Rekha Singh, V. ACIT,

ITA 114/PAT/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9632 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K NARAYAN
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PA T N A BENCH , PATNA BEFORE SHRI ABY. T. VARKEY , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ITA NO. 144 / PAT / 2013 ASSESSMENT YEAR: 2009 - 10 VINAY KUMAR BUNDEL TOLI, NAWABGANJ, PATNA CITY - 80008 [ PAN NO.AIMPK 2183 J ] / V/S . ITO WARD NO.6(4), PATNA /APPELLANT .. /RESPONDENT / BY APPELLANT SHRI S.K. NARAYAN, ADVOCATE / BY RESPONDENT SHRI KAUSIK KR. DAS, DR / DATE OF HEARING 04 - 04 - 2017 / DATE OF PRONOUNCEMENT 07 - 04 - 2017 /O R D E R PER BENCH : - THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - , DHANBAD DATED 1 9 .0.2013. ASSESSMENT WAS FRAMED BY ITO WARD - 6(4 ), PATN A U/S 144/ 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 27 .12.20 11 FOR ASSESSMENT YEAR 200 9 - 1 0. SHRI S.K. NARAYAN, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE AND SHRI KAUSIK KR. DAS, LD. DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE. 2. AT THE TIME OF HEARING LD. AR FOR THE ASSESSEE DID NOT PRESS THE GROUND NO.3 DUE TO SMALLNESS OF THE AMOUNT INVOLVED BY PLEADING THAT IT MAY NOT BE CONSI DERED AS PRECEDENT FOR OTHER ASSESSMENT YEARS. LD. DR RAISED NO OBJECTION ITA NO. 144/PAT/2013 A.Y. 2009 - 10 VINAY KUMAR VS. ITO WD - 6(4) PATNA PAGE 2 TO THE REQUEST OF THE LD. AR. CONSIDERING THE TOTALITY OF THE FACTS AND THE SUBMISSION OF THE LD. AR OF THE ASSESSEE, THIS GROUND IS DISMISSED AS NOT PRESSED BEING SMALL AMOUNT OF AD DITION INVOLVED T HUS, THE GROUND OF ASSESSEE IS DISMISSED. 3. THE EFFECTIVE ISSUE RAISED BY ASSESSEE IN GROUND NO.1 AND 2 IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAINING THE ADDITION OF 10,02,756/ - ON ACC OUNT OF DIFFERENCE IN THE CAPITAL ACCOUNT OF THE ASSESSEE WHICH WAS MADE AFTER IGNORING THE REMAND REPORT SUBMITTED BY THE AO. 4. BRIEFLY STATED FACTS ARE THAT ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND HAS FILED HIS RETURN OF INCOME DECLARING TOTA L INCOME OF 53,530/ - COMPRISING OF BUSINESS ONLY. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS SHOWN CAPITAL OF RS. 37,80,530/ - IN HIS RETURNED OF INCOME WHEREAS IN THE AUDIT REPORT THE CAPITAL WAS SHOW N AT 38.67 LAKH. A QUESTION WAS RAISED BY THE AO ABOUT THE DIFFERENCE IN HIS CAPITAL ACCOUNT OF ASSESSEE BUT NO EXPLANATION WAS OFFERED. THEREFORE, THE AO IN THE ABSENCE OF DOCUMENTARY EVIDENCE HAS MADE AN ADDITION OF 30 LAKH TO THE TOTAL INCOME OF ASSE SSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A) WHO CONFIRMED THE ORDER OF AO AFTER GIVING PART RELIEF TO ASSESSEE BY CONSIDERING THE REMAND REPORT AND SUBMISSION OF ASSESSEE BY OBSERVING AS UNDER: - SUCH REMAND REPORT WAS SUBMITTED VIDE LETTER DATED 30.02.2013. A COPY WAS GIVEN TO THE APPELLANT AND HE WAS DIRECTED TO FURNISH COMMENTS IF ANY, SHRI N.P. SINHA, ADVOCATE AND AR APPEARED ON 19.03.2013 AND