ITO, New Delhi V. Mr. Yash Deep Kumar, Delhi

ITA 470/DEL/2012

• Counselvise Citation: 47020114 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-03-2015
• Assessment Year: misc
• Appeal Filed On: 31-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: DEEPAK OSTWAL
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI I.C. SUDHIR, JM ITA NO.470/DEL/2012 ASSESSMENT YEAR : 2006-07 ITO, WARD-21(3), NEW DELHI. VS. YASH DEEP KUMAR, D. OSTWAL & ASSOCIATES, 303, DAKHA CHAMBERS, 2068/38, NAIWALA, KAROL BAGH, NEW DELHI. PAN: ADIPK2886M CO NO.141/DEL2013 (ITA NO.470/DEL/2012) ASSESSMENT YEAR : 2006-07 YASH DEEP KUMAR, D. OSTWAL & ASSOCIATES, 303, DAKHA CHAMBERS, 2068/38, NAIWALA, KAROL BAGH, NEW DELHI. PAN: ADIPK2886M VS. ITO, WARD-21(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPAK OSTWAL, CA DEPARTMENT BY : SHRI J.P. CHANDRAKAR, SR. DR ITA NO.470/DEL/2012 CO NO.141/DEL/2013 2 DATE OF HEARING : 03.03.2015 DATE OF PRONOUNCEMENT : 03.03.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 2.11 .2011 IN RELATION TO THE AY 2006-07. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN ITS APPE AL IS AGAINST THE DELETION OF ADDITION OF RS.11,65,000/- MADE BY THE AO IN RESPECT OF UNEXPLAINED CASH DEPOSITS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE AO RECEIVED INFORMATION FROM CIT (CIB), NEW DELHI, THAT THE ASS ESSEE HAD MADE CASH DEPOSITS IN HIS SAVING BANK ACCOUNT WITH DELHI STATE COOPERATIVE BANK LTD., AMOUNTING TO RS.11,65,000/- DURING THE F INANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SOURCE OF THIS DEPOSIT I N THE BANK ACCOUNT. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION FORTHCO MING FROM THE SIDE OF ITA NO.470/DEL/2012 CO NO.141/DEL/2013 3 THE ASSESSEE, AN ADDITION OF RS.11.65 LAC WAS MADE. THE LD. CIT(A) DELETED THE ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE FACTS WHICH HAVE BEEN RECO RDED IN THE IMPUGNED ORDER AND HAVE NOT BEEN CONTROVERTED BY THE LD. DR ARE THAT THE ASSESSEE IS A SMALL BUSINESS CONTACTOR SUPPLYING LABOUR ON V ARIOUS PROJECT SITES. NO BOOKS OF ACCOUNT WERE MAINTAINED, BUT, THE RETUR N WAS FILED U/S 44AD OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLE D THE ACT), SHOWING INCOME AT RS.89,820 AGAINST THE GROSS RECEI PTS FROM THE ABOVE ACTIVITIES AMOUNTING TO RS.14,05,000/-. WE HAVE PE RUSED THE COPY OF BANK ACCOUNT IN WHICH THE SUM OF RS.11.65 LAC WAS A LLEGEDLY DEPOSITED. A COPY OF THIS BANK STATEMENT IS AVAILABLE ON PAGES 9 ONWARDS OF THE PAPER BOOK. IT CAN BE SEEN THAT THERE ARE SEVERAL CREDIT AND DEBIT TRANSACTIONS IN THIS BANK ACCOUNT. TO CITE AN EXAMP LE, THE FIRST TRANSACTION FOR THE YEAR IS DATED MAY 3, 2005 FOR T HE CASH DEPOSIT OF RS.40,000/-. THEN, THERE IS DEBIT OF EQUAL AMOUNT ON THE SAME DATE. AGAIN, THERE IS A CASH DEPOSIT OF RS.50,000/- IN TH E BANK ACCOUNT ON ITA NO.470/DEL/2012 CO NO.141/DEL/2013 4 29.6.2005 AND THERE ARE DEBIT ENTRIES AMOUNTING TO RS.25,000/- ON 30.6.2005 AND RS.10,000/- ON 1.7.2005. IN THIS WAY , THERE ARE SEVERAL CREDIT AND DEBIT TRANSACTIONS IN THIS BANK ACCOUNT. AT THE END OF THE YEAR THE CLOSING BALANCE IS ONLY RS.11,472/-. WHAT THE AO HAS DONE IS THAT HE TOTALED ALL THE CREDIT ENTRIES IN THE PASSBOOK AND MADE ADDITION FOR SUCH AMOUNT COMING TO RS.11.65 LAC, BY COMPLETELY IGNORI NG THAT THERE WERE DEBIT TRANSACTION OF ALMOST EQUAL AMOUNT, LEAVING THE CLOSING BALANCE AT RS.11,472/-. GIVEN THE FACT THAT THE ASSESSEE IS A CONTRACTOR AND FILED HIS RETURN BY DECLARING INCOME U/S 44AD WITH THE TOTAL RECEIPTS FROM SUCH ACTIVITIES AT RS.14.05 LAC, THERE CAN BE NO QUESTIO N OF MAKING ADDITION IN RESPECT OF THE ONLY CREDIT ENTRIES IN THE PASSBOOK. SINCE THE TOTAL CREDIT ENTRIES IN THE PASSBOOK, FOR WHICH THE ADDITION HA S BEEN MADE, ARE LESS THAN THE GROSS RECEIPTS SHOWN BY THE ASSESSEE AND T HE FURTHER FACT THAT THERE ARE ALMOST EQUAL AMOUNT OF WITHDRAWALS ON DAY -TO-DAY BASIS, WE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. WHEN THE ACT HAS GIVEN AN OPTION TO THE ASSESSEE NOT TO MAIN TAIN ACCOUNTS IN THE CIRCUMSTANCES AS HAVE BEEN ENUMERATED U/S 44AD AND THE ASSESSEE HAS ITA NO.470/DEL/2012 CO NO.141/DEL/2013 5 AVAILED SUCH OPTION, NOW IT CANT BE EXPECTED OF TH E ASSESSEE TO MAINTAIN BOOKS OF ACCOUNT BY SHOWING ALL THE BANK DEPOSITS A ND WITHDRAWALS FROM ITS BUSINESS TRANSACTIONS IN THE BOOKS OF ACCOUNT. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. 5. THE LD. AR DID NOT PRESS THE CROSS OBJECTION FIL ED ON BEHALF OF THE ASSESSEE. 6. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 03.03. 2015. SD/- SD/- [I.C. SUDHIR] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 03 RD MARCH, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.