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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-II’, NEW DELHI
Before: SHRI H.S. SIDHU
The Assessee has filed the Appeal against the impugned Order dated 15.4.2014 of Ld. CIT(A), Faridabad pertaining to assessment year 2009-10. The ground raised in the Assessee’s appeal reads as under:-
1. That the order of the Ld. CIT(A), Faridabad is bad in law and on facts.
2. That on the facts and in the circumstancse of the case the appellant denies his liability to be assessed u/s. 144 and consequently to pay tax thereon.
3. That on the facts and in the circumstance of the case the Ld. CIT(A) Faridabad erred in :
A) Rejecting the claim of the appellant for surrender of peak credit of the cash deposited in to the bank accounts to the tune of Rs. 4,68,550/- made before the Ld. CIT(A) in good faith. B) Confirming the addition of Rs. 23,90,000/- without pursuit the facts of the case fully and properly.
4. That having regards to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of the AO in charging interest u/s. 234B and 234C of the Income Tax Act, 1961.
5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without prejudice to each other.
2. Brief facts of the case are that the assessee had filed return declaring income at Rs. 1,73,360/- on 31.3.2010 which was processed on the returned income. The case was taken for scrutiny through CASS. Notice u/s. 143(2) of the I.T. Act, 1961 was issued on 14.9.2010 fixing the case for 22.9.2010. Again notices u/s. 143(2) and 142(1) of the I.T. Act, 1961 dated 31.1.2011 alongwith questionnaire issued for 10.2.2011. Again notices u/s. 143(2) and 142(1) of the I.T. Act, 1961 dated 31.1.2011 issued for 11.2.2011. Fresh Notices u/s. 143(2) and 142(1) of the I.T. Act were issued on 11.3.2011 for 23.3.2011, but none attended nor any reply filed. Again notice u/s. 142(1) of the Act was issued on 02.9.2011 for 12.9.2011 alongwith show cause as to why penalty proceedings u/s. 271(1)(b) of the Act may not be initiated. But again the same was not complied with.
Thereafter, AO observed that assessee is doing some business the detail of which are not available on record. AO noticed that it is an unaudited case and gross receipts / sales during the year was not shown only declaring business gain of Rs. 2,65,360 and filed his return as traders. AO observed that from the return it is not verifiable whether books of accounts has been maintained or not. In view of the above, information/ documents obtained from the bank and after examination of the same, assessment of the income of the assessee was made. The AO noticed that assessee has deposited Rs. 23,90,000/- in cash in his bank account. The assessee was by questionnaire issued on 31.1.2011 fixing the case for 10.2.2011 to furnish the source of cash deposit in your saving bank accounts during the year alongwith supporting evidences. In this behalf, a show cause was issued on 1.11.2011 for 8.11.2011 to explain the source of cash of Rs. 23,90,000/- deposited in the bank account with sufficient documentary evidence and furnish other information. But on the fixed date the counsel of the assessee appeared but no reply/evidence and sought adjournment. Thereafter, the case was adjourned to several dates on the request of the assessee’s counsel and last opportunity was given by issuing the show cause dated 25.11.2011 for fixing the case on 2.12.2011 to complete the ex-parte u/s. 144 of the Act. was filed only. Thereafter, AO observed that on perusal of return of the assessee, it was found that assessee has not declared any sale declaring business gain of Rs. 2,65,360/- during the year under consideration. No detail in this regard was furnished before the AO. Since assessee has not produced his books to get her business income verified. Accordingly, the results cannot be accepted. Hence, the AO vide his order dated 14.12.2011 passed u/s. 144 of the I.T. Act, 1961 assessed the income of the assessee at Rs. 25,63,360/- and added back the amount of Rs. 23,90,000/- deposited in cash in the bank account of the assessee and treated the same as undisclosed income of the assessee.
Against the assessment order, assessee appealed before the Ld. CIT(A) and also filed additional evidence under Rule 46A, which was forwarded to AO for examination, both with regard to the admissibility of additional evidence and the merit of addition made in the light of additional evidence, submitted by the assessee. AO’s report has been reproduced in the CIT(A)’s order, after considering which ld. CIT(A) confirmed the addition of Rs. 38,36,000/- on account of unexplained cash deposit in the bank account, rejecting the assessee’s surrender of peak credit balance of Rs. 7,60,894/- before AO in remand proceedings, inter alia, observing that on one hand the AO had recommended rejection of additional evidence and has conclusively tried to establish the fact that source of cash deposit could not be satisfactorily explained, on the other, he has referred to the surrender of peak credit balance in his bank account and payment of tax thereon by the assessee. He pointed out that since AO has not been able to substantiate in his report as to why peak credit balance may be accepted, the assessee’s contention was to be rejected.
Now the Assessee is aggrieved against the impugned order and filed the present appeal before the Tribunal.
At the threshold, Ld. Counsel of the Assessee has stated that the issues involved in the present appeal are squarely covered by the ITAT, ‘C’ Bench, New Delhi in (AY 2009-10) in the case of Hansraj S/o Sh. Ishria vs. ITO, Faridabad. In this behalf, he filed the copy of the said decision and requested that by following the same reasoning, the additions in dispute may be deleted and accordingly, the appeal of the assessee may be allowed.
6. On the contrary, Ld. Sr. DR relied upon the orders of the authorities below.
7. I have heard both the parties and perused the records, especially the impugned order passed by the Ld. CIT(A) and the decision referred by the Ld. Counsel of the assessee in the case of Hansraj vs. ITO, Faridabad passed in (AY 2009-10) dated 26.6.2016. I find considerable cogency in the assessee’s counsel in relying upon the aforesaid decision of the ITAT, New Delhi. For the sake of clarity, I am reproducing the finding given vide para no. 5 to 7 at pages 4 to 5 of the ITAT, Delhi decision dated 26.6.2016 in the case of Hansraj vs. ITO, Faridabad passed in ITA No. 1139/Del/2014 (AY 2009-10) as under:- “5. We have considered the submissions of both the parties and have perused the record of the case . It is not disputed that assesse was doing the business of cattle feeds. In the statement of facts, filed before ld. CIT(A), the assessee had pointed out that it was in the business of retail trading of cattle feeds e.g. peddy, khal, choori, chilka, gud, jawar and barsam etc. and assessed with ITO, Ward 11(3), Faridabad. Return of income had been filed u/s 44AF, by declaring business income of Rs. 2,18,040/- and turnover of Rs. 30,25,200/-. It was also submitted in the statement of facts that the assessee deposited the cash of Rs. 72,65,400/- and at the same time withdrew cash of Rs. 64,04,556/- during the relevant assessment year. Deposits were primarily from withdrawal from bank, sale proceeds and realization debtors. Assessee had not maintained any books of a/c.
Now the issue is whether entire deposits in the bank could be assessed to tax, disregarding the amounts withdrawn by assessee or not. Admittedly, neither any other source of income has been pointed out by AO nor any investment out of withdrawals from bank has been shown. Under such circumstances, assessee’s explanation that both the bank accounts were in relation to its business, cannot be doubted. In our opinion, the peak surrendered by assessee should have been accepted by lower revenue authorities, in the absence of books of a/c. We order accordingly.
In the result, assessee’s appeal is allowed accordingly.”
After perusing the aforesaid decision of the ITAT, Delhi, I am of