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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI K.NARASIMHA CHARY
Date of Hearing : 26.09.2018 Date of Order : 03-10-2018
ORDER PER BENCH
These appeals filed by the Assessee challenging the separate Orders both dated 28.6.2016 in Appeal Nos. 15 & 16/13-14 for assessment years 2009-10 & 2010-11 respectively passed by the Ld. Commissioner of Income Tax (Appeals)-12, New Delhi (in Short “Ld. CIT(A)”).
The grounds raised in both the appeals are similar, except the change in figure. Therefore, we are only reproducing the ground of 2009-10 as under:-
1.1 That learned CIT [A] has erred in not quashing the proceedings initiated and the assessment order u/s 144 passed in consequence despite the learned LD. AO confirming in Remand report confirming that notices issued were returned un-served and the LD. AO not establishing service of notices on the assessee 1.2 That learned CIT [A] has erred in not quashing the proceedings initiated and the assessment order u/s 144 despite fact that the learned LD. AO has not made any efforts to serve the notices on the assessee as provided by Law 2 That learned CIT [A] has erred in determining the taxable income at Rs3,12,223 taken at 10% of gross receipts, (including capital receipts like sale proceeds of old trucks and LIC Maturity) instead of the applicable presumptive rate of income in terms of section 44AE of the Act as the assessee is engaged in carriage of goods, (truck operator) having less than 10 trucks.
3. That learned CIT [A] has erred in not giving directions for grant of deductions of Chapter VIA of the Act 4. The above grounds are independent and without prejudice to each other.
The appellant seeks leave to add, amend, alter or abandon any of the above grounds at the time of hearing of the appeal.
Since the issue involved in these appeals are common and therefore, the appeal were heard together and disposed of by this common order for the sake of convenience and brevity, by dealing with (AY 2009-10).
Brief facts of the case are that basing on the AIR information the LD. AO issued notice u/s. 148 of the Act on 6.1.2012 and subsequently notice u/s. 142(1) of the Act on several occasions. Since the assessee never responded to such notices, LD. AO recorded that he was left with no alternative, but to complete the assessment ex parte u/s. 144 of the Act on the basis of the material available on record. Ld. AO perused the bank statement of the assessee and found that there was cash deposits to the tune of Rs. 17,86,885/- and since there was no explanation from the assessee in respect of these deposits, Ld. AO treated it as unexplained cash deposits and added it to the income of the assessee. So also basing on the AIR information and Form 26AS, Ld. AO found that there were 59 entries relating to TDS, but none of the entry could be found in the bank statement as such he added a sum of Rs. 14,38,936/- relatable to TDS of Rs. 28,276/-.
5. Ld.. CIT(A) confirmed the action of the Ld. AO in considering the bank deposits and also the receipts in respect of which TDS of Rs. 28,276/- was shown in the Form No. 26S, but however, treating this amount as the total turnover of the assessee, Ld.. CIT(A) estimated the net profit of the assessee at 10% and confirmed the addition to the tune of Rs. 3,12,223/- and deleted the balance of Rs. 2913598/-. So also in respect of the TDS, Ld.. CIT(A) directed the Ld. AO to give credit of Rs. 28,276/-, after verification of the claim of the assessee. Challenging the action of the Ld.. CIT(A) in sustaining the addition of Rs. 3,12,223/-, the assessee is in appeal before us.
On a careful perusal of the record, we find that there is no denial of the fact that assessee do not appear before the Ld. AO thereby forcing the Ld. AO to complete the assessment ex parte u/s. 144 of the Act basing on the material available on record, and more specifically the assessee never thought it necessary to file the return of income when the TDS was made and did not respond to the notices issued by the Ld. AO. Though the Ld. AO treated the entire cash deposits in the bank and also the amount relatable to the TDS to be treated as income, Ld. CIT(A) had treated it as the total turnover of the assessee and estimated the income of the assessee only 10% thereof and sustained the addition only to the extent of Rs. 3,12,223/- to be brought to tax. We do not find any illegality or irregularity in the findings recorded by the Ld. CIT(A) in para no. 9.8 of his order. The impugned order does not suffer any illegality or irregularity. Further, Ld. CIT(A) directed the Ld. AO to give credit to the TDS amount on verification. We are, therefore, of the considered opinion that there is not much to interfere with the order of the Ld. CIT(A).
However, it is submitted on behalf of the assessee that in determining the taxable income at 10% of the gross receipt, Ld. CIT(A) failed to take into consideration the capital receipt in the nature of LIC maturity and it is prayed that Ld. AO may be directed to consider the LIC maturity amount to be excluded from the gross receipts. We find reasons in this submissions advanced on behalf of the Assessee and therefore, directed the Ld. AO to exclude the LIC maturity amount while considering the gross receipts on which 10% is determined as income of the assessee. Subject to this observation, we do not find any reasons to interfere with the impugned order, hence, we uphold the same.
As regard the (AY 2010-11), for the reasons given in the preceding paragraphs for the assessment year 2009-10, while confirming the impugned order, we direct the Ld. AO to consider the LIC maturity amount while determining the gross receipts 10% of which are treated as income of the assessee.
In the result, both the Appeals filed by the Assessee stand allowed in part.
Order pronounced in the Open Court on 03/10/2018.