Ravinder Singh, New Delhi V. ITO WARD - 54(2), New Delhi

ITA 9434/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2057 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ATIGU AHMED
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Additional evidence; TDS
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI F BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEM BER ITA NO. 9434/DEL/2019 [A.Y 2011-12] SHRI RAVINDER SINGH VS. THE I.T.O 10, BIRBAL ROAD WARD 54(2) JANGPURA, NEW DELHI NEW DELHI PAN: AIOPS 8010 N [APPELLANT] [RESPONDENT] ASSESSEE BY : SHRI HIREN MEHTA ADV REVENUE BY : SHRI ATIGU AHMED, SR. DR DATE OF HEARING : 01.12.2020 DATE OF PRONOUNCEMENT : 04.12.2020 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)35, DELHI DATED 20.11.2019 PERTAINING TO A.Y 201112. 2 2. THE GRIEVANCES OF THE ASSESSEE READ AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSES BY THE LD. CIT(A) 35 NEW DELHI I S CONTRARY TO FACTS AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN NOT ADMITTING THE ADDI TIONAL EVIDENCE 22.1 THAT HAVING FORWARDED THE A DD ITIONAL EVIDENCE TO ASSESSING OFFICER FOR COMMENTS/ REMAND REPORT, THE ACTION OF CIT(A) IN REFUSING TO ADMIT ADDITIONAL EVIDENCE IS NOT AS PER SETTLED LAW. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION O F AO IN SUSTAINING ADDITION OF RS. 1,49,95,369/- ON ACCOUNT OF UN EXPLAINED CREDIT ENTRIES IN THE BANK ACCOUNT AS THE BANK STATEMENTS WERE NOT AVAILABLE WITH THE ASSESSEE DURING ASSESS MENT PROCEEDINGS AND FURTHER REFUSING TO ADMIT THE ADDITIONAL EVIDENCE S UBMITTED ALONG WITH APPLICATION FOR ADDITIONAL EVIDENCE UNDER RULE 46A. 3 44. T HAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) WAS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS. 23,93,637/- BEING EXPENSES REMAINING UNEXPLAINED DURING THE ASS ESSMENT PROCEEDINGS U/S 68 OF THE INCOME TAX ACT AND FURTHE R REJECTING THE APPLICATION FILED UNDER RULE 46A OF THE INCOME TAX RULES. 55. T HAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) WAS NOT JUSTIFIED AND HAS ERRED IN SUSTAINI NG ADDITION OF RS 97,00,000/ - U/S 69 OF THE INCOME TAX ACT AS UNEXPLAINED INVESTM ENT BASED ON CASH DEPOSITED BY THE SELLER IN HIS BANK A CCOUNT BY RELYING UPON THE STATEMEN T OF THE SELLER WITHOUT PROVIDING ANY OPPORTUNITY TO THE APPELLANT FOR REBUTTAL. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN SUSTAINING ADDITION OF RS 22,828/- BEING DIFFERENCE IN THE INTEREST EARNED IN THE BANK ACCOUNT AND INTERES T SHOWN IN THE RETURN OF INCOME. 3. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORDS CAREFULLY PERUSED. 4 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF CIVIL CONTRA CTING AND DURING THE YEAR UNDER CONSIDERATION, HAS STARTED THE ACTIVITY OF A BUILDER. RETURN WAS FILED DECLARING TAXABLE INCOME OF RS.11.02 LAKH S. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX AC T, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] VI DE ORDER DATED 29.03.2014 BY MAKING THE FOLLOWING ADDITIONS: (1) UNDISCLOSED/UNEXPLAINED CREDITS RS. 1,49,9 5,369/- IN THE BANK ACCOUNT (2) INCOME FROM UNDISCLOSED SOURCES RS. 23,9 3,637/- USED FOR INCURRING EXPENSES (3) UNEXPLAINED INVESTMENT IN RS. 97,00,00 0/- IMMOVABLE PROPERTY (4) UNDISCLOSED INTEREST UNDER THE RS. 22,828/- HEAD INCOME FROM OTHER SOURCES 5. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EXAMINED THE BANK ACCOUNT WITH HD FC BANK. ON EXAMINING THE BANK STATEMENTS, THE ASSESSING OFFICE R FOUND THAT THE SAME HAS BEEN CREDITED BY AN AMOUNT OF RS.3.05 CROR ES. THE ASSESSING OFFICER, ON THE BASIS OF TDS CERTIFICATES, CAME TO THE CONCLUSION THAT THE CONTRACT RECEIPTS WERE TO THE TUNE OF RS.95,66, 489/- AND THE 5 ASSESSEE HAS SHOWN GROSS RECEIPTS AT RS.98,24,795/- . THE ASSESSEE WAS ASKED TO EXPLAIN THE EXCESS DEPOSITS FOUND IN THE H DFC BANK. 6. IN ITS REPLY, THE ASSESSEE EXPLAINED THAT HE HAS RECEIVED UNSECURED LOANS FROM FIVE PERSONS TOTALLING TO RS. 62.10 LAKHS. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSES SEE WAS ABLE TO EXPLAIN CREDITS OF RS.1.55 CRORES IN THE BANK ACCOU NT OUT OF RS.3.05 CRORES AND ACCORDING TO THE ASSESSING OFFICER, THE BALANCE AMOUNT OF RS.1.49 CRORES REMAINED UNEXPLAINED. ACCORDINGLY, H E MADE ADDITION OF RS.1.49 CRORES CREDITED IN THE BANK ACCOUNT WITH HD FC BANK. 7. PROCEEDING FURTHER, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED EXPENSES AMOUNTING TO RS. 96,29,565/-. THE ASSESSEE WAS ASKED TO FURNISH LEDGER ACCOUNT, VOUCHERS, BILLS OF EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT. REQUISITES DETAILS WER E FURNISHED. THE ASSESSING OFFICER WAS OF THE OPINION THAT RS.72 LAK HS HAD BEEN INCURRED IN CASH. THE ASSESSEE WAS ASKED TO FURNISH CASHBOOK BUT INSTEAD, THE ASSESSEE FURNISHED CERTIFICATE FROM HDFC BANK CERTI FYING THAT THE CASH OF RS.48 LAKHS HAS BEEN WITHDRAWN FROM THE BANK DUR ING THE YEAR UNDER CONSIDERATION. 6 8. THE ASSESSING OFFICER WAS OF THE OPINION THAT TH E ASSESSEE HAS NOT FURNISHED ANY DETAILS IN RESPECT OF DIFFERENCE OF R S. 23,93,637/- AND ACCORDINGLY, MADE ADDITION OF THE SAME AS INCOME FR OM OTHER SOURCES. 9. PROCEEDING FURTHER, THE ASSESSING OFFICER NOTICE D THAT THE ASSESSEE HAS PURCHASED PROPERTY FROM ONE SHRI RAM B ABU FOR AN AMOUNT OF RS.1.05 CRORES. HOWEVER, DURING THE ASSES SMENT PROCEEDINGS OF SHRI RAM BABU THE COUNSEL OF SHRI RAM BABU STATE D THAT THE CASH AMOUNTING TO 97 LAKHS, WHICH WAS FOUND TO BE DEPOSI TED IN THE BANK ACCOUNT OF SHRI RAM BABU, WAS GIVEN BY THE ASSESSEE AS ON MONEY FOR PURCHASE OF PROPERTY. 10. BELIEVING ON THE STATEMENT OF THE COUNSEL OF SH RI RAM BABU, ASSESSING OFFICER MADE ADDITION OF RS.97 LAKHS AS I NVESTMENT FROM UNDISCLOSED SOURCES. 11. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ASSESSEE HAS EARNED INTEREST OF RS.55,360/- IN THE SBI ACCOUNT W ITH HDFC BANK WHEREAS THE ASSESSEE HAS SHOWN INTEREST OF RS.32,53 2/- ONLY AND ACCORDINGLY, ADDED THE SAME AS INCOME FROM OTHER SO URCES. 7 12. WE HAVE CAREFULLY PERUSED THE ORDER OF THE CIT( A).WE FIND THAT THE ASSESSEE FURNISHED SOME EVIDENCES IN SUPPORT OF HIS CLAIM AND ALL THE EVIDENCES WERE REJECTED BY THE CIT(A) HOLDING T HAT THE CONDITIONS STIPULATED IN RULE 46A ARE NOT SATISFIED. WITHOUT G OING INTO THE MERITS OF THE ADDITIONS, THE CITA DISMISSED THE APPEAL OF THE ASSESSEE. 13. IN SO FAR AS THE ADDITION ON ACCOUNT OF CREDIT IN THE BANK ACCOUNT IS CONCERNED, WE FIND THAT THE ASSESSEE HAS TAKEN L OANS FROM SEVERAL PERSONS, WHICH WAS PARTLY REPAID DURING THE YEAR UN DER CONSIDERATION AND AGAIN THE LOANS WERE TAKEN FROM THE SAME PERSON S. THE ASSESSING OFFICER HAS SIMPLY SEEN CREDITS IN THE BANK ACCOUNT WITHOUT REALISING THAT THE SAME AMOUNT IS RECYCLED. WE FIND THAT DETA ILED EXPLANATION ALONGWITH RE-CONCILIATION HAS BEEN FURNISHED BY THE ASSESSEE BEFORE THE CIT(A) BUT THE SAME WAS DISMISSED OUT-RIGHTLY. 14. SIMILAR IS THE FATE OF EXPENDITURE TREATED BY T HE ASSESSING OFFICER AS PAID IN CASH IN EXCESS OF CASH WITHDRAWALS. WE F IND THAT OUT OF THE ALLEGED DIFFERENCE, MOST OF THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES ON ACCOUNT OF SALARIES AND WAGES, TYR E PURCHASES AND DIESEL EXPENSES, WHICH TOTALLED TO RS.24.65 LAKHS. THESE DETAILS WERE ALSO FURNISHED BEFORE THE CIT(A) BUT SUCH DETAILS R ECEIVED THE SAME 8 FATE. WE ARE OF THE CONSIDERED VIEW THAT WHEN THE A SSESSEE HAS EXPLAINED EVERYTHING WITH EVIDENCES, THE CITA SHOUL D NOT HAVE RUBBISHED THOSE EVIDENCES WITHOUT RECORDING ANY SPE CIFIC FINDINGS. 15. HOWEVER, IN THE INTEREST OF JUSTICE AND FAIR PL AY, WE REMIT BOTH THESE ISSUES TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO FURNISH ALL NECESSARY EVIDENCES WHICH W ERE FURNISHED BEFORE THE CIT(A) AND THE ASSESSING OFFICER IS DIRE CTED TO EXAMINE EACH AND EVERY EVIDENCE/EXPLANATION AND DECIDE THESE TWO ISSUES AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. 16. GROUND NOS.1 TO 4 ARE TREATED AS ALLOWED FOR ST ATISTICAL PURPOSES. 17. FACTS RELATING TO ADDITION OF RS.97 LAKHS HAVE BEEN EXPLAINED HEREINABOVE. THE ENTIRE ADDITION HAS BEEN MADE ONLY ON THE ADMISSION OF THE LD. COUNSEL OF SHRI RAM BABU THAT THE ASSESS EE HAS PAID RS.97 LAKHS TO SHRI RAM BABU IN CASH FOR PURCHASE OF THE IMPUGNED PROPERTY. IN OUR CONSIDERED VIEW, THE AO HAS GROSSLY ERRED IN SIMPLY BELIEVING THE CONTENTION OF THE COUNSEL OF SHRI RAM BABU. IT APPE ARS THAT RS.97 LAKHS WAS DEPOSITED IN CASH IN THE BANK ACCOUNT OF SHRI R AM BABU AND TO 9 EXPLAIN THE SOURCE, THE LD. COUNSEL SIMPLY STATED T HAT SHRI RAM BABU HAS RECEIVED THE SAME FROM THE ASSESSEE. 18. INTERESTINGLY, SHRI RAM BABU DIED IN ON 14.11.2 013 AS PER THE DEATH CERTIFICATE EXHIBITED AT PAGE 18 OF THE PAPER BOOK. ASSESSMENT PROCEEDINGS OF SHRI RAM BABU TOOK PLACE SUBSEQUENT TO HIS DEATH. A PERTINENT QUESTION ARISES AS TO HOW THE COUNSEL OF SHRI RAM BABU KNEW THAT RS. 97 LAKHS WERE RECEIVED BY SHRI RAM BABU FR OM THE ASSESSEE WHEN HE HAS LEFT FOR HEAVENLY ABODE ON 14.11.2013. ORDER SHEET ENTRIES ARE PLACED AT PAGES 1 TO 3 OF THE PAPER BOO K. ASSESSMENT PROCEEDINGS ARE DATED FEBRUARY 2014, WHICH MEANS TH AT THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE WERE MUCH AFTER THE DATE OF DEATH OF SHRI RAM BABU. 19. IN OUR CONSIDERED VIEW, THE ENTIRE ADDITION HAS BEEN MADE ON ASSUMPTIONS AND SURMISES AND ON THE STATEMENT OF CO UNSEL OF SHRI RAM BABU WHICH DO NOT HAVE ANY EVIDENTIARY VALUE KEEPIN G IN MIND THAT SHRI RAM BABU DIED IN 2013. CONSIDERING THESE FACTS IN T OTALITY, ADDITION OF RS.97 LAKHS IS DIRECTED TO BE DELETED. GROUND NO. 5 IS ACCORDINGLY ALLOWED. 10 20. GROUND NO. 6 RELATES TO THE ADDITION ON ACCOUNT OF DIFFERENCE OF INTEREST AS PER BANK STATEMENT AND AS PER BOOKS OF ACCOUNT. THE ASSESSEE IS DIRECTED TO RECONCILE THE SAME AND EXPL AIN THE DIFFERENCE, IF ANY, AND THE ASSESSING OFFICER IS DIRECTED TO EX AMINE THE ISSUE AFRESH AND DECIDE THE SAME AFTER GIVING OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. THIS GROUND IS, ACCORDINGLY, TREATED AS A LLOWED FOR STATISTICAL PURPOSES. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO. 9434/DEL/2019IS ALLOWED IN PART FOR STATISTICAL PUR POSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.12. 2020. SD/- SD/- [ SUDHANSHU SRIVASTAVA ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04 TH DECEMBER, 2020 VL/ 11 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION 0 1 . 1 2 . 2 0 2 0 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE APPROVED DRAFT COMES TO 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE FAIR ORDER COMES BACK TO 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 0 3 . 1 2 . 2 0 2 0 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE DATE OF DISPATCH OF THE ORDER