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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
personal phones. The ld. DR relied upon the order passed by the AO as well as CIT (A).
We are of the considered view that keeping in view the fact that the assessee has earned gross turnover of Rs.1,35,23,994/- with gross profit of Rs.5,62,401/- being into trading of iron and steel and this much turnover cannot be earned without incurring expenses on telephone and electricity charges. No doubt, the assessee has not claimed theses expenses in the profit & loss account but the assessee is getting deduction of these expenses since 1997. Ld. CIT (A) has categorically recorded in para 5.3 of the impugned order that additional evidence wan sot accepted by the AO in the remand proceedings on the ground that it was an afterthought but failed to record any findings on the admissibility of the additional evidence and proceeded to confirm the addition.
So, we are of the considered view that this ground is required to be restored to the CIT (A) to decide afresh after admitting the additional evidence sought to be brought on record by the assessee in accordance with law. So, ground no.2 is determined in favour of the assessee.
GROUNDS NO.3 & 4
The ld. AR for the assessee, at the very outset, contended that adequate opportunity of being heard has not been afforded by the ld. CIT (A) before confirming this addition and addition has been confirmed even on the ground that the PAN (No.AFTPM4677F) provided by the assessee did not tally with the account of M/s. Jai Balaji Road Lines and PAN (No.AFTPM4677F) belongs to Rajesh Brijbhushan Mittal and not M/s. Jai Balaji Road Lines. We are of the considered view that adequate opportunity of being heard has not been afforded to the assessee to explain the relationship between Rajesh Brishbhushan Mittal and M/s. Jai Balaji Road Lines.
So far as, cartage & unloading expenses of Rs.58,216/- are concerned, the same have been confirmed on the grounds that the cartage & unloading expenses for the entire year have been incurred on one single day and appears to be bogus. When the assessee has relied upon the audited books of account which have not been rejected, to decide the matter summarily without affording an opportunity of being heard is erroneous. So, we set aside grounds no.3 & 4 to the file of ld. CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. So, grounds no.3 & 4 are determined in favour of the assessee.
GROUND NO.5 12. CIT (A) confirmed the addition of Rs.52,000/- made by the AO on account of unexplained cash deposit in the bank. The AO made addition of Rs.52,000/- by dis-believing the extract of the portion of cash book produced by the assessee showing withdrawal of the cash for the purpose of deposit in the bank account. CIT (A) recorded in para 10.2 that the assessee has shown receipt of Rs.50,000/- in cash from Shri Neeraj Garg on the day the cash has been deposited in the bank and no evidence regarding the source of cash in the hands of Neeraj Garg has been made by the assessee.
CIT (A) also did not accept the contention of the assessee on the ground that only extracts of the cash books have been produced which do not show the complete picture. When the assessee has produced the extract of the cash book, he cannot be debarred from producing the complete cash book itself as it is not believable that extract of the cash book are forged document produced before the quasi-judicial authority. So, we are of the considered view that this ground is also required to be restored to the CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. So, ground no.5 is determined in favour of the assessee.
GROUND NO.6
CIT (A) confirmed the addition of Rs.19,20,000/- reflected in the assessee’s firm capital accounts which shows cash deposit in the account of Shri Neeraj Garg made by the AO as undisclosed income. Assessee claimed before CIT (A) that the amount in question was withdrawal by Shri Neeraj Garg with Oriental Bank of Commerce which he has received from M/s. Raksha Metals in which Neeraj Garg was a partner and also filed affidavit to support his contention. But the AO did not accept the claim on the sole basis that the same was not filed during assessment proceedings.
CIT (A) confirmed the addition on the ground that the capital account filed by the assessee shows that the cheque dated 26.02.2008 for Rs.9,00,000/- and cheque dated 28.02.2008 for Rs.10,00,000/- has been received from State Bank of India and Axis Bank respectively but the assessee has failed to furnish any bank account with the State Bank of India or Axis Bank. When the assessee has filed copies of bank account, annual statement and profit & loss account of Neeraj Garg of M/s. Raksha Metals, available at page 37 of the paper book, which have not been disputed by the CIT (A), the matter is required to be restored to the file of CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. So, ground no.6 is determined in favour of the assessee.
GROUNDS NO.7 & 8
CIT (A) enhanced the addition of Rs.85,000/- made by the AO to Rs.2,35,000/- on the ground that the cash withdrawal has been made after cash was being deposited and the assessee has failed to explain the source of its cash deposits and treated the same as unexplained income.
Ld. AR for the assessee contended that the amount was withdrawn out of the books of Rattan Lal Garg and brothers but this contention disbelieved by the CIT (A) on the ground that the supporting evidence regarding source of cash with Rattan Lal Garg has not been filed and copy of cash book shows that the receipt of the cash from Rattan Lal Garg was immediately followed by payment in cash to M/s. Jai Balaji Road Lines and to M/s. Sangam Movers which shows the cash entry in the hands of Rattan Lal Garg and shortage in cash in the hands of the firm on the dates when freight charges were paid in cash. Assessee placed on filed copy of account of Rattan Lal Garg from M/s. Akshit Steel, affidavit of Shri Rattan Lal Gar, Income-tax return of Rattan Lal Garg from M/s. Rattan Lal Garg & Bros. and extract of cash book dated 18.12.2007 and 14.03.2008, available at pages 92 to 100 of the paper book.
16. The ld. CIT (A), without perusing these documents and without disbelieving the documents brought on record by the assessee, proceeded to enhance the addition. So, we are of the considered view that this ground is also required to be restored to the file of the ld. CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. So, grounds no.7 & 8 are determined in favour of the assessee.
In view of what has been discussed above, present appeal is allowed for statistical purposes and file is ordered to be restored to the ld. CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. Order pronounced in open court on this 16th day of January, 2017.