Pr. Commissioner Of Income Tax-1 v. M/S Conwood Medipharma Pvt. Ltd

$~38 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 442/2022 PR. COMMISSIONER OF INCOME TAX-1 ..... Appellant Through:Mr. Sanjay Kumar, Senior StandingCounsel for Revenue. versus M/S CONWOOD MEDIPHARMA PVT. LTD...... RespondentThrough:Mr. Kapil Goel, Advocate. % Date of Decision: 10[th]November, 2022 CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMEET PRITAM SINGH ARORA, J (ORAL): 1.Present Income Tax Appeal has been filed by Revenue challengingthe Order dated 27[th]April, 2022, passed by Income Tax Appellate Tribunal(‘ITAT’) in ITA No. 6460/Del/2015 for the Assessment Year (‘AY’) 2011- 12. 2.Learned senior standing counsel for the Revenue states that the ITATerred in upholding the order of the Commissioner of Income Tax (Appeals)[‘CIT(A)’] deleting the addition of Rs. 10,20,64,174/- made by theAssessing Officer (‘AO’) on account of the difference in receipts as per theAssessee’s bank account when compared with the books of accountsmaintained by the Assessee. He states that the ITAT erred in concurring with the CIT(A) that the AO had failed to verify the evidence producedbefore him and for not providing adequate opportunity for hearing to theAssessee. 3.We have heard the learned counsel for the parties. The facts of thecase relevant for deciding the present appeal are as follows: 3.1.The Respondent, Assessee, is engaged in the business of equitytrading, derivatives trading and real estate investment. On 29[th]September,2011, the Assessee filed Income Tax Returns (‘ITR’) declaring an income ofRs. 42,43,39,960/-, which was revised on 14[th]August, 2012 at the samefigure. The case of the Assessee was selected for scrutiny under ComputerAided Scrutiny Selection (‘CASS’) and notice was issued under Section143(2) of the Income Tax Act, 1961 (the ‘Act’). 3.2.The Assessee was issued with Assessment Order dated 13[th]May,2014 under Section 143(3) of the Act, inter alia making an addition of Rs.10,20,64,174. After perusing the bank statement of the Assessee, the AOnoted that the amount credited into the bank account of the Assessee is Rs.59,71,35,900 whereas the receipts of the year amounts to Rs. 49,50,71,726.The AO made the aforesaid addition by holding that the difference betweenfunds received and the source of income as per the books of accounts is notdisclosed by the Assessee in its return. The AO held that the books ofaccounts declared by the Assessee is not reliable and thereby rejected thesame. 3.3.Aggrieved by the Assessment Order dated 13[th]May, 2014, Assesseepreferred an appeal before the Commissioner of Income Tax Appeals[CIT(A)]. The CIT(A) allowed the appeal of the Assessee vide Order dated31[st]August, 2015. The CIT(A) held that addition of Rs. 10,20,64,174 is not sustainable in view of the documentary evidences already available onrecord. It was further held AO failed to make any sincere effort regardingthe aforesaid addition and the same was made only on the basis of doubt,suspicion, conjecture or surmises without affording proper opportunity ofbeing heard to the Assessee which is in violation of the principles of thenatural justice. The relevant findings of the CITA(A) are as follows: 3.3.Aggrieved by the Assessment Order dated 13[th]May, 2014, Assesseepreferred an appeal before the Commissioner of Income Tax Appeals[CIT(A)]. The CIT(A) allowed the appeal of the Assessee vide Order dated31[st]August, 2015. The CIT(A) held that addition of Rs. 10,20,64,174 is not sustainable in view of the documentary evidences already available onrecord. It was further held AO failed to make any sincere effort regardingthe aforesaid addition and the same was made only on the basis of doubt,suspicion, conjecture or surmises without affording proper opportunity ofbeing heard to the Assessee which is in violation of the principles of thenatural justice. The relevant findings of the CITA(A) are as follows: “4.1.6.Inmyconsideredview,additionmadeofRs.10,20,64,174/- on account of amount credited in the bankaccount of the appellant in excess of receipt as per books ofaccounts is not sustainable in view of documentary evidencesalready available on record to substantiate the said difference.The AO has failed to make any sincere effort regarding the sameand made addition only on the basis of doubt, suspicion,conjecture or surmises without affording proper opportunity ofbeing heard to the appellant which is in violation of theprinciples of natural justice. Hence, considering the entire factsand circumstances of the case of the appellant, addition made bythe AO is liable to be deleted.”10,20,64,174/- on account of amount credited in the bankaccount of the appellant in excess of receipt as per books ofaccounts is not sustainable in view of documentary evidencesalready available on record to substantiate the said difference.The AO has failed to make any sincere effort regarding the sameand made addition only on the basis of doubt, suspicion,conjecture or surmises without affording proper opportunity ofbeing heard to the appellant which is in violation of theprinciples of natural justice. Hence, considering the entire factsand circumstances of the case of the appellant, addition made bythe AO is liable to be deleted.” 3.4.The Appellant Revenue preferred an appeal before the ITAT againstthe Order dated 13[th]May, 2014 of the CIT(A). The ITAT, vide theimpugned Order dated 27.04.2022 concurred with the findings in the orderof the CIT(A). The ITAT Para 9 of the impugned order noted that theRevenue has failed to controvert the findings of the CIT(A). The relevantfinding in the impugned order is as follows: “9. The learned DR for the Revenue has failed to controvert thefindings of the CIT(A) in this regard. We find no merit in theissue raised vide ground of appeal no. 1. Before parting, we mayalso point out that no additional evidence was produced beforethe CIT(A) and hence there is no merit in the additional ground of appeal raised by the Revenue.” 3.5.Thus, the ITAT and CIT(A) after perusing the evidence on recordhave returned a concurrent finding of fact and recorded their satisfactionwith respect to the explanation furnished by the Appellant with respect tothe difference in the receipts shown in the financial statements of theAssessee and the credit entries appearing in the bank account of theAssessee. 4.A perusal of the above Order dated 13[th]May, 2014 passed by theCITA(A) and the impugned Order dated 27[th]April, 2020 reveals that theITAT and CIT (A), both fact finding authorities have concurrently held thatthere is no merit in the ground raised with respect to the addition of Rs.10,20,64,174 on account of the income declared by the Assessee and thereceipts as per the books of account of the Assessee. The CIT(A) in its orderat paragraph 4.13 has set out the information and explanation furnished bythe Assessee explaining each of the entries amounting to Rs. 10,20,64,174/-to substantiate its contention that the said amount is not exigible to tax. TheCIT(A) has noted that the documentary evidence in support of the saidexplanation furnished by the Assessee was available on record. The ITATwhile concurring with the aforesaid finding has held that the Revenue hasfailed to controvert the said finding of the CIT(A). 5.We are of the considered view that in view of the concurrent findingsof fact, there is no substantial question of law raised in the present appeal.The Supreme Court in the case of Ram Kumar Aggarwal & Anr. vs.Thawar Das (through LRs), (1999) 7 SCC 303 has reiterated that underSection 100 of CPC, the jurisdiction of the High Court to interfere with the Signature Not Verified orders passed by the Courts below is confined to hearing on substantialquestion of law and interference with finding of the fact is not warranted if itinvolves re-appreciation of evidence. In the present appeal, the Appellanthas not placed any material on record to contradict the aforesaid concurrentfinding of facts returned by the ITAT and CIT(A). Thus, we see no merit inthe appeal and it is accordingly dismissed. MANMEET PRITAM SINGH ARORA, J MANMOHAN, J NOVEMBER 10, 2022msh