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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA No.9183/Del/2019 Assessment Year: 2011-12
Sh. Satya Dev Yadav, Vs. Income Tax Officer, Flat No. 12, Shri Awas Ward-3, Society, Sec-18B, Rewari Delhi PAN :AALPY0685Q (Appellant) (Respondent)
Appellant by Sh. Sanjay Ishar, CA Respondent by Sh. Om Parkash, Sr. DR
Date of hearing 19.07.2022 Date of pronouncement 11.08.2022
ORDER This is an appeal by the assessee against order dated
12.09.2019 of learned Commissioner of Income Tax (Appeals),
Rohtak, pertaining to assessment year 2011-12.
Registry has notified a delay of 58 days in filing the appeal.
The assessee has filed an application seeking condonation of delay
supported by affidavit, stating that the delay in filing the appeal
was due to time consumed for appointing a new counsel.
Having considering rival submissions on the issue, I am
satisfied that the delay in filing the appeal was due to reasonable
ITA No. 9183/Del/2019 AY: 2011-12
cause. Accordingly, I condone the delay and admit the appeal for
adjudication on merits.
Effective grounds raised by the assessee are as under:
On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)’ erred in rejecting that addition u/s 147 can be made when nothing new has come to the knowledge of the assessee. The Hon'ble CIT(A) has not considered that here the addition by the Ld. AO is an ad-hoc addition. 2. On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)’ erred in partly allowing the addition made by Ld. AO of Rs.951852/- by Rs.317284/- which clearly show that the issue is debatable and addition is ad-hoc. 3. On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)’ erred in rejecting that if addition has not been made on account of reopening u/s 148 an ad-hoc addition can be made by the Ld. AO. Even the case law on which the Hon’ble CIT(A) is relying does not discuss about an ad-hoc addition. 4. On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)’ erred in partly allowing the appeal without considering that the assessee has to pay 81% interest u/s 234B for an ad-hoc addition not for something which came to the knowledge of the Ld. AO after the filing of the return of income. 5. The Appellant prays that the addition/ disallowance of Rs.634568/- after providing due appeal affect recalculated in respect of issues mentioned in ground 1 to 3 be deleted.
Briefly the facts are, the assessee is a resident individual. For
the assessment year under dispute, the assessee has field his
return of income on 01.10.2011 declaring income of Rs.5,07,970.
Subsequently, the Assessing Officer received information that the
assessee, in the year under consideration, has deposited cash
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amounting to Rs.15,76,200/- in two bank accounts. Based on
such information, the Assessing Officer formed a belief that the
income chargeable to tax has escaped assessment. Accordingly, he
initiated proceeding for reopening of assessment under section 147
of the Act by issuing a notice under section 148 of the Act. In course
of re-assessment proceeding, the Assessing Officer called upon the
assessee to furnish the details of other expenses amounting to
Rs.31,72,840/- and establish the genuineness of such
expenditure. In response to the query raised by the Assessing
Officer, the assessee furnished its reply. However, stating that the
assessee was unable to fully establish the genuineness of the
expenditure claimed through supporting evidence, the Assessing
Officer disallowed 30% out of the expenditure claimed, which
worked out to Rs.9,51,852/-.
Against the assessment order so passed, the assessee
preferred an appeal before learned Commissioner (Appeals). After
considering the submissions of the assessee, learned
Commissioner (Appeals) granted partial relief by restricting the
disallowance to 20% of the expenses claimed.
Before me, learned counsel appearing for the assessee
submitted, though, the Assessing Officer has reopened the 3 | P a g e
ITA No. 9183/Del/2019 AY: 2011-12
assessment for assessing cash deposits made in the bank account,
however, without making any addition of the said amount, he has
made a completely different addition by disallowing a part of
expenditure claimed by the assessee. Thus, he submitted, the
addition made cannot be sustained. In support of such contention
he relied upon the following decision:
CIT Vs. Jet Airways (I) Ltd., 331 ITR 236 (Bom.) 2. CIT Vs. Mohmed Juned Dadani (2013) 355 ITR 172 (Guj.) 3. Ranbaxy Laboratories Ltd. Vs. CIT [2011] 336 ITR 136
Learned Departmental Representative relied upon the
observations of learned Commissioner (Appeals).
I have considered rival submissions and perused the
materials on record. From a reading of the assessment order, it is
evident, the reason for which the Assessing Officer reopened the
assessment under section 147 of the Act is, the alleged cash
deposits amounting to Rs.15,76,200/- made in the bank account.
Thus, it is quite obvious, the escaped income which was sought to
be assessed by the Assessing Officer while reopening the
assessment under section 147 of the Act is the cash deposit made
into the bank account. However, on a careful scrutiny of the
assessment order, I do not find any discussion made by the
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Assessing Officer on the issue on which the assessment was
reopened under section 147 of the Act.
On the contrary, the Assessing Officer has picked up the other
expenses claimed by the assessee amounting to Rs. 31,72,840/-
for scrutiny and has disallowed 30% of such expenses on purely
ad-hoc basis, which was reduced to 20% by learned Commission
(Appeals).
Therefore, the question which arises for consideration is,
without assessing the income for which the assessment was
reopened, can the Assessing Officer make any other addition. The
answer to the aforesaid question certainly has to be in negative. In
case of CIT Vs. Jet Airways (I) Ltd. (supra), the Hon’ble Bombay High
Court, while dealing with an identical issue, has held that without
assessing the income for which the assessment was reopened, the
Assessing Officer cannot assess any other item of income. Other
decisions cited by learned counsel for the assessee expressed
similar view.
Thus, respectfully following the ratio laid down in the
aforesaid judicial precedents, I hold that the addition made by the
Assessing Officer and part of which was sustained by learned
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Commissioner (Appeals) is unsustainable. Accordingly, I direct the
Assessing Officer to delete the addition.
In the result, the appeal is allowed, as indicated above.
Order pronounced in the open court on 11th August, 2022
Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER
Dated: 11th August, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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