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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SHRI J. SUDHAKAR REDDY & SHRI KULDIP SINGH
PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER This appeal is filed by the Revenue directed against the order of the Ld.CIT(A)-XXIII, New Delhi dated 29.6.2012 pertaining to the Assessment Year (A.Y.) 2008-09.
Facts in brief:- The assessee is an individual and is engaged in the business of fabrication of furniture, trading in imported items and investment in securities. She also had a proprietary concern under the name and style of M/s Reproductions wherein she carried on the business of an interior decorator. The Assessing Officer (A.O.) in his order u/s 143(3)
of the Income Tax Act, 1961 (the Act) made total addition of Rs.65,40,234/- consisting of different additions of Rs.18,77,937/-, Rs.2,16,00,104/-, Rs.16,27,813/- and Rs.11,74,380/- u/s 28(iv) of the Act, on the ground that these are bogus advances.
On appeal the First Appellate Authority gave a detailed finding that, most of these advances were opening balances of the Previous Year, and that the assessee has received advances by way of account payee cheques from various parties through banking account and that each of the above parties have filed confirmations as well as copies of their ledger accounts and that all these transactions were made in the regular course of business of the assessee, year after year. He deleted the addition.
Aggrieved the Revenue has filed the appeal before us on the following grounds . “1. On the facts and in the circumstances of the case the Ld.CIT(A) has erred both in deleting the addition of Rs.65,40,234/- made by A.O. on account of bogus advances.
2. The appellant craves leave to add, alter or amend any of the grounds of appeal before or at the time of hearing of the appeal.”
5. The assessee has filed a Cross Objection on the following grounds. “1. Whether the advance from customers amounting to Rs.65,40,234/- can, on facts and in law, be termed as bogus, as alleged, and can the same be treated as income of the assessee u/s 28(iv) of the Act as done by Ld.AO in the impugned order.
2. The appellant craves leave to add, alter or amend any of the grounds of appeal before or at the time of hearing of the appeal.”
6. We have heard Shri O.P.Mody, the Ld.Counsel for the assessee and Shri Anil Kr.Sharma, the Ld.Sr.D.R. on behalf of the Revenue. On a careful consideration of the facts and circumstances of the case, perusal of material on record, orders of lower authorities, case laws cited, we hold as follows.
The ld.CIT(A) had from para 5 to para 9 of his order, has recorded factual findings on each of the advances appearing in the books of accounts of the assessee. We have perused these factual findings. The Ld.Sr.D.R. could not controvert these factual findings. Under these circumstances we uphold the same and dismiss the appeal of the Revenue. 7.1. Even otherwise the addition in question is made u/s 28(iv) of the Act. S.28(iv) of the Act reads as follows. “The value of any benefit or perquisite, whether convertible into money or not, arising from business or exercise of a profession.” 7.2. The Hon’ble Mumbai High Court in the case of Mahindra & Mahindra Ltd. vs. CIT, 206 ITR 50 (Mum) held that S.28(iv) does not apply to benefits in cash or money. As the advance in question is received in cash, the addition made u/s 28(iv) of the Act is bad in law and the same is deleted.
In the result the appeal of the Revenue is dismissed.
The Cross Objection of the assessee is allowed.
In the result the appeal by the Revenue is dismissed and the assessee’s Cross Objection is allowed.
Order pronounced in the Open Court on 20th July, 2016.