Hemant Gandhi, Delhi v. ITO, New Delhi

ITA 3219/DEL/2010 | 2006-2007
Pronouncement Date: 29-03-2011 | Result: Allowed

Appeal Details

RSA Number 321920114 RSA 2010
Assessee PAN AAOPG6829K
Bench Delhi
Appeal Number ITA 3219/DEL/2010
Duration Of Justice 8 month(s) 29 day(s)
Appellant Hemant Gandhi, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-03-2011
Date Of Final Hearing 29-03-2011
Next Hearing Date 29-03-2011
Assessment Year 2006-2007
Appeal Filed On 30-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH C DELHI ] BEFORE SHRI C. L. SETHI JM AND SHRI K. D. RANJAN AM I. T. APPEAL NO. 3219 (DEL) OF 2010 ASSESSMENT YEAR : 2006-07. SHRI HEMANT GANDHI THE INCOME-TAX OFFIC ER HOUSE NO. 38 ROAD NO. 52 VS. W A R D : 19 (2) PUNJABI BAGH [WEST]; N E W D E L H I. N E W D E L H I. 110 026. P A N / G I R NO. AAO PG 6829 K. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI KAPIL GOEL ADV.; DEPARTMENT BY : MS. MONA MOHANTI S R. D. R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 06-07 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)-XXII NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW LD. CIT (APPEALS) ERRED IN NOT QUASHING THE ASSESSM ENT ORDER PASSED BY ITO WARD : 19(2) AS JURISDICTIONALLY ILLEGAL AND VOID AB INITIO; 2. THAT ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) ERRED IN NOT DELETING THE ADDIT ION AMOUNTING TO RS.70 55 000/- AS MADE BY THE LD. AO ON ACCOUNT OF BANK DEPOSITS B EING TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT 1961; 2 I. T. APPEAL NO. 3219 (DEL) OF 2010 3. THAT ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) ERRED IN NOT DELETING THE ADDITION AM OUNTING TO RS.70 55 000/- AS MADE BY LD. AO IGNORING NO. OF CITED CONTENTIONS A ND PRECEDENTS MADE ON THE SUBJECT ISSUE; 4. THAT ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW LD. CIT (APPEALS) ERRED IN NOT DELETING THE ADDITION AM OUNTING TO RS.50 55 000/- AS MADE BY LD. AO BEING AMOUNT RECD. FROM IDENTIFIED PARTIES. 3. THE ONLY ISSUE FOR CONSIDERATION RELATES TO CON FIRMING THE ADDITION OF RS.70 55 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BANK DE POSITS TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT 1961 [HEREI NAFTER REFERRED TO AS THE ACT]. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE HAD DEPOSITED CASH OF RS.1 01 46 500/- WITH VIJAYA BANK ROHINI BRANCH DELHI. THE ASSESSEE WAS ASKED TO FILE THE EXPLANATION WITH NARRATION OF EACH ENTRY IN THE BANK ACCOUNT MAINTAINED WITH VIJA YA BANK. THE ASSESSEE VIDE LETTER DATED 29 TH AUGUST 2008 EXPLAINED THAT THE ASSESSEE WAS ENGAGE D IN THE TRADING OF UTENSILS IN THE NAME OF M/S HEMANT GANDHI AND CO PRIOR TO THE BUSINESS PRE SENTLY CONDUCTED BY THE ASSESSEE. THE ASSESSEE HAD SUFFERED HEAVY LOSSES IN THE BUSINESS AND THEREFORE THE BUSINESS OF TRADING IN UTENSILS WAS CLOSED. HOWEVER SINCE THE ASSESSEE H AD NEITHER FILED COPY OF BANK ACCOUNT MAINTAINED WITH VIJAYA BANK NOR ANY REFERENCE WAS M