INCOME TAX OFFICER WARD-48(1), DELHI vs. RAVINDER NATH GOEL, DELHI

The ld. DR at the outset stated that there is a delay in filing appeal by the Revenue. After hearing the ld. DR and perusing the application for condonation of delay, we find that the reasons [A.Y 2012-13] 4. Brief facts of the case are that the assessee filed his return of income on 4.08.2012 declaring an income of Rs 11,13,390/-.The Assessing Officer initiated a reopening of re-assessment process on the basis of an information received from the ITO, (Inv.) Unit-6, New Delhi. 5. The information stated that a current account bearing No. 0190200000610 was opened in the name of M/s JMD Trading Co. by its Prop. Mr. Parshotam Singh on 09.07.2010 at Kamla Nagar Branch of Kotak Mahindra Bank, Delhi where an amount of Rs. 2,02,85,689/- were deposited. 5.1 The Inv. Wing further informed that a total of Rs. 42,05,98,631/- were deposited in the a/c number 00980200001053 in Bank of Baroda and that both the accounts were maintained by Mr. Parshotam Singh, Prop M/s JMD Trading Co. 5.2 Apart from the above deposits, it was also noticed that assessee has deposited an amount of Rs. 80.98 lakhs in the account no. 8240100007634 maintained with Bank of Baroda. [A.Y 2012-13] 6. On the basis of aforesaid information, proceedings u/s 147 of the Income-tax Act, 1961 [the Act, for short] was initiated after taking prior approval of competent authorities. Accordingly notice u/s 148 was issued on 29.03.2019 and served upon the assessee. The assessee filed a return in response to the notice u/s 148 on 9.11.2019 declaring an income of Rs 11,13,390/-. 7. After considering the facts and submissions, the Assessing Officer found that the assessee was one of the main beneficiary owner/beneficiary of JMD Trading Co. and Shri Parshottam Singh is only a façade/front of Shri Ravinder Nath Goel. The transactions in the bank and operations of the firm are managed by Shri Ravindra Nath Goel, himself. The AO therefore, treated the credit entries of Rs. 44,89,82,320/- (42,05,98,631 2,02,85,689 + 80,98,000/-) reflected in account no. 00980200001053 maintained with Bank of Baroda, account No. 0190200000610 maintained with Kotak Mahindra Bank and account No. 8240100007634 maintained with Bank of Baroda respectively as the total business turnover of the assessee and after considering all related expenses, estimated the G.P. rate at 10% of total turnover i.e. Rs. 4,48,98,232/- and added the same to the income of the assessee after giving relief of Rs. 12,19,430/- on account of profit from business & profession declared in the return. [A.Y 2012-13] 8. Aggrieved, the assessee went in appeal before the ld. CIT(A) who gave relief to the assessee stating that the AO has made the entire addition without there being any material to show that the assessee was the actual beneficial owner of the said M/s JMD Trading Co. or for that matter receipt in such account had any direct or proximate relation with the assessee or for that matter any live link between the assessee and the said bank account barring two transactions of receipts by family members of the appellant. The CIT(A) also held that the AO has not carried out further verification or investigation in this regard. 9. Aggrieved the Revenue is before us. Before us, the ld. DR stated that the ld. CIT(A) failed to appreciate that the AO, not only based his findings on the basis of investigation report, but also conducted his own enquiry and issued summons u/s 131 of the Act to the assessee which was not responded to. The ld. DR continued by saying that the Assessing Officer shifted the onus, to explain the deposits in bank, on the assessee which was not discharged. The ld DR submitted that the assessee was required by the AO to justify the original sale and purchase with documentary evidences and invoices, audited profit and loss account and details of substantial interest in all enterprises etc. which was not complied with and the ld. CIT(A) has not considered these aspects and deleted the addition. [A.Y 2012-13] 11. We have heard the rival submissions and have perused the relevant material on record. In the instant case, what is relevant to note is that the information was received by the Assessing Officer that the assessee was a beneficial owner of M/s JMD Trading Co. We find that, to verify the information, the Assessing Officer issued a notice u/s 131 of the Act to the assessee for personal appearance and to explain the transactions in the banks as revealed by the Investigation report. We, however, find that the assessee has not responded to the enquiry proceedings initiated by the Assessing Officer and the assessee had not discharged the onus for explaining the deposits made in the bank. We also find that the CIT(A) has not given credence to the report of the Bank Officials who had reported that the Mr. Goel could be the actual beneficial owners of the funds [A.Y 2012-13] which are routed through the account of M/s JMD Trading co and these transactions could be for layering of funds without having any genuine underlying commercial activities and may not have any economic rationale. 12. In that view of the matter, we are of the considered view that the enquiry is not completed in this case by the Assessing Officer largely due to non-cooperation from the side of the assessee. In the factual matrix of the instant case, we are of the considered view that the entire issue of veracity of the credit entries of Rs. 44.89 crores in the three bank accounts, namely two accounts in Bank of Baroda and one account in Kotak Mahindra Bank, requires a fresh adjudication. We, therefore, set aside the orders of the CIT(A) and remit the issue of verification of credit entries in the aforesaid bank accounts to the file of the AO with a direction to the Assessing Officer to verify and establish the identity, genuineness and creditworthiness of persons from where the credit entries are made in the aforesaid bank accounts. It is needless to add that the AO would afford adequate opportunities to the assessee and the assessee should appear before the Assessing Officer whenever the Assessing Officer seeks his presence to explain the transactions in [A.Y 2012-13] 13. In the result, appeal of the Revenue in ITA No. 3437/DEL/2024 is allowed for statistical purposes.