ITO, New Delhi V. Sh. Sahabuddin, Faridabad

ITA 418/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2954 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 31-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KASUHLENDRA TIWARI
• Section: 44AD; 142(1); 144

Judgement Text

1 ITA NO. 418/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI MS SUCHITRA KAMBLE, JU DICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER ITA NO. 418/DEL/2013 ( A.Y 2009-10) ITO WARD-38(3), ROOM NO. 2209, 22 ND FLOOR, BLOCK E2, PRATYAKSH KAR BHAWAN, CIVIC CENTRE, NEHRU MARG NEW DELHI (APPELLANT) VS SAHABUDDIN C/O. H. NO. 5423-24, SECTOR-3, BALLABGARH FARIDABAD APDPS6884E (RESPONDENT) APPELLANT BY SH. KASUHLENDRA TIWARI, SR. DR RESPONDENT BY NONE ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER DATED 25/10/2012 PASSED BY CIT(A)-XXVIII, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A) GROSSLY ERRED IN DELETING THE ADDITI ON OF RS. 21,70,777/- MADE BY THE AO ON THE GROUND THAT THE ASSESSEE HAS FILED HIS RETURN UNDER CODE 505 CONTRACTOR OTHERS. THE CIT(A) ERRED IN D ELETING THE ENTIRE ADDITION TO THE INCOME OF THE ASSESSEE WITH WITHOUT CONSIDER ING THE FACT THAT THE ASSESSEE HAD NOT FURNISHED ANY DETAILS/DOCUMENTS IN SUPPORT OF HIS BOOK DATE OF HEARING 07.03.2018 DATE OF PRONOUNCEMENT 14.03.2018 2 ITA NO. 418/DEL/2013 RESULTS AND THAT AO UNDER SUCH CIRCUMSTANCES WAS JU STIFIED IN ESTIMATING INCOME OF THE ASSESSEE TO THE BEST OF HIS JUDGMENT U/S 144 OF THE IT ACT. 2. THE LD. CIT(A) ERRED IN CONCLUDING THAT THE ADDI TION OF RS. 18,89,625/- UNDER THE HEAD INCOME FROM THE OTHER SOURCES WAS UNSUSTAINABLE ON THE BASIS THAT IT WAS ALREADY INCLUDED IN THE PROFIT & LOSS ACCOUNT WHEN THERE WAS NO MATERIAL ON THE RECORD BEFORE THE AO TO REAC H SUCH CONCLUSION. 3. THE LD. CIT(A) ERRED IS NOT CONSIDERING THAT THE AD DITION OF RS. 18,89,625/- WOULD NOT AMOUNT TO DOUBLE TAXATION EXCEPT WITH RES PECT TO RS. 3,51,438/- BEING THE PROFIT AS PER P&L A/C TO WHICH THE ESTIMA TED PROFIT OF BUSINESS AND INCOME FROM OTHER SOURCES HAS BEEN ADDED. 4. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. 3. THE ASSESSEE FILED INCOME TAX RETURN ON 30.09.2 009 FOR THE A.Y.2009-10, DISCLOSING TOTAL TAXABLE INCOME OF RS 351437 THROUG H E-FILING. NOTICE UNDER SECTION 143(2) AND 142(1) WAS ISSUED TO THE RESIDEN TIAL ADDRESS OF THE ASSESSEE AT FARIDABAD. NEITHER ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE ATTENDED THE OFFICE OF THE ASSESSING OFFICER. THE ASSESSING OFF ICER MADE THE BEST JUDGMENT ASSESSMENT U/S 144 OF THE INCOME TAX ACT 1961. THE ASSESSING OFFICER MADE ADDITION TO INCOME OF RS.21,70,777/- BY INCREASING THE INCOME AT THE RATE OF 8% ON TOTAL GROSS INCOME AS PER SECTION 44AD OF THE INCOME TAX ACT 1961,AND OF RS. 1,08,515/- AS UNDISCLOSED INCOME AND RS. 18, 89,625/- AS INCOME FROM OTHER SOURCES. THE ASSESSEE DISCLOSED HIS INCOME I N HIS RETURN OF INCOME AT RS.3,51,437/- INCLUDING OTHER INCOME OF RS.4,21,860 /-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE ASSESSEE TOOK PLEA BEFORE THE CIT( A) THAT THE ASSESSEE WAS NOT WELL AND LEFT HIS WORK FROM NCR AND WENT TO HIS HOM E TOWN DUE TO WHICH HE DID NOT REPLY TO THE NOTICES OF THE ASSESSING OFFIC ER. THE CIT(A) PARTLY ALLOWED 3 ITA NO. 418/DEL/2013 THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) WAS NOT COR RECT IN DELETING THE ADDITION OF RS.21,70,777/- MADE BY THE ASSESSING OF FICER ON THE GROUND THAT THE ASSESSEE FILED HIS RETURN IN CODE 505 CONTRACT OR OTHERS. THE CIT(A) ERRED IN DELETING THE ENTIRE ADDITION TO THE INCOME OF TH E ASSESSEE WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT FURN ISHED ANY DETAILED DOCUMENTS IN SUPPORT OF HIS BOOK RESULTS AND THAT T HE ASSESSING OFFICER UNDER SUCH CIRCUMSTANCES WAS JUSTIFIED IN AN ESTIMATING I NCOME OF THE ASSESSEE TO THE BEST OF HIS JUDGMENT U/S 144 OF THE ACT. 6. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) WAS NOT CORRECT IN CONCLUDING THAT THE ADDITION OF RS.18,89,625/- UNDE R THE HEAD INCOME FROM THE OTHER SOURCES WAS UNSUSTAIANABLE ON THE BASIS T HAT IT WAS ALREADY INCLUDED IN THE PROFIT AND LOSS ACCOUNT WHEN THERE WAS NO MA TERIAL ON THE RECORD BEFORE THE ASSESSING OFFICER TO REACH SUCH CONCLUSION. T HE LD. DR FURTHER SUBMITTED THAT THE CIT(A) ERRED IN NOT CONSIDERING THE ADDITI ON OF RS.18,89,625/- AS THE SAME WOULD NOT AMOUNT TO DOUBLE TAXATION EXCEPT WI TH RESPECT TO RS.3,51,438/- BEING THE PROFIT AS PER PROFIT AND LO SS ACCOUNT OF WHICH THE ESTIMATED PROFIT OF BUSINESS AND INCOME FROM OTHER SOURCES WAS ADDED. 7. NONE APPEARED FOR THE ASSESSEE. 8. WE HAVE HEARD THE LD. DR AND PERUSED ALL THE REC ORDS. AS RELATES TO GROUND NO. 1 AND 2 OF THE REVENUES APPEAL, THE CIT (A) HAS GIVEN A DETAILED FINDING AND HELD AS UNDER:- I HAVE CONSIDERED THE FACTS OF THE CASE, THE GROUNDS RAISED IN APPEAL AND THE SUBMISSION OF THE AR. IT IS APPARENT FROM RECOR D THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF CONTRACT IN GARMENT MANU FACTURING INDUSTRIES IN DELHI AND NCR REGION PROVIDING LABOUR FOR DOING WOR K OF GARMENT STITCHING IN 4 ITA NO. 418/DEL/2013 THE PREMISES OF CONTRACTEE. THE APPELLANT HAS STATE D THAT HIS FATHER WAS SERIOUSLY ILL FOR LONG PERIOD, SUFFERING FROM CANCE R, FOR WHICH THE APPELLANT HAD TO GO TO HIS HOME TOWN IN BIHAR TO LOOK AFTER HIM. THE APPELLANT HAS SUBMITTED ENOUGH PROOF IN SUPPORT OF HIS FATHERS ILLNESS AND CONSEQUENTIAL DEMISE. I HAVE REASON TO ACCEPT THIS EXPLANATION OF THE ASSES SEE FOR NOT BEING ABLE TO BE PRESENT IN THE PLACE OF BUSINESS. THIS HAS RESULTED IN NON RECEIPT OF NOTICES BY HIM OR HIS FAMILY MEMBERS. THIS EXPLAINS THE APPELL ANTS INABILITY TO COMPLY WITH THE STATUTORY NOTICES LEADING TO BEST JUDGMENT ASSESSMENT BY THE ASSESSING OFFICER. FURTHER AS SUBMITTED BY THE APPE LLANT, HE HAS FILED THE RETURN IN THE CODE OF 0505 WHICH IS FOR CONTRACTER OTHERS. THIS DOES NOT CALLED FOR THE INCOME TO BE ESTIMATED AT 8% OF THE GROSS RECEIPT. THE CASE OF THE APPELLANT IS NOT COVERED FOR ESTIMATION AS PER PROV ISIONS OF SECTION 44AD. ACCORDINGLY, I DELETE THE ADDITION MADE BY THE ASSE SSING OFFICER BY ESTIMATING THE INCOME OF THE ASSESSEE ATTRACTING THE PROVISION S OF SECTION 44AD OF THE IT ACT. APPEAL ON THIS GROUND IS ALLOWED.. THUS THE CIT(A) HAVE GIVEN DETAILED FINDING AS TO E STIMATING THE INCOME OF THE ASSESSEE ATTRACTING THE PROVISIONS OF SECTION 44AD OF THE INCOME TAX ACT, 1961. IN FACT MERELY REJECTING BOOKS OF ACCOUNTS A S IT WAS NOT AVAILABLE BEFORE A.O CANNOT BE THE GROUND FOR REJECTING BOOKS OF ACC OUNTS. THEREFORE, THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A). THUS, GROUND NO. 1 AND 2 ARE DISMISSED. 9. AS REGARDS GROUND NO. 3, THE CIT(A) HAS GIVEN TH E FINDING THAT THERE IS DOUBLE TAXATION AFTER VERIFYING PROFIT AND LOSS ACC OUNT. THE CIT(A) HELD AS UNDER: ..REGARDING THE THIRD GROUND, THE ISSUE IS THAT THE ADDITION OF RS. 18,89,625/- MADE AS INCOME FROM OTHER SOURCES IS ST ATED BY THE APPELLANT AS ALREADY CREDITED TO THE PROFIT & LOSS ACCOUNT. THE TAX ON THE SAME HAS BEEN 5 ITA NO. 418/DEL/2013 STATED TO BE OFFERED BY THE ASSESSEE RESULTING IN T HE DOUBLE TAXATION OF THE AMOUNT. I HAVE SEEN THE COPY OF THE PROFIT & LOSS ACCOUNT AND FOUND THE CONTENTION OF THE APPELLANT AS TRUE. ACCORDINGLY, I FIND THAT THE ADDITION OF THE SAID AMOUNT AS INCOME FROM OTHER SOURCES TO THE APPELLAN TS INCOME HAS RESULTED IN DOUBLE TAXATION OF THE SAME AMOUNT. THEREFORE, I DELETE TH E ADDITION OF RS. 18,89,625/- APPEAL ON THIS GROUND IS ALLOWED. THEREFORE, IT IS APPROPRIATE ON PART OF CIT(A) TO DELETE THIS ADDITION. THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A). GROUND NO. 3 IS DISMISSED. 10. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH MARCH, 2018 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 14/03/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 418/DEL/2013 DATE 1. DRAFT DICTATED ON 08/03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 09/03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 14.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 14.03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.