Ashok Atreja, New Delhi V. ITO, New Delhi

ITA 474/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6700 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 29-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAJ KUMAR CA SH AMIT KATOCH
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 44AD; 143(2); 68

Judgement Text

1 ITA NO. 474/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JU DICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEM BER I.T.A. NO. 474/DEL/201 6 (A.Y. 2011-12) ASHOK ATREJA RAJ KUMAR & ASSOCIATES CHARTERED ACCOUNTANTS, L-7 A(LGF), SOUTH EXT. PART-2, NEW DELHI-110049 (APPELLANT) VS . ITO WARD-40(4) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 02.12. 2015 PASSED BY CIT(A)- 14, NEW DELHI FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER : 1. THAT IN THE ABSENCE OF NOTICE U/S. 143(2) AND I TS SERVICE WITHIN STATUTORY TIME PERIOD, THE WHOLE ASSTT. IS WITHOUT JURISDICTI ON AND UN- SUSTAINABLE IN LAW AS WELL AS ON MERITS. 2.1 THAT UNDER THE FACTS AND CIRCUMSTANCES, THE EX PLANATION FURNISHED W.R.T. THE DEPOSITS OF RS. 63,60,190/- IN FOLLOWING BANK A/CS SHOULD HAVE BEEN ACCEPTED :- APPELLANT BY SH. RAJ KUMAR, CA RESPONDENT BY SH. AMIT KATOCH, SR.DR DATE OF HEARING 08.08.2019 DATE OF PRONOUNCEMENT 30.10.2019 2 ITA NO. 474/DEL/2016 S. NO. BANK BRANCH A/C. NO. CORRECT CREDIT IN BANK 1 AXIS BANK NEW DELHI 250010100107723 2,55,480 2. INDIAN BANK KIRTI NAGAR, NEW DELHI 600141950 2,52,497 3. ICICI BANK NEW DELHI 092801501330 31,57,974 4. STATE BANK OF INDIA KIRTI NAGAR, NEW DELHI 30385293812 17,11,861 5. PNB SHAKUR BASTI, DELHI 0649000101277151 9,82,378 TOTAL 63,60,190/- 2.2 THAT WITHOUT PREJUDICE, AFTER ASSESSING THE IN COME U/S. 44 AD @ 8%, AT RS. 1,47,214/- (1,18,240 + 28,974) THE CREDITS I N THE BANKS TO THE EXTENT OF RS. 18,40,180/- STANDS ACCEPTED / EXPLAINED, THEREF ORE, TO THIS EXTENT ADDITION U/S. 68 TENTAMOUNTS TO DOUBLE ADDITION. 2.3 THAT WITHOUT PREJUDICE, ON DETERMINING THE INCO ME IN RESPECT OF DEPOSITS IN THE BANK ON PEAK BASIS AT RS. 6,09,025/ -, THE LD. CIT(A) ERRED IN NOT ALLOWING DEDUCTION OUT OF THE PEAK FOR THE FOLL OWING AMOUNTS WHICH ARE ALREADY PART OF THE RETURNED INCOME AND EMANATING O UT OF THE SAID CASH DEPOSITS IN THE BANK A/C. RS. 1,47,214/- INCOME ASSESSED U/S. 44AD @ 8% ON S ALES OF RS. 18,40,180/- WHICH IS PART OF CASH DEPOSITS/ PEAK CALCULATED (1, 18,240 + 28,974) RS. 46,832/- COMMISSION INCOME ASSESSED @ 2% ON SAL ES OF RS. 23,41,600/- WHICH IS PART OF CASH DEPOSITED / PEAK CALCULATED. RS. 4,14,979/- TOTAL 3 ITA NO. 474/DEL/2016 THUS TO THE EXTENT OF RS. 4,14,979/-, THE ADDITION STANDS MADE TWICE I.E. ONE, IN THE PEAK FIGURE IN RS. 6,09,025/- AND SECOND TIM E, SINCE, ALREADY INCLUDED IN THE OTHER ASSESSED INCOME. 3. RETURN DECLARING AN INCOME OF RS. 1,73,072/- WAS FILED ON 29.07.2011. THE CASE WAS SUBSEQUENTLY SELECTED FOR SCRUTINY UND ER CASS. FIRST NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 01 .08.2012 AND WAS SERVED UPON THE ASSESSEE. THE ASSESSEE COULD NOT FILE THE REQUISITE DETAILS DURING THE ASSESSMENT PROCEEDINGS AS PER THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HELD THAT THE ASSESSEE FAILED TO DISCHARGE ONUS DESPITE REPEATED OPPORTUNITIES IN RE SPECT OF THE UNEXPLAINED CREDITS U/S 68 OF THE ACT. THE ASSESSING OFFICER FU RTHER OBSERVED THAT THE ASSESSEE ADMITTED THAT THE ASSESSEE SHOWED THE PROF IT AS REQUIRED U/S 44D I.E. 8% OF RS. 18,40,180/- WHICH COMES TO RS. 1,47,214 W HEREAS THE ASSESSEE SHOWS PROFIT OF RS. 1,18,240/- @ 6.14% ONLY, THUS, THE ASSESSEE AVOIDED THE TAX LIABILITY. THEREFORE, THE ASSESSING OFFICER MAD E ADDITION OF RS. 64,33,156/- IN RESPECT OF UNEXPLAINED CASH CREDITS U/S 68 OF TH E INCOME TAX ACT, 1961. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE. 5. THE LD. AR DID NOT PRESS GROUND NO. 1, THEREFORE , GROUND NO. 1 IS DISMISSED. 6. AS REGARDS TO GROUND NOS. 2.1, 2.2, 2.3, THE LD. AR SUBMITTED THAT THE FOLLOWING CREDITS WERE IN THE BANK ACCOUNTS:- S. NO. BANK BRANCH A/C. NO. CORRECT CREDIT IN BANK 1 AXIS BANK NEW DELHI 250010100107723 2,55,480 2 INDIAN BANK KIRTI NAGAR, 600141950 2,52,497 4 ITA NO. 474/DEL/2016 NEW DELHI 3 ICICI BANK NEW DELHI 092801501330 31,57,974 4 STATE BANK OF INDIA KIRTI NAGAR, NEW DELHI 303385293812 17,11,861 5 PUNJAB NATIONAL BANK SHAKUR BASTI, DELHI 0649000101277151 9,82,378 TOTAL 63,60,190 THE LD. AR FURTHER SUBMITS THAT ASSESSEE OUT OF ABO VE CREDIT DECLARED INCOME AS UNDER: RS.1,47,214/- INCOME ASSESSED U/S. 44AD @ 8% ON SA LES OF RS. 18,40,180/- WHICH IS PART OF CASH DEPOSITS/ PEAK CA LCULATED (1,18,240 + 28,974) RS. 46,832/- COMMISSION INCOME ASSESSED @ 2% ON SAL ES OF RS. 23,41,600/- WHICH IS PART OF CASH DEPOSITED / PEAK CALCULATED. RS. 1,94,046/- TOTAL THE LD. AR SUBMITTED THAT THE CIT(A) RESTRICTED THE ADDITION OF RS. 64,33,156/- TO RS. 6,09,025/- BEING THE PEAK OF TOTAL CASH DEPO SITS / CREDITS OF RS. 63,60,190/- IN THE BANK. HOWEVER, WHILE MAKING ADDI TION ON PEAK BASIS, THE CIT(A) WAS REQUIRED TO DELETE ALL OTHER AMOUNTS NAM ELY RS. 1,94,046/- WHICH WAS ASSESSED ON THE BASIS OF CASH DEPOSITS IN THE B ANK AS STATED ABOVE. THEREFORE, THE LD. AR SUBMITTED THAT IF ADDITION OF PEAK OUT OF CREDITS IN BANK WILL BE MADE THEN THE INCOME ALREADY DECLARED OUT O F CREDIT SHOULD ALSO BE REDUCED. 7. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 5 ITA NO. 474/DEL/2016 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT(A) WHI LE GIVING FINDING OBSERVED THAT AS PER THE DETAILS FILED BY THE AR DURING THE APPEL LATE PROCEEDINGS THE PEAK WORKS OUT TO RS. 6,09,025/- AND THEREFORE, THE CIT( A) HELD THAT THE SAME SHOULD BE TREATED AS INCOME FROM UNDISCLOSED SOURCE S. THE SUBMISSIONS MADE BY THE LD. AR BEFORE US THAT WHILE MAKING ADDITION ON PEAK BASIS, THE CIT(A) WAS REQUIRED TO DELETE ALL OTHER AMOUNTS NAMELY RS. 1,94,046/- WHICH WAS ASSESSED ON THE BASIS OF CASH DEPOSITS IN THE BANK AS STATED IN PARA 6 HEREINABOVE. THIS NEEDS TO BE VERIFIED, THEREFORE, WE ARE REMANDING BACK THE ISSUE TO THE FILE OF THE CIT(A) TO VERIFY THE SAID CONTENTIONS OF THE ASSESSEE AND TAKE APPROPRIATE DECISION. NEEDLESS TO SAY, THE ASS ESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. HENCE, GROUND NOS. 2.1, 2.2 AND 2.3 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . 9. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2019 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 30/10/2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 6 ITA NO. 474/DEL/2016 ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 0 8 .0 8 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 8 .08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK