Sh. Vijay Bhatnagar, New Delhi V. ITO, New Delhi

ITA 6704/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3754 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 30-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Income from undisclosed sources; Principle of natural justice; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND. SH. KULDIP SINGH, JUDICIAL MEMBER ITA NO.6704/DEL/2016 ASSESSMENT YEAR: 2011-12 SH. VIJAY BHATNAGAR 57, PRATAP NAGAR, JAIN ROAD, NEW DELHI-110064 PAN NO. AEXPB2221H VS. ITO ERSTWHILE WARD 46 (1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. VED JAIN, CA RESPONDENT BY SH. S. S. RANA, CIT DR DATE OF HEARING: 25/11/2019 DATE OF PRONOUNCEMENT: 28/11/2019 ORDER PER R.K PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE EXPARTE ORDER DATED 02.11.2016 OF THE CIT(A)-21, NE W DELHI RELATING TO A.Y. 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 29.03. 2012 DECLARING TOTAL INCOME OF RS.2,50,585/-. THE AO COMPLETED THE ASSESSMENT U/S. 143 (3) ON 24.03.2014 DETERMINING THE TOTAL IN COME OF THE ASSESSEE AT RS.4,55,34,030/- WHEREIN HE MADE (I) AD DITION OF RS.71,95,700/- ON ACCOUNT OF CASH DEPOSIT IN HIS BA NK ACCOUNT AS INCOME FROM UNDISCLOSED SOURCES AND (II) ADDITIO N OF PAGE | 2 RS.3,80,06,080/- ON ACCOUNT OF INCOME FROM UNDISCLO SED SOURCES BEING PROFIT @ 8% ON THE VARIOUS AMOUNTS CREDITED I N THE BANK ACCOUNT OF THE ASSESSEE EXCEPT CASH DEPOSITS. SINCE NONE APPEARED BEFORE THE CIT(A) DESPITE REPEATED OPPORTU NITIES GRANTED BY HIM, THE LD. CIT(A) IN HIS EXPARTE ORDER DATED 0 2.11.2016 UPHELD THE VARIOUS ADDITIONS MADE BY THE AO. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [ CIT( A) ] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING PROPER AND ADEQUATE OPPORTUNITY TO THE ASSESSEE TO REPRESENT I TS CASE AND IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. (II) THAT THE NON-APPEARANCE BEFORE THE CIT(A) WAS ON ACCOUNT OF REASONS BEYOND THE CONTROL OF THE ASSESSEE. 3. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING ADDITI ON OF RS.3,80,06,080/- MADE BY THE AO AS INCOME EARNED BY THE ASSESSEE BY APPLY ING A PRESUMPTIVE RATE OF 8% ON THE ASSUMED TURNOVER OF RS.47,50,76,011/-. (II) THAT THE ABOVE SAID INFERENCE WAS DRAWN BY THE AO IN UTTER DISREGARD TO THE ACTUAL FACTS OF THE CASE AND THE EXPLANATION AN D EVIDENCES SUBMITTED BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION. (III) THAT THE ABOVE SAID ADDITION IS WITHOUT ANY BASIS AND WAS MADE MISINTERPRETING THE FACTS OF THE CASE. 4(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS.1, 95,700/- ON ACCOUNT OF THE CASH DEPOSIT IN THE BANK ACCOUNT MADE BY THE AO AS INCOME FROM UNDISCLOSED SOURCE. PAGE | 3 (II) THAT THE ABOVE SAID ADDITION WAS MADE IGNORING THE EXPLANATION AND EVIDENCES SUBMITTED BY THE ASSESSEE THAT THE CASH D EPOSIT REPRESENTS EXACTLY THE SAME AMOUNT OF CASH WITHDRAWN FROM ANOTHER BANK ACC OUNT ON THE SAME DATE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DRAWING ADVERSE INFERENCE ON THE BASIS OF INFORMATION AND MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE WITHOUT PROVIDING A COPY OF THE SAME AND AN OPPORTU NITY TO REBUT THE SAME AS STATUTORILY REQUIRED UNDER SECTION 142(3) OF THE AC T. 6(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER ARE OTHERWISE UNTENABLE IN THE LAW APPLYING THE REAL INCOME THEORY. (II) THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN C ONFIRMING SUCH HUGE ADDITION WITHOUT THERE BEING ANY IOTA OF EVIDENCE T HAT THE ASSESSEE HAS EARNED SO MUCH INCOME. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE ASSESSEE OWNS VARIOUS BANK ACCOUNTS AND TH E AMOUNTS TRANSFERRED FROM /CREDITED IN THE BANK ACCOUNT WERE INFACT TRANSFERRED FROM HIS OWN BANK ACCOUNTS MAINTAINED W ITH OTHER BRANCHES / BANKS. THEREFORE, THE CIT(A) WAS NOT JU STIFIED IN CONFIRMING THE ADDITIONS MADE BY THE AO. HE SUBMITT ED THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO OR THE CIT(A) AS CASE MAY BE BY EXPLAINING EACH AND EVERY DEPOSIT IN THE BANK ACCOUNT. 5. THE LD. DR ON THE OTHER HAND STRONGLY OPPOSED TH E ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSES SEE AND SUBMITTED THAT LD. CIT(A) HAS GIVEN ENOUGH OPPORTUN ITIES TO THE PAGE | 4 ASSESSEE TO SUBSTANTIATE HIS CASE. THEREFORE, THE MATTER NEED NOT BE SET ASIDE AND SHOULD BE DECIDED HERE ITSELF BY D ISMISSING THE GROUNDS RAISED BY THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE A O IN THE INSTANT CASE MADE ADDITION OF RS.71,95,700/- BEING THE AMOU NT OF CASH DEPOSIT IN THE BANK ACCOUNT AS INCOME FROM OTHER SO URCES. FURTHER THE AO MADE ADDITION OF RS.3,80,06,080/- BY ESTIMATING THE PROFIT @ 8% ON THE VARIOUS CREDIT ENTRIES APPEA RING IN THE BANK ACCOUNT OTHER THAN CASH DEPOSITS. IT IS THE S UBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(A ) WITHOUT GOING THROUGH THE DETAILS ALREADY FILED BEFORE THE AO HAS SUSTAINED THE ADDITION SO MADE. IT IS ALSO HIS SUBMISSION THAT TH E VARIOUS CREDIT ENTRIES APPEARING IN THE BANK ACCOUNTS ARE INFACT T RANSFER ENTRIES FROM THE OWN BANK ACCOUNT OF THE ASSESSEE MAINTAINE D WITH OTHER BANKS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY, HE IS IN A POSITION TO S UBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF THE AO OR CIT(A) RE GARDING CASH DEPOSITS AS WELL AS CHEQUE DEPOSITS IN THE BANK ACC OUNTS MAINTAINED BY THE ASSESSEE. CONSIDERING THE TOTALIT Y OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRE CTION TO GRANT ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE I TS CASE AND DECIDE THE ISSUE AS PER FACT AND LAW. WE HOLD AND D IRECT PAGE | 5 ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE AR E ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2019. SD/- SD/- (KULDIP SINGH) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:- 28.11.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 26.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.11.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 26.11.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 26.11.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 28.11.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 28.11.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.11.2019 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER