VISHAL GUPTA vs. ITO, WARD-2,,

ORDER PER H.S. SIDHU, JM

These two appeals have been filed by the Assessee against the respective orders of the Ld. CIT(A) relating to assessment years 1995-96 & 1996-97 respectively. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are being disposed of by this common order for the sake of convenience.

2. That on the facts and in circumstances of the case and in law, the notice issued by the Ld. Assessing Authority is bad in law and deserves to be set aside / deleted. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 2783200/- on account of sundry debtors made by the Assessing Authority. 4. That on the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred legally and factually in confirming the decision of Assessing Authority in assessing Rs. 184701/- as income for withdrawals in respect of new car. 5. That on the facts and in the circumstances of the case, assessment order is bad in law and deserves to be deleted / set aside. That the petitioner craves to add, alter, amend or delete any ground or grounds of appeal

on or before the date of hearing.

3. The grounds raised in (AY 1996-97) read as under:-

1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 131131/- by applying GP rate of 3.5% on suppress sales of Rs. 3746603/- which is without any base or estimate and also no basis of the estimate of sale has been given.

2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 1287712/- on account of credit balances of Rs. 20000/- or more of various parties made by the Ld. Assessing Authority.

3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 276455/- on account of disallowance made of 20% of cash payment in excess of RS. 20000/- u/s. 40A(3) made by the Ld. Assessing Authority.

4. That on the facts and in the circumstances of the case, assessment order is bad in law and deserves to be deleted/ set aside. That the petitioner craves to add, alter, amend or delete any ground or grounds of appeal on or before the date of hearing. (AY 1995-96)

In response to the notice, Shri Vishal Gupta had filed his return of income on 30.06.1997 declaring an income of Rs.42500/- on 30.06.1997 in the office of DCIT, Special Range, Karnal, Sh. V.K.

Batra then JCIT, Special Range, Karnal had completed the assessment u/s. 144 of Income-tax Act, 1961 on 29.01.1999. Not satisfied with the order of A.O. Thereafter the assessee filed 2nd appeal before the worthy ITAT, New Delhi. The Hon'ble ITAT (Bench "C") New Delhi vide their order dated 23.10.2001 in appeal to 3260/De1/2000 cancelled the assessment on the ground that statutory notice u/s.143(2) which is required to be served within 12 months in which return was filed, was not complied with hence the proceedings completed by the A.O. cannot be held as valid. Thereafter the Department has filed Miscellaneous Application 261/Del/03 for recall of the ITAT's order dated 23.10.2001, but this miscellaneous application has also been dismissed on 1st October, 2004. In the meanwhile, AO had issued a notice under sec. 148 upon the assessee on 23.2.2002. In response to this notice, assessee has filed return of income on 20.5.2002. The Assessing Officer has framed the assessment under sec. 143(3) read with sec.

147 on 20.3.2003 and assessed the income of the assessee at Rs. 30,10,100/-. Against the assessment order, the assessee appealed before the Ld. CIT(A) who vide his impugned order dated 18.8.2005 has dismissed the appeal of the assessee. Aggrieved with the aforesaid order dated 18.8.2005, Assessee appealed before the Tribunal and the Tribunal vide its order dated 11.12.2009 in to 4238/Del/2005 (Ayrs. 1995-96 to 1997-98) has allowed the appeal no. 4236/Del/2005 (AY 1995-96) on the reopening of assessment. Against the order of the Tribunal dated 11.12.2009, the Department filed Appeals before the Hon’ble High Court of Delhi in ITA Nos. 1782/2010 & 1784/2010 and the Hon’ble High Court of Delhi vide its Order dated 30.4.2012 has answered the question of law in negative i.e. in favor of the appellant-Department and against the Respondent-Assessee and directed the Tribunal to decide the appeal on merits. The Hon’ble High Court of Delhi has also directed the parties to appear before the Assistant Registrar of the Tribunal on 28.5.2012, when the date of hearing will be fixed. But on 28.5.2012 nobody appeared before the Assistant Registrar of the Tribunal. Thereafter, pursuant to the directions of the Hon’ble High Court of Delhi, as aforesaid, the Tribunal vide order dated 24.7.2012 has fixed the case for hearing on 18.10.2012 and due to leave of the Ld. DR on 18.10.2012 the case was adjourned for 15.1.2013. On 15.1.2013 on the written request of the Assessee/Ld. Counsel of the Assessee, the case was adjourned for 9.10.2013, 11.2.2014, 5.5.2015, 5.8.2015, 9.10.2015 and further adjourned for 29.6.2016 and on this date also the nobody was present and the case was adjourned for 26.9.2016 and issue notice through Regd. Post and through DR. On 26.9.20116 the case was adjourned for 25.1.2017 due to non-functioning of Bench and on 25.1.2017 again nobody present at the time of hearing and accordingly issued the notice by Regd. Post. On 25.1.2017 the case was again adjourned for 16.5.2017 for hearing. But again on 16.5.2017 nobody was present on behalf of the assessee, however, Ld. DR was present. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, we are of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records on merits.

27,83,200 on account of sundry debtors and Rs. 1,84,701/-) on account of purchase of new car. We note that as per the impounded ledger for the period ending 31.3.1995, the assessee had sundry debtors amounting to Rs. 27,83,200/- as on 31.3.1995. There was no corresponding creditors on that date. The assessee however was failed to file any details of these debtors. It was also not proved that these debtors did note relate to the year under appeal and assessee even did not file his balance sheet, profit and loss account etc. Similarly, the source of the purchase of new car could also not be proved by him in spite of the fact that the AO had given more than reasonable opportunities to explain it.

Therefore, the Ld. CIT(A) has rightly upheld the addition of Rs. 29,67,901/- by dismissing the appeal of the assessee, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issues in dispute and grounds raised by the Assessee stand rejected. In the result, the Appeal No. 4236/Del/2005 (AY 1995-96) stands dismissed.

ITA NO. 4237/DEL/2005 (AY 1996-97)

We further note that during the appellate proceedings, it was claimed that the assessee has no concern with these books of accounts. Thus, the contention of the AR of the assessee that onus of proving entries in these books of accounts lied upon the partners of M/s Hindustan Agro Tech. cannot be accepted. These books admittedly belonged to the assessee and it was his duty to explain the entries in these books of accounts. Regarding the addition of Rs. 1,31,131/-, the assessee has failed to explain as to how the net profit rate of 3.5% as applied by the AO was on the higher side.

Similarly, the assesse has filed no explanation whatsoever before the AO regarding the cash credits appearing in his books of accounts amounting to Rs. 12,87,712/-. These amounts represent trading receipts for sale and purchase and not cash credits has not been substantiated. No documentary evidence in support of this contention has been filed by the AR of the assessee. Hence, this addition was rightly upheld. We find that addition was made on the basis of GP rate, was not accepted because violation of the provisions of section 40A stands proved from the books of accounts of the assessee himself. Accordingly, the addition of Rs. 2,76,455/- was rightly confirmed. Hence, all the additions of Rs. 1,31,131/-, Rs. 12,87,712/- and Rs. 2,76,455/- were upheld, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT(A) on the issues in dispute and grounds raised by the Assessee stand rejected. In the result, the Appeal No. 4237/Del/2005 (AY 1996-97) stands dismissed.

Order pronounced in the Open Court on 19/05/2017.