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Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
Date of Hearing : 26 Date of Hearing : 26-11111111-201 2015 Date of Hearing : Date of Hearing : 26 26 201 201 Date of Order : Date of Order : 03-12 Date of Order : Date of Order : 12 12-201 12 201 2015 201
ORDER ORDER ORDER ORDER PER H.S. SIDHU PER H.S. SIDHU : : : : JM PER PER H.S. SIDHU H.S. SIDHU This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXIV, New Delhi dated 22.5.2013 pertaining to assessment year 2005-06 on the following grounds:-
1. Whether the Ld.CIT(A) was justified by upholding the assumption of jurisdiction u/s 147 / 148 just in a mechanical way although it was based in general and mass in nature information , not supported by any iota of evidence nor any adverse material brought on record to substantiate information into reason . Therefore , the entire exercise is illegal and unjust 1
and bad in law.
2. Whether the Ld. CIT(A) was justified by upholding the assessment order just in a passive manner as under :-
(a) assumption was rightly exercised after recording of reasons (b) notice u/s 148 was served through registered post (c) no requirement for issue ()f notice u./s 143(2) when the C3se reopened (d) reasons have been provided (e) entire submissions and PB have been examined
3. Whether the Ld. CIT(A) was justified, by upholding an assessment order which is barred by limitation because based on notice issued instead of service even though the notice u/s 148 was not served hence barred by limitation .
4. Whether the Ld. CIT(A) was justified, by upholding an addition of Rs51000/- as loan u/s 68,by not considering the PB , from Pg.No. 1 - 22 , and written submission, without even bringing any adverse material against the details filed.
That the appellant craves leave to amend, alter or to raise any the time of hearing.”
The brief facts of the case are that the AO issued Notice uls 148 after recording requisite reasons for the same which was served upon the assessee by speed post requiring the assessee to file return of income in response to this Notice. However, no return was filed by the assessee, therefore, AO issued Notices u/s 142(1) dt. 09.07.2010 for 19.07.2010,Notice dt. 25.6.2010 for 26.7.2010, Notice dt. 13.09.2010 for 23.09.2010 and Notice dt. 4.10.2010 for 15.10.2010, but all these Notices remained un-complied with. On 25.10.2010, AR of the assessee, Shri Kamal Jain, CA appeared and filed part details on 25.10.2010, 09.11.2010,15.11.2010 and on 26.11.2010. On 25.10.2010, AR of the assesee also filed copy of return already filed by the assessee for the year under consideration with lTO, Ward 47( 1), New Delhi on 28.06.2005 declaring income of Rs.l,64,970/-. It was submitted by the AR of the assessee that this return may be treated as filed in response to notice issued uls 148. AO supplied copy of the reasons recorded for issue of Notice u/s 148 of the Act to the AR of the assessee. During the course of assessment proceedings, it was submitted by the AR of the assessee that assessee had taken ~ loan of Rs. 51,000/- through cheque dated 23.4.2004 from one Sh. Mukesh Jain which was later returned to the lender. However, AO asked the AR of the assessee to produce Sh. Mukesh Jain along with the copy of his ITR for the A Y 2005-06 and also copy of his bank account for the period 01.04.2004 to 31.3.2005. It was required to establish the genuineness of the claim of loan obtained from Sh. Mukesh Jain. However, assessee failed to comply with the above directions. It has been observced by the AO in the assessment order that Shri Mukesh Jain has not only advanced loan to the assessee but he has also given loans / advances / gifts to many other persons in lieu of cash. AO held that assessee was involved in money laundering actvitiy and routed his own money, earned from undislcosed sources, through Sh. Mukesh Jain, which was a colourable device to give a true color to his undisclosed income. Therefore, he made an addition of Rs. 51,000/- to the taxable income of the assessee by applying the provisions of secion 68 of the Act and assessed the income of the assessee at Rs. 2,15,970/- as against the returned income of Rs. 1,64,970/- vide his order dated 30.11.2010 passed u/s. 147/143(3) of the I.T. Act, 1961.
Against the aforesaid assessment order dated 30.11.2010, assessee appealed before the Ld. CIT(A) who vide impugned order dated 22.5.2013 has dismissed the appeal of the assessee.
Aggrieved, assessee appealed before the Tribunal.
At the time of hearing, Ld. Counsel for the assessee stated that he is not pressing the ground no. 1, 2 & 3. Therefore, the ground no. 1, 2 & 3 as aforesaid are dismissed, as not pressed.
5.1 With regard to ground no. 4 relating to upholding the addition of Rs. 51,000/- is concerned, he stated that this addition was made due to non- consideration of the Paper Book from page no. 1 to 22 and written submissions, without even bringing any adverse material against the details filed.
On the contrary, Ld. Sr. DR relied upon the order of the authorities below and requested that the same may be upheld and the appeal of the Assessee be dismissed accordingly.
We have heard both the parties and perused the records, especially the orders of the revenue authorities, Paper Book containing pages 1 to 25 having the details of Compliance of Notice u/s. 1452(1) dated 25.10.2010; Copy of ITR for AY 2005-06; copy of Assessment Order for AY 2004-05 with computation of taxes; Copy of notice u/s. 142(1) dated 4.10.2010; Copy of notice u/s. 142(1) dated 13.9.2010; Copy of notice u/s. 142(1) dated 9.7.2010; copoy of confirmation from Sh. Mukesh Jain with ITR, Bank Statement, Financial 4 Statements, PAN Card, Election Card, Computation of Income; Financial Statements, Computation of income of the assessee; Letter to the AO for inspection of record dated 14.1.2.2010 and Written Submission filed before the Ld.CIT(A). He also filed a separate copy of the Written Submission dated 9.3.2013 before us. Ld. Counsel for the assessee has also certified that all the said document have been filed before the AO & CIT(A) and there is not a single new document being placed on record.
7.1 After going through the aforesaid documents/evidences, we find that the assessee has filed on record all the details – from whom he has taken loans, their confirmations, ITRs, PAN Card copies, Balance sheets, computation of income. We further find that the AO without disputing these documents, had made the additions just on the piece of information received from the Investigation Wing and based on assumptions and presumptions. It is a settled law if the assessee has filed the necessary evidence without any dispute either bringing any adverse material, the evidence cannot be rejected and still in the present case the AO has not rejected the evidence on record but is solely based on the information received from the Investigation Wing. We further find that the assessee in the Paper Book has also filed the confirmation of Sh. Mukesh Jain, having confirmed the payment of Rs. 51,000/- to the assessee vide cheque no. 477714 dated 1.7.2004 which is reflected in the Balance Sheet as well as in the Statement of Account of the assessee and proves the genuineness and creditworthiness of the transactions and identity of the donor, which in our considered opinion seems to be genuine and addition made on this account deserve to be deleted.
7.2 In the background of the aforesaid discussions, we delete the addition of Rs. 51,000/- made by the AO and sustained by the Ld. CIT(A) and accordingly, this ground of appeal is allowed.
In the result, the Appeal filed by the Assessee stands partly allowed.
Order pronounced in the Open Court on 03/12/2015.