Deepak Gupta, Noida vs Assessee

1 ITA NO.1536.DEL.12 C.O184.DEL.12

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: 'B' NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .No.1536/Del/2012 (ASSESSMENT YEAR-2008-09) ITO vs Deepak Gupta Prop. Deep Graphics Ward-1(1) G- Block, Shopping Complex, Advertising Marketing Co.C-88, Sector-10 Sector-20 Noida Noida AFZPG9323E (APPELLANT) (RESPONDENT)

C.O NO. 184/Del/2012 (ASSESSMENT YEAR 2008-09) Deepak Gupta ITO Prop. Deep Graphics Advertising Ward-1(1) Marketing Co. G- Block, Shopping Complex, Sector-20 C-88, Sector-10 Noida Noida (RESPONDENT) AFZPG9323E (APPELLANT)

Appellant by Sh.P. Dam Kanunjia, Sr. DR Respondent by None Date of hearing 07/05/2015 Date of Pronouncement 15/05/2015 ORDER PER DIVA SINGH, JM

By the present appeal filed by the revenue the correctness of the order dated 13/01/2012 of Ld. CIT(A), Ghaziabad pertaining to 2008-09 assessment year has been assailed on the following grounds.

"1. That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.24,87,500/- in respesct of M/s R.K. Traders considering the documednts provided by the assessee. The Ld. CIT(A) did not consider the finding in respect of reply received by the Assessing Officer (AO) in response to notice u/s133(6) from the father oif the proprietor of M/s R.K. Traders that no transactions were made between the assessee and proprietor of M/s R.K. Traders nad who was also not p;roduced for examination.

2.That the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.14,78,750/- in respect of M/s Ganesh Enterprise without considering the fact 2 ITA NO.1536.DEL.12 C.O184.DEL.12

that Government Postal Authority had informed that the assessee has left and report of the Inspesctor of Income Tax that no such party exists at the address, whereas assessee has submitted the papers/letterhead of thet same address, at which no party exists as per report of the Government Postal Authority and Inspector of Income Tax.

3,That the appellant craves leave to add, alter and amend any of the grounds of appeal on or before hearing.

4. That the order of the Ld. CIT (Appeals) being erroneous in law and on facts deserves to be set aside/cancelled and the order of the AO be restored.

2. No one was present on behalf of the assessee at the time of hearing. The record shows that notice for the specific date of hearing has been issued to the assessee by speed post on 18th May 2015 at the address indicated by the assessee which has come back unserved with the comment "Left without Add". Accordingly, considering the material available on record the appeal of the Revenue and the CO filed by the assessese are being decided on merit after hearing the Ld. Sr. DR.

3. Ld. SR. DR qua the departmental ground raised invited attention to Para 3 & 4 of the assessment order on the basis of which it was his submission that in response to the letter u/s 133(6) issued by the Assessing Officer in the course of the assessment proceedings, the father of the proprietor of M/s R. K. Traders replied by speed post as per record has stated that no transaction of sale/purchase has been made with M/s Deep Graphics the proprietary firm of the assessee. Referring to the assessment order it was his submission that this fact was confronted to the assessee and he was required to produce the proprietor of M/s R. K. Traders and Shri Ganesh Enterprises. Referring to the record it was submitted that repeatedly the opportunities were given to prove the genuineness of the transactions and the assessee failed to address the issues. Inviting attention Para 4of the assessment order it was his submission that on record there is evidence qua the Shree Ganesh Enterprises that letter u/s133(6) came back unserved with the 3 ITA NO.1536.DEL.12 C.O184.DEL.12

comment of the postal authority that there is no such firm at the address given. This fact it was submitted was confronted to the assessese and opportunity was provided to produce the proprietor. The AO it was submitted further made enquiries through the Inspector who stated that there is no such firm. Inviting attention to the impugned order in Para 8.3 & 8.4 it was his submission that the CIT(A) has decided the issue in favour of the assessee holding that the assessee has furnished proof of payment made through account/payee cheques. It was his submission that the CIT(A) has not specifically dealt with the specific findings of the Assessing Officer and the findings arrived at consequently are vitiated as the relevant facts have not been taken into consideration while arriving at a conclusion. In the circumstances it was his prayer that the impugned order be set aside and the additions made in the assessment order be sustained.

