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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
O R D E R PER C. M. GARG, J. M.:
1. 1. This appeal has been filed by the assessee against the order of the ld CIT(A), Rohtak dated 18.10.2019 for AY 2009-10.
2. The assessee has raised the following grounds of appeal:- “6. (1) On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming an addition to the extent of Rs. 15,64,000/- on account of peak credit in bank accounts rejecting the explanations and evidences filed by the assessee. (ii) That the above said addition has been confirmed rejecting arbitrarily the working given by the assessee.
7. On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming an addition of Rs. 1,87 488/- on account of bank interest despite the fact that the interest belongs to the firm and not the assessee.”
Daya Nand 3. The ld counsel of the assessee submitted that except ground Nos. 6 and 7, the assessee does not want to press other grounds of appeal
, hence, other grounds of assessee are dismissed as not pressed.
4. Apropos ground No. 6 of the assessee, the ld counsel of the assessee submitted that the AO has erred in law and on facts in making addition of Rs. 15,64,000/- on account of fixed deposit in the bank account of the assessee despite the fact that the said deposit relates to firm name as M/s. Dayanand and duly shown in the current account of the assessee as partner with the said firm. The ld counsel also submitted that the deposit in the bank account of the assessee were on account of transaction entered on behalf of the firm for the business purpose which was duly shown in the books of account of the firm. She further submitted that apart from business transaction the deposit also on account of agricultural income which pertains to HUF and HUF of the appellant having about 15 acres of agricultural land therefore, addition made by the AO and upheld by the ld CIT(A) may kindly be deleted.
5. Replying to the above the ld Sr. DR submitted that the ld CIT(A) was right in upholding the addition made by the AO as the impugned amount deposited to the bank account of the assessee was related to the individual account of the assessee as no documentary evidences has been furnished by the assessee showing that these deposits pertains to his partnership firm M/s. Dayanand Contractor and his HUF. The ld Sr. DR submitted that no documents has been furnished by the assessee to substantiate its explanation towards impugned cash deposits of Rs. 15,64,000/- therefore, the ld CIT(A) was right in upholding the addition.
6. Placing rejoinder to the above the ld counsel drew our attention towards para 5 to 5.6 of the first appellate order and submitted that ITAT Delhi Bench in and 2807/Del/2016 for AY 2009-10 and 2010-11 order dated 30.11.2017 in the case of the assessee Firm M/s. Dayanand Contractor held that the business income and contract receipt are to be treated as that of the firm, therefore, the order of Tribunal in the case of firm is self explanatory and supportive to the Page | 2 Daya Nand explanation of the assessee and in case addition is sustained that would amount to double addition.
7. The ld Counsel also explained factual position and submitted the AO made addition on account of cash deposited in the bank account of the assessee. We further, note that undisputedly there were certain cash deposits to the bank account of the assessee and AO has made addition by computing the book credit in the bank account of the assessee. The copy of bank account clearly reveals that there were frequent withdrawals and deposits to the bank account of the assessee and on four occasions the assessee has deposited cash to his bank account, the details of said cash deposits are as follows:-
Date Amount/Rs. 25.07.2008 10,00,000/- 28.07.2008 60,000/- 05.01.2009 9,74,000/- 07.02.2009 7,00,000/-
Regarding cash deposit of Rs. 10 lakhs on 25.07.2008, the ld counsel contended that from the copy of capital account placed at page 55 shows that an amount of Rs. 10 lakhs was given by the firm to the assessee in cash on 25.07.2008 and the same amount was utilized by the assessee on 28.07.2009 for the purpose of providing security amount. The ld counsel also submitted that the cash deposit of Rs. 60,000/- on 28.07.2008 we note that prior to 28.07.2008 there was cash withdrawals of Rs. 70,000/- on 29.07.2008 which is higher than the amount of cash deposited to the bank account of the assessee. The ld counsel vehemently pointed out that the cash deposit of Rs. 9,74,000/- on 05.01.2009 the partner current account of the assessee in the firm available at pages 55 reveals that the assessee received cash amount of Rs. 9,74,000/- on 05.01.2009 and same was deposited to the bank account on the very same date and another Rs. 10,82,000/- (Rs.
Daya Nand 974,000/- + 108000/-) for the purpose of security deposit for the purpose of business of the firm.
Explaining the source of last cash deposit of Rs. 7 lakhs on 07.02.2009 the ld counsel submitted that there were cash withdrawals of Rs. 7 lakhs between 12.01.2009 to 22.01.2009 in four installments and total amount of Rs. 7 lakhs was deposited to the bank account of the assessee on 04.02.2009. these factual position noted above also gets supports from the copy of partners current account of the assessee in the partnership firm M/s. Dayanand Contractors and copy of cash flow statements supported by the bank statement of the assessee.
At the same time, we also note that these submissions and documentary evidence have not been examined and verified by the AO during assessment proceedings. Therefore, without expressing any opinion on the merits of the issue, the same is restored to the file of the AO for afresh adjudication after allowing due opportunity of hearing to the assessee and without being influenced with the earlier assessment and first appellate order. Accordingly, Ground NO. 6 of the assessee is allowed for statistical purposes. Ground No. 7 11. Apropos ground No. 7 of assessee the ld counsel submitted that the AO has made addition of Rs. 1,87,488/- on account of interest stating that 26AS shown as amount of interest income of Rs. 1,87,488/- which has not been disclosed by the assessee in his return of income. After stating the factual position of the issue the ld counsel submitted that there was certain income which was received by the assessee and TDS was also deducted in the name of the assessee but the same relate to the partnership firm and being duly considered in the returned income of the firm. Drawing our attention PB 22 and 23 ld counsel submitted the partnership firm has shown and declared interest on FDR of Rs. 7,48,021/- which includes impugned interest amount of Rs. 1,87,488/- and the same has been offered for taxation by the assessee. Therefore, the addition in the hands of the assessee would tantamount to double Page | 4 Daya Nand addition once in the hands of the partnership firm and second in the hands of the assessee, therefore, same may kindly be deleted.
Replying to the above, the ld Sr. DR submitted AO has made addition on the basis of 26AS as the interest income and deduction of TDS was shown in the hands of the of the assessee therefore, AO was right in making addition and ld CIT(A) was also correct in upholding the same as the interest income was not shown and disclosed by the assessee in the return income.
On careful consideration of the above submission, we are of the considered view that since facts related to the computation of taxable income as well as interest on FDR in the hands of the partnership requires examination and verification of these facts by the AO. Therefore, this issue is also restored to the file of the AO for verification of the fact that whether the impugned amount of interest of Rs. 1,87,488/- has been shown and declared by the partnership firm for taxation. The AO is also directed to adjudicate the issue afresh after allowing due opportunity of hearing to the assessee and without being influenced with the earlier orders. Accordingly, Ground No. 7 is also allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 23/08/2023.