Suresh Kumar Gupta , Delhi V. Central Circle-20, Delhi

ITA 660/DEL/2022

AI Insights

The case involves Suresh Kumar Gupta, the appellant, who contested the order of the Commissioner of Income-tax (Appeals)-27, New Delhi, which sustained a protective addition of Rs. 37,02,500 to his income for the assessment year 2016-17. This addition was based on the turnover disclosed under Section 44AD of the Income Tax Act, which the Assessing Officer considered as part of cash deposits post-demonetization. The Tribunal, however, found the addition to be made on a protective basis without substantive evidence and without proper legal provision, leading to the decision to allow the appeal and direct the deletion of the addition.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112805 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2022
• Assessment Year: misc
• Appeal Filed On: 11-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 68; 44AD

Judgement Text

1 ITA no. 660/Del/2022 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 660/DEL/2022 Assessment Year: 2016-17 Suresh Kumar Gupta, C-64, Hans Apartment, East Arjun Nagar, Delhi-110032 PAN- AGEPG8659D Vs ACIT, Central Circle-20, New Delhi. APPELLANT RESPONDENT Assessee represented by None Department represented by: Shri Sumesh Swani, Sr. DR Date of hearing 07.12.2022 Date of pronouncement 13.12.2022 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-27, New Delhi, dated 15.02.2022, pertaining to the assessment year 2016-17. The assessee has raised following grounds of appeal: “That the order of the learned Commissioner of Income tax (Appeals)-27, New Delhi is bad in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income Tax(Appeals)-27, New Delhi failed to appreciate that the order passed by the Assistant Commissioner of Income Tax, Central Circle-20, New Delhi is perverse in 2 ITA no. 660/Del/2022 law and facts and has been passed in a pre-determined and biased manner without considering the submissions, facts and evidences placed on records. 3. The Learned CIT (A)-27, New Delhi was not justified in not appreciating the fact that the assessing officer was not justified in law and facts for making addition of Rs. 37,02,500/- on protective basis which was the turnover for the year under consideration and the appellant had duly disclosed his income @8% on the same within the ambit of Section 44AD of the Act. 4. That the learned CIT (A)-27, New Delhi failed to consider the fact that the protective addition of the turnover achieved during the year was made on surmises and conjectures by presuming that the same was part of the cash deposited in the next year, post demonetization, even without indicating an iota of evidence to the contrary to the facts of the case. 5. Considering the turnover for the year as that u/s 68 of the Act, on protective basis, without any evidence contrary to the facts of the case is not only unjustified but contrary to the intent of legislature and judicial pronouncements. 6. That initiation of the penalty proceedings u/s 271(l)(c) of the Act on the basis of protective addition is not only unjustified but against the judicial pronouncements and intent of the legislation. 7. That the demand created consequent to the assessment/appellate order is highly excessive and un-reasonable in view of the facts submitted in the above grounds and deserves to be deleted. 8. That the above grounds of appeals are independent and without prejudice to one and another. 9. That the appellant craves lease to add, alter, amend or delete any of the grounds of appeal. 2. At the time of hearing no one attended the proceedings on behalf of the assessee. It is seen from the record that on various dates no one has been attending 3 ITA no. 660/Del/2022 the proceedings on behalf of the assessee. The notice of hearing through speed post sent at the address provided in form no. 36 have been returned unserved with the postal remarks “insufficient address”. The assessee has not provided any other address to the Registry. Therefore, the appeal is taken up for hearing in the absence of the assessee and is being decided on the basis of material available on record. 3. The facts giving rise to the present appeal are that in this case the assessee filed his return of income through electronic mode on 20.11.2017 declaring an income of Rs. 2,96,200/-. The case of the assessee was selected for limited scrutiny under CASS. The basis of picking for scrutiny was that the cash deposited during demonetization period was reported as per SFT reporting. The assessee had not filed any return of income for preceding assessment year and current year. In response to the statutory notice learned authorized representative attended the proceedings and stated that the deposit was out of business receipts and to be taxed u/s 44AD. However, the Assessing Officer did not accept this plea of the assessee and proceeded to make addition on protective basis in the assessment year under consideration. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who also sustained the impugned addition. Now the assessee is in appeal before this Tribunal. 4. The learned DR supported the orders of the authorities below. 5. I have heard the learned DR and perused the material available on record. I find that the Assessing Officer in the assessment order has made impugned addition on protective basis only and reserved right to make addition in the assessment year 2017-18. I fail to understand under what provision of law the Assessing Officer has made addition in this year when he himself is stating that 4 ITA no. 660/Del/2022 substantive addition would be made in the assessment year 2017-18. Therefore, in my considered view the impugned addition cannot be sustained. I hold accordingly. The Assessing Officer is hereby directed to delete the addition. 6. The appeal of the assessee is allowed. Order pronounced in open court on 13 th December, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI