M/s. Gaurav Engineeing, Vapi V. The Income tax Officer,Ward-1, Vapi

CO 123/AHD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8847 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 21-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: ARUN P PATEL
• Keywords: Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTA NT MEMBER INCOME-TAX OFFICER, WARD-1, VAPI (APPELLANT) VS M/S GAURAV ENGINEERING, SHED NO. A/2/2114, IIIRD PHASE, GIDC, VAPI PAN: AACFG 3313 N (RESPONDENT) M/S GAURAV ENGINEERING, SHED NO. A/2/2114, IIIRD PHASE, GIDC, VAPI PAN: AACFG 3313 N (APPELLANT) VS INCOME-TAX OFFICER, WARD-1, VAPI (RESPONDENT) REVENUE BY: SRI K.C. MATHEWS, SR.D.R. ASSESSEE BY: SRI ARUN P. PATEL, A.R. DATE OF HEARING : 05-08-2013 DATE OF PRONOUNCEMENT : 27-08-20 13 / ORDER ITA NO. 618/AHD/2010 ASSESSMENT YEAR 2006-07 C.O. NO. 123/AHD/2010 ASSESSMENT YEAR 2006-07 I.T.A NO. 618/AHD/2010 & CO NO. 123/AHD/2010 A.Y. 2006-07 PAGE NO ITO VS. M/S GAURAV ENGINEERING 2 PER : D.K. TYAGI, JUDICIAL MEMBER:- THESE REVENUES APPEAL AND ASSESSEES CO ARE AGAIN ST THE ORDER OF LD. CIT(A) VALSAD DATED 14-09-2009 FOR ASSESSMENT YEAR 2006-07. WE WILL FIRST TAKE UP REVENUES APPEAL IN ITA NO. 6 18/AHD/2010 2. THE REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUND S:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN DELETING THE ADDITION MADE U/S 68 OF IT ACT ON ACCOUNT OF INTROD UCTION BY PARTNERS AMOUNTING TO RS. 7,71,000/- EVEN THOUGH THE SOURCE OF INCOME WAS DULY VERIFIED DURING THE ASSESSMENT PROCEEDINGS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN D ELETING THE ADDITION MADE U/S 68 R.W.S. 41(1) OF IT ACT ON ACCO UNT OF NOT PRODUCING THE CONFIRMATION OF THE CREDITOR AMOUNTIN G TO RS. 9,43,232/- EVEN THOUGH SUITABLE OPPORTUNITY WAS GRA NTED TO THE ASSESSEE FIRM DURING THE ASSESSMENT PROCEEDINGS. 3. THE LD. CIT(A) HAS ERRED IN LAW AND IN FACT IN D ELETING OF RS. 57,600/- MADE ON ACCOUNT OF CAR HIRE CHARGES DISALL OWED, EVEN THOUGH THE FACT WAS VERIFIED DURING ASSESSMENT PROCEEDINGS . 3. FIRST GROUND RELATES TO ADDITION OF RS. 7,71,000 /- U/S 68 OF THE ACT MADE BY AO ON THE GROUND THAT ASSESSEE HAS NOT BEEN ABLE TO PROVE THE SOURCE OF INTRODUCTION OF ADDITIONAL CAPITAL BY PAR TNERS AND THE GENUINENESS OF THE CASH CREDIT APPEARING IN THE ACCOUNT OF THE PARTNER. THE AO RELYING ON THE DECISIONS IN THE CASE OF CIT VS. KISHORELAL SANTOSHLAL (1995) 216 9 (RAJ) AND CIT VS. MURGAPRASHAD MORE (1971) 82 ITR 5 40 (SC) AND OTHERS JUDICIAL PRONOUNCEMENTS, PROCEEDED TO MAKE THE ADDI TION OF RS. 7,71,000/- U/S. 68 OF THE ACT. I.T.A NO. 618/AHD/2010 & CO NO. 123/AHD/2010 A.Y. 2006-07 PAGE NO ITO VS. M/S GAURAV ENGINEERING 3 4. BEFORE LD. CIT(A), IT WAS POINTED OUT BY THE ASS ESSEE THAT CAPITAL INTRODUCED BY THE PARTNERS WAS ONLY 7,65,000/- AND NOT 7,71,000/-. IT WAS ALSO SUBMITTED THAT THE CAPITAL WAS INTRODUCED EITH ER FROM INTERNAL ACCRUALS OR FROM THEIR FATHER. IN SUPPORT OF THIS CONTENTIO N, THE ASSESSEE PRODUCED ZEROX COPY OF THE PAN OF THE PARTNERS. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF THE ASSESSEE HELD T HAT ASSESSEE HAS BEEN ABLE TO PROVE AND EXPLAIN THE SOURCE OF INTRODUCTION OF CAPITAL WITH COPY OF ACKNOWLEDGEMENT, COPY OF BANK PASSPORT AND OTHER DE TAILS, AND THEREFORE HE DELETED THE ADDITION MADE BY THE AO. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT AO HAS MADE THIS ADDITION ONLY ON ACCOUNT OF THE FA CT THAT THE SOURCE OF CAPITAL INTRODUCED BY THE PARTNERS WAS NOT FOUND SA TISFACTORY BY HIM. LD. CIT(A) GAVE RELIEF TO THE ASSESSEE BY BEING SATISFI ED WITH THE SUBMISSIONS MADE BEFORE HIM. NO ADDITION CAN BE MADE FOR INTR ODUCTION OF CAPITAL BY THE PARTNERS IN THE HANDS OF ASSESSEE-FIRM, IF AT A LL IT CAN BE CONSIDERED IN THE HANDS OF THE PARTNERS IN VIEW OF THE DECISION OF JU RISDICTIONAL HIGH COURT IN THE CASE OF PANKAJ DYESTUFF, THEREFORE WE ARE NOT I NCLINED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HERE BY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. 