MAYA CHAUDHARY,NEW DELHI vs. ITO, NEW DELHI

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ITA 5544/DEL/2015Status: DisposedITAT Delhi07 March 2017AY 2009-105 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 held that information collected at the back of the assessee and used against her without confronting it, denying an opportunity to be heard, renders the assessment order bad in law. Therefore, the addition made by the Assessing Officer was quashed.

What were the facts?

The assessee deposited Rs. 39 lac in her savings bank account. She explained the source as cash sales from her retail trading business, supported by balance sheets and P&L accounts. However, an inspector's report indicated no business activity at the premises.

What were the issues?

Whether the addition made by the Assessing Officer is valid when based on information collected ex-parte and not confronted to the assessee.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI

Before: SHRI B.P. JAIN

For Appellant: Dr. Rakesh Gupta, Adv
For Respondent: Ms. Bedobina Chaudhari, Sr. DR
Hearing: 06/03/2017Pronounced: 07/03/2017

PER B.P. JAIN, ACCOUNTANT MEMBER:

1.

This appeal of the assessee arises from the order of ld. CIT(A)-19, New Delhi vide order dated 28.07.2015 for the A.Y. 2009-10. The assessee has raised the following grounds of appeal:-

1. That the Commissioner of Income-Tax (Appeals) had erred, both in law, as-well-as in facts of the case in up- holding addition of Rs.39,00,000/- ignoring, explanation of the Appellant.

2. That the Commissioner of Income-Tax (Appeals) had erred both in law as- well-as in facts of the case in not appreciating the explanation of the Appellant and drawing adverse inference from it with biased mind.

3. That the Commissioner of Income-Tax (Appeals) had erred both in law as- well-as in facts of the case in making presumptions at his own as to business activities of the Assessee. 4. The Appellant craves leave of this Hon’ble court to add, amend, delete or substitute any of the grounds, appeal at the time of arguments.

2. The brief facts of the case are that as per AIR information available, the assessee has deposited the sum of Rs. 39 lac in his saving bank account maintained with HDFC bank, Noida. The explanation for the source of the same was given by the assessee as he was a retail trader and all the sale of the assessee are in cash and out of cash sales, the assessee has deposited Rs. 39 lac in her bank account and copy of balance sheet and profit and loss account were submitted before the Assessing Officer. The Assessing Officer collected the information from Sh. Jai Prakash Associates Ltd. to which the assessee has made payment for purchase of flat and also from the report of the Inspector it was gathered that the Secretary of the Society was not even aware of any business activity at the business premises. However being not satisfied with the explanation of the assessee the Assessing Officer made an Page 2 of 5 addition of Rs. 39 lac to the income of the assessee u/s 69A of the Act.

3.

The ld. CIT (A) confirmed the action of the Assessing Officer.

4.

I have heard the rival contentions and perused the facts of the case. It was pointed out by the Dr. Rakesh Gupta, Advocate, the ld. Counsel for the assessee that the information by the Inspector was collected at the back of the assessee and the sale was not confronted to the assessee and therefore the assessment order passed is bad in law.

5.

The ld. DR on the other hand relied upon the orders of both the authorities below.

6.

There is no dispute that the assessee has filed the return u/s 44AF of the Act and has submitted that the deposits are out of cash sales which are declared in the balance sheet and profit and loss account submitted before both the authorities below. But at the same time any information collected at the back of the assessee and such information being used against the assessee without controverting the explanation given is bad in law and therefore passing of such order with such information collected at the back of the assessee, against the assessee without affording any opportunities of being heard is not justified. Therefore in my view, the order passed by the Assessing Officer is bad in law and is liable to be quashed. Therefore, in the circumstances and facts of the case all the grounds of appeal are allowed and the appeal of the assessee in is allowed.

7.

In the result, the appeal of the assessee is allowed.

8.

Pronounced in the open court on 07.03.2017. Sd/- (B.P. JAIN) ACCOUNTANT MEMBER Dated: 07.03.2017 Narender Copy forwarded to: 1) Appellant 2) Respondent 3) CIT 4) CIT (Appeals) 5) DR: ITAT ASSISTANT REGISTRAR

Date Draft dictated on 06.03.2017 Draft placed before author 06.03.2017 Draft proposed & placed before the second member Draft discussed/approved by Second Member.

Approved Draft comes to the Sr.PS/PS 7.3.2017 Kept for pronouncement on File sent to the Bench Clerk 7.3.2017 Date on which file goes to the AR Date on which file goes to the Head Clerk.

Date of dispatch of Order.

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