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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: MS SUCHITRA KAMBLE & SHRI PRASHANT MAHARISHI
This appeal is filed against the order dated 02.12.2015 passed by CIT(A)- 14, New Delhi for assessment year 2011-12.
The grounds of appeal
are as under :
1. That in the absence of notice U/s. 143(2) and its service within statutory time period, the whole asstt. is without jurisdiction and un- sustainable in law as well as on merits. 2.1 That under the facts and circumstances, the explanation furnished w.r.t. the deposits of Rs. 63,60,190/- in following bank a/c’s should have been accepted :-
S. No. Bank Branch A/c. No. Correct credit in bank 1 Axis Bank New Delhi 250010100107723 2,55,480 2. Indian Bank Kirti Nagar, 600141950 2,52,497 New Delhi 3. ICICI Bank New Delhi 092801501330 31,57,974 4. State Bank of Kirti Nagar, 30385293812 17,11,861 India New Delhi 5. PNB Shakur 0649000101277151 9,82,378 Basti, Delhi Total 63,60,190/-
2.2 That without prejudice, after assessing the income u/s. 44 AD @ 8%, at Rs. 1,47,214/- (1,18,240 + 28,974) the credits in the banks to the extent of Rs. 18,40,180/- stands accepted / explained, therefore, to this extent addition u/s. 68 tentamounts to double addition. 2.3 That without prejudice, on determining the income in respect of deposits in the bank on peak basis at Rs. 6,09,025/-, the Ld. CIT(A) erred in not allowing deduction out of the peak for the following amounts which are already part of the returned income and emanating out of the said cash deposits in the bank a/c. Rs. 1,47,214/- Income assessed u/s. 44AD @ 8% on sales of Rs. 18,40,180/- which is part of cash deposits/ peak calculated (1,18,240 + 28,974) Rs. 46,832/- Commission income assessed @ 2% on sales of Rs. 23,41,600/- which is part of cash deposited / peak calculated. Rs. 4,14,979/- TOTAL
Thus to the extent of Rs. 4,14,979/-, the addition stands made twice i.e. one, in the peak figure in Rs. 6,09,025/- and second time, since, already included in the other assessed income.”
Return declaring an income of Rs. 1,73,072/- was filed on 29.07.2011. The case was subsequently selected for scrutiny under CASS. First Notice u/s 143(2) of the Income Tax Act, 1961 was issued on 01.08.2012 and was served upon the assessee. The assessee could not file the requisite details during the assessment proceedings as per the observations made by the Assessing Officer in the Assessment Order. The Assessing Officer held that the assessee failed to discharge onus despite repeated opportunities in respect of the unexplained credits u/s 68 of the Act. The Assessing Officer further observed that the assessee admitted that the assessee showed the profit as required u/s 44D i.e. 8% of Rs. 18,40,180/- which comes to Rs. 1,47,214 whereas the assessee shows profit of Rs. 1,18,240/- @ 6.14% only, thus, the assessee avoided the tax liability. Therefore, the Assessing Officer made addition of Rs. 64,33,156/- in respect of unexplained cash credits u/s 68 of the Income Tax Act, 1961.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
The Ld. AR did not press Ground No. 1, therefore, Ground No. 1 is dismissed.
As regards to Ground Nos. 2.1, 2.2, 2.3, the Ld. AR submitted that the following credits were in the bank accounts:- S. No. Bank Branch A/c. No. Correct Credit in bank 1 Axis Bank New Delhi 250010100107723 2,55,480 2 Indian Bank Kirti Nagar, 600141950 2,52,497
New Delhi 3 ICICI Bank New Delhi 092801501330 31,57,974 4 State Bank Kirti Nagar, 303385293812 17,11,861 of India New Delhi 5 Punjab Shakur Basti, 0649000101277151 9,82,378 National Delhi Bank Total 63,60,190 The Ld. AR further submits that assessee out of above credit declared income as under: Rs.1,47,214/- Income assessed u/s. 44AD @ 8% on sales of Rs. 18,40,180/- which is part of cash deposits/ peak calculated (1,18,240 + 28,974) Rs. 46,832/- Commission income assessed @ 2% on sales of Rs. 23,41,600/- which is part of cash deposited / peak calculated. Rs. 1,94,046/- TOTAL The Ld. AR submitted that the CIT(A) restricted the addition of Rs. 64,33,156/- to Rs. 6,09,025/- being the peak of total cash deposits / credits of Rs. 63,60,190/- in the bank. However, while making addition on peak basis, the CIT(A) was required to delete all other amounts namely Rs. 1,94,046/- which was assessed on the basis of cash deposits in the bank as stated above. Therefore, the Ld. AR submitted that if addition of peak out of credits in bank will be made then the income already declared out of credit should also be reduced.
The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
We have heard both the parties and perused all the material available on record. It is pertinent to note that the CIT(A) while giving finding observed that as per the details filed by the AR during the appellate proceedings the peak works out to Rs. 6,09,025/- and therefore, the CIT(A) held that the same should be treated as income from undisclosed sources. The submissions made by the Ld. AR before us that while making addition on peak basis, the CIT(A) was required to delete all other amounts namely Rs. 1,94,046/- which was assessed on the basis of cash deposits in the bank as stated in para 6 hereinabove. This needs to be verified, therefore, we are remanding back the issue to the file of the CIT(A) to verify the said contentions of the assessee and take appropriate decision. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence, Ground Nos. 2.1, 2.2 and 2.3 are partly allowed for statistical purposes.