6. SECOND GROUND RELATES TO ADDITION OF RS. 15,60,3 16/- MADE BY AO ON ACCOUNT OF SUNDRY CREDITORS U/S 68 OF THE ACT. THE AO DURING THE ASSESSMENT PROCEEDINGS WAS OF THE VIEW THAT ASSESSEE HAS NOT B EEN ABLE TO PROVE THE SUNDRY CREDITORS I.E. I.T.A NO. 618/AHD/2010 & CO NO. 123/AHD/2010 A.Y. 2006-07 PAGE NO ITO VS. M/S GAURAV ENGINEERING 4 SR. NO. NAME OF THE SUNDRY CREDITORS AMOUNT RS. 1 SRI VASANT DANJIBHAI KACHHI 546872 2 M/S. JALARAM STEEL SUPPLIERS 300360 3 M/S. AARTI STEEL 277900 4 M/S. DHANLAXMI METAL 232100 5 M/S. PRAKASH ENGINEERING 107084 6 M/S. CHIRAG BUILDERS & CONTRACTORS 96000 TOTAL RS . 15,60,316/- 7. IN APPEAL LD. CIT(A) RESTRICTED THIS ADDITION TO RS. 6,17,084/- AND THE BALANCE ADDITION OF RS. 9,43,232/- WAS DELETED. 8. BEFORE US, LD. DR SUBMITTED THAT RELIEF HAS BEEN GIVEN TO THE ASSESSEE BY ACCEPTING THE ADDITIONAL EVIDENCE WITHOUT PROVID ING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO GIVE HIS COMMENTS ON THE A DDITIONAL EVIDENCE, THEREFORE THE MATTER MAY KINDLY BE RESTORED BACK TO THE FILE OF LD. CIT(A). THIS CONTENTION OF THE DR WAS FOUND CORRECT BY US A FTER PERUSING THE RECORD, AND THEREFORE THE MATTER IN RESPECT OF THIS GROUND IS RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION. THIS GROUND OF THE R EVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 9. THIRD GROUND RELATES TO ADDITION ON ACCOUNT OF D ISALLOWANCE OF RS. 57,600/- OUT OF CAR HIRING CHARGES. THE AO HAS MAD E DISALLOWANCE OF RS. 57,600 OUT OF CAR HIRE CHARGES FOR THE REASONS THAT ELEMENT OF PERSONAL USE CANNOT BE RULED OUT. LD. CIT(A) HAS DELETED THIS A DDITION BY HOLDING THAT ASSESSEES VERSION THAT CAR IN THE NAME OF RELATIVE S OF THE PARTNERS WHICH WAS I.T.A NO. 618/AHD/2010 & CO NO. 123/AHD/2010 A.Y. 2006-07 PAGE NO ITO VS. M/S GAURAV ENGINEERING 5 USED FOR BUSINESS PURPOSE CANNOT BE FAULTED WITH. WE FIND NO INFIRMITY IN SUCH FINDING OF LD. CIT(A), AND THEREFORE THE SAME IS HEREBY UPHELD. THIS GROUND OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSE. NOW WE TAKE UP ASSESSEES CO NO. 123/AHD/2010 11. THE GROUNDS TAKEN IN THE CO READ AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S), VALSAD AFTER GOING THROUGH THE DETAILS AND SUBMISSIONS OF THE RESPONDENT SHOWS THAT THE RESPONDENT HAS PROVED THE SOURCE OF RECEIPT OF ADDITIONAL CAPITAL AND ACCORDINGLY, THE ADDITION MA DE BY THE A.O. U/S 68 FOR RS.7,71,000/- HAS BEEN RIGHTLY DELETED BY TH E LD. CIT (A) AND ALLOWED THE APPEAL IN FAVOUR OF THE RESPONDENT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ), VALSAD AFTER GOING THROUGH THE DETAILS AND SUBMISSIONS OF THE RESPONDENT SHOWS THAT THE RESPONDENT HAS PARTLY PROVED OF SUND RY CREDITORS, THE ADDITION MADE BY THE AO US. 68 READ WITH SECTION 41 (1) OF INCOME TAX ACT FOR RS. 15,60,316/-WHICH IS PARTLY ALLOWED FOR RS. 9,43,232/- HAS BEEN RIGHTLY DELETED BY CIT (A) AND ALLOWED THE APP EAL IN FAVOUR OF THE RESPONDENT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ), VALSAD AFTER GOING THROUGH THE DETAILS AND SUBMISSIONS OF THE RESPONDENT SHOWS THAT THE RESPONDENT HAS PROVED THE EXPENDITUR E MADE BY HIM FOR CAR HIRE CHARGES, THE ADDITION MADE BY THE A.O. FOR RS. 57,600/- HAS BEEN RIGHTLY DELETED BY THE LD. CIT (A) AND ALL OWED THE APPEAL IN FAVOUR OF THE RESPONDENT. IN VIEW OF OUR DECISION IN REVENUES APPEAL, THE C O FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTIOUS. I.T.A NO. 618/AHD/2010 & CO NO. 123/AHD/2010 A.Y. 2006-07 PAGE NO ITO VS. M/S GAURAV ENGINEERING 6 12. IN THE RESULT, APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSE AND CO OF ASSESSEE IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (A.K. GARODIA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 27/08/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,