Pr.commissioner Of Income Tax-19 v. Rakesh Kumar Aggarwal

$~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 828/2016, CM APPL.43451/2016 PR.COMMISSIONER OF INCOME TAX-19 ..... Appellant Through: Mr. Zoheb Hossain with Mr. Deepak Anand, Advocates. versus RAKESH KUMAR AGGARWAL ..... Respondent Through: Ms. Monika Ghai, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI % O R D E R23.11.2016 The revenue is aggrieved by the order of the Income Tax Appellate Tribunal (ITAT) whereby its appeal against the appellate Commissioner’s order has been rejected. It urged that the ITAT ignored the mandatory provisions of Rule 46A of the Income Tax Rules in permitting additional evidence and that the conditions for its applicability were overlooked. The assessee which facilitates/procures deposits and investments in mutual funds and earns commission income had filed its returns. The assessee was asked to file the details of commission received with copies of bank accounts which he did on 22.11.2011. The Assessing Officer on an analysis of its bank accounts was of the opinion that not all commission amount received had been truly disclosed and likewise number of amounts were greater than what was actually reported. On the basis of these conclusions, the Assessing Officer added `1,43,01,754/- and held that the total income subjected to tax was `2,82,23,020/-. Separate penalty proceedings were initiated. It was also held that there was impropriety inasmuch the amounts were not added in terms of Section 44AB. On appeal, the CIT (A) after analysis of the material produced before him which were made available to the AO and from whom remand report was sought concluded that the documents contained sufficient explanation vis-a-vis the assessee’s position and that not all amounts could be characterized as commission income, and therefore, partly allowed and sustained the additions to the extent of `9,91,500/- and `2,66,94,437/-. The ITAT which considered the revenue’s appeal as well as the assessee’s cross appeal was of the opinion that even the additions sustained by the CIT (A) could not be upheld upon its own independent factual analysis. Accordingly, he rejected the revenue’s contentions. This resulted in deletion of even the amounts added back by the CIT (A). As far as the primary question of law urged, i.e., non-compliance with Rule 46A is concerned, this Court is of the opinion that there is no substantial or material injustice to the revenue in the circumstances of the case because an opportunity was given and the remand report was sought on the basis of which substantial deletions were made. So far as the merits of the additions ultimately cancelled or set aside by the ITAT are concerned, this Court is of the opinion that the findings are purely factual and in any case even if the additions were to be sustained wholly, the net tax effect would be lower than `20 lakhs. No substantial question of law arises; the appeal is, therefore, dismissed. S. RAVINDRA BHAT, J NOVEMBER 23, 2016/vikas/ NAJMI WAZIRI, J