ITO, Faridabad V. Sh. Pawan Kumar Malhotra, Faridabad

ITA 827/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4028 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-04-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: VIVEK SURESH AGGARWAL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.827/DEL/2010 ASSESSMENT YEAR : 2006-07 INCOME-TAX OFFICER, WARD 1 (5), BLOCK 1-B, NEW CGO COMPLEX, NH-IV, FARIDABAD. VS. PAWAN KUMAR MALHOTRA, PROP. M/S NEWMAN ENGG. WORKS, 16/4, MATHURA ROAD, FARIDABAD. PAN : AWYP S 7509N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIVEK SURESH AGGARWAL, ADVOCATE REVENUE BY : SHRI H.K. LAL, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST ORDER OF THE CIT (A) DATED 15 TH JANUARY, 2010 FOR ASSESSMENT YEAR 2006-07. GROUND S OF APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) WAS RIGHT IN LAW AND ON FACTS IN DELETI NG THE ADDITION OF RS.22,25,000/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNEXPLAINED CREDITOR NAMELY M/S NIDHI EN TERPRISES ESPECIALLY WHEN ASSESSEE HAD FAILED TO EXPLAIN THE SAID CREDITOR WHICH RESULTED INTO ADDITION ON ACCOUNT OF UNDISCLOSED INCOME AND DESPITE GRANTING OPPORTUNITIES TO THE AS SESSEE, HE DID NOT FURNISH THE CONFIRMATION AND PRODUCE/FURNIS H THE CURRENT ADDRESS OF THE CREDITOR AS ON THE GIVEN ADD RESS THE PARTY WAS NOT TRACEABLE? 2. THAT THE APPELLANT CRAVES FOR THE PERMISSION T O ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIM E OF ITA NO.827/DEL/2010 2 HEARING OF APPEAL. 2. THE IMPUGNED ASSESSMENT IS FRAMED VIDE ASSESSMEN T ORDER DATED 27 TH NOVEMBER, 2009 PASSED U/S 143(3)/147 OF INCOME-TAX ACT, 1961 (THE ACT). THE REASON FOR REOPENING THE ASSESSMENT PROCEEDINGS WAS INTER ALIA CREDIT IN THE NAME OF M/S NIDHI ENTERPRISES. DURING THE YEAR UND ER CONSIDERATION THE OPENING BALANCE IN THE NAME OF M/S NIDHI ENTERPRISES WAS A SUM OF RS.1,63,45,359/- WHICH REMAINED UNCHANGED UPTO THE END OF THE FINANC IAL YEAR ENDING ON 31 ST MARCH, 2006 RELEVANT FOR THE IMPUGNED ASSESSMENT YE AR. HOWEVER, IN THE NEXT FINANCIAL YEAR I.E., FINANCIAL YEAR ENDING ON 31 ST MARCH, 2007,THE SAID OPENING BALANCE OF RS.1,63,45,359/- WAS REDUCED TO RS.1,41, 20,359/- AND IT WAS CLAIMED BY THE ASSESSEE THAT CERTAIN PAYMENTS WERE MADE TH ROUGH ACCOUNT PAYEE CHEQUES AGGREGATING TO RS.22,25,000/-. THE SAID AM OUNT HAS BEEN ADDED BY THE ASSESSING OFFICER IN THE YEAR UNDER CONSIDERATI ON WITH THE OBSERVATIONS AS CONTAINED IN PARA 4.1 OF THE IMPUGNED ASSESSMENT OR DER WHICH READ AS UNDER:- 4.1 REGARDING ADDITION OF RS.22,25,000/- IN CASE O F NIDHI ENTERPRISES THE ASSESSEE HAS NOT PRODUCED THE CONFI RMATION OF RS.22,25,000/-. THE ASSESSEE WAS ALSO ASKED TO FUR NISH/PRODUCE THIS CURRENT ADDRESS OF CREDITOR AS ON THE GIVEN A DDRESS THE PARTY IS NOT TRACEABLE. HE HAS SHOWN HIS INABILITY TO FURNI SH THE SAID CONFIRMATION AND PRESENT ADDRESS OF THE CREDITOR. HE WAS ASKED TO TAKE MORE TIME BUT HE STATED THAT HE HAS NOTHING M ORE TO SAY IN THIS REGARD AS THE PARTY MIGHT HAVE LEFT THE BUSINE SS. ACCORDINGLY, ADDITION OF RS.22,25,000/- IS MADE TO THE TOTAL INC OME OF ASSESSEE AS THE ASSESSEE COULD NOT EXPLAIN THE SAID CREDITOR . 3. LD. CIT (A) HAS DELETED THE ADDITION ON THE GROU ND THAT DURING THE YEAR UNDER CONSIDERATION NO EVENT HAPPENED AS THE OPENIN G BALANCE OF RS.1,63,45,359/- WAS SIMPLY CARRIED FORWARD TO THE NEXT YEAR AND, THUS, THE ADDITION COULD NOT BE MADE IN THE YEAR UNDER CONSID ERATION AS THE ADVERSE INFERENCE, IF ANY, COULD BE DRAWN IN THAT RESPECT I N THE NEXT YEAR AND IN THE PRESENT YEAR NO ADDITION SHOULD BE MADE AS NO NEW A MOUNT CAME TO THE ASSESSEE AND THE OPENING BALANCE WAS CARRIED FORWAR D TO THE NEXT YEAR IN THE ITA NO.827/DEL/2010 3 NAME OF M/S NIDHI ENTERPRISES. AGAINST SUCH FINDIN GS OF CIT (A) THE DEPARTMENT IS AGGRIEVED, HENCE, IN APPEAL. 4. RELYING UPON THE ASSESSMENT ORDER IT WAS SUBMITT ED BY LD. DR THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING AN ADDITI ON AND THE CIT (A) HAS WRONGLY DELETED THE SAME. 5. ON THE OTHER HAND, LD. AR OF THE ASSESSEE HAS SU BMITTED BEFORE US THE COPY OF THE ACCOUNT IN THE BOOKS OF THE ASSESSEE IN THE NAME OF M/S NIDHI ENTERPRISES AND HE SUBMITTED THAT THE OPENING BALAN CE WAS THE CLOSING BALANCE IN THAT ACCOUNT AND DURING THE YEAR NO OTHER ENTRY WAS THERE. THUS, HE SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER HAS RIGHTLY BEEN DELETED BY THE CIT (A). HE DREW OUR ATTENTION TOWARDS THE STATEME NT OF FACTS AND GROUNDS OF APPEAL FILED BEFORE THE CIT (A) IN WHICH IT IS CLEA RLY STATED THAT THE AMOUNT OF RS.22,25,000/- COULD NOT BE ADDED TO THE INCOME IN THE YEAR UNDER CONSIDERATION AS THE SAME REPRESENTED THE PAYMENT MADE BY THE ASS ESSEE TO THAT CONCERN IN THE PERIOD BETWEEN 01.04.2006 TO 31.03.2007. HE SU BMITTED THAT NOT ONLY SUCH SUBMISSION WAS MADE, BUT IT WAS SUBMITTED THAT THE SAID CONCERN, NAMELY, M/S NIDHI ENTERPRISES, WAS AN EXISTING ASSESSEE HAVING THE PERMANENT ACCOUNT NUMBER AS WELL AS SALES-TAX NO., THE PARTICULARS O F WHICH WERE ALSO GIVEN. THUS, HE PLEADED THAT THE ADDITION HAS RIGHTLY BEEN DELET ED BY THE CIT (A) AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. WE HAVE GONE THROUGH TH E ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF THE CIT (A). WE HA VE ALSO GONE THROUGH THE COPY OF ACCOUNTS SUBMITTED BY THE ASSESSEE IN THE NAME O F M/S NIDHI ENTERPRISES. THE OPENING BALANCE OF RS. 1,63,45,359/- REMAINED U NCHANGED FROM THE YEAR UNDER CONSIDERATION. THERE BEING NO ENTRY EITHER O F RECEIPT OR PAYMENT, THE IMPUGNED AMOUNT COULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE AS THE RELEVANCE OF THE SAME, IF ANY, IS FOR THE NEXT FINA NCIAL YEAR AND WE SEE NO ITA NO.827/DEL/2010 4 INFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH IT HAS BEEN HELD THAT THE ADDITION WAS UNCALLED FOR IN THE YEAR UNDER CONSIDERATION. WE DECLINE TO INTERFERE AND THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. . THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.20 10. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30.04.2010. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES