Delhi Kirana Co., New Delhi V. ITO, New Delhi

ITA 5653/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7373 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAN KANT GARG
• Keywords: Gross profit estimation
• Section: 143(3); 68

Judgement Text

1 ITA NO. 5653/DEL/11 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI INTURI RAMA RAO A CCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 5653/DEL/2011 (ASSESSMENT YEA R-2007-08) DELHI KIRANA CO. 138, GALI MASJID TEHWAR KHAN, NAYA BANS NEW DELHI AADFD6272C (APPELLANT) VS ITO WARD-28 (1) NEW DELHI (RESPONDENT) APPELLANT BY SH. ANIL KUMAR GUPTA, C.A RESPONDENT BY SH. RAMAN KANT GARG, SR. DR. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 12/10/2011 PASSED BY LD. CIT(A) XV, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. INCOME TAX OFFICER, WARD-28 (1), NEW DELHI (HEREINAFTER REFERRED TO AS LD. ITO) AS WELL AS THE LD.CIT(A) XXV, DELHI (HE REINAFTER REFERRED O AS LD.CIT(APPEALS), BOTH, HAVE ERRED IN LAW VIS--VIS THE FACTS & FEATURES OF THE SUBJECT MATTERS OF THE CASE OF THE ASSESSEE-FIR M (APPELLANT): (1) WHILE ASSESSING BY MAKING ADDITION OF RS.11,31,550/ = VIDE E ORDER U/S 143(3) DATED 29/12/2009 ALLEGING CASH LOANS FROM 59 PERSONS (LESS THAN RS.20,000/= EACH) AS CASH-CREDITS U/S 68 DESPITE:- DATE OF HEARING 02 .11.2015 DATE OF PRONOUNCEMENT 15.01.2016 2 ITA NO. 5653/DEL/11 (1.1) THE ADMITTED, COGENT & ESTABLISHED FACT THAT RS.11, 31,550/= COMPRISE OF RS.7,99,000/= FROM 42 PERSONS WHICH WER E NOT RECEIVED DURING THE YEAR UNDER APPEAL, BUT WERE REC EIVED DURING THE PRECEDING ASSESSMENT YEAR; AND (1.2) CONFIRMATIONS OF LENDERS OF SUCH SUM(S) WERE FURNIS HED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS ALSO DURING THE FIRST APPELLATE PROCEEDINGS BEFORE THE LD.CIT(A) WHO WAS PARTIALLY & WHIMSICALLY JUDICIOUS TO ADMIT THE ALLEGED CASH-CREDITS AS GENU INE TO THE EXTENT OF RS.6,31,515/= WHILE UPHOLDING THE ADDITION TO TH E TUNE OF RS.5,00,000/= I.E. ON AD HOC BASIS IN THE IMPUGNED ORDER U/S 250 (6) DATED 12/10/2011 (SERVED ON 20/10/2011 TO THE A PPELLANT) (2) WHILE MAKING UNWARRANTED COMMENTS INVOLVING ALLEGAT IONS ABOUT:- (A) THE FUNDS INTRODUCED BY THE PARTNERS OF THE ASSESSE E-FIRM/APPELLANT AS CAPITAL-ADDITIONS DURING THE YEAR; (B) THE ALLEGED LOW GP-RATE OF 9% ON TURNOVER OF RS.23. 62 LAKHS; AND (C) THE ALLEGED LOW NET-PROFIT & TOTAL INCOME RETURNED VIDE ITR FILED; WHEREAS NEITHER SUCH SUBJECT MATTER(S) WERE ADVERSE LY COMMENTED BY THE LD. ITO NOR FORMING PART OF THE GROUNDS OF APPE AL BEFORE THE LD.CIT(A) EVEN AFTER DETAILED ASSESSMENT PROCEEDING S AS WELL AS REMAND-REPORT PROCEEDINGS BY THE LD. ITO.; 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF KIRAN A STORES ETC. HAVING TWO PARTNERS NAMELY, MD. WASESEM AND MD. FAHIM. THE AS SESSEE DECLARED THE TOTAL TURNOVER OF RS.23,62,024/- THE GP @ 9% OF RS. 2,12,595/- AND THE ASSESSEE FILED THE NOMINAL RETURN INCOME OF RS.14,8 28/- ONLY. THE ASSESSEE CLAIMED THE UNSECURED LOANS OF RS.22,21,118/- OUT O F WHICH THERE WERE CASH LOANS OF RS.11,31,550/- WHICH WERE BELOW RS.20,000/ - EACH FROM 59 PARTIES. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE A.O WAS NOT SATISFIED REGARDING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE C ASH LOANS AND MADE THE ADDITION OF THE SAME AMOUNT OF RS.11,31,550/-. 4. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF T HE A.O BEFORE THE CIT(A). THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE C ASH LOANS WERE TAKEN AND THE CONFIRMATIONS WERE SUBMITTED FOR SOME OF THE PA RTIES WHICH WAS NOT ACCEPTED BY THE A.O. THE ASSESSEE ALSO SUBMITTED F URTHER CONFIRMATIONS DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH WAS REMAN DED TO THE A.O AND A REMAND REPORT DATED 19/8/2011 WAS FORWARDED BY THE JCIT, RANGE 28, NEW DELHI VIDE THE LETTER DATED 23/8/2011 AND A COPY OF WHICH WAS FORWARDED TO 3 ITA NO. 5653/DEL/11 THE ASSESSEE. THE MAIN SUBMISSION OF THE ASSESSEE WAS THAT THE CASH LOANS BELOW RS.20,000/- WERE RECEIVED FROM 59 PARTIES AND THE CONFIRMATIONS WERE SUBMITTED. THE LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS. 5 LAC. 5. THE AR SUBMITTED THAT THE CASH CREDIT OF 59 PEOP LE WERE RECEIVED WHICH WAS LESS THAN 20,000/- AND THE CHART GIVEN IN THE A SSESSMENT ORDER ITSELF SHOWS THAT THE AMOUNT SHOWN ON THE DATE ON 1/4/2006 AMOUNTS TO OPENING BALANCE AND CANNOT BE TREATED AS THE INCOME OF THE ASSESSEE. THE SUMMONS WHICH WERE GIVEN TO THE PARTIES WAS ALSO RECEIVED A ND THE CONFIRMATION OF THE PARTIES WAS PRODUCED BEFORE THE ASSESSING OFFICER . 6. THE DR SUBMITTED THAT THE CHART SHOWN IN THE ASS ESSING OFFICER S ORDER DOES NOT GIVE ANY CLEAR PICTURE AS TO WHICH IS THE OPENING BALANCE AND NEEDS TO BE REMANDED BACK FOR VERIFICATION. 7. WE HAVE PERUSED ALL THE RECORDS AND SUBMISSION O F BOTH THE PARTIES AND THOUGH THE CONFIRMATION OF 39 PARTIES HAS BEEN SUBM ITTED THE CHART GIVEN BY THE ASSESSING OFFICER HAS NOT GIVEN ANY CLEAR IDEA AS TO WHICH HAS TO BE CONSIDERED AS OPENING BALANCE. THEREFORE, THIS NEE DS TO BE VERIFIED BY THE ASSESSING OFFICER. THE LD. CIT(A) ALSO SILENT ON T HIS PART. THIS NEEDS CLARIFICATION AND HENCE THE MATTER IS REMITTED BACK BEFORE THE ASSESSING OFFICER IN THE INTEREST OF JUSTICE. NEEDLESS TO SAY BOTH T HE PARTIES SHOULD BE HEARD. 8. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH OF JANUARY, 2016. SD/- SD/- (INTURI RAMA RAO) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15/01/2016 R. NAHEED* 4 ITA NO. 5653/DEL/11 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 02.11.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 03.11.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .11.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28.10.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 15.01.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 5 ITA NO. 5653/DEL/11