AO can make addition if the cash credit is fully explained

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “A”, NEW DELHI

BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER

AND

SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

I.T.A. No. 4733/DEL/2009

A.Y.: 2005-06

ITO, Ward 29(2),

Room No. 112, Drum Shaped

Building, IP Estate, New Delhi

(Appellant )

vs.

Sh. Ashok Kumar Kesarwani,

409, Katra Maidgran, Khari Baoli,

Delhi – 110 006

(PAN/GIR NO. AATPK2759G)

 (Respondent )

Asseessee by : CA, Pratap Gupta

Department by : S h. B.R.R. Kumar, Sr. D.R.

ORDER

PER SHAMIM YAHYA: AM

This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals) dated 28.10.2009 pertaining to assessment year 2005-06.

2. The grounds raised read as under:-

“(i) In the facts and the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs. 11,40,000/- made by the Assessing Officer on account of difference in value of sale proceeds of plots.

(ii) In the facts and the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs. 4,30,000/- made by the Assessing Officer on account of unexplained cash credits.

(iii) The appellate craves leave for reserving the right to amend, modify, alter, add or forego any time before or during the hearing of this appeal.”

3. In this case on perusal of the computation of income, Assessing Officer noted that the assessee has shown short term capital gain of Rs. 20,000/- on the sale of two industrial plots as under:-

3.1 Assessing Officer asked the assessee to furnish the documentary evidence in respect of the purchase and sale of above mentioned two plots and further details. Assessee failed to provide the necessary details. Assessing Officer proceeded to estimate the sale value of each plot at Rs. 10 lacs as against Rs. 4,30,000/- declared by the assessee and accordingly computed the addition of Rs. 11,40,000/-. Furthermore, Assessing Officer noted that perusal of the assessee’s bank statement showed that on 1.7.2004, there was a deposit by clearing Rs. 4,30,000/-. Assessee explained that the same pertained to sale of plot, but the Assessing Officer rejected his contention on the ground  that date of deposit preceeds the sale of plot. Accordingly, he made the addition of Rs.4,30,000/-.

4. Upon assessee’s appeal Ld. Commissioner of Income Tax (Appeals) deleted the addition of Rs. 11.40 lacs by holding that keeping in view the phraseology of Section 69B of the Act, it appears that such an estimation by the Assessing Officer cannot be made. As regards addition of Rs. 4,30,000/- Ld. Commissioner of Income Tax (Appeals) observed that Assessing Officer has not properly understood the facts of the case. Narrating the facts of the case the Ld. Commissioner of Income Tax (Appeals) proceeded to delete the addition also.

5. Against the above order the Revenue is in appeal before us.

6. We have heard the rival contention in light of the material produced and precedent relied upon. We find that the impugned addition in this regard were made by the Assessing Officer as the assessee has failed to provide the necessary documentary evidence with regard to the transactions. We find that Ld. Commissioner of Income Tax (Appeals) has granted relief to the assessee without elaborately discussing the subject and without referring to the cogent material in this regard. In our considered opinion, interest of justice will be served, if the matter is remitted to the file of the Assessing Officer to consider the issue afresh. Assessee is directed to provide  the necessary details to the Assessing Officer in this regard. Accordingly, the issue stands remitted to the file of the Assessing Officer .

7. In the result, the appeal filed by the Revenue stands allowed for statistical purposes.

Order pronounced in the open court on 28/12/2011.

                                          Sd/-                                                   Sd/-

                                  [I.P. BANSAL]                       [SHAMIM YAHYA]

                             JUDICIAL MEMBER            ACCOUNTANT MEMBER

Date 28/12/2011

SRB

Copy forwarded to: -

1. Appellant  2. Respondent

3. CIT  4.CIT (A) 5. DR, ITAT

TRUE COPY

                                                                                                                           By Order,

Assistant Registrar,

ITAT, Delhi Benches