Smt. Dev Dutt, Faridabad V. ITO, Faridabad

ITA 3565/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6716 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: HARI OM BHATI
• Keywords: Business income; Peak credit; Additional evidence; Corroborative evidences
• Section: 142(1); 234B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3565/DEL/2014 ASSESSMENT YEAR: 2009-10 SH. DEV DUTT, S/O SH. KRISHAN SINGH, VS. INCOME TAX OFFICER, C/O M/S BHATI WADHWA & CO., WARD II(3), CHARTERED ACCOUNTANTS, FARIDABAD 5N/1A, FIRST FLOOR NEAR MCF MAYOR CAMP OFFICE, B.K. CHOWK, NIT FARIDABAD-121001 (PAN: AKGPD4152Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. HARI OM BHATI, CA DEPARTMENT BY : SH. S.K. JAIN, SR. DR ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMPU GNED ORDER DATED 15.4.2014 OF LD. CIT(A), FARIDABAD PERTAINING TO ASSESSMENT YEAR 2009-10. THE GROUND RAISED IN THE ASSESSEES APPEA L READS AS UNDER:- 1. THAT THE ORDER OF THE LD. CIT(A), FARIDABAD IS BAD IN LAW AND ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCSE OF THE C ASE THE APPELLANT DENIES HIS LIABILITY TO BE ASSESSED U/S. 144 AND CONSEQUENTLY TO PAY TAX THEREON. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CA SE THE LD. CIT(A) FARIDABAD ERRED IN : 2 A) REJECTING THE CLAIM OF THE APPELLANT FOR SURRENDER OF PEAK CREDIT OF THE CASH DEPOSITED IN TO THE BANK ACCOUNTS TO THE TUNE OF RS. 4,68,550/- MADE BEFORE THE LD. CIT(A) IN GOOD FAITH. B) CONFIRMING THE ADDITION OF RS. 23,90,000/- WITHOUT PURSUIT THE FACTS OF THE CASE FULLY AND PROPERLY. 4. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSING THE ACTION OF THE AO IN CHARGING INTE REST U/S. 234B AND 234C OF THE INCOME TAX ACT, 1961. 5. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHO UT PREJUDICE TO EACH OTHER. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD FILED RETURN DECLARING INCOME AT RS. 1,73,360/- ON 31.3.2010 WHICH WAS PRO CESSED ON THE RETURNED INCOME. THE CASE WAS TAKEN FOR SCRUTINY TH ROUGH CASS. NOTICE U/S. 143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 14. 9.2010 FIXING THE CASE FOR 22.9.2010. AGAIN NOTICES U/S. 143(2) AND 142(1 ) OF THE I.T. ACT, 1961 DATED 31.1.2011 ALONGWITH QUESTIONNAIRE ISSUED FOR 10.2.2011. AGAIN NOTICES U/S. 143(2) AND 142(1) OF THE I.T. ACT, 196 1 DATED 31.1.2011 ISSUED FOR 11.2.2011. FRESH NOTICES U/S. 143(2) AND 142(1) OF THE I.T. ACT WERE ISSUED ON 11.3.2011 FOR 23.3.2011, BUT NONE ATTENDE D NOR ANY REPLY FILED. AGAIN NOTICE U/S. 142(1) OF THE ACT WAS ISSUED ON 0 2.9.2011 FOR 12.9.2011 ALONGWITH SHOW CAUSE AS TO WHY PENALTY PROCEEDINGS U/S. 271(1)(B) OF THE ACT MAY NOT BE INITIATED. BUT AGAIN THE SAME WAS NO T COMPLIED WITH. 3 THEREAFTER, AO OBSERVED THAT ASSESSEE IS DOING SOME BUSINESS THE DETAIL OF WHICH ARE NOT AVAILABLE ON RECORD. AO NOTICED THAT IT IS AN UNAUDITED CASE AND GROSS RECEIPTS / SALES DURING THE YEAR WAS NOT SHOWN ONLY DECLARING BUSINESS GAIN OF RS. 2,65,360 AND FILED HIS RETURN AS TRADERS. AO OBSERVED THAT FROM THE RETURN IT IS NOT VERIFIABLE WHETHER B OOKS OF ACCOUNTS HAS BEEN MAINTAINED OR NOT. IN VIEW OF THE ABOVE, INFORMATI ON/ DOCUMENTS OBTAINED FROM THE BANK AND AFTER EXAMINATION OF THE SAME, AS SESSMENT OF THE INCOME OF THE ASSESSEE WAS MADE. THE AO NOTICED TH AT ASSESSEE HAS DEPOSITED RS. 23,90,000/- IN CASH IN HIS BANK ACCOU NT. THE ASSESSEE WAS BY QUESTIONNAIRE ISSUED ON 31.1.2011 FIXING THE CAS E FOR 10.2.2011 TO FURNISH THE SOURCE OF CASH DEPOSIT IN YOUR SAVING B ANK ACCOUNTS DURING THE YEAR ALONGWITH SUPPORTING EVIDENCES. IN THIS BEHAL F, A SHOW CAUSE WAS ISSUED ON 1.11.2011 FOR 8.11.2011 TO EXPLAIN THE S OURCE OF CASH OF RS. 23,90,000/- DEPOSITED IN THE BANK ACCOUNT WITH SUFF ICIENT DOCUMENTARY EVIDENCE AND FURNISH OTHER INFORMATION. BUT ON THE FIXED DATE THE COUNSEL OF THE ASSESSEE APPEARED BUT NO REPLY/EVIDENCE AN D SOUGHT ADJOURNMENT. THEREAFTER, THE CASE WAS ADJOURNED TO SEVERAL DATES ON THE REQUEST OF THE ASSESSEES COUNSEL AND LAST OPPORTUNITY WAS GIVEN BY ISSUING THE SHOW CAUSE DATED 25.11.2011 FOR FIXING THE CASE ON 2.1 2.2011 TO COMPLETE THE EX-PARTE U/S. 144 OF THE ACT. WAS FILED ONLY. THER EAFTER, AO OBSERVED THAT ON PERUSAL OF RETURN OF THE ASSESSEE, IT WAS FOUND THAT ASSESSEE HAS NOT DECLARED ANY SALE DECLARING BUSINESS GAIN OF RS. 2, 65,360/- DURING THE YEAR UNDER CONSIDERATION. NO DETAIL IN THIS REGARD WAS FURNISHED BEFORE THE 4 AO. SINCE ASSESSEE HAS NOT PRODUCED HIS BOOKS TO G ET HER BUSINESS INCOME VERIFIED. ACCORDINGLY, THE RESULTS CANNOT BE ACCEPTED. HENCE, THE AO VIDE HIS ORDER DATED 14.12.2011 PASSED U/S. 144 OF THE I.T. ACT, 1961 ASSESSED THE INCOME OF THE ASSESSEE AT RS. 25,63,36 0/- AND ADDED BACK THE AMOUNT OF RS. 23,90,000/- DEPOSITED IN CASH IN THE BANK ACCOUNT OF THE ASSESSEE AND TREATED THE SAME AS UNDISCLOSED INCOM E OF THE ASSESSEE. 3. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A) AND ALSO FILED ADDITIONAL EVIDENCE UNDER RU LE 46A, WHICH WAS FORWARDED TO AO FOR EXAMINATION, BOTH WITH REGARD TO THE ADMISSIBILITY OF ADDITIONAL EVIDENCE AND THE MERIT OF ADDITION MA DE IN THE LIGHT OF ADDITIONAL EVIDENCE, SUBMITTED BY THE ASSESSEE. AO S REPORT HAS BEEN REPRODUCED IN THE CIT(A)S ORDER, AFTER CONSIDERING WHICH LD. CIT(A) CONFIRMED THE ADDITION OF RS. 38,36,000/- ON ACCOUN T OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT, REJECTING THE ASSESSEE S SURRENDER OF PEAK CREDIT BALANCE OF RS. 7,60,894/- BEFORE AO IN REMAN D PROCEEDINGS, INTER ALIA, OBSERVING THAT ON ONE HAND THE AO HAD RECOMM ENDED REJECTION OF ADDITIONAL EVIDENCE AND HAS CONCLUSIVELY TRIED TO E STABLISH THE FACT THAT SOURCE OF CASH DEPOSIT COULD NOT BE SATISFACTORILY EXPLAINED, ON THE OTHER, HE HAS REFERRED TO THE SURRENDER OF PEAK CREDIT BAL ANCE IN HIS BANK ACCOUNT AND PAYMENT OF TAX THEREON BY THE ASSESSEE. HE POI NTED OUT THAT SINCE AO HAS NOT BEEN ABLE TO SUBSTANTIATE IN HIS REPORT AS TO WHY PEAK CREDIT BALANCE MAY BE ACCEPTED, THE ASSESSEES CONTENTION WAS TO BE REJECTED. 5 4. NOW THE ASSESSEE IS AGGRIEVED AGAINST THE IMPUG NED ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. AT THE THRESHOLD, LD. COUNSEL OF THE ASSESSEE HA S STATED THAT THE ISSUES INVOLVED IN THE PRESENT APPEAL ARE SQUARELY COVERED BY THE ITAT, C BENCH, NEW DELHI IN ITA NO. 1139/DEL/2014 (AY 2009-10) IN THE CASE OF HANSRAJ S/O SH. ISHRIA VS. ITO, FARIDABAD. IN THIS BEHALF, HE FILED THE COPY OF THE SAID DECISION AND REQUESTED THAT B Y FOLLOWING THE SAME REASONING, THE ADDITIONS IN DISPUTE MAY BE DELETED AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE MAY BE ALLOWED. 6. ON THE CONTRARY, LD. SR. DR RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND THE DE CISION REFERRED BY THE LD. COUNSEL OF THE ASSESSEE IN THE CASE OF HAN SRAJ VS. ITO, FARIDABAD PASSED IN ITA NO. 1139/DEL/2014 (AY 2009-10) DATED 26.6.2016. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL IN R ELYING UPON THE AFORESAID DECISION OF THE ITAT, NEW DELHI. FOR THE SAKE OF CLARITY, I AM REPRODUCING THE FINDING GIVEN VIDE PARA NO. 5 TO 7 AT PAGES 4 TO 5 OF THE ITAT, DELHI DECISION DATED 26.6.2016 IN THE CASE OF HANSRAJ VS. ITO, FARIDABAD PASSED IN ITA NO. 1139/DEL/2014 (AY 2009- 10) AS UNDER:- 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE . I T IS NOT DISPUTED THAT ASSESSE WAS DOING THE BUSINESS OF 6 CATTLE FEEDS. IN THE STATEMENT OF FACTS, FILED BEFO RE LD. CIT(A), THE ASSESSEE HAD POINTED OUT THAT IT WAS IN THE BUSINESS OF RETAIL TRADING OF CATTLE FEEDS E.G. PED DY, KHAL, CHOORI, CHILKA, GUD, JAWAR AND BARSAM ETC. AN D ASSESSED WITH ITO, WARD 11(3), FARIDABAD. RETURN OF INCOME HAD BEEN FILED U/S 44AF, BY DECLARING BUSINESS INCOME OF RS. 2,18,040/- AND TURNOVER OF R S. 30,25,200/-. IT WAS ALSO SUBMITTED IN THE STATEMENT OF FACTS THAT THE ASSESSEE DEPOSITED THE CASH OF RS. 72,65,400/- AND AT THE SAME TIME WITHDREW CASH OF R S. 64,04,556/- DURING THE RELEVANT ASSESSMENT YEAR. DEPOSITS WERE PRIMARILY FROM WITHDRAWAL FROM BANK, SALE PROCEEDS AND REALIZATION DEBTORS. ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF A/C. 6. NOW THE ISSUE IS WHETHER ENTIRE DEPOSITS IN THE BANK COULD BE ASSESSED TO TAX, DISREGARDING THE AMOUNTS WITHDRAWN BY ASSESSEE OR NOT. ADMITTEDLY, NEITHER ANY OTHER SOURCE OF INCOME HAS BEEN POINTED OUT BY AO NOR ANY INVESTMENT OUT OF WITHDRAWALS FRO M BANK HAS BEEN SHOWN. UNDER SUCH CIRCUMSTANCES, ASSESSEES EXPLANATION THAT BOTH THE BANK ACCOUNTS WERE IN RELATION TO ITS BUSINESS, CANNOT BE DOUBTED . IN OUR OPINION, THE PEAK SURRENDERED BY ASSESSEE SHOUL D HAVE BEEN ACCEPTED BY LOWER REVENUE AUTHORITIES, IN THE ABSENCE OF BOOKS OF A/C. WE ORDER ACCORDINGLY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED ACCORDINGLY. 8. AFTER PERUSING THE AFORESAID DECISION OF THE IT AT, DELHI, I AM OF THE CONSIDERED VIEW THAT THE ISSUES IN DISPUTE ARE SQUARELY COVERED BY THE 7 AFORESAID DECISION, BECAUSE THE FACTS AND CIRCU MSTANCES OF THE PRESENT CASE ARE EXACTLY SIMILAR AND IDENTICAL TO THAT OF CASE OF HANSRAJ VS. ITO (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE AFOR ESAID DECISION OF THE ITAT, NEW DELHI IN THE CASE OF HANSRAJ VS. ITO, FAR IDABAD PASSED IN ITA NO. 1139/DEL/2014 (AY 2009-10) DATED 26.6.2016, TH E ADDITION IN DISPUTE IS DELETED AND ACCORDINGLY, THE GROUND NO. 3 RAISED BY THE ASSESSEE STANDS ALLOWED. 9. WITH REGARD TO GROUND NO. 4 RELATING TO CHARGING OF INTEREST U/S. 234B & 234C OF THE INCOME TAX ACT, 1961 ARE CONCERN ED, THE SAME ARE CONSEQUENTIAL IN NATURE, HENCE, NEED NOT BE ADJUDIC ATED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/02/ 2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 02/02/2017 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITATTRUE COPY BY ORDER, ASSISTANT REGISTRAR