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Jeewan Chandra Punetha Cloth Merchant Khari Bazar Versus DCIT, Nainital Utrakhand

2015 (3) TMI 647 - ITAT DELHI

Suppressed profit - AO in upholding addition that out of the total business activity carried on in the same premises, 50% belonging to the father and son respectively - CIT(Appeal) sustaining addition to the extent of 50% of the business - Held that:- One of the contention of the assessee that he is engaged in the business of retail trade, and its total turn over did not exceed the prescribed monetary limit and AO ought to have computed profit @ 5% of total turn over as prescribed u/s 44AF of th .....

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the business activity from the same premises. No evidence is placed on record proving the volume of business carried out by the assessee. The AO has given a categorical finding that no separate stock was maintained by the assessee and his father. It is contended that the addition has been made by the AO without considering the explanation offered by the assessee but is contrary to the records as it is admitted position that the assessee was not maintaining proper books of accounts, therefore the .....

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ng officer and there was no undisclosed sundry debtors - Held that:- After considering the totality of the facts that if the sales effected to these debtors has been included into the suppressed sales and addition made thereof. Therefore, it would not be open to the Revenue to make addition of same amount. This aspect requires verification by the Ld. AO, therefore this ground is restored to the file of AO for verification. The AO is hereby directed to verify whether sales effected to the debtors .....

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se of survey was in fact collection made in respect of sales. The assessee has pointed out that in the impounded material collected during the course of survey itself the assessee has shown that the cash so found was out of the sales collections. This fact requires to be verified at the hands of the assessing officer. Therefore, the issue is restored to the file of AO for verification, whether the cash found during the course of survey was collection of the sale amount. In case, the amount perta .....

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. It was incumbent upon the assessee to produce the relevant documentary evidence in support of its claim. The assessee is required to furnish the evidence to prove genuineness of the transaction and creditworthiness of the donors. The authorities below have given a finding on fact that the donors were not having sufficient fund to give gifts to the assessee. This finding on fact is not rebutted by the assessee by placing any contray material on record. Therefore, we do not see any reason to int .....

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fact belonged to the assessee. On the contrary, the assessee has produced evidences in the form of bank statement etc., therefore, we hereby direct the assessing officer to delete the addition. - Decided in favour of assessee.

Discrepancy in balance sheet - CIT(A) allowing relief of ₹ 2,75,OOO/- to the assessee out of addition of ₹ 5,25,000/- Held that:- this amount is treated as explained in part only. It is seen that vide report dated 26.09.2011 (which has been rebutted .....

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; 2,75,000/- (i.e. 5,25,000 - 2,50,000=2,75,000) is held as explained and the addition to this extent deleted. The remaining amount of ₹ 2,50,000/- is upheld as an addition. Thus finding on fact by the Ld. CIT(Appeal) is not controverted by the revenue by placing any contrary material on record. - Decided against revenue.

Addition on account of benami transactions - CIT(A) deleted the addition - Held that:- CIT(Appeal) has given a finding that no action is taken against the reco .....

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count if he was merely introduces of the account then how the details related to the account of third party was found during the course of survey at his premises. Therefore, we hereby set aside this issue to the file of the assessing officer as to give a clear finding in respect of addition made what was the basis and material available before him for making such addition. - Decided in favour of revenue for statistical purposes. - ITA No. 1152//DEL/2012, ITA NO. 1174//DEL/2012, ITA NO. 1485/DEL/ .....

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peals, these were taken up together and are being disposed of by way of a consolidated order for the sake of convenience. 2. First, we take up to ITA No. 1152/DEL/2012. The grounds raised by the assessee read as under :- 1. That having regard to the facts and circumstances of the case, Ld. Commissioner of Income Tax (Appeals-II), Dehradun has erred in law and on facts in partly confirming the action of the ld. AO in upholding that out of the total business activity carried on in the same premise .....

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M/s Punetha Vastra Bhandar owned by the father of the assessee upholding 50% belonging to father and 50% belonging to son (assessee) without any basis. 3. The Ld. CIT(Appeals) also erred in law and on the facts of the case in confirming the addition of ₹ 401,112/- as undisclosed sundry debtors of the firm M/s Punetha Vastra Bhandar owned by the father of the assessee upholding 50% belonging to father and 50% belonging to son (assessee) without any basis even after physically verifying the .....

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the books & records of M/s Punetha Vastra Bhandar. 5. That on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in ignoring the documentary evidence and confirming addition of ₹ 250,000/- on the ground tha the donor did not have sufficient income in the ensuing year ignoring completely the past assessment records and cash flows / confirmation submitted during both the proceedings. 6. That on the facts and in the circumstances of the case the ld. CIT(Appeals) .....

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ing the documentary evidence and statement on oath of Shri Girish Chandra Sharma confirming addition of ₹ 50,000/- on the ground that the assessee has not been able to prove the genuineness of the transaction and credit worthiness of the person who had confirmed the transaction personally on oath before ld. AO during Assessment Proceedings. 8. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds ar .....

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disallowance / additions on account of suppression of profit on the basis of impounded material amounting to ₹ 7,79,999/-, addition on account of invoking the provisions of Section 40A(3) of the Act amounting to ₹ 3,80,069/-, addition on account of undisclosed sundry debtors amounting to ₹ 8,02,223/-, addition on account of discrepancy in trading account, addition on account of unexplained cash amounting to ₹ 3,20,546/-, addition on account of trading difference in balanc .....

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7; 380,069/-. a direction was issued to the AO that suppressed profit be divided into two parts hence the addition of 50% was sustained in the hands of the assessee, in respect of addition of ₹ 8,02,223/-, the Ld. CIT(Appeals) sustained the addition to the extent of 50% of addition. In respect of addition ₹ 84,466/-, this was not pressed before Ld. CIT(Appeals), in respect of addition of ₹ 3,20,546/- made on account of cash found at the time of survey, the Ld. CIT(Appeals) sust .....

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377; 8,70,000/-, was deleted from the hands of the assessee. 5. First ground of the assessee s appeal is against the confirmation of addition of ₹ 2, 56,601/- made on account of suppressed profit as per impounded material. Ld. Counsel for the assessee submitted that the Ld. CIT(Appeal) was not justified in sustaining addition to the extent of 50% of the business. He submitted that the assessee was only assisting his father, who was ill on the date of survey. He submitted that even otherwis .....

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ed that the assessing officer has rightly assessed, the entire suppressed profit in the hands of the assessee. As there was no separate books of accounts maintained. 7. We have heard the rival contention and perused the material available on record and gone through the orders of the authorities below. One of the contention of the assessee is that he is engaged in the business of retail trade, and its total turn over did not exceed the prescribed monetary limit. The AO ought to have computed prof .....

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any merit. It is not disputed by the assessee that he has been carrying out the business activity from the same premises. No evidence is placed on record proving the volume of business carried out by the assessee. The AO has given a categorical finding that no separate stock was maintained by the assessee and his father. It is contended that the addition has been made by the AO without considering the explanation offered by the assessee. This contention is contrary to the records. It is admitte .....

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no. 3 of the appeal is against confirmation of addition of ₹ 4,01,112/- . Ld. Counsel for the assessee submitted that there are not undisclosed debtors, he submitted that there is no concealed sales, was found. He, further submitted that sales estimated at ₹ 44,26,250/- against disclosed sales of ₹ 42,36,208/- profit of which has already been taxed. He submitted that Ld. CIT(Appeals) was not justified in sustaining this addition. Ld. Counsel submitted that the assessee cannot .....

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admitted position that both father and son were carrying out business activities from the same premises. In view of this position on the basis of finding given earlier for apportionment of amounts between the two businesses, it is held that 50% of the impugned amount (Rs. 8,02,223/2=4,01,112) at ₹ 4,01,112/- is sustained and the remaining has to be considered shall be issued later in this appellate order. 11. The assessing officer had made addition on the basis that the assessee neither fu .....

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der at pages 60 to 61 that the debtors were not disclosed by the assessee. However, the contentions of the Ld. Counsel for the assessee is that these debtors are duly explained and this can be inferred from the impounded material. Therefore, there was no occasion to make addition in this respect. After considering the totality of the facts that if the sales effected to these debtors has been included into the suppressed sales and addition made thereof. Therefore, it would not be open to the Reve .....

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of addition of ₹ 1,60,273/- Ld. Counsel for the assessee submitted that the cash found during the course of survey has been duly explained. He drew our attention to paper book page no. 156 on the contrary, Ld. Sr. DR supported the orders of authorities below. 12.1. We have heard the rival submissions and perused the available material on the record. We find that the Ld. CIT(Appeal) has observed that the amount could not be satisfactory explained at the time of survey. We are of the conside .....

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re, the issue is restored to the file of AO for verification, whether the cash found during the course of survey was collection of the sale amount. In case, the amount pertains to sale collection same be deleted. This ground of assessee s appeal is allowed for statistical purpose. 13. Ground no. 5 is against the confirmation of addition of ₹ 2,50,000/- Ld. Counsel for the assessee submitted that no addition can be made in the assessment year under consideration since these deposits / gifts .....

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cumbent upon the assessee to produce the relevant documentary evidence in support of its claim. The assessee is required to furnish the evidence to prove genuineness of the transaction and creditworthiness of the donors. The authorities below have given a finding on fact that the donors were not having sufficient fund to give gifts to the assessee. This finding on fact is not rebutted by the assessee by placing any contray material on record. Therefore, we do not see any reason to interfere into .....

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law so permits. The ground of the assessee appeal is allowed for the statistical purposes. 14. Ground no. 6 : The ground no. 6 is against the confirmation of addition of ₹ 1,60,000/-. Ld. Counsel for the assessee submitted that the authorities below were not justified in making addition. He submitted that it was demonstrated by the assessee that the amount belonged to one Shri Raj Bahadur Chand who confirmed the same. He submitted that all evidences were furnished in support thereof, ther .....

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the material available on record. We find that the revenue has not placed anything on record suggesting that the amount deposited by Raj Bahadur Chand in fact belonged to the assessee. On the contrary, the assessee has produced evidences in the form of bank statement etc., therefore, we hereby direct the assessing officer to delete the addition. Accordingly, this ground of Assessee s appeal is allowed. 15. Apropos, to ground no. 7 : Ld. Counsel for the assessee submitted that he does not wish t .....

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usiness turnover belongs to the assessee whereas the Assessing Officer has clearly established in the assessment order that the entire business turnover relates to the assessee only and Ld. CIT(A) has not given any justification as to the basis of apportionment of business turnover equally between the assessee and his father. (ii) In the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts by allowing relief of ₹ 2,75,OOO/- to the assessee out of addition of &# .....

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assessment order, which held substantial force in establishing the deposits in bank A/c benarni deposits of the assessee. 18. The ground no. 1 of the revenue is against the finding of the Ld. CIT(A). That out of the entire business turnover only 50% business turn over belong to the assessee. Ld. Sr. DR submitted that the Ld. CIT(Appeal) was not justified in treating that only 50% the business turn over belonged to this assessee. He submitted that the assessing officer in the case of assessee-son .....

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recorded in para 8 of this order. We hereby upheld the order of Ld. CIT(Appeal). This ground of revenue appeal is rejected. 19. Ground no. 2 is against the allowance of relief of ₹ 2,75,000/-. Ld. Sr. DR submitted that the Ld. CIT(Appeal) was not justified in deleting the addition. He submitted that the assessing officer has given a detailed finding the same be upheld. On the contrary, Ld. Counsel for the Assessee is supported the order of the Ld. CIT(Appeal). 19.1. We have heard the rival .....

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tal income for the year was ₹ 2,30,884/- and he is shown to have even gifted an amount of Rs, 270,000/- to the wife of the appellant in this very year. Thus the sum total of gifts far exceeds the income shown in the return and thus cannot be held to be explained. Thus, out of ₹ 5,25,000/-, ₹ 2,75,000/- (i.e. 5,25,000 - 2,50,000=2,75,000) is held as explained and the addition to this extent deleted. The remaining amount of ₹ 2,50,000/- is upheld as an addition. The above f .....

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course of survey. He submitted that the persons on whose name the bank account was held were not having sufficient means of income he submitted that the assessing officer at para 65 has observed that the assessee had deposited the amounts in account no. 10925759010. He submitted that the evidence collected during survey suggested benami transaction of assessee. Further he submitted that he finding of Ld. CIT(A) is contrary to the records. Ld. Counsel for the assessee supported the order of the .....

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s given a finding that the assessee was merely an introducer of bank account. However, it is transpired from the assessment order the Assessing Officer has observed that according to material available on records there were certain deposits in account no. 10925759010. Thus we are not able to accept the argument that the assessee was merely an introduced of the account if he was merely introduces of the account then how the details related to the account of third party was found during the course .....

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1485.Del.2013. The grounds raised in this appeal read as under :- 1. The reassessment framed by the Assessing Officer without providing any opportunity to the appellant to file any detail or rebut finding of CIT (A), in the individual case of Shri Jiwan Chand Punetha, which was the reason for reassessment and confirmation of such reassessment by CIT (A) is contrary to facts and law and therefore the reassessment order is bad in law and is therefore liable to be quashed. 2. The order of the lear .....

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pect of suppressed profit is contrary to facts and law and therefore, the addition is unlawful and is liable to be deleted. 4. Addition of ₹ 4,01, 112/- made by the Assessing Officer and confirmed by the CIT(A) in respect of undisclosed Sundry Debtors is contrary to facts and law and therefore, the addition is unlawful and is liable to be deleted. 5. Addition of ₹ 1 ,60,273/- made by the Assessing Officer and confirmed by the CIT(A) in respect of cash found at the time of survey is c .....

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the Ld. Counsel for the Assessee. Therefore, for the same reasoning as given in para 8 of this order, which is reproduced hereinunder :- Another contention of the assessee is that there is no basis to attribute 50% of the profit to the assessee. This contention of the assessee is devoid of any merit. It is not disputed by the assessee that he has been carrying out the business activity from the same premises. No evidence is placed on record proving the volume of business carried out by the asse .....

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nterfere in the order of Ld. CIT(A) same is hereby upheld. This ground of the assesssee s appeal is dismissed. We hereby reject this ground of appeal. Hence, ground no. 2 and 3 of the assessee s appeal reject. 23. Apropos to ground no. 4 the similar ground was taken in ITA No. 1152/Del/2012 as ground as ground no. 3. The Representative of the parties have adopted the same argument. There is no change under facts and circumstances pointed out. Therefore, for the same reasoning as in para 11 of th .....

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duly explained. We find that the Ld. CIT(Appeal) had observed that the assessing officer has recorded in assessment order at pages 60 to 61 that the debtors were not disclosed by the assessee. However, the contentions of the Ld. Counsel for the assessee is that these debtors are duly explained and this can be inferred from the impounded material. Therefore, there was no occasion to make addition in this respect. After considering the totality of the facts that if the sales effected to these deb .....

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