Sh. Mohinder Singh Chauhan, Delhi v. ITO, New Delhi

ITA 3957/DEL/2011 | 2005-2006
Pronouncement Date: 01-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 395720114 RSA 2011
Bench Delhi
Appeal Number ITA 3957/DEL/2011
Duration Of Justice 2 month(s) 1 day(s)
Appellant Sh. Mohinder Singh Chauhan, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 01-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 01-11-2011
Date Of Final Hearing 01-11-2011
Next Hearing Date 01-11-2011
Assessment Year 2005-2006
Appeal Filed On 30-08-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E DELHI) BEFORE SHRI G.D. AGARWAL HONBLE VICE PRESIDENT AND SHRI A.D. JAIN JUDICIAL MEMBER ITA NO. 3957(DEL)2011 ASSESSMENT YEAR: 2005-06 SH. MOHINDER SINGH CHAUHAN INCOME TAX OFFICER K-637 SIRASPUR ROAD LIBASPUR V. WARD 2 5(4) NEW DELHI. DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ANIL JAIN CA RESPONDENT BY : SHRI R.S. NEGI SR. DR ORDER PER A.D. JAIN J.M . THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005- 06 AGAINST THE ORDER DATED 30.6.2011 PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS)XXIV NEW DELHI. THE FOLLOWING GROUND S HAVE BEEN TAKEN:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OF FICER U/S 144 IS BAD IN LAW AND WRONG ON FACTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OF FICER U/S 144 IS WITHOUT JURISDICTION. ITA 3957(DEL)2011 2 3. THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY T HE LEARNED ASSESSING OFFICER IS AGAINST THE PRINCIPLES OF NATU RAL JUSTICE AND HAS BEEN PASSED WITHOUT AFFORDING REASONABLE OPPORTUNIT Y OF BEING HEARD. 4. THAT THE LD. AO HAS ERRED BOTH IN LAW AS WELL AS IN FACTS OF THE CASE IN MAKING AN ADDITION OF ` 10 22 800/- ON THE BASIS OF AIR INFORMATION. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND THE PROVISIONS OF THE LAW THE LEARNED ASSESSING OFFICER HAS ERRED IN INITIATING THE PROCEEDINGS U/S 271(1)(B) AND 271(1)(C) OF THE INCO ME TAX ACT 1961. 2. AT THE TIME OF HEARING THE SOLE CONTENTION R AISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE PERSONAL WITHDRAWAL AT ` 90 500/- BE SET OFF AGAINST THE ADDITION ON ACCOUNT OF G.P. ON UNACCOUN TED SALE OF ` 1 55 000/-. 3. THE SUBMISSION ON BEHALF OF THE ASSESSEE IS FOUND TO BE JUSTIFIED. THE LD. CIT(A) IN THE IMPUGNED ORDER AS OBSERVED INT ER ALIA AS FOLLOWS:- 5. I HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF T HE ASSESSING OFFICER AS WELL AS THE APPELLANT AND I AM OF THE OP INION THAT ONCE THE APPELLANT HAD MADE A CLAIM THAT ACCOUNT NO.700315 O F UCO BANK NEW SABZI MANDI DELHI PERTAINED TO HIS UNACCOUNTED PURCHASE AND SALES TRANSACTIONS OF CHEMICALS AND ONCE DIRECTIONS WERE ISSUED TO THE ASSESSING OFFICER U/S 250(4) OF THE ACT TO CARRY O UT REQUISITE ENQUIRIES TO VERIFY THE CLAIM OF THE ASSESSEE IT W AS INCUMBENT UPON THE ASSESSING OFFICER TO CONCLUSIVELY PROVE THAT TH E CLAIM OF THE APPELLANT WAS WRONG. HOWEVER HE HAS BEEN ABLE TO DO SO ONLY WITH REGARDS TO TWO ENTRIES AMOUNTING TO ` 90 500/-. THE APPELLANT HAS ACCEPTED THIS AMOUNT TO BE WITHDRAWALS FOR PERSONAL PURPOSES. ITA 3957(DEL)2011 3 5.1 A PERUSAL OF THE SAID BANK ACCOUNT NO. 700315 OF UCO BANK NEW SABZI MANDI DELHI REVEALS THAT THE PEAK BALANC E AVAILABLE IN THE ACCOUNT IS ON 10.01.2005 AMOUNTING TO ` 76 231.50. 5.2 THE APPELLANT HAS HIMSELF AGREED THAT HIS GROSS PROFIT FROM HIS REGULAR BUSINESS VARIES FROM 10% -15% OF SALES. T HE TOTAL SALES AS PER THIS AMOUNT COMES TO ` 10 22 800/-. 15% OF THIS AMOUNT COMES TO ` 1 53 420/-. IN MY CONSIDERED OPINION IT WOULD MEE T THE ENDS OF JUSTICE IF THE INCOME OF THE APPELLANT IS CALCULATE D FOR A.Y. 2005-06 IN THE FOLLOWING MANNER:- ` A) INCOME AS PER RETURN OF INCOME 97 500/- B) ADDITION ON ACCOUNT OF GP ON UNACCOUNTED SALES 1 55 000/- C) ADDITION ON PEAK CREDIT REPRESENTING INITIAL INVESTMENT 80 000/- D) DEBIT ENTRIES IDENTIFIED AS PERSONAL 90 500/- -------------------- TOTAL INCOME 4 23 000/- ------------------- 4. FROM THE ABOVE IT IS SEEN THAT THE AO ESTIMA TED THE ASSESSEES GROSS PROFIT ON THE BASIS OF ENTRIES IN THE UNACCOUNTED B OOKS. ONCE THE G.P. IS ESTIMATED IT TAKES CARE OF EVERY RECEIPT AND EXPEN DITURE. THEREFORE WHEN A G.P. ADDITION IS MADE NO SEPARATE ADDITION BY WAY OF ANY DISALLOWANCE OF ANY EXPENDITURE DEBITED IN THE ACCOUNT IS CALLED FO R. THEREFORE WE AGREE ITA 3957(DEL)2011 4 WITH THE ASSESSEES SUBMISSION THAT ONCE THE G.P. A DDITION IS MADE SEPARATE ADDITION FOR DEBIT ENTRIES COULD NOT HAVE BEEN MAD E. THEREFORE WE DELETE THE ADDITION IN RESPECT OF DEBIT ENTRIES IN SUCH BO OKS OF ACCOUNT AMOUNTING TO ` 90 500/- . THE INCOME OF THE ASSESSEE AT ` 4 23 000/- AS CALCULATED BY THE LD. CIT(A) IS REDUCED TO ` 3 32 500/-. THE LD. DR WOULD HAVE NO OBJECTION. 5. NO OTHER ARGUMENT WAS RAISED BEFORE US. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS INDICATED. ORDER PRONOUNCED IN THE OPEN COURT ON 1.11.2011. SD/- SD/- (G.D. AGARWAL) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 1.11.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ITA 3957(DEL)2011 5 DEPUTY REGISTRAR