Shri Sanjeev Nath Anand, New Delhi V. ITO, New Delhi

ITA 3975/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2049 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: VANDANA GOPAL SHARDA
• Keywords: TDS; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5447/DEL/2012 ASSESSMENT YEAR: 2007-08 ITA NO.3975/DEL/2016 ASSESSMENT YEAR: 2007-08 SANJEEV NATH ANAND, P-164, STREET NO.7, BIHARI COLONY, NEW DELHI. PAN: ABWPS2480F VS ITO, WARD 35(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : MS VANDANA GOPAL SHARDA, CA REVENUE BY : SHRI S.L. ANURAGI, SR. DR DATE OF HEARING : 31.07.2019 DATE OF PRONOUNCEMENT : 06.09.2019 ORDER THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DIR ECTED AGAINST THE SEPARATE ORDERS OF THE CIT(A)-37, NEW DELHI RELATING TO ASSE SSMENT YEAR 2007-08. 2. WHILE THE ASSESSEE IN ITA NO.5447/DEL/2012 HAS C HALLENGED THE ORDER OF THE CIT(A) IN SUSTAINING THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER, THE ASSESSEE, IN ITA NO.3975/DEL/2016, HAS CHALLENGED T HE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.51,273/-. 3. FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TO GETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 2 ITA NO.5447/DEL/2012 4. GROUNDS OF APPEAL NO. 1 AND 7 BEING GENERAL IN N ATURE ARE DISMISSED. 5. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED AN A DDITION OF RS.3,73,459/- MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A). 6. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM PROPERTY DEALING. HE FILED HIS RETURN OF INCOME ON 13 TH AUGUST, 2007 DECLARING THE TOTAL INCOME OF RS.1,72,452/-. THE A SSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTED THAT THE AS SESSEE HAS DEPOSITED A SUM OF RS.11,84,500/- IN CASH IN HIS SAVING BANK ACCOUNT. ON BEING QUESTIONED BY THE ASSESSING OFFICER, THE ASSESSEE EXPLAINED THE SOURC E OF SUCH CASH DEPOSITS THE DETAILS OF WHICH ARE AS UNDER:- A) CASH WITHDRAWN FROM BANK RS.3,80,000/- B) PROPERTY DEALINGS RS.3,95,000/- C) LOAN & ADVANCES REVERSED BACK RS.1,67,558/- D) DATA MAKING (MAINTENANCE CHARGES RECEIVED) RS.3 ,73,459/- E) ELECTRICITY ON ACCOUNT RS.1,77,277/- F) DEEPAK RS.5,000/- 7. THE ASSESSING OFFICER ACCEPTED THE FIRST TWO ITE MS. SO FAR AS THE AMOUNT OF RS.3,73,459/- IS CONCERNED, IT WAS EXPLAINED BY THE ASSESSEE THAT AS PER CLAUSE 2 OF MAINTENANCE AGREEMENT, THE CONTRACT IS COMMENCING F ROM 03.03.1999 AND FURTHER ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 3 AS PER CLAUSE 3 OF MAINTENANCE AGREEMENT CHARGES AG REED SHALL BE PAYABLE IN EQUAL INSTALLMENTS OF RS.12,000/- ON EVERY MONTH IN CASH OR BY CHEQUE IN ADVANCE LATEST BY 7 TH DAY OF RESPECTIVE MONTH, BESIDES 10% YEARLY REVISI ON WILL BE ADDED AS APPLICABLE. HOWEVER, THE ASSESSING OFFICER REJECTE D THE SAME ON THE GROUND THAT IT IS NOT UNDERSTOOD AS TO HOW THE ASSESSEE HAS CARRIE D ON THE MAINTENANCE WORK WITHOUT RECEIVING ANY AMOUNT FROM DATAMATION CONSUL TANTS. FURTHER, NO OTHER AGREEMENT WAS BROUGHT TO HIS NOTICE TO SUBSTANTIATE THAT CERTAIN RECEIPTS WERE OUTSTANDING AS ON 31.03.2006 WHICH WAS NOT RECEIVED DURING THE YEAR. HE, THEREFORE, HELD THAT THE DEPOSIT OF CASH TO THIS EX TENT IS AFTERTHOUGHT. HE ACCORDINGLY TREATED THIS AS UNEXPLAINED CASH DEPOSI T IN THE BANK ACCOUNT OF THE ASSESSEE. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTI ON OF THE ASSESSING OFFICER. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 9. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ASSESSEE MAINTAINS THE BOOKS ON MERCANTILE SYSTEM BASIS. RE FERRING TO PAGE 75 OF THE PAPER BOOK, THE LD. COUNSEL DREW THE ATTENTION OF THE BEN CH TO THE DEMAND NOTE RAISED BY THE BSES YAMUNA POWER LTD., AMOUNTING TO RS.42,000/ -. REFERRING TO PAGE 13 OF THE PAPER BOOK, SHE DREW THE ATTENTION OF THE BENCH TO THE TDS CERTIFICATE DATED 30 TH MARCH, 2006 FOR THE PERIOD FROM 01.04.2005 TO 31.0 3.2006 ISSUED BY DATAMATION CONSULTANTS PVT. LTD. REFERRING TO PAGE 21 OF THE PAPER BOOK, SHE DREW THE ATTENTION OF THE BENCH TO THE TDS CERTIFIC ATE ISSUED BY DATAMATION ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 4 CONSULTANTS ON 8 TH JULY, 2005 FOR THE PERIOD FROM 01.04.2004 TO 31.03 .2005. REFERRING TO PAGE 55 OF THE PAPER BOOK, SHE DREW TH E ATTENTION OF THE BENCH TO THE COPY OF MAINTENANCE AGREEMENT DATED 22.02.1999. RE FERRING TO LEDGER ACCOUNT OF DATAMATION IN THE BOOKS OF THE ASSESSEE FOR THE PER IOD FROM 01.04.2004 TO 31.03.2007, COPIES OF WHICH ARE PLACED AT PAGES 66 TO 68 OF THE PAPER BOOK, SHE SUBMITTED THAT THE ASSESSEE HAS SHOWN THE AMOUNT RE CEIVED FROM DATAMATION TOWARDS MAINTENANCE CHARGES. SHE SUBMITTED THAT FOR THE PERIOD FROM 01.04.2006 TO 31 ST MARCH, 2007, THE ASSESSEE HAS RECEIVED THE MAINTEN ANCE CHARGES IN CASH FROM THE SAID COMPANY. SHE SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION RECEIPT FROM DATAMATION DURING THE COURSE OF APPEAL PROCEEDINGS BEFORE THE CIT(A). THEREFORE, THE ADDITION MADE BY THE ASSESS ING OFFICER IS UNCALLED FOR. 10. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED O N THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 11. AFTER HEARING THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND ON PERUSAL OF THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE IN TH E PAPER BOOK, I AM CONVINCED THAT THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THE CASH DEPOSIT OF RS.3,73,459/- RECEIVED FROM DATAMATION CONSULTANTS PVT. LTD. TOWA RDS MAINTENANCE CHARGES. FURTHER, A PERUSAL OF THE ORDER OF THE CIT(A) SHOWS THAT WHILE ADJUDICATING THE PENALTY APPEAL THE ASSESSEE FILED CERTAIN CERTIFICA TES FROM DATAMATION WHICH WERE FORWARDED TO THE ASSESSING OFFICER FOR HIS VERIFICA TION AND THE ASSESSING OFFICER IN HER REPORT DATED 11 TH MARCH, 2016 HAD STATED THAT ALTHOUGH DATAMATION HA S NOT BEEN ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 5 ABLE TO PRODUCE THEIR BOOKS TO SHOW THE PAYMENT, HO WEVER, THEY HAVE ORALLY CONFIRMED THAT THEY ARE PAYING MAINTENANCE AND ELEC TRICITY CHARGES TO THE ASSESSEE. ACCORDINGLY, THE LD.CIT(A) HAD CANCELLED THE PENALT Y ON THIS AMOUNT. SINCE THE DATAMATION HAS ALREADY CONFIRMED BEFORE THE ASSESSI NG OFFICER DURING THE REMAND PROCEEDINGS THAT THEY ARE PAYING THE MAINTENANCE CH ARGES TO THE ASSESSEE, THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE CASH DEPOSIT IN THE BANK ACCOUNT STANDS EXPLAINED BEING THE AMOUNT RECEIVED FROM DAT AMATION. ACCORDINGLY, THE SAME IS DELETED. GROUND OF APPEAL NO.2 BY THE ASSES SEE IS ALLOWED. 12. IN GROUND OF APPEAL NO.3, THE ASSESSEE HAS CHAL LENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.1,77,277/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ELECTRICITY CHARGES RECEIVED FROM DAT AMATION CONSULTS PVT. LTD. 13. AFTER HEARING BOTH THE SIDES, I FIND THE ASSESS ING OFFICER MADE AN ADDITION OF RS.1,77,277/- ON THE GROUND THAT THE ASSESSEE CO ULD NOT EXPLAIN THE SOURCE OF SUCH CASH DEPOSIT IN THE BANK ACCOUNT TO THIS EXTEN T. THE EXPLANATION OF THE ASSESSEE THAT HE HAS DEBITED THE ELECTRICITY BILL F ROM HIS BANK ACCOUNT FOR ELECTRICITY USED BY DATAMATION AND OTHER PARTIES IN THE EARLIER YEARS WHICH WERE RECEIVED BY HIM IN CASH DURING THE CURRENT FINANCIAL YEAR WAS R EJECTED. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICE R. AS MENTIONED IN THE PRECEDING PARAGRAPH, DURING THE PENALTY APPEAL BEFO RE THE CIT(A) THE ASSESSEE HAD FILED CERTAIN DETAILS/CONFIRMATIONS WHICH WERE SENT BY THE CIT(A) TO THE ASSESSING OFFICER FOR THE REMAND REPORT. THE ASSESSING OFFIC ER, IN THE REMAND REPORT HAD ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 6 CONFIRMED THAT DATAMATION HAS ORALLY CONFIRMED THAT THEY ARE PAYING MAINTENANCE AND ELECTRICITY CHARGES TO THE ASSESSEE. SINCE THE STATEMENT OF THE ASSESSEE HAS BEEN CORROBORATED BY DATAMATION DURING THE REMAND P ROCEEDINGS BEFORE THE ASSESSING OFFICER, THEREFORE, I AM OF THE CONSIDERE D OPINION THAT NO ADDITION IS CALLED FOR. ACCORDINGLY, GROUND OF APPEAL NO.3 BY THE ASSESSEE IS ALLOWED. 14. IN GROUND OF APPEAL NO.4, THE ASSESSEE HAS CHAL LENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.1,67,558/-B EING LOANS AND ADVANCES RECEIVED BY IT. 15. AFTER HEARING BOTH THE SIDES, I FIND THE ASSESS ING OFFICER MADE AN ADDITION OF RS.1,67,558/- ON THE GROUND THAT THE ASSESSEE CO ULD NOT PROPERLY EXPLAIN BEFORE HIM REGARDING THE VARIOUS PARTIES TO WHOM HE HAS AD VANCED CASH IN THE EARLIER YEARS WHICH WERE RECEIVED BACK DURING THE CURRENT F INANCIAL YEAR SINCE THE ASSESSEE COULD NOT PROPERLY EXPLAIN THE DETAILS. I FIND THE LD.CIT(A) SUSTAINED THE ADDITION SO MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE IN THE PRECEDING YEARS HAD NOT FILED ANY BALANCE SHEET AND, THEREFOR E, NO RELIANCE CAN BE PLACED ON THE VARIOUS DOCUMENTS FILED BEFORE THE CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL THAT HE HAS FILED THE BALANCE SHEET FOR ASS ESSMENT YEARS 2005-06, 2006-07 AND 2007-08 AND THE TRIAL BALANCE FOR THE YEAR ENDI NG 31.03.2005 AND 31.03.2006. HE HAS ALSO FILED THE CONFIRMATIONS AND PAN DETAILS AND AFFIDAVIT OF THE PARTIES AND, THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE B Y THE ASSESSING OFFICER AND THE CIT(A) SHOULD NOT HAVE CONFIRMED THE ADDITION. I FIND MERIT IN THE ARGUMENTS ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 7 ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. A PE RUSAL OF THE VARIOUS DOCUMENTS FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES SHOW THAT THE ASSESSEE HAS FILED SUFFICIENT DETAILS REGARDING THE RECEIPT OF LOANS A ND ADVANCES GIVEN IN THE EARLIER YEARS. THE AFFIDAVITS FILED BY THE ASSESSEE FROM A LL THE PARTIES WITH CONFIRMATIONS AND THEIR PAN DETAILS HAD NOT BEEN FOUND TO BE FALS E OR UNTRUE. FURTHER, THE AMOUNTS ARE VERY SMALL. CONSIDERING THE TOTALITY O F THE FACTS OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY TH E ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. ACCORDING LY THE SAME IS DELETED AND THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 16. IN GROUND NO.5, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.5,000/- MADE BY THE A SSESSING OFFICER BEING THE AMOUNT RECEIVED FROM MR. DEEPAK. 17. AFTER HEARING BOTH THE SIDES, I FIND THE ASSESS ING OFFICER REJECTED THE SOURCE OF DEPOSIT OF CASH AMOUNTING TO RS.5,000/- ON THE G ROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION THAT HE HAS RECEIVED CASH FROM THE OFFICE BOY DEEPAK AGAINST WHICH CHEQUE WAS ISSUED T O HIM. HE HAD ALSO OBSERVED THAT NO SUCH OFFICE BOY WAS EMPLOYED BY THE ASSESSE E AS NO SALARY WAS DEBITED IN THE P&L ACCOUNT AND IT IS AN AFTERTHOUGHT. I FIND THE LD.CIT(A) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD. CO UNSEL ALSO COULD NOT SUBSTANTIATE WITH ANY EVIDENCE SO AS TO TAKE A CONT RARY VIEW THAN THE VIEW TAKEN BY THE CIT(A) ON THIS ISSUE. ACCORDINGLY, GROUND NO.5 IS DISMISSED. ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 8 18. GROUND NO.6 WAS NOT PRESSED BY THE LD. COUNSEL FOR WHICH THE LD. DR HAS NO OBJECTION. ACCORDINGLY, THE SAME IS DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO.3975/DEL/2016 20. THE ASSESSEE IN THE GROUNDS OF APPEAL HAS CHALL ENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY OF RS.51,273/- ON ACCOUNT OF ADDITION OF RS.1,67,558/- MADE BY THE ASSESSING OFFICER BEING T HE LOANS AND ADVANCES RECEIVED BACK. 21. AFTER HEARING BOTH THE SIDES, I FIND THE ASSESS ING OFFICER MADE ADDITION OF RS.1,67,558/- BEING THE LOANS AND ADVANCES RECEIVED BACK FROM VARIOUS PARTIES DURING THE YEAR WHICH WERE GIVEN IN THE PRECEDING Y EAR. IN APPEAL, THE LD.CIT(A) CONFIRMED THE ADDITION. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY OF RS.51,273/- ON THIS ADDITION U/S 271(1)(C) OF THE I T ACT WHICH HAS BEEN UPHELD BY THE CIT(A). IN THE PRECEDING PARAGRAPHS I HAVE ALR EADY DELETED THE ADDITION SO MADE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT (A). SINCE THE ADDITION ON WHICH PENALTY WAS LEVIED HAS BEEN DELETED, THEREFOR E, THE PENALTY DOES NOT SURVIVE. ACCORDINGLY, THE ORDER OF THE CIT(A) SUSTAINING THE PENALTY IS SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO CANCEL THE PENALTY . ITA NO.5447/DEL/2012 ITA NO.3975/DEL/2016 9 22. IN THE RESULT, ITA NO.5447/DEL/2012 IS PA RTLY ALLOWED AND ITA NO.3975/DEL/2016 IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 6.09.2019. SD/- (R.K. PANDA) ACCOUNTANT MEMBER DATED: 06 TH SEPTEMBER, 2019 DK COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI