Shri Keshav Garg, Delhi V. ITO, New Delhi

ITA 408/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6559 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G S KOHLI

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL, NEW DELHI BENCHES, NEW DELHI SMC BENCH SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 408/DEL/2016 A.Y. 2011-12 KESHAV GARG B-2/39, SECTOR-6, ROHINI, DELHI 110 085 (PAN:AEHPG5861J) VS. ITO, WARD 38(2), NEW DELHI AND ITA NO. 409/DEL/2016 A.Y. 2011-12 HARDIK GARG B-2/39, SECTOR-6, ROHINI, DELHI 110 085 (PAN:AIHPG7191H) VS. ITO, WARD 37(1), NEW DELHI ASSESSEE BY : SH. G.S. KOHLI, CA DEPARTMENT BY: SH. RAKESH KUMAR, SR. DR ORDER THESE APPEALS BY THE DIFFERENT ASSESSEES ARE DIRECTED AGA INST THE SEPARATE ORDERS BOTH DATED 14.12.2015 FOR THE A.Y. 2011-12 OF THE LD. CIT(A)-32, NEW DELHI. SINCE THE ISSUES INVOLVED IN TH ESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEALS WERE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF BREVITY. 2 2. THE ONLY COMMON GROUND PRESSED IN ITA NO. 408/DEL/2 016 FOR AY 2011-12 READ AS UNDER:- 3. THE LD. AO AS WELL AS THE LD. CIT(A) WERE NOT JU STIFIED IN APPLYING THE ADHOC RATE TO ESTIMATE THE PROFIT ON T OTAL DEPOSIT OF RS. 3,48,00,626/- IN UNDISCLOSED SAVING ACCOUNTS. THE APPLIED RATE MUST BE SUPPORTED WITH SOME EVIDENCE / MATERIAL. 3. THE ONLY COMMON GROUND PRESSED IN ITA NO. 409/DEL/2 016 FOR AY 2011-12 READ AS UNDER:- 2. THE LD. AO AS WELL AS THE LD. CIT(A) WAS NOT JUSTI FIED IN APPLYING THE ADHOC RATE TO ESTIMATE THE PROFIT ON T OTAL DEPOSIT OF RS. 1,14,66,457/- IN UNDISCLOSED SAVING ACCOUNTS. 4. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR T HE ASSESSEE, AT THE VERY OUTSET STATED THAT IN ASSESSEE OWN CASE I.E. SH. KESH AV GARG VS. ITO, THE ITAT, SMC-I BENCH, NEW DELHI VIDE ITS ORDER DATED 28.102.106 HAS DECIDED THE SIMILAR AND IDENTICAL ISSUE IN ITA NO. 609/D EL/2016 (AY 2010- 11) IN FAVOUR OF THE ASSESSEE, BY WHICH THE PRESENT ISSUE I S SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. HENCE, HE REQUESTED THAT BY RE SPECTFULLY FOLLOWING THE PRECEDENT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2010-11, BOTH THE PRESENT APPEALS OF THE DIFFERENT ASSESSES MAY BE ALLOWED. 5. IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SUPPOR TED THE ORDER OF THE AO, BUT COULD NOT CONTROVERT THE AFORESAID CONTENTI ONS OF THE LD. COUNSEL FOR THE ASSESSEE. 3 6. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES A ND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN TH E PRESENT CASE, IT IS NOTICED THAT THE SIMILAR GROUND IN THE ASSESSMENT YEAR 20 10-11 WAS ALLOWED IN ASSESSEES OWN CASE VIDE THE ORDER DATED 28.10.2016 BY THE SMC-I BENCH OF THE ITAT, DELHI PASSED IN ITA NO. 609/DEL/20 16 AND RELEVANT FINDING HAS BEEN GIVEN VIDE PARA NO. 10 & 11 WHICH R EAD AS UNDER:- 10. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. ADMITTEDLY IN EARLIER YEAR THE AO HAD ESTIMATED THE ASSESSEES INCOME FROM UNACCOUNTED CASH DEPOSITS @6% OF THE TOTAL DEPOSIT WHICH WAS MADE THE BASIS BY LD. CIT(A). THE SUBMISSION OF LD. COUNSEL IS THAT IN EARLIE R YEAR SINCE THE TAX LIABILITY WAS NOMINAL, THEREFORE, N O APPEAL WAS FILED. THIS PLEA CANNOT BE ACCEPTED BECAUSE WHEN THE ASSESSEE WAS AWARE OF THE FACT THAT HE HAD CARRIED OUT SIMILAR BUSINESS IN SUBSEQUENT YEAR, THEREFO RE, THIS PERCENTAGE WOULD BECOME A PRECEDENCE FOR SUBSEQUENT YEAR ALSO. HOWEVER, THE AO HIMSELF HAS OBSERVED IN PARA 4(III) OF HIS ORDER THAT .BUSINESS PRESUPPOSES THE EXISTENCE OF SALES AS WELL AS PURCHASES AND OTHER CONNECTED EXPENSE. THE GP RATE DOES NOT T AKE INTO CONSIDERATION THESE EXPENSES. KEEPING IN VIEW THE FACT THAT MOST OF THE EXPENSES MUST HAVE BEEN CLAIMED IN MAIN BUSINESS, I CONSIDER IT IN THE INTEREST OF JUSTICE TO ALLOW 2% TOWARDS CONNECTED EXPENSES. ACCORDINGLY, ADDITION IS TO BE RESTRICTED TO 4% OF THE TOTAL DEPOS ITS. I ORDER ACCORDINGLY. 4 11. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. 7. AFTER CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSE D HEREINABOVE, I AM OF THE VIEW THAT THE ISSUES INVOLVED IN THE PRESEN T APPEALS ARE SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY ITAT DECISION DATED 2 8.10.2016 FOR THE ASSESSMENT YEAR 2010-11 BY THE SMC-I BENCH OF THE IT AT, DELHI PASSED IN ITA NO. 609/DEL/2016, IN ASSESSEES OWN CASE. THEREFOR E, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, THE GROUNDS RAISED IN B OTH THE APPEALS ARE PARTLY ALLOWED, IN TERMS OF THE TRIBUNALS ORDER DAT ED 28.10.2016, AS AFORESAID. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE DIFF ERENT ASSESSEES STAND PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/02/2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 17/02/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES