Sh. Naushad Ahmed, Saharanpur V. ITO, Saharanpur

ITA 593/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69596 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 03-12-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 31-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .593/DEL/2013 & 594/DEL/2013 593/DEL/2013 & 594/DEL/2013 593/DEL/2013 & 594/DEL/2013 593/DEL/2013 & 594/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2003 2003 2003 2003- -- -04 & 2004 04 & 2004 04 & 2004 04 & 2004- -- -05 0505 05 SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, S/O SHRI BHURA S/O SHRI BHURA S/O SHRI BHURA S/O SHRI BHURA AHMED, AHMED, AHMED, AHMED, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, SADAK DUDHLI, SADAK DUDHLI, SADAK DUDHLI, SADAK DUDHLI, KAILASHPUR, KAILASHPUR, KAILASHPUR, KAILASHPUR, SAHARANPUR SAHARANPUR SAHARANPUR SAHARANPUR 247 001. 247 001. 247 001. 247 001. PAN : PAN : PAN : PAN : AHBPA7482L. AHBPA7482L. AHBPA7482L. AHBPA7482L. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2, 2,2, 2, SAHARANPUR. SAHARANPUR. SAHARANPUR. SAHARANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANDEEP SAPRA, ADVOCATE. RESPONDENT BY : SHRI KEYUR PATEL, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), MUZAFFARNAGAR DATED 2 ND SEPTEMBER, 2011 FOR THE AY 2003-04 & 2004-05. 2. IN ITA NO.593/DEL/2013, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT APPEAL HAS ERRED BY APPLYING GP RATE ON TOTAL CREDIT SUMMATION IN BANK A/C. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT APPEAL HAS ERRED BY HOLDING THE ADDITIO N OF RS.105000/- IN PURCHASE OF LAND. 3. SIMILARLY, IN ITA NO.594/DEL/2013, THE ONLY GROU ND RAISED BY THE ASSESSEE READS AS UNDER:- ITA-593 & 594/DEL/2013 2 ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE TH E LEARNED CIT APPEAL HAS ERRED BY APPLYING GP RATE ON TOTAL CREDIT SUMMATION IN BANK A/C. 4. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT THE ASSESSEE IS A SMALL BUSINESSMAN TR ADING IN RAW HIDES AND SKIN. SINCE IN THE YEAR UNDER CONSIDERATION TH E INCOME OF THE ASSESSEE WAS BELOW THE TAXABLE LIMIT, HE DID NOT FI LE THE RETURN BUT THE SAME WAS FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME- TAX ACT, 1961. THAT THE ASSESSING OFFICER MADE THE HUGE ADDITION OF ` 5,52,632/- BY ESTIMATING THE GROSS PROFIT ON THE EN TIRE CREDIT IN THE BANK ACCOUNT. IT IS STATED BY THE LEARNED COUNSEL THAT THE ASSESSEE HAS MAINTAINED THE REGULAR BOOKS OF ACCOUNT, HE HAS PREPARED THE TRADING AND PROFIT & LOSS ACCOUNT AND THE INCOME HA S BEEN DECLARED ON THE BASIS OF BOOKS OF ACCOUNT. THE ASSESSING OFFIC ER TREATED THE ENTIRE CREDIT AS SALES WHILE ONLY PART OF THE CREDIT IN TH E BANK ACCOUNT IS SALES. HE FURTHER STATED THAT IF ONE OPPORTUNITY IS GIVEN, THE ASSESSEE WOULD BE ABLE TO EXPLAIN EACH AND EVERY CREDIT IN THE BAN K ACCOUNT. HE FURTHER STATED THAT THOUGH THE ASSESSING OFFICER ME NTIONED THE APPLICATION OF GROSS PROFIT RATE OF 8%, BUT, IN EFF ECT, HE APPLIED THE NET PROFIT RATE BECAUSE THE ENTIRE PROFIT WORKED OUT IS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER DID NOT DED UCT THERE FROM EVEN THE PROFIT DISCLOSED BY THE ASSESSEE AS PER BOOKS O F ACCOUNT. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER ALSO M ADE THE ADDITION OF ` 1,05,000/- FOR UNEXPLAINED INVESTMENT IN THE PURCHA SE OF PLOT. THAT THE WITHDRAWAL FOR THE SAID PLOT IS ALREADY DEBITED IN THE ASSESSEES BOOKS OF ACCOUNT. HE, THEREFORE, SUBMITTED THAT EI THER THE ADDITIONS MADE BY THE ASSESSING OFFICER SHOULD BE DELETED OR THE MATTER BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR RE-E XAMINATION. ITA-593 & 594/DEL/2013 3 5. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF AUTHORITIES BELOW AND HE STATED THAT THE ASSESSING OFFICER HAS CONSIDERED THE ENTIRE FACTS AND ALSO EXAMINED THE B OOKS OF ACCOUNT AND, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND WHICH IS SUSTAINED BY THE LEARNED CIT(A) SHOULD BE SUSTAINED . 6. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND THE M ATTER RESTORED TO THE FILE OF THE ASSESSING OFFICER. WE ORDER ACCORDINGL Y AND DIRECT THE ASSESSING OFFICER TO ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE CREDIT IN THE BANK ACCOUNT. AFTER EXAM INING THE BOOKS OF ACCOUNT, HE WILL DECIDE WHETHER THE SAME IS REQUIRE D TO BE ACCEPTED OR REJECTED AS PER SECTION 145. IF THE BOOKS OF ACCOU NT ARE REQUIRED TO BE REJECTED, HE WILL ALSO ALLOW OPPORTUNITY TO THE ASS ESSEE FOR EXPLAINING THE RATE OF GROSS PROFIT/NET PROFIT WHICH MAY BE SU ITABLY APPLIED IN THE CASE OF THE ASSESSEE. SIMILARLY, THE ASSESSING OFF ICER WILL ALSO ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SOURCE OF ` 1,05,000/- FOR PURCHASE OF LAND. THEREAFTER, HE WI LL MAKE THE ASSESSMENT OF BOTH THE YEARS AFRESH IN ACCORDANCE W ITH LAW. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D EEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 3 RD DECEMBER, 2013. SD/- SD/- ( (( (A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 03.12.2013 VK. ITA-593 & 594/DEL/2013 4 COPY FORWARDED TO: - 1. APPELLANT : SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, SHRI NAUSHAD AHMED, S/O SHRI BHURA AHMED, S/O SHRI BHURA AHMED, S/O SHRI BHURA AHMED, S/O SHRI BHURA AHMED, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, VILLAGE & PO GHOGREKI, SADAK DUDHLI, KAILASHPUR, SAHARANPUR SADAK DUDHLI, KAILASHPUR, SAHARANPUR SADAK DUDHLI, KAILASHPUR, SAHARANPUR SADAK DUDHLI, KAILASHPUR, SAHARANPUR 247 001. 247 001. 247 001. 247 001. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2, SAHARANPUR. 2, SAHARANPUR. 2, SAHARANPUR. 2, SAHARANPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR