Mr. Nitin Arora, New Delhi V. ACIT, New Delhi

ITA 5335/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4805 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 30-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Keywords: Unexplained cash credit; Salary income; Opportunity of being heard; Peak credit; Additional evidence
• Section: 153A; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5335/DEL./2013 (ASSESSMENT YEAR : 2004-05) SHRI NITIN ARORA, VS. ACIT, 201, VIPPS CENTRE 2, CENTRAL CIRCLE 22, COMMUNITY COMPLEX, NEW DELHI. MASJID MOTH, GREATER KAILASH-II, NEW DELHI. (PAN : AABPA6440R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANAT KAPOOR, ADVOCATE REVENUE BY : MS. SHEFALI SWAROOP, CIT DR DATE OF HEARING : 07.08.2017 DATE OF ORDER : 21.08.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, SHRI NITIN ARORA (HEREINAFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 26.07.2013 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS)-III, NEW DELHI, FOR THE ASSESS MENT YEAR 2004-05 ON THE GROUNDS INTER ALIA THAT :- 1. THAT THE ADDITION MADE AND THE ORDER PASSED U/S 153A/143(3) DATED 26.07.2013 IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. ITA NO.5335/DEL./2013 2 2. THAT THE ADDITION MADE BY THE AO IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HENCE ASSESSMENT ORDER PASSED U/S 153A/143(3) AND THE ADDITIONS / DISALLOWANCES ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. THE CIT(A) ERRED IN UPHOLDING THE SAME. 3. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED IN LAW IN UPHOLDING ADDITION U/S 153A AS NO DOCUMENT WAS FOUND AT THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARC H. 4. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN REJECTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE UNDER RULE 46A OF THE INCOME TAX RULE, 1962 WITHOUT ANY SPECIFIC REASONS. 5. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO HAS ERRED IN LAW AND ON FACTS IN ASSESSING THE INCOME AT RS.11,01,436/- AFTER MAKING THE ADDITION OF RS.6,23,130/- ON ACCOUNT OF UNEXPLAINED CREDIT APPEARING, IN APPELLANT S BANK ACCOUNT U/S 69A OF THE INCOME TAX ACT, 1961. THE CIT(A) ERRED IN UPHOLDING THE SAME. 6. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO HAS ERRED IN LAW AND ON FACTS IN MAKING THE ADDITION OF RS.1,09,793/- AND RS.5,13,337/- AFTER TAKING THE PEAK BALANCE OF THE CURRENT YEAR APPEARING IN THE TWO SEPARATE BANK ACCOUNTS MAINTAINED IN THE NAME OF ASSESSEE'S MINOR DAUGHTER MS. JHANVI ARORA AND IN THE NAME OF NITIN ARORA (ASSESSEE) RESPECTIVELY, BY TREATING THE SAME AS UNDISCLOSED INCOME U/S 69A OF THE ACT. THE CIT(A) ERRED IN UPHOLDING THE SAME. 7. THAT THE AO ERRED IN DISALLOWING RS.4,334/- BEING THE PAYMENT OF HEALTH INSURANCE PREMIUM CLAIMED U/S 80D OF THE ACT WITHOUT ANY BASIS. THE CIT(A) ERRED IN UPHOLDING THE SAME. 8. THAT THE EXPLANATIONS GIVEN, EVIDENCE PRODUCED AND MATERIAL PLACED AND MADE AVAILABLE ON RECORD HAVE NOT BEEN PROPERLY CONSIDERED AND JUDICIALLY ITA NO.5335/DEL./2013 3 INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIO N MADE. 9. THAT THE ADDITION MADE IS BASED ON MERE SURMISES AND CONJUNCTURES AND THE SAME CANNOT BE JUSTIFIED BY ANY MATERIAL ON RECORD. 10. THAT INTEREST U/S 234A AND 234B OF THE INCOME TAX ACT, 1961 HAS BEEN WRONGLY AND ILLEGALLY CHARGE D AND HAS BEEN WRONGLY WORKED OUT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF SEARCH AN D SEIZURE OPERATION CONDUCTED IN THE KOHINOOR FOODS LTD GROUP OF CASES ON 05.12.2007, NOTICE UNDER SECTION 153A OF THE INCOME -TAX ACT, 1961 (FOR SHORT THE ACT) WAS ISSUED AND SERVED UPON TH E ASSESSEE AND IN RESPONSE THEREOF, THE ASSESSEE DECLARED INCOME OF R S.4,73,972/- ON 10.11.2008 AND CONSEQUENTLY, THE NOTICES U/S 143 (2 ) AND 142 (1) WERE ISSUED AND SERVED UPON THE ASSESSEE. 3. ASSESSEE DECLARED INCOME FROM SALARY AND LONG TE RM CAPITAL GAINS AND CLAIMED DEDUCTIONS U/S 80D AND TAX REBATE U/S 88 OF THE ACT. ASSESSEE WAS CALLED UPON TO FURNISH DETAILS O F MOVABLE AND IMMOVABLE ASSETS WITH COMPLETE LOCATION, DETAIL OF SHAREHOLDING AND SHARE OF INTEREST IN THE DIFFERENT BUSINESS CON CERNS AND SOURCE OF INVESTMENTS, BANK ACCOUNTS, CLUB MEMBERSHIP, FDR S, CREDIT CARDS, ETC. ASSESSEE VIDE LETTER DATED 08.10.2009 CLAIMED THAT HE IS MAINTAINING GENERAL BOOK, GENERAL LEDGER, CASH AND BANK BOOK AND FURTHER STATED THAT THE COPY OF THE STATEMENT OF AF FAIRS FOR AY 2002- ITA NO.5335/DEL./2013 4 03 IS NOT AVAILABLE AS NO BOOKS OF ACCOUNTS WERE MA INTAINED. THEN THE ASSESSEE HAS CHANGED ITS SUBMISSIONS BY STATING THAT NO BOOKS OF ACCOUNTS ARE MAINTAINED FOR THE YEAR UNDER ASSES SMENT AND THE STATEMENT OF AFFAIRS ARE NOT AVAILABLE. WHEREAS TH E ASSESSEE WAS CALLED UPON TO FURNISH STATEMENT OF AFFAIRS FOR FYS 2000-01 TO 2007-08. BUT HE HAS FILED BALANCE SHEET AND CAPITA L ACCOUNT STATEMENT FOR FYS 2005-06, 2006-07 & 2007-08 RELEVA NT TO AYS 2006-07, 2007-08 & 2008-09. SO, THE AO CAME TO THE CONCLUSION THAT ASSESSEE HAS FAILED TO DISCHARGE THE ONUS BY P ROVING TRANSACTIONS AND BY NOT FILING REQUISITE DETAILS. ASSESSEE HAS NOT DISCLOSED TWO BANK ACCOUNTS NO.040010100004642 AND 0400100100055499 MAINTAINED WITH AXIS BANK (UTI BAN K) IN THE NAME OF MINOR DAUGHTER MS. JHANVI ARORA, WHICH ARE UNDISCLOSED TO THE REVENUE DEPARTMENT. AO, BY TAKING PEAK OF T HE TWO BANK ACCOUNTS, MADE AN ADDITION OF RS.6,23,130/- TO THE TOTAL INCOME OF THE ASSESSEE. AO ASSESSED THE TOTAL INCOME OF THE ASSESSEE BY RS.11,01,436/- (RS.4,78,306/- DECLARED BY THE ASSES SEE IN ITS RETURN AND RS.6,23,130/- AS UNEXPLAINED CASH CREDIT). 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING AN APPEAL WHO HAS DISMISSED THE APPEAL. FEE LING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUGNED ORDER PASSED BY LD. CIT. ITA NO.5335/DEL./2013 5 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, THE ADDITION HAS BEEN MADE BY THE AO AND CONFIRMED BY THE LD. CIT (A) ON THE GROUND THAT THE ASSESSEE HAS FAILED TO DISCLOSE TWO BANK ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE NAME OF MS. JHANVI ARORA (ASSESSEES MINOR DAUG HTER) WITH AXIS BANK (UTI BANK) BEARING NO.040010100004642 AND 0400100100055499 IN HIS INCOME-TAX RETURN. 7. ASSESSEE CLAIMED THAT THE LOAN OF RS.2,50,000/- WAS REPAID TO SHRI JUGUL KISHORE BY PASSING AN ENTRY IN THE RE SPECTIVE LEDGER ACCOUNT BUT NOT ROUTED THROUGH THE BANK WHICH WAS R EQUIRED TO BE REPAID THROUGH DEMAND DRAFT OR CROSSED ACCOUNT PAYE E CHEQUE. LD. AR FOR THE ASSESSEE CONTENDED THAT DURING APPELLATE PROCEEDINGS BEFORE THE LD. CTI (A), THE ASSESSEE HAS SOUGHT TO FURNISH ADDITIONAL EVIDENCE REGARDING HIS CLAIM THAT RS.4,00,000/- CAM E FROM SHRI JAININDER KUMAR SINGH WHICH HAS BEEN REJECTED BY TH E LD. CIT (A) AND THE SAME IS THE VITAL PIECE OF EVIDENCE TO DECI DE THE CONTROVERSY AT HAND. 8. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY LD. CIT (A) PARTICULARLY PARA 7 GOES TO PROVE THAT ASSESSEE HAS SOUGHT TO LEAD ITA NO.5335/DEL./2013 6 ADDITIONAL EVIDENCE TO PROVE TWO FACTS : ONE THAT T HE ASSESSEE HAS RECEIVED RS.1,00,000/- BY WAY OF CHEQUE FOR WHICH N O EVIDENCE IS AVAILABLE; AND SECOND THAT RS.4,00,000/- CAME FROM SHRI JAININDER KUMAR SINGH. HOWEVER, LD. CIT (A) DECLINED TO ENTE RTAIN THE ADDITIONAL EVIDENCE ON THE SOLE GROUND THAT THE SAM E HAS NOT BEEN PLEADED BEFORE THE AO. WHEN THE ADDITIONAL EVIDENC E SOUGHT TO BE LED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS, W HICH CAN BE SOUGHT TO BE PROVED EVEN DURING APPELLATE PROCEEDIN GS AS THE APPEAL BEFORE CIT (A) IS CONTINUATION OF ORIGINAL A SSESSMENT PROCEEDINGS, AND GOES TO THE ROOTS OF THE CASE FOR COMPLETE ADJUDICATION OF THE CONTROVERSY AT HAND, WE ARE OF THE CONSIDERED VIEW THAT FAIR AND ADEQUATE OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE ASSESSEE. SO THE CASE IS REMANDED BACK TO THE F ILE OF AO TO DECIDE AFRESH AFTER ENTERTAINING THE ADDITIONAL EVI DENCE SOUGHT TO BE LED BY THE ASSESSEE AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD. 8. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 21 ST DAY OF AUGUST, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 21 ST DAY OF AUGUST, 2017 TS ITA NO.5335/DEL./2013 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-III, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.