Praveen Kumar, New Delhi V. ITO, New Delhi

ITA 5888/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7733 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 23-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Opportunity of being heard; Peak credit
• Section: 142(1); 69

Judgement Text

1 ITA NO. 5888/DEL /2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 5888/DEL/2012 (ASSESSMENT YEA R-2009-10) PRAVEEN KUMAR 16/82-C, GALI NO. 3. JOSHI ROAD, KAROL BAGH NEW DELHI AASPK0045K (APPELLANT) VS ITO WARD-25(3) VIKAS BHAWAN NEW DELHI (RESPONDENT) APPELLANT BY SH. K. SAMPATH, ADV. RESPONDENT BY MS. ANIMA BARNWAL, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 25/09/ 2012 PASSED BY CIT (A)-XXIV, NEW DELHI FOR THE ASSESSMEN T YEAR 2009- 10. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. THAT THE LEARNED AUTHORITY BELOW GROSSLY ERRED IN P ASSING THE ORDER ON ERRONEOUS AND INSUFFICIENT GROUNDS. 2. THAT THE LEARNED AUTHORITY BELOW ERRED IN MAKING AN ADDITION OF RS.12,84,429/- U/S 69 ON ERRONEOUS AND INSUFFICIENT GROUNDS. DATE OF HEARING 22.02.2016 DATE OF PRONOUNCEMENT 17.05.2016 2 ITA NO. 5888/DEL /2012 3. THAT IN ANY EVENT THE ORDER PASSES IS ILLEGAL, U N-LAWFUL AND UNJUSTIFIED TAKING INTO CONSIDERATION THE ABOVE ADDITIONS AND THE SAME ARE LIABLE TO THE DELETED AN D OBLIGE. 3. GROUND NO. 1 AND 2 ARE NOT PRESSED BY THE ASSESS EE/AR, HENCE DISMISSED. 4. THE ASSESSEE FILED HIS RETURN OF INCOME ON 29/09 /2010 DECLARING NET INCOME OF RS.1, 59,267/-. THE CASE W AS SELECTED FOR SCRUTINY AND STATUTORY NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 21/8/2010. NOTICE U/S 142(1) ALONG WITH DETAILED Q UESTIONNAIRE WAS ISSUED ON 2/9/2011. THE ASSESSEE IS IN THE BUS INESS OF MANUFACTURING SALE AND DISTRIBUTION OF FLEXO PRINTI NG MATERIAL. AIR INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER T HAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS.12, 84,429/- IN HIS BANK ACCOUNT IN ICICI BANK LTD., PUNJAB BAGH, NEW DELHI. THE ASSESSEE WAS REQUIRED TO GIVE DETAILS OF THE CASH DEPOSITS W ITH SOURCE THEREOF, ALONG WITH DOCUMENTARY EVIDENCE AND COMPLETE ADDRES S OF THE PARTIES INVOLVED IN THE TRANSACTION IN RESPECT OF C REDIT INTEREST. SINCE, THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS TO THE SATISFACTION OF THE ASSESSING OFFICER, THE ASSE SSING OFFICER ADDED RS.12,84,429/- TO THE INCOME OF THE ASSESSEE U/S 69 A OF THE INCOME TAX ACT. 5. THE ASSESSEE FILED APPEAL BEFORE THE CIT (A). TH E ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT HE WAS HAVING AN A CCOUNT WITH ICICI BANK THROUGH WHICH HE WAS DOING RETAIL BUSINE SS ON SMALL 3 ITA NO. 5888/DEL /2012 SCALE. IT WAS AVERRED BEFORE CIT (A) THAT THE DEBIT /CREDIT ENTRIES IN THE BANK ACCOUNT REPRESENT PURCHASE/SALES AND OTHER EXPENSES SUCH AS SCHOOL FEES OF CHILDREN, ELECTRICITY BILL P AYMENTS AND OTHER SMALL EXPENSES. DURING THE YEAR, THE ASSESSEE INCU RRED A LOSS ON THIS RETAIL BUSINESS DUE TO REJECTION OF MATERIAL. THE ASSESSEE CLAIMED THAT THE ASSESSING OFFICER NEVER POINTED OU T ABOUT THE SMALL SAVING ACCOUNTS OTHERWISE, THE SAME WOULD HAV E BEEN EXPLAINED AT THE RELEVANT TIME. THE ASSESSEE FURTH ER SUBMITTED BEFORE THE CIT(A) THAT THE BALANCE AS ON 31 ST MARCH 2009, FOR ICICI BANK ACCOUNT WAS RS.2,500/- WHICH SHOWS THAT THE AS SESSEE DID NOT EARN ENOUGH PROFIT. THE ASSESSEE OFFERED THAT HIS INCOME MAY BE CONSIDERED AT 5% OF THE TOTAL CREDIT ENTRIES IN THIS BANK ACCOUNT. 6. THE CIT (A) HELD IN PARA 4.3 OF THE ORDER THAT THERE ARE CERTAIN FACTS PERTAINING TO THESE ISSUES, WHICH ARE INCONTROVERTIBLE. THE MOST CRUCIAL FACT IS THAT THIS BANK ACCOUNT NO. 015501501915 IN ICICI BANK, PUNJABI BAGH BRANCH, NEW DELHI IN THE N AME OF THE APPELLANT WAS NOT DISCLOSED BY HIM IN HIS RETURN OF INCOME. THE LD. AR OF THE ASSESSEE ACCEPTED THE FACT DURING THE APP ELLATE PROCEEDING THAT THIS WAS AN UNDISCLOSED BANK ACCOUNT. ALTHOUG H THE APPELLANT HAS CLAIMED THAT THIS ACCOUNT PERTAINS TO HIS SIDE BUSINESS IN WHICH HE HAS INCURRED A LOSS, THE STORY DOES NOT APPEAR B ELIEVABLE ON A PERUSAL OF THE BANK ACCOUNT ENTRIES, MANY OF WHICH PERTAIN TO EXPENDITURES LIKE CREDIT CARD PAYMENTS, SCHOOL FEES PAYMENTS, ELECTRICITY BILL PAYMENT AND LIC PAYMENTS ETC. THE LD. AR OF THE APPELLANT WAS ASKED TO SUBMIT BILLS FOR PURCHASE AN D SALE OF MATERIAL, WHICH WAS TRANSACTED THROUGH THIS BANK AC COUNT. THE LD. 4 ITA NO. 5888/DEL /2012 AR SUBMITTED CERTAIN BILLS FOR PURCHASE AND SALE WH ICH APPEARS TO BE SELF-SERVING DOCUMENT SINCE NONE OF THE ENTRIES IN THE PHOTOCOPIES OF THE BILLS CAN BE MATCHED WITH THE ENTRIES IN THE BA NK ACCOUNT, AS NO PAYMENTS WERE EITHER MADE OR RECEIVED THROUGH CHEQU ES. THEREFORE, IN THE LIGHT OF THE EVIDENCES AVAILABLE ON RECORD A ND IN THE LIGHT OF THE NATURE OF THE ENTRIES REFLECTED IN THIS UNDISCLOSED BANK ACCOUNT IN ICICI BANK, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS NOT BEEN ABLE TO PROVE BEYOND DOUBT THAT HE WAS CARRIED OUT A SIDE BUSINESS OF POLYTHENE BAGS AND TUBES AND THE CASH D EPOSITED IN ICICI BANK ACCOUNT WAS THE SALE PROCEEDS OF SUCH BU SINESS. UNDER THESE CIRCUMSTANCES, THE ADDITION MADE BY THE AO OF TOTAL CASH DEPOSITS IN ICICI BANK OF RS.12,84,429/- IS SUSTAIN ED AND THIS GROUND OF APPEAL IS DISMISSED. 7. THE LD. AR SUBMITTED THAT IT WAS A MISTAKE ON P ART OF THE ASSESSEE THAT THE SAID AMOUNT WAS NOT PROPERLY ENTE RED IN THE RETURNS OF INCOME OF THE ASSESSEE AND THE ASSESSEE HAS RIGHTLY CLAIMED DEDUCTION U/S 44AE. THE LD. AR SUBMITTED TH AT BILLS FOR PURCHASE AND SALE WERE SUBMITTED BEFORE THE CIT(A). 8. THE LD. DR SUBMITTED THAT THERE IS NO EVIDENCE T HAT THE SAID AMOUNT WAS IN RESPECT OF THE ASSESSEES BUSINESS. THERE WAS SPECIFIC AIR INFORMATION WHICH STATE THAT THERE WAS A CASH TRANSACTIONS AND ASSESSING OFFICER HAS RIGHTLY ADDE D BACK THE SAID AMOUNT. 9. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. FROM THE ASSESSMENT ORDER, IT CAN BE SEEN THAT THE ASSESSEE HAS 5 ITA NO. 5888/DEL /2012 NOT FILED ANY DOCUMENTARY EVIDENCE WHATSOEVER TO PR OVE THE CASH TRANSACTIONS IN RESPECT OF THE ICICI BANK ACCOUNTS. THE ASSESSEE COULD NOT MAKE OUT HIS CASE THAT HE WAS HAVING A SI DE BUSINESS BEFORE THE ASSESSING OFFICER. THEREFORE, THE TRANS ACTION TO THE EXTENT OF RS.12,84,429/- WAS CORRECTLY HELD AS UNDI SCLOSED INCOME UNDER SECTION 69A OF THE ACT BY THE ASSESSING OFFIC ER. THE CIT (A) ALSO CONFIRMED THE SAME. THE SAID FINDING OF CIT(A ) IS CORRECT. ONLY, WHETHER THE AMOUNT WAS IN THE NATURE OF PEAK CREDIT ENTRIES HAS TO BE SEEN. THEREFORE, THE MATTER NEEDS TO BE VERIFIED BY THE ASSESSING OFFICER. HENCE, THE MATTER IS REMITTED BACK TO THE ASSESSING OFFICER WITH THE DIRECTION THAT THE DOCUMENTARY EVIDENCE HA S TO BE LOOKED INTO AND ACCORDINGLY TO PASS FRESH ORDER. NEEDLESS TO SAY, THE ASSESSEE HAS TO BE GIVEN FULL OPPORTUNITY OF BEING HEARD. 10. IN RESULT, APPEAL IS PARTLY ALLOWED FOR STATIST ICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH OF MAY, 2016. SD/- SD/- (J.S. REDDY) ( SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17/05/2016 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 5888/DEL /2012 DATE 1. DRAFT DICTATED ON 22/02/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 23/02/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17.05.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 7 . 0 5 .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.