the appeal of the Revenue was taken up for hearing in the absence of the assessee. 4. Learned DR vehemently supported the order of the AO and submitted that the learned CIT(Appeals) was not justified in deleting the impugned addition. 5. We have heard learned DR and perused the material available on record. We find that the learned CIT(Appeals) decided the issue by following the order of his predecessor in earlier year by observing as under: “Since the facts of both the yeas are similar, there is no reason to differ from the findings of my predecessor. Therefore, respectfully following the reasoning and decision of my predecessor (i) It is held that sales will be considered as per bank entries and no separate sales will be considered on the basis of declared income & commission margins. (ii) Sale as per bank credit entries shall form a composite/sale/purchase and no separate addition on the basis of bank accounts can be made. (iii) Net income will be taken @ 30 paise per KG after considering all expenses as against 0.10 paise per kG declared by the appellant. (iv) Sale price will be considered @ Rs. 180 per Kg. On the basis of above decision the revised working of net profit is as under: - Turnover on the basis of return of income R. 213,22,51,000/-(which has been held to include bank receipt of Rs. 182,30,70,579/-) - Quantity considering invoice amount @ 166/Kg = 1,28,44,885Kg - Quantity considering sale price of Rs. 180/Kg. = 1,18,45,839 Kg. - Net Income estimated @ Rs. 0.30 per Kg = Rs. 35,53,751 - Net commission income declared in the return = Rs. 21,32,215 - Total addition sustained on this account = Rs. 14,21,536 Thus addition of Rs. 14,21,536 is sustained out of total addition of Rs. 84,74,879/- (Rs. 3005652 + Rs.5469227) on this issue as discussed in para 4 & 5 of the assessment order. This ground of appeal is partly allowed.” 6. There is no dispute with regard to the fact that the addition made by the AO was on the basis of estimation. The AO has not stated the basis for adopting a different 4 ITA no. 3193/Del/2019 margin. The learned CIT(Appeals) has followed the earlier year’s order. Therefore, we do not see any reason to disturb the finding of the learned CIT(Appeals). Grounds raised by the Revenue are dismissed. 7. Appeal of the Revenue is dismissed. Order pronounced in open court on 29 th September, 2022. Sd/- Sd/- (NARENDRA KUMAR BILLAIYA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI