ITO, New Delhi V. Sh. Manmohan Singh Sehgal, New Delhi

ITA 3956/DEL/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3746 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 15-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Assessee Lawyers: MAYANK MAHESHWARI ADV PER
• Keywords: Unexplained cash credit; Business income; Deemed to accrue or arise in india
• Section: 143(3); 54F; 2(22)(e); 68

Judgement Text

ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 1 OF 31 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 3956/DEL/2015 ( ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER, WARD-48(4), NEW DELHI-110002. VS. SH. MANMOHAN SINGH SEHGAL, 5/58, W.E. A., SARASWATI MARG, KAROL BAGH, NEW DELHI-110005. PAN NO: ABAPS6153M APPELLANT RESPONDENT REVENUE BY : SHRI SARAS KUMAR, SR. DR ASSESSEE BY : SHRI C.S. ANAND, ADV. AND SHRI MAYANK MAHESHWARI, ADV. PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE IMPUGNED APPELLATE ORDER DATED 31.03.2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-16, NEW DELHI, [LD. CIT(A),FOR SHORT] PERTAINING TO ASSES SMENT YEAR 2011-12, ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 79,10,385/- MADE BY THE AO BY DISALLOWING CLAIM OF EXEMPTION U/S 54F OF THE ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.5,90,376/- MADE BY AO BY APPLYING A NET PROFIT R ATE OF 2 % ON TOTAL SALES OF RS.2,30,49,244/-. ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 2 OF 31 3. 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.10.95.230/- MADE BY THE AO TREATING MISCELLANEOU S INCOME CREDITED TO P&L ACCOUNT OF M/S. GAGANDEEP IMPEX PVT. LTD. AS INCOME FROM OTHER SOURCES. 4. 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.42,40,155/- MADE BY THE AO U/S 68 OF THE ACT. TH E LD. CIT(A) WITHOUT APPRECIATING THE FACT THAT INSPITE OF REPEATED REQU EST TO THE ASSESSEE, HE HAS NOT PRODUCED BOOKS OF ACCOUNTS AND ALSO NOT ESTABLISHED THE IDENTITY, CREDITWORTHINESS, GENUINENESS AND CAPACITY OF THE CREDITORS.' 5. 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.1,15,43,077/- MADE BY THE AO AS UNEXPLAINED CASH CREDITS IN THE HANDS OF THE ASSESSEE U/S 68 OF THE ACT.' 6. 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.10,00,000/- MADE BY THE AO U/S 2(22)(E) OF THE A CT. THE LD. CIT(A) WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS A DIRECT OR OF THE COMPANY AND IF PVT. LTD. COMPANY HAS MADE ANY PAYMENT .DIRECTLY OR INDIRECTL Y TO ITS DIRECTOR THEN SUCH PAYMENT SHALL BE TREATED AS DEEMED INCOME U/S 2 (22 ) (E) OF THE ACT.' 7. 'THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION U/S 2(22)(E) BY OBSERVING THAT THE SAID PAYMENT IS REFL ECTED IN THE BOOKS OF ACCOUNTS OF THE COMPANY I.E. M/S. GAGANDEEP IMPEX PVT. LTD., IG NORING THE FACT THAT THE AO HAS NOWHERE STATED THAT THE SAID PAYMENT MADE ON BEHALF OF THE ASSESSEE WAS MADE OUTSIDE THE BOOKS OF ACCOUNT OF THE COMPANY. 8. 'THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME B EFORE OR DURING THE HEARING OF THIS APPEAL (B) IN THIS APPEAL, FILED BY REVENUE THE DISPUTES P ERTAINED TO THE FOLLOWING ADDITIONS MADE BY THE ASSESSING OFFICER (AO, FOR SHORT) (VI DE ASSESSMENT ORDER DATED 28.03.2014 U/S 143(3) OF THE INCOME TAX ACT, 1961), WHICH WERE DELETED BY LD. CIT(A) VIDE IMPUGNED APPELLATE ORDER DATED 31.03.2015. (A) ADDITION OF RS. 5,90,376/- MADE BY THE AO BY AP PLYING NET PROFIT RATE OF 2% ON TOTAL SALES. (B) ADDITION OF RS. 10,95,230/- MADE BY THE AO TREA TING MISCELLANEOUS ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 3 OF 31 INCOME AS INCOME FROM OTHER SOURCES. (C) ADDITIONS OF RS. 42,40,155/- AND RS. 1,15,43,07 7/- MADE BY THE AO UNDER SECTION 68 OF I.T. ACT. (D) ADDITION OF RS. 10,00,000/- MADE BY THE AO UNDE R SECTION 2(22)(E) OF I.T. ACT. (B.1) FOR THE EASE OF REFERENCE, PORTION OF AFORESA ID ASSESSMENT ORDER DATED 28.03.2014 IS REPRODUCED AS UNDER: ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 4 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 5 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 6 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 7 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 8 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 9 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 10 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 11 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 12 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 13 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 14 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 15 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 16 OF 31 (B.2) ALSO, THE RELEVANT PORTION OF THE AFORESAID I MPUGNED APPELLATE ORDER DATED 31.03.2015 OF THE LD. CIT(A) IS REPRODUCED AS UNDER : ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 17 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 18 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 19 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 20 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 21 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 22 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 23 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 24 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 25 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 26 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 27 OF 31 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 28 OF 31 (B.3) IN THE COURSE OF APPELLATE PROCEEDINGS IN IN COME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT), A PAPER BOOK WAS FILED FROM AS SESSEES SIDE CONTAINING THE FOLLOWING PARTICULARS: 1. PHOTOCOPY OF APPLICATION DT. 23.01.2015 MOVED B Y THE ASSESSEE U/R 46A BEFORE THE LD. CIT(A). 2. PHOTOCOPY OF PAPER BOOK INDEX WITH ITS ENCLOSUR ES CONTAINING 123 PAGES, WHICH WERE FILED BY THE ASSESSEE ALONGWITH A PPLICATION DT. 23.01.2015 ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 29 OF 31 MOVED U/R 46A BEFORE THE LD. CIT(A). 3. PHOTOCOPY OF WRITTEN SUBMISSIONS DT. 23.01.2015 FILED BY THE ASSESSEE WITH THE LD. CIT(A). 4. PHOTOCOPY OF PAPER BOOK INDEX WITH ITS ENCLOSUR ES CONTAINING 9 PAGES, WHICH WERE FILED ALONGWITH APPLICATION DT. 23.01.20 15 WITH THE LD. CIT(A). 5. PHOTOCOPY OF ASSESSEES LETTER DT. 25.02.2015 WI TH ITS ENCLOSURES FILED BY THE ASSESSEE WITH THE LD. A.O. DURING REMAND PRO CEEDINGS. 6. PHOTOCOPY OF LD. A.O.S REMAND REPORT DT. 09.03. 2015 7. PHOTOCOPY OF THE ASSESSEES REJOINDER VIDE LETTE R DT. 23.03.2015 . (C) AT THE TIME OF HEARING BEFORE US, THE LEARNED D EPARTMENTAL REPRESENTATIVE (LD. DR, FOR SHORT) RELIED ON THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER SIDE, RELIED ON THE AFORESAID IMPUGNED APPELL ATE ORDER DATED 31.03.2015 OF THE LD. CIT(A). HE ALSO RELIED ON THE AFORESAID PAPER BOOK TO SUPPORT THE ORDER OF THE LD. CIT(A). (C.1) WE HAVE HEARD BOTH SIDES CAREFULLY. WE HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORDS. WE ARE OF THE VIEW THAT THE ORDER OF THE LD. CIT(A) IS IN ACCORDANCE WITH LAW IN FACTS AND CIRCUMSTANCES OF T HE CASE. RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) HAS ALREADY BEEN REPRODUCED IN FOREGOING PARAGRAPH (B.2) OF THIS ORDER. HE HAS PASSED A SPEAKING ORDER IN DETAI L AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). WE FIND NO REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A). NO MATERIALS WERE BROUGHT FOR OUR CONSIDERA TION BY EITHER SIDE TO WARRANT A VIEW DIFFERENT FROM THE VIEW ALREADY TAKEN BY LD. C IT(A) ON THE MERITS OF THE ADDITION. ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 30 OF 31 THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28/11/ 2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MIS SHRA) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED: 28/11/2019 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 3956/DEL/2015 SHRI MANMOHAN SINGH PAGE 31 OF 31 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER