Sh. Mukesh Kumar, New Delhi V. DCIT, New Delhi

ITA 4830/DEL/2012

• Counselvise Citation: 483020114 RSA 2012
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 11-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Keywords: Unexplained cash credit; Unexplained investment; Reasonable cause
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 4830 /DEL/2012 ASSESSMENT YEAR: 2008-09 MUKESH KUMAR, C/O H.NO. PRADHAN & CO., C.A., 205-206, ARA CENTRE, E/2, JHANDEWALAN EXTN., NEW DELHI. PAN NO. AFIPK4643N VS. DCIT, CIRCLE 26(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI GAUTAM JAIN, CA RESPONDENT BY: SH. GUNJAN PRASAD, CIT(DR) O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. CIT(A) DATED 18/11/2011 FOR A.Y. 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WA S ENGAGED IN THE BUSINESS OF SUPPLYING BUILDING MATERIAL TO VARIOUS CONTRACTORS. HE HAD FILED HIS RETURN OF INCOME DECLARING INCOME OF RS. 2,39,4 66/-. THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 44,70,130/- ON ACCOUNT OF FOLLOWING ADDITIONS: - I) UNEXPLAINED CASH U/S 68 OF THE I.T ACT AS DISCU SSED ABOVE RS. 24,19,534/- II) UNDISCLOSED PROFIT FROM SALE OF PROPERTIES ITA NO. 4830/D / 2012 2 AS DISCUSSED ABOVE RS. 11,48,130/- III) UNEXPLAINED CASH RECEIPT AS DISCUSSED ABOVE R S. 6,00,000/- 3. THE ASSESEE PREFERRED APPEAL BEFORE LD. CIT(A), WHO DISMISSED THE ASSESSEES APPEAL EX-PARTE. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, NEW DELHI, HAS ERRED BOTH IN LAW AND ON FACTS IN DISPOSING OFF THE APPEAL ON EXPARTE BASIS BY INCORRECTLY OBSERVING THAT SINCE MORE THAN ENOUGH OPPORTUNITY WAS GIVEN AND THE APPELLANT HAS CHOOSE NOT TO APPEAR OR TO FILE ANY WRITTEN SUBMISSION, THE APPEAL IS BEING DECIDED ON MERITS O N THE BASIS OF STATEMENT OF FACTS AND THE GROUNDS OF APPEAL AND THE MATERIAL AVAILABLE ON RECORD. 1.1THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FAILED TO APPRECIATE THAT THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT DATED 24.12.2010 BY LD. DY. COMMISSIONER OF INCOME TAX, CIRCLE 26(1), NEW DELHI WAS WITHOUT JURISDICTION AND DESERVE TO BE QUASHED AS SUCH. 1.2THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS OTHERWISE FAILED TO APPRECIATE THAT ADDITION MA DE OF RS. 24,19,534/- REPRESENTING ALLEGED UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT IS BASED ON COMPLETE MISCONCEPTION OF FACTS AND CIRCUMSTANCES OF THE APPELLANT AND PROVISION OF LAW AND HENCE UNSUSTAINABLE. ITA NO. 4830/D / 2012 3 1.3THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FAILED TO APPRECIATE THAT ENTIRE CASH DEPOSIT I N THE BANK REPRESENTED SALE OF BUILDING MATERIAL IN CASH DECLARED AS INCOME BY THE APPELLANT AND ASSESSED AS INCOME BY THE LD. OFFICER AND AS SUCH ADDITION WAS SUSTAINED IS WHOLLY UNTENABLE AND THEREFORE MAY KINDLY BE DELETED. 1.4THAT FINDING THAT THE FACT THAT THE APPELLANT W AS CARRYING OUT ANY BUSINESS OF PURCHASE/SALE OF BUILD ING MATERIAL DOES NOT GET ESTABLISHED IS NOT BASED ON CORRECT APPRECIATION OF FACTS ON RECORD. 1.5THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FAILED TO APPRECIATE THAT NOTICES DATED 23.3.20 11, 24.05.2011, 14.09.2011 AND 19.10.2011 WERE NEVER SERVED ON THE APPELLANT AND AS SUCH THERE WAS SUFFICIENT AND REASONABLE CAUSE FOR NOT CAUSING APPEARANCE DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS. 11,48,130/- BY DISREGARDING THE CLA IM OF EXPENDITURE INCURRED OF RS. 26,22,800/- FOR RENOVATION, FLOORING, WIDOW GLASS ETC. IN RESPECT O F SHARE IN A PROPERTY SOLD BY THE CO-OWNERS. 2.1THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FAILED TO APPRECIATE THAT SINCE A DISPUTE HAD ARISEN BETWEEN THE CO-OWNERS THEREFORE ORIGINAL INVOICES COULD NOT BE FURNISHED DURING THE COURSE O F ASSESSMENT PROCEEDINGS. ITA NO. 4830/D / 2012 4 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN UPHOLDIN G THE ADDITION OF RS. 6,00,000/- REPRESENTING ALLEGED UNEXPLAINED RECEIPTS BROUGHT TO TAX ON THE BASIS OF A SALE MADE OF PROPERTY BEARING FOR A CONSIDERATION O F RS. 12,00,000/- AND THAT TOO JOINTLY BY THE APPELLA NT AND ONE SHRI HAWA SINGH. THAT THE FINDING OF LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT THE AO HAD MADE THE ADDITION AS UNEXPLAINED INVESTMENT ON AN ASSUMPTION THAT THE PURCHASE AND SALE PRICE OF T HE SAME PROPERTY IS THE SAME. THUS, THE AO HAS ADDED 50% OF THE AMOUNT, I.E. RS. 6 LACS AS UNEXPLAINED INVESTMENT OF THE APPELLANT IN THE PROPERTY IS ALS O MISCONCEIVED AND NOT TENABLE. 4. LD. COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 5 OF CIT(A)S ORDER AND SUBMITTED THAT LAST TWO NOTICES FOR HEARING DATED 1 4 TH SEPTEMBER, 2011 AND 19 TH OCTOBER, 2011, RESPECTIVELY WERE SENT AT OLD ADDRE SSES THOUGH ASSESSEE HAD INTIMATED HIS NEW ADDRESS VIDE HIS LET TER DATED 20/06/2011 FILED IN THE OFFICE OF LD. CIT(A) ON 22/06/2011. H E, THEREFORE, SUBMITTED THAT SINCE ASSESSEE DID NOT RECEIVE THE LAST TWO NOTICES , HE COULD NOT APPEAR ON THE DATE FIXED FOR HEARING. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 6. WE FIND THAT ON ACCOUNT OF NON-RECEIPT OF NOTICE OF HEARING SENT BY LD. CIT(A), THE ASSESSEE COULD NOT APPEAR BEFORE HIM. WE, THEREFORE, IN ORDER TO IMPART SUBSTANTIAL JUSTICE TO THE ASSESSEE, SET ASIDE THE ORDER OF LD. CIT(A) ITA NO. 4830/D / 2012 5 AND RESTORE THE MATTER BACK TO THE FILE OF LD. CIT( A) TO DECIDE THE ISSUE DENOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE BY ISSUING NOTICE AT HIS NEW ADDRESS AS IN TIMATED TO HIS OFFICE. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2012 SD/- SD/- (JOGINDER SINGH) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 16.11.2012 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR