IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA No.5141/Del/2018 Assessment Year: 2006-07 Global Relocation Pvt. Ltd., Vs. ITO, E-2/4, Vasant Vihar, Ward-12(2), New Delhi. New Delhi. PAN: AABCG7287M (Appellant) (Respondent) Assessee by : Shri Kamal Ahuja, Advocate Revenue by : Shri S.L. Anuragi, Sr.DR Date of Hearing : 08.08.2019 Date of Pronouncement : 24.09.2019 ORDER This appeal by assessee is directed against order dated 30th May, 2018 of CIT(A)-42, New Delhi, relating to Assessment Year 2006-07. 2. Facts of case, in brief, are that assessee is company engaged in consultancy business in real estate and earns commission thereon. It filed its return of income on 30.11.2006 declaring total loss of Rs.1,13,138/-. Assessing Officer, during course of assessment proceedings, noted that assessee in its bank account No.7630 maintained with ICICI Bank, has made cash deposit of Rs.6,75,000/- on 03.01.2006. Since total commission income for year totaled only to ITA No.5141/Del/2018 Rs.3,87,000/-, Assessing Officer asked assessee to produce cash book and explain source of deposit of Rs.6,75,000/-. assessee was unable to confirm or explain source of deposit of Rs.6,75,000/-. Therefore, Assessing Officer, invoking provisions of section 68 of Act, made addition of Rs.6,75,000/- to total income of assessee. Similarly, Assessing Officer noted that assessee has claimed sum of Rs.72,567/- on account of office maintenance and Rs.90,000/- on account of rent paid which included payment of Rs.65,000/- to M/s Orient Ceramics. Since assessee company expressed its inability to produce necessary vouchers for expenditure incurred towards office maintenance and rent paid to Orient Ceramics, Assessing Officer made addition of Rs.1,37,567/-. Similarly, he also made addition of Rs.5,100/- on account of donation. Assessing Officer accordingly determined total income of assessee at Rs.7,04,529/-. In appeal, ld.CIT(A) upheld action of Assessing Officer. So far as addition of Rs.6,75,000/- is concerned, he upheld action of Assessing Officer by observing as under:- 5.2 facts of case are that assessee company during year has claimed to be engaged n consultancy business in real estate and earned commission of Rs. 3,87,000/-. 5.3 During assessment proceedings, A.O. noticed cash deposit of Rs.6,75,000/- on 03.01.2006 in bank a/c no.7630 maintained with ICICI Bank. assessee was asked to explain source of same. In response, assessee admitted it to be unexplained cash deposit vide letter letter 11.09.2008. During appellate proceedings, assesses took position that cash deposit in bank account was received in lieu of share application money from Mrs. Vimmi Kapoor wife of Mr. Umesh Kapoor, director of appellant company. Appellant also submitted copy of Board resolution, dated 01.03.2006 in respect of allotment of 75,000 shares to support its contention. 2 ITA No.5141/Del/2018 5.4 I find that Board meeting took place on 01.03.2006 at 3 P.M wherein it is recorded that appellant has to make payment of balance 90% of share application money. cash deposit in bank account of appellant is also on 01.03.2006. I find that plea of deposit of share application money in cash is afterthought because if cash was deposited on 01.03.2006 in bank account in that case fact of deposit of cash ought to have been recorded in Board meeting held on some date at 3 P.M. 5.5. Moreover, Mrs. Virnmi Kapoor, wife of Mr. Umesh Kapoor director of company was present in Board meeting and it cannot be case that he was not aware of any cash deposit by his wife. Further, appellant company was asked that whether receipt was duly recorded in books of account as share application money in hand of Mrs. Vimmi Kapoor in response to same appellant company responded that same was returned back to Mrs. Vimmi Kapoor on 28.03.2006. It cannot be case that when shares have been allotted on 01.03.2008 and share application money has taken character of share capital, it is no longer returnable by company allotting shares. Accordingly, response of assessee company is afterthought to cover up and explain source of cash. Moreover, appellant has failed to produce voucher of cash receipt from Mrs. Vimmi Kapoor and cash payment to Mrs. Vimmi Kapoor. In view of above discussion, I do not find merit in submission of appellant company. Hence, ground of appeal is dismissed. 3. He also sustained addition made by Assessing Officer on account of office maintenance and rent on ground that assessee failed to substantiate with evidence to his satisfaction. Similarly, donation made by Assessing Officer was also confirmed by him on ground that assessee failed to explain as to how donation expenditure is wholly and exclusively for business of assessee. 4. Aggrieved with such order of ld.CIT(A), assessee is in appeal before Tribunal challenging order of CIT(A) in sustaining various additions made by Assessing Officer. 5. ld. counsel for assessee, at outset, submitted that Assessing Officer made additions on ground that assessee failed to substantiate with 3 ITA No.5141/Del/2018 evidence to his satisfaction regarding source of deposit in bank account and failed to submit bills and vouchers for claim of office maintenance expenses and rent paid to M/s Orient Ceramics. In absence of any evidence to support claim of donation expenditure, same was disallowed by Assessing Officer. He, submitted that although full details were filed during course of appeal proceedings, however, ld.CIT(A), without appreciating facts properly, has upheld additions made by Assessing Officer. He submitted that given opportunity, assessee is in position to substantiate with evidence to satisfaction of Assessing Officer regarding nature and source of cash deposit in bank account and genuineness of expenditure incurred on account of office maintenance, rent and donation. 6. ld. DR, on other hand, heavily relied on order of Assessing Officer and CIT(A). He submitted that assessee miserably failed before Assessing Officer as well as before CIT(A) to substantiate its claim, therefore, no further opportunity should be given to assessee and additions made by Assessing Officer and sustained by CIT(A) should be upheld. 7. I have considered rival arguments made by both sides and perused orders of authorities below. I find Assessing Officer in instant case made addition of Rs.6,75,000/- on ground that assessee could not explain source of cash deposit in bank account maintained with ICICI Bank. Similarly, due to failure of assessee to substantiate claim of expenses on account of office 4 ITA No.5141/Del/2018 maintenance and rent paid to M/s Orient Ceramics, Assessing Officer made addition of Rs.1,37,567/-. Similarly, he disallowed amount of Rs.5,100/- being donation paid since assessee could not substantiate with evidence to justify allowability of such donation. We find although assessee filed certain details before CIT(A), he rejected contention of assessee and sustained various additions made by Assessing Officer. It is submission of ld. counsel for assessee that given opportunity, assessee is in position to substantiate nature and source of such cash deposit and allowability of various expenses which were disallowed by Assessing Officer and sustained by CIT(A). Considering totality of facts of case and in interest of justice, I deem it proper to restore issue back to file of Assessing Officer with direction to give one more opportunity to assessee to substantiate his case and decide issues as per fact and law. I hold and direct accordingly. grounds raised by assessee are accordingly, allowed for statistical purposes. 8. In result, appeal filed by assessee is allowed for statistical purposes. decision was pronounced in open court on 24.09.2019. Sd/- (R.K. PANDA) ACCOUNTANT MEMBER Dated: 24th September, 2019 dk 5 ITA No.5141/Del/2018 Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi 6 Global Relocation Pvt. Ltd. v. ITO, Ward-12(2), New Delhi