ARJUN MATTA,DELHI vs. ITO WARD-36(5), NEW DELHI

O R D E R PER KUL BHARAT, JM:

This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-12, New Delhi, dated 27.06.2019, pertaining to the assessment year 2011-12. The assessee has raised following grounds of appeal:

“1. Because the action for initiation, continuation and conclusion of reassessment proceedings u/s 148 is being challenged on facts and law.

2. Because the action is under challenge on facts & law, for initiating & concluding the reassessment proceeding u/s 144/147 of the Act at an amount of Rs. 10,45,255/- without noticing the distinction of the words, reasons to Arjun Matta Vs. iTo suspect distinguishable from reasons to belief pursuant to reasons recorded.

4. Because the action is under challenge on facts & law, for making addition u/s 68 amounting to Rs. 2,20,000/- relating to cash deposit in Sarvodya Co-op Bank overlooking the assessee’s submission that assessee has none bank account in any branch of Sarvodya Co-op Bank.

5. Because the action is under challenge on facts & law, for making addition of Rs. 4,76,595/- on estimation basis (0.5% of total turnover of transaction with multi commodity exchange Rs. 9,53,19,067/-) overlooking the documents & submission of assessee.

6. Because the action is under challenge on facts & law, for making addition of Rs. 1,73,100/- u/s 68 on account of sale of shares of Ashutosh Paper Mills Ltd. as unaccounted money of the assessee overlooking that assessee has incurred loss in trading of said shares.

Arjun Matta Vs. iTo the transaction as sham, the Assessing Officer reopened the case of the assessee by issuing notice u/s 148 of the Act. In response to the notice no return of income was filed. The Assessing Officer also show caused to the assessee for proceedings ex parte, but no one attended the proceedings. Therefore, the Assessing officer proceeded to make additions on account of cash deposited in the Sarvodaya Co- operative Bank amounting to Rs. 2,20,000/-; margin money of Rs. 4,76,595/- u/s 68 of the Act and the transactions relating to M/s Ashutosh Paper Mills Ltd. of Rs. 1,73,100/-. Hence the Assessing Officer assessed the income of the assessee at Rs. 10,45,255/- against the returned income at Rs. 1,75,560/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who after considering the submissions sustained the finding of Assessing Officer and dismissed the appeal. Aggrieved against this, the assessee is in appeal before this Tribunal.

3. Apropos ground nos. 1 to 6, learned counsel for the assessee vehemently argued that there is complete non-application of mind by the Assessing Officer for reopening of the assessment. He submitted that the assessment cannot be reopened purely on the basis of suspicion. He contended that the Assessing Officer made three additions at the back of the assessee. Firstly, on account of cash deposit in the Sarvodaya Co-operative Bank amounting to Rs. 2,20,000/-, he contended that no such bank account was held by the assessee. He submitted that the banker has Arjun Matta Vs. iTo issued a certificate in this regard. Secondly, an addition of Rs. 4,76,595/- was purely made on estimation basis, overlooking the documents and submissions of the assessee. Thirdly, an addition of Rs. 1,73,100/- was made u/s 68 of the Act on account of sale of shares of M/s Ashutosh Paper Mills Ltd., as unsecured money of the assessee, overlooking that the assessee had incurred loss in trading of such shares.

It is the say of the assessee that he was not holding any bank account in Sarvodaya Co-operative Bank Ltd., where the Assessing Officer has alleged having deposited cash amounting to Rs. 2,20,000/-. The other addition of Rs. 4,76,595/- was made purely on the basis of estimation and it is also stated that in transaction relating to trading of shares of M/s Ashutosh Paper Mills Ltd., the assessee has incurred loss.

Therefore, looking to the facts and contentions of the assessee and the material placed before me, the impugned orders of the authorities below are set aside and the assessment is restored to the file of the Assessing Officer to decide it afresh after considering the objections and submissions of the assessee de novo. Grounds Arjun Matta Vs. iTo raised in this appeal are allowed for statistical purposes.

Order pronounced in open court on 11.05.2022.