HARPREET SACHDEVA,NEW DELHI vs. ITO, WARD-11(2), NEW DELHI

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ITA 3214/DEL/2018Status: DisposedITAT Delhi08 June 2018AY 2013-146 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal could not verify the assessee's submission regarding the letter dated 18/01/16 as it lacked acknowledgement of receipt by the AO and no such ground was raised before the CIT(A). Therefore, the issue was set aside to the AO for fresh adjudication.

What were the facts?

The assessee received an advance of Rs. 50,00,000/- from Shri Shankar Lal Khandelwal, which was added to his income as an unexplained cash credit. The assessee contended that this was an advance against the sale of shares, which could not be completed due to a dispute and FIR, leading to the refund of the advance.

What were the issues?

Whether the advance received was a genuine transaction for share sale or an unexplained cash credit, and whether the assessee provided sufficient evidence to discharge the burden of proof.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES: ‘C’, NEW DELHI

Before: SHRI RS SYAL & SMT. BEENA A PILLAI

For Appellant: Adv. And Sh.Lalit Mohan, C.A
Hearing: 07/06/2018Pronounced: 08/06/2018

PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal filed by assessee against the order dated 20/03/2018 by Ld. CIT (A)-35 for Assessment Year 2013-14 on the following grounds of appeal:

1.

1. That the learned Commissioner of Income Tax has further erred both in law and on facts in upholding an addition of Rs. 50,00,000/- representing advance received from Shri Shankar Lai Khandelwal. and, held to be alleged unexplained cash credit u/s 68 of the Act.

Sh.Harpreet Sachdeva vs. ITO 1.1. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that advance received against sale of shares of the company M/s Captivate Consultants Services (P) Ltd. could not have been brought to tax as income of the appellant. 1.2.That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that appellant has led complete evidence to demonstrate and discharge the burden that advance was duly received from Sh. Shankar Lai Khandelwal and as such addition is based on fundamental misconception of facts and provisions of law and therefore, untenable. 1.3. That the learned Commissioner of Income Tax (Appeals) has overlooked relevant evidence placed on record and, drawn factually incorrect and legally unsustainable inferences based on irrelevant and extraneous consideration and thus, addition sustained is wholly unwarranted and not in accordance with law. 1.4. That various adverse findings recorded by the learned Commissioner of Income Tax (Appeals) are contrary to record and law and thus unsustainable. It is therefore prayed that, additions made by the learned Assessing Officer and confirmed by the learned Commissioner of Income Tax (Appeals) may kindly be deleted and appeal of the appellant be allowed.”

2.

Brief facts of the case are as under: Assessee is a Director in M/s Captive Consultant Services Pvt. Ltd, and also draws income as a Partner in Hotel Good Times and income from other sources during the year under consideration. Assessee filed its return of income on 02/04/2014, declaring total income of Rs.5,96,716/-for the year under consideration. 2.1. Assessing Officer as per information received from DDIT (Investigation)-II, Jaipur, regarding cash receipts of Rs.50,00,000/- by assessee from Sh. Shankar Lal Khandelwal pertaining to year under consideration in lieu of search operation Sh.Harpreet Sachdeva vs. ITO under section 132 of the Income Tax Act, 1961 (the Act) carried out by Investigation Wing, Jaipur on 26/02/14 in case of Guman group (Shankar Lal khandelwal) of Jaipur. The case of assessee was accordingly selected for scrutiny and notice under section 143(2) of the Act was issued to assessee along with notice under section 142(1) of the Act. Ld. AO asked assessee to furnish details regarding the information of receipt of cash loan of Rs.50,00,000/- from Shankar Lal Khandelwal, along with copy of ITR and computation of income, bank statements and capital account of assets and liabilities. In response to the query raised by Ld.AO assessee filed reply dated 18/01/16 which is reproduced at page 5-6 of order passed by Ld.AO. 2.2. The only issue that has been raised by assessee is regarding the alleged receipt of Rs.50,00,000/- added by Ld.AO as undisclosed income of assessee under section 68 of the Act. At this juncture Ld.Counsel pointed out that there are some typographic mistakes that has crept in while reproduction of the letter. He placed reliance upon the letter being Annexure 6 placed at page 7-8 of paper book and submitted that observations of Ld.AO in the assessment order being, “receipt of advance of Rs.1,45,28,000/- due to the dispute that has arisen and the deal now been completed” in the assessment order is incorrect. Ld.Counsel submitted that deal “had not been completed ”, as per submissions vide letter dated 18/01/16, filed by assessee before Ld.AO. He submitted that the entire addition is upon the premise that the deal has been completed, whereas since a dispute arose between the parties and an FIR was launched against assessee and other shareholders, the deal could not be

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