NITIN BAJAJ,NEW DELHI vs. ITO, WARD- 50(1), NEW DELHI

ORDER PER R.K. PANDA, A.M.

This appeal filed by the Assessee is directed against the Order dated 18.09.2017 of the Ld. CIT(A)-17, New Delhi, relating to the A.Y. 2012-2013.

2 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi.

3 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. the case was received on transfer to ITO, Ward-50(1), New Delhi. Again notices under section 143(2) and 142(1) along with questionnaire were issued. However, no one attended on behalf of the assessee on the appointed date. Subsequently, the Learned A.R. of the Assessee appeared before the A.O. and filed copy of the return and the case was adjourned. However, subsequently nobody appeared on behalf of the assessee.

4.1. In appeal, the Ld. CIT(A) upheld the various additions made by the A.O.

“On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in a) Dismissing the appeal of the assessee. b) Not holding the assessment illegal and invalid in the absence of any valid service of notice u/s 5 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. 143(2) for selecting the case for scrutiny i.e before the expiry of the time limit permissible for taking the case under scrutiny. c) Not holding the assessment illegal and invalid in the absence of any 143 notice issued by the jurisdictional Assessing Officer. d) Not holding the assessment illegal and invalid since the notice u/s 143(2) if any, was issued by a non jurisdictional assessing officer and therefore, being invalid notice. e) Not holding the assessment illegal and invalid in the absence of service of the notice u/s 143(2) within the permissible time limit. f) Confirming the addition of Rs.1,68,553/- incorrectly and unjustifiably made by the AO. g) Confirming Rs.5,86,742/- the addition of incorrectly and unjustifiably made by the AO. h) Confirming the addition of Rs.60,22,000/- incorrectly and unjustifiably made by the AO.

6 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in holding that the fresh evidences filed by the appellant could not be admitted in the absence of Rule-46A. application whereas in the appeal order evidences have been considered and rejected but without hearing the assessee on such fresh evidences and- also without considering such fresh evidences in detail and also merits of the evidences.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in confirming the addition of Rs.60,22,000/- incorrectly and unjustifiably made by the AO u/s 68 whereas there is no such credit of this amount in the books of account which is prerequisite condition for any addition u/s 68.

7 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in confirming the assessment incorrectly made by the AO u/s 144.”

“In ground no.1, the appellant has challenged the disallowance of Rs.1,68,553/- without any basis. The appellant has claimed that the Assessing Officer disallowed expenses on the basis that no justification and no details in respect

8 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. of expenses amounting to Rs.8,42,763/- was filed by the appellant. He therefore disallowed 20% of the expenses on estimate basis. In appeal, the appellant has claimed that the expense has been incurred an expense of Rs.5,63,513/- under various heads for running of the business. These expenses are genuine expenses and have been incurred in the ordinary course of business. The perusal of the detail of the expenses show that the entire expenses have been incurred by the appellant in cash. Thus, there is always possibility to inflate the expenditure on the basis of self-made vouchers/in absence of proper bills/vouchers. Further, without producing bills/vouchers of various expenses, the authenticity of the expenses cannot be ascertained. Under these circumstances, I find that the AO was justified to disallow out of the claim of the appellant. Keeping in view-all these facts, the disallowance of 20% made by the Assessing Officer is justified and upheld.”

9 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. 7.1. Similarly, while upholding the addition of 20% sundry creditors, the Ld. CIT(A) has rejected the various additional evidences filed before him as per Rule-46A in the absence of any application for admission of the same. Even otherwise he has also decided the issue on merit by holding as under :

“Further, even on merits, the above confirmations did not contain the PAN of the party and were undated. Even the Ledger account of these parties filed by the assessee only shows that the assessee had been making only cash payment to these parties against purchases of Rs.20,000/- each on continuous dates. Hardly any payment has been made through cheques. It is apparent that the assessee is making purchases from small parties who do not have the capacity to sell their goods on credit. The cash payments have been shown to square up the account on subsequent dates. Thus, the grounds of appeal are dismissed.”

10 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. 7.2. Similarly, while upholding the addition of unexplained cash deposit in the Bank A/c under section 68 of the I.T. Act, 1961, the Ld. CIT(A) has given a categorical finding that assessee could not substantiate with evidence regarding source of the cash deposit. The relevant observations of the Ld. CIT(A) at Para-10.6 of the order is reproduced as under :

10.6. In respect of the deposits made in the bank account the appellant has been unable to prove the source. The explanation offered by the assessee thus about the nature and source of the cash received in the bank account, is not satisfactory thus there is, prima facie, evidence against the assessee. The burden was on the assessee to rebut the same, and, it failed to rebut it. The appellant has failed to discharge its onus to produce legally acceptable evidence of genuineness of the transactions. The expression "the assessee offers no explanation" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the 11 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. assessee. In this case the appellant has offered no creditable explanation about the amounts credited in his bank account, the entire receipts of Rs.56,58,640/- (as against Rs.60,22,000/- taken by the r Assessing Officer) therefore cannot be treated as explained. In appeal, the additional evidence filed by the appellant has been examined, and perused, however, in the absence of application for admission of additional evidence, the same has not been admitted and taken cognizance of. The additions made by the Assessing Officer is therefore upheld subject to the confirmation in respect of the amount of cash deposited in the account whether Rs.56,58,640/- as claimed by the appellant or Rs.60,22,000/- as claimed by the Assessing Officer. Considering the above facts, the addition made by the AO u/s 68 is confirmed. The grounds of appeal are therefore dismissed.”

7.3. Since the assessee did not to appear before the Tribunal and since there is no other evidence before us to take a contrary view than the view taken by the Ld. CIT(A)

12 ITA.No.7078/Del./2017 Shri Nitin Bajaj, New Delhi. in sustaining the various additions made by the A.O, we do not find any infirmity in his order. We, accordingly, uphold the order of the Ld. CIT(A) and the grounds raised by the assessee are dismissed.

Order pronounced in the open Court at the time of hearing itself i.e., on 28.09.2021.