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

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ITA 3762/DEL/2024Status: DisposedITAT Delhi18 June 2025AY 2018-19Bench: SHRI CHALLA NAGENDRA PRASAD (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal set aside the impugned order and remitted the issues of additions back to the Assessing Officer (AO) to be decided afresh after providing the assessee with reasonable opportunities of being heard. The issue of penalty under section 271AAC was dismissed as premature.

What were the facts?

The assessee, a commission agent, initially filed an ITR for AY 2018-19 with income Rs.4,77,890/-, later revised to Rs.46,27,244/-. The case was selected for scrutiny based on a suspicious transaction report. The assessee claimed certain amounts as opening capital and stock-in-trade for her proprietary concern, Arshia Enterprises, but failed to provide corroboratory evidence.

What were the issues?

Whether the additions made by the AO under section 69 for capital and stock-in-trade without proper corroboration are valid, and whether the penalty initiated under section 271AAC was premature.

Which sections of the Income-tax Act were involved?

Section 69,Section 271AAC,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

Before: SHRI CHALLA NAGENDRA PRASAD & SHRI AVDHESH KUMAR MISHRA

For Respondent: Shri Amit Katoch, Sr. DR
Hearing: 03/04/2025Pronounced: 18/06/2025

A.Y. 2018-19 Tejasvi Bhalla Income Tax Officer, Plot No. 27, Road No. 77, Ward- 50(1), Punjabi Bagh West, Vs. Civic Centre, J L Nehru Road New Delhi-110026 New Delhi PAN: ANIPB0034G (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.

Tejasvi Bhalla, New Delhi 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 Tejasvi Bhalla, New Delhi 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.

We have heard both parties and have perused the material available 5. 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 Tejasvi Bhalla, New Delhi 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.

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