ITO, New Delhi V. Sh. Harjit Singh Bedi, New Delhi

ITA 986/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3763 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SB GUPTA
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 986/DEL/2016 : ASSTT. YEAR : 2011-12 INCOME TAX OFFICER, WARD-45(2), NEW DELHI VS HARJIT SINGH BEDI, J-7/13, RAJOURI GARDEN, NEW DELHI-110027 (APPELLANT) (RESPONDENT) PAN NO. BBRPB5019D ASSESSEE BY : SH. S. B. GUPTA, CA REVENUE BY : SH. AJAY KUMAR, SR. DR DATE OF HEAR ING: 04 . 0 8 .20 2 1 DATE OF PRONOUNCEMENT: 11 .10 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF LD. CIT(A)-15, NEW DELHI DATED 17.12.2 015. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1. THE LD. CIT(A) ERRED ON FACTS AND IN LAW HOLDIN G THE ISSUANCE OF THE NOTICE AS WELL AS ASSESSMENT PROCEEDING AS INVALID AND ANNULLING THE ASSESSMENT ORDER. 2. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN STRA IGHT AWAY ACCEPTING THE CONTENTION OF THE ASSESSEE THAT IT HAS FILED THE RETURN OF INCOME FOR A.Y. 2009-10 ON 15.02.2010 WITHOUT ADJUDICATING THE FACT WHICH THE AO BROUGHT ON RECORD THAT THE PAN IN THIS CASE WAS ALLOTTED ONLY ON 20.01.2011, THEN HOW CAN THE ASSESSEE MENTION SUCH A PAN PRIOR TO ISSUE OF SAME PAN. ITA NO. 986/DEL/2016 HARJIT SINGH BEDI 2 3. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN RESTRICTING THE ADDITION OF RS.4,10,48,041/- ON ACC OUNT OF UNEXPLAINED CAPITAL TREATED AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE I.T. ACT, 1961 TO RS.2,46,910/-. 4. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN DELE TING THE ADDITION OF RS.45,00,000/- ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS TREATED AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE I.T. ACT, 1961. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF AUTO PARTS. THE RETURN OF INCOME WAS FILED ELECTRONICALL Y ON 31.01.2012 DECLARING AN INCOME OF RS.7,09,000/-. 4. THE ASSESSING OFFICER OBSERVED THAT THERE WAS CA PITAL OF RS.4,10,48,041/- IN THE PROPRIETORS ACCOUNT, THE S OURCE OF WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE. THE A SSESSING OFFICER, THEREFORE, TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. 5. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 6. THE FACTS EMANATE AS UNDER: THE AMOUNT OF RS.4,10,48,041/- CONSISTS OF OPENING BALANCE OF CAPITAL OF RS.4,02,52,521/- AND THE NET PROFIT OF R S.5,48,610/- SHOWN IN THE RETURN OF INCOME. IT WAS EXPLAINED THA T THE OPENING BALANCE HAS BEEN THE CARRIED DOWN AMOUNT FR OM THE EARLIER YEARS. SINCE, THE AMOUNTS WERE OPENING BALA NCE, THEREFORE, IT WAS NOT LIABLE TO TAX U/S 68 FOR THE A.Y. 2011-12. THE LD. CIT(A) IN ORDER TO CLARIFY THE ISSUE HAS WR ITTEN LETTER TO THE ASSESSING OFFICER ON 21.10.2015. THE ASSESSING OFFICER SUBMITTED THE REMAND REPORT ON 07.12.2015. THE LD. CIT(A) HAS ITA NO. 986/DEL/2016 HARJIT SINGH BEDI 3 FURTHER PERUSED THE COPIES OF THE BALANCE SHEET FOR THE A.Y. 2009-10 AND A.Y. 2010-11 WHEREIN THE AMOUNTS ARE AP PEARING IN THE RELEVANT ANNEXURES. IT HAS BEEN CATEGORICALL Y HELD THESE AMOUNTS ARE NOT FRESH CREDIT ENTRIES IN THE BOOKS O F ACCOUNTS OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. EVEN, BEFORE US, THE REVENUE COULD NOT CONTROVERT THE FACT THAT THE AMOUNTS HAVE BEEN DULY REFLECTED IN THE CAPITAL ACCOUNT FOR THE A.YS. 2009-10 AND 2010-11. THE DOCUMENTS FILED BY THE ASSESSEE AN D ITS VERACITY BEFORE US IN THE PAPER BOOK CONSISTING OF COPY OF ACKNOWLEDGMENT OF INCOME TAX RETURN, TAX AUDIT REPO RT, BALANCE SHEET AND PROFIT & LOSS ACCOUNT FOR THE A.Y S. 2009-10 AND 2010-11 HAS NOT BEEN DISPUTED BY THE REVENUE. 7. HENCE, WE HEREBY HOLD THAT THE OPENING BALANCE C ANNOT BE HELD TO BE A CASH CREDIT U/S 68, THE ORDER OF THE L D. CIT(A) IS HEREBY AFFIRMED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/10/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 11/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR