Sh. Nirbhay Chhabra, New Delhi V. ITO, New Delhi

ITA 3215/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90935 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 20-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: P K ARYA
• Keywords: Unexplained expenditure
• Section: 69C; 143(3)

Judgement Text

ITA NO. 3215/ DEL/ 2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3215 /DEL/201 1 A.Y. : 200 6 - 0 7 NIRBHAY CHHABRA C/O P.K. ARYA & CO., CHARTERED ACCOUNTANTS, A - 87, FFC JHANDEWALAN, NEW DELHI 110 055 (PAN: AFKPC4965R) VS. INCOME TAX OFFICER - 21(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. P.K. ARYA, CA DEPARTMENT BY : SH. K.K. JAISWAL, SR. DR DATE OF HEARING : 20 - 4 - 2015 DATE OF ORDER : 2 2 - 4 - 2015 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XX II , NEW DELHI DATED 10 . 3 .201 1 PERTAINING TO ASSESSMENT YEAR 200 6 - 0 7 ON THE FOLLOWING GROUNDS: - 1.THAT THE IMPUGNED ORDER OF LD CIT - APPEALS - XII NEW DELHI DATED 10/03/2011 IS BAD IN LAW AND WRONG, INCORRECT AND ILLEGAL ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND LEGAL POSITION. ITA NO. 3215/ DEL/ 2011 2 2. THAT ON THE FACTS AND IN CIRCUMSTANCES OF CASE AND LEGAL POSITION THE LEARNED CIT - APPEALS IN CONFIRMING ADDITION OF CREDIT PAYMENTS OF RS.841000/ - AS UNEXPLAINED EXPENDITURE U/S 69C OF I.TAX ACT, PARTICULARLY, WHEN I. THE LD AO HAD ERRED IN INVOKIN G SEC 69C OF THE I. TAX ACT; AND II. THE APPELLANT HAD SATISFACTORILY EXPLAINED THE SOURCE OF PAYMENTS MADE TOWARDS CREDIT CARD ; AND, SAID ADDITION MADE WAS ON NO MATERIAL/EVIDENCE AND/OR ON IRRELEVANT MATERIAL/EVIDENCE AND/ OR BY IGNORING RELEVANT MA TERIAL/EVIDENCES AND / WAS BASED ON SURMISES AND WAS PERVERSE. 3. I. THAT THE OBSERVATIONS MADE BY AUTHORITIES BELOW ARE DENIED; II. THAT APPELLANT HAD DISCHARGED THE BURDEN/ONUS THAT REST ON HIM AND THE AUTHORITIES BELOW FAILED TO DISCHARGE THE BURDEN/ ONUS THAT REST ON THEM; III. THAT LD CIT (APPEALS) HAS ERRED IN IGNORING/OR REJECTING SUBMISSIONS AND CONTENTIONS MADE BY THE APPELLANT AND ERRED IN NOT PUTTING COGENT MATERIAL ON RECORD BEFORE DISAPPROVING THE SAME. IV . THAT THE ADDITION MADE AND/OR CONF IRMED WERE MADE AT THE BACK OF THE APPELLANT AND WITHOUT CONFRONTING ADVERSE ITA NO. 3215/ DEL/ 2011 3 INFERENCE DRAWN BY AUTHORITIES BELOW AND BY NOT GIVING REASONABLE OPPORTUNITY TO REBUT THE SAME. 4. THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND LEGAL POSITION THAT A.O ERR ED IN LEVYING INTEREST U/S 234 A AND, 234B, PARTICULARLY, THE SAID INTEREST WERE NOT LEVIABLE AT ALL IN VIEW OF ARBITRARY ADDITION OF RS. 841000/ - . 5. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE, AMEND, MODIFY OR VARY ANY GROUND(S) OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS IN THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME OF RS. 1,01,000/ - ON 31.3.2007. THE CASE WAS SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE HAD INCURRED EXPENDI TURE THROUGH CREDIT CARD OF RS. 8,41,000/ - . THE ASSESSING OFFICER ISSUED NOTICE U/S. 143(2) ON 6.11.2007, IN RESPONSE TO WHICH THE ASSESSEE FILED HIS BANK STATEMENT. NO BOOKS OF ACCOUNT WERE MAINTAINED. INSPITE OF SPECIFIC QUERY, THE ASSESSED OFFERED N O EXPLANATION REGARDING SOURCE OF PAYMENT OF CREDIT CARD BILL OF RS. 8,41,000/ - . THE AO TREATED THE SAID SUM OF UNEXPLAINED EXPENDITURE U/S. 69C OF THE I.T. ACT AND COMPLETED THE ASSESSMENT VIDE ORDER DATED 26.1.2008 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGAINST THE AFORESAID ASSESSMENT, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 10.3.2011 HAS ITA NO. 3215/ DEL/ 2011 4 UPHELD THE ACTION OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED WITH THE LD. CIT(A) S ORDER, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5 . LD. COUNSEL OF THE ASSESSEE REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL AND REQUESTED THAT THE ADDITION OF RS. 8,41,000/ - U/S. 69 OF THE I.T. ACT MADE BY THE AO AND UPHELD BY THE CIT(A) MAY BE DELETED. HE HAS ALSO FILED A PAPER BOOK CONTAINING PAGES 1 TO 102 IN WHICH HE HAS ATTACHED THE PARTICULARS OF HDFC CREDIT CARD STATEMENT; SALE AND PURCHASE OF TRUCKS; FREIGHT RECEIVED VOUCHER; DIESEL EXPENSE VOUCHER AND ITR OF FAMILY. 6. ON THE CONTRARY, LD. DR HAS OPPOSED THE REQUEST OF THE ASSESSEE S COUNSEL AND RELIED UPON THE ORDER OF THE REVENUE AUTHORITIES. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER S PASSED BY THE REVENUE AUTHORIT IES , WE FIND THAT THE LD. CIT(A) HAS PERUSED THE EVIDENCES AND DOCUMENTS FILED, NAMELY THE RETURNS OF INCOME OF ALL THE THREE FAMILY MEMBERS, THE COPY OF CREDIT CARD STATEMENT, 5 COPOIES OF FREIGHT BILLS OF SH. HARISH CHHABRA AND SMT. SHAIL CHHABRA, AND 3 COPIES OF DIESEL BILLS. LD. CIT(A) ALSO CALLED FOR THE PROOF OF OWNERSHIP OF THE VEHICLES CONCERNED OF WHICH THE ASSESSEE ITA NO. 3215/ DEL/ 2011 5 HAS FILED ONLY 3. WE NOTE THAT AS PER THE ASSESSING OFFICER, THE ASSESSEE FILED HIS RETURN DISCL OSING ESTIMATED INCOME FROM TRADING OF GENERAL GOODS . IN NO WAY CAN THIS BE CONSIDERED TO BE A RETURN OF INCOME U/S. 44AE, DISCLOSING INCOME ON PRESUMPTIVE BASIS FROM PLYING OF TRUCKS. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE AO WAS NEVER INFORMED TH AT THE SOURCE OF INCOME WAS FROM PLYING OF TRUCKS . MOREOVER, THE DETAILS FILED DURING THE APPELLATE PROCEEDINGS HAVE BEEN INCONSISTENT, WHICH CASTS DOUBT ON THEIR VERACITY. 7.1 WE FIND THAT LD. CIT(A) NOTED THAT I N THE SUBMISSION OF 10.06.2010, IT WAS S TATED THAT THE ASSESSEE FILED A RETURN UNDER SECTION 44AE, WHICH IS NOT CORRECT. IT IS STATED THAT HE OWNED ONLY ONE TRUCK - HR 38G 8082, WHICH WAS SOLD IN JUNE' 2005.THERE IS NO PROOF OF EITHER PURCHASE OR SALE OF THE TRUCK CONCERNED, THOUGH SPECIFICALLY ASKED FOR. IN THE SUBMISSION DATED 23.12.2010, IT IS STATED THAT THE APPELLANT OWNED ONLY ONE TRUCK - HR 38J 8442 - WHICH WAS SOLD ON 17.12.2008. THOUGH THE SUBMISSION SAYS THAT DELIVERY DOCUMENTS ARE ENCLOSED ., HOWEVER NO SUCH DETAILS ARE ATTACHED. IT H AS TO BE PRESUMED THAT THE APPELLANT WAS THE OWNER OF TWO TRUCKS, FOR PART OR WHOLE OF THE YEAR, BUT NEVER DISCLOSED THE INCOME FROM THEIR PLYING. THE INCOME OF RS. 1 ,O 1 ,OOO / - IS DISCLOSED FROM 'TRADING', AS ALREADY DISCUSSED. ITA NO. 3215/ DEL/ 2011 6 7.2 WE ALSO NOTE THAT LD. CIT (A) HAS OBSERVED THAT I N THE CASE OF SH. HARISH CHHABRA, AS PER SUBMISSION DATED 10.06.2010, HE WAS THE OWNER OF TWO TRUCKS IN THAT YEAR. HOWEVER, THE RETURN OF INCOME FILED BY SH. HARISH CHHABRA FOR THE A.Y. 2006 - 07 ON 31.03.2007, SHOWS COMPUTATION U/S 4 4AE FOR ONLY ONE TRUCK FOR 12 MONTHS, WHICH WORKS OUT TO RS.42,0001 - , BUT OFFERED AT RS. 1 ,O 1 ,OOO / - . HR38H 8412 WAS PURCHASED IN F.Y. 2003 - 04, AS PER REGISTRATION CERTIFICATE FILED WHICH IS DATED 13.05.2003. AS PER SUBMISSION OF23.12.2010, IT WAS SOLD IN F.Y. 2007 - 08, BUT THERE IS NO PROOF OF THE SALE. FOR TRUCK NO. HR38G6042, A COPY OF BILL OF PURCHAS E IS FILED, BUT THE DATE IS NOT LEGIBLE. ACCORDING TO SUBMISSION OF 10.06.2010, THIS TRUCK WAS SOLD ON 15.09.2005 (NO PROOF) BUT ACCORDING TO THE SUBMISSION OF 23.12.2010, IT WAS SOLD IN 2007 - 08 (NO PROOF). HENCE, IT IS PRESUMED THAT FOR THE A.Y. 2006 - 07, SH. HARISH CHHABRA OWNED AND PLIED TWO TRUCKS. 7.3 LD. CIT(A) FURTHER OBSERVED THAT SMT. SHAIL CHHABRA HAS FILED RETURN FOR A.Y. 2006 - 07 ON 31.03.2007, DISCLOSING INCOME U/S 44AE FOR TWO TRUCKS FOR 12 MONTHS, WHICH WORKS OUT TO RS.84,0001 - , BUT OFFERED AT RS.1,40,4501 - . HOWEVER, AS PER SUBMISSION OF 10.06.2010, SHE OWNED THREE TRUCKS - (1) HR38K0032 (2) HR38J1632 & (3) HR38G 6622 . AS PER SUBMISSION OF 23.12.2010, SHE OWNED ONLY TWO TRUCKS - AT ( 1 ) AND ( 2 ) A BOVE. COPY OF PURCHASE BILL OF 11.08.2003 AND RE GISTRATION CERTIFICATE OF 22.08.2003 ARE AVAILABLE ONLY FOR HR 38J 1632. AS PER SUBMISSION OF 23.12.2010, THE TRUCKS AT ( 1 ) AND ( 2 ) HAVE BEEN SOLD IN 2007 - 08, BUT THERE IS NO PROOF ITA NO. 3215/ DEL/ 2011 7 PROVIDED. THERE IS NO EVIDENCE OF DATE OF PURCHASE OF HR 38K 003 R 38G 6622 . IT MAY BE PRESUMED THAT SMT. CHHABRA WAS OWNING AND OPERATING 3 TRUCKS IN THE CONCERNED YEAR. WE FIND THAT LD. CIT(A) FURTHER OBSERVED THAT AS AGAINST 3 TRUCKS DISCLOSED BETWEEN THE RETURNS OF THE 3 FAMILY MEMBERS, THERE APPEAR TO HAVE ACTUALLY BEEN 7 TRUCKS. THE PRESUMPTIVE PROVISIONS OF THE INCOME TAX ACT WERE INTRODUCED WITH A VIEW TO ENABLE SMALL TAX PAYERS TO FILE RETURNS WITHOUT THE R EQUIREMENT OF MAINTENANCE OF BOOKS OF ACCOUNT. THE PURPOSE OF INCLUDING SUCH PROVISION WAS TO MITIGATE THE HARDSHI P THAT CERTAIN BUSINESSES MAY FACE IN COMPUTING TAXABLE INCOME ACCURATELY. BUT SUCH PROVISIONS ARE NOT MEANT TO BE MISUSED BY DISCLOSING INCOME FROM TRADING, WHEN THE INCOME WAS ACTUALLY DERIVED FROM THE OWNERSHIP OF TRUCKS. THERE IS NO EVIDENCE THAT THE P URCHASE OF DIESEL BY THE A SSESSEE 'S CREDIT CARD WAS MET OUT OF CASH RECEIVED FROM HIS PARENTS. IT IS EQUALLY POSSIBLE THAT THEY HAVE INCURRED DIESEL EXPENSES WHICH ARE NOT REFLECTED IN THE CREDIT CARD BILL OF THE APPELLANT. IT CAN BE SEEN THAT THERE IS VER Y INCOMPLETE AND INCONSISTENT EVIDENCE OF THE NUMBER OF TRUCKS OWNED AND OPERATED, AND NO EVIDENCE WHATSOEVER OF THE SOURCE OF PURCHASE OF THE TRUCKS - WHETHER 3 OR 7 IN NUMBER. WE FIND CONSIDERABLE FORCE IN THE FINDING OF THE LD. CIT(A) THAT E VEN WHEN BOOKS OF ACCOUNT ARE NOT MAINTAINED, ANY ASSESSEE WOULD MAINTAIN RECORDS OF PURCHASE AND SALE OF TRUCKS, AND OF RECEIPTS AND EXPENDITURE. HENCE, I N THE ABSENCE OF CREDIBLE DETAILS OF QUANTUM OF FREIGHT RECEIPTS AND QUANTUM OF EXPENDITURE, THE SOURCE OF PAY MENT OF THE CREDIT CARD BILLS CANNOT BE SATISFACTORILY EXPLAINED. ACCORDINGLY, CASH PAYMENT OF CREDIT CARD BILLS AMOUNTING TO RS.8,41,000 / - AS UNEXPLAINED EXPENDITURE U / S 69C WAS RIGHTLY CONFIRMED BY THE LD. CIT(A) . KEEPING IN VIEW OF THE FACTS AND CIRCUMS TANCES OF THE PRESENT CASE AND THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE BEFORE US AS WELL AS THE ORDER OF THE REVENUE AUTHORITIES, W E ARE OF THE ITA NO. 3215/ DEL/ 2011 8 CONSIDERED VIEW THAT THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT REQUIRE ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME ON THE ISSUE IN DISPUTE AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED . ORDER PRONOUNCED IN THE O PEN C OURT ON 2 2 / 4 /20 15. S D / - S D / - [ S.V. MEHROTRA ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 2 2 / 4 /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