ITO, New Delhi V. Sh. Shobhit Tyagi, Ghaziabad

ITA 3493/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7519 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEVINDER PAL SINGH
• Assessee Lawyers: B R R KUMAR
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. A. T VA RK E Y , JM ITA NO. 3493 /DEL/2013 : ASSTT. YEAR : 2009 - 10 INCOME TAX OFFICER , WARD 43(2), NEW DELHI VS SH. SHOBHIT TYAGI GH - 53, WINDSOR PARK PLOT NO. - 15, VEBHAV KHAND, INDERAPURAM, GHAZIABAD - 201010 (APPELLANT) (RESPONDENT) PAN NO. A CCPT8187D A SSESSEE BY : SH. B. R. R. KUMAR, SR. DR REVENUE BY : SH. DEVINDER PAL SINGH, ADV. DATE OF HEARIN G : 04.12 . 2014 DATE O F PRONOUNCEMENT : 11. 12 .2014 ORDER P ER N. K. SAINI , AM: THIS IS AN APPEAL BY THE DEPAR TMENT AGAINST THE ORDER DATED 28.03 .2013 OF CIT(A) - X XX , NEW DELHI . 2. THE ONLY EFFECTI VE GROUND RAISED IN THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING OF RS. 12,12,500/ - OUT OF TOTAL ADDITION OF RS. 13,40,500/ - MADE U/S 68 OF THE I. T ACT BY THE AO ON ACCOUNT OF UNEXPLA INED CASH CREDITS BY HOLDING THAT THE SAID CASH CREDITS WERE ASSESSEE S TURNOVER OF BUSINESS TO BE TAXES U/S 44AF OF THE I.T. ACT BY TAKING A NET PROFIT @ 8% AT RS. 1,28,000/ - BY IGNORING THE MATERIAL FACT THAT NO SUCH INCOME FROM BUSINESS WAS DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME. ITA NO. 3493 /DEL/2013 SHOBHIT TYAGI 2 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS. 6,00,540/ - ON 31. 07 .200 9 WHICH WAS PROCESSED U/S 143(1) OF THE I.T ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 30.04.2010 . LATER ON THE CASE WAS SELECTED FOR SCRUTINY . T HE AO NOTICED THAT THE ASSESSEE DEPOSITED RS. 13,40,500/ - UPTO 31.03.2009 IN THE PUNJAB NATIONAL BANK. HE ASKED THE ASSESSEE TO PRODUCE THE BANK PASS BOOK WITH NARRATION. THE ASSESSEE FU RNISHED THE BANK PASS BOOK AND STATED THAT HE ST ARTED SOME SHORT OF HANDLOOM AND WOODEN ITEMS BUSINESS WHICH WAS OPERATED FROM HOUSE AND LOOKED AFTER BY HIS WIFE. IT WAS FURTHER STATED THAT THE BUSINESS WAS NOT PROFITABLE HENCE IT WAS CLOSED AND THE CASH W ITHDRAWAL S & DEPOSITS WERE RELATED TO THAT BUSINESS. THE AO WAS NOT SATISFIED FROM THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT THE ASSESSEE WAS BANK EMPLOY EE AND THAT NO SUCH INCOME WAS SHOWN IN THE RETURN OF INCOME. H E, THEREFORE, ADDED A SUM OF RS. 13,40,500/ - . 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: THAT WHILE FRAMING ASSESSMENT DURING THE YEAR UNDER CONSIDERATION THE LD. AO HAS FRAMED TOOK THE VIEW OF HIS WRONG CONCEPTIONS, NOTIONS AND WITHOU T APPLYING HIS LEGITIMATE MIND AND ADDED RS. 13,40,500/ - TO THE INCOME OF THE ASSESSEE WHICH WAS DEPOSITED IN TO BANK ACCOUNT NO. 04496000100029698 MAINTAINED WITH THE PUNJAB NATIONAL BANK, VIKAS PURI BRANCH, NEW DELHI COPY OF THE SAME HAS ALREADY BEEN PLA CED ON RECORD WITH YOUR GOODSELF. IT IS ALSO WORTH STATING HERE THAT THE APPELLANT/ASSESSEE MADE FULL DISCLOSURES DURING THE COURSE OF THE PROCEEDINGS OF THE ASSESSMENT AND HAD SUBMITTED THAT THE HE HAD STARTED A SMALL ITA NO. 3493 /DEL/2013 SHOBHIT TYAGI 3 BUSINESS OF HANDLOOM AND SMALL WOODEN ITEMS OPERATED FROM THE HOUSE AND THE SAME WAS LOOKED AFTER BY HIS WIFE. THE BUSINESS WAS NOT PROFITABLE HENCE THE SAME WAS DISCONTINUED BY THE APPELLANT/ASSESSEE. ALL THE PURCHASES WERE MADE FROM THE PANIPAT WHICH IS NEAR TO SAHARANPUR, THE WIFE OF THE A PPELLANT/ASSESSEE HAD BEEN LOOKING AFTER THE SAID BUSINESS AND ALL THE CASH PAYMENTS HAS BEEN WITHDRAWN FROM SAHARANPUR. IT S FURTHER PERTINENT TO MENTION HERE THAT THE LD. AO DID NOT APPLY HIS LEGITIMATE MIND AND ADDED ALL SUCH CASH DEPOSITS IN THE INCOME OF THE APPELLANT/ASSESSEE AND TAXED THE SAME. NOW AT THIS STAGE THE ASSESSEE SUBMITS AND OFFERS, TO END UP THE ISSUE AND BUY PEACE OF MIND, THE SAID CASH CREDITS MAY BE TAKEN AT RS. 16,00,000/ - (RS. SIXTEEN LAC) TO BE TREATED AS ITS TURNOVER OF BUSINESS A ND BE TAXED UNDER SECTION 44AF OF THE INCOME TAX ACT TAKING A NET PROFIT @ 8% WHICH COMES TO RS. 1,28,000/ - . 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE , THE LD. CIT(A) OBSERVED THAT THE ASSESSEE STARTED A SMALL BUSINESS OF HANDLOOM AND SMALL WO ODEN ITEMS OPERATED FROM THE HOUSE WHICH WAS LOOKED AFTER BY HIS WIFE AND THE ASSESSEE TO BUY PEACE OF MIND SURRENDERED RS. 1,28,000/ - @ 8% OF RS. 16,00,000/ - . THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 1,28,000/ - AND DELETED THE REMAINING ADDITION OF RS . 12,12,500/ - . NOW THE DEPARTMENT IS IN APPEAL. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR ALONGWITH THE WRITTEN SUBMISSION FURNISHED BY THE ASSESSEE. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE VARIOUS DEPOSITS TOTALING TO RS. 13,40,500/ - WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE , DETAIL OF THE SAME IS GIVEN BY THE AO AT PAGE NOS. 1 TO 7 OF THE ASSESSMENT ORDER DATED 29.11.2011. THE ITA NO. 3493 /DEL/2013 SHOBHIT TYAGI 4 EXPLANATION OF THE ASSESSEE REGARDING THOSE DEPOSITS WAS THAT HE WAS DOING SMALL BUSINESS IN HANDICRAFT AND WOODEN ITEMS WHICH WAS LOOKED AFTER BY HIS WIFE FROM HIS HOUSE. ALL THE CASH PAYMENTS HAD BEEN WITHDRAWN FROM SAHARANPUR AND UTILIZED FOR MAKING THE PURCHASES FROM PANIPAT WHICH IS NEAR TO SAHARANPUR , THEREFORE, THE EXPLANATION OF THE ASSESSEE APPEARS TO BE PLAUSIBLE. THE ASSESSEE WAS DOING THE SMALL BUSINESS IN HANDI CRAFT AND WOODEN ITEMS WHICH WERE PURCHASED FROM PANIPAT ( NEAR TO SA HARANPUR ) . AS THE ASSESSEE WAS DOING SMALL BUSINESS AND THE TURNOVER WAS LESS THAN RS. 40,00,000/ - , T HE ASSESSEE OFFERED THE INCOME OF THE SAID BUSINESS U/S 44AF OF THE ACT ON THE ESTIMATED TURNOVER OF RS. 16,00,000/ - WHICH WAS MORE THAN RS. 13,40,500/ - DEPOSITED ON VARIOUS DATES THROUGHOUT THE YEAR IN THE BANK ACCOUNT . IN OUR OPINION THE LD. CIT(A) RIGHTLY SUSTAINED THE AD DITION OF RS. 1,28,000/ - CONSIDERING THE SAME AS PROFIT @ 8% ON THE TURNOVER OF RS. 16,00,000/ - . WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND ACCORDINGLY DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 7 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ( ORDER PRONOU N CED IN T HE OPEN COURT ON 11 /12 / 2014 ) . SD/ - SD/ - ( A. T. VA RK E Y ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 / 12 / 2014 *SUBODH* ITA NO. 3493 /DEL/2013 SHOBHIT TYAGI 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 05.12 . 2014 PS 2. DRAFT PLACED BEFORE AUTHOR 05.12 . 2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT D ISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.