Ranjiv Kumar, New Delhi V. ITO, ward-28(4), New Delhi

ITA 788/DEL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0393 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; TDS; Set aside
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: SMC-2 NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.788/DEL/2020 ASSESSMENT YEAR: 2009-10 SH. RANJIV KUMAR, A8-B, FRIENDS COLONY EAST, NEW DELHI, VS. ITO, WARD-28(4), NEW DELHI PAN :AFAPK1184Q (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 25/10/2019 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-10, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2009-10 RAISING FOLLOWING GROUNDS: 1. THAT THE ID. CIT(A) HAD ERRED ON FACTS AND UNDE R THE LAW IN NOT ADMITTING THE ADDITIONAL EVIDENCE AS FILED BEFORE H IM; AND ACCEPTING THE ASSESSING OFFICER'S VERSION IN REPORT SAYING THAT NO DOCUMENTARY EVIDENCES WERE SUBMITTED.. 2. THAT THE PROVISIONS OF SECTION 147/148 OF THE I .T. ACT WERE NOT APPLICABLE TO THE FACTS OF ASSESSEE'S CASE AND THER EFORE, THE ISSUE APPELLANT BY SH. RISHI K.S. GAUTAM, ADV. RESPONDENT BY SH. R.K. GUPTA, SR. DR DATE OF HEARING 01.07.2021 DATE OF PRONOUNCEMENT 16.07.2021 2 ITA NO.788/DEL/2020 OF NOTICE U/S 147/148 WAS ILLEGAL AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER AS PASSED U/S 147/143(3) IS UNLAWFUL AND UNJUST AND THEREFORE THE SAME DESERVED TO BE ANNULLED/CANCELLED. 3. THAT WITHOUT PREJUDICE TO GROUND NO.2 ABOVE, NO JUSTIFICATION SUBSISTED ON THE PART OF THE LD. AO IN MAKING AN AD DITIONS AGGREGATING AT RS.9,20,984/- U/S 68 OF THE I.T. ACT ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDITS AND THE SAME OUGHT TO HAVE BEEN DELETED BY THE LD. CIT(A) KEEPING IN VIEW THE SUBMISSIONS MADE BEFORE HIM WERE SUPPORTED BY DOCUMENTARY EVIDE NCE AND ALSO IN VIEW OF THE JUDICIAL PRONOUNCEMENTS. 4. THAT WITHOUT PREJUDICE TO GROUND NO. 3 ABOVE, TH E ADDITIONS AGGREGATING AT RS.9,20,984/- TOWARDS THE ASSESSABLE INCOME OF THE ASSESSEE IS NOT THE AMOUNT BELONGING TO ASSESSE E AS THE SAME WAS TAXES LIKE VAT AND TDS PAYABLE BY HIS EMPL OYER TO THE GOVERNMENT, DEPOSITED IN HIS ACCOUNT TO ONLY FACILI TATE THE PAYMENT OF TAXES IN TIME AND TO AVOID, WITHDRAWALS BY OTHER PARTIES BEFORE CLEARING OF TAX PAYMENTS. 5. VARIOUS OBSERVATIONS MADE BY THE ASSESSING AUTHO RITY IN HIS RESPECTIVE ORDER IS EITHER INCORRECT OR UNTENABLE. DETAILED WRITTEN SUBMISSIONS ALONG-WITH THE PAPERS FILED BEFORE THE LD. CIT(A) AND THE ARGUMENTS ADVANCED BY THE COUNSEL HAD NOT BEEN APPRECIATED PROPERLY OR HAD BEEN IGNORED. 6. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, A MEND / MODIFY THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED ITS REGULAR RETURN OF INCOME FOR THE YEAR UNDER CONSIDE RATION ON 08/02/2010 DECLARING TOTAL INCOME OF RS.2,79,066. IN VIEW OF INFORMATION OF CASH DEPOSIT OF 12,00,050/- IN FINANCIAL YEAR 2008-09 IN THE SAVING BANK ACCOUNT OF ASSESSEE MAIN TAINED WITH STATE BANK OF PATIALA, THE ASSESSING OFFICER REOPEN ED THE ASSESSMENT BY WAY OF ISSUE OF A NOTICE DATED 21/03/ 2016 UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED PART REPLIES IN HIS LETTER DATED 19/12/2016 AND 22/12/2016, HOWE VER, SAME WAS NOT FOUND BY THE ASSESSING OFFICER AS SUPPORTED BY ANY DOCUMENTARY EVIDENCE AND, THEREFORE, HE HELD THE CA SH DEPOSIT OF 3 ITA NO.788/DEL/2020 12,00,050/- AS UNEXPLAINED INCOME OF THE ASSESSEE AND AFTER REDUCING THE INCOME DECLARED, MADE ADDITION OF 9,20,984/-. THE ASSESSEE FILED ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A), WHO CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER . THE LD. CIT(A) CALLED FOR REJOINDER OF THE ASSESSEE ON THE REMAND REPORT OF THE ASSESSING OFFICER, HOWEVER, IN VIEW OF NO COMPL IANCE BY THE ASSESSEE, THE LD. CIT(A) UPHELD THE FINDING OF THE LEARNED ASSESSING OFFICER OBSERVING AS UNDER: 6.15 ON THE BASIS OF ABOVE DISCUSSION CONSIDERING THE RATIO OF VARIOUS JUDICIAL PRONOUNCEMENTS, IT CAN BE CONCLUDE D THAT IT IS NECESSARY FOR THE APPELLANT TO PROVE PRIMA FACIE TH E TRANSACTIONS WHICH RESULT IN CREDIT IN HIS BANK ACCOUNTS. THESE THINGS MUST BE PROVED PRIMA FACIE BY THE APPELLANT AND ONLY AFTER THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORE SAID, THE ONUS SHIFTS ON THE DEPARTMENT, IN THE PRESENT CASE, THE EXPLANATION GIVEN BY THE APPELLANT IS NOT FOUND TO BE SATISFACTORY AN D PLAUSIBLE FOR THE REASONS MENTIONED BY THE AO IN HIS REMAND REPORT TH AT THE EXPLANATION IS NOT SATISFACTORY SINCE IN THE AFFIDA VITS FILED BY THE PARTNERS OF THE FIRM THEY HAVE AFFIRMED THAT THE CA SH WAS PAID TO THE APPELLANT FOR THE PURPOSE OF MAKING PAYMENT TOWARDS SALES TAX/VAT BUT OUT OF THE TOTAL CASH DEPOSITED IN THE APPELLANTS BANK ACCOUNT OF RS. 12,00,050/-, ONLY AN AMOUNT OF RS.3, 21,621/- WAS FOUND TO BE UTILIZED FOR THE ABOVE PURPOSE. I AM AL SO INCLINED TO AGREE WITH THE OBSERVATION OF THE AO THAT IF THE FI RM HAD CASH AVAILABLE WITH IT WHY THE SAME HAS NOT BEEN UTILIZE D FOR MAKING PAYMENT DIRECTLY TOWARDS VAT/SALES TAX INSTEAD OF D EPOSITING IT IN THE APPELLANTS BANK ACCOUNT. FURTHER, THE CONTENTS OF THE AFFIDAVIT OF THE PARTNERS OF THE FIRM THAT DURING THE FY 2008-09 FIRM WAS FACING FINANCIAL PROBLEM DUE TO LOW SALES, HIGH RENT AND W ORKING CAPITAL SHORTAGE AND THAT THE SUPPLIERS WERE GIVEN POST-DAT ED CHEQUES AGAINST THEIR SUPPLIES AND DUE TO FINANCIAL CRUNCH, THE VAT PAYMENT CHALLANS WERE DISHONORED DUE TO LOW SALES RESULTING LOWER BALANCE IN THE BANK AND SUPPLIERS USED TO PRESENT CHEQUES W ITHOUT INFORMATION REMAINED UN-VERIFIED IN THE ABSENCE OF ANY CORROBORATIVE DOCUMENTARY EVIDENCE. NO PLAUSIBLE REASON HAS BEEN EXPLAINED THAT IN SPITE OF HAVING AVAILABILITY OF CASH WITH THE FI RM, THE SAME HAS NOT BEEN UTILIZED DIRECTLY BY THE FIRM FOR MAKING PAYME NT TOWARDS VAT/CASH. CONSIDERING THESE FACTS, THE AFFIDAVITS F ILED BY THE PARTNERS, THE BASIS ON WHICH APPELLANT WAS TRYING T O EXPLAIN THE SOURCE OF CASH DEPOSIT IS HELD TO BE SELF-SERVING I N NATURE IN COLLUSION WITH THE APPELLANT THUS, IN VIEW OF THE ABOVE DISCU SSION AND RATIO OF JUDICIAL PRONOUNCEMENTS, IT IS HELD THAT APPELLANT HAS MISERABLY 4 ITA NO.788/DEL/2020 FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSITS OF RS . 12,00,050/- IN THE ABOVE MENTIONED BANK ACCOUNT BOTH DURING ASSESS MENT AND AT APPELLATE STAGE FOR WHICH SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE APPELLANT. ACCORDINGLY, IT IS HELD THAT NO INTE RFERENCE IS CALLED FOR TO THE ORDER PASSED BY THE ASSESSING OFFICER MAKING ABOVE ADDITION TREATING THE SAME UNEXPLAINED CASH CREDIT. THE GROU NDS OF APPEAL TAKEN BY THE APPELLANT ARE HELD TO BE DEVOID OF ANY MERIT AND STAND DISMISSED. 2.1 AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. BOTH THE PARTIES APPEARED BEFORE US THROUGH VIDEO CONFERENCING FACILITY. 4. AT THE OUTSET, THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT LEARNED CIT(A) PASSED THE IMPUGNED ORDER WITHO UT TAKING INTO CONSIDERATION REJOINDER/EXPLANATION OF THE ASS ESSEE ON THE REMAND REPORT OF THE ASSESSING OFFICER. THE LEARNED COUNSEL SUBMITTED THAT DUE TO SOME PERSONAL DIFFICULTIES, T HE ASSESSEE COULD NOT RESPOND TO THE REMAND REPORT BY THE ASSES SING OFFICER AND NOW THE ASSESSEE IS WILLING TO FILE ITS REJOIND ER AND, THEREFORE, HE REQUESTED THAT THE MATTER MAY BE SENT BACK TO TH E FILE OF THE LD. CIT(A) FOR CONSIDERING THE EXPLANATION OF THE A SSESSEE AND ADJUDICATE THE MATTER IN ACCORDANCE WITH LAW. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE OR DER OF THE LEARNED CIT(A) AND SUBMITTED THAT SUFFICIENT OP PORTUNITY WAS GRANTED TO THE ASSESSEE FOR REJOINDER ON THE REMAND REPORT OF THE ASSESSING OFFICER, HOWEVER, LOOKING TO THE NON-COM PLIANCE ON THE PART OF THE ASSESSEE, THE LEARNED CIT(A) IS JUSTIFI ED IN DECIDING THE APPEAL ON THE BASIS OF THE MATERIAL AVAILABLE BEFOR E HIM. 6. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. WE FIND 5 ITA NO.788/DEL/2020 THAT THE LEARNED CIT(A) IN PARA 6.6 OF THE IMPUGNED ORDER HAS MENTIONED THE FACT OF CALLING REJOINDER FROM THE AS SESSEE ON THE REMAND REPORT. THE RELEVANT PART OF THE ORDER OF TH E LD. CIT(A) IS REPRODUCED AS UNDER: 6.6 THE ABOVE REMAND REPORT WAS CONFRONTED TO THE APPELLANT THROUGH HIS AR WHICH WAS RECEIVED IN PERSON TO SUBM IT THE REJOINDER ON THE ABOVE REMAND REPORT CONTAINING THE ABOVE OBS ERVATION CHALLENGING THE GENUINENESS OF THE CLAIM/EXPLANATIO N GIVEN BY THE APPELLANT TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT . IN THIS CONNECTION, IT IS PERTINENT TO MENTION HERE THAT ON 06/08/2019, A LETTER HAS BEEN RECEIVED FROM THE AR OF THE APPELLA NT SEEKING ADJOURNMENT, WHICH WAS GRANTED TILL 27/08/2019. AGA IN ON 27/08/2019, ADJOURNMENT HAS BEEN SOUGHT BY LD. AR A ND ON HIS REQUEST, HEARING OF THE CASE WAS ADJOURNED TO 25/09 /2019. HOWEVER, NO COMPLIANCE WAS MADE ON 25/09/2019 AND A GAIN ADJOURNMENT WAS SOUGHT BY LD. AR AND HEARING OF THE CASE WAS ADJOURNED TO 21/10/2019. THE PROCEEDINGS AGAIN REMA INED UN- COMPLIED WITH ON 21/10/2019 AND ADJOURNMENT HAS BEE N SOUGHT BY ANOTHER AR OF THE APPELLANT, WHICH HAS BEEN REFUSED CONSIDERING VARIOUS OPPORTUNITIES GRANTED EARLIER TO THE APPELL ANT, AS MENTIONED ABOVE. THEREFORE, I HAVE NO OTHER OPTION BUT TO COM PLETE THE APPELLATE PROCEEDINGS ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD RELYING ON THE RATIO OF FOLLOWING JUDICIAL PRONOUNCEMENTS: 6.1 WE FIND THAT THE ASSESSEE WAS GIVEN OPPORTUNITY TO FILE THE REJOINDER, HOWEVER, THE ASSESSEE SOUGHT ADJOURNMENT AND FINALLY DID NOT COMPLY. HOWEVER, BEFORE US, THE LEARNED COU NSEL OF THE ASSESSEE HAS EXPRESSED WILLINGNESS OF THE ASSESSEE TO FILE THE REJOINDER IN APPEAL BEFORE THE LEARNED CIT(A). IN V IEW OF THE UNDERTAKING GIVEN BY THE LEARNED COUNSEL OF THE ASS ESSEE, WE ARE OF THE OPINION, THAT ONE MORE OPPORTUNITY MAY BE PR OVIDED TO THE ASSESSEE. IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN THE INTEREST OF THE SUBSTANTIAL JUSTICE, WE SET ASIDE T HE ORDER OF THE LEARNED CIT(A) ON THE ISSUE-IN-DISPUTE AND RESTORE THE MATTER BACK TO HIM FOR DECIDING AFRESH AFTER TAKING INTO C ONSIDERATION 6 ITA NO.788/DEL/2020 REJOINDER OF THE ASSESSEE ON THE REMAND REPORT OF T HE ASSESSING OFFICER. IT IS NEEDLESS TO MENTION THAT BOTH THE PA RTIES, I.E., THE ASSESSEE AS WELL AS THE ASSESSING OFFICER, SHOULD B E GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATIST ICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2021. SD/- SD/- (KUL BHARAT) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH JULY, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI