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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: SHRI J. SUDHAKAR REDDY & SMT SUCHITRA KAMBLE
This appeal is filed against the order dated 01/03/2010 passed by CIT(A)-XXVIII, New Delhi, for Assessment Year 2004-05.
3. The assessee, an individual had filed return on 31/10/2004 declaring income of Rs.12,71,490/-. During the course of the assessment proceedings it was noticed that the opening balance of the capital account as on 1/4/2003 had been taken as Rs.77,52,208.56/- whereas the closing balance as on 31/3/2003, as per the return filed for the last year, was Rs.64,65,906/-. Thus, there was a difference of Rs.12,86,302/-. The aforesaid difference was confronted to the assessee, who in the reply had submitted that there was a presentation error and the opening balance and the capital account as on 1/4/2004 should be taken as Rs.64,65,906/- and not Rs.77,52,208/-. The Assessing Officer did not agree that this discrepancy was mere a presentation error. He held that the assessee had taken the opening figure of capital account as Rs.77,52,208/- and not Rs.64,65,906/-, while arriving at the closing balance of Rs.82,02,789/-. He observed that the assessee was not able to explain the corresponding debit entries which had resulted in increase in the capital account by Rs.12,86,302/-.
The Commissioner of Income Tax (Appeals) deleted the said addition accepting the version given by the assessee that it was a presentation error. The said order refers to the computation made by the assessee to justify the said plea and mentions two entries; amount of Rs.26,38,696/- transferred from account of Fair Deal Corporation, supplier of the assessee, and Rs.3,50,000/- received from Jayanta Rao in capital account.
Aggrieved, revenue preferred an appeal before ITAT, which was partly allowed, with the direction that the issue be remanded back to the Assessing Officer for fresh adjudication.
The Revenue filed appeal before the Hon'ble High Court. The Hon'ble High Court directed the Tribunal as per Para 10 as follows:-
“….. At this stage, Learned Counsel for the respondent-assessee submits that the additions on merits have not been examined by the Tribunal. This is factually correct. The Tribunal will now dispose of the appeal filed by the respondent-assessee on merits in respect of addition of Rs.26,38,696/- and Rs.3,50,000/-. To curtail delay, parties are directed to appear in person or through authorized representative before the Tribunal on 29th September, 2014, when a date of hearing would be fixed.…”
Thus in the present appeal has two issues to be adjudicated as to addition of Rs.26,38,696/- and Rs.3,50,000/-.
The Ld. AR submitted that the addition of Rs.26,38,696/-was on the basis of amount due to M/s. Fair Deal Corporation. The assessee during the assessment proceedings was called for to establish the transaction between M/s Fair Deal Corporation & the assessee answered that the confirmation was given by M/s Fair Deal Corporation but presently the same is not traceable. The Ld. DR submitted that the address which was given by the assessee in respect of M/s Fair Deal Corporation was not correct address and it was not established whether the confirmations are proper or not. Thus, the actual existences of the creditors are doubtful.
As relates to gift received from Shri Jayanta Rao for Rs.3,50,000/-, the Ld. AR submitted that ample opportunities were given to the assessee, therefore the Assessing Officer rightly made an addition of the said amount. The Ld. DR relied on Assessing Officer’s order & submitted that the assessee was not able to make out relation between Shri Jayanta Rao & the assessee.
9. We have perused all the records and heard both the parties. As relates to addition for Rs.26,38,696/- the assessee submitted the ledger account of M/s Fair Deal Corporation to the Assessment Year 2004-05 & 2005-06. The assessee also submitted capital amount for Assessment Year 2007-08 along with confirmation. There is bank statement obtained from the bank clearly showing the transaction. Thus, mere non-presence of the party who has given loan cannot be obtained to hold that the transaction is not genuine. The other testimonies of confirmation as well as the books of accounts and bank statement clearly reveal that there is a transaction and the same appears to be genuine. Thus, the addition made in respect of amount due to M/s Fair Deal Corporation does not sustain. As relates to gifts received from Mr. Jayanta Rao, the assessee could not establish that the same person was a relative or there is a genuine reason for gifting such a large amount to the assessee. The said link is missing. Hence, the addition of Rs.3,50,000/- made by the Assessing Officer sustains.
In the result, appeal is partly allowed.
The order is pronounced in the open court on 08th of December, 2016.