Income Tax Appellate Tribunal - Delhi
Ito, New Delhi vs Sh. Saurabh Kumar Sankalan, New Delhi on 16 March, 2018
1 ITA No. 3802 & 3335/Del/2013
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'G' NEW DELHI
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
AND
SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No. 3802/DEL/2013 ( A.Y 2009-10)
ITO Vs Saurabh Kumar Sankalan
Ward-31 (1), Room No. 1407 C-116, 1st Floor
E-2 Block, Civic Centre Ananad Niketan
New Delhi New Delhi
ACXPK2692M
(APPELLANT) (RESPONDENT)
ITA No. 3335/Del/2013 (A.Y 2009-10)
Saurabh Kumar Sankalan Vs ITO
C-116, 1st Floor Ward-31 (1), Room No. 1407
Ananad Niketan E-2 Block, Civic Centre
New Delhi New Delhi
ACXPK2692M (RESPONDENT)
(APPELLANT)
Appellant/Respondent Sh. Kaushlendra Tiwari, Sr.
by DR
Respondent/Appellant None
by
Date of Hearing 06.03.2018
Date of Pronouncement 16.03.2018
ORDER
PER SUCHITRA KAMBLE, JM
These appeals are filed by the Revenue and assessee against the order dated 28/03/2013 passed by CIT(A)-XXVI, New Delhi.
2. The grounds of appeal are as under:-
2 ITA No. 3802 & 3335/Del/20131. "Whether on the facts and circumstances of the case the CIT(A) was justified in admitting the fresh evidence when none of the conditions as laid out in the rule 46A are fulfilled in the case of the assessee"
2 "Whether on the facts and circumstances of the case, the CIT (A) was justified in deleting the addition amounting to Rs 46,46,900/ on account to LTCG on sale of land when despite numerous opportunities, the assessee failed to substantiate its claim."
3 "Whether on the facts and circumstances of the case, the C1T(A) was justified in admitting the fresh documentary evidence and deleting the addition amounting to Rs.30.19,371 /out of Rs 38.59.371/ as made by AO u/s 68 on account of unexplained cash credits when assessee failed to substantiate the genuineness of the cash credits during the assessment proceedings"
4 "Whether on the facts and circumstances of the case , the CIT(A) was justified in deleting the addition of Rs 16,59,000/being the unexplained investments when assessee during assessment proceedings failed to substantiate the source of investment in purchase of property at Nainital"
5 "The appellant craves leave to add. alter or amend any/all the grounds of appeal before or during the course of hearing of the appeal."
3. The assessee during the year sold his agricultural land, and no Capital gains accrue on this account. The Assessing Officer has determined long term Capital gain of Rs. 46.46,900/- in respect of Agricultural Land. All credits appearing in the bank statement and Receipts shown in the Profit & Loss Account was added to income by the Assessing Officer. The assessment has been completed u/s 144 of the Income Tax Act without giving sufficient opportunity to the assessee; and in fact certain documents could not be furnished as the accounts and finances of the assessee are being maintained by his father, and due to his ill-health documents could not be retrieved and submitted during the course of assessment proceedings.
3 ITA No. 3802 & 3335/Del/20134. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. The Ld. DR submitted that the CIT(A) was not justified in admitting the fresh evidence when none of the conditions as laid in the Rule 46A are fulfilled in the case of the assessee. The CIT(A) was not justified in deleting the addition amounting to Rs.46,46,900/- on account of LTCJ on sale of land when despite numerous opportunities the assessee fail to substantiate its claim. The CIT(A) was not right in admitting the fresh documentary evidence and deleting the addition amounting to Rs.30,19,371/- out of Rs.38,59,371/- as made by the Assessing Officer u/s 68 on account of unexplained cash credit when the assessee fail to substantiate the genuineness of the cash credit during the assessment proceedings. The CIT(A) was not right in deleting the addition of Rs.16,59,000/-. Being the unexplained investment in the assessee during the assessment proceedings fails to substantiate the source of income in purchase of property at Nainital.
6. None appeared for the assessee.
7. We have heard Ld. DR and perused the material available on record. As relates to Ground No. 1 of the Revenue's appeal, the CIT(A) observed that the assessee filed the copy of two sale deeds during the assessment proceedings as well and thus the CIT(A) was right in giving finding that there was no additional evidence to the issues and called for remand report from the Assessing Officer. The Assessing Officer in remand report dated 11/3/2013 stated that due to the assesse's attitude of non co-operative nature, the Assessing Officer passed order u/s 144. But the Assessing Officer has not commented on the documents which were called by the Assessing Officer during the assessment proceedings and was submitted before the CIT(A). Rejoinder to the remand report the assessee submitted that the documents 4 ITA No. 3802 & 3335/Del/2013 which are produced before the CIT(A) was relied during the course of assessment proceedings. In fact in remand report, the Assessing Officer admitted that the sale deed was filed regarding the land. Bank account details were also filed which was not denied by the Assessing Officer in his remand report. The CIT(A) after giving careful consideration to the evidences produced before him asked the Assessing Officer to give his remand report on the said documents. The Assessing Officer failed to give the proper finding in respect of those evidences. Thus Ground No. 1 of the Revenue's appeal is dismissed.
8. As relates to Ground No. 2 of the Revenue's appeal, the CIT(A) dealt with the evidences in detail. The CIT(A) held in Para 12.1 as under:-
"12.1 Despite of having all the information pertaining to the sale of land on the record of the Assessing Officer, he did not bother to make any independent enquiries and to give a clear finding as to why he is disallowing the capital gains. Without appreciating and analyzing evidence that was available with him and making an addition on the ground that the appellant did not furnish any documentary evidence is unjustified and unwarranted. Instead of issuing the same letter repeatedly on different dates i.e. on 04.10.2011, 17.10.2011 and 28.11.2011, the Assessing Officer should have utilized this time in initiating and furthering the enquiries to prove conclusively that the said land generated capital gains instead of presuming the appellant to be wrong without bringing any adverse material on record contrary to that of the appellant. On the basis of the material available on record and in view of the above discussion, since the land which was sold by the appellant falls under the category of "agricultural land" and does not come under the ambit of capital asset as per section 2(14) of the Income Tax Act, the sale of such land cannot be charged to tax under the head "capital gains". Therefore the addition of Rs.46,46,900/- made by the Assessing Officer on account of sale of agricultural land under the head "capital gains"
is hereby deleted."
5 ITA No. 3802 & 3335/Del/2013Since the CIT(A) has already given a detailed finding after verifying all the documents given by the assessee at the time of Assessment Proceedings and also at the time of appellate proceedings. In fact, the Assessing Officer without giving proper finding and the observations has simply made the additions which was rightly deleted by the CIT(A). Thus, Ground No. 2 of the Revenue's appeal is dismissed.
9. As relates to Ground No. 3 of the Revenue's appeal, the CIT(A) dealt with the evidences in detail. The CIT(A) held in Para 15 as under:-
"15. I have considered the written submissions filed by the appellant and also the details filed in support of the contentions raised in the grounds of appeal. I have also perused the assessment order and assessment record. On perusal of the copy of the bank account of Deutsche Bank of the appellant it is seen that an amount of Rs.7,34,940/- was found deposited on 13.10.2008. In support of the same, the Assessing Officer furnished a copy of the business loan procured from HDFC Bank. In support of the business loan, the appellant furnished a loan disbursement letter wherein it was stated that an installment of Rs.27,495/- would be the monthly repayment from 07.12.2008. On 16.12.2008, there is a deposit of Rs. 6,83,401/- which pertains to loan taken from Kotak Mahindra Family. Therefore, out of the deposit of Rs.38,59,371/- an amount of Rs.7,34,940/- and Rs.6,83,401/- stands explained by the appellant. However, on perusal of the bank account, I find there are some cash deposits on various dates given as under:
07.07.2008 Rs. 1,50,000/-
15.07.2008 Rs.3,00,000/-
21.07.2008 Rs.3,00,000/-
22.08.2008 Rs.50,000/-
09.02.2008 Rs.40,000/-6 ITA No. 3802 & 3335/Del/2013
The appellant neither in his written submissions nor in the course of assessment proceedings, nor in rejoinder furnished any explanation pertaining to the source of cash deposits that were found credited in his bank account. In the absence of any explanation given by the appellant to the satisfaction of the Assessing Officer, he was correct in treating the cash credits as unexplained income. However, out of Rs.38,59,371/- an amount of Rs.8,40,000/- remains unexplained in the absence of any evidence substantiating such deposit. Therefore the addition on this account is restricted to only Rs.8.40,000/- and hence it is directed that a consequential order may be passed restricting the amount to Rs.8,40,000/- only."
The CIT(A) has taken cognizance of the evidence for the cash deposits given by the assessee during the assessment proceedings as well as during the appellate proceedings. Therefore, there is no need to interfere with the findings of the CIT(A). Thus, Ground No. 3 of the Revenue's appeal is dismissed.
10. As regards to Ground No. 4 of the Revenue's appeal, the CIT(A) dealt with the evidences in detail. The CIT(A) held in Para 22 as under:-
22. I have considered the written submissions of the appellant, details filed by the appellant, perused the assessment order and also the assessment record. On perusal of the statement of account of customer id 000041552 i.e. the account of the appellant, it is seen that on 25.08.2008 an amount of Rs. 16,50,000/- was debited in the name of Ravi Taneja vide cheque no. 274115. These details were mentioned on the registered document also. However it is also seen that prior to the making of this payment there were certain cash deposits in the account of the appellant on 07.07.2008, 15.07.2008, 21.07.2008, 22.08.2008 amounting to Rs.8,00,000/-. Since this cash deposit was already added u/s 68 to the income of the appellant in the above mentioned paragraph, the same cannot be taken as unexplained for the second time and being it under the tax net, as it amounts to double taxation.
Therefore, considering these transactions, the appellant had a balance of 7 ITA No. 3802 & 3335/Del/2013 Rs.17,15,632/- prior to the payment made for the purchase of land. Since the appellant had sufficient funds for investment, no adverse inference should be drawn on this account. The source of the investment in purchase of land was explained by the appellant as loan procurement from HDFC Bank and Kotak Mahindra in the month of October 2008 and December 2008. Whereas the land was purchased and registered on 14.08.2008. The purpose of procuring the loan was not explained by the appellant nor gave any evidence of its investment. Since the land was purchased much before the loan was taken, the explanation of the appellant that the source of investment made in land was out of the loan amount cannot be accepted. However from the material on record, I find that the opening balance as on 01.04.2008, was found in the bank account to be at Rs.8,12,280/- and prior to 25.08.2008, a cash deposit of Rs.8,00,000/- was reflected in the bank statement and was already considered as unexplained cash credit u/s 68 of the IT Act 1961 and added to the income of the appellant in the above paragraph. Therefore, the opening balance as on 01.04.2008 was Rs.8,12,280/- and the unexplained cash credit of Rs.8,00,000/- i.e. totaling to Rs. 16,12,280/- approximately explains the investment made by the appellant in purchase of land. Therefore, the addition made by the Assessing Officer amounting to Rs.16,59,000/- is hereby deleted."
The finding given by the CIT(A) is in detail and there is no need to interfere with the findings given by the CIT(A). Hence Ground No. 4 of the Revenue's appeal is dismissed.
11. In result, appeal of the Revenue is dismissed.
12. As regards the assessee's appeal, the grounds of appeal are as under:-
1. That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi has erred in law and on facts in upholding the Assessment made u/s 144 of the Income Tax Act by the Respondent ignoring the documents and other information on record.8 ITA No. 3802 & 3335/Del/2013
2. That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi has erred in law in upholding an addition of Rs. 8,40,000/- being amount deposited by the appellant in his Bank account out of Cash in hand.
3. That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-XXVI, New Delhi has erred in law upholding an addition of Rs. 5,73,113/- being credit in Profit & Loss Account of the assessee disallowing the expenses amounting to Rs. 3,85,680/-
incurred by the assessee to earn the said income.
That the appellant craves to add, alter and / or delete any grounds of appeal at later stage, if necessary.
13. Since the assessee was not present, we are taking the assessee's arguments placed before the CIT(A) as arguments in the present appeal. The CIT(A) while passing the order in respect of Ground No.1 of the assessee's appeal has given a detail finding as to ex-parte order u/s 144 of the Act. From the assessment order, it can be seen that despite giving several opportunities, the assessee failed to furnish proper records before the Assessing Officer. Thus, there is no need to interfere with the findings given by the CIT(A). Ground No. 1 of the assessee's appeal is dismissed.
14. As relates to Ground No. 2 of the assessee's appeal, the CIT(A) has given a categorical finding that out of Rs.38,59,379/- an amount of Rs.8,40,000/- remains unexplained for which the assessee has not given any document before the CIT(A) and in the absence of any evidence, restricted the amount to Rs.8,40,000/- as unexplained income. There is no need to interfere with the order of the CIT(A). Ground No. 2 of the assessee's appeal is dismissed.
15. As regards Ground No. 3 of the assessee's appeal, the assessee has not furnish any evidence pertaining to the sale of agricultural produce before the Assessing Officer as well as before the CIT(A). The CIT(A) has rightly held that if the assessment proceedings is independent and has no bearing on the assessment or the earlier or subsequent years. In-fact, the agricultural produce differs from one year to another year. Therefore, there is no need to 9 ITA No. 3802 & 3335/Del/2013 interfere with the order of the CIT(A). Ground No. 3 of the assessee's appeal is dismissed.
16. In result, the appeal of the assessee is dismissed.
Order pronounced in the Open Court on 16th March, 2018.
Sd/- Sd/-
(PRASHANT MAHARISHI) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 16/03/2018
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
10 ITA No. 3802 & 3335/Del/2013
Date
1. Draft dictated on 07/03/2018 PS
2. Draft placed before author 08/03/2018 PS
3. Draft proposed & placed before .2018 JM/AM
the second member
4. Draft discussed/approved by JM/AM
Second Member.
5. Approved Draft comes to the PS/PS
Sr.PS/PS 16.03.2018
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk 16.03.2018 PS
8. Date on which file goes to the AR
9. Date on which file goes to the
Head Clerk.
10. Date of dispatch of Order.
11 ITA No. 3802 & 3335/Del/2013