4. We have heard the submission and perused the material available on record. It is seen that the Assessing Officer in Para 3 & 4 of the assessment order made the following discussion on facts for making the addition:-

"3. During the course of assessment proceedings, on perusal of balance sheet it is observed that assessee has shown sundry creditors amounting to Rs.61,79,038/-. On 3/12/2010 assessee furnished list of sundry creditors and confirmation of creditors. 03/12/2010 some letters u/s 133(6) were issued to certain parties to confirm the transaction. Letter u/s 133(6 was sent to M/s R.K. Traders 224, Bhagatpura, Meerut. The reply of the father of the M/s R. K. Traders was received through speed post wherein he has stated that no transaction of sale/purchase has been made with M/s Deep Graphics and also said that the documents relating to his son have been misused by M/s Deep Graphics. Therefore, vide this office letter dated 15/12/2010 the assessee was asked to produce M/s R.K. Traders. On 21/12/2010 assessee filed application that he was trying to best to produce in person the concerned parties (Proprietors of M/s R.K. Traders & M/S Shree Ganesh Enterprises) and case was adjourned to 24/12/2010. On 24/12/2010 non-attended and a letter was issued to the assessee please show cause why the closing balance shown by you in the case of M/s R.K. Traders may not be treated as bogus credit and added back to your income. Further on 28/12/2010 counsel of the assessee attended but not produced any creditor. Therefore the credits (closing balance) shown in the case of M/s R. K. Traders is bogus. The onus to prove the genuineness of transaction and creditworthiness of party lies with the assessee. But assessee could not 4 ITA NO.1536.DEL.12 C.O184.DEL.12

prove it. Therefore, Rs.24,87,500/- shown as sundry creditors are being added in the total income of the assessee. Penalty proceedings u/s 272(1) (c) is also being initiated for furnishing inaccurate particulars of his income and concealing the income.

Addition Rs.24,87,500/-

4. Assessee has shown credit balance against the M/s Shree Ganesh Enterprises for Rs.14,78,750/-. Letter u/s 133(6) dated 3/12/2010 sent to M/s Shree Ganesh Enterprises LGF-73, Durga Tower, RDC, Raj Nagar, Ghaziabad through speed post to confirm the transaction, which was received back unserved with the remarks "No Such Firm". Since the transaction with the said party are appearing in your books of account, therefore, onus to prove the genuineness of these lies with your. Therefore, vide this office letter dated 15/12/2010 the assessee was asked to produce M/s Shree Ganesh Enterprises for examination along with books of account in this office on 21/12/2010. On fixed date no compliance was made. The Inspector of this office was deputed to make local enquiry on the address provide by assessee. The Inspector in his report has stated that no such firm exist on this address. As the onus to prove the genuineness of the transaction and creditworthiness of the party lies with the assessee. But assessee could not prove it. Therefore, amount of Rs.14,78,750/- is being added in the total income of the assessee on account of unexplained cash credits. Penalty proceedings u/s 271 (1) (c) is also being initiated for furnishing inaccurate particulars his income and concealing the income.

Addition Rs. 14,78,750/-

4.1 On a perusal of the impugned order in Paras 8.3 & 8.4, we find that these objections have not been considered by the Ld. CIT(A). In the absence of any representation on the part of the assessee and considering the findings the CIT(A) which have not addressed the findings of the Assessing Officer we deem it appropriate to set aside the impugned order and restore the same back to the said authority with the direction to pass a speaking order in accordance with law after giving the assessee reasonable opportunity of being heard addressing the specific findings of the Assessing Officer.

6. In the result the appeal of the Revenue is allowed for statistical purposes.

7. The assessee in his cross-objection filed has assailed the action of the Ld. CIT(A) in sustaining the addition of Rs.4,86,196/- made by the Assessing Officer. The facts qua the same are found addressed in para 5 of the assessment order and 5 ITA NO.1536.DEL.12 C.O184.DEL.12

Para 8.5 of the CIT(A)'s order. In the absence of any representation on behalf of the assessee as evidently no effort has been made by the assessee to indicate any change of address if any, as the notice sent through speed post has come back unserved with the comment left without address. We find that in the absence of any evidence the following finding arrived at in the circumstances of the CIT(A) deserves to be upheld.

"8.5. Ground of appeal no. 4 regarding addition of Rs.4,06,496/-.

The AO made inquiry from M/s Varun Plastics, another client of the assessee and found that there is difference in balance as per ledger account maintained by the assessee vis-à- vis account maintained by M/s Varun Plastic. When given a chance, the assessee was unable to explain the discrepancies.

Even in appeal, no concrete explanation or any supporting evidences, of any sort, have been brought on record.

Therefore, I am constrained to hold that the AO was correct in making addition of unconfirmed/unproved balance.

8. In the result, the appeal of the Revenue is allowed for statistical purposes and the C.O filed by the assessee is dismissed.

The order is pronounced in the open court on 15th of May , 2015.

Sd/- Sd/- (T. S. KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 15 /05/2015

*R. Naheed*

Copy forwarded to: 6 ITA NO.1536.DEL.12 C.O184.DEL.12

1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR

ITAT NEW DELHI

Sl.No. Description Date 1. Date of Dictation by the Author 07/05/2015 2. Draft Placed before the Dictating Member 08/07/2015 3. Draft Placed before the Second Member 4. Draft approved by the Second Member 5. Date of approved order comes to the Sr. PS 6. Date of pronouncement of order 7. Date of file sent to the Bench Clerk 8. Date on which file goes to the Head Clerk 9. Date of dispatch of order 7 ITA NO.1536.DEL.12 C.O184.DEL.12