ITO, Dehradun V. Shri Praveen Teotia (Indl.), Dehradun

ITA 6313/DEL/2012

• Counselvise Citation: 631320114 RSA 2012
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Business income; Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.6313 /DEL/2012 ASSESSMENT YEAR : 2009-10 ITO, WAARD 2(1), VS. PRAVEEN TEOTIA (INDL.) DEHRADUN 170, PANT ROAD, CLEMENT TOWN, DEHRADUN GIR / PAN:AAWPT3268R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIKRAM SAHAY, SR DR RESPONDENT BY : SHRI NONE ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY REVENUE AGAINST THE ORD ER OF LD. CIT(A) DATED 30.10.2012. NONE WAS PRESENT ON BEHALF OF TH E ASSESSEE. IT WAS NOTED FROM THE RECORD THAT INITIALLY, THE APPEAL WAS FIXE D ON 21.02.2013 ON WHICH DATE NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE A ND THE APPEAL GOT ADJOURNED TO 23.01.2014 ON WHICH DATE ALSO NOBODY W AS PRESENT AND FINALLY, THE APPEAL WAS FIXED FOR TODAY I.E. 13.01.2015 ON W HICH DATE AGAIN NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE. WITH THE AS SISTANCE OF LD. D.R., WE HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD AND WE FIND THAT THE MATER CAN BE DISPOSED OFF EVEN WITHOUT LEGAL REPRESENTATI VE OF ASSESSEE. THE REVENUE IS AGGRIEVED WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD RESTRICTED THE ADDITION MADE BY A.O. FOR AN AMOUNT OF RS.23.25 LACS TO RS.12.50 LACS. ITA NO.6313/DEL/2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. DU RING ASSESSMENT PROCEEDINGS OBSERVED THAT AN AMOUNT OF RS.23.25 LAC S WAS SHOWN TO HAVE BEEN RECEIVED BY ASSESSEE IN CASH FROM M/S. NANAK B UILDERS AND DEVELOPERS ON VARIOUS DATES AS NOTED ON PAGE 2 OF THE ASSESSME NT ORDER. THE ASSESSEE COULD NOT EXPLAIN THE PURPOSE OF RECEIPT OF SUCH AM OUNT FROM M/S. NANAK BUILDERS AND DEVELOPERS AND NEITHER ANY CONFIRMATIO N WAS FILED. THE A.O. FURTHER OBSERVED THAT HE ASSESSEE HAD NOT SUBMITTED EVEN PAN OF SUCH DEVELOPER AND THEREFORE, IT WAS HELD THAT GENUINENE SS OF RECEIPT OF CASH IN THE CASH BOOK WAS NOT VERIFIABLE AND, THEREFORE, HE MADE ADDITION U/S 68 OF THE ACT. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) OBSERVED THAT FROM THE BOOKS OF ACCOUNTS, IT SEEMS THAT SOME OF CASH DEPOSITED WAS MADE FROM OUTSIDE DEHRADUN I.E. DELHI , MEERUT, LUCKNOW, MUZAFFARNAGAR ETC AND MOREOVER HE OBSERVED THAT BES IDES CASH DEPOSITS, THERE WERE RECEIPTS OF CHEQUE DEPOSITS ALSO AND ASS ESSEE HAD AGREED BEFORE LD. CIT(A) THAT HE WAS WORKING AS A CIVIL CONTRACTO R. LD. CIT(A) FURTHER OBSERVED THAT THERE WERE TRANSACTIONS TO THE TUNE O F RS.2.53 CRORES IN THE BANK ACCOUNT OF PNB AND IDBI AND THEREFORE, HE HELD THAT THE CONTENTION OF ASSESSEE THAT THE MONEY WAS RECEIVED FROM M/S. NANA K BUILDERS AND DEVELOPERS WAS UNSUBSTANTIATED AND HE HELD THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS AND ESTIMATED BUSINESS AS CIVIL CON TRACTOR PROFITS @ 5% OF TOTAL RECEIPTS. THE OPERATIVE PORTION OF LD. CIT(A )S ORDER IS REPRODUCED BELOW: 1.6 AS NOTED ABOVE, MONEY WAS COMING MOSTLY FROM OUTSIDE DEHRADUN AND IT WAS BE WITHDRAWN AND APPLIED AT DEH RADUN. THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION ABOUT TH IS. IN VIEW OF THIS, IT CANNOT BE SAID THAT THE ASSESSEE WAS WITHDRAWING CASH AMOUNT FORM HIS BANK ACCOUNTS AND DEPOSITING IT BACK IN THE SAM E AND, FOR THAT ITA NO.6313/DEL/2012 3 REASON, THE BENEFIT OF PEAK BALANCE OF CASH DEPOSIT CANNOT BE GIVEN TO HIM. CONSIDERING THE NATURE OF THE FUND- FLOW, IT I S HELD THAT THAT THE ENTIRE AMOUNT DEPOSITED IN HIS BANK ACCOUNT REPRESE NTED HIS BUSINESS RECEIPT. THE AMOUNT WITHDRAWN BY HIM FROM THE BANK ACCOUNT MAY BE ACCEPTED TO PARTLY REPRESENT HIS BUSINESS EXPENDITU RE. SINCE THE CLOSING BALANCE OF THE BANK ACCOUNTS WAS NOMINAL AN D THERE IS NOTHING ON RECORD TO SUGGEST THAT HE HAD ACQUIRED A SSETS OUT OF THE AMOUNT WITHDRAWN FROM HIS BANK ACCOUNT, A RATIONAL METHOD OF ESTIMATING HIS INCOME WOULD BE TO ESTIMATE HIS NET PROFIT FROM THESE TRANSACTIONS. IN VIEW OF THE MATCHING FUND-FLOW IN HIS BANK ACCOUNTS, THE GROSS TURNOVER OF HIS BUSINESS IS ESTIMATED TO BE 2.5 CRORE AND THE NET PROFIT MAY BE ESTIMATED @5% I.E. RS.12,50,OOOI. THE AO WAS NOT CORRECT IN CONSIDERING ONLY THE CASH DEPOSITS A ND IGNORING THE CASH WITHDRAWALS ALTOGETHER. IN FACT, HE WAS ALSO N OT CORRECT IN IGNORING THE CHEQUE TRANSACTIONS BECAUSE THEIR NATU RE AND SOURCE AS WELL AS THE INCOME COMPONENT EMBEDDED THEREIN WAS E QUALLY IMPORTANT. THE NET PROFIT ESTIMATED ABOVE WOULD TAK E CARE OF THE ASSESSEE'S PAYMENTS SIDE OF THE BANK ACCOUNT 'AS WE LL AS THE INCOME COMPONENT OF THE CHEQUE TRANSACTIONS. THE AO IS ACC ORDINGLY DIRECTED TO REDUCE THE ADDITION TO RS.12,50,000/-. 4. LD. D.R. ARGUED THAT WITHOUT ANY BASIS, LD. CIT( A) ARRIVED AT THE CONCLUSION THAT RECEIPT REPRESENT BUSINESS RECEIPT AND HE ESTIMATED THE PROFITS @ 5%. IT WAS SUBMITTED THAT THE ASSESSEE W AS NOT EVEN MAINTAINING BOOKS OF ACCOUNTS WHICH LD. CIT(A) HAD IGNORED AND THEREFORE, HE SUBMITTED THAT CASE BE REMITTED BACK TO LD. CIT(A) FOR READJUDICATION. 5. WE HAVE HEARD LD. D.R. AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT LD. CIT(A) ON ONE HAND OBSERV ED THAT THERE WAS HEAVY TRANSACTIONS IN THE TWO BANK ACCOUNTS OF THE ASSESS EE AND THE VALUE OF TRANSACTIONS WAS TO THE TUNE OF RS.2.53 CRORES AND WITHOUT LOOKING INTO THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, ESTIMAT ED THE PROFITS @ 5% ON ABOVE RECEIPTS THEREFORE, THE ORDER PASSED BY LD. C IT(A) IS NOT A REASONED ONE AND IS NOT AN SPEAKING ORDER. THEREFORE, IN TH E INTEREST OF JUSTICE, WE ITA NO.6313/DEL/2012 4 REMIT THIS CASE TO THE FILE OF LD. CIT(A) WHO SHOUL D PASS A WELL REASONED AND SPEAKING ORDER. NEEDLESS TO SAY THAT NECESSARY OPP ORTUNITY WILL BE PROVIDED TO THE ASSESSEE OF BEING HEARD. 6. IN VIEW OF ABOVE, APPEAL FILED BY REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JAN., 2015. SD./- SD./- (H. S. SIDHU ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 16 TH JAN., 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 13/1 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 13,14, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 16/1 SR. P S/PS 6 KEPT FOR PRONOUNCEMENT 16/1 SR. PS/PS 7 FILE SENT TO BENCH CLERK 16/1/15 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER