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    DCIT-Vs-Subhash-Chand-Gupta-ITAT-Delhi

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    Saurabh Bhat
    This case discuses the importance of reassessment proceedings and manner in which reassessment can be initiated

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    DCIT-Vs-Subhash-Chand-Gupta-ITAT-Delhi

    Uploaded by

    Saurabh Bhat
    2 views6 pages
    This case discuses the importance of reassessment proceedings and manner in which reassessment can be initiated

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    This case discuses the importance of reassessment proceedings and manner in which reassessment can be initiated

    Copyright:

    © All Rights Reserved
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    2 views6 pages

    DCIT-Vs-Subhash-Chand-Gupta-ITAT-Delhi

    Uploaded by

    Saurabh Bhat
    This case discuses the importance of reassessment proceedings and manner in which reassessment can be initiated

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    www.taxguru.

    in
    I.T.A. No. 1548/Del/2022

    IN THE INCOME TAX APPELLATE TRIBUNAL


    DELHI BENCH “G” NEW DELHI

    BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER


    AND
    SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER

    आ.अ.स/ं .I.T.A No.1548/Del/2022


    िनधारणवष/Assessment Year:2018-19

    DCIT बनाम Subhash Chand Gupta


    Central Circle 29, Vs. 43/1, Rajpur Road, Civil Lines,
    New Delhi. New Delhi.
    PAN No. AAAPG2554K
    अपीलाथ Appellant यथ/Respondent

    Revenue by Ms. Maninder Kaur, Sr. DR


    Assessee by Shri P C Yadav, Adv.

    सुनवाईकतारीख/ Date of hearing: 12.04.2023


    उोषणाकतारीख/Pronouncement on 25.05.2023

    आदेश /O R D E R

    PER C.N. PRASAD, J.M.

    This appeal is filed by the Revenue against the order of the Ld.

    Commissioner of Income Tax (Appeals)-30, New Delhi dated 28.04.2022

    for the AY 2018-19 in deleting the addition of Rs.2,12,14,164/- made u/s

    68 of the Act.

    2. Briefly stated that facts are that the assessee e-filed his return of

    income on 17.09.2018 declaring income of Rs.45,88,710/- for the

    assessment year under consideration. The assessment was completed u/s

    143(3) on 19.04.2021 determining the income of the assessee at

    1
    I.T.A. No. 1548/Del/2022

    Rs.2,58,02,871/-. In the course of assessment proceedings, the assessee

    was required to furnish the details of sales made by the assessee for the

    financial year relevant to the assessment year under consideration as the

    assessee has shown sales only for April to June 2017 only for three

    months. Assessee has submitted part-wise details in respect of 18 parties

    to whom the assessee made sales. The assessee was required to furnish

    confirmation of accounts, PAN numbers, addresses, ITR in respect of

    Bajrang Enterprises, Om International, Puja Traders, Tirupati trading,

    Vardhaman Traders. Since the assessee could not submit the PAN related

    with the above parties, AO could not issue notice u/s 131/133(6) of the

    Act. Therefore, the AO made addition u/s 68 in respect of the sales

    made to the above parties observing that the assessee has not explained

    the credits upto the satisfaction of the AO. On appeal the Ld.CIT(A)

    deleted the addition the Ld. DR submitted that the assessee has not

    proved the sales made to the five parties as stated by the AO in the

    assessment order i.e. Bajrang Enterprises, Om International, Puja

    Traders, Tirupati Trading and Vardhaman Traders and, therefore, the AO

    has rightly treated the sales made to these parties as unexplained income

    of the assessee.

    3. On the other hand, the Ld. Counsel for the assessee further

    submits that the total sales made by the assessee during the assessment

    year under consideration are Rs.23,43,48,801/- as can be seen from the

    audited balance sheet which is placed at page 11 of the paper book. Ld.

    2
    I.T.A. No. 1548/Del/2022

    Counsel submits that for affecting these sales assessee has made

    purchases of Rs.22,96,24,186/- and the AO has accepted the figures of

    purchases as correct and figures of sales has also correct. The AO

    accepted the profit declared by the assessee from the transactions of

    sales and purchases and he has not doubted the purchases made during

    the year. Ld. Counsel submits that when purchases and profit as

    computed by the assessee or accepted there are no reasons to doubt the

    sales made by the assessee. Ld. Counsel submits that the payments

    received from the five parties were received by a banking channel and in

    support of this the assessee filed bank statement which is also placed at

    paper book pages 43 to 48. Ld. Counsel further submits that as a matter

    of fact the AO accepted in the assessment order that after the

    introduction of GST from July 2017 the assessee did not carry out any

    business. Therefore, the Ld. Counsel submits that since the assessee has

    not carried out any business from the month of July 2017 assessee is not

    in contact with the parties to whom sales were made thereafter. Ld.

    Counsel submits that assessee pointed out that assessee has paid VAT on

    these sales which was 20% of the sales and has submitted the VAT returns

    and hence the action of the AO in disbelieving the sales made to these

    five parties is totally unjustified.

    4. Heard rival submissions, perused the orders of the authorities

    below.

    3
    I.T.A. No. 1548/Del/2022

    5. The only dispute in appeal is as to whether the sales made by the

    assessee to five parties as mentioned in the assessment order as well as

    CIT(Appeals) order can be assessed as income of the assessee u/s 68 of

    the Act. We observe that the Ld.CIT(A) had considered the issue

    elaborately with reference to the evidences furnished by the assessee

    and the averments of the AO and the assessment order and deleted the

    addition made u/s 68 observing as under: -

    “9. Ground nos. 2 to 4: It has been noted that the


    Assessing Officer during the assessment proceedings has
    asked the appellant to submit the PAN, ITR and confirmed
    copy of accounts of all the party-wise sales made by the
    appellant to prove the genuineness of the transactions. The
    Assessing officer noted that the appellant failed to provide
    above mentioned details in respect of five parties
    accordingly, he had disallowed corresponding sale of
    Rs.1,12,14,164/- and treated the same as unaccounted
    income under section 68 of the Income Tax Act. The
    appellant during the assessment proceedings as well as a
    during the appellate proceedings has submitted that the
    PAN of parties in respect of sales amounting to Rs.
    2,12,14,164/- out of total sale of Rs. 28,12,16,947/- could
    not be provided by him, but it cannot be the ground for
    treating the sales bogus and adding the same under section
    68 thereby taxing him twice firstly as a sales declared by
    the appellant secondly by adding the same sales under
    section 68 as cash credit.

    9.1 The applicant had further stated that the sales made
    by him are genuine sales, the payments in respect of the
    sales had been received via banking channels and has been
    duly recorded in the books of the appellant. He has also
    stated that the appellant has paid VAT on the sales which
    was 20% of the sales and submitted VAT returns reconciling
    the same with the sales. The appellant has also submitted
    various case laws in his support stating that the sales
    cannot be treated as bogus unless the purchases or stocks
    shown by him are found to be un-explained. The Assessing
    Officer did not point out any mistake in the purchases or in
    the inventory or in the VAT return filed by the appellant

    4
    I.T.A. No. 1548/Del/2022

    and therefore, the sale shown by him in the P&L account


    should not have been treated as bogus sales. I am of the
    opinion that the sales cannot be added under section 68
    unless they are proved as bogus on the basis of some
    reliable evidence. The reliance is placed on the decision of
    Hon’ble Delhi High Court of Delhi in ITA 613/2010 in the
    matter of CIT v/s Kailash Jewellery House.

    9.2 In this case, the Assessing Officer has added the sales
    only on the ground that the appellant has not kept PAN and
    addresses of these purchasers. It has been observed that,
    the appellant has also shown cash sales ^ without any
    party-wise details (or PAN details) amounting to Rs. 6, 64,
    57,477/- which has not been suspected by the Assessing
    Officer. The appellant does not keep any PAN or address
    details of its cash sales. The Assessing Officer treated the
    cash sales as genuine and declared party-wise sales in which
    the payments were received via banking channel, with
    verifiable trails, as bogus sales. I find that the action is not
    sustainable and therefore the addition made by AO
    amounting to Rs.2,12,14,164/- is here by deleted and the
    assessee’s appeal is allowed.”

    6. On careful consideration of the observations of the Ld.CIT(A), we

    do not see any infirmity in the order passed by the Ld.CIT(A) in holding

    that the sales cannot be added u/s 68 unless they are proved as bogus on

    the basis of some reliable evidences. Thus, we sustain the order of the

    Ld.CIT(A) and reject the grounds raised by the Revenue.

    7. In the result, appeal of the Revenue is dismissed.

    Order pronounced in the open court on 25.05.2023

    Sd/- Sd/-
    (NARENDRA KUMAR BILLAIYA) (C.N. PRASAD)
    ACCOUNTANT MEMBER JUDICIAL MEMBER

    Dated: 25.05.2023

    *Kavita Arora, Sr. P.S.

    5
    I.T.A. No. 1548/Del/2022

    Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard
    file of ITAT.
    By order

    Assistant Registrar, ITAT: Delhi Benches-Delhi

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