Aniol Munjal, New Delhi V. ITO, Ward-28(2), New Delhi

ITA 7883/DEL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1529 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 11-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJOG KAPOOR
• Keywords: Income from undisclosed sources; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DLEHI BEFORE SHRI G.S. PANNU, HONBLE VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.7883/DEL/2018 ASSESSMENT YEAR: 2015-16 ANIOL MUNJAL, 304, BUILDING NO. 5, PUSA ROAD, KAROL BAGH, NEW DELHI VS. ITO, WARD -28(2), NEW DELHI PAN: ACVPM5574E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.C. YADAV, ADVOCATE RESPONDENT BY: SHRI SANJOG KAPOOR, SR.DR DATE OF HEARING: 03.10.2019 DATE OF ORDER : 12.12.2019 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 28/9/2018 IN APPEAL NO . 240/17-18 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-10, NEW DELHI (LD. CIT(A)) FOR THE ASSESSMENT YEAR 2015-1 6, MR ANIL MUNJAL (THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE ONE FIFTH PARTNER OF THE FIRM NEXTWAVE INDIA WHICH IS ENGAGED IN THE MANUFACTURE OF VARIOUS KINDS OF MEDICINES FOR HUMAN CONSUMPTION SI NCE 2005. ASSESSEE 2 ITA NO.7883/DEL/2018 HAS ALSO BEEN EARNING COMMISSION INCOME ON SELLING OF MEDICAL PRODUCTS, WHICH COMES UNDER THE HEAD PROFIT AND GAINS FROM B USINESS AND PROFESSION. FOR THE ASSESSMENT YEAR 2015-16, HE HA D FILED HIS RETURN OF INCOME ON 1/10/2015, DECLARING AN INCOME OF RS.15,2 6,470/-. ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS, HOWEVER, COMPL ETE BY ORDER DATED 31/12/2017 AT AN INCOME OF RS.4,28,56,891/- BY MAKI NG AN ADDITION OF RS.4,13,30,421/- TOWARDS UNEXPLAINED INCOME. 2.1 AGGRIEVED BY THE SAME ASSESSEE PREFERRED AN APP EAL BEFORE THE LD. CIT(A). ASSESSEE CONTENDED THAT THE CAPITAL WAS NOT SHOWN IN THE INCOME TAX RETURN PRIOR TO THE ASSESSMENT YEAR 2015 -16 AND THEREFORE, THE ASSESSING OFFICER CONSIDERED THE SHARE OF CAPIT AL BALANCE IN NEXT WAVE WHICH WAS RS.2,92,72,915/-AS ON 31/3/2015 AS A CCOUNTED INCOME AND THE REST OF THE CAPITAL OF RS.4,13,30,421/-AS U NACCOUNTED INCOME. ACCORDING TO THE ASSESSEE BEFORE THE LD. CIT(A), TH E CLOSING CAPITAL AS ON 31/3/2015 WAS THE RESULT OF ALL MONEY EARNED BY THE ASSESSEE UPTO 31/3/2015 FROM THE SALARY DERIVED FROM NEXT WAVE IN DIA, PROFIT FROM PERSONAL BUSINESS, SHARE OF PROFIT EARNED FROM NEXT WAVE INDIA AND INCOME FROM OTHER SOURCES, AND FROM THE ABOVE TOTAL INCOME EXPENSES INCURRED BY THE ASSESSEE AND THE DRAWINGS MADE BY H IM FOR INDIVIDUAL PURPOSE UPTO 31/3/2015 WERE DIRECTED TO ARRIVE AT T HE CLOSING CAPITAL BALANCE AS ON 31/3/2015. 2.2 LD. CIT(A), HOWEVER, PASSED A VERY LACONIC ORDE R WHICH READS THAT THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE ASSESSEE WERE DULY CONSIDERED; THAT THE LEARNED ASSESSING OFFICER HAD MENTIONED THE FACTS OF THE CASE IN THE ASSESSMENT ORDER; THAT IT IS NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO, THE ASSESSEE COULD NOT REBUT THE 3 ITA NO.7883/DEL/2018 FINDINGS OF THE ASSESSINGOFFICER; THAT IT IS NOTED THAT THE ASSESSEE HAD NOT BEEN ABLE TO SUBSTANTIATE THE SOURCE OF THE CAPITAL TO THE EXTENT OF RS. 4,13,30,421/-; AND THAT CONSIDERING THESE ADDITION OF RS.4,13,30,421/-WAS CONFIRMED. LD. CIT(A) THEREBY DISMISSED THE APPEAL. 2.3 ASSESSEE IS, THEREFORE, BEFORE US IN THIS APPE AL CONTENDING THAT THE LD. CIT(A) DID NOT ADVERT TO THE FACTS AVERRED BEFORE HIM BY WAY OF ARGUMENTS AND HE FAILED TO CONSIDER THE MATERIAL AV AILABLE ON RECORD TO VERIFY WHETHER BASING ON SUCH MATERIAL THE LEARNED ASSESSING OFFICER REACHED A RIGHT CONCLUSION OR NOT. ACCORDING TO THE LD. AR THE IMPUGNED ORDER DOES NOT SPEAK OUT THE REASONS FOR DISMISSAL OF THE APPEAL EXCEPT STATING THAT BEFORE HIM THE ASSESSEE FAILED TO REBU T THE FINDINGS OF THE ASSESSING OFFICER. ACCORDING TO HIM, IT IS INCUMBEN T UPON THE LD. CIT(A) TO ADVERT TO THE MATERIAL AVAILABLE ON RECORD AND IS O NLY AN APPRAISAL OF SUCH RECORD AND MATERIAL BY WAY OF REASONED ORDER THE LD . CIT(A) HAD TO DISPOSE OF THE APPEAL. 3. LD. DR, PER CONTRA, SUBMITTED THAT AS IS INDICAT ED BY THE IMPUGNED ORDER, THE ASSESSEE DID NOT PRODUCE ANY MATERIAL BE FORE THE LD. CIT(A) AND, THEREFORE, THE LD. CIT(A) IS JUSTIFIED IN OBSE RVING THAT THE ASSESSEE COULD NOT REBUT THE FINDINGS OF THE LEARNED ASSESSI NG OFFICER. HE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. IT COULD BE SEEN FROM THE ASSE SSMENT ORDER THAT THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E DECLARED HIS CAPITAL AT RS. NIL DURING THE FINANCIAL YEAR 2013-14 RELEVA NT TO THE ASSESSMENT YEAR 2014-15 AND DURING THE FINANCIAL YEAR 2014-15 RELEVANT FOR THE 4 ITA NO.7883/DEL/2018 ASSESSMENT YEAR 2015-16 THE ASSESSEE DECLARED A SUB STANTIAL AMOUNT AS PROPRIETORS CAPITAL AMOUNTING TO RS.2,16,78,017/- AS THE OPENING CAPITAL AS ON01/042014 AND RS.2,92,70,915/- AS CLOSING CAPI TAL AS ON 31/3/2015 AS PER SCHEDULE-I (PARTNERS CAPITAL ACCOUNT OF M/S NEXT WAVE (INDIA). BASING ON THIS THE LEARNED ASSESSING OFFICER IMPLIE D THAT NOT ONLY THE ADDITION TO PLACE DURING THE FINANCIAL YEAR 2014-15 BUT THE CAPITAL WAS THERE EVEN BEFORE 2014. HE FURTHER OBSERVED THAT TH E ASSESSEE HAD NOT SHOWN THE FIGURE AGAINST THE PROPRIETORS CAPITAL B EFORE THE ASSESSMENT YEAR 2015-16 AND IN 2015-16 INSTEAD OF SHOWING A CA PITAL OF RS.2,16,78,017/-, THE ASSESSEE HAD SHOWN RS.7,06,0, 336/-FOR WHICH NO EXPLANATION WAS OFFERED BY THE ASSESSEE AS OF THE D ATE OF 31/12/2017. 5. THE ASSESSEE ARGUED BEFORE THE LD. CIT(A) THAT THE CAPITAL WAS NOT SHOWN IN INCOME TAX RETURN PRIOR TO THE ASSESSMENT YEAR 2015-16, THE ASSESSING OFFICER CONSIDERED THE SHARE OF CAPITAL B ALANCE IN NEXT WAVE WHICH WAS RS.2,92,72,915/-AS ON 31/3/2015 AS ACCOUN TED INCOME AND REST OF THE CAPITAL AS UNACCOUNTED INCOME, BUT THE CLOSING CAPITAL AS ON 31/3/2015 WAS THE RESULT OF ALL MONEY EARNED BY THE ASSESSEE TO 31/3/2015 FROM SALARY FROM NEXT WAVE INDIA, PROFIT FROM PERSONAL BUSINESS, SHARE OF PROFIT EARNED FROM NEXT WAVE IND IA AND INCOME FROM OTHER SOURCES AND FROM THIS TOTAL INCOME EXPENSES I NCURRED BY THE ASSESSEE AND THE DRAWINGS MADE BY HIM FOR INDIVIDUA L PURPOSE UPTO 31/3/2015 WERE DEDUCTED TO ARRIVE AT THE CLOSING CA PITAL BALANCE AS ON 31/3/2015. 6. THE OBSERVATIONS OF THE LEARNED ASSESSING OFFICER, THE SUBMISSIONS MADE BY THE ASSESSEE REQUIRES VERIFICATION INTO THE FINANCIALS AND THE MATERIAL IN THE LIGHT OF THE SUBMISSIONS MADE BY TH E ASSESSEE. LD. CIT(A), 5 ITA NO.7883/DEL/2018 HOWEVER, DID NOT ADVERT TO ANY PAPER WHATSOEVER TO REACH THE CONCLUSION THAT THE ASSESSEE FAILED TO REBUT THE FINDINGS OF T HE LEARNED ASSESSING OFFICER. WHEN THE ASSESSEE IS RELYING UPON THE MATE RIAL ALREADY AVAILABLE BEFORE THE LEARNED ASSESSING OFFICER AND MADE CERTA IN SUBMISSIONS, TO REACH A CONCLUSION THE LD. CIT(A) SHOULD HAVE RECOR DED REASONS WITH REFERENCE TO SUCH MATERIAL AVAILABLE ON RECORD AND ON AN APPRAISAL OF THE SAME. IN THE CIRCUMSTANCES WE FIND IT DIFFICULT TO APPRISE APPRECIATE THE IMPUGNED ORDER AS TO ITS CORRECTNESS AND VERACITY, FOR WANT OF REASONS EXPECTED TO BE RECORDED BY THE LD. CIT(A). WE ARE, THEREFORE, IN AGREEMENT WITH THE SUBMISSIONS MADE BY THE LD. AR T HAT THE MATTER REQUIRES TO BE REMANDED TO THE FILE OF THE LD. CIT( A) FOR CONSIDERATION AFRESH AND TO DISPOSE OF BY WAY OF A SPEAKING ORDER BY DULYRECORDING THE REASONS. 7. WITH THIS VIEW OF THE MATTER, WE SET ASIDE THE I MPUGNED ORDER AND REMAND THE MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH DISPOSAL BY RECORDING REASONS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN OPEN COURT ON 12 TH DECEMBER, 2019. SD/- SD/- (G.S. PANNU) (K. NARASIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 12.12.2019 RK