Mohit Wadhwa, Meerut V. ITO, Meerut

ITA 4985/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5092 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Opportunity of being heard
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4985/DEL/2015 ASSESSMENT YEAR: 2011-12 SH. MOHIT WADHWA, VS. ITO, WARD-1(4), 31/3, VIDHYA NAGAR, MEERUT SHASTRI NAGAR, MEERUT (PAN: AASPW4644E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. KAPIL GOEL, ADV, & SH . MUKUL GUPTA, ADV. REVENUE BY : SH. T. VASANTHAN, SR. DR ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER DATED 08.6.2015 OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS)- MEERUT RELEVANT TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED IN THE APPEAL READ AS UNDER:- 1. THE ORDER OF LD. CIT(A) IS BAD IN LAW AND ON F ACTS. 2. THAT THE LD. CIT(A) HAS IGNORED THE FACT THAT TH E ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS AND LEGITIMATELY OPTED FOR SECTION 44AD BUT ON AO REQUISITION PREPARED CASH FLOW STATEMENT, WEALTH STATEMENT, CAPITAL ACCOUNT AND STATEMENTS. THE CASH FLOW STATEMENT SHOWING OPENING CASH, INFLOW AND OUTFLOW OF CASH FROM THE ASSESSEES BANK ACCOUNT HAVE BEEN SUBMITTED TO EXPLAIN CASH ENTRIES. THEREFORE, NO DISALLOWANCE CAN BE MADE TO OPENING CASH AS IT IS SELF EXPLANATORY. 2 3. THAT LD. CIT(A) IS IN ERROR IN CONFIRMING ADDITI ON OF RS. 29,65,836/- AS PEAK NEGATIVE CASH, IGNORING THAT IN CASH FLOW STATEMENT, IT INCLUDES LOAN FROM FATHER OF RS. 31,93,000/- THROUGH ACCOUNT PAYEE CHEQUE AND THE ASSESSEE HAS MADE WITHDRAWAL FROM BANK ACCOUNT. LD. CIT(A) HAS NOT MADE ANY ADVERSE COMMENT OF THIS ISSUE. 4. THAT THE LD. CIT(A) IS IN ERROR IN CONFIRMING RS . 16,90,000/- SHOWN AS CUSTOMERS ADVANCE FOR REPAIRING OF TRANSFORMERS, BECAUSE LD. AO HAS NOT MADE ANY ADVERSE COMMENT ON JOB WORK. EVEN IT IS DOUBLE ADDITION, BECAUSE THIS IS PART OF CASH FLOW STATEMENT ON WHICH, AO HAS CONSIDERED PEAK NEGATIVE CASH AND MADE ADDITION OF RS. 29,65,836/-. 5. THAT THE ASSESSEE RESERVES THE RIGHT TO HAVE ADDITIONS/ DELETIONS TO THE GROUNDS OF THE APPAEL I N ORDER TO HAVE JUSTICE. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 4. DURING THE HEARING, LD. A.R. OF THE ASSESSEE, HA S STATED THAT LD. CIT(A) HAS PASSED THE ORDER WHICH IS BAD IN LAW AND ON FACTS. HE FURTHER STATED THAT LD. CIT(A) HAS IGNORED THE FACT THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS AND LEGITIMATE LY OPTED FOR SECTION 44AD BUT ON AO REQUISITION PREPARED CASH FL OW STATEMENT, WEALTH STATEMENT, CAPITAL ACCOUNT AND STATEMENTS. T HE CASH FLOW STATEMENT SHOWING OPENING CASH, INFLOW AND OUTFLOW OF CASH FROM THE ASSESSEES BANK ACCOUNT HAVE BEEN SUBMITTED TO EXPL AIN CASH ENTRIES. THEREFORE, NO DISALLOWANCE CAN BE MADE TO OPENING CASH AS IT IS SELF EXPLANATORY. HE FURTHER STATED THAT LD . CIT(A) IS IN ERROR IN CONFIRMING ADDITION OF RS. 29,65,836/- AS PEAK NEGA TIVE CASH, 3 IGNORING THAT IN CASH FLOW STATEMENT, IT INCLUDES L OAN FROM FATHER OF RS. 31,93,000/- THROUGH ACCOUNT PAYEE CHEQUE AND TH E ASSESSEE HAS MADE WITHDRAWAL FROM BANK ACCOUNT. LD. CIT(A) HAS N OT MADE ANY ADVERSE COMMENT OF THIS ISSUE. HE FURTHER STATED TH AT LD. CIT(A) IS IN ERROR IN CONFIRMING RS. 16,90,000/- SHOWN AS CUSTOM ERS ADVANCE FOR REPAIRING OF TRANSFORMERS, BECAUSE LD. AO HAS NOT M ADE ANY ADVERSE COMMENT ON JOB WORK. EVEN IT IS DOUBLE ADDITION, BE CAUSE THIS IS PART OF CASH FLOW STATEMENT ON WHICH, AO HAS CONSIDERED PEAK NEGATIVE CASH AND MADE ADDITION OF RS. 29,65,836/-. BEFORE ME, LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING P AGES 1 TO 74 HAVING THE COPY OF REPLY TO THE ITO FOR THE AY 201 1-12, DATED 21.1.2014; COPY OF CASH FLOW STATEMENT FOR THE AY 2010-11, 2011- 12, DATED 15.11.2013 ALONGWITH COPY OF PARTICULARS OF ASSETS AND LIABILITIES; COPY OF ITR FOR THE AY 2011-12 ALONGWI TH COPY OF STATEMENT OF INCOME; COPY OF CORPORATION BANK STAT EMENT OF MOHIT WADHWA FROM 1.4.2010 TO 31.3.2011; COPY OF IDBI BAN K STATEMENT OF MOHIT WADHWA FROM 1.4.2010 TO 31.12.2011; COPY O F REPLY TO THE ITO FOR THE AY 2011-12, DATED 25.2.2014; COPY OF CO RPORATION BANK STATEMENT OF M/S PIE TRADING CO. FROM 10.9.2009 TO 31.3.2010; COPY OF CORPORATION BANK STATEMENT OF M/S PIE TRADING CO . FROM 1.4.2010 TO 31.3.2011; COPY OF CORPORATION BANK STATEMENT OF MOHIT WADHWA FROM 25.8.2009 TO 31.3.2010; HONBLE ITAT BENCH DEC ISION IN THE CASE OF SUNIL VAID, ORDER DATED 30.12.2016 (ITA NO. 2414/DEL/2016); COPY OF REPLY TO THE ITO FOR THE AY 2011-12 DATED 19.2.2014; HONBLE DELHI HIGH COURT DECISION IN THE CASE OF L AKSHYA SETH, ORDER DATED 21.4.2017 (ITA NO. 398/2016) AND HONBLE DELH I ITAT BENCH DECISION IN THE CASE OF SEEMA KHANNA, ORDER DATED 31.8.2016, ITA NO. 6281/DEL/2015. HE ALSO CERTIFIED THAT THE ABOV E DOCUMENTS / EVIDENCES WERE FILED BEFORE THE LD. CIT(A), BUT HE HAS NOT CONSIDERED THE SAME. THEREFORE, HE REQUESTED THAT T HE ISSUES IN DISPUTE MAY BE SET ASIDE TO THE FILE OF THE LD. CI T(A) TO DECIDE THE 4 SAME AFRESH, UNDER THE LAW, AFTER GIVING FULL OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW. I FIND THAT LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING P AGES 1 TO 74 HAVING THE COPY OF REPLY TO THE ITO FOR THE AY 2011 -12, DATED 21.1.2014; COPY OF CASH FLOW STATEMENT FOR THE AY 2010-11, 2011- 12, DATED 15.11.2013 ALONGWITH COPY OF PARTICULARS OF ASSETS AND LIABILITIES; COPY OF ITR FOR THE AY 2011-12 ALONGWI TH COPY OF STATEMENT OF INCOME; COPY OF CORPORATION BANK STAT EMENT OF MOHIT WADHWA FROM 1.4.2010 TO 31.3.2011; COPY OF IDBI BAN K STATEMENT OF MOHIT WADHWA FROM 1.4.2010 TO 31.12.2011; COPY O F REPLY TO THE ITO FOR THE AY 2011-12, DATED 25.2.2014; COPY OF CO RPORATION BANK STATEMENT OF M/S PIE TRADING CO. FROM 10.9.2009 TO 31.3.2010; COPY OF CORPORATION BANK STATEMENT OF M/S PIE TRADING CO . FROM 1.4.2010 TO 31.3.2011; COPY OF CORPORATION BANK STATEMENT OF MOHIT WADHWA FROM 25.8.2009 TO 31.3.2010; HONBLE ITAT BENCH DEC ISION IN THE CASE OF SUNIL VAID, ORDER DATED 30.12.2016 (ITA NO. 2414/DEL/2016); COPY OF REPLY TO THE ITO FOR THE AY 2011-12 DATED 19.2.2014; HONBLE DELHI HIGH COURT DECISION IN THE CASE OF L AKSHYA SETH, ORDER DATED 21.4.2017 (ITA NO. 398/2016) AND HONBLE DELH I ITAT BENCH DECISION IN THE CASE OF SEEMA KHANNA, ORDER DATED 31.8.2016, ITA NO. 6281/DEL/2015, WHICH HAS NOT BEEN CONSIDERED BY THE LD. CIT(A) AND DECIDED THE ISSUES AGAINST THE ASSESSEE. THERE FORE, IN THE INTEREST OF JUSTICE, I SET ASIDE THE ISSUES IN DISP UTE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTIONS TO DECIDE THE ISSUES IN DISPUTE AFRESH, UNDER THE LAW, AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AFTER APPRECIATING THE DOCUMENTS, FILED IN THE SHAPE OF PAPER BOOK, AS AFORESAID. 5 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 08-08-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 08-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. 6