Dewan Chand Vs CIT (Appeals) (ITAT Delhi)
Delhi Tribunal allowed the appeal of Assessee by holding that enhancement of income by CIT(A) without notice u/s 251 was illegal & unsustainable.
Survey Disclosure & Return
A survey u/s 133A was conducted on 17.09.2010 in the premises of Assessee. During survey, partner Shri Vikram Kumar surrendered ₹70 lakh as additional income. This disclosure was duly included in the return filed on 14.10.2010 declaring total income of ₹1.40 crore.
Assessment & First Appeal
AO completed assessment u/s 143(3) on 25.03.2013 making an addition of ₹99.25 lakh towards unverifiable expenses. On appeal, CIT(A) vide order dated 13.02.2015 rejected the books & estimated profit at 8% of turnover. AO in consequence determined income at ₹1.85 crore vide order dated 03.06.2015.
ITAT’s Earlier Remand
In ITA No.2707/Del/2015, Tribunal vide order dated 21.12.2018 held that CIT(A)’s adoption of 8% net profit was not a speaking order. Tribunal restored the matter back to CIT(A) for de novo adjudication with direction to pass a reasoned order after hearing Assessee.
CIT(A)’s Enhancement in Fresh Order
In de novo proceedings, CIT(A) vide order dated 15.02.2024 determined income at ₹2.10 crore. This was an enhancement over earlier income of ₹1.85 crore. Importantly, no notice u/s 251 was issued to Assessee before such enhancement.
