Marble Centre International P vt. Ltd., Bangalore V. ACIT, Bangalore

ITA 1014/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5533 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 19-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARSHA PRAKASH CITII
• Assessee Lawyers: H N KHINCHA

Judgement Text

ITA.1014/BANG/2010 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE SHRI. N. BHARATHVAJA SANKAR, VICE PRESIDENT AND SHRI. GEORGE GEORGE K. JUDICIAL MEMBER I.T.A NO.1014/BANG/2010 (ASSESSMENT YEAR : 2007-08) M/S. MARBLE CENTRE INTERNATIONAL P. LTD., NO.12A, 7TH CROSS, R. D. LAYOUT, BANNERGHATTA ROAD, BANGALORE .. APPELLANT PAN : AADCM2473R V. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 1(2), BANGALORE .. RESPONDENT APPLICANT BY : SHRI. H. N. KHINCHA, CA RESPONDENT BY : SHRI. HARSHA PRAKASH, CIT-II O R D E R PER N. BHARATHVAJA SANKAR, VICE PRESIDENT : THIS IS AN APPEAL FILED BY THE ASSESSEE FOR THE AS SESSMENT YEAR 2007-08, AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(A) VI, BANGALORE, DATED.24.06.2010. THE APPEAL ARISES OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED U/S.143(3) OF THE INCO ME-TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED TWO GROUNDS OF APPEAL, A S UNDER : ITA.1014/BANG/2010 PAGE - 2 I) THE COMMISSIONER OF INCOME-TAX(A) ERRED IN CONFIRMING THE DISALLOWANCE OF ` .4 LAKHS OUT OF CARRIAGE EXPENSES ; AND II) THE COMMISSIONER OF INCOME-TAX(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN N OT CONSIDERING THE CASH SEIZED AT THE TIME OF SEARCH F OR THE PURPOSE OF CALCULATION OF INTEREST U/S.234B AND 234 C OF THE ACT. IT IS ALSO THE GRIEVANCE OF THE ASSESSEE THAT THE COMMISSIONER OF INCOME-TAX(A) HAD NOT CONSIDERED TH E PLEA OF THE ASSESSEE FOR ADJUSTMENT OF CASH SEIZED TOWARDS ADVANCE- TAX FROM THE DATE OF SEIZURE OR AT LEAST FROM THE D ATE ON WHICH THE REQUEST FOR ADJUSTMENT WAS MADE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY. IN THE RETURN OF INCOME THE ASSES SEE CLAIMED AN AMOUNT OF ` .18,68,071/- AS CARRIAGE EXPENSES. A SEARCH TOOK PL ACE IN THE PREMISES OF THE ASSESSEE ON 08.03.2007, DURING THE COURSE OF WHICH AN AMOUNT OF ` .4.77 CRORES WAS FOUND AND SEIZED. OUT OF THIS AMO UNT ` .50 LAKHS WAS EXPLAINED TO BE BELONGING TO ITS SIST ER CONCERN M/S. RPG MARBLES P. LTD., AND OFFERED TO TAX IN THE HAND S OF THE SISTER CONCERN. THE BALANCE OF ` .4.27 CRORES WAS ADDED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. IN THE ASSESS MENT ORDER, THE ASSESSING OFFICER HAS DEDUCTED AN AMOUNT OF ` .4.27 CRORES AS PD ADJUSTMENT AFTER LEVY OF INTEREST UNDER SECTIONS.23 4B AND 234C. ITA.1014/BANG/2010 PAGE - 3 AGGRIEVED BY THIS ORDER OF THE ASSESSING OFFICER, T HE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO CO NFIRMED THE ACTION OF THE ASSESSING OFFICER. STILL AGGRIEVED, THE ASSESS EE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS OF APPEAL MENTIONED E LSEWHERE IN THIS ORDER. 3. WE HAVE HEARD BOTH SIDES AND PERUSED THE MATERIA LS ON RECORD. FIRST WE SHALL DEAL WITH THE FIRST GRIEVANCE OF THE ASSESSEE IN RELATION TO DISALLOWANCE OF CARRIAGE EXPENSES. WE FIND THAT TH IS ISSUE IS IDENTICAL TO THE FACTS OF THE CASE OF THE SISTER CONCERN, NAM ELY, M/S.RPG MARBLE P. LTD., DECIDED BY THE COORDINATE BENCH OF THIS TR IBUNAL IN ITA NO.1015/BANG/2010, DATED.30/06/2011. THE TRIBUNAL IN PARA 9 OF ITS ORDER HAS OBSERVED AS UNDER : '9. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT IT IS THE USUAL PRA CTICE FOR THE BUSINESSMAN TO DELIVER THE GOODS AT THE PREMISES AC CORDING TO THE CUSTOMER'S CHOICE AND THE ASSESSEE USUALLY PAYS TRANSPORTATION CHARGES IN CASH. HOWEVER, THERE SHO ULD BE SOME EVIDENCE WITH REGARD TO INCURRING OF SUCH EXPE NDITURE. THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE EVIDENCES WITH REGARD TO INCURRING OF SUCH EXPENDITURE AND, THEREF ORE, THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF ` .2 LAKHS ONLY OUT OF TOTAL CLAIM OF `. 9,34,943/-. WHEN THE ASSESSEE IS CLAIMING THE EXPENDITURE, ONUS IS ON THE ASSESSEE TO PROVE T HE NECESSITY ITA.1014/BANG/2010 PAGE - 4 AND GENUINENESS OF THE SAID CLAIM. IN THE CASE BEF ORE US, THE ASSESSEE HAS PROVE THE NECESSITY OF MAKING SUCH PAY MENTS, BUT HAS NOT BEEN ABLE TO PROVE THE GENUINENESS OF THE E NTIRE CLAIM, THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE O RDER OF THE COMMISSIONER OF INCOME-TAX(A) IN CONFIRMING THE DISALLOWANCE OF ` .2 LAKHS WHICH IS REASONABLE.' 4. FOLLOWING THE ABOVE ORDER OF THE COORDINATE BENC H OF THE TRIBUNAL IN THE CASE OF THE SISTER CONCERN, FACTS A ND CIRCUMSTANCES BEING IDENTICAL, WE CONFIRM THE DISALLOWANCE OF ` .4 LAKHS, SUSTAINED BY THE COMMISSIONER OF INCOME-TAX(A). THIS GROUND OF APPEAL IS DISMISSED. 5. AS REGARDS THE SECOND ISSUE IS CONCERNED, WE FIN D THAT THIS ISSUE IS ALSO IDENTICAL TO THE FACTS OF THE CASE OF THE S ISTER CONCERN, VIZ., M/S. RPG MARBLE P. LTD., WHICH HAS BEEN DECIDED BY THE C OORDINATE BENCH OF THE TRIBUNAL VIDE ORDER OF EVEN DATE, IN ITA NO. 1015/BANG/2010, FOR THE ASSESSMENT YEAR 2007-08. THE TRIBUNAL HAS UPHELD THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) BY ADJUDICATING O N THE ISSUE AT LENGTH. THE TRIBUNAL HAS ARRIVED AT THE ABOVE CONC LUSION BE OBSERVING AT PARA 14, AS UNDER : '14. THIS ISSUE HAS BEEN CONSIDERED BY 'A' BENCH OF THE TRIBUNAL IN THE CASE OF SMT. SUSHILA DEVI TAINWALS AND IT HAS BEEN HELD THAT MONEY SEIZED DURING THE COURSE OF SE ARCH ITA.1014/BANG/2010 PAGE - 5 PROCEEDINGS CAN BE APPLIED ONLY AGAINST THE LIABILI TY DETERMINED BUT ANOTHER FACT THAT HAS TO BE CONSIDER ED IS THAT THE LIABILITY TO PAY TAX COULD BE FASTENED ON THE A SSESSEE WHEN THE ASSESSEE HAS FILED THE RETURN OF UNDISCLOSED IN COME FOR THE BLOCK PERIOD OR FOR RELEVANT PREVIOUS YEAR AND THE ASSESSEE IS BOUND TO PAY THE TAX AS SOON AS HE ACKNOWLEDGES HIS LIABILITY BY FILING HIS RETURN OF INCOME. IN THE CASE BEFORE US, THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 31.10.20 07 DECLARING INCOME OF ` .3,60,15,785/- AND THE TAXABLE INCOME DETERMINED OR ASSESSED BY THE ASSESSING OFFICER AT ` .3,60,15,790/-, THEREFORE, FOLLOWING THE DECISION O F THE 'A' BENCH, WE ARE OF THE OPINION THAT THE AMOUNT OF ` .50 LAKHS SEIZED BY THE DEPARTMENT DURING THE COURSE OF SEARC H HAS TO BE TREATED AS THE TAX PAID AS ON THE DATE OF THE FILIN G OF THE RETURN AND THE INTEREST U/S.234B AND 234C HAS TO BE CALCUL ATED AFTER REDUCING THE SAME FROM THE TAXABLE INCOME. THEREFO RE, WE UPHOLD THE FINDING OF THE COMMISSIONER OF INCOME-TA X(A).' 6. FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, WE CO NFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A), AND DISMISS T HIS GROUND OF APPEAL. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 30TH JUNE, 2011. SD/- SD/- (GEORGE GEORGE K) (N. BHARATHVAJA SANKAR) JUDICIAL MEMBER VICE PRESIDENT