Satish Aroar, Delhi V. ITO, Ward- 67(2), New Delhi

ITA 7063/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2330 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard; Peak credit; Reason to believe; TDS; Set aside
• Section: 69A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: SMC-1 NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.7063/DEL./2018 ASSESSMENT YEAR: 2010-11 SH. SATISH ARORA, C-456, VIKAS PURI, NEW DELHI VS. ITO, WARD-67(2), NEW DELHI PAN :AAAPA0285D (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER DATED 30/08/2018 PASSED BY THE LEARNED CIT(APPEALS) -21, NEW DELHI [IN SHORT THE LEARNED CIT(A)] FOR ASSESSMEN T YEAR 2010-11 RAISING FOLLOWING GROUNDS: 1. LD. CIT(A) ERRED IN FACTS AND IN LAW IN CONFIRM ING ORDER PASSED BY LD. ASSESSING OFFICER IN COMPLETING ASSESSMENT AS I NDIVIDUAL WHEREAS RETURN FILED AND BUSINESS DONE IS OF HUF AN D THUS ASSESSMENT FRAMED AS INDIVIDUAL IS BAD IN LAW. 2. CIT(A) MISDIRECTED IN CONFIRMING OBSERVATIONS O F LD. A.O. THAT HUF SHOULD HAVE FORMAL DEED HUF SHOULD HAVE TRADE L ICENCE ARE OPPOSED TO FACTS LAW AND CIRCUMSTANCES OF THE CASE AND APPELLANT BY SH. DHARAMVIR TANEJA, CA RESPONDENT BY SH. R.K. GUPTA, SR. DR DATE OF HEARING 07.06.2021 DATE OF PRONOUNCEMENT 28.06.2021 2 ITA NO.7063/DEL/2018 ASSESSMENT FRAMED IN INDIVIDUAL CAPACITY AS AGAINST HUF IS BAD IN LAW. 3. LD. CIT(A) MISDIRECTED IN OBSERVING APPELLANT F AILED TO ESTABLISH THE GENUINENESS OF HIS CLAIM THAT CASH DEPOSIT PERT AINED TO HUF AS NO DOCUMENTARY EVIDENCE WHEREAS APPELLANT FILED RETURN U/S 44AF. LD. A.O. COMPLETELY IGNORED BUSINESS DONE BY HUF U/S 44AF AND RETURN FILED BY HUF U/S 44AF AT RS.165571 AND COMPLETED ASSESSMENT AS INDIVIDUAL OF RS. 1589570/- TREATING ENTIRE CASH DEPOSITED AS BUSINESS INCOME AS AGAINST INCOME DECLARED U/S 44AF MORE THAN 5%. 4. CASE LAWS ARE NOT APPLICABLE TO THE APPELLANT C ASE AND CONFORMATION OF ENTIRE CASH DEPOSITS AT RS.1326900/ - IS BAD IN FACTS AND IN LAWS WHEREAS HUF DEPOSITED RS. 1329600 AND SIMULTANEOUS WITHDRAWALS OF 1210400 IN PUNJAB NATIO NAL BANK. NET DEPOSIT WAS ONLY 119200/-. LD. CIT (A) IGNORED APPELLANT PLACED ON RECORD INCOME EARNED AT RS. 302460/- U/S 44AF FROM 1985 TO 2010 AND DEPOSIT WAS ONLY 119200/-. 5. ORDER PASSED BY LD. CIT(A) IS BAD IN LAW. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT DURING T HE PERIOD RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, TH E ASSESSEE WAS EMPLOYED WITH INDIAN BANK AND INCOME WAS SHOWN FROM SALARY AND INTEREST. ACCORDING TO THE ASSESSING OFF ICER, AN INFORMATION WAS RECEIVED RELATING TO CASH DEPOSIT I N THE BANK ACCOUNT OF THE ASSESSEE AND THEREAFTER SATISFACTION FOR REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT WAS RECORDED . THE CASE WAS REOPENED IN TERMS OF SECTION 147 OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT) AND NOTICE UNDER SECTION 148 O F THE ACT WAS ISSUED ON 30/03/2017. DURING ASSESSMENT PROCEEDING, THE ASSESSEE CONTESTED THAT CASH DEPOSIT WAS INCOME OF HIS HINDU UNDIVIDED FAMILY (HUF) FROM TRADING IN AUTO PARTS. HOWEVER, THE ASSESSEE FAILED TO SUBSTANTIATE THIS CLAIM WITH DOC UMENTARY EVIDENCE AND THEREFORE THE ASSESSING OFFICER HELD T HE CASH DEPOSIT IN BANK ACCOUNT AS UNEXPLAINED INCOME IN TERMS OF S ECTION 69A OF THE ACT. BEFORE THE LD. CIT(A) ALSO THE ASSESSEE FA ILED TO 3 ITA NO.7063/DEL/2018 SUBSTANTIATE THE CLAIM OF BUSINESS ACTIVITY ALLEGED TO BE CARRIED OUT BY THE HUF AND THEREFORE LD. CIT(A) ALSO UPHELD THE FINDING OF THE ASSESSING OFFICER. 3. BEFORE US, BOTH THE PARTIES APPEARED THROUGH VIDEO - CONFERENCING FACILITY. 4. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED NOT TO PRESS THE CLAIM OF CASH DEPOSIT AS INCOME OF HUF, HOWEVER , HE SUBMITTED THAT PEAK OF CASH DEPOSITS MIGHT BE ADDED IN THE HANDS OF THE ASSESSEE AND MATTER MAY BE RESTORED BA CK TO THE FILE OF THE ASSESSING OFFICER FOR COMPUTATION OF PEAK CR EDIT. THE LEARNED DR THOUGH RELIED ON THE ORDER OF THE LOWER AUTHORITIES, BUT DID NOT SERIOUSLY OBJECT FOR RESTORING THE MATT ER TO THE FILE OF THE ASSESSING OFFICER. 5. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. THE ISSUE IN THE INSTANT CASE IS OF EXPLAINING CASH DEPOSITS IN THE BANK ACCOUNT. BEFORE US, THE LEARNED COUNSEL OF THE ASSE SSEE HAS PLEADED FOR TAKING PEAK OF THE CASH CREDITS APPEARI NG IN THE BANK ACCOUNT OF THE ASSESSEE. IN OUR OPINION, IF THE CAS H WITHDRAWN FROM THE BANK ACCOUNT, HAS BEEN REINVESTED IN THE F ORM OF CASH DEPOSIT, THEN SUCH CLAIM OF THE ASSESSEE OF MAKING ADDITION FOR THE PEAK CREDIT IS JUSTIFIED. SINCE NO STATEMENT OF THE BANK ACCOUNT AND DETAILS OF THE CASH DEPOSITS ARE AVAILA BLE ON RECORD, THEREFORE, WE FEEL IT APPROPRIATE TO SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND RESTORE THIS ISSUE TO THE FILE OF T HE LEARNED ASSESSING OFFICER FOR EXAMINING THE APPLICABILITY O F PEAK CREDIT AND COMPUTATION THEREOF. IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEARD. 4 ITA NO.7063/DEL/2018 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AC CORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE, 2021 SD/- SD/- (KUL BHARAT) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH JUNE, 2021. RK/- (DTDS) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI