Shri Manmeet Singh, Delhi V. ITO, New Delhi

ITA 694/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6856 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: S L DEEPAK
• Keywords: Peak credit; Additional evidence; Assessment record; Condonation of delay
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NOS.694 & 964/DEL/2014 ASSESSMENT YEARS : 2008-09 & 2009-10 MANMEET SINGH, B- 1, HATHI KHANNA, AZAD MARKET, DELHI. VS. ITO, WARD- 39(1), NEW DELHI. PAN : AOPPS 6593 D (APPELLANT) (RESPONDENT) ITA NO.2165/DEL/2016 ASSESSMENT YEAR : 2011-12 MANMEET SINGH, B- 1, HATHI KHANNA, AZAD MARKET, DELHI. VS. ITO, WARD- 39(1), NEW DELHI. PAN : AOPPS 6593 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. L. DEEPAK, CA RESPONDENT BY : SHRI S. K. JAIN, SR.DR DATE OF HEARING : 25-01-2017 DATE OF PRONOUNCEMENT : 31-01-2017 O R D E R PER S.V. MEHROTRA, A.M : THE CAPTIONED THREE APPEALS PREFERRED BY THE SAME A SSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 ITA NO.694/DEL/2014 (A.Y. 2008-09): 2. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 24.12.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-XXVIII, NE W DELHI, U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) RE LATING TO ASSESSMENT YEAR 2008-09. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME DECLARING INCOME OF RS.3,01,206/-. THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.23,74,566/- U/S 144 OF THE ACT BY ASSE SSING OFFICER, INTER- ALIA, OBSERVING AS UNDER :- HOWEVER, ON THE DATE OF HEARING I.E. 16.11.2010 TH ERE WAS NO COMPLIANCE AS NEITHER THE ASSESSEE ATTENDED THE PROCEEDINGS, NOR WAS ANY APPLICATION FOR ADJOURNMENT RECEIVED NOR WERE THE DETAILS/EXPLANATI ON ASKED FOR VIDE NOTICE ISSUED UNDER SECTION 142(1) OF THE INCOME-TAX ACT, 1961 WERE FILED BY THE ASSESSEE. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT THE ASSESSEE IS NON- COOPERATIVE WITH REGARD TO THE COMPLETION OF HIS AS SESSMENT. IN THE CIRCUMSTANCES, I HAVE NO ALTERNATIVE BUT TO COMPLET E THE ASSESSMENT EX PARTE UNDER SECTION 144 OF THE IT ACT, 1961 ON THE BASIS THE INFORMATION AVAILABLE ON RECORD. 4. BEFORE LD. CIT(A), THE ASSESSEE HAD FILED APPLIC ATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 FOR ADMISSION OF ADDI TIONAL EVIDENCE IN THE FORM OF COPY OF INCOME-TAX RETURN, COPY OF BALANCE SHEET, COPY OF BANK STATEMENT WITH NARRATIONS, COPY OF CASH BOOK AND CO PY OF DAILY CASH FLOW STATEMENT, INTER-ALIA, POINTING OUT THAT DOCUMENTARY EVIDENCES COULD NOT B E 3 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 FILED AS THE ASSESSEE WAS BUSY IN CONSTRUCTING HIS HOUSE. LD. CIT(A) REJECTED THE ASSESSEES APPLICATION UNDER RULE 46A OF THE RULES. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE DID NOT GET PROPER OPPORTUNITY TO REPRESENT HIS CASE EITHER BEFORE ASS ESSING OFFICER OR BEFORE LD. CIT(A) AND, THEREFORE, PRAYED THAT ASSESSEE BE PROVIDED WITH REASONABLE OPPORTUNITY TO EXPLAIN HIS CASE. 6. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE RECORD OF THE CASE. ADMITTEDLY, THE AS SESSING OFFICER HAS PASSED THE ORDER U/S 144 AND THE ADDITIONAL EVIDENC E FILED BEFORE LD. CIT(A) UNDER RULE 46A HAS NOT BEEN ADMITTED. UNDER SUCH C IRCUMSTANCES, IT IS EVIDENT THAT THE ASSESSEE DID NOT GET AN OPPORTUNIT Y TO PLEAD HIS CASE BEFORE EITHER OF THE LOWER REVENUE AUTHORITIES AND, THEREF ORE, IN ORDER IMPART SUBSTANTIAL JUSTICE TO ASSESSEE, I SET-ASIDE THE OR DER OF THE LOWER REVENUE AUTHORITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR PASSING THE ASSESSMENT ORDER DE-NOVO. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.694/DEL/2014 IS ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 ITA NO.964/DEL/2014 (A.Y. 2009-10): 8. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 18.12.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-XXVIII, NE W DELHI, U/S 143(3) OF THE ACT RELATING TO ASSESSMENT YEAR 2009-10. 9. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE POIN TED OUT THAT THE APPEAL FILED BY THE ASSESSEE IS TIME BARRED AND THE DELAY IN FILING THE APPEAL BY 353 DAYS WAS CAUSED AS THE IMPUGNED ORDER WAS RECEIVED BY AUTHORIZED REPRESENTATIVE HANDLING THE CASE AND GOT BURIED IN THE VOLUMINOUS RECORD IN HIS OFFICE. IN SUPPORT OF CONDONATION PETITION, TH E ASSESSEE HAS FILED AN AFFIDAVIT ALSO, WHEREIN, FOLLOWING AVERMENTS HAVE B EEN MADE :- 1. THAT THE IMPUGNED CIT(A) ORDER DATED 18.12.2012 FOR ASSESSMENT YEAR 2009-10 WAS SERVED ON 02.01.2013 ACCORDING TO WHICH THE APPEAL BEFORE ITAT WAS DUE TO BE FILED BEFORE 02.03.2013. 2. THAT THE APPEAL UNDER ADJUDICATION WAS FILED ON 19.02.2014 THAT IS LATE BY APPROX 11 AND A HALF MONTHS. 3. THE REASON FOR THE DELAY IN FILING OF APPEAL IS THAT THE IMPUGNED ORDER WAS RECEIVED BY THE AUTHORIZED REPRESENTATIVE (AR) HANDLING THE CASE AND GOT BURIED IN THE VOLUMINOUS RECORD IN HIS OFFICE AND P ROBABLY THE NEGLIGENT STAFF DID NOT MAKE AN EFFORT TO INFORM THE ASSESSEE AND THERE BY ITS TRACK WAS LOST. THE ASSESSEE ENQUIRED FROM THE AR ONLY WHEN HE RECEIVED THE APPELLATE ORDER OF CIT(A)-XXVIII DATED 24.12.2013 FOR THE ASSESSMENT Y EAR 2008-09 AGAINST WHICH THE APPEAL WAS FILED ON 07.02.2014 BEFORE ITAT-BENC H E AS ITA NO.694/DEL/14. THE AR WHEN CHECKED UP THE RECORDS IN HIS OFFICE DI SCOVERED THE IMPUGNED APPELLATE ORDER OF THE LATER YEAR I.E. ASSESSMENT Y EAR 2009-10 PASSED A YEAR AGO. 4. THAT A PETITION OF CONDONATION OF DELAY HAS BEEN FILED WITH HONBLE ITAT ALONG WITH THE APPEAL. 5 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 10. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. I FIND THAT THE DE LAY IN FILING THE APPEAL WAS CAUSED ON ACCOUNT OF PAPERS BEING GOT BURIED IN THE VOLUMINOUS RECORD OF AUTHORIZED REPRESENTATIVE AND, THEREFORE, ASSESSEE SHOULD NOT BE MADE SUFFER. I, ACCORDINGLY, CONDONE THE DELAY IN FILING THE APP EAL. 11. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ERIVED INCOME FROM BUSINESS OF FINANCING OF AUTOS UNDER THE NAME AND S TYLE OF M/S JOGINDER AUTO. HE HAD FILED HIS RETURN DECLARING INCOME OF RS.3,02,137/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) AT A TOTAL INCO ME OF RS.13,16,636/-, INTER-ALIA, MAKING AN ADDITION OF RS.9,79,569/- ON ACCOUNT OF C ASH DEPOSITS IN BANK ACCOUNT, REJECTING THE ASSESSEES EXPLANATI ONS THAT HE HAD DEPOSITED THE CASH AND WITHDRAWN ONLY TO SHOW MORE TRANSACTIO NS SO THAT HE COULD GET A VISA FOR CANADA. LD. CIT(A) DISMISSED THE ASSESS EES APPEAL OBSERVING IN PARAS 3, 4 AND 5, WHICH ARE REPRODUCED HEREUNDER :- 3. I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE SUBMISSIONS OF THE AR OF THE APPELLANT. THE GROUND AGAINST THE ADDITION OF RS.9,79,569/-. THE ASSESSING OFFICER HAS MADE THE SAID ADDITION BECAUSE THERE WERE CASH DEPOSITS. THE EXPLANATION OF THE ASSESSEE THAT THE DEPOSITS WERE MADE AND WITHDRAWN ONLY TO SHOW MORE TRANSACTIONS IN ORDER TO GET VISA FOR CANADA, WAS R EJECTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS REJECTED THE EX PLANATION ALSO FOR THE REASON THAT THERE WERE HUGE CASH DEPOSITS IN PREVIOUS YEAR ALSO. IN APPEAL THE APPELLANT HAS GIVEN SAME EXPLANATION. THERE IS NO JUSTIFICAT ION FOR CASH DEPOSITS FOR GETTING THE SAID VISA. THE APPELLANTS EXPLANATION IS REJECTED AND THE GROUND RAISED IN APPEAL IS DISMISSED. 4. THE GROUND AGAINST THE ADDITION OF RS.11,580/-. THE APPELLANT HAS NOT SHOWN THIS AMOUNT IN HIS RETURN OF INCOME BUT THE S AME WAS CREDITED TO HIS TWO 6 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 BANK ACCOUNTS. THE ADDITION IS CORRECTLY MADE. TH ERE IS NO NEED TO INTERFERE WITH THAT. THE GROUND IS DISMISSED. 5. THE GROUND AGAINST THE ADDITION OF RS.23,350/- C LAIMED UNDER CHAPTER VIA. THE ASSESSING OFFICER HAS MADE THE DISALLOWAN CE BECAUSE THERE WAS NO PROOF IN SUPPORT OF THE CLAIM. THIS IS CORRECTLY M ADE. THE GROUND RAISED IN APPEAL IS DISMISSED. 12. LD. COUNSEL POINTED OUT THAT THE ASSESSING OFFI CER IN HIS ORDER HAS, INTER-ALIA, OBSERVED THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD BEEN PERSUADED TO PAY TAX ON THE PEAK BALANCE AVAIL ABLE IN THE SAVING ACCOUNT. HE REFERRED TO GROUND NO.4 RAISED BEFORE LD. CIT(A), WHICH READS AS UNDER :- 4. THAT THE ORDER IS BAD IN LAW, AS THE AR NEVER A CCEPTED TO PAY TAX ON PEAK BALANCE AVAILABLE IN SAVING ACCOUNT. 13. HE REFERRED TO THE ORDER OF LD. CIT(A) REPRODUC ED ABOVE AND POINTED OUT THAT HE HAS NOT CONSIDERED THIS ASPECT. LD. CO UNSEL SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF ASSESSIN G OFFICER BECAUSE HE HAS NOT CONSIDERED THE ASSESSEES PLEA IN DETAIL. 14. LD. DR SUBMITTED THAT ASSESSEE WAS PROVIDED SUF FICIENT OPPORTUNITY BY BOTH THE REVENUE AUTHORIZES AND, THEREFORE, MATT ER SHOULD NOT BE RESTORED TO LOWER REVENUE AUTHORITIES. 15. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. ADMITTEDLY, LD. CI T(A) HAS NOT CONSIDERED 7 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 GROUND NO.4 RAISED BY ASSESSEE BEFORE HER AND, THER EFORE, IT WOULD BE APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A). THE PLEA OF LD. COUNSEL THAT THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER CANNOT BE ACCEPTED BECAUSE THE ASSESSING OFFICER HA S REJECTED THE ASSESSEES EXPLANATION, INTER-ALIA , OBSERVING THAT ASSESSEE HAD DEPOSITED HUGE CASH I N THE PREVIOUS YEAR ALSO. THE ORDER HAS BEEN PASSED U/S 143(3) AND UNDER SUCH CIRCUMSTANCES, IT IS APPROPRIATE TO RESTORE BACK TH E MATTER TO THE FILE OF LD. CIT(A) FOR PASSING A REASONED ORDER ON ALL THE ISSU ES AS HE HAS SUMMARILY REJECTED THE ASSESSEES SUBMISSIONS. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.964/DEL/2014 IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF AFOREM ENTIONED OBSERVATIONS. ITA NO.2165/DEL/2016 (A.Y. 2011-12): 17. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 03.03.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-20, NEW DE LHI, U/S 143(3) OF THE ACT RELATING TO ASSESSMENT YEAR 2011-12. 18. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,65,910/-. THE ASSES SING OFFICER OBSERVED THAT, AS IN EARLIER YEAR, THE ASSESSEE WAS DOING TH E BUSINESS OF FINANCING AND COMMISSION OF AUTOS (THREE WHEELERS) AS PROPRIETOR OF M/S JOGINDER AUTO. AS PER AIR INFORMATION, THE ASSESSEE HAD DEPOSITED CASH OF RS.12,70,000/- 8 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 AND RS.4,00,000/- IN HIS SAVING BANK ACCOUNT. THE ASSESSEE GAVE THE SAME REASON FOR FREQUENT DEPOSITS AND WITHDRAWALS AS IN EARLIER YEAR VIZ. THAT HE WAS ADVISED BY THE VISA AGENT TO SHOW SOME BANK TRA NSACTIONS FOR VISA PURPOSES. THE ASSESSEE ALSO EXPLAINED THAT CASH DE POSITS OF RS.4,00,000/- AND RS.2,00,000/- DID NOT BELONG TO THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND DETERMINED THE PEAK CREDIT AT RS.7,57,672/- AND ADDED THE SAME TO ASSES SEES INCOME. LD. CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION. 19. LD. COUNSEL REFERRED TO GROUND NO.6 RAISED BEFO RE LD. CIT(A), WHICH READS AS UNDER :- 6. THE CASH DEPOSITED IN THE SAVING ACCOUNT IS BEI NG TRANSFERRED FROM HIS BUSINESS FOR WHICH CASH BOOK IS MAINTAINED. 20. LD. COUNSEL POINTED OUT THAT THE ENTIRE DEPOSIT S IN THE BANK ACCOUNT WERE NOT FROM BUSINESS AND INCLUDED LOANS ALSO WHIC H HAVE NOT BEEN PROPERLY SEGREGATED BY THE ASSESSING OFFICER. HE F URTHER POINTED OUT THAT SOURCE OF CASH DEPOSIT IN SAVINGS BANK ACCOUNT HAS NOT BEEN CORRECTLY APPRECIATED. HE, THEREFORE, SUBMITTED THAT THE MAT TER MAY BE RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR RE-COMPUTING T HE PEAK CREDIT CORRECTLY. 21. LD. DR SUBMITTED THAT ASSESSEE WAS PROVIDED SUF FICIENT OPPORTUNITY TO EXPLAIN HIS CASE. 9 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 22. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THE ASSESSEE VIDE HIS LETTER DATED 04.08.2005 HAD FILED ADDITIONAL GROUND BEFORE LD. CIT(A) WHICH HAS BEEN REPRODUCED AT PAGE 3 AND 4 OF HIS ORDER, WHICH, INTER-ALIA, READS AS UNDER :- THAT I AM HEREBY ENCLOSING THE COPY OF CASH BOOK W HICH CLEARLY SHOWS BEYOND THE REASONABLE DOUBT THAT THE CASH DEPOSITED BY THE ASSESSEE WAS OUT OF CASH IN HAND AVAILABLE IN THE CASH BOOK. THERE IS NO NEGAT IVE BALANCE DURING THE WHOLE YEAR. I ALSO FILED THE COPY OF JUDGMENT OF THE INC OME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI. IN THIS CASE IT WAS HELD THA T NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE ABOUT THE IMPUGNED CASH DEPOSITS AS THIS IS NOT THE CASE OF THE AO THAT THE AMOUNT WITHDRAWN FROM BANK WERE UTILIZED SOMEWHERE ELSE FOR SOME IRRELEVANT PURPOSE. THERE IS NO NEGA TIVE BALANCE AT ANY POINT OF TIME. IT IS NOT THE CASE OF THE AO THAT THE AMOUNT WITHDRAWN WERE UTILIZED ANYWHERE ELSE. IT IS NOT MANDATORY UNDER ANY LAW O F THE LAND THAT INDIVIDUAL HAS TO KEEP HIS SAVING IN THE BANK ACCOUNT ONLY AND AS CASH IN HAND. 23. LD. CIT(A) DID NOT ACCEPT THE ADDITIONAL EVIDEN CE BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE ADDITIONAL GROUND OF APPEAL AS FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS. I AM NOT ABLE TO MAKE OUT ABOUT THE GROUND OF APPEAL THAT THE APPELLANT WANTS TO MAKE. PERHAPS, THE APPELLANT WANT TO FILE ADDITIONAL EVIDENCE. HOWEVER, FROM THE PERUSAL OF THE ASSESSMENT RECORDS IT IS SEEN THAT ASSESSEE WAS GIVEN ADEQUATE OPPORTUNITIES TO FILE EVIDENCES IN FAVOUR OF HIS CLAIMS. HOWEVER, THE APPELLANT HAS NOT AVAILED THE OPPORTUNITY PROVIDED DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, ADDI TIONAL EVIDENCE CANNOT BE ACCEPTED AS PER RULE 46A. 24. THE MAIN CONTENTION OF LD. COUNSEL IS THAT THE PEAK NEEDS TO BE CORRECTLY COMPUTED BY TAKING ONLY THE BUSINESS RECE IPTS AND CORRESPONDING WITHDRAWALS. THEREFORE, IT WOULD BE APPROPRIATE TO AFFORD ONE MORE OPPORTUNITY TO ASSESSEE TO EXPLAIN THE NATURE OF RE CEIPTS IN RESPECTIVE BANK 10 ITA NOS.694 & 964/DEL/2014 ITA NO.2165/DEL/2016 ACCOUNTS. ACCORDINGLY, I RESTORE THIS MATTER TO TH E FILE OF THE ASSESSING OFFICER FOR DE-NOVO ADJUDICATION ON THIS ISSUE. 25. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.2165/DEL/2016 IS ALLOWED FOR STATISTICAL PURPOSES. 26. RESULTANTLY, ALL THE THREE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JANUARY, 2017. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED : 31-01-2017. 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