Sh. Shiv Kumar, New Delhi V. ITO, New Delhi

ITA 3903/DEL/2014

• Counselvise Citation: 390320114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Wrong claim
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SHRI H.S. SIDHU, J UDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTA NT MEMBER ITA NOS. 3901,3902,3903/DEL/2014 ASSESSMENT YEARS : 2008-09 SHIV KUMAR, VS. ITO RAMESH SETHI, 81-82, WARD -20(2) 1 ST FLOOR, NEW DELHI. GOKHALE MARKET, OPP. TIS HAZARI COURTS NEW DELHI 110 054 (PAN AVWPK9672K) (APPELLANT) (RESPONDENT) ASSESSEE BY :- NONE DEPARTMENT BY:- SHRI SUJIT KUMAR , SR. DR O R D E R PER T.S. KAPOOR, ACCOUNTANT MEMBER THESE ARE THREE APPEALS FILED BY ASSESSE E AGAINST THE SEPARATE ORDERS OF LD. CIT(A) ALL DATED 29/11/2013. ITA NO. 3901/DEL/2 014 IS AGAINST LD. CIT(A) ORDER PARTLY CONFIRMING THE ASSESSMENT COMPLETED BY AO U/S 144 OF THE INCOME TAX ACT, 1961 WHEREAS ITA NO. 3902/DEL/2014 RELATES TO CONFIRMATION OF PENALTY IMPOSED BY AO U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 AND ITA NO. 3903/DEL/2014 RELATES TO CONFIRMATION OF PENALTY U /S 271(1)(C) OF THE INCOME TAX ACT. 2. THESE APPEALS WERE HEARD TOGETHER. THEREFORE FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. N ONE WAS PRESENT ON BEHALF ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 2 OF ASSESSEE. HOWEVER IT WAS FELT THAT THE APPEALS C AN BE DISPOSED OFF EVEN IN THE ABSENCE OF REPRESENTATIVE OF ASSESSEE. THEREFORE WI TH THE HELP OF LD. DR THE FACTS OF THE CASE WERE EXAMINED. 3. LD. DR POINTED OUT THAT ASSESSEE INITIALLY F ILED RETURN OF INCOME DECLARING THE INCOME FROM BUSINESS OF AUTOMOBILE AND AUTO PAR TS AND DESPITE AFFORDING MANY OPPORTUNITIES THE ASSESSEE DID NOT APPEAR BEFO RE AO AND THEREFORE AO HAD TO COMPLETE ASSESSMENT U/S 144 OF THE ACT. HE FURTH ER ELABORATED THAT ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING INCOME FRO M AUTOMOBILE PARTS WHEREAS BEFORE LD. CIT(A) HE CHANGED HIS STANCE AND STATED THAT HE HAD EARNED INCOME FROM TUITION AND IN FACT BEFORE LD. CIT(A) HE ALSO STATED THAT THE RETURN WAS FILED BY HIM BY MISTAKE AND IN FACT HE WAS NOT LIABLE FOR INCOME TAX. LD. DR SUBMITTED THAT HOW CAN BE A PERSON FILE A RETURN AND THEN DE NY THAT IT WAS NOT HIS RETURN. THEREFORE LD. DR SUBMITTED THAT ADDITIONS SUSTAINED BY LD. CIT(A) NEED TO BE CONFIRMED. 4. WE HAVE HEARD LD. DR AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT AO HAD MADE VARIOUS ADDITIONS U/S 144 OF THE ACT. THE RELEVANT FINDINGS OF AO IMPOSING ADDITIONS ARE REPR ODUCED AS UNDER :- A. IN THE RETURN OF INCOME AGAINST SALE, T HE ASSESSEE HAS SHOWN THE TOTAL SALES AT RS. 5,08,431/-. WHEREAS AGAINST THE GROSS RECEIPT AT RS. 4,43,903/- HAS BEEN SHOWN. NO REASON FOR THE DIFFER ENCE HAS BEEN GIVEN. IN VIEW OF THE ABOVE, THE DIFFERENCE OF THE TOTAL TURN OVER AND GROSS RECEIPT WHICH COMES TO RS. 64,528/- IS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE. (ADDITION OF RS. 64,528/-) ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 3 B. NO CAPITAL HAS BEEN SHOWN AS UTILIZED. IT IS N OT POSSIBLE TO DO THE BUSINESS WITHOUT CAPITAL TO MAKE SALE OF RS. 5,08,4 31/-. THE ASSESSEE MAY REQUIRE ATLEAST RS. 1,00,000/- (APPROX) AS HIS CAPI TAL. AS THE ASSESSEE DID NOT SHOW ANY CAPITAL, RS. 1,00,000/ - IS ADDED TO T HE INCOME OF THE ASSESSEE AS INVESTMENT U/S 68 OF THE IT ACT. (ADDITION OF RS. 1,00,000/-) C. AS PER COLUMN 51 OF THE ITR THE ASSESSEE HAS S HOWN NET PROFIT OF RS. 2,10,750/- WHEREAS AS PER THE COMPUTATION OF INCOME , THE NET PROFIT HAS BEEN SHOWN AT 1,55,897/- ONLY. ON THE BASIS OF ABOV E, THERE IS A NET DIFFERENCE OF RS. 54,853/- (2,10,750 - 1,55,897) IN THE PROFIT DECLARED BY THE ASSESSEE. THE DIFFERENCE OF RS. 54,853/- IS ADDED T O THE INCOME OF THE ASSESSEE. (ADDITION OF RS. 54,853/- ) D. AS PER THE RETURN, THE ASSESSEE HAS SHOWN GROSS EXPENSES AT RS. 2,97,681/-. IN THE ABSENCE OF THE DETAILS OF THE EX PENSES, IT IS DIFFICULT TO ASCERTAIN THE NATURE OF THESE EXPENSES. IN THE ABSE NCE OF DETAILS, 1/4TH OF THE ABOVE EXPENSES WHICH COMES TO RS. 74,420/- IS D ISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. (ADDITION OF RS. 74,420/- ) E. AS PER RETURN, IN COLUMN NO. 6, THE ASSESSEE HA S SHOWN SUNDRY CREDITORS AT RS 19,872/-. NO DETAILS OF THE CREDITO RS HAS BEEN PROVIDED. THE ONUS LIES ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE CREDITOR WHICH THE ASSESSEE FAILED. IN THE ABSENCE OF THE DETAILS, RS. 19,872/- OUTSTANDING AGAINST CREDITORS IS ADDED TO THE. INCOME OF THE AS SESSEE (ADDITION OF RS. 19,872/-) F. THE ASSESSEE HAS CLAIMED DEDUCTION UNDER CHAPTER VI-A AT RS. 3,400/- FOR WHICH NO EVIDENCE OF PAYMENT IS AVAILABLE ON RECORD . IN THE ABSENCE OF THE EVIDENCE, THE SAME I. ADDED TO THE INCOME OF THE AS SESSEE. (ADDITION OF RS. 3,400/- ) ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 4 5. LD. CIT(A) ALLOWED PART RELIEF TO THE ASSES SEE BY HOLDING AS UNDER :- 8,4 THUS IT IS SEEN THAT THE APPELLANT HAS BEEN SH IFTING HIS STAND REGARDING THE SOURCE OF INCOME, INITIALLY CLAIMING IN THE RET URN THAT HE WAS INVOLVED IN TRADING OF AUTO PARTS ETC., SUBSEQUENTLY CLAIMIN G THAT HE WAS HAVING INCOME FROM TUITION AND THAT HE WAS RUNNING COACHIN G CLASSES UNDER THE NAME AND STYLE OF 'OASIS ACADMY' AND THEN SUBSEQUEN TLY CLAIMED THAT HE HAD NO INCOME FROM TUITION IN THE YEAR UNDER CONSID ERATION. IN VIEW OF THESE CONTRADICTORY AND FALSE CLAIMS OF THE APPELLA NT, IT IS CLEAR THAT THE CLAIMS OF THE ASSESSEE ARE NOT RELIABLE AND IT IS A PPARENT THAT THE ASSESSEE MAKING VARIOUS CLAIMS JUST TO AVOID TAX AND PENAL L IABILITY. 8.5 IT IS CLAIMED BY THE ASSESSEE THAT THE NOTICES DID NOT REACH HIM AND HENCE HE COULD NOT COMPLY TO THE SAME. PERUSAL OF T HE ASSESSMENT ORDER U/S 144 DATED 27.12.2010 IN THE CASE OF THE ASSESSE E FOR THE A.Y. 2008-09, SHOWS THAT THE NOTICE WAS SERVED THROUGH AFFIXTURE. IN THE ABSENCE OF THE LATEST ADDRESS OF THE APPELLANT THE SERVICE BY AFFI XTURE UPON THE LAST KNOWN ADDRESS IS FULLY VALID. IT IS ALSO SEEN THAT THE AS SESSEE HAS NO EVIDENCE FOR HIS CLAIMS THAT HE WENT AWAY FROM DELHI IN DECEMBER , 2008 AND RETURNED BACK AFTER TWO YEARS IN DECEMBER 2010 AND ALSO THAT HE DID NOT RECEIVE ANY NOTICES FROM THE ASSESSING OFFICER. ON ONE HAND THE ASSESSEE CLAIMS TO BE ENGAGED IN AUTOMOBILE BUSINESS, ON THE OTHER HA ND CLAIMS THAT HE IS HAVING TUITION INCOME AND RUNNING OASIS ACADEMY AND THEN, TO AVOID THE TAXES AND PENALTIES CLAIMS THAT HE WAS NOT HAVING ANY INCOME FROM TUITION IN AY 08- 09 AND HAS EVEN FILED AN AFFIDAVIT CLAIMI NG THAT THE RETURN FOR THE AY 08-09 WAS INADVERTENTLY FILED, ALONGWITH BALANCE SHEET, P&L ACCOUNT ETC. THERE CAN BE AN INADVERTENT MISTAKE, IN SOME A CTION BUT EACH AND EVERY ACTION CAN NOT BE BRUSHED ASIDE, CLAIMING IT TO BE AN INADVERTENT ACTION. THE ASSESSEE DREW UP HIS BALANCE SHEET, P&L ACCOUNT ETC. AND EVEN FILED RETURN ON THE BASIS OF SUCH DOCUMENTS; AND NO W TO AVOID TAXES AND PENALTIES IS CLAIMING THEM TO BE INADVERTENTLY FILE D. IN VIEW OF THE NATURE OF THE ACTION, IT IS VERY CLEAR THAT THE CONDUCT OF TH E ASSESSEE WAS DELIBERATE, IT CAN NOT BE TAKEN AS A MINOR INADVERTENT MISTAKE. ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 5 8.6 THE ASSESSEE HAS CLAIMED THAT HE DID NOT GET RE ASONABLE OPPORTUNITY FOR MAKING COMPLIANCE BEFORE THE ASSESSING OFFICER. HOWEVER. IT IS SEEN THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO HIM IN APP EAL BUT THE ASSESSEE DID NOT AVAIL OF THAT OPPORTUNITY AND DID NOT SUBMIT AL L THE INFORMATION, DETAILS, DOCUMENTS ETC. AND RATHER CHANGED HIS CLAI MS REGARDING THE INCOME OF THE YEAR UNDER CONSIDERATION AFTER DETAIL ED QUERIES WERE MADE BY ORDER SHEET ENTRY DATED 30.05.13 (IN APPEAL NO. 82/11-12), AND ALSO DID NOT GIVE THE FULL DETAILS, DOCUMENTS AND INFORMATIO N ETC. ASKED FOR. IT .WAS CLEAR THAT THE ASSESSEE WAS EVADING IN MAKING COMPL IANCE TO ESCAPE FROM THE TAX AND PENAL LIABILITY. IN VIEW OF THIS SITUAT ION, EACH OF THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE EXAMINED AND OTH ER THAN AN ADDITION OF RS. 1,00,0001- MADE ON ADHOC BASIS BY THE ASSESS ING OFFICER, ALL OTHER ADDITIONS WERE CONFIRMED. 8.7 IT IS SEEN THAT THE CONDUCT OF THE ASSESSEE WAS DELIBERATE, AND WITH AN INTENTION TO PREVENT THE TRUTH FROM COMING OUT, THE ASSESSEE KEPT ON SHIFTING HIS STAND ABOUT HIS INCOME FOR AY 08-09 AN D HAVING INITIALLY CLAIMED IN THE RETURN THAT HE WAS INVOLVED IN TRADI NG OF AUTO PARTS ETC., SUBSEQUENTLY CLAIMED THAT HE WAS HAVING INCOME FROM TUITION AND THAT HE WAS RUNNING COACHING CLASSES UNDER THE NAME AND STY LE OR 'OASIS ACADMY' AND THEN SUBSEQUENTLY CLAIMED THAT HE HAD NO INCOME FROM TUITION IN THE YEAR UNDER CONSIDERATION. IN VIEW OF THESE CONTRADI CTORY AND FALSE CLAIMS OF THE APPELLANT, IT IS CLEAR THAT THE CLAIMS OF THE A SSESSEE ARE NOT RELIABLE AND IT IS APPARENT THAT THE ASSESSEE MAKING VARIOUS CLA IMS JUST TO AVOID TAX AND PENAL LIABILITY. 8.8. THE ASSESSING OFFICER HAS ADDED AN AMOUNT OF RS. 1,00,000/- ON A PURELY ADHOC BASIS WITHOUT ANY EVIDENCE FOR HIS CON TENTION THAT THE ASSESSEE WOULD HAVE MADE AN INVESTMENT OF RS. 1,00, 000/- WHICH WAS TAXED BY THE ASSESSING OFFICER U/S 68 OF THE IT ACT . THE ASSESSEE HAS STATED THAT THE APPELLANT HAS ALREADY SHOWN HIS ACTUAL INV ESTMENT IN THE BALANCE SHEET. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO P OINT OUT ANY INVESTMENT BY THE ASSESSEE OVER AND ABOVE THAT SHOWN IN THE BA LANCE SHEET AND HENCE, I AM UNABLE TO SUSTAIN THIS ADDITION WHICH I S HEREBY DELETED. ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 6 8.9 THE ASSESSING OFFICER HAS ADDED A DIFFERENCE OF RS.54,853/- TO THE INCOME OF THE BASIS THAT THE ASSESSEE HAS DISCLOSED NET PROFIT OF RS. 2,10,750/- WHEREAS IN THE COMPUTATION OF INCOME, TH E NET PROFIT HAS BEEN SHOWN AT RS. 1,55,897/- ONLY. IN THE ABSENCE OF ANY PROPER EXPLANATION BY THE ASSESSEE, NO RELIEF CAN BE GIVEN AND THIS ADDIT ION IS HEREBY CONFIRMED. 8.10 THE ASSESSING OFFICER HAS DISALLOWED L/4TH OF THE EXPENSES CLAIMED AT RS. 2,97,686/- IN ABSENCE OF THE DETAILS OF THE EXP ENSES AND HAS OBSERVED THAT EVEN THE NATURE OF THESE EXPENSES CANNOT BE AS CERTAINED. THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE TO CONTROVER T THESE OBSERVATIONS. THOUGH IT WAS CLAIMED IN THE WRITTEN SUBMISSIONS DA TED 30.05.13 THAT ALL THE EXPENSES ARE FOR BUSINESS PURPOSE ONLY. IT IS N OTEWORTHY THAT THE CLAIM OF GENUINENESS OF EXPENSES IS CONTRARY TO THE SUBSE QUENT CLAIMS OF THE ASSESSEE. IN VIEW OF THE ENTIRE FACTS. THE ADDITION AMOUNTING TO RS 74/420/- IS HEREBY CONFIRMED. 8.11 SUNDRY CREDITORS AMOUNT TO RS. 19,872/-- WERE ADDED BACK TO THE INCOME OF THE ASSESSEE IN THE ABSENCE OF ANY DETAIL S AND THE ASSESSEE BEING UNABLE TO DISCHARGE THE ONUS OF PROVING THE G ENUINENESS OF THE CREDITORS. FOR THIS ADDITION ALSO THE ASSESEE COULD NOT SUBMIT ANY EVIDENCE TO CONTROVERT THESE OBSERVATIONS, THOUGH IT WAS CLA IMED IN THE WRITTEN SUBMISSIONS DATED 30.05.13 THAT ALL THE CREDITORS ARE TOTALLY GENUINE. IT IS NOTEWORTHY THAT THE CLAIM OF GENUINENESS SOF CREDI TORS IS CONTRARY TO THE SUBSEQUENT CLAIMS OF THE ASSESEE. IN VIEW OF THE EN TIRE FACTS, THE ADDITION AMOUNTING TO RS. 19,872/- IS HEREBY CONFIRMED. 8.12 THE ASSESSEE CLAIMED DEDUCTION UNDER CHAPTER -VIA AMOUNTING TO RS. 3,400/- WHICH WAS DISALLOWED IN THE ABSENCE OF ANY EVIDENCE. NO EVIDENCE WAS GIVEN IN THE APPELLATE PROCEEDINGS ALSO AND HEN CE THE DISALLOWANCE HAS TO BE CONFIRMED. 6. FROM THE ORDERS OF AUTHORITIES BELOW MAKING A DDITIONS AND PARTLY CONFIRMING THEM WE FIND THAT BOTH AUTHORITIES HAVE NOT PASSED SPEAKING ORDERS AND ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 7 MOREOVER THE NECESSARY CLARIFICATIONS STATED BY ASS ESSEE WERE NOT PROPERLY EXAMINED. ASSESSING OFFICER HAS ALSO COMPLETED ASSE SSMENT U/S 144 OF THE ACT. THEREFORE IN VIEW OF THE SUBSTANTIAL JUSTICE WE ARE OF THE VIEW THAT APPEALS CONFIRMING THE ASSESSMENT AND CONFIRMING THE PENALT IES NEEDS TO BE LOOKED AFTER AGAIN BY AO. THE AO WILL PROVIDE SUFFICIENT OPPORTU NITY TO THE ASSESSEE OF BEING HEARD. IN VIEW OF THE ABOVE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 2 ND SEPTEMBER, 2015. SD/- SD/- (H.S. SIDHU) (T.S. KAPOOR) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: THE 2 ND SEPTEMBER, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 1.9..2015 ITA NOS. 3901,3902, 3903/DEL/2014 SHIV KUMA R VS. ITO 8 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 2.9.20 15 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER