Sunita Tapria, Ratlam V. ITO Wd-1, Ratlam

ITA 101/IND/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2989 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: RAVI SARDA
• Keywords: Business income; Depreciation; Source of fund
• Section: 143(3); 234B

Judgement Text

PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AFEPT2755C I.T.A.NO. 101 /IND/201 3 A.Y. : 2008-09 SMT. SUNITA TAPARIA, 28, NOLAIPURA, RATLAM VS. ITO, WARD 1, RATLAM APPELLANT RESPONDENT PAN NO. : AF NPT1691L I.T.A.NO. 10 2 /IND/2013 A.Y. : 2008-09 SMT. INDIRA DEVI TAPARIA, 28, NOLAIPURA, RATLAM VS. ITO, WARD 1, RATLAM APPELLANT RESPONDENT PAN NO. : AFEPT275 6B I.T.A.NO. 10 3 /IND/2013 A.Y. : 2008-09 SHRI RAJIV TAPARIA, 28, NOLAIPURA, RATLAM VS. ITO, WARD 1, RATLAM APPELLANT RESPONDENT SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 2 PAGE 2 OF 15 PAN NO. : AADFT9539Q I.T.A.NO. 596 /IND/201 2 A.Y. : 2007-08 M/S. TODARMAL AND SONS, RATLAM VS. ITO, WARD 1, RATLAM APPELLANT RESPONDE NT APPELLANT S BY : SHRI RAVI SARDA, ADV. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 25 . 10 .201 3 DATE OF PRONOUNCEMENT : 30 . 10 .201 3 O R D E R PER R. C. SHARMA, A.M. I.T.A.NOS. 101 TO 103/IND/2013: THESE ARE APPEALS FILED BY DIFFERENT ASSESSEES AGAI NST THE ORDER OF CIT(A) DATED 07.11.2012 FOR THE ASSESSMENT YEAR 2008-09 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME-TAX ACT, 1961. 2. COMMON GROUNDS HAVE BEEN TAKEN IN ALL THESE APPEALS AND FACTS AND CIRCUMSTANCES ALSO PARI MATERIA. GROU NDS TAKEN BY THE ASSESSEE IN THE CASE OF SMT. SUNITA TAPARIA READ AS UNDER :- SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 3 PAGE 3 OF 15 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING ALLEGED ADDITION OF RS. 10,296/- BY ESTIMATING INCOME FROM CLOTH BUSINESS AT RS. 60,000/- IN PLACE OF SHOWN AS RS. 49,704/- 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING ALLEGED ADDITION OF RS. 2,89,500/- AS UNEXPLAINED INCOME IGNORING SETTLED PRINCIPLES OF LAW ARBITRARILY. 3. THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITIONS IGNORING MATERIAL ON RECORD ARBITRARILY 4. THE LD. CIT(A) HAS ERRED IN CHARGING INTEREST U/S 234A AT RS. 5,952/- AND 234B AT RS. 23,064/- ARBITRARILY. 3. AS GROUNDS IN ALL THE APPEALS ARE COMMON, THEREFORE , ALL THE APPEALS WERE HEARD TOGETHER AND ARE NOW BEI NG DISPOSED OF BY THIS CONSOLIDATED ORDER. 4. FACTS IN BRIEF ARE THAT DURING THE YEAR, THE ASSESS EE HAD FILED RETURN OF INCOME SHOWING INCOME FROM CLOT H BUSINESS, HOUSE RENT AND INTEREST. DURING THE YEAR, THE ASSESSEE HAD SHOWN TOTAL SALES OF RS. 2,05,325/- ON WHICH PROFIT HAS BEEN SHOWN AT RS. 49,704/-, WHICH IS ARO UND 24 % SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 4 PAGE 4 OF 15 OF THE SALES. HOWEVER, THE ASSESSING OFFICER HAS ES TIMATED PROFIT AT RS. 60,000/- WHICH WORKS OUT TO BE 30%, W ITHOUT GIVING ANY BASIS. BY THE IMPUGNED ORDER, THE LD. CI T(A) CONFIRMED THE ADDITION OF RS. 10,296/- ( RS. 60,000 /- (-) RS. 49,704/-). 5. WE FOUND THAT NO BASIS HAS BEEN GIVEN BY THE ASSESSING OFFICER OR BY THE LD.CIT(A) FOR ESTIMATIN G PROFIT AT 30 %. IN CASE OF RETAIL TRADE AS PER PROVISIONS OF 44A F, THE ASSESSEE IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOU NTS IF THE SALES IS BELOW RS. 40 LAKHS, ASSESSING OFFICER IS R EQUIRED TO COMPUTE INCOME AT A MAXIMUM RATE OF 5% OF SALES. IN THE INSTANT CASE, THE ASSESSEE HERSELF HAS SHOWN INCOME AT 24%, THERE IS NO JUSTIFICATION FOR ESTIMATING INCOME ABO VE THE PERCENTAGE SHOWN BY THE ASSESSEE. ACCORDINGLY, WE D IRECT THE ASSESSING OFFICER TO TAKE PROFIT OF RS. 49,704/- AS DECLARED BY THE ASSESSEE ON SALE OF RS. 2,05,325/-. 6. THE ASSESSING OFFICER HAS ALSO MADE AN ADDITION OF RS. 2,89,500/- AS UNEXPLAINED INCOME. FACTS IN BRIEF A RE THAT THE ASSESSEE IS REGULARLY FILING INCOME TAX RETURN. COP Y OF INCOME TAX RETURN FILED FOR ASSESSMENT YEAR 2005-06, 2006- 07, 2007- SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 5 PAGE 5 OF 15 08 AND 2008-09 ARE PLACED ON RECORD. EVEN IN EARLIE R YEARS, THE ASSESSEE WAS FILING INCOME TAX RETURN AND SHE H AS FILED THE SAME UP TO ASSESSMENT YEAR 1992-93 ALONGWITH BALANC E SHEET AND CAPITAL ACCOUNT. SINCE INCOME DID NOT EXCEED TH E PRESCRIBED LIMIT NOT LIABLE TO TAX IN THE ASSESSMEN T YEAR 1993- 94 AND SUBSEQUENT YEARS, THE ASSESSEE DID NOT FILE HER RETURN TILL ASSESSMENT YEAR 2005-06. AS SOON AS HER INCOME INCREASED THE TAXABLE LIMIT, SHE AGAIN STARTED FILING RETURN REGULARLY FOR ASSESSMENT YEAR 2005-06, COPIES OF WHICH ARE PLACED ON RECORD. IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS ADVANCED LOAN TO VARIOU S PARTIES. SUCH LOANS WERE ADVANCED IN LAST 2-3 YEARS, WHICH W ERE COLLECTED DURING THE YEAR AND DEPOSITED THE SAID AM OUNT IN BANK ACCOUNT AND THE SAID COLLECTED AMOUNT AGAIN GI VEN TO OTHER ON INTEREST. SUCH INTEREST INCOME WAS ALSO D ISCLOSED BY THE ASSESSEE IN HER RETURN OF INCOME. DURING THE CO URSE OF SCRUTINY ASSESSMENT, THE ASSESSEE HAS FILED A LIST OF SUNDRY LOANS FOR LAST YEAR I.E. ASSESSMENT YEAR 2007-08 IN WHICH ALL THE DETAILS TO WHOM ADVANCES GIVEN WITH AMOUNT AND THEIR COMPLETE ADDRESS. THE ASSESSING OFFICER ISSUED SUMM ONS U/S SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 6 PAGE 6 OF 15 131 TO ALL THE DEBTORS ON 21.9.2010 FOR APPEARING O N 27.9.2010. ALL THE DEBTORS PERSONALLY ATTENDED THE OFFICE OF ASSESSING OFFICER ON 27.9.2010 IN RESPONSE TO THE N OTICE U/S 131 AND ALSO FILED THEIR CONFIRMATION LETTERS BEFOR E THE ASSESSING OFFICER WITH THEIR SOURCE OF INCOME AND A MOUNT TAKEN ON INTEREST. ALL THESE CONFIRMATION LETTERS W ERE ALSO PLACED IN THE PAPER BOOK TOWARDS WHICH OUR ATTENTIO N WAS ALSO INVITED BY LD. AUTHORIZED REPRESENTATIVE. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAD GIVEN PETTY LOANS WHICH WERE COLLECTED DURING THE YEAR AND DEPOSITED THE SAID AMOUNT IN THE BANK ACCOUNT. THE ASSESSEE HAD ENCLOS ED LIST OF SUNDRY LOANS TO WHOM ADVANCES GIVEN WITH THEIR COMP LETE ADDRESS, THE ASSESSING OFFICER DID NOT AGREE WITH T HE ASSESSEES CONTENTION ON THE PLEA THAT ASSESSEE HAD GIVEN SMALL LOANS TO DIFFERENT DEPOSITORS RANGING RS. 500 0/- TO RS. 19,500/-, THEY ARE SMALL PERSONS HAVING INCOME BELO W TAXABLE LIMIT. ASSESSING OFFICER FURTHER FOUND THAT ALL THE DEBTORS IN THE CASE OF ASSESSEE ARE THE SAME AS IN THE CASE OF SMT. INDIRA DEVI TAPARIA AND RAJIV TAPARIA. THUS, HE ADDED THE ENTIRE AMOUNT OF RS. 2,89,500/- TO THE INCOME OF THE ASSES SEE. BY SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 7 PAGE 7 OF 15 THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE AC TION OF THE ASSESSING OFFICER. 7. DURING THE COURSE OF HEARING BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF METACHEM I NDUSTRIES, 234 ITR 160, WHEREIN IT WAS HELD THAT ONCE IT IS ES TABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR P ERSON, BE HE IS A PARTNER OR AN INDIVIDUAL, THEN THE RESPONSI BILITY OF THE ASSESSEE IS OVER. ASSESSEE CANNOT BE ASKED THAT PER SON WHO MAKES INVESTMENT WHETHER THE MONEY INVESTED IS PROP ERLY TAXED OR NOT. RELIANCE WAS ALSO PLACED ON THE FOLLO WING DECISIONS :- (I) CIT VS. ABDUL AZIZ, (2013) 21 ITJ 70 ( C. G.) . (II) ASSEMSINGH VS. ASSESSMENT. CIT, (2012) 19 IT J 52 (INDORE) (III) M/S. VICTORY POLY PACK PVT. LTD. VS. ASST. CIT, (2008) 10 ITJ 519 INDORE. (IV) M/S. SANJAY KHATRI & CO. VS. ITO, (2005) 4 ITJ 173 INDORE SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 8 PAGE 8 OF 15 8. FROM THE RECORD, WE FOUND THAT ALL THE EVIDENCES SO FURNISHED BEFORE THE ASSESSING OFFICER IN THE FORM OF CONFIRMATION OF LOANS SO TAKEN ALONGWITH PERSONAL A PPEARANCE OF ALL THE DEBTORS BEFORE THE ASSESSING OFFICER IN RESPONSE TO THE NOTICES ISSUED U/S 131, CLEARLY ESTABLISHES GEN UINENESS OF LOAN GIVEN BY THE ASSESSEE. THE ASSESSEE HAD GIVEN HIS OWN MONEY ON LOAN AT INTEREST AND THE INTEREST INCOME W AS DULY OFFERED IN THE RETURN OF INCOME, SOURCE OF FUND WIT H THE ASSESSEE WERE DULY EXPLAINED AND ALSO FOUND PLACE I N THE RESPECTIVE BALANCE SHEET. UNDER THESE CIRCUMSTANCES , WE DO NOT FIND ANY JUSTIFICATION FOR THE ADDITION MADE BY THE ASSESSING OFFICER. WE FOUND THAT BY WAY OF DOCUMENT ARY EVIDENCE PLACED ON RECORD AND WHICH WERE FILED BEFO RE THE ASSESSING OFFICER, THE ASSESSEE HAS DISCHARGED HER ONUS BY SHOWING THE LOAN GIVEN TO THE DIFFERENT PERSONS, WH O APPEARED BEFORE THE ASSESSING OFFICER IN RESPONSE TO NOTICE U/S 131, THESE PERSONS HAVE FILED THEIR RESPECTIVE CONFIRMAT IONS. ONCE IT IS ESTABLISHED THAT AMOUNT LENDED TO DEBTORS RECEIV ED BACK HAS BEEN INVESTED BY THE ASSESSEE, THEN THE RESPONS IBILITY OF THE ASSESSEE IS OVER. MERELY BECAUSE THE PERSONS TO WHOM SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 9 PAGE 9 OF 15 SMALL LOANS WERE GIVEN, WERE NOT INCOME TAX ASSESSE ES, CANNOT BE MADE REASON FOR DISBELIEVING THE LOANS GIVEN BY THE ASSESSEE. AVAILABILITY OF FUNDS WITH THE ASSESSEE I S NOT IN DOUBT, ADDITION CANNOT BE MADE IRRESPECTIVE OF THE TIME GAP BETWEEN EARLIER WITHDRAWAL AND SUCH DEPOSITS. IN TH E INSTANT CASE, DEBTORS TO WHOM ADVANCES WERE GIVEN WERE APPE ARED BEFORE THE ASSESSING OFFICER ON RECEIPT OF NOTICE U /S 131 DISCLOSED THEIR SOURCE OF INCOME AND ALSO FILED THE IR CONFIRMATION LETTERS AND AS SUCH THE ASSESSEE HAS D ISCHARGED THE ONUS. ACCORDINGLY, THERE IS NO MERIT IN THE ASS ESSING OFFICERS ACTION FOR MAKING THE ADDITION. ACCORDING LY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. 9. FACTS IN CASE OF SMT. INDIRA TAPARIA ARE SAME AS IN CASE OF SMT. SUNITA TAPARIA DISCUSSED ABOVE. IN THI S CASE ALSO ASSESSEE HAD CLOTH BUSINESS. SALES TURNOVER IN THE YEAR WAS OF RS. 3,10,500/-, ASSESSEE HAD DECLARED NET PROFIT OF RS. 49,704/-, WHICH WORKS OUT TO 20%. HOWEVER, THE ASSE SSING OFFICER HAS MADE AD HOC ADDITION BY ESTIMATING INCO ME FROM SAREE BUSINESS AT 26 %. THE ASSESSEE WAS ENGAGED IN RETAIL TRADING AND SINCE TURNOVER WAS BELOW RS. 40 LAKHS, THE SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 10 PAGE 10 OF 15 ASSESSEE WAS NOT SUPPOSED TO MAINTAIN BOOKS OF ACCO UNTS. KEEPING IN VIEW THE OBSERVATION OF THE ASSESSING OF FICER WITH REGARD TO PROFIT IN SAREE BUSINESS, WE DIRECT THE A SSESSING OFFICER TO RESTRICT ADDITION BY ESTIMATING PROFIT A T 20%. WE DIRECT ACCORDINGLY. 10. THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 5,02,600/- ON ACCOUNT OF ADVANCES GIVEN. THE FACTS AND CIRCUMSTANCES ARE SAME AS DISCUSSED IN SMT. SUNITA TAPARIA. THE DEBTORS TO WHOM THE LOANS WERE GIVEN WERE ALSO THE SAME AS IN THE CASE OF SMT. SUNITA TAPARIA. ALL THESE DE BTORS APPEARED IN CASE OF PROCEEDINGS OF SMT. SUNITA TAPA RIA IN PURSUANCE OF NOTICES ISSUED U/S 131. IN THIS CASE A LSO ALL THE DEBTORS CONFIRMED THEIR TRANSACTIONS OF LOANS TAKEN FROM ASSESSEE, INTEREST PAID TO THEM AND ALSO THE AMOUNT OF REPAYMENT MADE TO ASSESSEE. FROM THE RECORD, WE FOU ND THAT THE ASSESSEE HAD DEPOSITED HER OWN MONEY, WHICH WER E LENDED IN THE LAST YEAR AND ALL THE CORROBORATIVE EVIDENCE FILED BEFORE THE ASSESSING OFFICER CLEARLY ESTABLISHED THE AVAIL ABILITY OF FUNDS WITH THE ASSESSEE. THE ASSESSEE HAS DISCHARGE D ITS ONUS BY FURNISHING COPY OF ITS RETURN ALONGWITH BALANCE SHEETS FOR SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 11 PAGE 11 OF 15 ASSESSMENT YEARS 2005-06, 2006-07 AND 2008-09. FOLL OWING THE SAME REASONING AS DISCUSSED IN THE CASE OF SMT. SUNITA TAPARIA, WE DELETE THE ADDITION MADE IN THE HANDS O F SMT. INDIRA DEVI TAPARIA. 11. SIMILAR ADDITIONS HAVE BEEN MADE IN THE CASE OF SHR I RAJIV TAPARIA AMOUNTING TO RS. 3,94,500/-. FOLLOWIN G THE SAME REASONING AS DISCUSSED ABOVE, WE DELETE THE AD DITION. 12. IN THE RETURN OF INCOME, SHRI RAJIV TAPARIA HAS SHO WN INCOME FROM CONSULTANCY BUSINESS AT RS. 51,214/-,, WHICH THE ASSESSING OFFICER ESTIMATED AT RS. 60,000/-. WE DO NOT FIND ANY INFIRMITY FOR ESTIMATING CONSULTANCY BUSINESS I NCOME AT RS. 60,000/-. I.T.A.NO. 596/IND/12 M/S. TODARMAL & SONS : 13. IN THIS CASE, AN ADDITION OF RS. 1 LAKH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTM ENT. FACTS IN BRIEF ARE THAT IN THE YEAR 2002, THE ASSESSEE WA S IN RECEIPT OF LOAN FROM M/S. A.R. INDUSTRIAL TRADERS, MUMBAI. THE ASSESSING OFFICER MADE AN INQUIRY, WHEREIN M/S. A.R . INDUSTRIAL TRADERS, DENIED TO ANY PAYMENT DUE FROM THE ASSESSEE. THE ASSESSEE SHOWED IT IN THE LIST OF SUN DRY SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 12 PAGE 12 OF 15 CREDITORS. M/S. A.R. INDUSTRIAL TRADERS GIVEN IN W RITING THAT IT HAS NOTHING TO RECEIVE FROM THE ASSESSEE AND NO DUE S WERE OUTSTANDING AGAINST IT, THE ASSESSING OFFICER MADE THE ADDITION WHICH WAS CONFIRMED BY THE LD.CIT(A). 14. CONTENTION OF LD. AUTHORIZED REPRESENTATIVE WAS TH AT IT WAS AN OPENING BALANCE IN THIS YEAR, WHICH WAS L YING CREDIT FOR LAST 7 YEARS. AMOUNT WAS RECEIVED THROUGH BANKI NG CHANNEL BY DD DATED 16.9.2002, WHICH COULD NOT BE A DDED IN THIS YEAR. 15. IT WAS ALSO CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE THAT MERELY BECAUSE ASSESSEE HAS AD MITTED TO MAKE ADDITION SINCE CREDITOR HAS DENIED THE TRANSAC TION, SUCH ADMISSION MERELY AN IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO ASSESSEE WHO MAKES THE ADMISSION THAT IT IS INCORRECT. IT IS SETTLED L AW THAT THOUGH AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVI DENCE, IT CANNOT BE SAID TO BE CONCLUSIVE AND IT IS OPEN TO T HE PERSON WHO HAS MADE THE ADMISSION TO SHOW THAT IT IS INCOR RECT. IT IS ALWAYS OPEN TO A PERSON, WHO MADE THE ADMISSION, TO SHOW THAT THE STATEMENT TO OFFER INCOME IS INCORRECT AND HAD SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 13 PAGE 13 OF 15 MATERIAL TO SUBSTANTIATE SO. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- (A) PULLANGODE RUBBER PRODUCE VS. STATE OF KERALA , 91 ITR 18 ( S. C. ). (B) NAGUBAI AMMAL VS. SHAMA RAO, AIR 1958 S.C.593. (C) ACIT VS. RAVI AGRICULTURAL LIMITED, 316 ITR ( A.T.) AGRA. (D) CIT VS. DHINGRA METAL WORKS, (2010) 328 ITR 384 (DEL). (E) CIT VS. S. KHANDER KHAN, 300 ITR 157 (MAD). (F) M. NARAYANAN & BROS VS. ACIT, (2011) 339 ITR 192 (MAD). THAT APART, THE CASE OF THE ASSESSEE ALSO STANDS SU PPORTED BY CIRCULAR F.NO. 286/2/2003-IT (INVESTMENT) DATED 10 TH MARCH, 2003, WHEREIN CBDT HAS GIVEN CATEGORICAL DIRECTION S TO THE DEPARTMENTAL OFFICERS THAT UNDER EMPHASIS SHOULD NO T BE PLACED ON THE RECORDED STATEMENTS. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND FROM RECORD THAT BALANCE OF RS. 1 LAKH WAS SHOWN AS PAYABLE TO M/S. A.R. INDUSTRIAL TRADERS, MUMBAI, WHO HAVE C LEARLY DENIED ANY AMOUNT RECEIVABLE FROM THE ASSESSEE. SIN CE SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 14 PAGE 14 OF 15 CREDITOR HIMSELF HAS DECLINED AND DID NOT CONFIRM T HE TRANSACTION, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF ASSESSING OFFICER FOR MAKING ADDITION, WHICH WAS CO NFIRMED BY THE LD.CIT(A). 17. IN THE RESULT, THE GROUND TAKEN BY THE ASSESSEE IS DISMISSED. 18. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER HAS ALSO MADE AN ADDITION OF RS. 38,516/- BY ESTIMA TING INTEREST INCOME AT 9 % IN RESPECT OF ADVANCES GIVEN TO THE THREE PARTIES. 19. CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WA S THAT THE ASSESSEE WAS HAVING SUFFICIENT INTEREST FR EE FUNDS AVAILABLE WITH IT AND ADVANCES WERE MADE OUT OF SUC H INTEREST FREE FUNDS TO THE SISTER CONCERNS. FROM THE RECORD, WE FOUND THAT THE ASSESSEE WAS HAVING INTEREST FREE FUNDS AV AILABLE IN THE FORM OF SUNDRY CREDITORS AMOUNTING TO RS. 11,30 ,909/-, HOWEVER, INTEREST FREE ADVANCES GIVEN TO PARTIES AM OUNTS TO ONLY RS. 6,83,985/-. AS THE ADVANCE GIVEN TO THE SI STER CONCERN WITHOUT INTEREST WAS LESS THAN THE INTEREST FREE FU NDS AVAILABLE WITH THE ASSESSEE, THERE IS NO JUSTIFICATION FOR ES TIMATING SMT. SUNITA TAPARIA, SMT. INDIRA TAPARIA AND SHRI RAJIV TAPARIA AND M/S. TODARMAL AND SONS I.T.A.NOS. 101 TO 103/IND/2013AND 596/IND/2012 15 PAGE 15 OF 15 INTEREST INCOME ON SUCH ADVANCES, WHICH WAS NEITHER EARNED NOR RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION F RS. 38,516/-. 20. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER HAS DISALLOWED 25% OF EXPENDITURE CLAIMED ON CAR RE PAIR, MAINTENANCE, PETROL EXPENSES AND DEPRECIATION, WHIC H WAS RESTRICTED BY THE LD.CIT(A) TO 20%. KEEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS VIS--VIS PERSONAL USE OF CA R BY THE PARTNERS, WE DIRECT THE ASSESSING OFFICER TO RESTRI CT THE DISALLOWANCE TO THE EXTENT OF 10 % OF THE EXPENDITU RE SO INCURRED. WE DIRECT ACCORDINGLY. 21. IN THE RESULT, THE APPEALS ARE ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH OCTOBER, 2013. CPU* 282910