Dhruv Sachdeva, New Delhi V. ITO, Ward- 49(3), New Delhi

ITA 6914/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4200 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 17-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bad and doubtful debts; Reason to believe
• Section: 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6914/DEL/2017 ASSESSMENT YEAR : 2007-08 DHRUV SACHDEVA, WZ-276, 3 RD FLOOR, G-BLOCK, JAIL ROAD, HARI NAGAR, NEW DELHI. VS. ITO, WARD -49(3), NEW DELHI. PAN : BAVPS3244Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJAN BHATIA, SHRI SUNIL DHAMIJA, CA DEPARTMENT BY : SHRI ARUN KUMAR YADAV, SR.DR DATE OF HEARING : 03-01-2018 DATE OF PRONOUNCEMENT : 03-01-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 12.09.2017 OF CIT(A)- 17, NEW DELHI RELATING TO ASS ESSMENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 31.03.2008 DECLARING TOTAL INCOME OF RS.1,46,260/-. THE CASE WAS REOPENED BY ISSUING OF NOTICE U/S 148 DATED 28.03.2014 ON THE FOLLOWING REASONS :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SH. DHRUV SACHDEVA FOR THE A.Y. 2011-12 IT IS FOUND THAT THE ASSESSEE HAS NOT DECLARED THE TRUE/CORRECT AMOUNT OF TAX DEDUCTED AT SOURCE AND THERE IS HUGE DIFFERE NCE OF TDS CLAIMED AND TDS SHOWN IN 26AS STATEMENT. SIMILARLY ISSUE HAS ALSO BEEN D ETECTED FOR THE A.Y. 2007-08. THE ASSESSEE HAS CLAIMED TDS OF RS.64,332/- ON RECEIPTS OF RS.11,89,074/- WHEREAS AS PER TDS IN 26AS THIS AMOUNT IS 98045/- ON RECEIPT OF 18 ,12,205/-. THEREFORE, FACTS ARE LEADING TO CONCLUSION THAT THE ASSESSEE HAS NOT DEC LARED HIS INCOME/RECEIPTS TO THE 2 ITA NO.6914/DEL/2017 TUNE OF RS.6,23,131/- (18,12,205 11,89,074/-) FOR THE A.Y. 2007-08 AND HAS EVADED TAX LIABILITY ON THE INCOME EARNED DURING THIS PERI OD. THE ABOVE ASPECT ALONG WITH OTHERS NEED TO BE EXAMI NED FOR CORRECT COMPUTATION OF INCOME OF THE ASSESSEE FOR THE F.Y. 2006-07 RELEVAN T TO ASSTT. YEAR 2007-08. THEREFORE, AFTER GOING THROUGH THE INFORMATION AVAI LABLE ON RECORD PAPERS, AIR INFORMATION AGAINST THE ASSESSEE AND HIS INCOME TAX RETURN FOR THE A.Y. 2007-08 AND ALSO KEEPING IN VIEW OF THE FACTS NARRATED ABOVE. I HAVE REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS.6,23,131/- HAS ESCAPED ASSESSME NT. THUS, THE INCOME WHICH HAS ESCAPED ASSESSMENT IS MORE THAN RS.1,00,000/-. 3. SUBSEQUENTLY IN THE ASSESSMENT ORDER, THE ASSESS ING OFFICER DISALLOWED AN AMOUNT OF RS.38,534/- BEING ON 1/5 TH OF TELEPHONE EXPENSES OF RS.1,92,669/- BEING PROBABLE PERSONAL USES. HE FURTHER ADDED AN AMOUNT OF RS.77,774/- CLAIMED BY THE ASSESSEE ON ACCOUNT OF BAD DEBTS DUE TO NON-FURNISHING OF ANY EXPLANATION OR DETAILS IN THIS REGARD. SIMILARLY, THE ASSESSING OFFICER ALSO MADE ADDITION OF RS.6,23,131/- ON ACCOUNT OF DIFFERENCE IN THE RECEIPTS AS PER 26AS BEING RS.18,12,205/- AS PER 26AS AND RECEIPTS DECLA RED BY THE ASSESSEE AT RS.11,89,074/- IN HIS PROFIT & LOSS ACCOUNT. THE E XPLANATION OF THE ASSESSEE THAT THE BOOKS OF ACCOUNT ARE MAINTAINED ON CASH BA SIS AND THE DIFFERENCE AMOUNT OF RS.1,02,804/- HAS BEEN DECLARED IN THE SU BSEQUENT YEAR WAS REJECTED BY THE ASSESSING OFFICER, WHO MADE ADDITION OF RS.6 ,23,131/- ON ACCOUNT OF UNDER-REPORTED INCOME. 4. IN APPEAL, THE LD. CIT(A) SUSTAINED THE ADDITION OF RS.6,23,131/-. SO FAR AS DISALLOWANCE OF TELEPHONE EXPENSES IS CONCERNED, THE LD. CIT(A) RESTRICTED THE SAME TO 5%. HE HOWEVER DID NOT ADJUDICATE THE ISSUE RELATING TO BAD DEBTS. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING VARIOUS GROUNDS. 3 ITA NO.6914/DEL/2017 6. SO FAR AS GROUNDS RELATING TO REOPENING OF THE A SSESSMENT IS CONCERNED, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS THE SAME DUE TO SMALLNESS OF THE AMOUNT. ACCORDINGLY, THE GROUND RELATING TO REOPENING OF AS SESSMENT IS DISMISSED AS NOT PRESSED. 7. SO FAR AS ADDITION OF RS.6,23,131/- IS CONCERNED , THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO PAGE 3 OF THE ORDER OF THE LD. CIT(A) WHEREIN HE HAD GIVEN THE RE-CONCILIATION. HE ALSO DREW OUT ATTENTION TO THE DIFFERENCE OF RS.1,02,804/- WHICH HAS BEEN OFFERED TO TAX IN THE SUBSEQUENT YEAR. 8. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS CONSIDERED ONLY RECEIPT OF RS.11,89,074/- IN PROFIT & LOSS ACCOUNT WHEREAS AS PER PROFIT & LOSS ACCOUNT FILED BY THE ASSESSEE IT SHOWS THAT THE ASSESSEE HAS SHOWN RECEIPT OF RS.14,37,002/-. IT IS NOT UNDERST OOD AS FROM WHERE HE BROUGHT THE RECEIPT OF RS.11,89,074/-. EVEN THE LD. DR COU LD NOT EXPLAIN FROM WHERE THE ASSESSING OFFICER HAS PICKED THE FIGURE. I FIND TH E LD. CIT(A) WITHOUT APPLYING HIS MIND AS MECHANICALLY UPHELD THE ORDER OF THE AS SESSING OFFICER. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE A ND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSING OFFICER SHALL CONSIDER THE SUBMISSIONS MADE BY THE ASSESSEE AND PASS A SPEAKING ORDER ON THIS ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. 4 ITA NO.6914/DEL/2017 9. SO FAR AS GROUND RELATING TO ADDITION OF RS.77,7 74/- IS CONCERNED, I FIND THE LD. CIT(A) HAS NOT ADJUDICATED THE ISSUE. SINC E THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.77,774/- IN THE PROFIT & LOSS ACCOUNT, HE IS ENTITLED TO SUCH BAD DEBT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LTD.. THEREFORE, THIS GROUND BY THE ASSESSEE IS AL LOWED. 10. SO FAR AS DISALLOWANCE OF TELEPHONE EXPENSES IS CONCERNED, I FIND THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS.38,53 4/- BEING 1/5 TH OF THE TELEPHONE EXPENSES BEING PROBABLE PERSONAL USE WHIC H HAS BEEN RESTRICTED BY THE LD. CIT(A) TO 50% OF SUCH EXPENSES. CONSIDERIN G THE TOTALITY OF THE FACTS OF THE CASE AND CONSIDERING THE FACTS THAT CERTAIN FRE E CALLS ARE ALLOWED BY THE TELEPHONE DEPARTMENT, LUMP SUM DISALLOWANCE OF RS.1 0,000/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WILL MEET THE ENDS OF JUSTICE. I HOLD AND DIRECT ACCORDINGLY. THE ISSUE RELATING TO THE TELEPHONE E XPENSES IS ACCORDINGLY PARTLY ALLOWED. 11. SO FAR AS LEVY OF INTEREST U/S 234B AND 234D IS CONCERNED, THE SAME IS MANDATORY AND CONSEQUENTIAL IN NATURE. HOWEVER, I DIRECT THE ASSESSING OFFICER TO VERIFY THE COMPUTATION AND RECTIFY THE ARITHMETI CAL IN ACCURACY, IF ANY. THIS GROUND RAISED BY THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO.6914/DEL/2017 ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 03 RD DAY OF JANUARY, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 03-01-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI