ITO, New Delhi V. Shri Bharat Bhushan Nayyar, New Delhi

ITA 5508/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91147 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT JAIN SENIOR
• Keywords: Opportunity of being heard; Peak credit
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.5508/DEL./2011 (ASSESSMENT YEAR : 2008-09) ITO, WARD 29 (3), VS. SHRI BHARAT BHUSHAN NAYYAR, NEW DELHI. N & B MEDICAL PRODUCTS & CO., 1935/112, FOUNTAIN, ELECTRIC MARKET, CHANDNI CHOWK (PAN : AADPN0250A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADVOCATE REVENUE BY : SHRI AMIT JAIN, SENIOR DR DATE OF HEARING : 09.06.2015 DATE OF PRONOUNCEMENT : 12.06.2015 O R D E R PER GEORGE GEORGE K. : THE APPEAL, AT THE INSTANCE OF THE DEPARTMENT, IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX-XXV, NEW DE LHI DATED 28.09.2011. THE RELEVANT ASSESSMENT YEAR IS 2008-09 . 2. THE ASSESSEE IS THE PROPRIETOR OF M/S N&B MEDICAL PRODUCTS & CO. THE RETURN OF INCOME WAS E-FILED ON 30.09.2008 DECLA RING INCOME OF RS.2,24,160/-. THE RETURN WAS PROCESSED U/S 143 (1) ON 26.02.2009. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UN DER CASS. A NOTICE U/S ITA NOS.5508/DEL./2011 2 143(2) DATED 04.08.2009 WAS SENT AT THE ADDRESS GIV EN BY THE ASSESSEE AND THE SAID NOTICE WAS RETURNED BACK. LATER ON, VARIOUS NO TICES U/S 143(2) WERE ISSUED AND THE SAME WERE RETURNED WITH THE REMARKS LEFT WITHOUT ADDRESS. THE NOTICE WAS ALSO SERVED BY AFFIXTURE ON 25.09.200 9. ANOTHER NOTICE U/S 143 (2) DATED 21.09.2010 WAS PERSONALLY SERVED AT G URGAONS ADDRESS TO THE ASSESSEE ON 21.09.2010 FIXING THE CASE FOR 08.10.20 10. IN RESPONSE TO THIS NOTICE, MR. MOHIT SHARMA, CA/AR OF M/S. ANM ASSOCIA TES CHARTERED ACCOUNTANTS FILED A LETTER DATED 08/10/2010, ALONG WITH ANNEXURE CONSISTING OF 8 PAGES, WHICH INCLUDED P&L, BALANCE SHEET, WITHO UT AUDIT REPORT. LATER ON, THE CASE WAS ADJOURNED TO DIFFERENT DATES BUT N OBODY APPEARED ON BEHALF OF THE ASSESSEE. FINALLY, THE CASE WAS LISTED FOR 2 4.12.2010 AND A COPY OF THE NOTICE WAS ALSO SENT TO THE AR OF THE ASSESSEE. TH IS NOTICE WAS ALSO REMAINED UNCOMPLIED WITH. THE ASSESSING OFFICER ASKED THE A SSESSEE TO PRODUCE BOOKS OF ACCOUNT ALONG WITH VOUCHERS BUT THE SAME WERE NO T PRODUCED FOR EXAMINATION AND EVEN NO VOUCHER WHATSOEVER WAS FURN ISHED BY THE ASSESSEE. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT DECLARED HIS BANK ACCOUNT MAINTAINED IN ICICI BANK, WHEREIN TOTAL DEP OSITS ARE RS.19,37,545/- WHICH INCLUDED CASH DEPOSITS AS MENTIONED IN AIR IN FORMATION. EVEN AFTER AFFORDING SUFFICIENT TIME AND AMPLE OPPORTUNITY, TH E ASSESSEE COULD NOT EXPLAIN THE SOURCES OF DEPOSITS MADE IN THIS ACCOUN T. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE DELIBERATELY HAD NO T PRODUCED BOOKS OF ACCOUNTS WITH VOUCHERS IF ANY MAINTAINED AND HAD NO T DECLARED THE TWO BANK ITA NOS.5508/DEL./2011 3 ACCOUNTS DURING THE ASSESSMENT PROCEEDINGS. IN THE SE CIRCUMSTANCES, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143( 3) OF THE ACT ON A TOTAL INCOME OF RS.26,10,875/- ON 29.12.2010. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO T HE LD. CIT (A) WHO, VIDE ORDER DATED 28.09.2011, PARTLY ALLOWED THE APP EAL OF THE ASSESSEE. 4. AGAINST THE ORDER OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 5. THE FIRST GROUND IS AGAINST THE DELETION OF ADDIT ION OF RS.13,73,349/- MADE BY ASSESSING OFFICER U/S 43B OF THE ACT. 6. THE ASSESSEE HAD CLAIMED THE EXPENDITURE OF RS.13 ,73,349/- AS CUSTOM DUTY AND THE SAME WAS DEBITED IN THE P&L ACCOUNT AND THERE WAS NOTHING PAYABLE. BEFORE THE LD. CIT (A), LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THERE WAS NO LIABILITY IN THE BALANCE SHEET BUT THE ASSESSING OFFICER HAD MADE THE DISALLOWANCE BY MISTAKE AND NO SUCH ADDITION HA D BEEN MADE IN THE COMPUTATION OF INCOME BY THE ASSESSING OFFICER AS T HERE IS NO LIABILITY AS PROVIDED U/S 43B. IT IS SUBMITTED BY THE ASSESSEE T HAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE THE ADDITION WITHOUT ANY VALID AND PROPER REASONS. LD. CIT (A) DELETED THE ADDITION BY OBSERVING AS UNDE R :- I HAVE CONSIDERED THE ADDITION OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT SINCE THERE IS NO LIABILITY, THE PROVISIONS OF SECTION 43B IS NOT ATTRACTED. AFT ER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THERE IS CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE AND ACCORDINGLY, THE ADDITION MADE BY THE AO IS DELETED. ITA NOS.5508/DEL./2011 4 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF BALANCE SHEET AND THE CUSTOM DUTY PAYABLE LEDGER, WE NOTICE THAT NOTHING WAS PAYABLE AS ON THE YEAR END. SINCE ENTIRE CUSTOM DUTY WAS PAID, PROVISION OF SECTION 43B HAS NO APPLICATI ON. THEREFORE, CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.13,73, 349/-. IT IS ORDERED ACCORDINGLY. GROUND NO.1 IS REJECTED. 8. GROUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.18,43,181/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED CASH DEPOSITED. 9. THE ASSESSING OFFICER HAD RECEIVED THE AIR INFORM ATION REGARDING THE CASH DEPOSITS IN THE ICICI BANK ACCOUNT OF THE ASSE SSEE OF RS.19,37,545/- AND IN THE AXIS BANK ACCOUNT OF THE ASSESSEE OF RS.50,0 00. THE ASSESSING OFFICER HAS MADE THE ADDITION OF THE ENTIRE CASH DE POSITS IN BOTH THE BANK ACCOUNTS. BEFORE THE CIT (A), LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE THE ADD ITION WITHOUT ANY VALID AND PROPER REASONS OF THE ENTIRE CASH DEPOSITS. IT WAS SUBMITTED THAT BOTH THE SAVINGS BANK ACCOUNTS WERE IN THE JOINT NAME OF THE ASSESSEE AND HIS WIFE, MRS. NEENU NAYYAR. IT WAS ALSO SUBMITTED THAT ALL THE TRANSACTIONS WERE FOR THE PURPOSE OF BUSINESS OF HIS WIFE FOR WHICH SEPAR ATE RETURNS WERE FILED. LD. COUNSEL SUBMITTED THAT ALTERNATELY, THE ADDITIONS O F THE ENTIRE CASH DEPOSITS SHOULD NOT BE MADE AND AT THE BEST, THE ADDITION OF THE PEAK CREDIT OF THE ICICI BANK ACCOUNT ON 17.04.2007 OF RS.1,44,364/- S HOULD BE MADE. IT IS ALSO SUBMITTED THAT THE DEPOSIT IN THE AXIS BANK ACCOUNT WAS OUT OF THE SAME ITA NOS.5508/DEL./2011 5 MONEY RELATING TO THE CASH DEPOSITS AND WITHDRAWALS IN THE ICICI BANK ACCOUNT. LD. CIT (A), AFTER GOING THROUGH THE SUBM ISSIONS MADE BY THE ASSESSEE, PARTLY CONFIRMED THE ADDITION AS UNDER :- 6.3 I HAVE CONSIDERED THE ADDITION OF THE AO AND T HE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE AO IS NOT J USTIFIED TO MAKE THE ADDITION OF THE ENTIRE CASH DEPOSITS IN TH E BANK ACCOUNTS WHEN THERE ARE FREQUENT AND SIMULTANEOUS C ASH DEPOSITS AND WITHDRAWALS IN THE MAIN BANK ACCOUNT W ITH ICICI BANK ACCOUNT. THE TOTAL CASH DEPOSITS IN BOTH THE BANK ACCOUNTS OF RS.19,87,545/- (RS 19,37,5451- (+) RS 5 0,000/-) AND THE AO HAS MADE THE ADDITION OF BOTH THE AMOUNT S VIDE GROUND NOS. 5 & 6. 6.4. AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTAN CES OF THE CASE, I AM OF THE VIEW THAT THE ENDS OF JUSTICE WIL L BE MET IF THE PEAK CREDIT OF ICICI BANK ACCOUNT OF RS 1,44,364/- IS CONSIDERED FOR ADDITION AS THERE HAS BEEN CIRCULATI ON OF THE SAME MONEY IN THE FORM OF FREQUENT CASH DEPOSITS AN D WITHDRAWALS IN BOTH THE ACCOUNTS AND ACCORDINGLY, T HE ADDITION TO THE EXTENT OF RS.1,44,364/- IS CONFIRME D AND THE BALANCE AMOUNT OF RS.18,43,181/- (RS.19,87,545/- (- ) RS.1,44,364/-) IS DELETED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE LD. CIT (A) RESTRICTED THE DISALLOWANCE TO RS.1,44,364/- ONLY WITH AN OBSERVATION THAT ENDS OF JUSTICE WOULD BE MET, IF THE PEAK CREDIT OF ICICI BANK ACCOUNT OF RS.1,44,36 4/- WAS CONSIDERED FOR ADDITION AS THERE HAD BEEN CIRCULATION OF THE SAME MONEY IN THE FORM OF FREQUENT CASH DEPOSITS AND WITHDRAWALS IN BOTH THE ACCOUNTS. ADMITTEDLY, THESE TWO BANK ACCOUNTS ARE NOT DISCLOSED IN ASSESS EES BALANCE SHEET. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCE EDINGS AFFORDED SUFFICIENT ITA NOS.5508/DEL./2011 6 OPPORTUNITIES TO ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS. HOWEVER, THERE WAS NON-COMPLIANCE ON THE PART OF THE ASSESSEE WARR ANTING THE ASSESSING OFFICER TO MAKE THE ADDITION. THE CIT (A) ORDER IS BRIEF AND CRYPTIC. THE CIT (A) HAD ONLY TAKEN THE PEAK CREDIT OF ICICI BANK WHILE REDUCING ADDITION TO RS.1,44,364/-. MOREOVER, WE FIND THAT THE CIT (A ) HAS NOT ASKED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE AND EQU ITY, THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER ON THIS ISSUE TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. GROUND NO.2 IS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO.3 IS AGAINST THE DELETION OF ADDITION OF RS.2,99,170/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNCONFIRMED SUND RY CREDITORS. 12. THE ASSESSEE HAD DECLARED THE SUNDRY CREDITORS O F RS.29,91,703/- AND THE ASSESSING OFFICER HAS MADE THE ESTIMATED DISALL OWANCE @ 10% OF RS.2,99,170/- OF THE SUNDRY CREDITORS ON THE GROUND OF NON-SUBMISSION OF THE DETAILS TO COVER UP THE UNVERIFIED PURCHASES. BEF ORE THE LD. CIT (A), IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSING OFFICE R WAS NOT JUSTIFIED TO MAKE THE ADDITION WITHOUT ANY VALID AND PROPER REASONS. LD. CIT (A) DELETED THE ADDITION AS UNDER: 7.3. I HAVE CONSIDERED THE ADDITION OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE AO IS NOT J USTIFIED TO MAKE SUCH ESTIMATED AND AD-HOC ADDITION WITHOUT COL LECTING ITA NOS.5508/DEL./2011 7 PROPER EVIDENCE AGAINST THE ASSESSEE AND ACCORDINGL Y, THE ADDITION MADE BY THE AO IS DELETED. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSING OFFICER MADE TH E ADDITION OF 10% OF THE SUNDRY CREDITORS ON THE GROUND THAT THE ASSESSEE HA D NOT FURNISHED THE CONFIRMATIONS FROM THE SUNDRY CREDITORS ALTHOUGH TH E SAME WERE SPECIFICALLY ASKED FOR. WE OBSERVED FROM THE ORDER OF THE LD. C IT (A) THAT THE LD. CIT (A) DELETED THE ADDITION WITHOUT GOING THROUGH ANY EVID ENCES FILED BY THE ASSESSEE AND ALSO NOT ASKED FOR ANY REMAND REPORT F ROM THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER AND IN THE INTEREST OF J USTICE AND EQUITY, WE FEEL IT APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER ON THIS ISSUE TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2015 TS ITA NOS.5508/DEL./2011 8 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.