Rajender Kumar Budhiraja, New Delhi V. ITO ward-46(4), New Delhi

ITA 9172/DEL/2019

AI Insights

The case revolves around an appeal by Rajender Kumar Budhiraja against the order of the CIT(A)-16, New Delhi, which sustained an addition of Rs. 1,40,00,000 made by the Assessing Officer under section 68 of the Income Tax Act, 1961. The addition was initially made on the grounds that the assessee failed to prove the genuineness and creditworthiness of M/s Marvelous Beauty Pvt. Ltd., from whom the amount was received. The assessee argued that the amount was an advance for a property sale, which was later returned as the deal did not materialize. The Tribunal, after examining the documents and arguments presented, concluded that the assessee had adequately substantiated the transaction and thus allowed the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131841 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 26-11-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘F’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 9172/Del/2019 : Asstt. Year : 2016-17 Rajender Kumar Budhiraja, 123, Kamla Market, New Delhi-110002 Vs Income Tax Officer, Ward-46(4), New Delhi-110001 (APPELLANT) (RESPONDENT) PAN No. ABAPK1744Q Assessee by : Smt. Rano Jain, Adv. & Ms. Mansi Jain, Adv. Revenue by : Sh. K. K. Mishra, Sr. DR Date of Hearing: 07.12.2022 Date of Pronouncement: 01.03.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-16, New Delhi dated 11.10.2019. 2. Following grounds have been raised by the assessee: “1. On the facts and circumstances of the case, the order passed by the Learned CIT(A) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in sustaining the addition made by the AO of Rs.1,40,00,000/- under section 68 of the Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the order passed by the A.O., despite the fact that the A.O. has no jurisdiction to travel ITA No. 9172/Del/2019 Rajender Kumar Budhiraja 2 beyond the scope of Limited Scrutiny, without getting the prior approval of the prescribed authority. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the assessee bringing all material and evidences on record to prove the source of amount. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the fact that the assessee being an individual, no books of accounts are maintained and as such no addition under section 68 is called for.” 3. The only issue involved in the case is an addition of Rs.1,40,00,000/- made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 which has been confirmed by the ld. CIT(A). 4. Facts pertinent to the adjudication of this issue are that while verifying the sources of investments made by the assessee during the year under consideration, the assessee explained to the AO that an amount of Rs.1,40,00,000/- was received from M/s Marvelous Beauty Pvt. Ltd. during the year under consideration. To prove this fact, the assessee filed the confirmation from M/s Marvelous Beauty Pvt. Ltd., the ITR of M/s Marvelous Beauty Pvt. Ltd. and also the bank statement explaining the corresponding loan entry. The AO requisitioned the assessee to prove the genuineness and creditworthiness of M/s Marvelous Beauty Pvt. Ltd., the loaner. The assessee submitted all the relevant documents through E-mail. However, the AO made the addition on the grounds that the assessee has not replied to notice dated 22.12.2018. ITA No. 9172/Del/2019 Rajender Kumar Budhiraja 3 5. Before the ld. CIT(A), the assessee filed application under Rule 46A and also submitted that all these documents were duly filed before the AO and also submitted that these documents if not treated not to have been submitted before the AO, the same may be considered as additional evidences. 6. The ld. CIT(A) called for the remand report from the AO who stated that the sale agreement was not provided by the assessee and hence the receipts from the M/s Marvelous Beauty Pvt. Ltd. cannot be held to be genuine. 7. Heard the arguments of both the parties and perused the material available on record. 8. Before us, it was argued that the assessee had entered into a agreement to sell some property to M/s Marvelous Beauty Pvt. Ltd. during the year under consideration and as an advance against sale consideration an amount of Rs.1,40,00,000/- was received by the assessee. This transaction can be verified from the bank statement of the assessee and the corresponding entry in the bank statement of the lender. Since, the deal could not be materialized in the year under consideration, the amount was returned back by the assessee to M/s Marvelous Beauty Pvt. Ltd. All the confirmations, tax records are on record. The notice issued by the AO on the lender has also been duly served. The details of the property for sale has been mentioned from page 14 to 57 of the paper book which has been duly perused. The same has been ultimately sold also. Hence, we hold that the assessee has proved identity, creditworthiness of the lender and genuineness of the transactions, the purpose, ITA No. 9172/Del/2019 Rajender Kumar Budhiraja 4 the mode of payment and also the mode of re-payment and the entire details thereof. 9. Hence, we hold that in the facts and circumstances of the instant case, no addition u/s 68 is called for. 10. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 01/03/2023. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 01/03/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR