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Facts
The assessee's appeal concerns additions made by the Assessing Officer (AO) and upheld by the CIT(A) for Assessment Year 2018-19. The AO made additions based on discrepancies in turnover declared versus bank deposits and property valuation. The assessee contested these additions, citing various grounds of appeal.
Held
The Tribunal observed that the submissions and reconciliations were made for the first time before them. Therefore, for substantial justice, the matter concerning grounds 1 and 2 was restored to the Assessing Officer for fresh adjudication. Similarly, ground 3 was also restored to the AO for a decision afresh. Grounds 4 to 7 were dismissed as consequential, and grounds 8 and 9 were dismissed as general.
Key Issues
Whether the additions made by the AO and confirmed by the CIT(A) regarding unexplained credits in bank accounts and discrepancies in property valuation are valid. Whether the Tribunal should allow fresh submissions and evidence at the appellate stage.
Sections Cited
69A, 115BBE, 56(2)(x), 234A, 234B, 234C, 143(3), 133(6), 69C
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Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the assessee is directed against order dated 07.02.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
Grounds of appeal against the Appellant Order & Grounds Grounds of appeal against the Appellant Order & Grounds Grounds of appeal against the Appellant Order & Grounds of Decision dated 07/02/2024 passed by the National of Decision dated 07/02/2024 passed by the National of Decision dated 07/02/2024 passed by the National Faceless Appeal Centre (NFAC), Delhi. Faceless Appeal Centre (NFAC), Delhi. Following grounds of appeal are without prejudice to each other: Following grounds of appeal are without prejudice to each other: Following grounds of appeal are without prejudice to each other: 1) The Learned NFAC has erred in law & on facts in upholding 1) The Learned NFAC has erred in law & on facts in upholding 1) The Learned NFAC has erred in law & on facts in upholding the Learned AO's action of addition of Rs.2,42,29,763/ the Learned AO's action of addition of Rs.2,42,29,763/ the Learned AO's action of addition of Rs.2,42,29,763/- being total credits appearing in the total credits appearing in the bank accounts of the appellant bank accounts of the appellant including cash deposit of Rs.93,16,000/ including cash deposit of Rs.93,16,000/- as per the provisions of as per the provisions of section 69A rws 115BBE of the Income Tax Act, 1961. section 69A rws 115BBE of the Income Tax Act, 1961. 2) The Learned NFAC has further erred in law & on facts in not 2) The Learned NFAC has further erred in law & on facts in not 2) The Learned NFAC has further erred in law & on facts in not considering peak credits while upholding th considering peak credits while upholding the Learned AO's action e Learned AO's action of addition of Rs.2,42,29,763/ of addition of Rs.2,42,29,763/-being total credits appearing in being total credits appearing in the bank accounts of the appellant including cash deposit of the bank accounts of the appellant including cash deposit of the bank accounts of the appellant including cash deposit of Rs.93,16,000/ Rs.93,16,000/- as per the provisions of section 69A rws 115BBE as per the provisions of section 69A rws 115BBE of the Income Tax Act, 1961. of the Income Tax Act, 1961. 3) The Learned NF 3) The Learned NFAC has erred in law & on facts in upholding AC has erred in law & on facts in upholding the Learned AO's action of addition of Rs.60,92,300/ the Learned AO's action of addition of Rs.60,92,300/ the Learned AO's action of addition of Rs.60,92,300/- being the difference in valuation of property as per Stamp valuation difference in valuation of property as per Stamp valuation difference in valuation of property as per Stamp valuation authority and the sale consideration actually paid under the authority and the sale consideration actually paid under the authority and the sale consideration actually paid under the head Income-from other sourc -from other sources as per the provisions of section es as per the provisions of section 56(2)(x) of the IT Act, 1961. 56(2)(x) of the IT Act, 1961. 4) The Learned CIT (A) has erred in law & on facts in upholding 4) The Learned CIT (A) has erred in law & on facts in upholding 4) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of imposing interest of Rs.15,65,200/ the Learned AO's action of imposing interest of Rs.15,65,200/ the Learned AO's action of imposing interest of Rs.15,65,200/- under Section 234A of the Income Tax Act, 1961. under Section 234A of the Income Tax Act, 1961. 5) The Learned 5) The Learned CIT (A) has erred in law & on facts in upholding CIT (A) has erred in law & on facts in upholding the Learned AO's action of imposing interest of Rs.80,49,600/ the Learned AO's action of imposing interest of Rs.80,49,600/ the Learned AO's action of imposing interest of Rs.80,49,600/- under Section 234B of the Income Tax Act, 1961. under Section 234B of the Income Tax Act, 1961. 6) The Learned CIT (A) has erred in law & on facts in upholding 6) The Learned CIT (A) has erred in law & on facts in upholding 6) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of imposi the Learned AO's action of imposing interest of Rs. 4,544/ ng interest of Rs. 4,544/- under Section 234C of the Income Tax Act, 1961. Section 234C of the Income Tax Act, 1961.
7) The Learned CIT (A) has erred in law & on facts in upholding 7) The Learned CIT (A) has erred in law & on facts in upholding 7) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of imposing surcharge of Rs.41,28,522/ the Learned AO's action of imposing surcharge of Rs.41,28,522/ the Learned AO's action of imposing surcharge of Rs.41,28,522/- under Section 115BBE of the Income Tax Act, 1961. under Section 115BBE of the Income Tax Act, 1961. 8) The Appellant craves leave to add to and/or amend and/ or The Appellant craves leave to add to and/or amend and/ or The Appellant craves leave to add to and/or amend and/ or delete and/or modify and/ or alter the aforesaid grounds of delete and/or modify and/ or alter the aforesaid grounds of delete and/or modify and/ or alter the aforesaid grounds of appeal as and when the occasion demands. appeal as and when the occasion demands.
9) All the aforesaid grounds of appeal are independent, in the 9) All the aforesaid grounds of appeal are independent, in the 9) All the aforesaid grounds of appeal are independent, in the alternative and without prejudice alternative and without prejudice to one another.
2. At the outset, the Ld. counsel fo At the outset, the Ld. counsel for the assessee submitted that r the assessee submitted that there was a delay of 23 days in filing the appeal due to old age of a delay of 23 days in filing the appeal due to old age of a delay of 23 days in filing the appeal due to old age of the assessee and certain health issues. In view of the reasons cited the assessee and certain health issues. In view of the reasons cited the assessee and certain health issues. In view of the reasons cited by the assessee, we condoned the by the assessee, we condoned the delay in filing the appeal and in filing the appeal and admitted the appeal for adjudication. for adjudication.
3. Briefly stated, facts of the case a Briefly stated, facts of the case are that in the scrutiny re that in the scrutiny assessment completed u/s 143(3) of the Income completed u/s 143(3) of the Income-tax Act, 1961 (in tax Act, 1961 (in short ‘the Act’), the Assessing Officer pointed out certain short ‘the Act’), the Assessing Officer pointed out certain short ‘the Act’), the Assessing Officer pointed out certain discrepancies in the discrepancies in the turnover declared in return of income fil return of income filed vis- à-vis books of accounts and vis books of accounts and deposits in bank accounts, which were accounts, which were gathered by him way of notice u/s 133(6) of the Act. Accordingly way of notice u/s 133(6) of the Act. Accordingly, he way of notice u/s 133(6) of the Act. Accordingly made additions, firstly firstly, amounting to Rs.2,42,29,763 amounting to Rs.2,42,29,763/- as credits in bank accounts to be taxed at bank accounts to be taxed at special rates, secondly secondly, addition of Rs.60,92,300/- being the value of the property and prescribed being the value of the property and prescribed being the value of the property and prescribed valuation authority and the sale consideration shown by the valuation authority and the sale consideration shown by the valuation authority and the sale consideration shown by the assessee, thirdly addition of Rs.2,50,000/ addition of Rs.2,50,000/- u/s 69 u/s 69C of the Act towards credit card expenses. On further appeal, the Ld. CIT(A) towards credit card expenses. On further appeal, the Ld. CIT(A) towards credit card expenses. On further appeal, the Ld. CIT(A) upheld the additions. Aggrieved the assessee is in appeal before the upheld the additions. Aggrieved the assessee is in appeal before the upheld the additions. Aggrieved the assessee is in appeal before the Tribunal by way of raising grounds as reproduced above. Tribunal by way of raising grounds as reproduced above. Tribunal by way of raising grounds as reproduced above.
Before us, the Ld. counsel for the assessee has fi Before us, the Ld. counsel for the assessee has fi Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 201 and also filed a written synopsis. Book containing pages 1 to 201 and also filed a written synopsis. Book containing pages 1 to 201 and also filed a written synopsis.
In relation to ground No In relation to ground Nos. 1 and 2 of the appeal, the Ld. CIT(A) of the appeal, the Ld. CIT(A) referred to discrepancy in the turnover discrepancy in the turnover declared in return of income declared in return of income vis-à-vis total credits appearing in the vis total credits appearing in the bank accounts of the bank accounts of the assessee and GST return GST return. In absence of any explanation, the Ld. . In absence of any explanation, the Ld. CIT(A) upheld the addition observing as under: CIT(A) upheld the addition observing as under:
“I have considered the facts of the case and submissions filed by I have considered the facts of the case and submissions filed by I have considered the facts of the case and submissions filed by the appellant. I find that even though the books of accou the appellant. I find that even though the books of accou the appellant. I find that even though the books of accounts are not required to be maintained u/s 44AD, but the appellant has to not required to be maintained u/s 44AD, but the appellant has to not required to be maintained u/s 44AD, but the appellant has to show evidences of conducting the eligible business and basis of show evidences of conducting the eligible business and basis of show evidences of conducting the eligible business and basis of turnover shown. However the appellant has failed to show turnover shown. However the appellant has failed to show turnover shown. However the appellant has failed to show evidences of conducting the eligible business and basis of evidences of conducting the eligible business and basis of evidences of conducting the eligible business and basis of turnover during assessment proceedings as well as during nover during assessment proceedings as well as during nover during assessment proceedings as well as during appellate proceedings. Further the claim of the appellant that the appellate proceedings. Further the claim of the appellant that the appellate proceedings. Further the claim of the appellant that the cash withdrawn but not utilized and again deposited in bank cash withdrawn but not utilized and again deposited in bank cash withdrawn but not utilized and again deposited in bank accounts, however the appellant has not submitted any evidence accounts, however the appellant has not submitted any evidence accounts, however the appellant has not submitted any evidence to support his claim. I find that the turnover as per GST return is is claim. I find that the turnover as per GST return is is claim. I find that the turnover as per GST return is only Rs.18,00,000/ only Rs.18,00,000/- and turnover shown in the return of income and turnover shown in the return of income is Rs.1,29,90,255/ is Rs.1,29,90,255/- whereas as per the bank statements there whereas as per the bank statements there are total credits of Rs.2,42,29,763/ are total credits of Rs.2,42,29,763/-. The appellant has not . The appellant has not explained the r explained the reasons for differences between the figures shown easons for differences between the figures shown GST return, Income tax return and credits appearing in the bank GST return, Income tax return and credits appearing in the bank GST return, Income tax return and credits appearing in the bank accounts. Further I find that most of the expenses were incurred accounts. Further I find that most of the expenses were incurred accounts. Further I find that most of the expenses were incurred for personal purposes. I find that the facts of the case case laws for personal purposes. I find that the facts of the case case laws for personal purposes. I find that the facts of the case case laws relied upon by the appellant are not identical to the facts of the by the appellant are not identical to the facts of the by the appellant are not identical to the facts of the present case hence the contention of the appellant is not found present case hence the contention of the appellant is not found present case hence the contention of the appellant is not found acceptable. In view of the above discrepancies the addition made acceptable. In view of the above discrepancies the addition made acceptable. In view of the above discrepancies the addition made by the AO is confirmed and ground of appeal raised by the by the AO is confirmed and ground of appeal raised by the by the AO is confirmed and ground of appeal raised by the appellant is dismissed.” 5.1 Before us, the Ld. counsel for the assessee in the written Before us, the Ld. counsel for the assessee in the written Before us, the Ld. counsel for the assessee in the written synopsis submitted detailed explanation reconciling the deposits in synopsis submitted detailed explanation reconciling the deposits in synopsis submitted detailed explanation reconciling the deposits in the bank account and turnover declared in the the bank account and turnover declared in the return of income. return of income. The relevant submission of the assessee reproduce relevant submission of the assessee reproduced as under: d as under:
“3) Working of amount to be excluded including cash deposit added u/s Working of amount to be excluded including cash deposit added u/s Working of amount to be excluded including cash deposit added u/s 69A r.w.s.HSBBE of IT Act. 69A r.w.s.HSBBE of IT Act. - ICICI Bank Particulars Amount Reason
Apar Advertisers Rs.46,05,000 Rs. 40, 00, 000 already Rs. 40, 00, 000 already considered in ITR and considered in ITR and balance of Rs. 6,05, 000 is out Rs. 6,05, 000 is out opening debtors opening debtors (31/03/2017) of Rs. (31/03/2017) of Rs. 14,00, 000. Copy of 14,00, 000. Copy of Balance Sheet as on Balance Sheet as on 31/03/2017 along with 31/03/2017 along with break-up of debtors, up of debtors, creditors and other creditors and other advances is attached advances is attached herewith. Balance Sheet as herewith. Balance Sheet as on 31/03/2017 is on 31/03/2017 is reflecting in ITR filed for the reflecting in ITR filed for the A.Y. 2017-18 (Page No. 14, 18 (Page No. 14, 15 & 16 of paper book 15 & 16 of paper book filed dated 09/10/20241 filed dated 09/10/20241 Cash Deposit Rs.80,94,000 Considered separately in point Considered separately in point No. 5 below TRANSFER Rs.5,00,000 It is transfer from It is transfer from A/c.074001507878 Appellant's wife account. Appellant's wife account. RETURNED Rs. 90,000 It is cheque return can't be It is cheque return can't be considered as income. considered as income. RETURNED- JASPAL Rs. 1,42,000 It is cheque return can't be It is cheque return can't be CARGO CARRIERS considered as income. considered as income. RETURN FROM SWASTIK RETURN FROM SWASTIK Rs. 45,125 It is cheque return can't be It is cheque return can't be CARS (CAR PUR) considered as income. considered as income.
Race Rs. 1,50,000 It is already considered as It is already considered as income from stake money in income from stake money in ITR under the head income ITR under the head income from other sources (COI from other page No. 95 of paper book page No. 95 of paper book filed dated 09/10/2024) filed dated 09/10/2024) Contra Rs. 24,630 It is contra entry can't be It is contra entry can't be considered as income. considered as income. Sapphire Land Dev. Pvt. Sapphire Land Dev. Pvt. Rs.25,00,000 Rs.30,00,000 Shown as Rs.30,00,000 Shown as Ltd advances (Liability) in ITR advances (Liability) in ITR
(Page No. 5 of paper book filed (Page No. 5 of paper book dated 09/10/2024). Copy of dated 09/10/2024). Copy of balance sheet as 31-03-2018 balance sheet as 31 along with break-up of along with break debtors, creditors and other debtors, creditors and other advances is attached advances is attached herewith. Ravindra Baliram Rs.3,50,000 Shown as advances (Liability) Shown as advances (Liability) in ITR (Page No. 5 of paper in ITR (Page No. 5 of paper book filed dated 09/10/2024). book filed dated 09/10/2 Copy of balance sheet as 31- Copy of balance sheet as 31 03-2018 along with break 2018 along with break-up of debtors, creditors and other of debtors, creditors and other advances is attached advances is attached herewith. JASPAL CARGO Rs.5,58,000 Shown as Unsecured loans in Shown as Unsecured loans in CARRIERS ITR (Page No. 5 of paper book ITR (Page No. 5 of paper book filed dated 09/10/2024). filed dated 09/10/2024). Copy of balance sheet as 31 balance sheet as 31- 03-2018 along with break 2018 along with break-up of debtors, creditors and other of debtors, creditors and other advances is attached advances is attached herewith. DHARMENDRA Shown as advances (Liability) Shown as advances (Liability) Rs.3,00,000 KESHAVDAS in ITR (Page No. 5 of paper in ITR (Page No. 5 of paper book filed dated 09/10/2024). book filed dated 09/10/2024). Copy of balance sheet as 31- Copy of balance sheet a 03-2018 along with break 2018 along with break-up of debtors, creditors and other of debtors, creditors and other advances is attached advances is attached herewith. Rs.1,82,73,657 Total Balance Rs.41,94,107 (Rs.2,24,67,763 (Details attached minus herewith) Rs.1,82,73,657)
4) Working of amount to be excluded in amount Working of amount to be excluded in amount including cash deposit including cash deposit added u/s 69A r.w.s.HSBBE of IT Act. added u/s 69A r.w.s.HSBBE of IT Act. - PMC Bank Particulars Amount Reason Sapphire Land Dev. Pvt. Sapphire Land Dev. Pvt. Rs. 5,00,000 Rs. 30, 00, 000 Shown Rs. 30, 00, 000 Shown Ltd as advances as advances (Liability) in ITR (Liability) in ITR (Page No. 5 of paper (Page No. 5 of paper book filed dated filed dated 09/10/2024). Copy of 09/10/2024). Copy of balance sheet as 31- balance sheet as 31 03-2018 along with 2018 along with break-up of debtors, up of debtors, creditors and other creditors and other advances is attached advances is attached herewith. herewith. Balance (Rs. 17,63, 117 Balance (Rs. 17,63, 117 Rs.12,63,117 minus Rs. 5,00,000)
5) Out of the total cash deposit of Rs.80,94,000/ 5) Out of the total cash deposit of Rs.80,94,000/- in ICICI Bank, total cash in ICICI Bank, total cash withdrawal was Rs.38,85,000/ withdrawal was Rs.38,85,000/- (Duly mentioned in Assessment Order (Duly mentioned in Assessment Order at Para No. 5.7, 5.7, page No. 13) (being redeposit of cash) and appellant (being redeposit of cash) and appellant had opening cash on hand of Rs.7,62,961/ had opening cash on hand of Rs.7,62,961/- (Page No. 16 being ITR for A.Y. Page No. 16 being ITR for A.Y. 2017-18 of paper book filed dated 09/10/2024) considering the same 18 of paper book filed dated 09/10/2024) considering the same 18 of paper book filed dated 09/10/2024) considering the same peak credit/excess cash deposit (after reducing re-deposits of cash peak credit/excess cash deposit (after reducing re peak credit/excess cash deposit (after reducing re withdrawals & opening cash on hand) amounts to Rs.34.46.039/- withdrawals & opening cash on hand) amounts to withdrawals & opening cash on hand) amounts to (Rs.80,94,000/- minus RS.38, minus RS.38,85,000/- minus Rs.7,62,961/ minus Rs.7,62,961/-) (working is attached herewith). attached herewith). 6) In the case of Appellant's business of sale and purchase of 6) In the case of Appellant's business of sale and purchase of 6) In the case of Appellant's business of sale and purchase of advertisement hoardings was been accepted for the A.Y. 2016-17 vide advertisement hoardings was been accepted for the A.Y. 2016 advertisement hoardings was been accepted for the A.Y. 2016 para No.3.6, page No. 6 of the Assessment order dated 30/12/2018 of the Assessment order dated 30/12/2018 para No.3.6, page No. 6 passed u/s 143(3) of the IT Act, 1961 passed u/s 143(3) of the IT Act, 1961 (Copy is attached herewith) by (Copy is attached herewith) by virtue of which Rule of consistency Rule of consistency should be followed. should be followed.
The learned AO held that where assessee has claimed to have received The learned AO held that where assessee has claimed to have received The learned AO held that where assessee has claimed to have received amounts for advertisi amounts for advertising business, the study of bank transaction pattern ng business, the study of bank transaction pattern for these receipts show that they are not in the nature of business receipts for these receipts show that they are not in the nature of business receipts for these receipts show that they are not in the nature of business receipts and have gone to fund activities which are not related to advertisement and have gone to fund activities which are not related to advertisement and have gone to fund activities which are not related to advertisement business. (Para No. 5.4, page No. 7 of the assessment order). In simple business. (Para No. 5.4, page No. 7 of the assessment or business. (Para No. 5.4, page No. 7 of the assessment or words, the learned AO held that appellant is not into the business of words, the learned AO held that appellant is not into the business of words, the learned AO held that appellant is not into the business of advertisement based on application/utilization of amount received without advertisement based on application/utilization of amount received without advertisement based on application/utilization of amount received without bringing any material to show that the assessee was not engaged in bringing any material to show that the assessee was not engaged in bringing any material to show that the assessee was not engaged in advertisement business. advertisement business.
7) Therefore it is contended that erefore it is contended that, total receipts to be considered under , total receipts to be considered under the head business is Rs.1,29,03,263/- [Rs.41,94,107/- the head business is - (balance credits in ICCI bank as per point No.3 above) +Rs.12,63,117/ ICCI bank as per point No.3 above) +Rs.12,63,117/- (balance credits in (balance credits in PMC bank as per point no.4 above) +Rs.34,46 PMC bank as per point no.4 above) +Rs.34,46,039/- (as per point No.5 above) +Rs.40,00,000 (Apar Advertisers as per point No.1 above)]. Gross above) +Rs.40,00,000 (Apar Advertisers as per point No.1 above)]. Gross above) +Rs.40,00,000 (Apar Advertisers as per point No.1 above)]. Gross receipts considered in ITR as per point No.1 above is Rs.1,29,90,255/- receipts considered in ITR as per point No.1 above is Rs.1,29,90,255/ receipts considered in ITR as per point No.1 above is Rs.1,29,90,255/ which is more than Rs.1,29,03,263/-. Therefore, gross receipts . Therefore, gross receipts which is more than claimed in ITR be accept claimed in ITR be accepted and addition made of Rs.2,42,29,763/ ed and addition made of Rs.2,42,29,763/- u/s u/s 69A r.w.s.115BBE of IT Act is required to be deleted. u/s u/s 69A r.w.s.115BBE of IT Act is required to be deleted u/s u/s 69A r.w.s.115BBE of IT Act is required to be deleted
Hence, Gr. No 1 & 2 of the Appellant may Hence, Gr. No 1 & 2 of the Appellant may be allowed.”
5.2 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. We find that all these submissions find that all these submissions have been made for the first time have been made for the first time before us and no evidence and no evidences in support of same have same have been filed for reconciliation, therefore, , therefore, in the interest of substantial justice, interest of substantial justice, we feel it appropriate to restore this we feel it appropriate to restore this matter back to the file of the Assessing Officer with the opportunity file of the Assessing Officer with the opportunity file of the Assessing Officer with the opportunity to the assessee to provide all documents to support its contentions to the assessee to provide all documents to support its contention to the assessee to provide all documents to support its contention made above. The ground No. 1 made above. The ground No. 1 and 2 of the appeal of the assessee of the appeal of the assessee are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes.
In respect of gro In respect of ground No. 3 also the assessee has filed written also the assessee has filed written submission explaining discrepancy. As no documentary evidence submission explaining discrepancy. As no documentary evidence submission explaining discrepancy. As no documentary evidence were filed in support of filed in support of its contention before the Ld. CIT(A) its contention before the Ld. CIT(A), the ground No. 3 is also restored back to the file of the Assessing Officer also restored back to the file of the Assessing Officer also restored back to the file of the Assessing Officer to be decided afresh after considering submission of the assessee. cided afresh after considering submission of the assessee. cided afresh after considering submission of the assessee. The ground No. 3 of the appeal of the assessee is allowed for The ground No. 3 of the appeal of the assessee The ground No. 3 of the appeal of the assessee statistical purposes.
7. The ground Nos. 4 to 7 are consequential and Ground No. 8 and 7. The ground Nos. 4 to 7 are consequential and Ground No. 8 and 7. The ground Nos. 4 to 7 are consequential and Ground No. 8 and 9 are general, hence these grounds are dismisse 9 are general, hence these grounds are dismissed as infructuous. d as infructuous.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.