ITO, New Delhi v. Sh. Dharmender Kumar, New Delhi

ITA 5391/DEL/2016 | 2008-2009
Pronouncement Date: 05-11-2019 | Result: Partly Allowed

Our System has flagged this appeal as eligible for Vivad Se Vishwas Scheme. If you are party to this appeal, get on a Free Consultation Call with our team of Legal Experts who shall guide you as to how you can save huge Interest and Penalty in VSV Scheme.


Apply Now
        
Try VSV Calculator

Appeal Details

RSA Number 539120114 RSA 2016
Assessee PAN AIVPK1870D
Bench Delhi
Appeal Number ITA 5391/DEL/2016
Duration Of Justice 3 year(s) 18 day(s)
Appellant ITO, New Delhi
Respondent Sh. Dharmender Kumar, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 05-11-2019
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 05-11-2019
Assessment Year 2008-2009
Appeal Filed On 17-10-2016
Judgment Text
PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE MS SUCHITRA KAMBLE JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI ACCOUNTANT MEMBER ITA NO. 5391/DEL/2016 (ASSESSMENT YEAR: 2008 - 09 ) ITO WARD - 38(2) NEW DELHI VS. DHARMENDER KUMAR D - 16/381. SECTOR - 7 ROHINI NEW DELHI PAN: AIVPK1870D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SURENDRA MEENA SR. DR ASSESSEE BY: NONE DATE OF HEARING 06/08 / 201 9 DATE OF PRONOUNCEMENT 0 5 / 11 / 2019 O R D E R PER PRASHANT MAHARISHI A. M. 1 . THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 13 NEW DELHI DATED 29.07.2016 FOR THE ASSESSMENT YEAR 2008 - 09 WHEREIN THE ADDITION OF RS. 33435821/ - MADE ON PROTECTIVE BASIS BY THE ITO - WARD - 21(1) NEW DELHI (LD AO) IS DELETED . THE COMMISSION INCOME WAS ALSO DELETED AS SAME IS ASSESSABLE IN THE HANDS OF THE SHRI R.N. AGARWAL. 2 . T HE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL: - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE LD. CIT(APPEAL] ERRED IN NOT APPRECIATING THE FACTS OF THE CASE (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE LAW THE LD. CIT(APPEAL) ERRED IN DELETING THE ADDITION OF RS. 3 34 35 821/ - ON ACCOUNT OF UNEXPLAINED CREDIT/CASH DEPOSITS. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN C OMPUTING THE INCOME BEING 0.37% ON RS.3 34 35 821/ - HAS COMMISS ION INCOME. IT IS NOT ESTABLISHED THAT THE ASSESSEE IS EARRING GENUINE BUSINESS ON WHICH SUCH COMMISSION IS EARNED. 3 . THE LD AO AGGRIEVED WITH THE ORDER OF THE LD CIT(A) HAS PREFERRED THIS APPEAL . 4 . THE BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE FILED H IS RETURN OF INCOME ON 02.02.2009 AT RS. 163510/ - . THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 OF THE ACT BY ISSUING NOTICE ON 28.03.2013. THE ASSESSEE REQUESTED THAT ITO VS DHARMENDER KUMAR ITA NO. 5391/DEL/2016 (ASSESSMENT YEAR: 2008 - 09) PAGE | 2 ORIGINAL RETURN OF INCOME FILED BE TREATED AS RETURN IN RESPONSE TO THE ABOVE NOTICE. I T WAS FOUND THAT IN ASSESSMENT YEAR 2010 - 11 THAT THE ASSESSEE IS AN EMPLOYEE OF MR. RN AGARWAL. IN CASE OF TWO PROPRIETARY CONCERN OF THE ASSESSEE AND HIS ACCOUNT IS OPENED AND SUCH ACCOUNT WAS INTRODUCED BY MR. RN AGARWAL AND ALSO OPERATED BY HIM. THE ST ATEMENT ON OATH WAS RECORDED OF SHRI RN AGARWAL WH ERE HE CONFIRMED THE ABOVE FACT. THE HUGE DEPOSITS AMOUNTING TO RS. 33 435821 / - WAS FOUND TO BE CREDITED IN THE BANK ACCOUNT OF SUCH PROPRIETARY CONCERN WHICH REMAINS UNEXPLAINED. SAME WAS ALSO ADDED BACK U/ S 68 OF THE ACT IN HANDS OF SHRI R. N. AGARWAL AS HE DID NOT FURNISH ANY IDENTITY CREDITWORTHINESS AND GENUINENESS OF SUCH CASH DEPOSIT AS WELL AS BANK DEPOSIT. THEREFORE SAME WAS ADDED IN THE HANDS OF THE SHRI RN AGARWAL ON SUBSTANTIVE BASIS AND IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS. THE LD AO FURTHER MADE AN ADDITION OF COMMISSION INCOME @0.25 PER THOUSAND AS COMMISSION AND OUT OF WHICH PAYABLE TO THE ASSESSEE BY MR. RN AGARWAL WAS CONSIDERED AT 0.10 PER PAISE PER THOUSAND. THUS ADDITION OF RS. 3343/ - WAS MADE. ASSESSMENT U/S 143(3) READ WITH SECTION 147 OF THE ACT WAS PASSED ON 31.03.2014 DETERMINING TOTAL INCOME OF THE ASSESSEE OF RS. 33602 6 74/ - . 5 . THE ASSESSEE AGGRIEVED WITH THE ORDER PREFERRED APPEAL BEFORE THE LD CIT(A) WHO D ELETED THE ADDITION AS PER PARA NO. 7 OF HIS ORDER AS UNDER: - 7. THE ABOVE SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED. THE ADDITIONAL EVIDENCES HAVE BEEN ADMITTED FOR THE PURPOSES OF THIS APPEAL AS THEY ARE GERMANE TO A MORE THAN REASONABLE OPPORTUNITY HAS BEEN GIVEN TO THE AO TO EXAMINE THE ADDITIONAL EVIDENCE AND FILE REBUTTAL IF ANY. THE APPELLANT HAS POINTED OUT THAT IN HIS OWN CASE ON THE SAME SET OF FACTS ADDITION OF THE DEPOSITS IN THE BANK ACCOUNT HAS BEEN DELETED BY THE CIT(A) - 32 IN THE A.Y. 201 0 - 11 VIDE ORDER DATED 19.11.2015. IT IS ALSO SUBMITTED THAT THE SUBSTANTIVE ADDITION OF THE SAME AMOUNT OF RS.3 34 35 821/ - WAS MADE IN THE CASE OF SHRI R.N. AGGARWAL IN THE A.Y. 2008 - 09 BUT IN THE SUBSEQUENT SCRUTINY ASSESSMENTS FOR A.Y. 2009 - 10 AND 2010 - 11 NO SUCH ADDITION OF ENTIRE CREDITS IN THE BANK ACCOUNTS OF THE APPELLANT WERE MADE. THE AO ASSESSED THE COMMISSION INCOME BY APPLYING A RATE OF 0.37 - 0.43% ON THE TURNOVER IN THE BANK ACCOUNTS IN THE NAMES OF M/S PRIDE TRADE AGENCY AND M/S SIDH TRADING COMPANY. IN THE APPELLANT'S OWN CASE THE ASSESSMENT FOR THE A.Y. 2009 - 10 HAS BEEN COMPLETED U/S 147 DATED 30.03.2005 ACCEPTING THE RETURNED INCOME. IN THE ORDER OF THE CIT(A) - 32 FOR THE A.Y. 2010 - 11 THE ADDITION HAS BEEN RESTRICTED TO COMMISSION COMPU TED AT 0.37% ON THE TOTAL BANK DEPOSITS TO ITO VS DHARMENDER KUMAR ITA NO. 5391/DEL/2016 (ASSESSMENT YEAR: 2008 - 09) PAGE | 3 BE ADDED ON PROTECTIVE BASIS. THE DEPOSITS HAVE ALSO BEEN DIRECTED TO BE ADOPTED AT THE NET FIGURE AFTER REDUCING CASH WITHDRAWALS WHICH HAVE BEEN DEPOSITED AGAIN IN THE BANK ACCOUNTS AT LATER DATES. AFTER CAREF ULLY CONSIDERING THAT THE DEPARTMENT HAS ACCEPTED THAT SHRI R.N. AGGARWAL WAS THE REAL OWNER OF M/S SIDH TRADING CO. AND M/S PRIDE TRADE AGENCY AND THAT HE WAS ACTUALLY EARNING 0.37% ON THE DEPOSITS IN THOSE BANK ACCOUNTS THERE IS NO BASIS FOR THE DEPOSI TS TO BE TREATED AS INCOME IN THE HANDS OF THE APPELLANT. THE DEPARTMENT HAS IN SUBSEQUENT A.YS. ADMITTED THAT THE ENTIRE DEPOSITS IN THE TWO BANK ACCOUNTS OF THESE CONCERNS WERE NOT THE UNACCOUNTED INCOME OF SHRI R.N. AGGARWAL. HENCE THE ADDITION OF RS .3 34 35 821/ - MADE ON PROTECTIVE BASIS IS DELETED. 6 . THE COMMISSION INCOME WAS ALSO DELETED BY HIM VIDE PARA NO. 8 OF HIS ORDER AS UNDER: - 8. SO FAR AS THE ADDITION OF COMMISSION OF RS.3 343/ - IS CONCERNED IT IS SEEN FROM THE STATEMENT OF SHRI R.N. AGGARWAL RECORDED UNDER OATH ON 20.03.2014 THAT THE ALLEGED COMMISSION OF 0.025% WAS SHARED BETWEEN HIMSELF AND THE APPELLANT IN THE RATIO OF 60:40 I.E. THE APPELLANT RECEIVED 10 PAISE OUT OF 25 PAISE EARNED ON EACH THOUSAND RUPEES TRANSACTED. THE APPELL ANT HAS NOT DENIED THIS. HOWEVER IT IS SEEN THAT IN THE SCRUTINY ASSESSMENT* U/S 143(3)/ 147 FOR THE AY 2009 - 10 VIDE ORDERS DATED 30.03.2015 THE AO HAS ASSESSED THE ENTIRE COMMISSION INCOME IN THE HANDS OF SHRI R.N. AGGARWAL BY APPLYING A RATE OF 0.43% TO THE CREDITS IN THE BANK ACCOUNTS OF M/S SIDH TRADING CO. AND M/S PRIDE TRADE AGENCY AND ACCEPTED THE RETURNED INCOME OF THE APPELLANT. NEITHER THE APPELLANT NOR SHRI R.N. AGGARWAL HAVE CONTESTED THIS. IN THE AY 2010 - 11 THE AO HAS AGAIN ASSESSED THE COM MISSION INCOME ONLY IN THE HANDS OF SHRI R.N. AGGARWAL AND APPLIED THE RATE OF COMMISSION OF 0.37% OF THE TURNOVER. AFTER CAREFULLY CONSIDERING ALL THE ABOVE FACTS IT IS HELD THAT THE COMMISSION EARNED FROM THE TRANSACTIONS IN THE BANK ACCOUNTS OF M/S S IDH TRADING CO. AND M/S PRIDE TRADE AGENCY ARE ASSESSABLE IN THE HANDS OF SHRI R.N. AGGRAWL. THE ADDITION OF RS.3 343/ - MADE IN THE APPE LLANTS CASE IS DELETED. 