TEJASVI BHALLA ,NEW DELHI V. ITO,WARD-50(1), DELHI

ITA 3762/DEL/2024

AI Insights

This case involves an appeal by Tejasvi Bhalla against the order of the Commissioner of Income Tax (Appeals), which pertained to the Assessment Year 2018-19. The primary contention was regarding the additions made under section 69 of the Income Tax Act, 1961, which included capital and stock-in-trade amountsing to Rs.7,28,72,419/-. The assessee argued that these amounts were the opening balances for her proprietary concern, Arshia Enterprises, and should not be taxed in the relevant year as they were already reflected in the balance sheet of the preceding year. The Tribunal found merit in the assessee's request for a re-examination of the additions and remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653098 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: M.G.ARORA
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3); 69

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.3762/Del/2024, A.Y. 2018-19 Tejasvi Bhalla Plot No. 27, Road No. 77, Punjabi Bagh West, New Delhi-110026 PAN: ANIPB0034G Vs. Income Tax Officer, Ward- 50(1), Civic Centre, J L Nehru Road New Delhi (Appellant) (Respondent) Appellant by Sh. M.G.Arora, CA Respondent by Shri Amit Katoch, Sr. DR Date of Hearing 03/04/2025 Date of Pronouncement 18/06/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal of the assesseefor the Assessment Year (AY) 2018-19 is directed against the order dated 27.06.2024of the Commissioner of Income Tax (Appeals), NFAC, New Delhi [CIT(A)]. 2. Vide five grounds of appeal; the assessee has challenged the aggregate addition of Rs.7,28,72,419/- [Capital of Rs.5,51,33,956/- plus stock of Rs.1,77,38,463/-] made under section 69 of the Income Tax Act, 1961 (Act)and initiation of penalty under section 271AAC of the Act. ITA No.3762 /Del/2024 Tejasvi Bhalla, New Delhi 2 3. The relevant facts giving rise to this appeal are that the appellant assessee, the commission agent, filed her Income Tax Return (ITR) of the relevant year on 28.08.2018 declaring income of Rs.4,77,890/-. The case was picked up for scrutinybased on suspicious transaction report submitted by the Bank in respect of credits appearing in the bank account of the assessee. During the scrutiny assessment proceedings, the assessee filed her revised ITR declaring income of Rs.46,27,244/-. In the revised ITR, the assessee claimed that she was the proprietor of Arshia Enterprises, which dealt in trading of import and export licenses since 2012. During the course of scrutiny assessment proceedings, the assessee submitted that transactions aggregating to Rs.96,66,11,798/- as per the bank account pertained to her proprietary concern; namely, Arshia Enterprises. During the assessment proceedings, the assessee claimed that sums of Rs.5,51,33,956/- and Rs,177,38,463/- were opening capital and opening stock-in-trade of Arshia Enterprises respectively as the same were closing balances as evident from the balance sheet of the preceding year i.e. AY 2017-18. However, the assessee failed to produce any corroboratory evidence for the same. Therefore, the Assessing officer (AO) taxed these sums under section 69 of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who dismissed the appeal due to non-prosecution. 4. Before us, the Ld. Authorized Representative (AR) submitted that the AO had simply mentioned that the said proprietary concern; Arshia ITA No.3762 /Del/2024 Tejasvi Bhalla, New Delhi 3 Enterprises was not disclosed by the assessee in preceding years. But the AO had not mentioned the correct and complete facts. It was submitted that the assessee’s case of AY 2017-18 was scrutinized and the assessment of AY 2017-18 was completed under section 143(3) of the Act where in the AO made additions aggregating to Rs.129,52,68,431/-. The Ld. AR submitted that the case ofAY 2017-18 was pending before the Ld. CIT(A). It was further submitted that the AO had erred in taxing capital as liability on one hand and stock-in-trade as asset on other hand, which tantamounted to double taxation. The Ld. AR contended that the assessee, with the help of the balance sheet of Arshia Enterprises for the financial year ending on 21.03.2017 relevant to AY 2017-18, would demonstrate that sums of Rs.5,51,33,956/- and Rs.1,77,38,463/- were nothing but the closing capital balance and closing stock-in-trade for the year ending on 31.03.2017. Hence, these sums could not be taxed in the relevant year. Since, the verification of opening capital balance and opening stock-in-trade for the year ending on 01.04.2017 was not done by the authorities below; therefore, the Ld. AR prayed for remitting the matter back to the AO. To which, the Ld. Senior Departmental Representative (Sr. DR) did not object too. 5. We have heard both parties and have perused the material available on the record. In view of the interest of justice, we are of the considered opinion that the assessee deserves reasonable opportunity of being heard to make shortcomings or non-compliances. In view thereof, without offering any ITA No.3762 /Del/2024 Tejasvi Bhalla, New Delhi 4 comment on merit of the case, we deem it fit to set aside the impugned order and remit the issues of additions of Rs.7,28,72,419/- and Rs.1,77,38,463/ back to the file of the AO to be decided afresh after providing reasonable opportunities of being heard to the assessee. 6. The issue relating to initiation of penalty under section 271AAC of the Act, being premature, stands dismissed. 7. In the result, the appeal of assessee is allowed for statistical purposes as above. Order pronounced in open Court on 18th June, 2025. Sd/- Sd/- (C.N.PRASAD) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18/06/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(Appeals) 5. Sr. DR ASSISTANT REGISTRAR ITAT, NEW DELHI "