DCIT circle I, V. S.N. Agarwal,

ITA 3477/DEL/2007

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 6254 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2004-2005
• Appeal Filed On: 01-08-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V K TULSIYAN
• Keywords: Source of fund
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA : VICE PRESIDENT AN D SHRI GEORGE MATHAN : JUDICIAL MEMBER ITA NO. 3477/DEL/07 ASSTT. YR: 2004-05 DCIT, CIRCLE-1, VS. S.N. AGARWAL, MUZAFFARNAGAR. 434 PATEL NAGAR, NEW DELHI. ( APPLICANT ) ( RESPONDENT ) APPLICANT BY : SMT. ABHA RANI SINGH DR RESPONDENT BY : SHRI V.K. TULSIYAN CA O R D E R PER G.E. VEERABHADRAPPA, V.P: THIS APPEAL, PREFERRED BY THE REVENUE, IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 17-05-2007 RELATING TO THE ASSESSMENT YEAR 2004-05. 2. THE ISSUES RAISED IN THIS APPEAL ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 4,60,920/- MADE ON ACCOUNT OF EXTRA GROSS PROFIT, WITHOUT APPR ECIATING THE FACTS OF THE CASE THAT THE CORRECTNESS AND COMPLETE NESS OF BOOKS OF ACCOUNTS FOUND NOT TO BE SATISFACTORY AND THE ADDIT ION WAS MADE BY INVOKING PROVISIONS OF SECTION 145(3) OF THE INCOME TAD ACT, 1961. 2. THE LD. CIT(A) ERRED IN LAW IN DELETING HE ADDI TION OF RS. 12,77,000/- MADE ON ACCOUNT OF UNEXPLAINED UNSECURE D LOANS AND ENTERTAINING FRESH EVIDENCES IN THIS REGARD WHICH W AS NOT PRODUCED BEFORE THE AO WITHOUT APPRECIATING FACTS OF THE CAS E THAT THE ASSESSEE FAILED TO PROVE GENUINENESS, CREDITWORTHIN ESS AND IDENTITY OF THE LOANS DURING THE COURSE OF ASSESSMENT PROCEE DINGS. 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPO N THE ORDER OF THE CIT(A) ON THE STRENGTH OF THE PAPER BOOK CONTAININ G 45 PAGES IN THE COMPILATION. 4. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUPP ORTED THE FINDINGS OF THE AO. 5. WE HAVE GONE THROUGH THE RECORDS INCLUDING THE D ISCUSSIONS IN THE IMPUGNED ORDER. IN OUR VIEW THE ORDER OF THE CIT(A) , ON BOTH THE ISSUES, CANNOT BE FOUND FAULT WITH. AS REGARDS GROSS PROFIT ADDITION, IT MAY SPECIFICALLY BE MENTIONED THAT THE AO HAS NOT BROUG HT OUT ANY SPECIFIC DEFECTS IN THE AUDITED ACCOUNT MAINTAINED BY THE A SSESSEE FOR REJECTION OF THE RESULTS DECLARED BY HIM. IN THE LINE OF THE BUSINES S IN WHICH THE ASSESSEE IS ENGAGED, IT IS DIFFICULT TO MAINTAIN CASH VOUCHERS. THE ASSESSEE HAS, HOWEVER, MAINTAINED ELABORATE QUANTITATIVE RECORDS FOR PUR CHASES, SALES AND STOCKS. IN OUR VIEW, THERE IS NO JUSTIFICATION FOR REJECTING T HE BOOKS OF ACCOUNT ONLY ON THE BASIS OF THE PERCENTAGE OF GROSS PROFIT DECLARE D BY THE ASSESSEE. ACCORDINGLY, WE DECLINE TO INTERFERE WITH THE FINDI NG OF CIT(A) ON THE ISSUE IN QUESTION. 6. AS REGARDS UNSECURED LOANS, THE ASSESSEE HAS FI LED COPIES OF ACCOUNT; CONFIRMATION LETTERS OF THE LOANERS; AND BANK STATEMENTS EXPLAINING THE SOURCE OF FUNDS. ALL THE CREDITORS WERE REGULAR LY ASSESSED TO TAX. IN SUCH 3 EVENT THE QUESTION OF MAKING ANY ADDITION U/S 68 IN RESPECT OF CASH CREDIT IS HIGHLY IMPROPER AND HAS CORRECTLY BEEN DELETED BY T HE CIT(A). ACCORDINGLY, WE DECLINE TO INTERFERE WITH THE ORDER OF CIT(A) ON THE ISSUE IN QUESTION. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30-3-2009. SD/- SD/- ( GEORGE MATHAN ) ( G.E. VEERABHADRAPPA ) JUDICIAL MEMBER VICE PRESIDENT DATED: 30-03-2009. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR