ANIRUDH KESHAV DUBEY, VAPI V. Income Tax Officer, Income Tax officer, Daman

ITA 564/SRT/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0552 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-10-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 13-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; TDS; FORM 26AS
• Section: 147; 148; 144; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 564/Srt/2023 (Assessment Year 2011-12) (Hybrid hearing) Anirudh Keshav Dubey, Flat No. 602, Leela tower, Near Vatsav Park, Rofel College, Namdha Road, Vapi- 396191 (Gujarat) PAN No. AEJPD 7924 B Vs. I.T.O., Daman Appellant/ assessee Respondent/ revenue Assessee represented by None Department represented by Shri Vinod Kumar, Sr. DR Date of Institution of Appeal 16/08/2023 Date of hearing 25/10/2023 Date of pronouncement 25/10/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 16/06/2023 for the Assessment Year (AY) 2011-12. The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer in making addition of Rs 1,93,146/- by calculating 20% of the receipts (Rs 9,65,728) as reflected in form 26AS but which was never billed or received by your appellant. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing officer in making addition of Rs. 9,39,200/- which is the gross receipts from business activity and not the profits. 3. It is, therefore prayed, that addition made by assessing officer may please be deleted. ITA No. 564/Srt/2023 Anirudh Keshav Dubey Vs ITO 2 4. Appellant craves leave to add, alter or delete any ground(s) either before or during the course of hearing of the appeal.” 2. Brief facts of the case are that the case of assessee was reopened under Section 147 of the Income Tax Act, 1961 (in short, the Act) on the basis of information that the assessee has not filed return of income and was having contractual receipt of Rs. 9,65,728/- from M/s Creative Garments Pvt. Ltd. as reflected in Form 26AS on which TDS was made under Section 194C of the Act. Further the assessee also had certain credit/ deposit in his bank account with State Bank of Patiala. On the basis of such information and perusal of ITS Data that no return of income was filed by assessee for A.Y. 2011-12, the Assessing Officer recorded reasons that income of assessee escaped assessment. Notice under Section 148 of the Act dated 27/03/2018 was issued to the assessee. The Assessing Officer recorded that despite service of notice under section 148 and other number of various notices, neither the assessee filed any response nor filed return of income in response to notice under Section 148 of the Act. The Assessing Officer after serving final show cause notice, proceeded for best judgement assessment under Section 144 of the Act. The Assessing Officer noted that as per Form 26AS, the assessee received total receipt of Rs. 9,65,728/- from M/s Creative Garments Pvt. Ltd.. Since no return of income was filed nor any response to various correspondences was made by assessee, the Assessing Officer made addition @ 20% of total receipt of Rs. 9,65,728/- thereby made addition ITA No. 564/Srt/2023 Anirudh Keshav Dubey Vs ITO 3 of Rs. 1,93,146/-. The Assessing Officer also noted that there was total deposit in the bank account of assessee of Rs. 9,39,200/- out of which there was cash deposit of Rs. 8,98,200/- and other credit of Rs. 41,000/- and interest of Rs. 208/-. Since no response was made by assessee to the notice issued by Assessing Officer, the Assessing Officer treated the cash deposit and other credit aggregating of Rs. 9,39,200/- as unexplained money under Section 69A of the Act. Rs. 208/- was also added to the income of assessee. 3. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Alongwith appeal, the assessee filed detailed statement of fact. The assessee in his statement of fact stated that no notice was served upon the assessee. The assessee came to know about the order when his bank account was blocked for debit transaction. The assessee is unaware about the TDS transaction as he never entered into such transaction with M/s Creative Garments Pvt. Ltd.. It seems that his PAN is wrongly reflected in such statement. The Assessing Officer added 20% on ad hoc basis. The other addition was made by Assessing Officer on account of deposit in his bank account. Rs. 8,98,200/- was deposited in cash and Rs. 49,000/- other than cash. Such amount is a gross receipt from the business. The addition is made without considering the expenses incurred for earning such receipt. The income of whole credit was added wrongly and without any basis. The ld. CIT(A) confirmed the addition by ITA No. 564/Srt/2023 Anirudh Keshav Dubey Vs ITO 4 taking a view that despite issuing various notices for fixing the date of hearing, no compliance was made. The ld. CIT(A) upheld both the additions by taking a view that no written submission or documentary evidence was filed in support of grounds of appeal. Further aggrieved, the assessee has filed present appeal before this Tribunal. 4. None appeared on behalf of assessee despite service of notice on two occasions by e-mail. Notice for hearing fixed on 25.10.2023 was sent and served through e-mail as well as RPAD. Considering such facts and keeping in view the smallness of addition, I decided to hear the submission of the learned Senior Departmental Representative (ld. Sr.DR) for the revenue and to decide the appeal on the basis of material available on record. The ld. Sr.DR for the revenue supported the orders of lower authorities. The ld. Sr.DR for the revenue submits that the assessee was given sufficient opportunity by the lower authorities. The assessee despite availing such opportunity has neither contested the proceeding nor filed any evidence, therefore, the assessee does not deserve any leniency for seeking any further relief. 5. I have considered the submission of ld. Sr. DR for the revenue and the material available on record. I find that the case of assessee was reopened on the basis of information that the assessee has not filed any return of income and that there was cash deposit and contractual receipt. The reopening of assessment is not challenged by assessee before the ITA No. 564/Srt/2023 Anirudh Keshav Dubey Vs ITO 5 Tribunal. The assessee has challenged only the addition of contractual receipt being 20% of such receipt and the credit in the bank account. I find that before the ld. CIT(A), the assessee flatly denied of any receipt on account of contractual receipt by assessee. The assessee also contended that he has no transaction with M/s Creative Garments Pvt. Ltd.. The ld. CIT(A) instead of getting verified such information from assessing officer, whether any such contractual receipt in fact was credited in the bank account of assessee or not or it was really a result of mismatch of PAN, upheld that addition. Such addition is prima facie is not justified. Therefore, this ground of appeal is restored back to the file of Assessing officer with the direction to verify the fact from the bank account of assessee and / or make further verification of fact from payer i.e. M/s Creative Garments Pvt. Ltd, if they have any contractual obligation towards assessee. The assessee is also directed to show his bank details to substantiate the fact that no such amount was ever received by him. In the result, ground No. 1 of the appeal is allowed for statistical purposes. 6. So far as ground no. 2 of appeal is concerned, the assessee has taken stand that credit in the bank account is the gross receipt of his business and that expenses were not considered while making addition of the said receipt. I find merit in the fact stated by the assessee that the entire credit in the bank account cannot be added to the income of assessee, if ITA No. 564/Srt/2023 Anirudh Keshav Dubey Vs ITO 6 the assessee was engaged in some business activity. It is settled position under the Income Tax Act that only profit element can be taxed and not the entire transaction. Thus, ground No. 2 of appeal is also restored back to the file of Assessing Officer with the direction to estimate a reasonable profit of total receipt/credit in the bank account, if the assessee produce evidences of his business activities. The assessee is also directed to show his business activities if any by showing some positive evidence to substantiate such fact. In the result, this ground No. 2 of appeal is also allowed for statistical purposes. 7. In the result, this appeal of assessee is allowed for statistical purposes only. Order announced in open court on 25 th October, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 25/10/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat