Sh. Surinder Kharbanda, New Delhi V. ITO, New Delhi

ITA 6310/DEL/2013

• Counselvise Citation: 631020114 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 20-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D V TANEJA
• Keywords: Business income; Opportunity of being heard; Corroborative evidences
• Section: 143(3)

Judgement Text

ITA NO. 6310/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 6310 /DEL/201 3 A.Y. 200 9 - 10 SURINDER KHARBANDA E - 53, 1 ST FLOOR, MOTI NAGAR, NEW DELHI 110 015 (PAN: AAJPK1058M) VS. ITO, WARD 25(3), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. D.V. TANEJA, CA DEPARTMENT BY : SH. SUJIT KUMAR, SR. DR DATE OF HEARING : 20 - 0 8 - 2015 DATE OF ORDER : 01 - 0 9 - 2015 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XXIV, NEW DELHI DATED 16 . 9 .201 3 PERTAINING TO ASSESSMENT YEAR 200 9 - 10. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 29.12.2012 DECLARING INCOME OF RS. 3,34,070 / - IN THIS CASE, THERE WAS AN AIR INFORMATION THAT THE A SSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 41,75,715 IN HIS SAVING ACCOUNT MAINTAINED WITH AXIS BANK LTD. KIRTI NAGAR BRANCH. NEW DELHI. THE CASE WAS SELECTED FOR SCRUTINY AND THE APPELLANT WAS REQUESTED TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN HI S SAVINGS ACCOUNT. IN REPLY THE ASSESSEE A SSESSEE SUBMITTED BEFORE THE ITA NO. 6310/ DEL/ 2013 2 ASSESSING OFFICER THAT HE IS AN A GENT OF LIFE INSURANCE CORPORATION AND HAS ALSO DONE THE BUSINESS OF RICE GRAIN ETC. AND THE CASH DEPOSITS IN THE SAVINGS ACCOUNT WERE OUT OF BUSINESS RECEIPTS. HOWEVER , THE A PPELLANT COU LD NOT PRODUCE ANY BILLS/VOUCHERS, BOOKS E TC. IN SUPPORT OF HIS CLAIM OF BEING ENGAGED IN THE BUSINESS OF SUPPLY OF RICE, GRAIN ETC. IN THE ABSENCE OF ANY EVIDENCE, THE ASSESSING OFFICER HELD THAT THE APPELLA NT IS NOT ENGAGED IN ANY KIND OF BUSINESS AND HE HAS DEPOSITED CASH OUT OF SOME UNDISCLOSED SOURCES. THE ASSESSING OFFICER FURTHER HELD THAT THE CASH DEPOSITS IN THE SAVINGS ACCOUNT OF THE APPELLANT REMAINED UNEXPLAINED AND THEREFORE, HE ADDED THE PEAK DEPOSIT OF R S.15,74,585 AS THE INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCES DURING THE RELEVANT ASSESSMENT YEAR. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE IT ACT VIDE ORDER DATED 19.12.2011. 3. AGGRIEVED BY THE AFORESAID ADDITION THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 16.8.2013 HAS HELD AS UNDER: - 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND HAVE GONE THROUGH THE ASSESSMENT ORDER. IT IS OBSERVED THAT DURING THE COU RSE OF ASSESSMENT THE ASSESSING OFFICER PROVIDED OPPORTUNITY TO THE APPELLANT TO PROVE WITH SUPPORTING EVIDENCES SUCH AS BILLS/VOUCHERS, BOOKS ETC. THAT HE WAS ENGAGED IN THE BUSINESS OF SUPPLY OF RICE, SUGAR, GRAINS ETC. HOWEVER, THE APPELLANT FAILED TO F URNISH ANY EVIDENCE IN SUPPORT OF HIS CLAIM THAT HE WAS ENGAGED IN ANY KIND OF BUSINESS. NOT A SINGLE PURCHASE BILL OR SALE BILL ETC. WERE FURNISH BEFORE THE ASSESSING OFFICER REGARDING THE BUSINESS TRANSACTIONS OF THE APPELLANT. IN THE ABSENCE OF ANY EVI DENCE, IN MY OPINION, THE ASSESSING OFFICER HAS RIGHTLY HELD THAT THE APPELLANT ITA NO. 6310/ DEL/ 2013 3 WAS NOT ENGAGED IN ANY KIND OF BUSINESS. HOWEVER, IT IS OBSERVED THAT THE APPELLANT HAD SUO MOTTO DECLARED INCOME FROM BUSINESS AT RS. 3,34,070/ - BUT WHILE COMPUTING THE INCOM E OF THE APPELLANT, THE ASSESSING OFFICER HAS NOT REDUCED THE DECLARED INCOME