RAJKUMAR GUPTA PROP. M/S. JAI BHARAT TRADING COMPANY, Alwar V. ITO, Alwar

ITA 1038/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5570 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 28-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Rejection of books of accounts; Assessment record
• Section: 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1038/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 RAJKUMAR GUPTA, PRO.P- M/S JAI BHARAT TRADING COMPANY, ALWAR. CUKE VS. INCOME TAX OFFICER, WARD 2(2), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACCPG 4162 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSIONS. JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/02/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/02/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/09/2016 PASSED BY THE LD CIT(A), ALWAR FOR THE A. Y. 2012-13, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ITO WAS WRONG AND UNJUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE IT ACT AND THEREBY MAKING A TRADING ADDITION OF RS. 1,27,893/- AND THE LEARNED CIT (APPEAL) WAS ALSO WRONG AND ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 2 UNJUSTIFIED IN CONFIRMING THE SAME. THE LEARNED ITO AND THE LEARNED CIT (APPEAL) BOTH ARE WRONG IN SAYING THAT STOCK REGISTER WAS NOT PRODUCED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ITO WAS WRONG AND UNJUSTIFIED IN DISALLOWING A SUM OF RS. 50,000/- OUT OF VARIOUS EXPENSES. THE LEARNED ITO HAS NOT POINTED OUT A SINGLE ITEM FOR WHICH VOUCHER WAS NOT PRODUCED. THE LEARNED CIT (APPEAL) WAS ALSO WRONG AND UNJUSTIFIED IN CONFIRMING THE SAME. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ITO WAS WRONG AND UNJUSTIFIED IN MAKING AN ADDITION OF RS. 56,600/- ON ACCOUNT OF LOW HOUSE HOLD EXPENSES AND THE LEARNED CIT (APPEAL) WAS ALSO WRONG AND UNJUSTIFIED IN CONFIRMING THE SAME. 2. NONE ATTENDED ON BEHALF OF THE ASSESSEE. LD. SR. DR WAS HEARD. AFTER HEARING THE LD. SR. DR, THE APPEAL IS BEING D ECIDED. 3. GROUND NO. 1 OF THE APPEAL IS AGAINST REJECTING THE BOOKS OF ACCOUNT AND CONFIRMING THE ADDITION OF RS. 1,27,893 /- MADE BY THE ASSESSING OFFICER. 4. THE LD. CIT(A) HAD CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER:- ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 3 5.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT THE A.O HAS REJECTED THE BOOKS OF ACCOUNTS UNDER SECTIO N 145(3) OF THE ACT CITING VARIOUS REASONS AS IS MENTIONED IN PARA 4.1 ABOVE. THE APPELLANT HAS CLAIMED IN THE SUBMISSION THAT ST OCK REGISTER WAS PRODUCED BEFORE THE A.O HOWEVER, ON PERUSAL OF THE ASSESSMENT RECORDS, IT IS EVIDENTLY CLEAR FROM THE NOTE SHEETS THAT THE ASSESSEE DID NOT PRODUCE THE STOCK REGISTER AND THAT FACT IS MENTION ED IN THE NOTE SHEET DATED 12/01/2015. THEREFORE, THE APPELLANTS CONTENTION IS NOT FACTUALLY CORRECT FRO M THE ASSESSMENT RECORD. FURTHER, THE A.O HAS CLEARLY RECORDED IN THE NOTE SHEET THAT DIRECT EXPENDITURE WERE NOT FULLY VOUCHED HENCE COULD NOT BE VERIFIED. ALSO THE A.O HAD RECORDED THAT OVERHEAD CHARGES WERE NOT INCLUDED IN THE VALUATION OF THE STOCKS. IN VIEW OF THE FOREGONE, IN MY CONSIDERED VIEW, THE A.O IS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS AND MAKING THE TRADING ADDITIONS TO THE TUNE OF RS. 1,27,893/- TAKING THE AVERAGE OF LAST 2 YEARS GROSS PROFIT RATE. ACCORDINGLY, THE ADDITION IS SUSTAINED AND THE APPELLANTS GROUND OF APPEAL IS DISMISSED. ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 4 5. AFTER GOING THROUGH THE RECORDS AND HEARING OF T HE LD. SR. DR, I FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHE REIN HE HAS SUSTAINED THE REJECTION OF BOOKS OF ACCOUNT AND ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON PRODUCTION OF STOCK REGIS TER BY SAYING THAT THE APPELLANTS CONTENTION IS NOT FACTUALLY CORRECT FRO M THE ASSESSMENT RECORD. THE LD. CIT(A) HAS HELD THAT THE ASSESSING OF FICER HAS CLEARLY RECORDED IN THE NOTESHEET THAT DIRECT EXPENDITURE WE RE NOT FULLY VOUCHED HENCE COULD NOT BE VERIFIED. HE HAD ALSO RECORDED T HAT OVERHEAD CHARGES WERE NOT INCLUDED IN THE VALUATION OF THE STOCKS. AC CORDINGLY THIS GROUND OF APPEAL BY THE ASSESSEE IS HEREBY REJECTED. 6. GROUND NO. 2 OF THE APPEAL IS AGAINST DISALLOWANC E A SUM OF RS. 50,000/- OUT OF VARIOUS EXPENSES. THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING A S UNDER:- 6.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WE LL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT THE TRADING ADDITIONS WERE MADE ON THE GROSS PROFIT. THEREFORE, ADDITION ON ACCOUNT OF EXPENDITURES OTHER THAN TRADING EXPENSES IS JUSTIFIABLE. THE ABOVE ADDITION @ 5% IS MADE ON THE BASIS OF POSSIBLE PERSONAL USAGE OF TELEPHONE AND VEHICLE AND OTHER SUNDRY EXPENDITURES AND ON THE FACT THAT NOT ALL EXPENDITURE ARE FULLY VOUCHED. THE A.O HAS RECORDED ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 5 THAT NO LOG BOOK FOR VEHICLE USAGE ARE MAINTAINED. THE ASSESSEE IS ALSO NOT MAINTAINING CALL REGISTERS. IT WILL NOT BE OUT OF CONTEXT HERE TO MENTION THAT IN ORDER TO AVAIL ANY EXPENDITURE UNDER SECTION 37 OF THE ACT, THE PRIMARY ONUS LIES ON THE ASSESSEE TO PROVE THAT SUCH EXPENDITURES ARE INCURRED OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN ABSENCE OF COMPLETE DETAILS, THE A.O IS VERY REASONABLE TO DISALLOW ONLY RS.50,000/- OUT OF EXPENDITURES CLAIMED AT RS. 12,87,074/- OF THE EXPENSES CLAIMED. ACCORDINGLY, THE ADDITION OF RS.50,000/- IS SUSTAINED AND APPELLANTS GROUND OF APPEAL ON THE ISSUE IS DISMISSED. 7. FROM PERUSAL OF RECORD, I HAVE FOUND THAT THERE IS NO CONTRARY MATERIAL WHATEVER REPORTED BY THE LD. CIT(A) IN HIS O RDER, THEREFORE IN ABSENCE OF ANY MATERIAL AGAINST THE FINDINGS OF THE LD. CIT(A), I HAVE NO ALTERNATE BUT TO CONCUR WITH THE FINDINGS OF THE LD. CIT(A), THEREFORE, I UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. AC CORDINGLY, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 8. THE 3 RD GROUND OF APPEAL IS AGAINST CONFIRMING THE ADDITIO N OF RS. 56,600/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. THE L D. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R BY HOLDING THAT THE ASSESSING OFFICER HAD ESTIMATED THE ADDITION ON ACC OUNT OF LOW ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 6 HOUSEHOLD EXPENSES BUT HE HAS NOT MADE ANY ADDITION ON THIS ACCOUNT IN VIEW OF TRADING ADDITIONS ALREADY MADE, THEREFORE, H E FOUND NO REASON TO INTERFERE ON THIS ACCOUNT AS NOT ADDITIONS HAVE BEE N MADE. 9. FROM PERUSAL OF RECORD, IT TRANSPIRES THAT THE A SSESSING OFFICER HAS NOT MADE ANY ADDITION ON THIS ACCOUNT, DUE TO SIZE OF FAMILY, STANDARD OF LIVING, COST OF LIVING. THE LD. CIT(A) HAS CONFIRMED THE ADDITION BY HOLDING THAT THE ASSESSING OFFICER HAD ESTIMATED THE ADDITI ON ON ACCOUNT OF LOW HOUSEHOLD EXPENSES BUT HE HAS NOT MADE ANY ADDITION ON THIS ACCOUNT IN VIEW OF TRADING ADDITIONS ALREADY MADE. THEREFORE, I FIND NO ANY CONTRARY MATERIAL WHATEVER REPORTED BY THE LD. CIT(A) IN HIS O RDER, THEREFORE IN ABSENCE OF ANY MATERIAL AGAINST THE FINDING OF THE LD. CIT(A), I HAVE ALTERNATE BUT TO CONCUR WITH THE FINDING OF THE LD. CIT(A), ACCORDINGLY, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 TH FEBRUARY, 2017 *RANJAN ITA 1038/JP/2014_ RAJKUMAR GUPTA VS ITO 7 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAJKUMAR GUPTA, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 2(2), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1038/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR