VIKAS MALIK,NEW DELHI vs. ITO WARD - 39(4), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, World Trade Centre, Nauroji Nagar, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member, Sh. Sudhir Kumar, Judicial Member ITA No. 1569/Del/2020 : Asstt. Year: 2011-12 Vikas Malik, Vs Income Tax Officer, H-1, 61-62, FF, Sector-11, Rohini, Ward-39(4), New Delhi-110085 New Delhi (APPELLANT) (RESPONDENT) PAN No. AMSPM0740P Assessee by : Ms. Rano Jain, Adv. & Ms. Mansi Jain, CA Revenue by : Sh. Amit Katoch, Sr. DR Date of Hearing: 25.07.2024 Date of Pronouncement: 29.07.2024

ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-13, New Delhi dated 18.03.2020.

“1. On the facts and circumstances of the case, the order passed by the Learned CIT(A) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the initiation, of the proceedings under Section 147, read with Section 148, by A.O. is bad and liable to be quashed as the condition and procedure prescribed under the statute have not been satisfied and complied with. 3. On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming the order of the

2 ITA No. 1569/Del/2020 Vikas Malik A.O., despite the same having been passed in the absence of proper service of statutory notice under section 148 of the Act. 4 On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming the order of the A.O., passed under section 144 of the Act, without proper service of the statutory notice. 5 (i) On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming the order of the A.O. despite the same having been made on the basis of reasons recorded without there being any independent application of mind. (ii) That the reassessment order passed by the A.O. is bad and liable to be quashed as the same has been reopened on the basis of the reasons which are vague and has been recorded only on borrowed satisfaction. 6. (i). On the fact and circumstances of the case, Id. CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the reopening u/s 147 of the income tax Act, 1961 is bad in law having been made without obtaining valid approval as prescribed under section 151 of the Act. (ii)Even otherwise, the approval so granted by the approving authority is without due application of mind. 7. On the facts and the circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 66,36,000/- on account of cash deposits in the bank. 8. On the facts and the circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the assessee bringing on record all evidences and material to prove the source of the deposits, duly supported by an affidavit filed which was not contradicted. 9. On the facts and the circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition rejecting the contention of the assessee to assess the income at the most under section 44AD of the Act, the assessee having disclosed the nature of business and in the absence of books of account. 10. On the facts and the circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the same having been made by the A.O. following own surmises and conjectures by adding the total cash deposited during the year into the bank account.”

3 ITA No. 1569/Del/2020 Vikas Malik 3. The Assessing Officer made addition of Rs.66,36,000/- based on the cash deposits in the bank account of State Bank of India and Oriental Bank of Commerce. For the sake of ready reference, the Assessment order is reproduced as under:

“As per the information, the assessee has made cash deposits of Rs. 36,40,000/- in State Bank of India, Sector-11 Rohini branch and Rs. 29,96,000/- in Oriental Bank of Commerce, Connaught Place branch, Delhi during the year under consideration. As the assessee did not come forward to explain the sources of cash deposits aggregating to Rs. 66,36,000/-, in the two bank accounts mentioned above therefore, the total deposits of Rs. 66,36,000/- is treated as unexplained income of the assessee for the year under consideration. Penalty proceedings u/s 271(1)(c) are being initiated for concealing the true particulars of her income. Also, penalty proceedings u/s 271(1)(b) are being initiated for non compliance of statutory notices issued from time to time.

With the above remarks, assessed at Rs. 66,36,000/-. Issued demand notice and challan. Charge interest u/s 234A and 234B as per rules. Penalty proceedings u/s 271(1)(b) and u/s 271(1)(c) have been initiated separately.

With the above remarks, assessed at Rs.66,36,000/-. Issued demand notice and challan. Charge interest u/s 234A and 234B as per rules. Penalty proceedings u/s 271(1)(b) and u/s 271(1)(c) have been initiated separately.”

4 ITA No. 1569/Del/2020 Vikas Malik 4. Aggrieved, the assessee filed appeal before the ld. CIT(A) who affirmed the action of the AO. The operative part of the order of the ld. CIT(A) is as under:

“The explanation offered is that the appellant was doing business of coal trading and that he used to keep cash in hand instead of keeping it in the bank. It is claimed that cheques were issued to supplier of coal. Subsequently, it was also informed that the "entire deposit in bank during 01.04.2010 to 31.03.2011 (AY 2011-12) is for purchase of coal or cash deposit for purchase of coal but did not supply & thereafter withdrawn cash in order to deposit later on as & when required for supply of coal." The above explanation, which is without any supporting and reliable evidence is neither logical nor reasonable. It is also unexplained what was the commercial expediency or compulsion of keeping cash in hand rather than in the bank. It is further claimed that the initial source of purchase of coal was some payments received from DRO on account of land acquisition by state government in the earlier year. This firstly, is a bald claim without evidence & more importantly, the nexus between the two is not established i.e. the source deposits in the relevant year are unambiguously out of the compensation received against land acquisition and not utilized elsewhere is questionable. Hence, there is no merit in the plea of the appellant & the ground of appeal is accordingly dismissed.” 5. Aggrieved, the assessee filed appeal before the Tribunal.

5 ITA No. 1569/Del/2020 Vikas Malik the cash sales made by the assessee cannot be disputed as emanating from the bank statement. The ld. AR submitted the cash account, P&L account and the bank statement. On the other hand, the ld. DR relied on the order of the Revenue. 7. The facts emanate as under: Opening cash in hand - Rs.2,00,000/- Cash withdrawal - Rs.37,38,920/- as per bank account Cash sales - Rs.42,00,000/- as per bank account Rs.81,38,920 Cash deposits - Rs.66,36,000/- as per bank account Closing cash in hand - Rs.15,02,920- the balance amount

6 ITA No. 1569/Del/2020 Vikas Malik

Sd/- Sd/- (Sudhir Kumar) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 29/07/2024 *Subodh Kumar, Sr. PS*