FROM BUSINESS OF RS. 3,34,070 FROM THE PEAK DEPOSIT OF RS. 15,74,585. IN MY OPINION, THE NON - REDUCTION OF THE AMOUNT OF RS. 3 , 34 , 070/ - FROM THE PEAK DEPOSIT OF RS. 15,74,585 WOU LD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME WHICH IS NOT ALLOWED AS PER THE I NCOME TAX ACT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO REDUCE THE INCOME OF THE APPELLANT BY RS. 3 , 34 , 070 / - FROM THE PEAK DEPOSIT OF RS. 15,74,585 / - . THE BALANCE AMOUN T OF ADDITION OF RS. 12,40,515/ - TO THE TOTAL INCOME OF THE APPELLANT BY THE ASSESSING OFFICER IS THEREFORE CONFIRMED. 4 . AT THE TIME OF HEARING SHRI D.V. TANEJA, CA/ AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND REQUESTED TO SET ASIDE THE IM PUGNED ORDER AND IN SUPPORT OF HIS CONTENTION, HE FILED THE BRIEF SYNOPSIS , WHICH READS AS UNDER: - 1. APPELLANT WAS A RETAIL TRADER OF FOOD GRAINS AND FILED INCOME TAX RETURN FOR 2009 - 10 U/S 44AF. 2. APPELLANT HAS SHOP AT FOOD GRAIN MARKET AT MOTI NAGAR DELHI WHEREIN RICE AND CHANNA IS TRADED. 3. PURCHASES ARE MADE IN CASH OR SETTLED ON NEXT PURCHASE FROM AGRICULTURISTS WHO BRING RICE AND CHANNA ON TRACTOR /TROLLEYS SMALL TRUCKS. RICE AND CHANNA IS PU RCHASED AT PREVALENT MARKET RATE AND PAYMENT IS ITA NO. 6310/ DEL/ 2013 4 MADE IN CASH AT THE TIME OF PURCHASE OR ON SUBSEQUENT DAY. NO VOUCHER OR BILLS ARE SUBMITTED BY AGRICULTURISTS AND ALL PURCHASES ARE IN CASH. RICE AND CHANNA IS SPREAD OUT AT SHOPS IN MARKET WHEREIN RICE AN D CHANNA IS PURCHASED AND SOLD. ALL SALES ARE IN CASH AS BUYERS BUY AT CHEAPEST COMPETITIVE RATES. BY EVENING ENTIRE STOCK PURCHASED IS SOLD - AS ALL SHOPS ARE SMALL TRADERS. AND AGRICULTURISTS GET CASH . RICE AND CHANNA SOLD TO BUYERS WHO ARE EITHER ACTU AL USERS OR SMALL TRADERS WHO SELL AT THEIR SHOPS LOCATED AT NEARBY LOCATIONS. 4. APPELLANT FILED ALL INCOME TAX RETURNS U/S 44AF FROM ASSTT.YEAR 2002 - 2003 T O ASSTT.YEAR 2009 - 2010 A ND THEREAFTER TILL 2014 - 2015. 5. MARKET PLACE OF APPELLANTS SHOP IS AT A LOCATION WHEREIN TRANSACTION OF SALE OR PURCHASE OF RICE AND CHANNA IS DONE. 6. SALE IN CASH IS DEPOSITED WITH BANK AND ALL CASH DEPOSITED IS WITHDRAWN AT THE TIME OF PAYMENT WITHIN ONE OR TWO DAY OF DEPOSITS. CASH IS DEPOSITED INTO BANK TO AVOID LOOT/THE FT. 5 . ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES AND REQUESTED THAT THE SAME MAY BE UPHELD. 6 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS , ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. WE FIND THAT THE CASE OF THE ASSESSEE WAS ELECTED FOR SCRUTINY AND THE ASSESSEE WAS ITA NO. 6310/ DEL/ 2013 5 REQUESTED TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN HIS SAVINGS ACCOUNT. IN REPLY THE ASSESSEE SUBMITTED BEFORE THE AO THAT HE IS AN AGENT OF LIFE INSURANCE CORPORATION AND HAS ALSO DONE THE BUSINESS OF RICE, GRAIN ETC. AND THAT THE CASH DEPOSITS IN THE AFORESAID SAVINGS ACCOUNT WERE OUT OF BUSINESS RECEIPTS. AO HAS MENTIONED IN HIS ORDER THAT ASSESSSEE COULD NOT PRODUCE ANY BILLS / VOUCHERS, BOOKS ETC. IN SUPPORT OF HIS CLAIM BEING ENGAGED IN THE BUSINESS OF SUPPLY OR RICE, GRAIN ETC. IN THE ABSENCE THEREOF, THE AO HELD THAT ASSESSEE IS NOT ENGAGED IN ANY KIND OF BUSINESS AND HE HAS DEPOSITED CASH OUT OF SOME UNDISCLOSE D SOURCES , HENCE, HE ADDED THE PEAK DEPOSIT OF RS. 15,74,585/ - AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. WE ALSO FIND THAT LD. CIT(A) HAS DIRECTED THE AO TO REDUCE THE INCOME OF THE ASSESSEE BY RS. 334070/ - FROM THE PEAK DEPOSIT OF RS. 15,74 ,585/ - AND BALANCE ADDITION OF RS. 12,40,515/ - WAS CONFIRMED. HOWEVER, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT A SSESSEE WAS A RETAIL TRADER OF FOOD GRAINS AND FILED INCOME TAX RETURN FOR 2009 - 10 U/S 44AF AND HAS A SHOP AT FOOD GRAIN MARKET AT MOTI NAGAR DELHI WHEREIN RICE AND CHANNA IS TRADED. PURCHASES ARE MADE IN CASH OR SETTLED ON NEXT PURCHASE FROM AGRICULTURISTS WHO BRING RICE AND CHANNA ON TRACTOR /TROLLEYS SMALL TRUCKS. RICE AND CHANNA IS PURCHASED AT PREVALENT MARKET RATE AND PAYMENT IS MADE IN CASH AT THE TIME OF PURCHASE OR ON SUBSEQUENT DAY. NO VOUCHER OR BILLS ARE SUBMITTED BY AGRICULTURISTS AND ALL PURCHASES ARE IN CASH. RICE AND CHANNA IS SPREAD OUT AT SHOPS IN MARKET WHEREIN RICE AND CHANNA IS PURCHASED AND SOLD. ALL SALES ARE IN CASH AS BUYERS BUY AT CHEAPEST COMPETITIVE RATES. BY EVENING ENTIRE STOCK PURCHASED IS SOLD - AS ALL SHOPS ARE SMALL TRADERS. AND AGRICULTURISTS GET CASH. RICE AND CHANNA SOLD TO BUYERS WHO ARE EITHER ACTUAL USERS OR SMALL TRADERS WHO SELL AT THEIR SHOPS LOCAT ED AT NEARBY LOCATIONS. ASSESSEE FILED ALL INCOME TAX RETURNS U/S 44AF FROM ASSTT.YEAR 2002 - 2003 TO ITA NO. 6310/ DEL/ 2013 6 ASSTT.YEAR 2009 - 2010 AND THEREAFTER TILL 2014 - 2015. MARKET PLACE OF ASSESSEE S SHOP IS AT A LOCATION WHEREIN TRANSACTION OF SALE OR PURCHASE OF RICE AND CHA NNA IS DONE. SALE IN CASH IS DEPOSITED WITH BANK AND ALL CASH DEPOSITED IS WITHDRAWN AT THE TIME OF PAYMENT WITHIN ONE OR TWO DAY OF DEPOSITS. CASH IS DEPOSITED INTO BANK TO AVOID LOOT/THEFT. LD. COUNSEL FOR THE ASSESSEE ALSO CONTENDED THROUGH HIS GROUNDS OF APPEAL VIDE GROUND NO. (VI) THAT ASSESEE MET THE LD. CIT(A) PERSONALLY AND APPRAISED HIM ABOUT THE FACT THAT HIS A.R. HAS REFUSED TO APPEAR AND ALTHOUGH THE ASSESSEE HAS ALREADY GIVEN C OPIES OF RELEVANT BILLS TO HIS A.R. AND HE MUST HAVE SUBMITTED THE SAME IN APPEAL, BUT IN THE CASE THE SAME HAS NOT BEEN SUBMITTED BY HIS A.R., HE SHOULD BE GIVEN TIME TO FILE THE SAME AFRESH BUT IGNORING THE SAID SUBMISSION OF THE ASSESSEE THE LD. CIT(A) PASSED THE IMPUGNED ORDER WITHOUT AFFORDING ANY SUCH OPPORTUNITY TO THE ASSESSEE. 6 .1 FROM THE ABOVE, WE FIND THAT ASSESSEE IS REGULARLY FILING THE INCOME TAX RETURN FROM HIS BUSINESS INCOME AND FROM LIC COMMISSION BEING AGENT, HENCE, IT CANNOT BE SAID THAT THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF SUPPLY OF RICE, GRAIN ETC. WE ALSO FIND CONSIDERABLE COGENCY IN THE ASSESSEE S CONTENTION THAT NO THE DETAILS OF VOUCHERS AND BILLS WERE NOT PRODUCED BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) FOR REASON S MENTIONED ABOVE . THEREFORE, IN OUR CONSIDERED OPINION, THERE IS A NEED TO EXAMINE IN DETAIL THAT HOW MUCH THE UNDISCLOSED INCOME OF THE ASSESSEE IS FROM HIS BUSINESS OR FROM THE LIC COMMISSION BEING AGENT, AFTER VERIFYING THE DOCUME NTS, BILLS AND VOUCHERS. THEREFORE, IN THE INTEREST JUSTICE THE ISSUE S IN DISPUTE ARE REMITTED BACK TO THE ASSESSING OFFICER TO DECIDE THE SAME DENOVO. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NO. 6310/ DEL/ 2013 7 ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND SUBMIT ALL THE DETAILS, BILLS AND VOUCHERS IN SUPPORT OF HIS CONTENTION . 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN C OURT ON 01 / 9 /2 0 15. SD/ - SD/ - [ O.P. KANT] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 01 / 9 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES