Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘D+ SMC’ NEW DELHI
Before: SHRI N. K. SAINI & MS SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 29/03/2018 passed by CIT(A)-1, Gurgaon, for Assessment Year 2011-12.
The grounds of appeal are as under:-
“1. That on the facts & circumstances of the case the learned ITO & CIT (A) erred in (a) Making an addition of Rs.5,48,000/- to the income of the Assessee. (b) Not giving the reasons recorded for the reopening of the case. (c) Not serving the notice on the Assessee at the address intimated to the ITO. (d) That the addition is against the principle of natural justice and needs to be quashed because the Assessee has not been allowed the opportunity to see the material evidence against him and has not got the opportunity to contest the same or cross examine the person if any who gave information. This request was made to CIT(A) also that since he has the powers which are co- terminous with that of Income Tax Officer however no action has been taken by the CIT(A) also. (e) not exercising his powers u/s 133(6) to get confirmation from M/s Karishma Diamond P. Ltd. which is a Private Limited Company. Mere suspicion cannot lead to addition. (f) Not considering the fact that The Assessee is a young qualified Gemologist who is 29 years of age today & was 22 years old during this A.Y. his financial and accounting affairs were being looked after by his father Mr. J. P. Singh. He had absolutely no idea of accounts and finance. There is also a dispute now between the father and the Assessee and Assessee has no access to his accounts.”
The return of income declaring income of Rs.6,10,670/- was filed by the assessee for A.Y. 2011-12. The Assessing Officer received information that the assessee had taken accommodation entry in the form of bogus bills amounting to Rs.5,48,000/- from M/s Krishma Diamond Pvt. Ltd. during the F.Y. 2010- 11. The Assessing Officer accordingly recorded reasons and issued notice under Section 148 after taking approval of the competent authority. There was no compliance from the assessee. The Assessing Officer, thereafter, issued notice under Section 142(1) along with questionnaire. Once again there was no compliance. The Assessing Officer issued a show cause notice proposing addition of Rs. 5,48,000/-. There was no compliance to the show cause notice also. The Assessing Officer accordingly, added amount of Rs. 5,48,000/- to the total income of the assessee.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that the Assessing Officer acted only on the information mentioned in the re-opening. The Ld. AR further submitted that layering of the funds discussed by the Assessing Officer is totally contradictory to the documents/audited accounts produced before the Assessing Officer. The Ld. AR pointed out from the paper book that the reasons and re-opening is on totally different footings. There was no detail of information given by the Assessing Officer and there is no application of mind on part of the Assessing Officer. The Ld. AR further submitted that there is no allegation in reasons recorded that there was failure on part of assessee to disclose fully and truly all material facts necessary for assessment u/s 147 of the Act. The Ld. AR submitted that this present Assessment Year is the first year of business therefore there is no opening stock described in the balance sheet and the Assessing Officer has taken the figures of the sales, but overlooked the balance sheet showing that the opening stock is Nil. The Ld. AR relied upon the decision of the Hon’ble Calcutta High Court in case of Rajmandir Estates Pvt. Ltd. vs. Pr. CIT (2016) 386 ITR 162 (Cal) and Hon’ble Delhi High Court’s decision in case of NDTV vs. DCIT & Anr. (2017) 298 CTR 230.
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 relevant material available on record. The reasons recorded by the Assessing Officer are as under: “Annexure Shri Gunpreet Singh, C/o M/s Green Carrier and Contractors Pvt. Ltd., H. No.51, Saini Farm, Khanpur Mehrauli Badarpur Road, Delhi-110062. Assessment year 2011-12 – PAN-BDEPS3018Q Return declaring an income of Rs. 6,02,450/- was filed by the assessee on 2809.2011 and the same was processed u/s 143(1) of I. T. Act, 1961 as such. Later on, it has come to notice that the assessee has taken accommodation entries in the form of bogus bills from M/s Karishma Diamond Pvt. Ltd. amounting to Rs.5,48,000/-. From the perusal of return of income of the assessee for the assessment 2011-12, it is seen that the assessee has shown opening stock of Rs. 4,14,86,563/- whereas in the immediately preceding year, the assessee had declared income from salary in Saral form and no business has been disclosed. In the circumstances, there is a mismatch in opening stock to this extent. Therefore, I have reasons to believe that the income of the assessee has escaped assessment to the extent of Rs.4,20,34,563/- for the assessment year 2011-12 within the meaning of Section 147 of the Income-tax Act, 1961.