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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: SH. R. K PANDA & SH. K. N. CHARY
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI
BEFORE SH. R. K PANDA, ACCOUNTANT MEMBER AND SH. K. N. CHARY, JUDICIAL MEMBER ITA No.5640/Del/2016 Assessment Year: 2011-12
Anuj Miglani Vs. ITO H. Nl. A -2/76, Ward – 71 (2) G/F Janakpuri New Delhi New Delhi-110058 PAN No. ACYPM4699M (APPELLANT) (RESPONDENT)
Appellant by Sh. V. P. Gupta, Advocate Sh. Anumav Kumar, Advocate Sh. Hem Singh, Advocate Respondent by Sh. V. K Chadha,Sr. DR Date of hearing: 17/12/2019 Date of Pronouncement: 25/02/2020 ORDER PER R.K PANDA, AM:
This appeal filed by the assessee is directed against the order dated 23.08.2016 of the CIT(A)-21, New Delhi relating to A.Y.2011-12.
Although a number grounds have been raised by the assessee these all relate to the order of the CIT(A) in dismissing
the appeal filed by the assessee upholding the various additions made by the AO where in the AO has determined the total income of the assessee at Rs.59,67,724/- as against the returned income of Rs.18,51,101/-.
Facts of the case, in brief, are that the assessee is an individual and derives income from salary from M/s. Plug Power Energy Private Limited. He filed his return of income on 31.07.2011 declaring total income of Rs.18,51,101/-. The case was selected for scrutiny and statutory notices were issued to the assessee from time to time. However, a perusal of page 2 and 3 of the assessment order shows that there was no proper compliance to the said statutory notices and the assessee filed only scanty details and was seeking adjournment from time to time on one ground or the other. As per 26 AS information available on the ITD system, the AO noted that assessee has received following amounts : Sr Section / Name of Deductor / ( Nature of Income TDS No Date Filer Name Transaction 192B Plug Power Energy India Salary 14,95,034 4,32,574 1 Pvt Ltd 194J Plug Power Energy India Professional 11,66,665 1,16,666 2 Pvt Ltd Services 3 1.94C Reliance Communications Contract 31,857 637 Infrastructure Ltd Receipts 4 194C Reliance Infratel Ltd Contract 867 17 Receipts Total 26,94,423 5,49,894
On being questioned by the AO to reconcile the receipt shown in the TDS certificates/ Form 26 AS with the income Page | 2
declared in the return of income under different heads, the assessee filed the following reconciliation:- Sr No Name of Deductor / Filer Income TDS Plug Power Energy India Pvt Ltd (Salary Receipts) 19,61,700 4,32,574 1 . 6,99,999 Plug Power Energy India Pvt Ltd (Professional 2 1,16,666 Receipts) 3 Reliance Communications Infrastructure Ltd 31,857 637 4 Reliance Infratel Ltd 867 17 Total 26,94,423 5,49,894
From the above the AO noted that assessee has declared only salary income in the ITR. However, no income has been declared on account of the other receipts shown in the 26 AS. After analyzing the copy of form No.16 cum salary certificate issued by M/s. Plug Power Energy India Private Limited, the AO noted that the assessee has declared lesser income and has made wrong claim of allowance as u/s.10 (14) of the IT Act. He, therefore, made addition of Rs.4,800/- to the total income of the assessee. Similarly in absence of any valid explanation given by the assessee, the AO, after allowing certain expenses made addition of Rs.9,38,497/- to the total income of the assessee on account of non disclosure of professional receipts of Rs.11,99,389/-. The AO similarly noted that there is discrepancy in actual receipts on account of salary / professional receipts from M/s. Plug Power Energy India Private Limited and the amount received from the said company as per Form No. 16 and 26 AS information. The AO analysed the bank statements of the assessee maintained with ICICI Bank in his name and noted that assessee has received an amount of Rs.48,50,609/- from the said
company through RTGS. The explanation of the assessee that these are part of the amount received from the said company on account of reimbursement of expenses was not accepted by the AO who made addition of Rs.22,71,484/-. Similarly the AO rejected the claim of exemption u/s.54 amounting to Rs.12,88,927/- claimed by the assessee during the course of assessment proceedings by way of a letter. In absence of any plausible explanation to his satisfaction the AO also made addition of Rs.8,43,000/- u/s. 68 of the IT Act being cash deposited in the bank account maintained with HDFC and ICICI Bank. The AO similarly made addition of Rs.35,137/- being interest on IT refund and Rs.23,705/- being interest on savings bank account. He accordingly determined the total income of the assessee Rs.60,60,724/-. After deducting an amount of Rs.1 lakh under chapter VI-A, the AO determined the total income of the assessee at Rs. 59,67,724/-.
5.1 In appeal the Ld. CIT(A) dismissed the appeal filed by the assessee by observing as under :-
Observation : I have carefully considered the written submission of the appellant and also the contents of the assessment order and perused the relevant material available on record. After having carefully considered the entire facts and circumstances of the case, my conclusions on the issues raised in the grounds of appeal are as under: -
under the head professional and other receipts. While making above addition the AQ has worked out the above amount of Rs.9,38,4977- which is- given as under: Part A Particulars- Amount (Rs.) Income, from profession as appearing in 26AS . 11,66,665 Less- Income from profession as accepted 6,99,999 Difference.(Part A). 4,66,666 :Particulars Amount (Rs.) income, as appearing in income and 7,51,193 expenditure account Loss - expenses in earning above income 2,79,362 Difference (Part. B) 4,71,831
b. Based on above the AO has made an addition of Rs.9,38,497/-, i.e. (4,66,666 + 4,71,831). Out of the above, a sum of Rs.4,66,666/- has already been included in the salary income by the assessee himself and the remaining amount of Rs.4,71,831/- has been offerend for taxation during the assessment proceedings itself. In view of the above, addition to the extent of Rs.4,71,831/- is sustained. It is seen that the assessee has filed his return of income in ITR-1 (Sahaj) and declared income of Rs.19,51,101/- under the head "salary". From 26AS it is seen that the assessee has received a sum of Rs.11,66,666/- as professional receipt from M/s Plug Power Energy India Ltd. against which, tax was deducted at source @ 1Q% u/s 194J of the I.T. Act, Moreover, the assessee has also received contractual payment against which tax was deducted at source @ Page | 5
2% u/s 194C of the I.T. Act, It is also learnt that the assessee has earned salary income of Rs.14,95,034/- against which TDS of Rs.4,32,574/- was already deducted at source u/s 192. Assessee has neither shown professional income nor claimed TDS against them. However, income & expenditure account furnished by the assessee shows net income of Rs.4,71,831/- against gross receipt of Rs.7,51,193/- under the head "business & profession". Besides above, form 16 provided by the assessee reveals that the assessee has received salary income of Rs.19,56,701/-. During the assessment proceedings the assessee was given sufficient opportunity to furnish details of income along with supporting evidence but the assessee has failed to do so. In the light of see to produce evidence to substantiate his claim that Rs.4,66,666/- was double addition made by the AO. Accordingly, the addition of sum of Rs.4,66,666/- is upheld. c. Addition of Rs.22.71.884/- on a/o of discrepancy in salary /professional receipts: During the assessment proceedings it came to AO’s notice that there were large number of cash entries appearing in assessee’s bank account which the assesses was specifically asked to explain the nature, source and genuineness of the cash credits. In this regard, the assessee has contended that the .assessee is working as Project Engineer in M/s Plug Power Energy. India Ltd. on remote site, not having banking facility where the assessee is supposed to incur various expenses on behalf of the employer company which were lateron reimbursed for which they are sending bills to the company. With the above contention it has been strongly, pleaded by the appellant that these payments being reimbursement of expenditure should not be treated as income ip the hands of the assessee. In this regard, the appellant was asked to substantiate his above claim with the help of relevant evidence which the assessee has failed to discharge and to that extent I find that the assessee has failed to Page | 6
discharge his onus to explain the nature and source of above cash credits in the bank account despite having been given sufficient' time and adequate opportunity to the assessee. The AO has even conducted the necessary enquiry for which the summons were also issued to the concerned parties but the communication returned back with the comment "company left". Even during the appellate proceedings no further/new evidence or supporting papers were furnished by the assessee. In the light of the above facts I uphold the addition made by the AO amounting Rs.22,71,884/-.
c.Addition on a/c of exemption u/s. 54 of the Act : proceedings it came to the AO’s notice that the appellant has shown one immovable property being Fiat No.143, Block-1, 4th Floor, Rao CGHS, Sector 23, Plot No.2, Dwarka, New Delhi for a sum of Rs.28 lakhs which were neither declared in his return nor did he claim exemption u/s 54 of the Act. Even in the computation of income filed during the course of assessment proceedings assessee failed to declare the same, In this regard the appellant has also claimed that he entered into agreement to sale with a property dealer in the month of February'2011 for a consideration of Rs.28 lakhs which was got registered in May’2011 with the final buyer for Rs.35 lakhs. Based on the above facts, the appellant was denied exemption now claimed by the assessee before me u/s 54 of the Act. In this regard the appellant has strongly argued that the capital gain arising out of above transaction has actually; received in the AY 2012-13 and not in the A.Y. 2011-12 and, therefore, the impugned capital gain can be taxed only in the A.Y. 2012-13. In this regard the appellant has further relied upon the judgment of Hon’ble Supreme Court in the case of Goetz Ltd. vs CIT (2006) 284 ITR in which it has been held that where the exemption has not been claimed, in the return and- the assessee wants to: claim the same in the assessment proceedings, then be could only do by filing revised return. It is an Page | 7
accepted fact that the appellant has neither declared capital gain nor has he claimed exemption u/s 54 of the Act. Moreover, as discussed above, the assessee has filed return of income in ITR-1, which is not a proper form for disclosing capital gains. It is an established legal position that it is essentially for. an assessee to claim benefit of any exemptions/deductions in the return or in the revised return which is not the case in appeal in hand. Moreover, in the case In hand; it is visible that the appellant has claimed exemption only after the enquiries were initiated by the AO. Taking all the above into consideration exemption u/s 54 claimed by the appellant by way of letter during the assessment proceedings is disallowed and accordingly addition of Rs. 12,88,927/- made on account of disallowance of exemption u/s 54 of the Act is upheld. d. Bank interest : During the assessment proceedings the assessee furnished all the bank accounts held by him during the year under consideration and filed copy of bank statement on which the assessee has earned interest income as below: Sr.No. Name of the bank Account number Date Interest T . HDFC Bank 00031050202618 30.09.2010 981 2 HDFC Bank 000310502Q2618 31.03:2010 1,664 3 ICIGI Bank 005101000087 28,04.2010 1,013 4 ICICI Bank 005101000087 04.09.2010 10,190 5 ICICI Bank 005101000087 05.03.201.1 9,857 Total 23,705
For want of any explanation by the appellant, the AO was justified in treating the same as undisclosed income which was added to the total income of the assessee under the head "income from other sources”. Even during the appellate proceedings, the assessee failed to explain the reason for non-disclosure of interest income. In view of the above, I find AO justified in taxing the interest income in the
appellant’s hand, Hence, no interference Is warranted. This ground of appeal is dismissed. e. Interest on income tax refund: As per AIR information, the assessee was issued, income tax refund for A.Y. 2009-10 & 2010- 11 which also included interest of Rs.35,137/-, which was not found to be declared in the appellant’s return. Moreover, the assessee was given, opportunity to explain the reasons for non- disclosure of interest on income tax refunds but the appellant has no valid argument in his defence. As such, the addition made by the AO, as above, deserves to be confirmed. f. Addition of Rs. 8,43.000/- on account of cash deposits : During the assessment proceedings the AO has found that the assessee has deposited a sum of Rs.8,43,000A in cash in his bank account. In this regard, assessee was specifically asked to explain the nature and source of above deposits. Besides above, the assessee was also asked to furnish the narration describing the nature and deposits appearing in the bank account. Assessee was given specific show cause notice to explain the nature and source of impugned cash deposits failing which the same would be treated as unexplained cash credit u/s 68 of the I.T, Act.'-However, despite having been given several opportunities, the assessee1 has not bothered to explain the source of above impugned cash deposits. Regarding impugned addition of Rs.8,43,000/- the appellant has claimed that he was running' an imprest account for his employer and withdrawing money from his account to meet those purpose and re-depositing the same as and when required "for business purpose. In this regard, the assessee has filed details of deposits and withdrawals during the remand proceedings but he failed to furnish the details of all those" bank account from which he withdraw the cash and also the bank to which the funds were re-deposited. In this regard, the assessee was specifically asked to explain the numerous, cash deposits but despite having been given sufficient Page | 9
opportunity he failed to explain the same, it is a well established law that in the case of cash deposits u/s 68 of the Act, the primary onus lies on the assessee to establish the nature, source & genuineness of the cash transaction. However, from the material available on record, I find that the appellant has not bother to establish the nature, source and genuineness of above transaction. As such in the absence of any satisfactory explanation from the assessee’s side, I find AO fully justified in treating the impugned cash credit of Rs.8,43,000/- as undisclosed money in the hands of the assessee u/s. 68 of the IT Act.
Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.
We have heard the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the order passed u/s. 143 (3) made various additions on the ground that there was difference in the income shown by the assessee and the income reflected as per 26 AS available with the income tax department. He also made addition on account of various amounts received by the assessee from M/s. Plug Power Energy India Private Limited through RTGS and not properly explained by the assessee before him. Apart from the above the AO also made addition u/s. 68 being the unexplained cash deposit in the bank account, made addition on account of interest on savings bank account and on IT refund and denied the claim of
exemption u/s. 54 made by the assessee by filing a letter during the course of assessment proceedings. We find in appeal the Ld. CIT(A) dismissed the appeal filed by the assessee, the reasons of which have already been reproduced in the preceding paragraphs. A perusal of the AO’s order shows that there was very little compliance or no compliance before the AO to explain the various discrepancies. Even before the CIT(A) the assessee could not furnish any evidence to support the discrepancies of Rs.2,72,484/- being the receipts on account salary/ professional receipts. We find the summon issued by the AO to the company was returned back unserved with the remark “company left”. Similarly the assessee also could not establish the nature, source and genuineness of the cash deposits in the bank account amounting to Rs.8,43,000/-. The mere statement that he was running an imprest account for his employer and withdrawing money from this account to meet the required expenses and re- depositing the same as and when required for the business purposes was not substantiated with supporting details. Assessee also could not substantiate the non disclosure of such interest on savings bank account and interest on income tax refund.
7.1 It is the submission of the Ld. Counsel for the assessee that assessee had already filed the return of income based on income shown in form No. 16 as salary which included payments of Rs.4,66,676/-, therefore, considering the same as payment for professional fee had resulted in double addition. It is also his Page | 11
submission that the amount of Rs.22,71,884/- was on account of reimbursement of expenses by the employer company which were transferred to his account maintained with ICICI Bank in order to meet the site expenses. Similarly it is also his submission that the amount of Rs.8,43,000/- added by the AO was based on wrong and incorrect appreciation of facts. It is also his submission that the assessee has filed the statement giving cash withdrawn and deposited in the paper book to substantiate the sources of the same which were completely ignored by the lower authorities.
So far as the addition of Rs.12,88,927/- on account of long term capital gain is concerned, it is his submission that despite enquiry conducted by the AO and obtaining confirmation from the society that assessee has sold a flat through registered sale deed dated 04.05.2011 to Mrs. Suvida Singh for consideration of Rs. 35 lacs, the AO wrongly determined the long term capital gain of Rs.12,68,927/-. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to file the relevant details with supporting evidence to the satisfaction of the AO to substantiate the discrepancies in the return filed vis a viz, the amount reflected in the 26 AS statement and the nature and source of various deposits both cheque/ cash / RTGS in the bank account of the assessee. The assessee is also hereby directed to substantiate the non disclosure of interest income on IT refund Page | 12
and SB account and the claim of deduction u/s. 54. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 25.02.2020.
Sd/- Sd/- (K. NARSIMHA CHARY) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *Neha* Date:- 25 .02.2020 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for Pronouncement Date on which the fair order comes back to the Sr. PS/ PS 25.02.2020 Date on which the final order is uploaded 25.02.2020 on the website of ITAT Date on which the file goes to the Bench Clerk 25.02.2020 Date on which file goes to the Head Clerk. The date on which file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order