MANISH KUMAR VERMA ,GWALIOR V. ITO1(1), GWALIOR

ITA 83/AGR/2024

AI Insights

The case involves Sh. Manish Kumar Verma, a retailer of gold and silver jewelry, who appealed against the order of the Income Tax Officer, Ward 1(1), Gwalior, concerning the assessment year 2008-09. The primary issue was the disallowance of Rs.14.13 Lacs under section 40A(3) of the Income Tax Act, which pertained to cash purchases. The Income Tax Officer had reopened the case to verify transactions with Shri H.D. Joshi and others, leading to an alleged underreporting of income. However, the Tribunal found that the reopening was not supported by new evidence, and thus, the subsequent disallowance was unjustified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126502 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDER SHRIVASTAVA LD
• Assessee Lawyers: M.K. AGARWAL; LD
• Keywords: Deemed to accrue or arise in india; Tangible material; Commissioner; Commissioner of Income Tax; Purchases; Transactions
• Section: 147; 148; 143(3); 2; 40A(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.83/Agr/2024 (िनधा \u0010रणवष\u0010 / Assessment Year: 2008-09) Sh. Manish Kumar Verma J-15, Site No. 1, City Centre, Near Honda Showroom, Gwalior. बनाम/ Vs. Income-tax Officer, Ward 1(1), Gwalior. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. ABDPV-8563-H (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Sh. M.K. Agarwal, Adv. – Ld. AR थ कीओरसे/Respondent by : Sh. Shailender Shrivastava – Ld. DR सुनवाईकीतारीख/Date of Hearing : 19-02-2025 घोषणाकीतारीख /Date of Pronouncement : 22.04.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2008-09 arises out of an order of Ld. Addl. / Joint Commissioner of Income Tax (Appeals), NFAC, Delhi [CIT(A)] dated 24-01-2024 in the matter of an assessment framed by Ld. AO u/s 147 r.w.s. 143(3) of the act on 18-03- 2014. The sole grievance of the assessee is confirmation of disallowance u/s 40A(3) for Rs.14.13 Lacs. Having heard rival submissions and upon perusal of case records, the same is adjudicated as under. The assessee is stated to be carrying out retail trade of gold and silver jewellery. The assessee did not maintain books of accounts and declared income u/s 44AF. 2 2. The case of the assessee was reopened vide notice u/s 148 dated 15-03-2013. The same was to verify the transactions as carried out by the assessee with Shri H.D. Joshi and others. It transpired that the assessee reflected income of Rs.1.28 Lacs against turnover of Rs.33.27 Lacs. Considering the provisions of Sec.44AF, 5% thereof would be deemed income which would be Rs.1.66 Lacs. The assessee reflected less income. Therefore, Ld. AO held that the income was not declared u/s 44AF. Finally, Ld. AO computed disallowance u/s 40A(3) for Rs.14.13 Lacs on account of cash purchases. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 3. Upon perusal of reasons recoded to reopen the case of the assessee as kept on Page No.9 of the paper-book, we find that the assessment has been reopened merely on the allegation that the assessee has made unaccounted purchase / sale to Shri H.D. Joshi and others. It has been alleged that the assessee has made unaccounted transaction which has escaped assessment. However, no such addition has been made in the assessment order. The Ld. AO has merely made disallowance u/s 40A(3) which is against accounted purchases only. Further, there is no new tangible material before Ld. AO to form a belief that the income had escaped assessment. For these reasons alone, the assessment is liable to the quashed. We order so. Delving into the merits has been rendered academic in nature. 3 4. The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) 5ा ियक सद6 /JUDICIAL MEMBER लेखा सद6 / ACCOUNTANT MEMBER Dated: 22.04.2025 आदेश की 8ितिलिप अ:ेिषत / Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु3/CIT 4. िवभागीय ितिनिध/DR 5. गाड9फाईल/GF ASSISTANT REGISTRAR ITAT AGRA "