Naina Balsaver Ahmed, New Delhi V. ITO, Ward-31(4), New Delhi

ITA 4755/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8744 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 02-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 44AD; 14A; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.4755/DEL/2018 ASSESSMENT YEAR: 2013-14 NAINA BALSAVER AHMED, N-69, N BLOCK, SAINIK FARMS, NEW DELHI. PAN: ACHPB3033D VS ITO, WARD-31(4), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. M.K. BHATT, CA SHRI S.L. ANURAGI, SR. DR DATE OF HEARING : 08.08.2019 DATE OF PRONOUNCEMENT : 13.09.2019 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 26 TH APRIL, 2018 OF THE CIT(A)-11, NEW DELHI RELATING TO ASSESSMENT YEAR 2013-14. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND HAS FILED HIS RETURN OF INCOME ON 1 ST AUGUST, 2013 DECLARING THE TOTAL INCOME AT RS.10,91,670/-. THE ASSESSEE IS ENGAGED IN TRADING OF JEWELLERY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OB SERVED FROM THE BALANCE SHEET THAT THE ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS. 16,93,843/-. THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATION OF THE ACCOUNTS ALONG WITH COPY OF INCOME-TAX RETURN OF THE SUNDRY CREDITORS, BUT, THERE WAS NO COMPLIAN CE. THE ASSESSING OFFICER, ITA NO.4755/DEL/2018 2 THEREFORE, ISSUED NOTICE U/S 133(6) TO THE FOLLOWIN G PARTIES AS PER THE ADDRESSES PROVIDED BY THE ASSESSEE:- S.NO. NAME OF THE CREDITORS & ADDRESSES AMOUNT OUTS TANDING 1. M/S ASHISH GEMS 2445/10, BEADON PURA, KAROL BAGH, DELHI. RS.3,41,199/- 2. M/S HARISH KUMAR & CO. 1111/12, CHHATTA MADAN GOPAL, MALIWARA CHANDNI CHOWK, DELHI. RS.8,57,977/- 3. OM SHIVAM & CO. D-63, SHREE GANESH COLONY, VIJAY KUNJ GARDEN, MAHESH NAGAR, JAIPUR. RS.27,000/- 4. RONAK JEWELLERS THE DIAMOND MALL, 2678/1, SHOP NO.114, GURUDWARA ROAD, KAROL BAGH, N DELHI. RS.2,96,192/- 5. YASHODA JEWELLERS 1711, S-04, IIND FLOOR, RENUKA HOUSE, SHYAM SUNDER JI KI GALI, JADIYON KA RASTA, CHOURA RASTA, JAIPUR. RS.1,71,475/- 3. THE ASSESSING OFFICER NOTED THAT THE NOTICES IN RESPECT OF SL. NO.1, 3 AND 5 ABOVE WERE RECEIVED BACK WITH THE REMARKS EITHER L EFT OR NO SUCH FIRM. AGAIN NOTICES IN THESE CASES WERE ISSUED AT THE NEW ADDRE SSES PROVIDED BY THE ASSESSEE WHICH WERE ALSO RECEIVED BACK WITH THE SAME REMARKS . SO FAR AS RONAK JEWELLERS AT SL. NO.4 IS CONCERNED, NECESSARY INFORMATION/CON FIRMATION WAS RECEIVED AND FOUND TO BE CORRECT. SO FAR AS SL.NO.2 IN THE CASE OF M/S HARISH KUMAR & CO. IS CONCERNED, THE ASSESSING OFFICER NOTED THAT THE SAI D PARTY, VIDE ITS REPLY DATED 14 TH DECEMBER, 2015 STATED THAT THERE IS NOTHING DUE AGA INST THE ASSESSEE AND THE ACCOUNT BALANCE AS ON 31.03.2013 IS NIL. THE ASSES SING OFFICER, THEREFORE, CONFRONTED THE SAME TO THE ASSESSEE AND ASKED HIM T O EXPLAIN THE DISCREPANCIES. THE ASSESSEE VIDE LETTER DATED 19 TH FEBRUARY, 2016 DID NOT FILE ANY EXPLANATION TO ITA NO.4755/DEL/2018 3 THE QUERY, BUT, CHANGED HER STAND THAT HER CASE FAL LS U/S 44AD OF THE IT ACT AND, THEREFORE, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN ANY BOOKS OF ACCOUNT WHERE THE NET PROFIT IS DECLARED EQUAL TO 8% OF THE TOTAL TUR NOVER OR GROSS RECEIPTS IN THE PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS. HOWEVER , THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE EXPLANATION OF THE ASSESSEE. HE N OTED THAT THE ASSESSEE HAS NOT FILED HER RETURN OF INCOME IN ACCORDANCE WITH SECTI ON 44AD. THE ASSESSEE HAS FILED HER RETURN OF INCOME IN ITR-4 AND FILLED IN ALL REL EVANT COLUMNS OF RETURN ACCORDING TO THE FIGURES SHOWN IN HER BALANCE SHEET FILED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. REJECTING THE VARIOUS EXPLANATIONS GIV EN BY THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITION OF RS.13,97,651/- T O THE TOTAL INCOME. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS.16,341/- U/S 14A TO THE TOTAL INCOME AND, ACCORDINGLY, DETERMINED THE TOTAL INCOME AT RS .25,05,660/-. IN APPEAL, THE LD.CIT(A) CONFIRMED THE ADDITIONS. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), IS ARBITRARY AND BAD IN LAW. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED ON FACTS AND IN LAWS BY CONFIRMING THE ADDITION MADE BY THE LD. INCOME TAX OFFICER BY TREATING CREDITORS AS UNEXPLAINED CREDIT BALANCE UNDER SECTION 68 OF THE INCOME TAX ACT, DESPITE THE FACT THAT ASSESSEE IS C OVERED UNDER SECTION 44AD OF INCOME TAX ACT ON PRESUMPTIVE BASIS, AND NOT SUP POSED TO MAINTAIN BOOKS OF ACCOUNTS AND PROVE THE AUTHENTICITY OF THE SAME. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, SU BSTITUTE OR CHANGE ANY GROUNDS OF APPEAL. ITA NO.4755/DEL/2018 4 4.1. THE ASSESSEE HAS ALSO FILED THE FOLLOWING ADDI TIONAL GROUND:- 'THE CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS, W HILE CONFIRMING THE ADDITION OF RS.13,97,651/- OUTSTANDING AS ON THE BA LANCE SHEET DATE ON ACCOUNT OF SUNDRY CREDITORS WHO HAD FAILED TO COMPLY WITH N OTICES ISSUED BY THE AO UNDER SECTION 133(6) OF THE INCOME TAX ACT 1961, IG NORING THE VITAL FACT THAT RESPECTIVE PURCHASES FROM THE PARTIES AND CONSEQUEN T SALE OF THE GOODS HAS BEEN ACCEPTED ALONG WITH THE CLOSING STOCK. ' 5. REFERRING TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NTPC LTD., REPORTED IN 229 ITR 383 , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT S INCE ALL MATERIAL FACTS ARE ALREADY AVAILABLE ON RECORD AND NO NEW FACTS ARE REQUIRED TO BE INVESTIGATED AND THE GROUND BEING PURELY A LEGAL ONE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SHOULD BE ADMITTED. 6. AFTER HEARING BOTH THE SIDES AND PERUSING THE RE CORD, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTED. 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS ADVANCED B Y BOTH THE SIDES AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). I HAVE ALSO CONSIDERED THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND THE ASSESSING OFFICER MADE ADDITION OF RS.13,97,651/- TO THE TOTAL INCOME OF T HE ASSESSEE U/S 68 OF THE IT ACT ON THE GROUND THAT THE VARIOUS SUNDRY CREDITORS SHO WN BY THE ASSESSEE EITHER DID NOT RESPOND TO THE NOTICE ISSUED U/S 133(6) OR HAVE STATED THAT NOTHING IS DUE FROM THE ASSESSEE. IT IS THE CASE OF THE ASSESSING OFFI CER THAT THE SUNDRY CREDITORS REMAINED UNEXPLAINED AND THEIR IDENTITY, CREDIT WOR THINESS AND GENUINENESS REMAINED UNVERIFIED. IT IS THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE PURCHASES FROM THE RESPECTIVE PARTIES WERE ACCEPTED AND THE SALE OF THE ASSESSEE ITA NO.4755/DEL/2018 5 BEING THE PURCHASE FROM THE ABOVE PARTIES HAVE NOT BEEN DOUBTED. THEREFORE, MERELY BECAUSE THE CREDITORS DID NOT RESPOND TO THE NOTICE ISSUED U/S 133(6) OR HAVE STATED TO HAVE NO OUTSTANDING BALANCE CANNOT MAKE T HE SUNDRY CREDITORS UNVERIFIABLE. IN HIS ALTERNATE ARGUMENT, THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT GIVEN AN OPPORTUNITY, THE ASSESSEE IS IN A POS ITION TO SUBSTANTIATE HIS CASE BEFORE THE ASSESSING OFFICER TO HIS SATISFACTION. HE ACCORDINGLY SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE F ILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE ISSUE. 8. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTE D THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). HE SUBMITTED THAT THE ASSE SSEE SHOULD NOT BE GIVEN ANY FRESH INNINGS SINCE HE COULD NOT SUBSTANTIATE SUNDR Y CREDITORS EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A). FURTHER, TH E ASSESSEE HAS CHANGED HER STAND BEFORE THE ASSESSING OFFICER ON THE GROUND TH AT SHE IS TO BE COVERED U/S 44AD OF THE IT ACT. HE ACCORDINGLY SUBMITTED THAT THE GROUND RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 9. CONSIDERING THE TOTALITY OF THE FACTS OF THE CAS E AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GRANT ONE MORE OPPORTUNITY TO THE ASSE SSEE TO SUBSTANTIATE HER CASE AND DECIDE THE ISSUE AS PER FACT AND LAW. I HOLD AND DI RECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR S TATISTICAL PURPOSES. ITA NO.4755/DEL/2018 6 10. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 3.09.2019. SD/- (R.K. PANDA) ACCOUNTANT MEMB ER DATED: 13 TH SEPTEMBER, 2019 DK COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI