RAJIV SHARMA,DELHI V. ITO,WARD-55(1), DELHI

ITA 3578/DEL/2024

AI Insights

The case involves Rajiv Sharma, the appellant, who challenged the protective addition of Rs.3,56,97,007 made by the Assessing Officer (AO) for the assessment year 2014-15. This addition was based on a perceived discrepancy in the capital balances between the assessment years 2013-14 and 2014-15. The AO had also reopened the assessment for 2013-14 to substantively assess the income. However, the Tribunal noted that the capital balances had been reconciled in the substantive assessment for 2013-14, thus resolving the issue. The Tribunal also considered the delay in the appeal due to the assessee's change of residence, which resulted in the late receipt of the First Appellate Order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 27111 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: SACHIN AGARWAL
• Section: 147; 143(3)

Judgement Text

" ITA No.3578/Del/2024 Page | 1 INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ‘F’: DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No.3578/Del/2024 Assessment Year: 2014-15 Rajiv Sharma Shop No.9, Ambedkar Stadium, Delhi Gate Darya Ganj, Delhi Vs. ITO Ward- 55 (1) Delhi PAN No. : AFZPS5691D (Appellant) (Respondent) ORDER PER PRADIP KUMAR KEDIA, AM: The assessee preferred the captioned appeal, challenging the order dated 02.08.2017 passed by the Commissioner of Income Tax (Appeals)-37, New Delhi (in short “CIT(A)”) Delhi pertaining to Assessment year 2014-15 and arises out of the assessment order dated 19.12.2016 passed under s. 143(3) of the Income Tax Act, 1961 (in short “The Act”). Assessee by Sh.Sachin Agarwal, CA Department by Ms. Harpreet Kaur Hansra, Sr. DR Date of hearing 11.03.2025 Date of pronouncement 11.03.2025 ITA No.3578/Del/2024 Page | 2 2. When the matter was called for hearing the counsel for the assessee Sh. Sachin Agarwal adverted to para 5.1 of the assessment order for the A.Y.2014-15 in question and submitted that an addition of Rs.3,56,97,007/- was carried out on protective basis by the AO on the ground of difference in the opening capital balance of this year vis-a-vis closing balance of immediate preceding year. The AO reopened the assessment for A.Y. 2013-14 to assess the escaped income on substantive basis in that year. Pausing here, the learned Counsel adverted to the assessment framed for A.Y.2013-14 order dated 27.12.2017 passed under Section 147 r.w.s. 143(3) of the Act. The Ld. Counsel for the assessee pointed out that in the substantive assessment carried out for A.Y. 2013-14, the closing balance of the capital of the assessee which stand at Rs.4,66,89,899/- and thus stands reconciled with the opening balance of the assessment year 2014-15 under appeal. 3. The very issue has been examined by the AO on substantive basis in the preceding assessment year 2012-13 and, therefore, the additions on protective basis and that too, in a different assessment year, do not survive any more. 4. The Ld. Counsel thus submitted that after the assessment of the preceding assessment year, the basis for addition in the A.Y. 2014-15 to which such dispute is connected, is unsustainable in law. ITA No.3578/Del/2024 Page | 3 5. As regards the belated delivery of first appellate order resulting in delay in appeal before the Tribunal, the Ld. Counsel submitted that the assessee had shifted the residential premises and, therefore, did not receive the First Appellate Order. In this regard, Sale Deed towards sale of property was placed on record. 6. As noted in the preceding paras the assessee has successfully demonstrated the factum order reconciliation of capital balance for A.Y.2013-14. The additions in the instant case were carried on protective basis in AY 2014-15. The substantive assessment was later carried under s. 147 for A.Y.2013-14. The issue thus stand resolved by the assessment order framed for A.Y. 2013-14. The reassessment order for AY 2013-14 was framed subsequent to impugned First Appellate order under challenge. Thus, the Ld. CIT(A) was not in a position to take cognizance of such facts. We thus find sufficient basis in the plea of the assessee for cancellation of the protective additions in so far as assessment year 2014-15 in question is concerned. 7. Ground Nos. 1, 2, and 3 of the assessee appeal are thus allowed. 8. Ground No.4 consisting short term capital loss of Rs.2,16,958/- is dismissed as not pressed. ITA No.3578/Del/2024 Page | 4 9. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 11 /03/2025. Sd/- Sd/- (SUDHIR KUMAR) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 11th March,2025 “Neha & Amit Kumar, Sr. PS” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar ITAT, Delhi "