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Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
Date of Hearing : Date of Hearing : 02 Date of Hearing : Date of Hearing : 02 02-03-201 02 201 2016 201 Date of Order : 03-03-201 Date of Order : 2016 Date of Order : Date of Order : 201 201
ORDER ORDER ORDER ORDER
PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM
1. This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXIII, New Delhi dated 28.1.2014 pertaining to assessment year 2009-10 on the following grounds:-
“The Ld. Income Tax Officer as well as CIT (Appeals) erred in respect of the following and made/confirmed the additions in disregard to facts and law:
Business income was declared at Rs 2,10,480 under section 44AF of Income Tax Act meaning thereby 6% flat rate of net profit on a sale of Rs. 35,08,000. As per section 44AF(4), no books of accounts are compulsory in such a case, nor kept by the appellant. Provisions of section 68 are not applicable in a case where books are not kept by the assessee. Language of sec 68 says "sum found credited in the books of an assessee." Bank statement/pass book is not the books of assessee - CIT vs Bhaichand H. Gandhi (1983) 141 ITR 67 (Bom).
2. The total deposits in bank a/c as per order are Rs 13,15,750 whereas sales of the appellant is Rs 35,08,000 all in cash. So the deposits in bank alc are from cash sales which are quite reasonable. The learned ITO/CIT(A) failed to take note of the fact when there is a sale, there will be corresponding purchases also to the tune of Rs 33 lakhs.
The same money has been/can be re-routed several times for deposit into bank account, so only the peak sum so introduced can be added to income, if unexplained. Here the ITO/CIT(A) have added both cash deposits as well as use of credit card for purchases and expenses. No income can be earned without incurring expenses.
The other addition of Rs 23,35,023 under section 69 C being payment for credit cards is factually incorrect and also legally wrong. The three figures noted by ITO in assessment order under this category, one of Rs 14,01,080 belongs to other bank account with ICICI Bank and not for credit card payment. AIR also speak this fact and ITO never tried to look into the facts of the case. No addition u/s 69C can be made for deposits in bank a/c.
The payment for credit cards are for purchases to enable the assessee to make sales. Without purchases, sales cannot be made. Confirmations from some suppliers were filed before CIT(A) but has not been considered at all by him.
6. That the principal' of natural justice has not been followed by' both lower authorities. Justice should not only be done but it should appear to have been done. Not affording sufficient time and opportunity make the orders bad in law.
Both the lower authorities have made additions without investigation or evidence to justify the action taken. Absence of any evidence/detail, makes the order invalid and bad in law. When the order of an authority is subject to consideration by higher authorities, it must be speaking order and must reveal all the facts and mind of the officer passing the said order. These are totally missing in this case.
That such other relief be kindly granted in view of the facts and law as the Hon'ble Tribunal may deem fit.”
The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.
3. At the time of hearing, Ld. Counsel of the Assessee stated that Ld. CIT(A) has not given sufficient opportunity to the assessee for substantiating his claim before him and decide the issue in dispute against the assessee which is contrary to the principles of natural justice. He further stated that assessee has filed the documentary evidence in the shape of additional evidence before the Ld. CIT(A) who has also called for Remand Report from the AO, in spite of the same the addition made by the AO has been sustained by the Ld. CIT(A). He requested that the issue in dispute may be set aside for Denovo proceedings to the Assessing Officer, after giving adequate opportunity of being heard to the assessee to substantiate his claim before him.
4. On the contrary, Ld. DR has not raised any serious objection on the request of the Ld. Counsel of the assessee, but he relied upon the order of the Ld. CIT(A). He stated that assessee remained non-cooperative before the Ld. CTI(A) which he has mentioned in the impugned order vide para no. 4.2 at page no. 4.
5. We have heard both the parties and perused the relevant records especially the orders passed by the Revenue Authorities. We find that Ld. CIT(A) has fixed the hearing in the months of February, 2013; August, 2013; September, 2013 and November, 2013 and after that in the month of January, 2014 and decided the Appeal of the assessee on 28.1.2014 by passing the impugned order exparte. It is admitted fact that as per the impugned order the assessee filed additional evidences before the Ld. CIT(A) which the Ld. CIT(A) has mentioned in para no. 4.2 at Page no. 4 and he has also called for Remand Report from the AO, but finally has decided the issue against the assessee without thoroughly examining the additional evidence filed by the assessee. In our considered view, Ld. CIT(A) should made the enquiry himself or through the AO about the additional evidence filed by the assessee on the addition in dispute and decide the same as per law, which he has not done as per the impugned order. In the interest of justice, we are of the considered view that the issue in dispute requires thoroughly examination at the level of the AO. Accordingly, in the interest justice the issues in dispute are remitted back to the file of the Assessing Officer to decide the same denovo. Needless to add that the assessee should be given adequate opportunity of being heard. Assessee is also directed to cooperate with the AO and submit all the evidences/additional evidences, in support of his contention before him to substantiate his case.
In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.
Order pronounced in the Open Court on 03/03/2016.