ASHOK KUMAR,DELHI vs. DCIT, NEW DELHI

Making this addition on protective basis is wrong and arbitrary because no addition for this is made in the case of the firm which is also decided u/s 143(3).”

The assessee has filed his return of income for the Assessment Year 2009-10 on 29/12/2009 declaring an income of Rs.23,06,864/-. The case was selected for scrutiny and statutory notices u/s 143(2) was issued on 27/9/2010. The assessee is an individual and the source of taxable income was income from house property. He is also partner in the firm M/s Faqir Chand Raghunath Dass from which his share of loss for this assessment year was not adjusted against Income from other source. In respect of notice u/s 143(2), the assessee explains that bank account in the Canara Bank being A/c No. GLSB000061138 is maintained in the name of the assessee which account actually belongs to the firm, M/s Faqir Chand Raghunath Dass, 1080, Jama Masjid, Delhi. The assessee further explained that this Account No. 611138 pertains to the firm which can be verified from the Annexure 8 of the balance sheet of the firm. The copy of same was submitted and filed before the Assessing Officer during the assessment proceedings. The assessee further stated before the Assessing Officer that the cash transactions were entered in the books of the firms and the same was utilized by the firm and deposits were made by it. The Assessing Officer rejected the contention of the assessee and made addition of Rs.1,53,50,000/- in respect of deposits in bank account in the name of the assessee which held by him as partner, being income from undisclosed sources. This assessment was done by the Assessing Officer as protective assessment.

Being aggrieved by this, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee holding that the assessee failed to explain the sources of cash credit in the account to the satisfaction of the Assessing Officer . The assessee is before this Tribunal.

The Ld. AR submitted that the ledger book and the books of accounts clearly mentioned that it belongs to M/s Faqir Chand Raghunath Dass, a partnership firm and though the account was in the name of the assessee, the said amount was deposited and utilized by the firm only. The assessee has also produced original books of accounts before the Assessing Officer as well as the CIT(A). The Ld. AR submitted the bank statement of the assessee also reveals the same position. The Ld. AR submitted the assessment order dated 28/2/2014 of M/s Faqir Chand Raghunath Dass as well.

The Ld. DR relied on the order of the Assessing Officer and the order of the CIT(A).

We have perused all the records and heard both the counsels. The Assessing Officer in the present case has not looked into the books of accounts and the balance-sheets of the firm which was produced before the Assessing Officer at the time of assessment proceedings. The Assessing Officer observed in the assessment order that the contention of the assessment related to Canara Bank account in the name of the assessee belongs to the firm appears to be true because Account No. 611138 does appear in Annexure 8 of the balance-sheet of the firm. The said material was evident on record and while arriving at the conclusion the Assessing Officer has not given any reasons as to why the same is not acceptable. The Assessing Officer has not doubted the correctness of the balance-sheet of the firm M/s Faqir Chand Raghunath Dass. The said evidence was before the CIT(A) as well, but CIT(A) also failed to look into and arrive at the correct conclusion. The assessee being the partner can have the bank account for the firm to meet its business and in the present case also the same has been done. In light of this, the Assessing Officer as well the CIT(A) in wrongly made the addition in the hands of the assessee when the said income belongs to M/s Faqir Chand Raghunath Dass.

In result, the appeal of the assessee is allowed.