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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-2’, NEW DELHI
Before: Sh. Bhavnesh SainiDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of the ld. CIT(A)-23, New Delhi dated 28.06.2019.
Following grounds have been raised by the assessee:
1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)]) is bad both in the eye of law and on facts.
2(i). On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in enhancing the income of the assessee to the extent of Rs. 30,00,000/- under section 69A of the Act.
(ii). That the enhancement has been made misunderstanding the facts of the case, arbitrarily
2 Pankaj Goel rejecting the evidences and explanation brought on record by the assessee.
3(i). On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in enhancing the income of the assessee, having been made without jurisdiction, without understanding the law that for the purpose of enhancement under section 251 of the Act, the CIT(A) cannot make a new source of income.
(ii). That the CIT(A) ignored the fact that there being no whisper, much less any discussion regarding said transaction, in the A.O.’s order, there is total lack of jurisdiction on the part of CIT(A) under section 251 of the Act.
4(i). On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming the action of the A.O. in making the addition to the extent of Rs. 1,42,500/- on account of incomes received in cash.
(ii) That the addition has been confirmed, misunderstanding the facts of the case.
5. On the facts and circumstances of the case Id. CIT(A) has erred both on facts and in law in confirming the action of the A.O. in making addition of Rs.2,25,000/- on account of interest on loan.”
The assessee was intercepted on 25.03.2017 by Delhi Police and consequently authorization u/s 132 of the Income Tax Act, 1961 was issued in the name of the assessee and an amount of Rs.25,00,000/- has been seized. The assessee opted for disclosure under Pradhan Mantri Garib Kalyan Yojna (PMGKY).
During the assessment, the AO made addition of Rs.2,25,000/- on account of interest and loan from the period July 2016 to March 2017 on the amount of Rs.25,00,000/- that 3 Pankaj Goel has been seized. The AO held that the assessee is in the business of given cash loans and he must have received the interest on the amount of Rs.25,00,000/- at least @1%. We have seen the assessment record and the order of the ld. CIT (A) and having heard arguments of both the parties, we find that the revenue has no prima facie evidence of receipt of the interest by the assessee. The addition has been made on a notional basis without any proof. Hence, in the absence of any tangible reasons and material available on record and or with the revenue, we hereby direct that no notional interest can be added to the total income of the assessee.
The ld. CIT (A) made an addition of Rs.30,00,000/- to the returned income. The reason given by the ld. CIT (A) was that the assessee has admitted during the statement recorded on 25.03.2017 that on 22.11.2016 he has collected Rs.30,00,000/- in cash.
The question 14 read as under:
You are being shown message in your mobile sent by you to Sh. Rajendra Goel Ji on 22.11.2016 at 15:49 which has the content – 10 ka note, 37L 881231, 30/- The assessee answered – “The message means that I was to collect Rs.30,00,000/- in cash from the person having the Rs.10/- note with Serial No. 37L 881231.
Based on the above question and answer, the ld. CIT (A) held that the full address of Sh. Rajendra Goel and full particulars of transactions were not provided nor any supporting
4 Pankaj Goel evidences were provided. Holding this, the ld. CIT (A) made addition of Rs.30,00,000/- to the total income of the assessee.
Heard the arguments of both the parties and perused the material available on record.
We find from the events that the revenue did not have any evidence of the assessee being the owner of the purported Rs.30,00,000/-. It was not proved that the assessee has received the money and the monies have been found in the custody of the assessee by the revenue. The message only depicts that the assessee was to collect Rs.30,00,000/- but it was not proved that the assessee has indeed collected the amount and the amount belongs to him and the matter has been examined by the Assessing Officer who choose to not to treat this amount as undisclosed income. The CBDT has also issued Circulars from time to time, directing the officers not to make additions merely based on the statement of the assessee without bringing any cogent material on record or conducting suitable enquiries. We find in this case, the ld. CIT (A) has swayed away by the message in the mobile but could not bring anything on record or made enquiries or proved that the assessee has indeed received the amounts. The rigors of presumption allowed under the Act cannot be invited in the facts of the instant case. It was not even prima facie proved whether the assessee indeed received the money or was to receive the money. There was no material to prove the case of the revenue regarding the addition (enhancement) made by the ld. CIT (A).
5 Pankaj Goel 10. In view of the aforesaid observation, we hereby direct that the enhancement made by the ld. CIT (A) is not valid on merits of the case.
As a result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 26/03/2021.