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Before: SHRI S.V. MEHROTRA & MS. SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order of Ld. CIT(A), XXIV, New Delhi passed on 1/03/2011. 2. The grounds of appeal is as follows:-
“1. That the addition of Rs.10,55,497/- made by the Assessing Officer and sustained by the Ld. CIT(A) is against the facts and circumstances of the case. 2. That the Ld. CIT(A) was not justified in confirming the addition made by the A.O.
That the cash deposit of Rs.13,12,500/- on various dates in the bank account represented the job work receipt of Rs.8,48,000/- and amount receipt from other tenants, towards consumption of electricity.
4. That the Ld. CIT(A) was not justified in holding that the amount of Rs.10,55,497/-was not receipt from various tenants, whereas the deposit in the bank account to the extend of Rs.8,48,000/- were received from job work. 5. That the sources of cash deposit in the bank account were duly explained by the assessee. 6. That the Assessing Officer as well as Ld. CIT(A) were not justified in not accepting the explanation of source of deposit in bank account. 7. That the Ld. CIT(A) had not properly appreciated the facts of the case in not accepting the contents of the statements of various tenants recorded by Assessing Officer . 8. That the Assessing Officer as well as the Ld. CIT(A) were not justified in not accepting that the assessee was doing job work and the receipts there from were deposited in the bank account on various dates. 9. That while completing the assessment the Assessing Officer had accepted the total income of Rs.92,748/- as per the computation of the income, which clearly indicates that the assessee was doing job work and the income was declared as per the provision of Section 44AF of the Income Tax Act. 10. That no interest u/s 234(A), 234(B), is leviable. It is prayed that the addition of Rs.10,55,497/- being unjustified and arbitrary, may kindly be deleted. 3. During the course of scrutiny the Assessing Officer asked the assessee for clarification about the source of Rs.13,12,500/- deposited in cash in his saving bank account which was reflected in yearly information during the assessment proceedings. The amount of Rs.13,12,500/- which was deposited in his bank account is job receipt of Rs.8,48,000/- and the amount is related to electricity bill amount received from other tenants. During the relevant year, there were 5 tenants including him who used only one common electricity meter the assessee also claimed that during the relevant year he has paid an amount of Rs.13,26,910/- NDPL out of which Rs.10,55,497/- belongs or related to the electricity bill of concerned tenants. The Assessing Officer asked for certain clarifications but the assessee failed to give clarification on the same. Hence, the Assessing Officer included the amount of Rs.10,55,497/- in his income which was deposited in his SB account claiming the same having received from the other tenants.
Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the assessee had taken a shop for doing business in C-15/1 Vazirpur Industrial Area, New Delhi. This shop was on rent the electricity bill for the above said building was in the name of Shri Shyam Sons Industries. The assessee paid the electricity of Rs. 13,12,500/- out of which according to him, he shares stands of Rs.2,71,413/- and the share of other four tenants at Rs.10,55,497/-, the assessee took the plea during the assessment proceeding that the assessee used to collect the money in cash for electricity bill from other tenants and deposited in the bank account. The Ld. CIT(A) during the appellate proceedings directed the Assessing Officer to make investigation u/s 250(4) of the Income Tax Act. The Assessing Officer submitted remand report dated 8/2/2010 the facts which emerges from this report was as under:-
“a) Along with the assessee a total no of six person are residing at H. No. C-15/1, Wazirpur Industrial Area, New Delhi. These person are Shri Rakesh Aggarwal, Sh. Salim Khan, Shri Mohammad Badre Alam, Sh. Manjoor and Shri Satish Aggarwal. (The full address of these five people’s are given in the point No. 5 Page-3 of the remand report). b) The assessee produced three person out of five person before the Assessing Officer and their statement were recorded. c) Shri Rakesh has said in his statement that he left this commercial complex in 2009 and during the year. He was with Shri Salim, Shri Manjoor and Shri Satish Aggarwal as tenants, he doesn’t remember the name of all other’s tenants. (In reference to the answer of question No. 6 & 7) a copy of aforesaid statement is attached as Annexure ‘c’. d) Shri Salim Khan in his statement has said that he left the commercial complex in 2008 but during the year he was with another tenant’s naming Shri Rakesh, Shri
Chander Prakash Aggarwal and he doesn’t remember the other’s name. (In reference to the answer of question No. 6) a copy of aforesaid statement is attached as Annexure ‘d’. e) Shri Satish has said in his statement that he left the commercial complex in 2007 and during the year he was with another tenants naming Shri Chander Prakash Aggarwal, Shri Badre Alam, Shri Rakesh and Shri Salim Manjoor &, he doesn’t remembers other’s name, (with reference to answer of question No. 6 &) a copy of aforesaid statement is attached as Annexure ‘E’. f). All aforesaid three person have given a chart to the Assessing Officer which showed their income calculation. It showed their total income after deductions of gross receipts and other expenses, which was shown below taxable limit.
The CIT(A) in Para 4.2 of the order observed that during the assessment and remand proceedings Shri Shyam & Sons Industries never mentioned that the electricity bill is being paid by the assessee. The four persons named Shri Surender Kumar Jain, Sushil Kumar Jain, Shri Sanjay Kumar and Shri Chanchal Kumar were working in the said commercial complex. Only three persons namely Shri Surender Kumar, Shri Sanjay Kumar and Shri Chanchal Kumar produced before the Assessing Officer / Inspector. The said persons were working in this commercial complex for last two years while commenting on the remand report. The assessee mentioned that the amount of income that has been added by the A.O cannot be treated as income u/s 68 the amount deposited in the bank account is out of the purview of Section 68 of the Income Tax Act as the bank account is not an account ledger of the assessee. The assessee mentioned that three tenants out of 5 served this fact in front of Assessing Officer that they paid cash to the assessee for their electricity bill which is related to them. Therefore, the facts and evidences produced during the assessment proceedings by the assessee are true and right. The assessee submitted the statements of Shri Rakesh Aggarwal, Shri Salim Khan and Satish Chand co-tenants of the assessee and given a detail that they have paid almost 6,59,225/- towards the electricity bill to the assessee. The other tenants whose statement was not recorded had paid 3,96,272/- but there was no record to show that they have paid this large amount. There was nothing to show on the record that Shyam & Sons has verified this fact. Therefore, the CIT(A) dismissed the appeal of the assessee.
The AR submitted that the A.O as well as the CIT(A) has ignored that three co-tenants have specifically said that they have made payment to the assessee for 4185 units consumed by them.
For the Financial Year 2005-06 by Shri Rakesh Aggrawal 41077 by Shri Salim Khan and 48974 by Satish Chand.
The DR relied on the order of the Assessing Officer as well as of the CIT(A) and submits that the assesse’s case has been properly dealt by both the authorities.
We have perused all the records and heard both the parties the finding given by the Ld. CIT(A) as related to the statement of the three co-tenants cannot be ignored. It is an admitted position that they have given the money for electricity charges to be paid on their behalf by the assessee. Those statements are proper and that should have been taken into account by the Assessing Officer as well as CIT(A). Therefore, the addition of Rs.6,59,225/- cannot be added to the income of the assessee. As relates to other tenants whose statements as well as whereabouts have not been produced by the assessee, the same was properly dealt by the Assessing Officer as well as the CIT(A). When there is no evidence given byte to the extent of Rs.3,96,272/- for alleged electricity charges the said amount is properly added by the Assessing Officer and confirmed by the CIT(A). In light of this, the appeal of the assessee is partly allowed. As relates to Ground No. 9 & 10, the assessee did not press the same. Therefore, the same are dismissed.
In result, the appeal is partly allowed.
The order is pronounced in the open court on 29th of December 2015.