ITO, Gurgaon V. Shri Praveen Yadav, Gurgaon

ITA 3386/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4235 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: PRAVEEN YADAV IN PERSON
• Keywords: Business income; Depreciation; Additional evidence
• Section: 143(3); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F , NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI MAHARISHI PRASHANT, ACCOUNTANT MEMBER ITA NO. 3386 /DEL/2015 AY: 2011 - 12 ITO, WARD 3(2) HSIIDC BUILDING UDYOG VIHAR PHASE V GURGAON VS . SH. PRAVEEN YADAV PROP. M/S ALPHA TECHNOLOGIES & MARKETING CO. H.NO.2249P, SECTOR 46 GURGAON PAN: AAYPY5403B (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SURENDER PAL, SR. D.R. ASSESSEE BY : SH. PRAVEEN YADAV, ASSESSEE IN PERSON. DATE OF HEARING : 01 / 11 / 2018 DATE OF PRONOUNCEMENT : 01 / 11 / 2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER P RESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 19/03/15 PASSED BY LD.CIT(A) - 1, G URUGAON, ON FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS A ND C I RCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN FACT AND I N LAW IN GRANTING THE RELIEF OF RS.38 , 74,086/ - AFTER ACCEPTING THE BOOK RESULTS A L THOUGH THE BOOKS OF ACCOUNTS ARE NOT COMPLETE AND CORRECT . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN FACT AND I N LAW IN GRANTING THE RELIEF OF RS . 43,37,000/ - ON ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 2 ACCOUNT OF CAS H DEPOSITED IN SAVING BANK ACCOUNT ALTHOUGH THE SAID ACCOUNT DOES NOT FORM PART OF T HE BALANCE SHEET . 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN FACT AND IN LAW IN GRANTING THE RELIEF OF RS . 43 , 37 ,000 / - ON ACCOUNT OF CASH DEPOSI TED SAVING BANK ACCOUNT AS DEPOSITED OUT OF CASH RECEIVED FROM CONTRACT RECEIPTS ALTHOUGH NO DETAILS OF SUCH PA Y ERS HAVE EVER BEEN FURNISHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN FACT AND IN LAW IN ALLOWING RELIEF ON THE BASIS OF REPORT SUBMITTED B Y THE AO IN WHICH IT WAS NEVER ACCEPTED THAT THE BOOKS ARE COMPLETE AND CORRECT . 5. THE APPELLANT CRAVES FOR THE PERMISSION TO ADD , DELETE OR AMEND GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SSESSEE FILED HIS RETURN OF INCOME ON 28/09/11 DECLARING TOTAL INCOME OF RS.9,30,860/ - . RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . THE CASE WAS SELECTED FOR SCR UTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO ASSESSEE. IN RESPONSE TO THE STATUTORY NOTICES RECEIVED, R EPRESENTATIVE OF ASSESSEE APPEARED BEFORE THE LD.AO AND FILED REQUISITE DETAILS. 2.1. LD.AO OBSERVED THAT ASSESSEE DERIVES HIS INCOME FROM PROVIDING OF ADVERTISING AND CIVIL CONTRACTOR SERVICES TO DIFFERENT COMPANIES ON CONTRACT BASIS. DURING THE YEAR UNDER CONSIDERATION , ASSESSEE DECLARED GROSS RECEIPTS OF RS.3,87,40,859/ - . ASSESSEE CLAIMED HUGE EXPENSES UNDER THE HEAD PURCHASES, CONSUMAB LES, INTEREST, DEPRECIATION, WAGES AND SALARIES OUT OF THE TOTAL TURNOVER OF BUSINESS. AFTER CONSIDERING DETAILS AND REPLY FILED BY ASSESSEE , LD.AO OBSERVED THAT ASSESSEE ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 3 HAD NOT FURNISHED BILLS AND VOUCHERS IN RESPECT OF CERTAIN EXPENSES RELATING TO BUS INESS. HE THUS APPLIED PROFIT RATE OF 10% OF GROSS RECEIPTS FROM ADVERTISING AND CIVIL BUSINESS BY INVOKING SECTION 145(3) OF THE ACT. 2.2 . IT WAS ALSO OBSERVED BY LD.AO THAT ASSESSEE DURING THE YEAR DEPOSITED CASH OF RS.43,37,000/ - IN HIS ORIENTAL B ANK OF C OMMERCE. LD.AO DISALLOWED THESE AMOUNTS AS PROPER DETAILS WERE NOT FURNISHED BY ASSESSEE REGARDING CREDITORS . 3. AGGRIEVED BY ORDER OF LD. AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) , WHO DELETED THE ADDITION. 4. AGGRIEVED BY ORDER OF LD.CIT( A) ASSESSEE IS IN APPEAL BEFORE US NOW. 5. BEFORE US , ASSESSEE APPEARED IN PERSON AND REPRESENTED HIS CASE. 5.1. HE SUBMITTED THAT ALL DETAILS REGARDING IMPUGNED ADDITION WERE HANDED OVER TO HIS R EPRESENTATIVE WHO WAS APPEAR ING BEFORE LD.AO. HOWEVER THE R EPRESENTATIVE FAILED TO APPEAR IN THE PROCEEDINGS BEFORE LD.A.O. AND DID NOT FILE VARIOUS DETAILS LIKE BILLS/VOUCHERS IN RESPECT OF EXPENSES INCURRED BY ASSESSEE AS WELL AS UNSECURED LOANS. ASSESSEE THUS SUBMITTED THAT ALL THE NECESSARY DETAILS THAT WERE REQUIRED TO ADJUDICATE THESE ISSUES WERE FILED BEFORE LD.CIT(A) , WHO AFTER CALLING FOR A REMAND REPORT FROM LD.A.O. ADMITTED THOSE EVIDENCES AS IT WAS NECESSARY TO DECIDE THE CASE. ASSESSEE SUBMITTED THAT LD.CIT(A) WHILE DEALING WITH THE ISSUES BEFORE HIM , HAVING REGARD TO DETAILS FILED , DELETED ADDITION BY OBSERVING THAT ASSESSEE PRODUCED ALL BOOKS OF ACCOUNTS A ND DOCUMENTS TO SUBSTANTIATE CASH CREDITS , WHICH HAS BEEN FOUND TO BE IN ORDER AFTER EXAMINATION BY LD.AO. IT IS ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 4 ON THESE PREMISE THAT LD. CIT (A) DELETED THE ADDITION MADE BY LD.AO. 5.1 . HE THUS PRAYED FOR RELIEF BEING CONF I RMED GRANTED BY LD. CIT (A ). 5.2. ON THE CONTRARY LD.SR.DR SUBMITTED THAT VARIOUS OPPORTUNITIES WERE GIVEN TO ASSESSEE DURING ASSESSMENT PROCEEDINGS AND STILL NECESSARY DOCUMENTS CALLED FOR BY LD. AO WERE NOT PRODUCED DURING ASSESSMENT PROCEEDINGS . HE PLACED RELIANCE UPON ORDERS OF LD. AO. 6. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 7 . IN GROUND NO. 1 REVENUE IS AGGRIEVED AGAINST ACCEPTING OF BOOK RESULTS BY LD. CIT (A). 7.1 . ON PERUSAL OF RECORDS, IT IS OBSERVED THAT LD.A.O. IN HI S REMAND REPORT , ACKNOWLEDGED , THAT ALL DETAILS REGARDING CASH DEPOSITS HAS BEEN PRODUCED ALONG WITH COMPLETE BOOKS OF ACCOUNTS AND OTHER SUPPORTING DETAILS. THUS LD.A.O. IN REMAND PROCEEDINGS , WAS SATISFIED OF ASSESSEE HAVING MAINTAINED ITS BOOKS OF A CCOUNT , WHICH HAS BEEN EXAMINED BY LD. AO. THUS IT IS ON THESE PREMISES THAT LD. CIT (A) HELD THAT SECTION - 145 (3) OF THE A CT COULD NOT HAVE BEEN INVOKED. 7.2. WE ARE IN AGREEMENT WITH THE FINDINGS OF LD.CIT(A) . ON PERUSAL OF REMAND REPORT ADMITTEDLY LD.A.O. IS ACCEPTING THE BOOKS OF ACCOUNTS FILED BY ASSESSEE. IT IS ALSO BEEN SUBMITTED THAT ALL DETAILS REGARDING THE AMOUNTS HAVE BEEN VERIFIED AND IS ALSO REFLECTED. THUS WE DO NOT FIND ANY REASON TO DEVIATE FROM OBSERVATIONS OF LD. CIT (A). ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 5 7. 3 . ACCO RDINGLY GROUND NO.1 RAISED BY REVENUE STANDS DISMISSED. 8. IN GROUND NO. 2 - 3 REVENUE IS AGGRIEVED BY DELETION OF CASH CREDITS MADE IN HANDS OF ASSESSEE AMOUNTING TO RS.43,37,000/ - . TH I S AGAIN HAS BEEN DELETED BY LD. CIT (A) AFTER GIVING A DETAILED ANALYSI S WHICH IS AS UNDER: I) UNEXPLAINED CASH DEPOSITS OF RS. 43,37,000/ - IN APPELLANT'S BANK ACCOUNT: - THE FACTS ARE THAT THE A.O NOTICED THAT THERE WERE CASH DEPOSITS IN APPELLANT'S BANK ACCOUNT WITH ORIENTAL BANK OF COMMERCE DURING THE YEAR UNDER CONSIDERA TION AMOUNTING TO RS. 43,37,000. SINCE THE APPELLANT DID NOT FILE ANY DETAILS AND OTHER NECESSARY EVIDENCE SUBSTANTIATING THE GENUINENESS OF THE AFORESAID CASH DEPOSITS, THE A.O ADDED THE ENTIRE AMOUNT OF UNEXPLAINED CASH DEPOSITS AMOUNTING TO RS.43,37,000 / - TO THE APPELLANT'S INCOME. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT GAVE NECESSARY EVIDENCE IN SUPPORT OF CASH DEPOSITS IN HIS BANK ACCOUNT. WHILE GIVING THE ADDITIONAL EVIDENCE, THE APPELLANT SUBMITTED THAT DURING THE YEAR UNDER CONS IDERATION, HE HAD GROSS RECEIPTS OF RS. 3,87,40,859/ - OUT OF WHICH HE RECEIVED PAYMENT OF RS. 1,54,94,983/ - IN CASH AND REMAINING AMOUNT OF RS. 2,32,45,875/ - THROUGH CHEQUE. IN ORDER TO ESTABLISH THIS FACT, THE APPELLANT PRODUCED BOOKS OF ACCOUNT BEFORE TH E A.O WHO STATED THE FOLLOWING WITH REGARD TO THIS ADDITION AFTER EXAMINING THE BOOKS OF ACCOUNT IN HER REPORT DATED 03 - 03 - 2015: - 'DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND THAT IN THE BANK ACCOUNT OF ASSESSEE THERE WAS CASH DEPOSIT OF RS.43 , 37,000/ - . AFTER GIVING VARIOUS OPPORTUNITIES THE ASSESSEE FAILED TO COMPLY ON THAT. NOW DURING APPELLATE PROCEEDINGS THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE AND STATED THAT HE HAD IN THE BUSINESS OF ADVERTISEMENT & DURING THE YEAR HE HAD GROSS RECEIPT S OF RS.3, 87, 40,859/ - OUT OF WHICH HE GOT PAYMENT OF RS.154,94,983/ - IN CASH & RS.2,32,45,875/ - THROUGH CHEQUE. THE ASSESSES ALSO PRODUCED COMPLETE BOOKS OF ACCOUNTS & OTHER RELEVANT SUPPORTING DETAILS ON THIS ISSUE. FROM DETAILS IT HAS BEEN FOUND THAT T HE ASSESSEE HAS RECEIVED THE AMOUNT FROM SOME PARTIES IN CASH & SAME IS ALSO REFLECTED IN THIS BOOK OF ACCOUNTS. HENCE, THE LD. CIT (A) TAKE