7 . THE LD AO AGGRIEVED HAS PREFERRED THIS APPEAL. THE LD DR VEHEMENTLY SUPPORTED THE ORDER OF THE L D AO. DESPITE NOTICE TO THE ASSESSEE NONE APPEARED BEFORE US ON THE APPOINTED DATE. THUS THE ISSUE IS DECIDED IN ABSENCE OF ASSESSEE ON THE MERITS OF THE CASE. 8 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AU THORITIES. THE LD CIT(A) ADMITTED THE ADDITIONAL EVIDENCE WHERE THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2009 - 10 AND 2010 - 11 IN CASE OF SHRI RN AGARWAL WAS PLA CED. IN THOSE ASSESSMENT YEAR S THE TOTAL ADDITION OF BANK DEPOSIT WAS MADE IN HANDS OF SHRI R N AGARWAL ON SUBSTANTIVE BASIS. THE LD CIT(A) DESPITE GIVING OPPORTUNITY TO THE LD AO COULD ITO VS DHARMENDER KUMAR ITA NO. 5391/DEL/2016 (ASSESSMENT YEAR: 2008 - 09) PAGE | 4 NOT REBUT THE ABOVE FACT. SUBSEQUENTLY FOR ASSESSMENT YEAR 2009 - 10 THE LD AO ACCEPTED THE RETURN OF INCOME OF THE ASSESSEE AND DESPITE HAVING SIMILAR FACTS NO SUCH ADDITION HAS MADE. AS SHRI RN AGARWAL CONFIRMED THAT THE ASSESSEE IS MERELY AN EMPLOYEE AND AS THE LD AO HAS ALSO MADE THE ADDITION ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE NO INFIRMITY IS FOUND IN THE ORDER OF THE LD CIT(A) IN DELETING THE ABOVE ADDITION. NATURALLY WHEN THE SUBSTANTIVE ADDITION IS CRYSTALISED IN THE HANDS OF THE REAL OWNER THE PROTECTIVE ADDITION MUST BE DELETED. HOWEVER LATER ON IF THE SUBSTANTIVE ADDITION IS DELETED FOR THE TECHNICAL REASON THEN THE ADDITION MUST REVIVE IN TH E HANDS OF THE ASSESSEE IN WHOSE BANK ACCOUNT THE MONEY IS CREDITED. HOWEVER AT PRESENT NO SUCH FACT ARE BROUGHT ON RECORD. THEREFORE WE FOUND THAT THE LD CIT(A) HAS CORRECTLY DELETED THE ADDITION OF RS. 33435821/ - IN THE HANDS OF THE ASSESSEE. ACCORDING LY GROUND NO . 2 OF THE APPEAL OF THE LD AO IS DISMISSED. 9 . WITH RESPECT TO GROUND NO. 3 WHERE THE ADDITION OF RS. 3343/ - IS DELETED BY THE LD CIT(A). WE FIND SOME FORCE IN THE ARGUMENT THE LD DR EHO SUBMITTED THAT THE ASSESSEE CANNOT BE SUCH A GULLIBLE PERSON WHO ALLOWS MR. RN AGARWAL TO OPERATE THE BANK ACCOUNT AND DEPOSIT THE CASH OF SUCH HUGE SUM IN HIS PROPRIETARY CONCERN. THE ASSESSEE MUST BE SIGNING VARIOUS CHEQUE BOOKS HE MUST BE SIGNING VARIOUS BILLS ETC THEREFORE IT CANNOT BE SAID THA T EVEN THE ASSESSEE DOES NOT EARN 0.10 PAISA PER THOUSAND ON THE TRANSACTION . UNDOUBTEDLY ASSESSEE IS ONE OF THE PART OF PROVIDING ACCOMMODATION ENTRIES THEREFORE IT IS HIGHLY UNBELIEVABLE THAT HE ALLOWED MR. R. N. AGARWAL TO DO SO MAY THING WITHOUT RECE IVING ANY CONSIDERATION. ACCORDINGLY WE CONFIRM THE ADDITION OF RS. 3343/ - IN THE HANDS OF THE ASSESSEE. GROUND NO. 3 OF THE APPEAL IS ALLOWED. 10 . ACCORDINGLY APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 5 / 11 / 2019 . - SD / - - SD/ - ( SUCHITRA KAMBLE ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 5 / 11 / 2019 A K KEOT ITO VS DHARMENDER KUMAR ITA NO. 5391/DEL/2016 (ASSESSMENT YEAR: 2008 - 09) PAGE | 5 COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI