Case Law Details
Arun Duggal Vs DCIT (ITAT Delhi)
Brief facts of the case are that information has been received from investigation division of the Income Tax department with regard to the two bank accounts maintained by the assessee which have not been disclosed to the Income Tax Department. Based on the information received, the Assessing Officer having satisfied himself has initiated reopening proceedings u/s 148 of the Income Tax Act, 1961 and issued notice as per the provisions of the Act after taking due approval from the competent authorities u/s 151. In response to the notices issued, the assessee availed inspection of the file and records on 19.04.2016 and certified copies were given by the revenue authorities. Owing to the credits in the bank account, addition of Rs.12.81 Crores has been made by the Assessing Officer u/s 68 of the Act.
We find that the revenue department has been conducted enquiries with the bank as to the transactions of the account. The assessee has vehemently argued that entire reopening and assessment is made on the basis of mere credit in the bank account and the credit cannot be called as real income in the hands of the assessee. The ld. AR argued referring to the decision of Hon’ble Apex Court in the case Shoorji Vallabh Dass 46 ITR 144. We have gone through the said judgment. The Hon’ble Supreme Court in Shoorji Vallabh Das (supra) has held that income tax is a levy on income and the Act takes into account two points of time at which the liability to tax is attracted i.e., accrual of income or its receipt but substance of the matter is the income. It has further been held that if the income does not result at all, there cannot be a levy of tax even though in book keeping entry is made about a hypothetical income which does not materialize. The Hon’ble High Court of Delhi in Ericsson Communications Ltd. has also taken a view that in the absence of any accrual of income, there is no obligation on the part of the assessee to deduct tax at source. Similar view has been taken by various other High Court’s including in the case of Toyota Kirloskar Motor (P) Ltd. Vs ITO (Karnataka High Court). We find that the facts and ratio of the said judgment is not applicable to the instant case before us.
At the cost of repetition, we reiterate the bare facts of this case, that the assessee has opened, operated and owned two bank accounts in which Rs.12.81 crores duly deposited. The assessee before the revenue authorities on various occasions denied the knowledge of having any such account. During the statement recorded on 29.12.2015, the assessee said that he was no way associated with Alfa India and he was hearing the name for the first time during the assessment proceedings also the assessee contended that he received nothing from Alfa India and explained that it is operated at the instruction of M/s Jagjit Industries Ltd. Late Sh. Banga has denied that any such instructions were given to Mr. Arun Duggal. These submissions of the assessee when weighed against the documentary evidences collected by the revenue authorities, it can be said that the assessee has miserably failed to explain in the credits in the bank account.
As per the provisions section 68 of the Act, since the assessee failed to prove the source of sum of money found in the bank account of the assessee they have been rightly taxed by the revenue u/s 68 of the Income Tax Act. Onus of providing the source of a sum of money found to have been received by an assessee is on him. When the nature and source of a receipt, whether it be a money or other property, cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that the income is from any particular source. [Roshan Di Hatti Vs CIT (SC) 107 ITR 938, Kale Khan Mohammad Hanif Vs CIT 50 ITR 1].
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