Atul Jain, New Delhi V. ITO, New Delhi

ITA 990/DEL/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5372 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 18-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N K KARHAIL
• Keywords: Unexplained cash credit
• Section: 43B; 144

Judgement Text

ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2686/DEL /2012 ASSESSMENT YEAR: 2007-08 ITA NO. 990/DEL /2013 ASSESSMENT YEAR: 2007-08 ATUL JAIN, C/O MANOJ KUMAR KANTH, ADVOCATE, B-136, LAJPAT NAGAR-I, NEW DELHI. (PAN: AAGPJ2270H) VS ITO, WARD 36(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. KARHAIL, ADVOCATE RESPONDENT BY : SHRI SANJAY KUMAR YADAV, SR. DR DATE OF HEARING: 05.01.2018 DATE OF PRONOUNCEMENT: 03.0 4.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. BOTH THESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE. ITA NO. 2686/DEL/2012 HAS BEEN FILED AGAI NST THE ORDER DATED 23.02.2012 PASSED BY THE LD. CIT (APPEALS)-XXVII, NEW DELHI WHEREIN VIDE THE IMPUGNE D ORDER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 2 CONFIRMED THE ADDITION OF RS. 5,20,792/- ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSITS. ITA 990/DEL/2013 IS AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(A)-XXVII, NEW DELHI CONFIRMING THE IMPOSITION OF PENALTY ON THE QUANTUM ADDITION OF RS . 5,20,792/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') FOR ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE RETURN WAS FILED SHOWING LOSS OF RS. 4,81,364/-. THE ASSESSMENT ORD ER WAS PASSED U/S 144 OF THE ACT AFTER MAKING THE FOLL OWING ADDITIONS:- I) RS. 1,63,862/- ON ACCOUNT OF INCREASE IN GROSS PROFIT II) RS. 5,20,792/- IN RESPECT OF UNEXPLAINED ADDITIONS TO THE CAPITAL ACCOUNT III) RS. 2,09,573/- ON ACCOUNT OF DISALLOWANCE OF REBATE AND DISCOUNT IV) RS. 6,85,038/- ON ACCOUNT OF DISALLOWANCE U/S 43B OF THE ACT ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 3 V) RS. 25,023/- ON ACCOUNT OF DISALLOWANCE OF INSURANCE OF VEHICLE VI) RS. 97,870/- ON ACCOUNT OF DISALLOWANCE OUT OF VEHICLE AND TELEPHONE EXPENSES. 2.1 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO PARTLY ALLOWED THE APPEAL O F THE ASSESSEE BUT CONFIRMED THE ADDITION ON ACCOUNT OF UNEXPLAINED ADDITION TO THE CAPITAL ACCOUNT AMOUNTI NG TO RS. 5,20,792/-. THE ASSESSEE HAS NOW APPROACHED TH E ITAT CHALLENGING THIS CONFIRMATION OF ADDITION. 2.2 THE ASSESSING OFFICER ALSO IMPOSED A PENALTY OF RS. 5,16,846/- ON THE DISALLOWANCES MADE IN THE ASSESSM ENT ORDER. ON APPEAL BEFORE THE LD. FIRST APPELLATE AUT HORITY, THE QUANTUM OF PENALTY WAS CURTAILED TO THE EXTENT OF PENALTY IMPOSABLE ON THE UNEXPLAINED CREDIT OF RS. 5,20,792/- TO THE CAPITAL ACCOUNT AND NOW THE ASSES SEE IS BEFORE THE ITAT AND HAS CHALLENGED THE CONFIRMAT ION OF PENALTY U/S 271(1)(C) OF THE ACT. 3. AT THE OUTSET, LD. AR SUBMITTED THAT GROUND NO. 1 OF THE ASSESSEES APPEAL IN ITA 2686/DEL/2012 RAISED T HE GROUND OF NON-SERVICE OF NOTICE OF HEARING AND OF N OT ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 4 AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE BY THE LD. COMMISSIONER OF INCOME TAX (A). LD. AR SUBMITTED T HAT THIS GROUND WAS NOT BEING PRESSED. ACCORDINGLY, THI S GROUND IS DISMISSED AS NOT PRESSED. 3.1 WITH REGARD TO GROUND NO.2 CHALLENGING THE ACTI ON OF THE LD. COMMISSIONER OF INCOME TAX (A) IN CONFIRMIN G THE ADDITION OF RS. 5,20,792/- ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSITS, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE BANK ACCOUNT OF THE ASSESSEE BEING MAINTAINED WITH CANARA BANK AND BEARING ACCOUNT NO. 1399101003155. IT WAS SUBMITTE D THAT THE WITHDRAWALS AND THE TRANSFERS FROM THIS BA NK ACCOUNT WERE RELATED TO THE ADDITION TO THE CAPITAL ACCOUNTS AND, THEREFORE, SINCE THE ASSESSING OFFICE R HAD NOT EXAMINED THIS ACCOUNT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ISSUE SHOULD BE RESTORE D TO THE FILE OF THE ASSESSING OFFICER SO AS TO ENABLE T HE ASSESSEE TO EXPLAIN THE IMPUGNED ADDITION. 3.2 WITH REGARD TO THE ASSESSEES OTHER APPEAL CHALLENGING THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT, THE LD. AR SUBMITTED THAT IF THE QUANTUM APPEA L IS ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 5 RESTORED TO THE FILE OF THE LOWER AUTHORITIES, THE ISSUE OF PENALTY SHOULD ALSO BE RESTORED TO THE FILE OF THE LOWER AUTHORITIES. 4. IN RESPONSE, THE LD. SR. DR SUBMITTED THAT THE ASSESSEE HAD NOT AVAILED OF THE NUMEROUS OPPORTUNIT IES GIVEN BY THE ASSESSING OFFICER AND HAD ALSO NOT FIL ED ANY REJOINDER TO THE REMAND REPORT WHEN ASKED TO DO SO BY THE LD. COMMISSIONER OF INCOME TAX (A) AND, THEREFO RE, THE ADDITION SHOULD BE CONFIRMED. HE ALSO SUBMITTE D THAT BOTH THE LOWER AUTHORITIES HAD GIVEN A CLEAR F INDING ON THE FACTS AND THE IMPUGNED AMOUNT HAD NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNTS BY THE ASSESSEE AND, THEREFORE, THE ADDITION SHOULD BE UPHELD. 4.1 THE LD. SR. DR ALSO SUBMITTED THAT IT WAS A FIT CASE FOR LEVY OF PENALTY AS BOTH THE LOWER AUTHORITIES H AD GIVEN A CONCURRENT FINDING ON THE ISSUE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE SAME WAS PASSED EX PARTE U/S 144 OF THE ACT. IT IS ALSO EVIDENT THAT THE ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 6 ASSESSEE HAD NOT AVAILED OF THE NUMEROUS OPPORTUNIT IES GIVEN BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS NOTED THAT MORE THAN SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE BUT THE ASSESSEE HAS NOT FURNISHED COMPLETE DETAILS. DURING THE COURSE OF T HE FIRST APPELLATE PROCEEDINGS, THE LD. COMMISSIONER O F INCOME TAX (A) HAS GIVEN SUBSTANTIAL RELIEF TO THE ASSESSEE BUT HAS UPHELD THE ADDITION PERTAINING TO THE ACCRETION TO THE CAPITAL ACCOUNT WHICH HAS BEEN CHALLENGED IN THE APPEAL BEFORE US. A PERUSAL OF T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) SHO WS THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAS NOT ED THAT THE SAVINGS BANK ACCOUNT OF THE ASSESSEE WITH THE ORIENTAL BANK OF COMMERCE WAS NOT REFLECTED IN THE BALANCE SHEET. HOWEVER, THERE IS NO MENTION OF ANY ACCOUNT WITH THE CANARA BANK IN THE ORDER OF THE LD . COMMISSIONER OF INCOME TAX (A). A PERUSAL OF THE ANNEXURES TO THE BALANCE SHEET SHOWS THAT THE OBSERVATION OF THE LD. COMMISSIONER OF INCOME TAX ( A) WITH RESPECT TO THE ACCOUNT WITH ORIENTAL BANK OF ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 7 COMMERCE IS INCORRECT AS THE ASSESSEE WAS MAINTAINI NG A CASH CREDIT ACCOUNT WITH ORIENTAL BANK OF COMMERCE AND THE OUTSTANDING BALANCE AS ON 31.03.2007 IS DULY REFLECTED IN ANNEXURE II OF THE BALANCE SHEET. SIMI LARLY, A PERUSAL OF THE CAPITAL ACCOUNT SHOWS THAT THE IMPUG NED AMOUNT OF RS. 5,20,792/- IS THROUGH BOOK TRANSFERS AND THERE IS NO CASH INTRODUCED BY THE ASSESSEE PERTAIN ING TO ACCRETION OF CAPITAL. WE NOTE THAT THE ASSESSEE HA S ALSO FAILED IN PROVIDING PROPER DETAILS BOTH BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. COMMISSIONER O F INCOME TAX (A). WE ALSO NOTE THAT THE AVERMENT OF T HE LD. AR REGARDING CANARA BANK IS ALSO INCORRECT BECAUSE AS PER ANNEXURE II TO THE BALANCE SHEET NO CREDITS SEE M TO HAVE BEEN MADE TO THE CAPITAL ACCOUNT THROUGH CANAR A BANK. ALTHOUGH THE ASSESSEE HAS BEEN CARELESS IN LO OKING AFTER HIS AFFAIRS AND IN FURNISHING PROPER EXPLANAT ION AND DOCUMENTARY EVIDENCE BEFORE THE LOWER AUTHORITIES A S WELL AS IN THE PROCEEDINGS BEFORE US, IN THE INTERE ST OF JUSTICE, WE DEEM IT EXPEDIENT TO RESTORE THE ASSESS EES APPEAL BEARING ITA 2686/DEL/2012 TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX(A) WITH THE DIRECTION TO THE ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 8 ASSESSEE TO EXPLAIN THE IMPUGNED ADDITION WITH PROP ER DOCUMENTARY EVIDENCES BEFORE THE LD. COMMISSIONER O F INCOME TAX (A). WE ALSO DIRECT THE LD. COMMISSIONE R OF INCOME TAX (A) TO DECIDE THE ASSESSEES GROUND PERTAINING TO THE ADDITION OF RS. 5,20,792/- DE NOVO AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE TO PRE SENT ITS CASE. WE ALSO DIRECT THAT SHOULD THE ASSESSEE FAIL TO AVAIL OF THIS OPPORTUNITY BEFORE THE LD. COMMISSION ER OF INCOME TAX (A), THE LD. COMMISSIONER OF INCOME TAX (A) WILL BE AT LIBERTY TO PROCEED EX PARTE THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, ITA 2686/DEL/201 2 STANDS ALLOWED FOR STATISTICAL PURPOSES. 5.1 AS FAR AS ITA 990/DEL/2013 IS CONCERNED, IT IS SEEN THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAD CURTAILED THE QUANTUM OF PENALTY IMPOSED U/S 271(1) (C) TO THE EXTENT OF PENALTY IMPOSABLE TO THE IMPUGNED AND UPHELD ADDITION OF RS. 5,20,792/-. AS WE HAVE REST ORED THE QUANTUM APPEAL TO THE FILE OF THE LD. COMMISSIO NER OF INCOME TAX (A), THE ASSESSEES APPEAL CHALLENGIN G THE CONFIRMATION OF PENALTY ALSO WILL HAVE TO BE NECESS ARILY DECIDED DE NOVO . ACCORDINGLY, ITA NO. 990/DEL/2013 IS ITA NO. 2686/D/2012 & 990/D/2013 ASSESSMENT YEAR 2007-08 9 ALSO RESTORED TO THE FILE OF THE LD. COMMISSIONER O F INCOME TAX (A) TO BE DECIDED AFRESH AFTER GIVING PR OPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. WE ALSO DIRECT THAT SHOULD THE ASSESSEE FAIL TO AVAIL OF TH IS OPPORTUNITY BEFORE THE LD. COMMISSIONER OF INCOME T AX (A), THE LD. COMMISSIONER OF INCOME TAX (A) WILL BE AT LIBERTY TO PROCEED EX PARTE THE ASSESSEE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 RD APRIL, 2018. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD APRIL, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR