M/s ITO, New Delhi V. Sh. Vishal Kapoor, Delhi

ITA 3217/DEL/2013

• Counselvise Citation: 321720114 RSA 2013
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 21-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K SAMPATH; RAJ KUMAR
• Assessee Lawyers: SAMEER SHARMA
• Keywords: Peak credit
• Section: 80C; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A .NO.-3217/DEL/ 2013 (ASSESSMENT YEAR-2010-11) ITO, WARD-30(3), ROOM NO-113, RUM SHAPED BUILDING, I.P.ESTATE, NEW DELHI-02. (APPELLANT) VS SH. VISHAL KAPOOR, 319, KUCHA MIR ASHIA, DELHI-110006. PAN-AHFPK2427B (RESPONDENT) APPELLANT BY SH. K.SAMPATH & RAJKUMAR, ADV. RESPONDENT BY SH. SAMEER SHARMA, SR DR. ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 14.03.2013 OF CIT(A)-XXV, NEW DELHI PERTAINING TO 2010-11 ASSE SSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.18,60,455/- MADE U /S 69A OF THE IT ACT, 1961 ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEE CONTENTION THAT HIS CHARTERED ACCOUNTANT HAS WRONGLY ADMITTED THE CREDITS AS UNDISCLOSED WITHOUT CONSENT OF THE ASSESSEE IGNORING THE BASIC LEGAL PRINCIPAL THAT THE ASSESSE E IS BOUND BY THE ACT OF HIS LEGAL REPRESENTATIVE HOLDING VALID POWER OF ATTORNE Y. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.20,000/- MADE ON A CCOUNT OF EXCESS CLAIM OF DEDUCTION U/S 80-C OF IT ACT 1961. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE WHO IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN WEDDING CARDS AND PAPERS IN THE NAME OF I.T.A .NO.-3217/DEL/2013 2 SH. VISHAL KAPOOR PROP. M/S SANYA CARDS E-FILED ITS RETURN DECLARING A TOTAL INCOME OF RS.4,90,420/-. THE SAID RETURN WAS SELEC TED FOR SCRUTINY. THE FACTS QUA THE FIRST ISSUE AGITATED BY THE REVENUE VIDE GR OUND NO-1 & 2 AS PER THE ASSESSMENT ORDER ARE THAT THE ASSESSEE MADE CASH DE POSITS AMOUNT TO RS.25,45,582/- IN STATE BANK OF INDIA, PITAMPURA, N EW DELHI IN HIS SAVING BANK ACCOUNTS NO.-30371440399 AND 30731037899 MAINTAINED IN THE NAME OF SH. VISHAL KAPOOR. THE DETAILS WERE CALLED FOR FROM TH E BANK VIDE NOTICE U/S 133(6) OF THE INCOME TAX ACT, 1961 AND THE ASSESSEE WAS CO NFRONTED WITH THIS FACT. A PERUSAL OF PAGE 2 OF THE ASSESSMENT ORDER SHOWS THA T THE ASSESSEES EXPLANATION WAS ASKED AND WAS PROVIDING BY WAY OF A WRITTEN SUB MISSION DATED 04.01.2013. THE AO HAS EXTRACTED PARA 19 OF THE SAME WHICH SHOW S THAT THE ASSESSEE CLAIMED THAT HE WAS ADVANCING MONEY TO VARIOUS PARTIES FOR SHORT PERIOD AND WAS CHARGING INTEREST THERE-ON. IT WAS FURTHER EXPLAINED THAT T HE EARNED INTEREST FROM THIS AMOUNTING TO RS.22,767/- AND BANK INTEREST OF RS.15 3/- WHICH HE HAD OMITTED TO INCLUDE IN THE RETURN FILED. IT WAS FURTHER CLAIME D THAT ALL THE CASH DEPOSITS AND THE WITHDRAWALS ARE FROM THIS ONLY. IN SUPPORT OF THE SAME, COPY OF THE CASH BOOK WAS ENCLOSED ALONGWITH THE COPY OF PROFIT AND LOSS ACCOUNT WAS ENCLOSED ALONGWITH THE EXPLANATION. 2.1. CONSIDERING THE EXPLANATION OF THE ASSESSEE, T HE AO MADE AN ADDITION OF RS.20,45,250/- U/S 69A TAKING NOTE OF THE FACT THAT SH. V.K.CHETAL, AR OF THE ASSESSEE HAD MARKED THE SPECIFIC CASH DEPOSITS AS U NEXPLAINED. APART FROM THAT THE AO ALSO MADE AN ADDITION OF RS.22,920/- AS BANK INTEREST FROM THE SAID UNDISCLOSED BANK ACCOUNT. 2.2. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY , THE EXPLANATION OFFERED WAS RE-ITERATED. THE SAME IS EXTRACTED FROM THE IMPUGN ED ORDER AS UNDER:- 4.2. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER O F THE AO AND HAS SUBMITTED THAT THE AO IS NOT JUSTIFIED TO MAKE THE ADDITION OF RS.20,45,250/- OUT OF THE TOTAL CASH DEPOSITS WITH THE SBI BANK AC COUNT. IT IS SUBMITTED THAT THE DEPOSIT OF RS.20,45,250/- HAS BEEN MADE ON VARI OUS DATES AND THE DEPOSITS I.T.A .NO.-3217/DEL/2013 3 AND WITHDRAWALS ARE IN THE RANGE OF RS.20,000/- TO RS.25,000/- AND ACCORDINGLY, THE AO SHOULD HAVE TAKEN THE PEAK CRED IT OF THE CASH DEPOSITS OF RS.2,07,715/- ON 15/08/2009. IT IS ALSO SUBMITTED THAT SINCE THE AO HAS MADE A SEPARATE ADDITION OF THE BANK INTEREST OF RS.22,9 20/- THE SAME SHOULD BE REDUCED FROM THE PEAK CREDIT OF RS.2,07,715/- AND ONLY THE BALANCE ADDITION OF RS.1,84,795/- (RS.2,07,715/(-) RS.22,920/-) SHOU LD BE CONFIRMED. 2.3. CONSIDERING THE SAME, THE CIT(A) CAME TO THE F OLLOWING CONCLUSIONS:- 4.3. I HAVE CONSIDERED THE ORDER FO THE AO AND THE SUBMISSION OF THE ASSESSEE AND I FIND SOME MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE AO IS NOT JUSTIFIED TO MAKE ADDITION OF THE TOTAL CASH DE POSITS AS THE CASH DEPOSITS AND CASH WITHDRAWALS ARE MADE ON VARIOUS DATES AND THE SAME ARE IN THE RANGE OF RS.20,000/- TO RS.25,000/- ONLY. AFTER CO NSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT TH ERE IS NO PROPER JUSTIFICATION FOR THE TOTAL ADDITION MADE BY THE AO AND THE ENDS OF JUSTICE WILL BE MET IF THE PEAK CREDIT OF THE BANK ACCOUNT IS TAKEN WHICH IS R S.2,07,715/- ON 16/08/2009 AND THE INTEREST AMOUNT OF RS.22,920/- ADDED BY THE AO IS REDUCED FROM THE PEAK CREDIT AMOUNT AND ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS.1,84,795/- IS CONFIRMED AND THE BALANCE ADDITION OF RS.18,60,455/- (RS,20,45,250/- (-) RS.1,84,795/-) IS DELETED. 3. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL. LD. SR. DR PLACES RELIANCE ON THE ASSESSMENT ORDER. THE LD . AR OF THE ASSESSEE ON THE OTHER HAND RELIED UPON THE IMPUGNED ORDER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE STATEMENT OF FACTS FILE D BY THE ASSESSEE BEFORE THE CIT(A) SHOWS THAT THE SUBMISSIONS ADVANCED BEFORE T HE AO WERE RE-ITERATED NAMELY THAT THE ASSESSEE HAD BEEN PROVIDING SHORT-T ERM ADVANCES TO VARIOUS THIRD PARTIES AND THE AMOUNT BEING RETURNED BACK BY THE P ARTIES WAS AGAIN BEING GIVEN TO OTHERS. IN THESE CIRCUMSTANCES IT WAS REQUESTED THAT THE PEAK CREDIT COULD BE ADDED WHICH WAS SUPPORTED BY THE FOLLOWING DECISION S : ITO VS MADAN LAL MITTAL (2006) 8 SOT 880 (DELHI) ARUN KALA VS. ACIT (2005) 98 TTJ 1046 ASSTT CIT VS TRITAN HAPPY HOME PVT. LTD. (2005) 94 TTJ 628. I.T.A .NO.-3217/DEL/2013 4 4.1. THE PLEADINGS SET OUT IN THE STATEMENT OF FAC TS FURTHER ELABORATES IN SUPPORT OF THE CLAIM THAT THE SAME AMOUNT CANNOT BE TAXED MULTIPLE TIMES. REGARDING THE ADMISSION ON BEHALF OF THE ASSESSEES LD. AR THE SAME WERE ASSAILED IN THE FOLLOWING MANNER, THE RELEVANT PORT ION IS EXTRACTED FROM THE STATEMENT OF FACTS AVAILABLE ON RECORD:- THE CHARTERED ACCOUNTANT REPRESENTING THE CASE HAD WRONGLY ADMITTED THAT THE CREDITS APPEARING IN THE BOOKS BE ADDED. THE S AID ADMISSION WAS MADE BY THE CA ON HIS OWN, WITHOUT EVEN TAKING THE APPELLAN T INTO CONFIDENCE. THE APPELLANT HAD BEEN MADE TO SUFFER, ON ACCOUNT OF FA ULT OF THE COUNSEL WHO HAD NOT FOLLOWED THE PROFESSIONAL ETHICS TO ENSURE THAT THE CLIENT IS NOT TAKEN FOR RIDE. 4.2. IN THE AFORE-MENTIONED PECULIAR FACTS AND CIRC UMSTANCES OF THE CASE AND ON A CONSIDERATION THEREOF, WE FIND NO MERIT IN THE DE PARTMENTAL GROUND. BEING SATISFIED WITH THE REASONING AND FINDING OF THE CIT (A), THE SAME IS UPHELD. NO INFIRMITY IN THE CALCULATION OF THE PEAK CREDIT HAS BEEN POINTED OUT BY THE REVENUE NOR ANY REASON TO CANVASS A CONTRARY VIEW HAS BEEN ADVANCED. ACCORDINGLY IN THE AFOREMENTIONED PECULIAR FACTS AN D CIRCUMSTANCES, THE DEPARTMENTAL GROUND IS DISMISSED. 5. THE FACTS QUA THE SECOND ISSUE AGITATED BY THE R EVENUE VIDE GROUND NO-3 ARE FOUND DISCUSSED IN PARA 6 OF THE ASSESSMENT ORD ER AND EXTRACTED HEREUNDER FOR READY-REFERENCE:- THE ASSESSEE HAS CLAIMED DEDUCTION UNDER CHAPTER V I-A AMOUNTING TO RS.53360/-. THE ASSESSEE VIDE LETTER DATED 26.06.2 012 WAS ASKED TO FURNISH THE DETAILS AND EVIDENCE OF PAYMENT OF THE CLAIM. THE ASSESSEE VIDE LETTER DATED 04.01.2013 FURNISHED THE DETAILS U/S 80C AMOU NTING TO RS.31,470/-, ONLY. IN VIEW OF THE ASSESSEES FAILURE TO PRODUCE DOCUMENTARY EVIDENCE IN RESPECT OF THE BALANCE AMOUNT OF RS.21,890/- (53360 -31470), BEING EXCESS DEDUCTION CLAIMED, IS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 5.1. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE ASSESSEE APPARENTLY PRODUCED THE REMAINING EVIDENCE BEFORE THE CIT(A). CONSEQUENTLY THE CIT(A) ISSUED A DIRECTION TO ALLOW A FURTHER DEDUCTION OF RS.20,000/-. 6. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL. I.T.A .NO.-3217/DEL/2013 5 7. LD. SR. DR INVITING ATTENTION TO THE IMPUGNED OR DER ASSAILED THE SAME STATING THAT FIRSTLY THERE WAS A FRESH EVIDENCE BEF ORE THE CIT(A); SECONDLY THE SAME HAS NOT BEEN CONFRONTED TO THE AO. MOREOVER I T WAS ARGUED THAT THERE IS NO DISCUSSION IN THE IMPUGNED ORDER QUA THE NATURE OF EVIDENCE. AS SUCH IT WAS HIS SUBMISSION THAT THE FINDING ARRIVED AT BY THE CIT(A ) IS VITIATED IN FACTS AND LAW. 7.1. LD. AR RELIES UPON THE IMPUGNED ORDER. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CAREFUL CONSIDERATION OF THE SAME, WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE IT IS APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE TO THE AO AS THE FRESH EVIDENCE TA KEN INTO CONSIDERATION BY THE CIT(A) HAS NOT BEEN CONFRONTED TO THE AO. IT IS AL SO SEEN THAT THERE IS NO DISCUSSION IN THE IMPUGNED ORDER ON THE NATURE OF T HE EVIDENCE CONSIDERED. FOR READY-REFERENCE, WE REPRODUCE THE SAME:- 6.2. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER O F THE AO AND IT IS SUBMITTED THAT THE AO IS NOT JUSTIFIED TO DISALLOW THE CLAIM OF THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSE SSEE WAS ASKED TO PRODUCE THE EVIDENCE OF RS.53,600/- FOR THE CLAIM OF DEDUCT ION U/S 80C BUT THE ASSESSEE COULD PRODUCE THE EVIDENCE OF RS.51,470/- ONLY AND ACCORDINGLY, THE ALLOWANCE OF RS.51,470/- IS ALLOWED. SINCE THE AO HAS ALREADY ALLOWED THE DEDUCTION U/S 80C OF RS.31,470/-, THE AO IS DIRECTE D TO ALLOW FURTHER DEDUCTION OF RS.20,000/- (RS.51,470/- (-) RS.31,470 /-). AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF TH E VIEW THAT THE ADDITION TO THE EXTENT OF RS.1,890/- (RS.21,890/- (-) RS.20,000 /-) IS CONFIRMED AND THE BALANCE ADDITION OF RS.20,000/- IS DELETED. 8.1. ACCORDINGLY FOR THE REASONS GIVEN HEREINABOVE, GROUND NO-3 OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS PA RTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 TH OF JANUARY 2014. SD/- SD/- (B.C.MEENA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10/01/2014 *AMIT KUMAR* I.T.A .NO.-3217/DEL/2013 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR ITAT NEW DELHI