SUBMITTED THAT HE HAS NO FURTHER COMMENTS TO OFFER IN THIS REGARD. IN THE REMAND REP ORT, THE ASSESSING OFFICER (AO) EXAMINED RETURNS OF INCOME FILED BY THE APPELLANT AND FOUND THAT AS ON 31.03.2009, THE CLOSING CAPITAL BALANCE WAS COMING TO RS.27,27,774/ - AS AGAINST RS.37,80,530/ - SHOWN BY THE APPELLANT. IT WAS EXPLAINED BEFORE THE AO THA T THE BALANCE AMOUNT WAS OUT OF UNSECURED LOANS FROM HIS FAMILY MEMBERS AND RELATIVES AND ADVANCE SECURITY DEPOSITS IN THE FORM OF PAGRI . THE AO HAS EXPRESSED OPINION THAT UNSECURED LOANS OF RS.49,000/ - , 62,000/ - AND RS.1,44,626/ - REMAIN UNEXPLAINED. HOW EVER, I FIND THAT IN THE BALANCE SHEET, THE CLOSING BALANCE OF CAPITAL HAS BEEN SHOWN AT RS.37,80,530/ - AND NO SUCH UNSECURED LOANS OR PAGRI HAVE BEEN SHOWN SEPARATELY. SINCE THE SAME HAVE BEEN SHOWN AS PART OF THE CAPITAL, THE APPELLANT HAS HIMSELF ACCE PTED THE SAME TO ITA NO. 144/PAT/2013 A.Y. 2009 - 10 VINAY KUMAR VS. ITO WD - 6(4) PATNA PAGE 3 BE OF INCOME NATURE AND NOT REFUNDABLE LOANS OR PAGRI . THEREFORE, THE RESULTANT ADDITION TO THE CAPITAL OF RS.10,52,756/ - IS REQUIRED TO BE MADE TO THE INCOME AND ADDITION TO THIS EXTENT IS CONFIRMED. THE BALANCE ADDITION IS DELETED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSEE CAME IN SECOND APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - 1. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE REMAND RE PORT SUBMITTED BY THE ASSESSING OFFICER WITH RESPECT TO THE CAPITAL ACCOUNTS OF THE APPELLANT. 2. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING AN ADDITION OF RS.1 0 ,52,756 6. BEFORE US LD. AR FOR THE ASSESSEE FILED PAPER BOOK WHICH IS RUNNING PAGES FROM 1 TO 25 AND SUBMITTED THAT ASSESSEE WAS MAINTAININ G TWO SEPARATE BALANCE SHEETS FIRSTLY FOR HIS BUSINESS TRANSACTION AND SECONDLY IN HIS INDIVIDUAL CAPACITY. HE STATED THAT THE SAID DIFFERENCE WAS MAINLY ARISING DUE TO DIFFERENT FIGURES OBSERVED BY THE LD. CIT - A IN THE PERSONAL BALANCE SHEET AS WELL AS BUSINESS BALANCE SHEET OF ASSESS EE. THE LD. AR IN SUPPORT OF ASSESSEES CLAIM HAS SUBMITTED BOTH BALANCE - SHEETS OF ASSESSEE WHICH ARE PLACED ON PAGES 6 AND 7 OF THE PAPER BOOK. LD. AR ALSO SUBMITTED THAT ADDITION HAS BEEN MADE WITHOUT CONSIDERING THE REMAND REPORT OF AO WHICH IS PLACED O N PAGES 1 TO 5 OF THE PAPER BOOK . ON THE OTHER HAND THE LD. DR FOR THE REVENUE VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 7. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT WAS OBSERVED THAT T HE DIFFERENCE WAS OBSERVED BY LD. CIT(A) AT THE APPELLATE STAGE IN THE AMOUNT OF CAPITAL OF ASSESSEE AS SHOWN IN THE PERSONAL BALANCE SHEET VIZ A VIZ IN THE BUSINESS BALANCE SHEET. HOWEVER, ON PERUSAL OF PERSONAL BALANCE - SHEET OF ASSESSEE, WE FIND THAT INV ESTMENT IN THE BUSINESS BALANCE - SHEET WAS DULY SHOWN IN THE PERSONAL BALANCE SHEET BY THE ASSESSEE WHICH IS PLACED ON PAGE 7 OF THE PAPER BOOK . F OR THE READY REFERENCE WE ARE REPRODUCING THE PERSONAL BALANCE - SHEET OF ASSESSEE AS ON 31.03.2009 AS UNDER: - ITA NO. 144/PAT/2013 A.Y. 2009 - 10 VINAY KUMAR VS. ITO WD - 6(4) PATNA PAGE 4 BALANCE SHEET AS ON 31.03.2009 CAPITAL ACCOUNT & LIABILITIES CAPITAL ACCOU NT (31.03.2008) 2727774.00 LOANS & ADVANCES LOAN FROM FATHER 93000.00 ADDITIONS 94000.00 187000.00 LOAN FROM BROTHER 150000.00 ADDITIONS 750000.00 ADDITIONS 97000.00 997000.00 LOAN FROM MOTHER 23000.00 LOAN FROM BROTHER - IN - LAW 49000.00 LOAN FROM FRIENDS 144626.00 L OAN FROM LIC PATNA CITY 91500.00 CURRENT LIABILITIES & PROVISIONS SD (FROM TENANTS) 500000.00 TOTAL 4738900.00 ========== ASSETS & INVESTMENTS INVESTMENTS M/S GRAFIC WORLD, EX RD. PATNA 3760530.00 CURRENT ASSETS S. DEBTORS 505311.00 (IN PERSONAL CAPACITY) CASH & BANK BALANCES CASH & BANK 125295.00 LOANS & ADVANCES S. DEPOSIT WITH LANDLORD 98000.00 ADVANCES TO SUPPLIERS 229764.00 ---------------------- TOTAL 4738900.00 ============ FROM ABOVE, WE FIND THAT INVESTMENT AS SHOWN BY THE ASSESSEE IN HIS PERSONAL BALANCE SHEET HAS BEEN DULY REFLECTED AND SAME IS ALSO MATCHING WITH THE CAPITAL AS SHOWN BY THE ASSESSEE IN HIS BUSINESS BALANCE - SHEET . B ESIDES THE ABOVE, WE ALSO FIND THAT THE A O IN HIS REMAND REPORT HAS RECONCILED THE DIFFERENCE EXCEPT FOR A SUM OF 2,55,626/ - WHICH THE LD. CIT(A) HAS COMPLETELY IGNORED FOR HIS CONSIDERATION. THUS IF THE ADDITION NEEDS TO BE MADE THEN IT SHOULD BE RESTRICTED TO THE AMOUNT AS SUGGESTED BY THE AO IN HIS REMAND REPORT. THE BREAKUP OF RS. 2 , 55,626 / - STANDS AS UNDER : - 1. RS. 49,000.00 LOAN FROM BROTHER IN LAW 2. RS. 62,000.00 LOAN FROM HIS BROTHER 3. RS. 1,44,626.00 LOAN FROM FRIENDS W E ALSO FIND THAT A SUM OF 49,000/ - IS ARISING FROM EARLIER YEAR AS EVIDENT FROM THE BALANCE - SHEET AS ON 31.03.2008 WHICH IS PLACED ON PAGE 8 OF THE PAPER BOOK. HOWEVER THE LOAN OF 62,000/ - AND 1,44,626 / - FROM HIS BROTHER & FRIENDS HAVE NOT BEEN EXPLAIN ED BY THE LD. AR. THUS, WE ARE INCLI NED TO DELETE THE ADDITION OF 49,000 / - AND AO IS DIRECTED ACCORDINGLY. HOWEVER, LD. AR HAS NOT EXPLAINED ITA NO. 144/PAT/2013 A.Y. 2009 - 10 VINAY KUMAR VS. ITO WD - 6(4) PATNA PAGE 5 THE DIFFERENCE OF 62,000 / - AND 1, 4 4,626/ - AS SUGGESTED BY THE AO IN HIS REMAND REPORT. IN THIS VIEW OF THE MATTER , WE ARE NOT INTERESTED IN SENDING BACK THE MATTER TO THE AO TO AVOID FURTHER LITIGATION, THEREFORE, IN THE INTEREST OF JUSTICE WE RESTRICT THE DISALLOWANCE OF 2,06,626 / - ( 62,000+ 14 4,626/ - ) FOR THE YEAR UNDER CONSIDERATION AS SUGGESTED BY AO. THEREFORE, THE ISSUE RAISED BY ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 07 / 04 /201 7 SD/ - SD/ - ( ABY. T. VARKEY ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP , SR.P.S - 07 / 04 /201 7 PATNA COPY OF ORDER FORWARDED TO: - 1 . APPELLANT - VINAY KUMAR, BUNDEL TOLI, NAWABGANJ, PATNA CITY - 800008 2 . RESPONDENT - ITO WARD - 6(4), PATNA 3 . CONCERNED CIT 4 . CIT (A) 5 . DR, ITAT, PATNA 6 . GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS/PS, ITAT, PATNA