ITO- 3(3), Bijnor V. Shri Abdul Sami, Bijnor

ITA 3278/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6833 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 3278/DEL/2015 [A.Y 2010-11] THE I.T.O VS. ABDUL SAMI WARD 3(3) B 24, CHAHSHIRIN BIJNOR BIJNOR DISTT. BIJNOR PAN : AXNPS 5819 B [APPELLANT] [RESPONDENT] DATE OF HEARING : 12.07.2018 DATE OF PRONOUNCEMENT : 17.0 7.2018 ASSESSEE BY : NONE REVENUE BY : SHRI AMIT JAIN, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS], MORADABAD DAT ED 04.03.2015 PERTAINING TO A.Y 2010-11. 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN LAW TO REDUCE BANK UNEXPLAINED CREDITS RS. 66,97,03 8/- TO 3% I.E. 2,00,911/-, ALLOWING RELIEF OF RS. 64,96,127/-. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HE ARD THE LD. DR AT LENGTH AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN CIVIL CONSTRUCTION WORK ON CONTRACT. RE TURN OF INCOME WAS FILED ELECTRONICALLY ON 15.10.2010 SHOWING TOTAL IN COME OF RS. 5,05,289/-. RETURN WAS SELECTED FOR SCRUTINY ASSES SMENT THROUGH CASS AND ACCORDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 5. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSEE WAS ASKED TO FURNISH DETAILS IN RESPECT OF ITS CONTRACT RECEIPTS. ON RECEIVING NO PLAUSIBLE REPLY, THE OFF ICER PROCEEDED BY ISSUING NOTICE U/S 133(6) OF THE INCOME-TAX ACT, 19 61 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] CALLING FOR INF ORMATION FROM NUMBER OF PERSONS. THE ASSESSING OFFICER FOUND THAT THE M ANY IRRECONCILABLE 3 DISCREPANCIES REMAINED TO BE EXPLAINED. THE DISCRE PANCIES WERE IN THE GROSS AMOUNT OF PAYMENTS MADE BY VARIOUS GOVERN MENT AGENCIES WHICH HAVE BEEN CREDITED TO THE PROFIT AND LOSS ACC OUNT VIS A VIS THE TAX DEDUCTED BY THE PAYERS. THE ASSESSING OFFICER WAS OF THE OPINION THAT THESE DIFFERENCES HAVE DIRECT BEARING ON THE F INAL ACCOUNTS. 6. THE ASSESSING OFFICER FURTHER FOUND THAT THERE W AS DIFFERENCE IN GROSS RECEIPTS AS PER PROFIT AND LOSS ACCOUNT AND B ANK ACCOUNTS. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT THE G ROSS RECEIPTS CREDITED TO THE PROFIT AND LOSS ACCOUNT SHOULD BE THE TOTAL OF CREDITS FOUND IN THE BANK ACCOUNTS PLUS VARIOUS ITEMS OF RECEIVABLE NATURE SHOWN/NOT SHOWN IN THE BALANCE SHEET. SINCE THE ASSESSEE HAS ALREADY DEBITED ALL THE EXPENSES INCURRED BY HIM FOR BUSINESS, THE ASSE SSING OFFICER TREATED THE DIFFERENCE OF RS. 85,93,227/- AS NET PR OFIT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 7. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND CONTENDED THAT THE ASSESSING OFFICER HAS COMPUTED T HE NET PROFIT @ 3% ON AGREED BASIS ON RECEIPTS SHOWN/CREDITED IN THE P ROFIT AND LOSS ACCOUNT AT RS. 4,62,93,261/-. THEREFORE, ANY FURTH ER ADDITION BY THE ASSESSING OFFICER IS UNCALLED FOR. 4 8. AFTER CONSIDERING THE FACTS AND SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED WITH THE CONTENTION OF THE ASSESSEE AND H ELD AS UNDER: I HAVE CAREFULLY PERUSED THE GROUNDS OF APPEAL, WR ITTEN SUBMISSIONS OF THE COUNSEL FOR THE APPELLANT AS