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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI G. S. PANNU & MS SUCHITRA KAMBLE
ORDER
PER SUCHITRA KAMBLE, JM
1. This appeal is filed by the assessee against order dated 20/05/2017 passed by CIT(A)-19, New Delhi for assessment year 2013-14.
The grounds of appeal are as under:-
“The order passed by the Ld. Assessing Officer is arbitrary and bad in law.
2. That the Learned Assessing Officer has erred on the facts and in law, adding an income of Rs.2,27,49,500/- under Section 68 of the Income Tax Act, 1961.
3. That the Learned Assessing Officer has failed to accept that addition under section 68 of the Income Tax Act, 1961 can be made on the basis of unexplained cash credit found in the books of the assessee which is Hyvolt Electricals.
That the Learned Assessing Officer has failed to note that U/s 68 of the Income Tax Act, 1961, books of accounts must of assessee himself and not of any other assessee. In Smt Shanta Devi v. CIT [1998] 171 ITR 532 (P&H), it was held that a perusal of Section 68 would show that the expression books has been used with reference to the word assessee. In other words, such books of account have to be books of the assessee himself and not of any other assessee. Thus books of account of a partnership firm cannot be considered to be the books of account of the partner. Any cash credit shown therein cannot be brought to tax as income under Section 68 in the hands of the partners. 5. That the Learned Assessing Officer has relied only on Bank Pass book of the Partners of the Assesee and not of the Assessee. 6. That the Learned Assessing Officer has failed to note that ank Pass book is not books of account for the purpose of Section 68. In CIT, Poona v. Bhaichand H. Gandhi 141 ITR 67 (Bom.) it was held that the pass book supplied by the bank to the assessee cannot be regarded as the book of the assessee, that is, a book maintained by the assessee or under his instructions. 7. That on the above grounds, the assessee prays for justice not to add Rs.2,27,49,500/- U/s 68 of the Income Tax Act, 1961 and Rs.27,86,940/- as Interest expense.
M/s. Hyvolt Electricals PAN AAAFH1571M was a partnership firm in the said Assessment Year and was carrying on the business of manufacturing of copper and aluminum alloys, wires and conductors. A Notice U/s 274 read with section 271(1)(c) of the Income Tax Act, 1961 against concealment of Income against Additions made in the Assessment Order passed under section 143(3) of the Income Tax Act. The Assessment was done under section 143(3) of the Income Tax Act, 1961 and the order was passed on 18th March 2016. The following Additions were made under section 143(3) of the Income Tax Act, 1961.On Account of unexplained cash credit U/s 68 of the Income Tax Act.
SI.No. Persons from whom loan taken Amount of Loan being added U/s 68 (Fig in Rupees) Shri V.K Mittal 1,70,00,000/- 1 Shri Kaushal Mittal 46,49,500/- 2 3 Smt Santosh Mittal 7,00,000/- 4 Shri Yogesh Mittal 4,00,000/- TOTAL 2,27,49,500/- On Account of Interest expense claimed on the above SI.No. Name Interest Rate Amount (Fig. In Rupees) Shri V.K. Mittal 12% 20,40,000/- 1 Shri Kaushal Mittal 12% 5,57,940/- 2 3 Smt Santosh Mittal 12% 84,000/- 4 Shri Yogesh Mittal 12% 1,05,000/- TOTAL 27,86,940/-
That the Assesee is in the course of filing Appeal against the said Assessment Order under Section 143(3) of the Income Tax Act.
4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT (A) dismissed the appeal of the assessee.
None appeared on behalf of the assessee despite giving notices.
The Ld. DR relied upon the assessment order and the order of the CIT(A) as well as the order passed by the Tribunal in Revenue’s appeal in of 2017 order dated 14/7/2021 wherein the order of the CIT(A) is confirmed.
We have heard Ld. DR and perused all the relevant material available on record. It is pertinent to note that from the perusal of the order of the CIT(A) on Page No. 6, the opening balance was not mentioned and the same was not taken into account by the CIT(A). It appears that there is no mention of opening balance in respect of V. K. Mittal, and, therefore, we direct the Assessing Officer to verify the same in regards to the opening balance in consonance with the earlier year’s closing balance. Further, in respect of deposit of Rs. 4,00,000/- in the account of Yogesh K. Mittal, whether the same is actually done or not, has to be verified by the Assessing Officer. Hence, to this extent the order of the CIT(A) is set aside to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.