BIJENDER SINGH,PANIPAT vs. ITO WARD - 3, PANIPAT

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ITA 873/DEL/2020Status: DisposedITAT Delhi28 March 2024AY 2013-14Bench: SHRI G.S. PANNU (Vice President), SHRI ANUBHAV SHARMA (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the lower authorities erred in not considering the assessee's submissions and using incorrect figures. Consequently, the assessment order and the consequential penalty order were quashed.

What were the facts?

The Assessing Officer (AO) made additions to the assessee's income, incorrectly stating the assessee's business as share broking instead of textiles. The AO also allegedly did not properly examine the audited financials and vouchers provided by the assessee.

What were the issues?

Whether the AO and CIT(A) properly examined the assessee's financials and correctly applied the law while making additions and levying penalty.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(2),Section 144,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A” : NEW DELHI

Before: SHRI G.S. PANNU & SHRI ANUBHAV SHARMA&

For Appellant: Adv. Sh. Kanv BaLI, Sr. DR
Hearing: 13.02.2024Pronounced: 28.03.2024

Heard together (2 matters)

ITA no. 6775/Del/2018
ITA No. 873/Del/2020

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R PER ANUBHAV SHARMA, JM:

The assessee has come in quantum appeal against the order dated 30.07.2018 passed by the Commissioner of Income Tax (Appeals), Karnal (hereinafter referred as “learned First Appellate Authority” or in short “FAA”) in Appeal no. IT/20/PPT/2016-17, for the assessment year 2013-14, arising out of the assessment order dated 30.03/2016 u/s 147/143(2) of the Income-tax Act, 1961 (hereinafter referred as the “Act”), passed by the Income Tax Officer, Ward-1, Panipat

2 & (hereinafter referred in short as “Ld. AO”). The assessee has also come in penalty appeal against CIT(A)’s order dated 26.09.2018 arising out of the penalty order dated 29.09.2016 u/s 271(1)(c) of the Act, passed by the ITO, Ward-3, Panipat. Both the appeals were taken up for hearing together and are being disposed of by this common order for the sake of convenience. 2. Heard and perused the record.

3.

At the time of hearing learned AR has stressed on the fact that in the assessment order the learned AO has mentioned facts which are not connected with either nature of business of the assessee or the figures coming out from the financials and that this issue was raised before the learned CIT(A) but he has not taken into account the discrepancies pointed out and sustained the additions.

4.

Learned DR has, however, supported the order of the learned CIT(A) submitting that in the grounds raised before learned CIT(A) assessee had merely challenged the figures of addition as mentioned by the learned AO.

5.

As we appreciate matter before us in the light of submission of Ld. AR, it comes up from the statement of facts that assessee is an individual, dealing in textile goods, dying, fabrication etc. under the name and style of M/s Harsh Textile, tehsil Samalkha, district Panipat. The assessee maintains books of account and filed return of income at Rs. 3,19,590/-. However, in the assessment order learned AO has mentioned that the assessee derives income from share broking business.

5.1 Then, it comes up that during the scrutiny assessment assessee had filed duly audited balance-sheet and other information, but learned AO has not examined the same and by observing that books of a/c are not produced with vouchers the assessment order u/s 144 of the Act was passed.

3 & 5.2 It comes up that learned AO has made an addition treating the gross profit percentage at 22% as against 18.60% shown by the assessee. While the assessee has shown gross profit at Rs. 9,65,903/-, the learned AO has taken gross profit at Rs. 14,20,081/-. How this figure was arrived is not coming from the assessment order or from the financials filed before us.

5.3 Similarly, assessee’s expenses have been shown to be Rs. 12,50,000/- in P&L a/c as per the assessment order. While we examine the copy of P&L a/c made available at page 10 of the paper book, the figure is not reconciled as assessee’s expenses under different heads as mentioned are far more.

5.1 The fact that learned AO has picked correct figures of sundry creditors of Rs. 5,22,614/- and unsecured loan of Rs. 4,55,800/-, it is established that financials were available with the learned AO, a with regard to alleged cash deposit of Rs. 10,60,000/- additional evidences were filed before learned CIT(A) and remand report was called on the plea of assessee that the same were out of sale proceeds of business dealings, how could arbitrarily without examining the financials the learned CIT(A) has sustained the addition.

5.3 We are of the considered view that learned tax authorities below seems to have completely ignored the plea of assessee on every count and on their own have also erred in not taking the correct figures for arriving at the additions.

5.4 Consequently, we are inclined to quash the assessment order with liberty of passing a fresh order in accordance as per law and taking into consideration relevant information made available by the assessee and, if required, AO will be at liberty to call for further information from the assessee to decide the issue afresh.

6.

Since in appeal arising out of the merits or additions, the assessment order has been quashed, the consequent penalty order dated 26.09.2016, levying penalty u/s 271(1)(c) of the Act, is also quashed.

7.

Resultantly Both the appeals of the assessee are allowed.

Order pronounced in open court on 28.03.2024.

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