IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : A : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM
ITA No.4221/Del/2009
Assessment Year : 2001-02
ITO, Vs. Bhagwati Builders,
Ward 47(1), Room No.188, E-315, Basement,
CR Building, IP Estate, Greater Kailash Part-1,
New Delhi. New Delhi.
PAN : AAAFB3037G
(Appellant) (Respondent)
Assessee By : Shri N.K. Gupta, CA
Department By : Ms Kakkar, Sr.DR
ORDER
PER R.S. SYAL, AM:
This appeal by the Revenue is directed against the order passed
by the CIT (A) on 31.8.09 in relation to the assessment year 2001-02.
2. All the grounds raised in this appeal are against the deletion of
addition of ` 20 lac made by the AO u/s 68 of the Act.
3. Briefly stated, the facts of the case are that the AO received a
report from the Investigation Wing revealing that the assessee had
ITA No.4221/Del/2009
taken entry of ` 20 lac from M/s P.S Daxelor after paying commission
@ 1% to the entry provider. After issuing notice u/s 148, the assessee
was called upon to explain its position on this entry. The assessee's
representative appeared contending that the firm was not doing any
business for the last 9-10 years and it was dissolved long back. The
authorized representative further submitted that how the transaction
of ` 20 lac could take place when the business itself was closed long
back. The AO observed that at the time of search at the premises of
M/s P.S. Daxelor, the Investigation Wing came to know that the
assessee, namely, M/s Bhagwati Builders, had received ` 20 lac as
accommodation entry. In the absence of any details furnished by the
assessee, the AO made addition u/s 68 of this sum. The ld. CIT(A) got
convinced with the submissions advanced on behalf of the assessee
and ordered for the deletion of addition. The Revenue is aggrieved
against such deletion.
4. We have heard the rival submissions and perused the relevant
material on record. It can be seen from the submissions advanced by
the assessee before the AO as well as the ld. CIT(A), which have not
been refuted with any cogent material, that the assessee's business
was closed for the last 9-10 years and the firm itself was dissolved
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long back. The only basis on which such addition was made by the AO
is the information received from the Investigation Wing. When the
assessee categorically stated before the AO that no such entry was
ever received, we fail to appreciate as to how any addition u/s 68
could have been made without first controverting the assessee's
contention in this regard. It is trite law that a particular contention
raised by the assessee has to be taken as correct unless proved
otherwise. It is impermissible on the part of the AO to set aside the
contention made by assessee and proceed on a presumption contrary
to such contention without any thing further. It is just basic that
section 68 can be invoked only if some credit is appearing in the
books of the assessee. In the absence of any such credit, there can be
no question of taking recourse to section 68. When we advert to the
facts of the instant case, it is noticed that there is no mention
whatsoever in the assessment order about the fact that any such
entry appeared in the books of account of the assessee. Another
factor which merits mention is that the assessee had only one bank
account with Vijaya Bank which stood closed on 7.7.99. The previous
year relevant to the assessment year under consideration runs from
1.4.2000 to 31.3.2001. When the assessee did not have any bank
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account at the material time and further the business stood closed,
we fail to appreciate as to how the AO could make addition simply on
the basis of some report of the Investigation Wing. Before making any
such addition, the minimum required from the AO was to first confront
the details of such investigation report to the assessee and then prove
that this amount was credited in the books of the assessee which was
unexplained within the meaning of section 68 of the Act. Nothing of
this sort has been done in the instant case. Considering the totality of
the facts and circumstances prevailing in the instant case, we are of
the considered opinion that the ld. CIT(A) was fully justified in deleting
this addition. We, therefore, countenance the impugned order on this
score.
5. In the result, the appeal is dismissed.
The order pronounced in the open court on 01.10.2014.
Sd/- Sd/-
[A.T. VARKEY] [R.S. SYAL]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, 01st October, 2014.
dk
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ITA No.4221/Del/2009
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.
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