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Income Tax Appellate Tribunal, DELHI BENCHES : SMC : NEW DELHI
Before: SHRI H.S. SIDHU
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
ITA No. 3260/Del/2018 Assessment Year : 2009-10
Ashok Kumar Bothra & Sons Vs. ITO, WARD 36(4), K-5/24, Model Town-II, NEW DELHI New Delhi – 110 009 (PAN AAAHA2193J)
(Appellant) (Respondent)
Assessee by : Ms. Himani Agarwal, CA Department by : Sh. S.L. Anuragi, Sr. DR.
ORDER This appeal filed by the assessee is directed against the order
passed by the Ld. CIT(A)-12, New Delhi on 28.3.2018 in relation to the
assessment year 2009-10 on the following grounds:-
On the facts and circumstances of the case, the order passed by Ld CIT (A) is bad both in eyes of law and on facts. 2. That Ld. CIT (A) has erred in law as well as on facts by upholding the addition of Rs. 11,56,570 made by Ld. AO. 3. That Ld.CIT (A) has upheld the above addition arbitrarily and without appreciating the facts of the case. 4. That Ld. CIT (A) has erred in law as well as on facts in ignoring the fact that the Assessing Officer has not provided any proof of above transaction made
except repetitions of borrowed facts and information and not on the basis of independent inquiry. 5. That the Ld. CIT(A) erred in fact and law as well by not providing reasonable opportunity of being heard. 6. That the Ld. CIT(A) erred in law as well as fact by passing the order without taking into consideration the details and evidences submitted by the applicant. 7. That the AO has erred in law and fact as well by initiating penalty proceedings u/s. 271(1)© of the Act. 8. That the appellant reserves the right to add, modify, alter, amend or delete any of the grounds.
The brief facts of the case are that the assessee e-filed the
return of income for A Y 2009-10 on 24.03.2010 declaring an income
of Rs.1,78,275/-. The case of the assessee was re-opened under
section 148 of the Income Tax Act, 1961 on the basis of information
received by ADIT (Inv) unit-1(3) Ahmedabad vide dated 18.03.2016
in respect of Client Code Modification (CCM) Dissemination of
beneficiary client who have taken contrived losses and shifted out
profit of Rs..11,56,570.75 during the FY 2008-09. Before the AO, the
assessee has submitted that no transaction took place with the
alleged broker and that the total income of the assessee during the
year including the exempt income was Rs.1,78,275/-. In replies
dated 17.06.2016 and 12.12.2016, the assessee shared all the DMAT
details alongwith bank statements for FY 2007-08 and FY 2008-09. In
order to clarify the allegations, the assessee requested the A.O. for a
cross examination, which was never arranged. A perusal of the
reasons recorded by the AO clearly show that the AO has simply
acted upon the information received from the Investigation Wing and
did not apply his own mind to the said information. Being aggrieved
the assessee carried the matter to the Ld. CIT(A), who vide his
impugned order dated 28.3.2018 has upheld the action of the AO by
holding the opening of assessment proceedings as valid and also on
merit confirmed the addition in dispute. Against the impugned order
28.3.2018, assessee is in appeal before the tribunal.
During the hearing, Ld. Counsel for the assessee reiterated the
submissions made before the authorities below and further submitted
that without prejudice even if reliance is placed on the alleged
account statement of the broker, no profit/income has been earned
by the asseesee during the above period and hence, no addition is
called for even on merit. The Ld. Counsel for the assessee further
submitted that the reasons recorded do not show any application of
mind nor the same show any belief independently arrived at by the
AO, which is the basic pre-requisite for issuing notice u/s 148. AO
made addition purely on the basis report received from investigation
team and without applying his mind. Therefore, in view of the above
circumstances and further considering the settled position of law in
this regard, the reassessment proceedings initiated by the AO are
without due application of mind, and thus, the reassessment
proceedings should be quashed as such. Further, the AO‘s order
shows that this may at best be a ‘reason to suspect’ & not ‘reason to
believe’. Only on the basis of reason to suspect, reopening cannot be
done. Therefore, the addition made by the AO and sustained by the
ld. CIT(A) was not justified and needs to be deleted.
In his rival submissions, the ld. DR strongly supported the
orders of the authorities below.
I have heard both the parties and perused the records especially
the orders of the authorities below. In the present case, it is evident
from the copy of account of the broker which the assessee has
strongly denied having dealt with, that no income has accrued to the
asseessee rather a loss of Rs. 11,56,570/- has been incurred and the
same has also not been claimed by the asseessee. The asseessee has
neither paid nor received any amount to/from the broker. In my
opinion, when no income has been earned and the asseessee has not
claimed any losses in the return of income nor setoff those losses 4
against any income aided by the fact that the assessee has neither
received/paid any amount to/from the broker which substantiates the
claim of the assessee that he have not dealt with the broker, then the
addition made by the AO and sustained by the ld. CIT(A) was not
justified. Therefore, I delete the addition in dispute and allow the
ground raised by the assessee.
In the result, the Appeal filed by the Assessee stands allowed
Order pronounced on 11-01-2019.
Sd/-
[H.S. SIDHU] JUDICIAL MEMBER Dated: 11-01-2019 SRBhatnagar Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.