NECESSARY DECISION ON MERIT BASIS. ' ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 6 I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE SUBMISSIONS OF THE APPELLANT TOGETHER WITH REMAND REPORT OF THE A.O. THE ADDITION OF RS. 43,37,000/ - WAS MADE BY THE A.O IN HER ORDER U/S 143(3) OF THE INCOME TAX ACT IN VIEW OF THE FACT THAT NO DETAILS WERE SUBMITTED BY THE APPELLANT ESTABLISHING THE GENUINENESS OF THE AFORESAID CASH DEPOSITS. THE APPELLANT HOWEVER, DURING THE COURSE OF REMAND PROCEEDINGS, PRODUCED COMPLETE BOOKS OF ACCOUNT AND OTHER RELEVANT DOCUMENTS SUBSTANTIATING THE FACT THAT THE AFORESAID CASH DEPOSITS WERE ON ACCOUNT OF THE TOTAL PAYMENT OF RS. 1,54,94,983/ - RECEIVED IN CASH IN CONNECTION WITH HIS BUSINESS. THE A.O AFTER EXAMINING THE BOOKS OF ACCOUNT WAS CO N VINCED THAT THE APPELLANT RECEIVED THE AFORESAID PAYMENT IN CASH AND SAME WAS REFLECTED IN HIS BOOKS OF ACCOUNT. HENCE AFTER A CAREFUL CONS IDERATION OF THE FACTS OF THE CASE, PARTICULARLY THE FACT THAT THE CASH DEPOSITS OF RS.43,37,000/ - WERE MADE OUT OF CASH RECEIPTS OF 1,54,94,983/ - RECEIVED IN CONNECTION WITH HIS BUSINESS, AS FOUND BY THE AO ON THE BASIS OF EXAMINATION OF APPELLANT'S BOOKS OF ACCOUNT;. I HOLD THAT THERE IS NO BASIS FOR MAKING THE ADDITION OF RS. 43,37,000/ - . ON ACCOUNT TO UNEXPLAINED CASH DEPOSITS IN APPELLANT'S BANK ACCOUNT. THE APPELLANT GETS CONSEQUENTIAL RELIEF ON THIS ISSUE. 8.1. LD.C IT(A) HEREINABOVE CATEGORICALLY OBSERVED THAT LD.A.O. VERIFIED ADDITIONAL EVIDENCES FILED BY ASSESSEE AND HAS GONE THROUGH COMPLETE BOOKS OF ACCOUNTS AND OTHER RELEVANT SUPPORTING DETAILS ON THIS ISSUE. IT HA S ALSO BEEN RECORDED BY LD. AO IN REMAND REPORT , THAT THESE DETAILS REVE ALS THAT ASSESSEE HAS RECEIVED AMOUNT FROM SOME PARTIES IN CASH , AND WHICH IS REFLECTED IN BOOKS OF ACCOUNTS. HE THUS DOES NOT QUESTION/DOUBT GENUINENESS OF THE DEPOSITS AS IT HAS BEEN CONSIDERED TO BE IN THE DUE COURSE OF DISCHARGING HIS OBLIGATIONS IN CARRYING OUT BUSINESS. UNDER SUCH CIRCUMSTANCES WE DO NOT FIND IT APPROPRIATE TO UPHOLD ADDITION MADE BY LD. AO. LD.A.O. IN TURN ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 7 IS ACCEPTING THE DETAILS FILED BY ASSESSEE AND THEREFORE WE UPHOLD THE DECISION OF LD. CIT (A). 8.2. ACCORDINGLY THESE GR OUNDS RAISED BY REVENUE STANDS DISMISSED. 9. GROUND NO. 4 - 5 RAISED BY REVENUE ARE GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 10. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 / 1 1 / 2 0 1 8 . S D / - S D / - ( MAHARISHI PRASHANT) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 0 1 S T NOVEMBER, 2018. * GMV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NO.3386/DEL/2015 A.Y.2011 - 12 SH. PRAVEEN YADAV 8 DATE DRAFT DICTATED ON 01.11.18 DRAFT PLACED BEFORE AUTHOR DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.