WEL L AS THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. P ERUSAL OF ASSESSMENT ORDER INDICATES THAT THE AO COMPUTED THE NET PROFIT @ 3% ON AGREED BASIS ON THE RECEIPTS SHOWN / CREDITED IN THE PROFIT AND LOSS ACCOUNT AT RS. 4,62,93,261/ THUS THE AO WO RKED OUT INCOME OF THE APPELLANT AT RS. 13,88,798/. /THE ASS ESSING OFFICER FURTHER ADDED AN AMOUNT OF RS. 85,93,227/ AS PER DI SCUSSION MADE IN PARA 3 OF THE ASSESSMENT ORDER. THE AO FURTHER M ENTIONED IN THE ORDER THAT THE CREDIT TO THE BANK ACCOUNTS REMA INED UN- RECONCILED TO THE TUNE OF RS. 66,97,038/. ON THIS A MOUNT, DURING THE COURSE OF DISCUSSION IN APPEAL THE COUNSEL FOR THE APPELLANT STATED THAT AN AMOUNT OF RS. 66,97,038/ WAS LEFT TO BE ADDED WHICH WAS SHOWN IN THE GROSS RECEIPTS. THE COUNSEL ALSO STATED THAT THE APPELLANT AGREED TO PAY TAX ON THIS AMOUNT. THE AO HAS COMPUTED THE NET PROFIT @3% ON AGREED BASIS. IN THI S V I EW OF THE MATTER ON THE AMOUNT OF RS. 66,97,038/ PROFIT OF THE APPELLANT IS COMPUTED AT 3% WHICH WOULD COME TO RS. 2,00,911/. THE AO HAS COMPUTED THE NET PROFIT AT RS. RS. 13,88,798/-. 5 9. THE LD. CIT(A) FURTHER HELD AS UNDER: SINCE THE AMOUNTS HAVE DULY BEEN SHOWN IN THE BALA NCE SHEET AND THE INCOME OF THE APPELLANT HAS BEEN COMPUTED BY AP PLYING NP RATE ON AGREED BASIS THERE REMAINS NO CASE TO MAKE FURTH ER ADDITIONS ON THE GROUND THAT RECONCILIATION HAS NOT BEEN MADE. I N THE TOTALITY OF THE FACTS, WRITTEN SUBMISSIONS AND CIRCUMSTANCES OF THE CAST THE NET INCOME OF THE APPELLANT IS TAKEN AT RS. 15,89,7 09/. THE APPELLANT SHALL GET RELIEF ACCORDINGLY. 10. BEFORE US, THE LD. DR STRONGLY SUPPORTED THE FI NDINGS OF THE ASSESSING OFFICER. IT IS THE SAY OF THE LD. DR THA T ADDITION HAS BEEN MADE OVER AND ABOVE THE PROFIT ESTIMATED ON GROSS R ECEIPTS OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) ERRED IN DELET ING THE ADDITION. 11. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER HAS PROCEEDED BY ESTIMATING NET PROFIT BECAUS E THE ASSESSEE DID NOT FURNISH NECESSARY DETAILS. IT IS TRUE THAT IF THE ASSESSEE DOES NOT FURNISH NECESSARY DETAILS IN RESPECT OF ITS INCOME, THE ASSESSING OFFICER IS LEFT WITH NO CHOICE BUT TO ESTIMATE THE NET PROF IT OF THE ASSESSEE. IN OUR CONSIDERED OPINION, ONCE THE PROFIT IF ESTIMATE D ON GROSS RECEIPTS, NO FURTHER ADDITION NEEDS TO BE MADE ON THIS COUNT. MOREOVER, THE ASSESSEE, BEFORE THE FIRST APPELLATE AUTHORITY, HAS SUCCESSFULLY 6 EXPLAINED THE AMOUNT FOUND DEPOSITED IN THE BANK AC COUNTS OVER AND ABOVE THE DEPOSIT OF CONTRACT RECEIPTS AND THE LD. CIT(A) HAS GIVEN A FACTUAL FINDING IN THIS RESPECT. THE LD. DR COULD NOT POINT OUT ANY ERROR OR INFIRMITY IN THE FACTUAL FINDINGS OF THE F IRST APPELLATE AUTHORITY. THEREFORE, NO INTERFERENCE IS CALLED FO R. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 3278/DEL/2015 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.07. 2018. SD/- SD/- [ KULDIP SINGH] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 TH JULY, 2018 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER