DCIT, Muzaffarnagar V. Sh. Ashok Kumar, Muzaffarnagar

ITA 3835/DEL/2008

• Counselvise Citation: 383520114 RSA 2008
• Duration Of Justice: 6 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 31-12-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Depreciation; Onus to prove
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A , NEW DELHI) BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NO.3835 /DEL/2008 ASSESSMENT YEAR : 2005-06 DCIT, CIRCLE 1, VS. SHRI ASHOK KUMAR, MUZAFFARNAGAR S/O SHRI BOHAR SINGH, 510, NORTH CIVIL LINES, MUZAFFARNAGAR (U.P.) GIR / PAN:ADKPK0279Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. K. JAISWAL, DR RESPONDENT BY : SHRI ANKIT GUPTA, ADV. DATE OF HEARING : 09.10.2015 DATE OF PRONOUNCEMENT : 20.10.2015 ORDER PER KULDIP SINGH, JM: THE APPELLANT, DCIT, CIRCLE 1, MUZAFFARNAGAR BY FI LING THE PRESENT APPEAL U/S 250 OF THE INCOME TAX ACT, 1961 (FOR SHO RT THE ACT) SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 22.10.2008 PASSED BY LD. CIT(A) MUZAFFARNAGAR, QUA THE ASSESSMENT YEAR 2005-06 ON T HE GROUNDS INTER ALIA THAT: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW BY REDUCING THE PROFIT ADDI TION (8%) RS.21,39,786/- TO RS.1,50,000/- WITHOUT ANY BASIS A ND IN OTHER CASE OF SAME NATURE VIDE ORDER NO.ZR DATED 16.09.2008 IN TH E CASE OF M/S. VERMA CONSTRUCTION VILL. & P.O. BHABHISA, MUZAFFARN AGAR, THE LD. CIT(A) HAS CONFIRMED PROFIT ADDITION TO 5%. ITA NO.3835/DEL/2008 2 2) THE LD. CIT(A) HAS ERRED ON LAW AND FACTS BY DEL ETING THE ADDITION OF RS.44,50,000/- OF UNSECURED LOANS. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCES OF GENUINENESS OF THE TRANSA CTIONS. 3) THE LD. CIT(A) HAS ERRED ON LAW AND FACTS BY DEL ETING THE ADDITION OF RS.12,65,822/- WITHOUT ANY BASIS AS NO EVIDENCES WERE PRODUCED BEFORE THE A.O. EVEN AT THE REMAND REPORT TIME. 4) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS BY DEL ETING THE ADDITION OF RS.6,80,822/- AS ON ACCOUNT OF ACCRETIO N IN THE CAPITAL OF THE PARTNERS, BOOKS OF ACCOUNTS U/S 145(3) HAD BEEN REJECTED. T4EH SAME AMOUNT IS TO BE ADDED BACK AT THE TIME OF COMP UTATION. 2. BRIEFLY STATED THE FACTS OF THIS CASE ARE THAT T HE ASSESSEE IS IN THE BUSINESS OF CIVIL CONSTRUCTION WORK, FILED RETURN O F INCOME FOR THE ASSESSMENT YEAR 2005-06 DECLARING INCOME AT RS.7,10 ,822/- AND DURING PROCESSING OF THE SAME U/S 143(2) OF THE ACT, THE C ASE WAS SUBJECTED TO SCRUTINY AND CONSEQUENTLY, NOTICES U/S 143(2) / 142 (1) ALONG WITH QUESTIONNAIRE WERE ISSUED ON 03.02.2006 FOR COMPLIA NCE ON 14.02.2006. PURSUANT TO THE NOTICES ISSUED TO THE ASSESSEE SHRI ANIL GUPTA, ADVOCATE APPEARED ON 23.08.2006 ON BEHALF OF THE ASSESSEE AN D THE CASE WAS ADJOURNED TO 30.08.2006, BUT ON THE ADJOURNED DATE, NO COMPLIANCE WAS MADE NOR ANY ADJOURNMENT WAS SOUGHT AND THEN SAID S HRI ANIL GUPTA, ADVOCATE APPEARED ON BEHALF OF THE ASSESSEE ON 08.0 9.2006 AND FURNISHED THE DETAILS VIDE LETTER DATED 08.09.2006 AND THE CA SE WAS ADJOURNED FURTHER FOR 13.09.2006 ON WHICH DATE, NONE APPEARED ON BEHA LF OF THE ASSESSEE. THEN THE JURISDICTION OF THE CASE WAS CHANGED AND A CCORDINGLY FRESH NOTICES U/S 143(2) / 142(1) OF THE ACT WERE ISSUED. THEN O N 16.10.2007, SHRI ANIL GUPTA, ADVANCE PUT HIS APPEARANCE WHO ALSO HAS STAT ED THAT MAXIMUM COMPLIANCE HAS ALREADY BEEN MADE AND THE CASE WAS D ISCUSSED WITH HIM AND ITA NO.3835/DEL/2008 3 HE WAS REQUIRED TO PRODUCE COMPLETE BOOKS OF ACCOUN TS AND CONFIRMATION FOR SECURED LOANS AS WELL AS UNSECURED LOANS ALONG WITH ASSESSMENT PARTICULARS AND COPIES OF BANK ACCOUNT ETC AND TO COMPLETE THE COMPLIANCE OF NOTICES DATED 03.02.2006. BUT NONE APPEARED ON BEHALF OF T HE ASSESSEE ON 20.10.2007 THE DATE OF HEARING FIXED AND FINAL NOTI CE U/S 142(1) DATED 05.11.2007 WAS ISSUED AND THE ASSESSEE WAS REQUIRED TO PRODUCE COMPLETE BOOKS OF ACCOUNTS, FILE DETAILS AS PER THE QUESTION NAIRE ON 12.11.2007 BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. DUE TO NO N APPEARANCE OF THE ASSESSEE AND / OR HIS REPRESENTATIVE, THE ASSESSMEN T WAS COMPLETED AS PER THE PROVISIONS OF SECTION 144 OF THE ACT ON THE BASIS O F MATERIAL AVAILABLE ON RECORD. 3. FROM THE BALANCE SHEET, IT TRANSPIRES THAT THE A SSESSEES CAPITAL HAS INCREASED BY RS.12,65,822/- FOR WHICH NO EXPLANATIO N HAS BEEN FILED DURING THE ASSESSMENT PROCEEDINGS. DESPITE THE FACT THAT ASSESSEE WAS SPECIFICALLY ASKED TO EXPLAIN THE SOURCE OF ACCRETION IN PROPERT Y BUT IN THE ABSENCE OF ANY REPLY OR EVIDENCE, THE AMOUNT REMAINED UNEXPLAINED. ACCORDINGLY, RS.12,65,822/- WAS ADDED TO THE INCOME OF THE ASSES SEE. 4. THE BALANCE SHEET FURTHER SHOWS THAT THERE WAS U NSECURED LOAN TO THE TUNE OF RS.50,92,924/- BUT AS PER ANNEXURE TO THE A UDIT REPORT, LOANS/DEPOSITS ACCEPTED DURING THE YEAR ARE SHOWN AT RS.44,50,000/ -. ON FAILURE OF THE ASSESSEE TO PROVE GENUINENESS, CREDITWORTHINESS AND ANTECEDENTS OF CREDITORS OF THE AFORESAID LOAN AND IN THE ABSENCE OF ANY EVI DENCE EXCEPT THE LEDGER ACCOUNT, ADDITION OF RS.44,50,000/- WAS MADE TO THE INCOME OF THE ASSESSEE. 5. THE ASSESSEE, IN THE P & L ACCOUNT HAS SHOWN NET PROFITS AT RS.6,20,190/- ON THE TOTAL CONTRACT RECEIPTS OF RS. 3,44,99,705/- GIVING NP RATE OF 1.80% AND CONSIDERED AS LOW DESPITE THE FAC T THAT ASSESSEE HAD ITA NO.3835/DEL/2008 4 RECEIVED RS.4,21,832/- FROM JCB MACHINE AND RS.1,57 5/- DIVIDEND AND INTERESTS AT RS.2,57,555/- AS HAS BEEN SHOWN IN THE P & L ACCOUNT. IN THE ABSENCE OF ANY BILLS AND VOUCHERS, THE RECEIPT OF E XPENDITURE IS NOT OPEN FOR VERIFICATION AND BY INVOKING THE PROVISIONS OF SECT ION 145(3), NET PROFIT IS ESTIMATED BY APPLYING THE NET PROFIT RATE AT 8% ON THE TOTAL CONTRACT RECEIPT OF RS.3,44,99,705/- WHICH COMES TO RS.27,59,976/- AS A GAINST NET PROFIT OF RS.6,20,190/- DECLARED BY THE ASSESSEE RESULTING IN TO AN ADDITION OF RS.21,39,786/-. KEEPING IN VIEW THE INCOME OF THE ASSESSEE FROM JCB MACHINE AT RS.4,21,832/-, DIVIDEND INCOME OF RS.1,5 75/- AND INTEREST INCOME AT RS.2,57,555/-, ADDITION OF RS.6,80,962/- HAS BEE N MADE. CONSEQUENTLY, THE TOTAL ADDITION OF RS.91,56,760/- HAS BEEN MADE TO THE INCOME OF THE ASSESSEE. 6. THE ASSESSEE HAS CHALLENGED THE ASSESSMENT ORDER BY WAY OF APPEAL, WHICH HAS BEEN PARTLY ALLOWED BY LD. CIT(A). NOW, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER BEFORE THE TRIBUNAL B Y WAY OF PRESENT APPEAL. 7. WE HAVE HEARD LD. AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND GONE THROUGH THE DOCUMENTS RELIED UPON IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE FIRST GROUND RAISED BY THE APPELLANT CHALLEN GING THE IMPUGNED ORDER THAT LD. CIT(A) HAS ERRED IN LAW BY REDUCING THE PROFIT ADDITION (8%) RS.21,39,786/- TO RS.1,50,000/- WITHOUT ANY BASIS A ND IN OTHER CASE OF SAME NATURE VIDE ORDER NO.ZR DATED 16.09.2008 IN THE CAS E OF M/S. VERMA CONSTRUCTION VILL. & P.O. BHABHISA, MUZAFFARNAGAR, THE LD. CIT(A) HAS CONFIRMED PROFIT ADDITION TO 5%. THE A.O. MADE THE ADDITION I.E. 8% AMOUNTING TO RS.21,39,786/-. ITA NO.3835/DEL/2008 5 8.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) WHO REDUCED THE ADDITION TO RS,.1,50,000/- BY OBSER VING AS UNDER: IT IS OBSERVED THAT THE PERCENTAGE OF PROFIT (BEFO RE CONSIDERING THE DEPRECIATION AMOUNT) IS HIGHER THIS YEAR THAN A NY OTHER YEARS. AS FAR AS NET PROFIT RATE OF 1.8% MENTIONED BY THE A.O . IS CONCERNED, THE SAME IS AFTER GIVING EFFECT TO DEPRECIATION. TO BE FAIR TO THE ASSESSEE, DEPRECIATION CLAIMED THIS YEAR IS VERY HIGH (RS.32. 09 LACS) AS AGAINST SMALLER AMOUNTS IN OTHER YEARS, FOR EXAMPLE RS.6.71 LACS FOR LAST YEAR. I N VIEW OF THIS DISCUSSION, I FIND THAT THE PROFIT RESULTS DECLARED FOR THIS YEAR ARE QUITE REASONABLE. 9.3.2 NEVERTHELESS; THE ADMITTED FACT IS ON RECORD THAT ASSESSEE HAS NOT BEEN ABLE TO FULLY SUBSTANTIATE TH E CLAIM FOR EXPENSES ESPECIALLY EXPENSES RELATED TO CONSTRUCTION MATERIA L INCLUDING RODI, COARSE SAND, MITTI WORK ETC. THEREFORE, I CONCLUDE THAT ON ESTIMATE BASIS, AN A DDITION OF RS.L.5 LACS WOULD BE REASONABLE TO COMPENSATE THE P ROFIT LEAKAGE AS INDICATED BY NON-FURNISHING OF ALL BILLS AND VOUCHE RS OF SUCH EXPENSES. THUS THE ADDITION OF RS.21,39,786/- MADE ON ACCOUNT OF NET PROFIT IS REDUCED TO THE AMOUNT OF RS.1,50,000/-. 8.2 NOW, THE ASSESSEE IN APPEAL BEFORE THE TRIBUNAL . 9. HOWEVER, LD. A.R. REITERATED THE ARGUMENTS MADE BY HIM BEFORE LD. CIT(A) AND CONTENDED THAT THE ADDITION MADE IS ARBI TRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AS IN THE TRADI NG AND P & L ACCOUNT AND BALANCE SHEET, THE ASSESSEE HIMSELF HAS SHOWN NET B OOK PROFIT BEFORE DEPRECIATION AT RS.38,29,397.96 WHICH IS INCLUSIVE OF OTHER INCOME AT RS.6,80,962.00 AND CONSEQUENTLY, NET PROFIT BEFORE DEPRECIATION AGAINST GROSS RECEIPT OF RS.3,44,99,705/- COMES AT RS.38,29 ,394.96 6,80,962.00 = 31,48,432.96 WHEREAS THE A.O. HAS TAKEN THIS AMOUNT AS PER HIS CALCULATION AT RS.27,59,976/- AND THAT SINCE THE ASSESSEE HIMSE LF HAS SHOWN MORE PROFITS AS COMPARED TO THE A.O., ADDITION OF RS.21,39,786/- IS LIABLE TO BE DELETED. ITA NO.3835/DEL/2008 6 10. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRC UMSTANCES, THE SOLE QUESTION ARISES FOR DETERMINATION OF GROUND NO.1 IS AS TO WHETHER NET BOOK PROFIT IS TO BE TAKEN INTO ACCOUNT BEFORE DEPRECIAT ION AT RS.38,29,397.96 WHICH INCLUDES OTHER INCOME AT RS.6,80,962/-. 11. NO DOUBT, PERUSAL OF COMPARATIVE CHART RELIED U PON BY THE ASSESSEE LYING AT PAGE 12 OF THE IMPUGNED ORDER GOES TO PROV E THAT THE ASSESSEE HAS SHOWN HIGHER PERCENTAGE OF PROFIT IN THE YEAR UNDER ASSESSMENT I.E. 11.10% AS AGAINST PREVIOUS ASSESSMENT YEARS AND AFTER GIVI NG EFFECT TO THE DEPRECIATION CLAIMED BY THE ASSESSEE, THE NET PROFI T STANDS REDUCED TO 1.8%, LD. CIT(A) HAS REDUCED THE ADDITION OF RS.21,39,786 /- MADE ON ACCOUNT OF NET PROFIT TO THE AMOUNT OF RS.1,50,000/-. WHEN LD . CIT(A) HIMSELF OBSERVED IN PARA 9.3 OF THE IMPUGNED ORDER THAT THE ASSESSEE HAS NOT BEEN ABLE TO FULLY SUBSTANTIATE THE CLAIM FOR EXPENSES E SPECIALLY EXPENSES RELATING TO CONSTRUCTION MATERIAL INCLUDING RODI, COARSE SAN D, MITTI WORK ETC, IT IS BEYOND IMAGINATION AS TO HOW AND BY APPLYING WHICH OF THE PARAMETER, HE HAS REDUCED THE ADDITION OF RS.21,39,786/- TO RS.1, 50,000/-, AS SUCH LD. CIT(A) HAS ERRED IN REDUCING THE ADDITION FROM RS.2 1,39,786/- TO RS.1,50,000/-. SO, THE FILE IS REQUIRED TO BE REST ORED TO LD. CIT(A) TO DECIDE THIS GROUND BY PASSING SPEAKING ORDER. CONSEQUENTL Y GROUND NO.1 IS DETERMINED IN FAVOUR OF THE APPELLANT FOR STATISTIC AL PURPOSES. 12. THE SECOND GROUND RAISED BY THE APPELLANT IS, THAT LD. CIT(A) HAS ERRED ON LAW AND FACTS IN DELETING THE ADDITION OF RS.44,50,000/- OF UNSECURED LOANS AS THE ASSESSEE HAS NOT PRODUCED AN Y EVIDENCES OF GENUINENESS OF THE TRANSACTIONS. REGARDING ADDITION OF RS.44,50,000/- ON ACCOUNT OF UNSECURED LOANS, THE A.O. HAS MADE THE F OLLOWING OBSERVATIONS IN THE ASSESSMENT ORDER: ITA NO.3835/DEL/2008 7 UNSECURED LOANS: AS PER BALANCE SHEET UNSECURED LOANS ARE SHOWN AT R S.50,92,924/- BUT AS PER ANNEXURE ATTACHED TO AUDIT REPORT LOANS/ DEP OSITS ACCEPTED DURING THE YEAR ARE SHOWN AT RSA4,50,000/- AS UNDER : M.A. BUILDERS RS. 6,50,000/- PANKAJ KUMAR RS. 5,00,000/- R.C.DHEMAN RS. 3,00,000/- SUNIL KUMAR RS.30,00,000/- RS44,50,000/- ASSESSEE VIDE NOTICE U/S 142(1) DT. 03.02.06 WAS SP ECIFICALLY REQUIRED TO PROVE GENUINENESS, CREDIT WORTHINESS, IDENTITY O F THESE LOANS, BUT NO EVIDENCE EXCEPT COPY OF LEDGER ACCOUNT IN THIS REGA RD HAS BEEN FILED EVEN CONFIRMATION HAS NOT BEEN FILED. UNDER THESE C IRCUMSTANCES UNSECURED LOANS TAKEN BY THE ASSESSEE ARE TREATED A S UNEXPLAINED. RELIANCE IS PLACED ON THE DECISION CITED IN 140 ITR 151 (ALLAHABAD), 50 ITR 1 SC, AS THE BURDEN TO PROVE NATURE AND SOUR CES OF RECEIPTS IS ON THE ASSESSEE AS HELD BY THE HON'BLE SUPREME COUR T IN 57 ITR 532,53 ITR 623, 49 ITR 112,35 ITR 416,34 ITR 807. T HEREFORE ADDITION OF RS. 44,50,000/- IS MADE TO THE INCOME. ( ADDITION OF RS44,50,000/ -) 13. DURING APPELLATE PROCEEDINGS, REMAND REPORT WAS CALLED FOR BY LD. CIT(A), THE A.O. MADE THE REPORT REGARDING UNSECURE D LOANS TO THE FOLLOWING EFFECT: UNSECURED LOANS: IT HAS BEEN STATED THAT THE ASSESSEE HAS ALREADY FILED THE RELEVANT DOCUMENTARY EVIDENCE IN SUPPORT OF UNSECURED LOANS AND HAS AMPLY PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. THE ASSESSEE'S VERS ION IS NOT ACCEPTABLE BECAUSE FILING OF PAPERS DOES NOT PROVE THE GENUINENESS OF LOANS SPECIFICALLY WHEN ASSESSEE WAS REQUIRED TO PR ODUCE THE PERSONS FOR CROSS-EXAMINATION ON OATH ON THE BASIS OF DOCUM ENTS EVIDENCE FILED BY HIM. SINCE ASSESSEE FAILED TO DISCHARGE BU RDEN, THE LIABILITIES/UNSECURED LOAN CANNOT BE TREATED AS GEN UINE THOUGH THEY MIGHT BE ASSESSED TO TAX. THERE ARE SO MANY THINGS WHICH MAY COME ITA NO.3835/DEL/2008 8 OUT AT THE TIME OF CROSS EXAMINATION, ON THE BASIS OF WHICH ANY DECISION MAY BE TAKEN WHETHER PARTICULAR LOAN IS GE NUINE OR NOT. IT IS PERTINENT TO MENTION THAT SIMILAR AMOUNT AS OF LOAN WAS FOUND TO BE CREDITED IN THE BANK ACCOUNT OF THE DEPOSITORS A DA Y BEFORE ISSUING CHEQUE/DRAFT IN FAVOUR OF THE ASSESSEE WAS EITHER I N CASH OR OTHERWISE FOR WHICH CROSS EXAMINATION WAS NECESSARY TO ARRIVE AT ANY CORRECT DECISION. 14. A BARE PERUSAL OF THE FACTS REGARDING UNSECURED LOANS AND THE REMAND REPORT MADE BY THE A.O. AMPLY PROVE INTER ALIA THAT THE ENTIRE DOCUMENTARY EVIDENCE IN SUPPORT OF UNSECURED LOANS HAS BEEN BRO UGHT ON RECORD BY THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF THE TRANSACTIONS; THAT ALL THE TRANSACTIONS QUA THE UNS ECURED LOANS HAVE BEEN ROUTED THROUGH BANKS BY WAY OF CHEQUES; THAT CONFIR MATIONS FROM THE CREDITORS REGARDING UNSECURED LOANS HAVE BEEN BROUG HT ON RECORD BY THE ASSESSEE LYING AT PAGES 64-81 OF THE PAPER BOOK AND HAVE BEEN DULY PERUSED AND VERIFIED BY THE A.O. DURING REMAND PROCEEDING A ND HAS NOT DISPUTED THE SAME; THAT WHEN IDENTITY OF THE PARTIES WHO HAVE P ROVIDED UNSECURED LOANS TO THE ASSESSEE HAS NOT BEEN DISPUTED BY THE A.O. AND AS SUCH, IT WAS ARBITRARY ON THE PART OF THE A.O. TO INSIST UPON TO PRODUCE THE PARTIES FOR CROSS EXAMINATION. 15. SO, IN THE INSTANT CASE, THE A.O. ON THE ON E HAND HAS ADMITTED ALL THE DOCUMENTARY EVIDENCE ADDUCED BY THE ASSESSEE TO PRO VE THE UNSECURED LOANS AS UNDISPUTABLE BUT ON THE OTHER HAND, MADE THE ADD ITION ON FLIMSY GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE THE CREDITO RS TO PROVE THE UNSECURED LOANS FOR CROSS EXAMINATION. WHEN ALL THE LOAN TRA NSACTIONS QUA UNSECURED LOANS IN QUESTION WERE THROUGH BANK TRANSACTIONS AN D INCOME TAX ITA NO.3835/DEL/2008 9 DETAILS OF PARTIES WERE ON RECORD WITH THE A.O., AD DITION OF RS.44,50,000/- HAS BEEN MADE BY THE A.O. ON THE BASIS OF CONJECTUR ES AND SURMISES. THUS CIT(A) HAS RIGHTLY AND LEGALLY DELETED THE ADDITION OF RS.44,50,000/- ON THE BASIS OF EVIDENCE BROUGHT ON RECORD, CONSEQUENTLY T HE GROUND NO.2 IS DETERMINED AGAINST THE APPELLANT. 16. GROUND NO.3 RAISED BY THE APPELLANT IS, THAT LD. CIT(A) HAS ERRED ON LAW AND FACTS BY DELETING THE ADDITION OF RS.12,65, 822/- WITHOUT ANY BASIS AS NO EVIDENCES WERE PRODUCED BEFORE THE A.O. EVEN AT THE REMAND REPORT TIME. DURING ASSESSMENT, THE A.O. NOTICED INCREASE OF R S.12,65,822/- IN THE ASSESSEES CAPITAL (A PROPRIETORSHIP FIRM) FOR WHICH HE FAILED TO EXPLAIN THE SOURCE OF ACCRETION IN THE CAPITAL AND CONSEQUE NTLY, MADE THE ADDITION OF RS.12,65,822/- IN THE INCOME OF THE ASSESSEE. 17. DURING THE APPELLATE PROCEEDINGS, THE MATTER WA S REMANDED TO THE A.O. WHO HAS SUBMITTED HIS COMMENTS WITH VERIFICATI ON U/S 250(4) OF THE ACT ON MERITS AND EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE. THE ASSESSEE FILED DOCUMENTARY EVIDENCE LYING AT PAGES 48-62 OF THE PAPER BOOK TO EXPLAIN THE ACCRETION OF RS.12,65,822/- BEING THE T RANSFER OF FUNDS FROM THE CAPITAL OF ASSESSEE FROM OTHER FIRMS IN WHICH HE IS A PARTNER. AN AMOUNT OF RS.6,50,000/- STATED TO HAVE BEEN TRANSFERRED FROM THE FIRM M/S. RAMPAL SINGH MUKHTYAR AHMED WHICH IS A FIRM ASSESSED TO TA X AND AN AMOUNT OF RS.5,15,822/-IS A TRANSFER OF CAPITAL FROM M/S. SAM RAT CONSTRUCTION WORKS AND RS.1,00,000/- WAS RECEIVED BY THE ASSESSEE AS R EFUND FROM LIC OF INDIA. SINCE THE ASSESSEE HAS DULY PROVED THE TRANSFER OF SUM OF RS.6,50,000/- FROM THE FIRM M/S. RAMPAL JUKHTYAR AHMED, AN AMOUNT OF R S.5,15,822/- TRANSFERRED FROM M/S. SAMRAT CONSTRUCTION WORKS, BO TH THE FIRMS BEING ASSESSED TO INCOME TAX, FILED COPIES OF INCOME TAX RETURN RECEIPTS AND BANK ITA NO.3835/DEL/2008 10 STATEMENTS IN SUPPORT OF ACCRETION AS WELL AS RECEI PT FOR RECEIVING REFUND OF RS.1,00,000/- FROM LIC OF INDIA, WHICH HAVE NOT BEE N DISPUTED BY THE A.O. EVEN AFTER DUE VERIFICATION NOR MINCED A WORD THAT THE AFORESAID DOCUMENTS ENTERTAINED IN EVIDENCE DURING APPELLATE PROCEEDING S ARE BOGUS ONE AND AS SUCH, MAKING ADDITION BY HIM IS NOT SUSTAINABLE. S O, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS LEGALLY AND RIG HTLY MADE DELETION OF RS.12,65,822/-. CONSEQUENTLY, GROUND NO.3 IS DETER MINED AGAINST THE APPELLANT. 18. GROUND NO.4 RAISED BY THE APPELLANT IS, THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS BY DELETING THE ADDITION OF RS.6,80,822/- AS ON ACCOUNT OF ACCRETION IN THE CAPITAL OF THE PARTNERS , BOOKS OF ACCOUNTS U/S 145(3) HAD BEEN REJECTED. THE SAME AMOUNT IS TO BE ADDED BACK AT THE TIME OF COMPUTATION. THE A.O. OBSERVED THAT AS PER TRADING AND P & L AC COUNT ASSESSEE HAS SHOWN NET PROFITS AT RS.6,20,190/- ON TOTAL CONTRACT RECEIPT OF RS.3,44,99,705/- GIVING A NET PROFIT RATE OF 1.80% AND CONSIDERED THE SAME AS LOW. THE A.O. ALSO MADE ADDITION OF RS.6,80,692 /- ON ACCOUNT OF RECEIPT FROM JCB MACHINE TO THE TUNE OF RS.4,21,832/-, DIVI DEND INCOME AT RS.1,575/- AND INTEREST INCOME AT RS.2,57,555/- WIT HOUT RECORDING ANY REASON. UNDISPUTEDLY, THE ASSESSEE HAS HIMSELF SHO WN THE INCOME OF RS.6,80,962/- IN TRADING AND P & L ACCOUNT. WHEN T HE ASSESSEE HAS ALREADY SHOWN HIS INCOME AT RS.6,80,962/- BEING INCOME FROM JCB MACHINE, DIVIDEND AND INTEREST IN HIS TRADING AND P & L ACCO UNT, MAKING ADDITION BY THE A.O. AMOUNTS TO DOUBLE TAXATION. THE A.O. DURI NG REMAND REPORT HAS EVEN FAILED TO EXPLAIN AS TO HOW AND UNDER WHAT CIR CUMSTANCES, HE HAS MADE THE ADDITION OF RS.6,80,962/- DESPITE THE FACT THAT THE SAME HAS ALREADY BEEN DECLARED AS INCOME BY THE ASSESSEE IN ITS TRADING A ND P & L ACCOUNT. SO, WE ITA NO.3835/DEL/2008 11 ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS RIGH TLY DELETED THE ADDITION MADE BY THE A.O. CONSEQUENTLY, GROUND NO.4 IS DETE RMINED AGAINST THE APPELLANT. 19. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, PRESE NT APPEAL IS PARTLY ALLOWED QUA GROUND NO.1 FOR STATISTICAL PURPOSE. 20. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH OCT., 2015. SD./- SD./- ( N. K. SAINI) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 20 TH OCT., 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 12,13/10 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 13,14,15,15,19,19 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 20/10/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 20/10 SR. PS/PS 7 FILE SENT TO BENCH CLERK 20/10 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER