Mr. Narender Singh, Delhi V. ITO, New Delhi

ITA 4557/DEL/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 5926 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital receipt
• Section: 142(1); 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NOS. 4557 & 4558/DEL/2016 A.YRS. : 2009-10 & 2010-11 NARENDER SINGH, A-458, SHASTRI NAGAR, DELHI 110 052 (PAN: - AIIPS1725Q) VS. ITO, WARD 35(3), NEW DELHI 809, E-2 BLOCK, CIVIC CENTRE, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. M.P. RASTOGI DEPARTMENT BY : MS. RASHMITA JHA, SR. DR. DATE OF HEARING : 26.09.2018 DATE OF ORDER : 03-10-2018 ORDER PER BENCH THESE APPEALS FILED BY THE ASSESSEE CHALLENGING T HE SEPARATE ORDERS BOTH DATED 28.6.2016 IN APPEAL NOS. 15 & 16/13-14 FOR ASSESSMENT YEARS 2009-10 & 2010-11 RESPECTIVELY PASSED BY THE LD. COMMISSIONER OF INCO ME TAX (APPEALS)-12, NEW DELHI (IN SHORT LD. CIT(A)). 2. THE GROUNDS RAISED IN BOTH THE APPEALS ARE SIMI LAR, EXCEPT THE CHANGE IN FIGURE. THEREFORE, WE ARE ONL Y 2 REPRODUCING THE GROUND OF ITA NO. 4557/DEL/2016 ASS ESSMENT YEAR 2009-10 AS UNDER:- 1.1 THAT LEARNED CIT [A] HAS ERRED IN NOT QUASHING THE PROCEEDINGS INITIATED AND THE ASSESSMENT ORDER U/S 144 PASSED IN CONSEQUENCE DESPITE THE LEARNED LD. AO CONFIRMING IN REMAND REPORT CONFIRMING THAT NOTICES ISSUED WERE RETURNED UN-SERVED AND THE LD. AO NOT ESTABLISHING SERVICE OF NOTICES ON THE ASSESSEE 1.2 THAT LEARNED CIT [A] HAS ERRED IN NOT QUASHING THE PROCEEDINGS INITIATED AND THE ASSESSMENT ORDER U/S 144 DESPITE FACT THAT THE LEARNED LD. AO HAS NOT MADE A NY EFFORTS TO SERVE THE NOTICES ON THE ASSESSEE AS PRO VIDED BY LAW 2 THAT LEARNED CIT [A] HAS ERRED IN DETERMINING T HE TAXABLE INCOME AT RS3,12,223 TAKEN AT 10% OF GROSS RECEIPTS, (INCLUDING CAPITAL RECEIPTS LIKE SALE PRO CEEDS OF OLD TRUCKS AND LIC MATURITY) INSTEAD OF THE APPLICA BLE PRESUMPTIVE RATE OF INCOME IN TERMS OF SECTION 44AE OF THE ACT AS THE ASSESSEE IS ENGAGED IN CARRIAGE OF GOODS, (TRUCK OPERATOR) HAVING LESS THAN 10 TRUCKS. 3. THAT LEARNED CIT [A] HAS ERRED IN NOT GIVING DIRECTIONS FOR GRANT OF DEDUCTIONS OF CHAPTER VIA O F THE ACT 4. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 5. THE APPELLANT SEEKS LEAVE TO ADD, AMEND, ALTER O R ABANDON ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL. 3. SINCE THE ISSUE INVOLVED IN THESE APPEALS ARE CO MMON AND THEREFORE, THE APPEAL WERE HEARD TOGETHER AND D ISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY, BY DEALING WITH ITA NO. 4557/DEL/2016 (AY 2009-10). 4. BRIEF FACTS OF THE CASE ARE THAT BASING ON THE AIR INFORMATION THE LD. AO ISSUED NOTICE U/S. 148 OF TH E ACT ON 6.1.2012 AND SUBSEQUENTLY NOTICE U/S. 142(1) OF THE ACT ON 3 SEVERAL OCCASIONS. SINCE THE ASSESSEE NEVER RESPOND ED TO SUCH NOTICES, LD. AO RECORDED THAT HE WAS LEFT WITH NO ALTERNATIVE, BUT TO COMPLETE THE ASSESSMENT EX PARTE U/S. 144 OF THE ACT ON THE BASIS OF THE MATERIAL AVAILABLE O N RECORD. LD. AO PERUSED THE BANK STATEMENT OF THE ASSESSEE AND FOUND THAT THERE WAS CASH DEPOSITS TO THE TUNE OF RS. 17,86,885/- AND SINCE THERE WAS NO EXPLANATION FROM THE ASSESSEE IN RESPECT OF THESE DEPOSITS, LD. AO TREAT ED IT AS UNEXPLAINED CASH DEPOSITS AND ADDED IT TO THE INCO ME OF THE ASSESSEE. SO ALSO BASING ON THE AIR INFORMATION AND FORM 26AS, LD. AO FOUND THAT THERE WERE 59 ENTRIES RELAT ING TO TDS, BUT NONE OF THE ENTRY COULD BE FOUND IN THE BA NK STATEMENT AS SUCH HE ADDED A SUM OF RS. 14,38,936/ - RELATABLE TO TDS OF RS. 28,276/-. 5. LD.. CIT(A) CONFIRMED THE ACTION OF THE LD. AO I N CONSIDERING THE BANK DEPOSITS AND ALSO THE RECEIPTS IN RESPECT OF WHICH TDS OF RS. 28,276/- WAS SHOWN IN THE FORM NO. 26S, BUT HOWEVER, TREATING THIS AMOUNT AS THE TOTAL TURN OVER OF THE ASSESSEE, LD.. CIT(A) ESTIMATED THE NET PROFIT OF T HE ASSESSEE AT 10% AND CONFIRMED THE ADDITION TO THE TUNE OF RS . 3,12,223/- AND DELETED THE BALANCE OF RS. 2913598/- . SO ALSO IN RESPECT OF THE TDS, LD.. CIT(A) DIRECTED THE LD. AO TO GIVE CREDIT OF RS. 28,276/-, AFTER VERIFICATION OF THE C LAIM OF THE ASSESSEE. CHALLENGING THE ACTION OF THE LD.. CIT(A) IN SUSTAINING THE ADDITION OF RS. 3,12,223/-, THE ASSE SSEE IS IN APPEAL BEFORE US. 6. ON A CAREFUL PERUSAL OF THE RECORD, WE FIND THAT THERE IS NO DENIAL OF THE FACT THAT ASSESSEE DO NOT APPEAR BEFORE THE 4 LD. AO THEREBY FORCING THE LD. AO TO COMPLETE THE A SSESSMENT EX PARTE U/S. 144 OF THE ACT BASING ON THE MATERIA L AVAILABLE ON RECORD, AND MORE SPECIFICALLY THE ASSESSEE NEVER THOUGHT IT NECESSARY TO FILE THE RETURN OF INCOME WHEN THE TDS WAS MADE AND DID NOT RESPOND TO THE NOTICES ISSUED BY T HE LD. AO. THOUGH THE LD. AO TREATED THE ENTIRE CASH DEPOSITS IN THE BANK AND ALSO THE AMOUNT RELATABLE TO THE TDS TO BE TREATED AS INCOME, LD. CIT(A) HAD TREATED IT AS THE TOTAL T URNOVER OF THE ASSESSEE AND ESTIMATED THE INCOME OF THE ASSESS EE ONLY 10% THEREOF AND SUSTAINED THE ADDITION ONLY TO THE EXTENT OF RS. 3,12,223/- TO BE BROUGHT TO TAX. WE DO NOT FI ND ANY ILLEGALITY OR IRREGULARITY IN THE FINDINGS RECORDED BY THE LD. CIT(A) IN PARA NO. 9.8 OF HIS ORDER. THE IMPUGNED ORDER DOES NOT SUFFER ANY ILLEGALITY OR IRREGULARITY. FURTHER , LD. CIT(A) DIRECTED THE LD. AO TO GIVE CREDIT TO THE TDS AMOUN T ON VERIFICATION. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THERE IS NOT MUCH TO INTERFERE WITH THE ORDER OF TH E LD. CIT(A). 7. HOWEVER, IT IS SUBMITTED ON BEHALF OF THE ASSES SEE THAT IN DETERMINING THE TAXABLE INCOME AT 10% OF THE G ROSS RECEIPT, LD. CIT(A) FAILED TO TAKE INTO CONSIDERAT ION THE CAPITAL RECEIPT IN THE NATURE OF LIC MATURITY AND IT IS PRA YED THAT LD. AO MAY BE DIRECTED TO CONSIDER THE LIC MATURITY AMO UNT TO BE EXCLUDED FROM THE GROSS RECEIPTS. WE FIND REASO NS IN THIS SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE AND THEREFORE, DIRECTED THE LD. AO TO EXCLUDE THE LIC M ATURITY AMOUNT WHILE CONSIDERING THE GROSS RECEIPTS ON WHIC H 10% IS DETERMINED AS INCOME OF THE ASSESSEE. SUBJECT TO TH IS OBSERVATION, WE DO NOT FIND ANY REASONS TO INTERFER E WITH THE IMPUGNED ORDER, HENCE, WE UPHOLD THE SAME. 5 8. AS REGARD THE ITA NO. 4558/DEL/2016 (AY 2010-11) , FOR THE REASONS GIVEN IN THE PRECEDING PARAGRAPHS FO R THE ASSESSMENT YEAR 2009-10, WHILE CONFIRMING THE IMPU GNED ORDER, WE DIRECT THE LD. AO TO CONSIDER THE LIC MAT URITY AMOUNT WHILE DETERMINING THE GROSS RECEIPTS 10% OF WHICH ARE TREATED AS INCOME OF THE ASSESSEE. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/20 18. SD/- SD/- [G.D. AGRAWAL] [K.NARASIMHA CHARY] PRESIDENT JUDICIAL MEMBER DATE 03/10/2018 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 6