Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES : “F” NEW DELHI
Before: SHRI G.D. AGRAWAL & SHRI H.S. SIDHU
PER H.S. SIDHU, JM The assessee has filed the appeal against the impugned order dated 23.6.2014 passed by the Ld. CIT(A)-XXXIII, New Delhi raising the following grounds of appeal :-
1. “That the CIT(A) erred in not appreciating that since the appellant is admittedly part of Tarun Goyal Group , which group has been carrying on the business of providing accommodation entries during the relevant year and the amount of cash deposited in the bank account of the appellant was representing part of above business and, therefore, addition in respect thereof could not be made under section 68 of the Act and the case of the appellant could not be considered independently.
2. That the CIT(A) erred in upholding the addition of Rs. 34,65,000/- being the cash deposits in the bank account of the appellant company observing that the appellant has not given list of beneficiaries. He failed to appreciate that as per the admitted position duly accepted by Mr. Tarun Goyal who had appeared before the AO, the cash deposits were part of business carried on by him of providing accommodation entries and, therefore, only the commission income thereon was to be assessed and the CIT(A) also failed to appreciate that it was not possible at this stage to give list of beneficiaries or the parties with whom the business was done. That the Ld. CIT(A) also failed to appreciate that after deposits of cash in the bank account of the appellant the funds had been transferred to other accounts of the group company for the purpose of utilizing the same for providing accommodation entries.
3. That the CIT(A) also failed to appreciate that considering the financial status of the appellant there was no possibility to earn such an amount as an income and, therefore, addition on account of cash deposits could not be made as undisclosed income u/s. 68 of the Act in the case of the appellant in view of the decisions of the Supreme Court in the cases of CIT vs. Smt. PK Noorjahan, 237 ITR 570 (SC) and CIT vs. Bharat Engineers & Construction Co. 83 ITR 187 (SC).
4. That the CIT(A) also erred in not adjudicating the appeal following the order of this Tribunal dated 18.10.2013 passed in the cases of Tarun Goyal Group in accordance with which holistic view is to be taken considering the group as a whole and only the commission income is to be assessed in respect of cash received and deposited in bank accounts as a part of business of providing accommodation entries by the group at the rate of percentage to be determined considering the precedence available in this regard.
The brief facts of the case are that the assessee is an individual. He has filed return of income for the assessment year 2005-06 on 29.7.2005 declaring total income of Rs. 1,34,631/-. Subsequently search and seizure operation passed u/s 132 of the Income Tax Act, 1961 was conducted on 15.9.2008 at the group concern of one Mr. Tarun Goyal. As a result of search and seizure operation, it was found that bank account No. IB4005-111250-050 with Indusind Bank Ltd. belongs to the assessee. From the bank statement, it was found that a sum of Rs. 34,65,500/- was deposited in cash on various dates during the financial year 2004-05. Consequent this information, the assessment proceedings were reopened by issuing notice u/s 148 of the I.T. Act, 1961 on 27th March, 2012.
During the course of reassessment proceedings, assessee was put on notice as to why said cash deposited should not be added as income and cash deposit should not be brought to tax. It was explained to the AO that the assessee was only earning commission under such cash deposits and no other explanation is furnished to the AO. Therefore, the AO made addition of Rs. 34,65,500/-. Reassessment was completed vide order dated 25.03.2013. Aggrieved by this order of assessment, the assessee had preferred an appeal before the Commissioner of Income Tax (Appeals)
XXXIII, New Delhi who vide order dated 23.06.2014 dismissed the appeal by holding that the assessee not offered as satisfactory explanation for the source of the cash deposits in bank account. Aggrieved, the present appeal was filed before us.
It was submitted on behalf of the assessee that in the assessee’s own case for the assessment year 2004-05, the ITAT vide its order dated 17.4.2015 passed in adjudication, hence, he requested that in the present appeal also the matter may be restored back to the AO for fresh adjudication by following the aforesaid decision.
5. On the other hand, Ld. DR relied upon the orders of the authorities below.
We have heard both the parties and perused the records. We find considerable cogency in the submissions of the assessee’s counsel that in the case of assessee for the assessment year 2004-05, the ITAT vide its order dated 17.4.2015 passed in has restored the matter to the file of AO for fresh adjudication, on the similar and identical issues. For the sake of convenience, we are reproducing the operative portion of the order as under :-
“4. It was submitted on behalf of the appellant that in the similar cases this Hon’ble Tribunal in & 4637/Del/2012 has restored the matter to the file for fresh adjudication. The operative portion of the order is as under:-
“22. Admittedly certain assessment of Shri Tarun Goyal, the kin pin are at various stages and have not reached the Tribunal. Under these circumstances, it would not be possible to have in over all view of the matter and eliminate chain / multiple transaction, for arriving at the correct assessable amount. Thus we have no other alternative but to set aside all these appeals to the file of the AO for fresh adjudication in accordance with law.
The AO shall after examining the evidence submitted by the assessee, consider all the cases together and; a) restrict the addition u/s 68 to only the peak unexplained credit in each case after elimination circular transaction. b) To eliminate taxation of the same amount multiple times, due to the chain transactions which resulted due to layering indulged by the assessee. c) Consider the material on record and the precedence available on the issue and determine the percentage of commission, which the assessees would have earned and bring the same to tax.”
Therefore, in this case also since the case also belongs to the same group and having nexus with the assessment proceedings
of Mr. Tarun Goyal, we restore the matter to the file of the AO with a direction that to consider the explanation offered, if any, in the light of provision of section 69 of the Income Tax Act and redo the assessment.”
Respectfully following the aforesaid precedent, we restore the matter to the file of the AO with the direction that to consider the explanation offered, if any, in the light of provision of section 69 of the Income Tax Act, 1961 and redo the assessment.
In the result, the Assessee’s appeal is allowed for statistical purpose.
Order pronounced on 18/12/2017.