ADE IN LETTER DATED 29 TH AUGUST 2008 THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSIT INTO THE BANK ACCOUNT WITH DOCUMENTARY EVIDENCE. THE ASSESSEE VIDE HIS LETTER DATED 18/11/2008 SUBMITTED THAT THE ASSESSEE HAD MAINTAINED A SAVING BANK ACCOUNT WITH VIJAYA BA NK ROHINI IN WHICH HE HAD DEPOSITED CASH OF RS.1 01 46 500/- DURING THE YEAR AND HAD WITHD RAWN A SUM OF RS.52 60 000/- FROM THE BANK ON DIFFERENT OCCASIONS. HE HAD ALSO DEPOSITED RS.7 2 05 005/- BY CHEQUE IN HIS ACCOUNT DURING THE FINANCIAL YEAR 2005-06 WHICH WAS LOAN FROM DIF FERENT PARTIES AND IN SUPPORT OF THE ABOVE TRANSACTION THE ASSESSEE ENCLOSED THE COPY OF ACCOU NT OF DIFFERENT PARTIES. THE ASSESSEE ALSO FILED COPY OF ADVANCES GIVEN TO SOME PARTIES AND CONFIRMA TION OF COPY OF ACCOUNTS OF THE CONCERNED PARTIES AS SHOWN IN THE STATEMENT OF AFFAIRS OF TH E ASSESSEE. HOWEVER THE ASSESSING OFFICER AFTER DETAILED EXAMINATION OF VARIOUS CONTENTIONS NOTED T HAT THE ONUS TO PROVE THE CASH DEPOSITS THE GENUINENESS OF TRANSACTION THE CREDITWORTHINESS / IDENTITY OF THE PARTIES WAS ON THE ASSESSEE WHICH HE HAD FAILED TO DO SO. THEREFORE THE AMOUN T WAS LIABLE TO BE ADDED UNDER SECTION 68 OF THE ACT. THE ASSESSING OFFICER ADDED THE DIFFERENC E OF CASH DEPOSITS AT RS.90 75 000/- AND CASH 3 I. T. APPEAL NO. 3219 (DEL) OF 2010 WITHDRAWN OF RS.20 20 000/- DURING THE PERIOD 1/04/ 2005 TO 31 ST OCTOBER 2005 AMOUNTING TO RS.70 55 000/- AND ADDED THE SAME AS UNEXPLAINED CR EDIT IN THE BOOKS OF ACCOUNTS. 4. ON APPEAL THE ASSESSEE SUBMITTED THAT THERE WAS NO DISCREPANCY IN THE ACCOUNTS. THE ASSESSEE OBJECTED TO THE ADDITION OF RS.70 55 000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE VIJAYA BANK ON THE GROUND THAT THE CONFIRMATION S OF 5 PERSONS FROM WHOM THE MAJOR CASH DEPOSITS WERE RECEIVED WERE FILED BEFORE THE ASSESS ING OFFICER AND THAT CASH FLOW STATEMENT WAS NOT CONSIDERED BY THE AO BEFORE MAKING THE ADDITION . THIS CONTENTION OF THE ASSESSEE WAS REJECTED ON THE GROUND THAT THE ASSESSEE HAD FAILED TO PRODUCE THESE PARTIES BEFORE THE AO. NOTICES ISSUED UNDER SECTION 133(6) WERE RECEIVED B ACK UN-SERVED FOR THE REASON THAT THE SAID PERSONS WERE NOT RESIDING AT THE ADDRESSES GIVEN BY THE ASSESSEE. AS A RESULT THE AMOUNT OF DEPOSITS APPEARING IN THE CASH-FLOW STATEMENT COULD NOT BE VERIFIED. SINCE THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE SOURCE OF CASH DE POSITS THE LD. CIT (APPEALS) UPHELD THE ADDITION. HE ALSO OBSERVED THAT THE ASSESSEE HAS N OT BROUGHT ANY MATERIAL ON RECORD CONTRARY TO THE FINDINGS OF THE ASSESSING OFFICER. THEREFORE THERE WAS NO FORCE IN THE CONTENTION OF THE ASSESSEE THAT SOURCE OF THE DEPOSIT IN THE BANK ACC OUNT WAS EXPLAINED. 5. BEFORE US THE LD. AR OF THE ASSESSEE FILED ADDIT IONAL EVIDENCE UNDER RULE 29 OF THE ITAT RULES AND SOUGHT PERMISSION OF THE BENCH FOR ADMISS ION OF THE SAME. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT CAUSE AS THE SUBJECT EVIDENCE I.E. THE AFFIDAVITS OF THE DEBTORS AND THEIR BANK STATEMENTS APPEARING ON PAGE NOS. 69 TO 80 OF THE PAPER BOOK WERE NOT AVAILABLE ON EARLIER OCCASIONS. HE THEREFORE RELYING ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TEXT HUNDR EDS INDIA PVT. LTD. [ORDER DATED 14/01/2011] REQUESTED FOR ADMISSION OF ADDITIONAL EVIDENCE. 6. WE HAVE CONSIDERED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WHICH IS IN THE FORM OF AFFIDAVITS AND THE COPIES OF BANK ACCOUNTS INCOME- TAX RETURN ACKNOWLEDGEMENTS. HONBLE DELHI HIGH COURT IN THE CASE OF TEXT HUNDRED INDIA PVT. LTD. 197 TAXMAN 128 HAS HELD THAT THE DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ADDI TIONAL EVIDENCE IN THE INTEREST OF JUSTICE ONCE 4 I. T. APPEAL NO. 3219 (DEL) OF 2010 THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOUL D BE NECESSARY FOR PROPER ADJUDICATION OF THE MATTER. THIS CAN BE DONE EVEN WHEN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE APPEAL AND IT NEED NOT BE A SUO MOTO ACTION OF THE TRIBUNAL. RUL E 29 OF THE INCOME-TAX RULES IS AKIN TO ORDER 41 RULE 27(1) OF THE CODE OF CIVIL PROCEDURE. THE AFORESAID RULE IS MADE ENABLING THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUNAL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSARY TO DO SUBSTA NTIAL JUSTICE IN THE MATTER. THE CONTENTION OF THE ASSESSEE BEFORE THE AO AS WELL AS BEFORE THE LD . CIT (A) WAS THAT THE DEPOSITS MADE IN THE BANK ACCOUNT IN CASH REPRESENTED THE RECOVERY FROM THE DEBTORS OF THE OLD BUSINESS. THE ASSESSEE HAD FILED AFFIDAVITS BANK ACCOUNTS OF SMT. NEERU K HANNA WIFE OF LATE SHRI VIRENDRA KHANNA; SAVITA SHARMA WIFE OF SHRI MOHAN LAL SHARMA; SHRI A MIT KUMAR KHATRI COPY OF INCOME-TAX RETURN ACKNOWLEDGEMENT OF SHRI AMIT KUMAR KHATRI; T HE AFFIEAVFIT OF SHRI JOGINDER KHURANA COPY OF HIS BANK ACCOUNT. SINCE THESE DOCUMENTS WE RE NOT AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT AND THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT (APPEALS) THE SAME COULD NOT BE PRODUCED BY THE ASSESSEE. SINCE THE EVIDENCES SO P RODUCED BEFORE US BY THE LD. AR OF THE ASSESSEE GO TO THE ROOT OF THE MATTER WE FEEL IT P ROPER TO ADMIT THE SAME. WE THEREFORE ADMIT THE ADDITIONAL EVIDENCE. SINCE THE ASSESSING OFFIC ER HAS NO OCCASION TO EXAMINE THIS ADDITIONAL EVIDENCE WE SET ASIDE THE MATTER TO THE FILE OF TH E AO WITH THE DIRECTION TO EXAMINE THE CONTENTION OF THE ASSESSEE IN THE LIGHT OF ADDITION AL EVIDENCE FILED BEFORE US AND DECIDE THE ISSUE ON MERITS AFTER CONSIDERING THE ADDITIONAL EVIDENC ES AS ALSO ANY OTHER MATERIAL TO BE FILED BY THE ASSESSEE TO SUPPORT HIS CONTENTION. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED AFTER CLOSE OF THE HEARING IN THE OPEN COURT ON 29 TH MARCH 2011 AFTER CLOSE OF THE HEARING. SD/- SD/- [ C. L. SETHI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : _31 ST MARCH 2011 . *MEHTA * 5 I. T. APPEAL NO. 3219 (DEL) OF 2010 COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT.