SURESH KUMAR BHATIA,DELHI vs. ITO, WARD-47(5), NEW DELHI

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ITA 7595/DEL/2018Status: DisposedITAT Delhi11 March 2020AY 2010-114 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the assessee's business of trading medicines and the factual position in earlier years. Considering the parties' submissions, the Tribunal directed the Assessing Officer to compute the income by accepting 30% of the addition.

What were the facts?

The assessee had cash deposits of Rs. 43,46,300/- in a bank account which the revenue authorities treated as unexplained cash credit. The assessee argued that similar deposits in earlier and subsequent years were treated as business receipts.

What were the issues?

Whether cash deposits in a bank account, not disclosed in the books, can be treated as unexplained cash credit when similar deposits in other years were accepted as business receipts.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’, NEW DELHI

Before: SH. H.S. SIDHU

The assessee has filed the appeal against the impugned order dated 30.08.2018 passed by Ld. CIT(A)-16, New Delhi relevant to assessment year 2010-11 on the following grounds:- 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in sustaining the addition of Rs. 43,46,300/- on account of unexplained cash credit.

2. That the authorities below have failed to appreciate that in the assessment year 2009-10 and subsequent assessment year 2011-12, SB No. 0551930003747 of the appellant with HDFC Bank, Chadni Chowk, Delhi – 110 006, was found by the department being used for the business activities of the appellant and cash deposits therein were treated as business receipts and brought to tax after allowing estimated expenses. As the factual position remained the same as in the assessment year 2009-10 and 2011-12 and in the absence of any material on record to hold otherwise, there was no justification to treat the total amount cash deposits of RS. 43,46,300/- as unexplained cash credit and addition made on mere surmises and conjecture is liable to be deleted.

3. That on the facts and circumstances of the case the authorities below have further erred in law and on facts in treating the cash deposits of Rs. 43,46,300/- as unexplained cash credit merely on ground of not disclosing the bank account by the appellant in his books of account. Such an approach is wholly arbitrary and liable to be set aside.

4. That the appellant craves leave to add, amend, alter and / or vary any of the above grounds of appeal either at or before the date of hearing.

2.

Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.

3.

After hearing both the parties, I am of the view that assessee is contesting the addition of Rs. 43,46,300/- being cash deposits as unexplained cash credit in undisclosed bank account. After considering the submissions of both the parties, the revenue authorities have sustained this addition and now the assessee is in appeal before the Tribunal by stating that the AO has made the addition of Rs. 43,46,300/- on account of unexplained cash credit. He further stated that the authorities below have not appreciated the similar facts and circumstances of the case of assessee for the assessment year 2009-10 and subsequent years i.e. 2011-12. In these 02 assessment years similar cash deposits made by the asseessee, and the Revenue has treated the same as business receipts and brought to tax after allowing the estimated expenses. But in the present case, the same has not been done by the revenue authorities. However, the revenue authorities have treated these cash deposits of Rs. 43,46,300/- as unexplained cash credit and made/confirmed the addition in dispute. I am of the view that assessee is engaged in trading of medicines and transaction of bank account is from sale and purchase of medicines and assessee has disclosed the Gross Profit (GP)@3.63%, but the same has not been accepted by the Revenue authorities and they made/confirmed the addition in dispute on the ground that assessee did not disclose the bank account.

4.

After hearing both the parties and perusing the relevant records available with me and keeping in view the business of the assessee and the facts and circumstances of the earlier years, the Bench put the proposal before the Ld. Counsel for the assessee that how much assessee can make the payment on the addition of Rs. 43,46,300/- on account of cash deposit. Ld. Counsel for the assessee agreed to make the payment @30% on the addition of Rs. 43,46,300/- and no objection has been raised by the Ld. DR on this proposition.

5.

Keeping in view of the facts and circumstances of the case and the issue in dispute, I am directing the Assessing Officer to make the payment @30% on the addition of Rs. 43,46,300/- and accordingly compute the income of the assessee for the assessment year 2010-11, in accordance with law.

6.

In the result, the appeal of assessee is allowed in the aforesaid manner.

The decision is pronounced on 11-03-2020.

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