Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (3) TMI 647 - ITAT DELHI

2015 (3) TMI 647 - ITAT DELHI - TMI - 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessee 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 but is contrary to the records as it is admitted position that the assessee was not maintaining p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thing was explained before the assessing 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at the amount so found during the course 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd thus cannot be held to be explained. 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. Ther .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unt 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. - 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 date .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hus, 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. 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 th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see 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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed issues are involved in all these appeals, 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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ansactions in the accounts 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. 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 bas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as collection from various debtors in 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 circumst .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. CIT(Appeals) has also erred in ignoring 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 o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the assessing officer made various 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 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

001/-, in respect of addition of ₹ 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 tim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

addition in respect of addition of ₹ 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 s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r of the assessing officer and submitted 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 lim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ontention 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 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s dismissed as not pressed. 10. Ground 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. Couns .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch a denial considering that it is an 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 debtors has been included into the suppressed sales and addition made thereof. There .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d no. 4th is against the confirmation 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ands 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 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 cons .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not be held to be explained. 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 d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he same in relevant Assessment Year if 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 w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

heard the rival contention and perused 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 asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acts by holding that only 50% of the business 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/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ailed by the Assessing Officer in the 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 assessi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2012. Following the same reasoning as 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( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that Shri Ganesh Shanker Punetha s total 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/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

basis of the material found during the 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 th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the appellant. The Ld. CIT(Appeal) has 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al purpose. 21. Now we take up ITA NO. 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cer and confirmed by the CIT(A) in respect 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

circumstances has been pointed out by 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 volu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fore him. Hence, we see no reason to interfere 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nstrate that debtors were recorded and 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version