What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, finding that the assessee had provided sufficient details regarding the nature and source of the credits. The Revenue's arguments could not controvert the factual findings of the CIT(A).

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 35,08,795/-. The addition was related to cash deposits in the assessee's savings bank account, which the Revenue argued were unsubstantiated.

What were the issues?

Whether the CIT(A) erred in deleting the addition without appreciating the assessee's inability to substantiate cash deposits and whether the CIT(A) exceeded its powers by directing verification of books.

ITO vs Sh. Dinesh Kumar Ghelani | ITAT Delhi 2016

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-3’, NEW DELHI

Before: SHRI J. SUDHAKAR REDDY

This is an appeal filed by the Revenue directed against the order of the Ld.Commissioner of Income Tax (Appeals)-XXV dated 3.6.2014 pertaining to the Assessment Year (A.Y.) 2010-11 on the following grounds.

“1. Whether on the facts and in the circumstances of the case the Ld. CIT(A) has erred in law in deleting addition of Rs. 35,08,795/- without appreciating the fact that the assessee was not able to substantiate the nature and source of cash deposit in the saving bank account. 2. Whether on the facts and in the circumstances of the case the Ld. CIT(A) has erred in Law in allowing the grounds raised by the assessee subject to the verification of the books of accounts of the assessee as the same is equal to setting aside the issue and therefore beyond the power of CIT(A).

3. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 35,08,795/- by accepting the plea of the assessee that the amounts were withdrawn from this bank account to pay the creditors, ignoring the facts that this bank account is not reflected in the Balance Sheet of the assessee and therefore the withdrawals in this account could have not been used for the purpose of the business.

4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

None appeared on behalf of the assessee despite issual of notice.

After hearing the Ld.Sr.D.R. I find that the Ld.CIT(A) has held that the assessee has filed the following details before the Assessing Officer.

(a)Extract of books of accounts of the assessee’s proprietary concern and its Partnership Firm; (b) Copies of the accounts of the assessee as appearing in the books of the Partnership Firm M/s Kummin Diesels and M/s Saurashtra Engineering Works, along with accounts of suppliers of goods i.e. M/s WR Jain & Sons, Laxmi Automotive & Co., Anand Motor House, Goels Sales Corporation etc.

After considering the details of cash deposits, a factual finding is given at para 4 by the Ld.CIT(A) that he has verified the details of the accounts submitted by the assessee, source of credits in the pass book, relevant books and copies of accounts and has come to a conclusion that the assessee has explained the nature and source of credits in the pass book. The argument of the assessee is that payments were made from his personal savings bank account for the sake of RTGS. The Ld.D.R. could not controvert these factual findings of the Ld.CIT(A) nor could rebut the submissions of the assessee. Thus, we uphold this order of the Ld.CIT(A) and dismiss this appeal of the Revenue.

In the result the appeal by the Revenue is dismissed.

Order pronounced in the Open Court on 19th July, 2016.

ITO, NEW DELHI vs. SH. DINESH KUMAR GHELANI, DELHI

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