Pardeep Kumar Rai, New Delhi V. JCIT, New Delhi

ITA 6116/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91196 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 08-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Non passing of speaking order
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F , NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY , JUDICIAL MEMBER I.T.A.NO. 61 1 6 /DEL/2013 A.Y. 200 9 - 10 SH . PARDEEP KUMAR RAI C/O RAJ KUMAR & ASSOCIATES, CAS 4435/7, ANSARI ROAD DARYA GANJ NEW DELHI 110 002 PAN: APCPK 6691 J VS. JCIT, RANGE 37 NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJ KUMAR, C.A. DEPARTMENT BY : SH. VIKRAM SAHAY, SR.DR ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(APPEALS) X X VI II , NEW DELHI DATED 14.01.2013 PERTAINING TO THE ASSESSMENT YEAR (A.Y.) 200 9 - 10 . 2 . FACTS IN BRIEF : - THE ASSESSEE IS AN ADVOCATE BY PROFESSION. HE FILED HIS RETURN OF INCOME ON 7.12.2009 DECLARING INCOME OF RS.2,59,96,890/ - . THE A.O. PASSED AN ORDER U/S 143(3) OF T HE INCOME TAX ACT, 1961 (THE ACT) ON 30.12.2011 DETERMINING THE TOTAL INCOME AT RS.2,93,80,45 4/ - . AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY IN A VERY CRYPTIC AND NON SPEAKING ORDER DISMISSED THE APPEAL OF THE ASSESSEE. FURTHER AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE US ON THE FOLLOWING GROUNDS. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, NO PROPER AND REASONABLE OPPORTUNITY HAS BEEN ALLOWED BY THE AO. ITA NO. 6116/DEL/2013 AY: 2009 - 10 MR.PARDEEP KUMAR RAI, N.DELHI 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES, NO PROPER AND REASONABLE OPPORTUNITY HAS B EEN ALLOWED BY THE CIT (A). 3. THAT UNDER THE FACTS AND CIRCU MSTANCES, THE ADDITION OF RS. 43,755/ - AS UN - DISCLOSED INTER EST INCOME IS ABSOLUTELY ILLEGAL AND UN - SUSTAINABLE IN LAW AS WELL AS ON MERITS. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE ADDITION OF RS. 18,39,806/ - AS ALLEGED UNEXPLAINED INCOME OF THE ASSESSEE IS ABSOLUTELY WRONG AND UN - SUSTAINABLE IN LAW AS WELL AS OR MERITS. THE ALLEGED UN EXPLAINED INCOME IS ACTUALLY EXPENDITURE INCURRED BY THE ASSESSEE WHICH WERE PAID BY CHEQUE FOR PAYMENTS MADE TO MTNL, NDMC, INSURANCE EXPENSES AND ELECTRICITY EXPENSES. 5. THAT UNDER THE FACTS AND CIRCUMSTANCES, THERE IS NO LEGALITY AND JUSTIFICATION IN TREATING THE CASH DEPOSIT OF RS. 15, 00,000 / - ON 15.01.2009 IN ALLAHABAD BANK AS UN - EXPLAINED AS THE SOURCE OF THE SAME STANDS FULLY EXPLAINED. THE SUM OF RS . 15,00,000 / - WAS ACTUALLY WITHDRAWN FROM ONE SAVING BANK ACCOUNT AND WAS DEPOSITED IN ANOTHER SAVING BANK ACCOUNT ,OF THE ASSESSEE, ON THE SAME DAY. 3 . WE HAVE H EARD SHRI VIKRAM SAHAY, LD.SR.D.R. ON BEHALF OF THE REVENUE AND SHRI RAJ KUMAR, THE LD.COUNSEL FOR THE ASSESSEE. 4 ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF MATERIAL ON RECORD, ORDERS OF THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS. 5. THE ASSESSEE HAS DISCLOSED TOTAL PROFESSIONAL RECEIPTS OF RS.2.49 CRORES AND INTEREST RECEIPTS OF RS.22.5 LAKHS. 96.4% OF THE GROSS PROFESSIONAL RECEIPTS WERE OFFERED AS INCOME. DURING THE YEAR THE ASSESSEE CLAIMED THAT HE HAD RECEIVED AN AMOUNT OF RS.18,39,806/ - , FROM VARIOUS CLIENTS, AS REIMBURSEM ENT OF EXPENSES. THIS AMOUNT WAS ENTERED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE DEBITED EXPENDITURE INCURRED ON BEHALF OF THE CLIENT, AGAINST SUCH AMOUNTS RECEIVED. IT IS THE ADMITTED POSITION THAT THE ASSESSEE HAS NEVER CLAIMED THE EXPENDITURE INCURRED BY HIM ON BEHALF OF HIS CLIENTS, WHILE COMPUTING HIS TAXABLE INCOME. UNDER THESE CIRCUMSTANCES THE AMOUNT RECEIVED BY THE ASSESSEE FOR INCURRING EXPENDITURE ON BEHALF OF THE CLIENT, CANNOT BE TREATED AS HIS INCOME. IF THE ASSESSING OFFICER (A.O.) CHOOSE S TO TREAT THIS RECEIPT AS INCOME OF THE ASSESSEE, THEN THE RELATABLE ITA NO. 6116/DEL/2013 AY: 2009 - 10 MR.PARDEEP KUMAR RAI, N.DELHI 3 EXPENDITURE, INCURRED AND TO BE INCURRED HAS TO BE DEDUCTED FROM THIS RECEIPT AND THEN ONLY THE INCOME SHOULD BE DETERMINED. 5.1 . THE LD.CIT(A) HAS NOT APPLIED HIS MIND AND PASSED A VERY CRYPTIC AND NON SPEAKING ORDER. THIS IS NOT PROPER. THE REVENUE AUTHORITIES, SPECIFICALLY THE APPELLATE AUTHORITIES, SHOULD PASS SPEAKING ORDERS AFTER TAKING INTO CONSIDERATION THE MATERIAL SUPPLIED BY THE ASSESSEE AND THE CONTENTIONS RAISED BY THEM. I N THE RESULT GROUND NO.4 OF THE ASSESSEE IS ALLOWED. 6 . GROUND NO.3 IS AGAINST THE DELETION OF ADDITION OF RS.43,755/ - . THIS ADDITION IS MADE ON ACCOUNT OF DIFFERENCE IN CASH BALANCE DEPICTED IN THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME AND CASH BALANCE APPEARING IN THE CASH BOOK PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE S CONTENTION IS THAT THE INTEREST IN SAVINGS BANK ACCOUNT WAS CREDITED BUT THE ACCOUNTANT HAS MISTAKENLY CLASSIFIED THE SAME UNDER THE GROUP HEAD CASH IN HAND. THE ASSESSEE ADMITS THAT THIS RESULTED IN NON TAXATION OF INTEREST INCOME RECEIVED FROM AXIS BANK. THUS WE SET ASIDE THE ISSUE TO THE FILE OF THE A.O. TO VERIFY WHETHER THE INTEREST IN QUESTION WAS DISCLOSED BY THE ASSESSEE AS PART OF ITS INTEREST INCOME AND IF IT HAS NOT BEEN DISCLOSED, THE ADDITION WOULD BE JUSTIFIED. 7. GROUND NO.5 IS AGAINST AN ADDITION OF RS.15 LAKHS. THE ASSESSEE EXPLAINS THAT THE AO OBTAINED INFORMATION DIRECTLY FROM THE BANK REGARDING CASH DEPOSIT OF RS.15 LAKHS. THE CONFUSION WAS REGARDING THE DATE OF DEPOSIT. THE A.O. WAS OF THE VIEW THAT THE DATE OF DEPOSIT WAS 15.1.2009 AND WHEREAS THE ASSESSEE STATES THAT THE DATE OF DEPOSIT WAS 2.1.2009. AFTER THE ASSESSMENT WAS COMPLETED, THE ASSESSEE OBTAINED A CERTIFIC ATE FROM THE BANK THAT THE TRANSACTIONS IN QUESTION WAS ONLY ON 2 ND JANUARY, 2009 AND THAT THERE WAS NO TRANSACTION IN THE BANK ON 15.1.2009. 7.1. THE ASSESSEE EXPLAINS THAT ON 2.1.2009, RS.15 LAKHS WAS WITHDRAWN FROM AXIS BANK ACCOUNT AND THEREAFTER DEPOSITED IN ALLAHABAD BANK ACCOUNT ITA NO. 6116/DEL/2013 AY: 2009 - 10 MR.PARDEEP KUMAR RAI, N.DELHI 4 FOR THE REASON THAT PAYMENT WAS TO BE MADE TO ONE M/S E & COMMUNICATIONS WHICH WAS HAVING ITS ACCOUNT IN ALLAHABAD B ANK. 7.2 . AS THIS IS A MATTER OF VERIFICATION, AND AS THE CERTIFICATE OBTAINED FROM THE BANKS WERE NOT PUT TO THE AO, WE SET ASIDE THIS ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. IN THE RESULT GROUND NO.5 IS ALLOWED FOR STAT ISTICAL PURPOSES. 8. GROUND NOS. 1 AND 2 ARE ON THE ISSUE OF OPPORTUNITY AND AS THE SAME WERE NOT ARGUED BY THE LD.COUNSEL FOR THE ASSESSEE, THEY ARE DISMISSED AS SUCH. 9. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JUNE, 2015. SD/ - SD/ - [ A.T VARKEY ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DT. THE 24 TH JUNE, 2015 MANGA ITA NO. 6116/DEL/2013 AY: 2009 - 10 MR.PARDEEP KUMAR RAI, N.DELHI 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES