Shri Hukamsingh Kishansingh Rathaur, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

ITA 1212/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76785 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice
• Section: 143(3); 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT M EMBER HUKAMSINGH KISHANSINGH RATHAUR, PROP. OF M/S SUNRISE SECURITY, 15, SHRI KRISHNA APARTMENT, B/H JASODANAGAR POST, VATVA, AHMEDABAD-382445 PAN: AHQPR3355Q (APPELLANT) VS INCOME TAX OFFICER, WARD-6(4), AHMEDABAD (RESPONDENT) ASSESSEE BY: SRI S.N. DIVETIA, A.R. REVENUE BY: SRI P.L. KUREEL, SR.D.R. DATE OF HEARING : 25-04-2014 DATE OF PRONOUNCEMENT : 30-05-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XI AHMEDABAD DATED 27-01-2011. ITA NO. 1212/AHD/2011 ASSESSMENT YEAR 2006-07 I.T.A NO.1212 /AHD/2011 A.Y. 2006-07 PAGE NO HUKAMSINGH KISHANSINGH RATHAUR PROP. OF M/S. SUNRIS E SECURITY V. ITO 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL. 1.1 THE ORDER PASSED U/S.250 ON 27.1.2011 FOR A.Y .2006-07 BY CIT(A),XI ABAD CONFIRMING PARTLY THE ADDITIONS MADE BY AO IN ORDER U/S , 143(3) DATED 18.02.2008 IS WHOLLY ILLEGAL, UNLAWFUL AND AG AINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND OR ON FACTS IN PASSING THE IMPUGNED ORDER WITHOUT CONSIDERING FULLY AND PR OPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D ON FACTS IN CONFIRMING THE ADDITION OF RS. 78520 AS UNACCOUNTED INCOME TO THE EXTENT OF CLAIM OF EXPENSES REJECTED BY HIM. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD ADDITION OR RS.7 8250 TO THE EXTENT OF CLAIM FOR EXPENSES DISALLOWED. THE CLT(A) HAS ERRED IN DISALLOWING THE CLAIM OF EXPENSES WITHOUT GIVING COGENT REASONS AND DISREGARDING THE EVIDENCE ON RECORD. 3.1 THE ID. CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND IN FACTS IN CONFIRMING THE ADDITION OF RS. 1 LAC ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THAT THE CASH CREDIT OF RS.1 LA C WAS UNEXPLAINED. 4.1 WITH OUT PREJUDICE AND IN THE ALTERNATIVE, THE LD. CIT(A) OUGHT TO HAVE ALLOWED THE BENEFIT OF TELESCOPING OR SET OFF AGAINST THE ADDITIONAL INCOME CONFIRMED BY HIM. 3. GROUND NO. 1 IS GENERAL AND DOES NOT REQUIRE ANY ADJUDICATION ON OUR PART. 4. GROUND NO. 2 RELATES TO ADDITION OF RS. 8,80,249 /- AS UNACCOUNTED RECEIPT OUT WHICH ASSESSEE CLAIMED EXPENSES OF RS. 7,56,458/-. 5. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF SECURITY SERVICES. HE H AD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,35,460/-. D URING THE COURSE OF I.T.A NO.1212 /AHD/2011 A.Y. 2006-07 PAGE NO HUKAMSINGH KISHANSINGH RATHAUR PROP. OF M/S. SUNRIS E SECURITY V. ITO 3 ASSESSMENT PROCEEDINGS AO NOTICED THAT AS PER AIR I NFORMATION THE ASSESSEE WAS HOLDING BANK ACCOUNT WITH UTI BANK LTD WHEREIN HE HAD MADE DEPOSITS TOTALING RS. 8,80,249/-. WHEN ASSESS EE WAS SHOW CAUSED IN THIS RESPECT, HE CONFIRMED THE SAID BANK ACCOUNT AND DEPOSITS OF RS. 8,80,249/- BUT CLAIMED EXPENSES TOTALING RS. 7,56,4 58/- CONSISTING OF SALARY EXPENSES OF RS. 6,77,938/-, BANK CHARGES OF RS. 1444/-, CONVEYANCE CHARGES OF RS. 28,263/- TEA EXPENSES OF RS. 63,33/- AND PETROL EXPENSES OF RS. 42,480/-. THE ASSESSEE OFFE RED NET INCOME OF RS. 1,23,791/-. HOWEVER THE AO REJECTED THIS EXPLANATI ON OF THE ASSESSEE ON THE GROUND THAT ASSESSEE HAS NOT FURNISHED ANY DETA ILS/VOUCHERS IN SUPPORT OF THESE EXPENSES INCURRED BY HIM AND ASSES SEE COULD NOT SUBSTANTIATE THE FACT THAT THE EXPENSES INCURRED ON THE RECEIPT OF RS. 8,80,249/- HAVE NOT BEEN CLAIMED IN THE REGULAR BOO KS OF ACCOUNT AND MADE THE ADDITION OF RS. 8,80,249/- TO THE INCOME O F THE ASSESSEE AS UNACCOUNTED INCOME AND THE MATTER WAS CARRIED BY TH E ASSSESSEE TO FIRST APPELLATE AUTHORITY. LD. CIT(A) DIRECTED THE AO TO VERIFY THE CLAIM OF SALARY EXPENSES OF RS. 677,938/- BUT REJECTED THE CLAIM OF BALANCE EXPENSES OF RS. 78,520/-. 6. FURTHER AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF SECURITIES S ERVICES AND HE HAS CLAIMED EXPENSES AGAINST THE RECEIPT OF RS. 8,80,24 9/- ON ACCOUNT OF SALARY EXPENSES, CONVEYANCE EXPENSES, PETROL EXPENS E BANKING EXPENSES AND TEA EXPENSES. LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE TO EXTENT OF SALARY EXPENSES OF RS. 6,77,938/- SUBJECT TO VERIFI CATION BY AO. THE OTHER EXPENSES IN OUR CONSIDERED OPINION ARE NOTHING BUT INCIDENTAL EXPENSES IN I.T.A NO.1212 /AHD/2011 A.Y. 2006-07 PAGE NO HUKAMSINGH KISHANSINGH RATHAUR PROP. OF M/S. SUNRIS E SECURITY V. ITO 4 THE LINE OF BUSINESS IN WHICH ASSESSEE IS ENGAGED I .E. SECURITY SERVICES AND SINCE EXPENSES ARE REASONABLE WHEN COMPARED TO THE TOTAL RECEIPTS, DESERVE TO BE ALLOWED AND THEREFORE ADDITION MADE B Y AO BY DISALLOWING THIS EXPENSES AND SUSTAINED BY LD. CIT(A) IS HEREBY DELETED. THIS GROUND OF THE ASSESSEE IS ALLOWED. 8. SECOND GROUND RELATES TO ADDITION OF RS. 1,00,00 0/- ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES IN THE BOOKS OF ACCOUNT. 9. THE ASSESSEES CONTENTION BEFORE LD. CIT(A) WAS AS UNDER:- 3. THE SECOND GROUND OF APPEAL IS DIRECTED AGAINST THE ADDITION OF RS 1,00,000/- ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES IN THE BOOKS OF ACCOUNT. THE RELEVANT PARA OF THE WRITTEN SUBMISSIO NS FILED BY THE A R. OF THE APPELLANT ARE REPRODUCED HEREUNDER: ANOTHER MAJOR ISSUE IS ADDITION OF RS. 1,00.000 AS UNEXPLAINED CREDITS U/S 63 OF THE ACT, IN THE CAPITAL ACCOUNT. . INITIAL CREDITS IN THE CAPITAL ACCOUNT TO THE TUNE OF RS 40000, CONSI ST OF 25000 FROM ASSESSEE'S OWN SAVINGS AND RS. 15000 WAS FROM LOAN TAKEN FROM ONE MR. RAJESH JOSHI, WHOSE PAN AND CONFIRMATION W AS ALSO FILED DURING THE COURSE OF HEARING. HENCE TO THE EXTENT OF THIS RS. 40,000/- THE INTRODUCTION OF FRESH CAPITAL STANDS E XPLAINED. 3.1. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A. R. OF THE APPELLANT AND THE OBSERVATIONS OF ME ASSESSING OFFICER IN THE ASSESSMENT ORDER. AS REGARDS BORROWAL OF RS.15,000/- FROM MR. RAJESH JOS HI, A O. OBSERVED THAT NO CONFIRMATION LETTER WAS FURNISHED WHEREAS LEARNE D A. R. CONTENDS THAT IT WAS FURNISHED. A.O. MAY VERIFY THE FACT. IF CON FIRMATION LETTER WAS FURNISHED ADDITION OF SAID SUM SHALL BE DELETED. 3.1.2. AS REGARDS THE CLAIM OF RS 25.000/- BEING FR OM PAST SAVINGS, IT IS SEEN TO BE A MERE CLAIM WITHOUT ANAY EXPLANATION/JU STIFICATION/EVIDENCE. AS REGARDS BALANCE CAPITAL OF RS. 60.000/- INTRODUC ED, NO EVIDENCE WAS FURNISHED EITHER DURING ASSESSMENT PROCEEDINGS OR D URING APPELLATE PROCEEDINGS. HENCE ADDITION TO THE EXTENT OF RS 85 000/- IS UPHELD. I.T.A NO.1212 /AHD/2011 A.Y. 2006-07 PAGE NO HUKAMSINGH KISHANSINGH RATHAUR PROP. OF M/S. SUNRIS E SECURITY V. ITO 5 10. LD. CIT(A) GAVE RELIEF TO THE ASSESSEE TO THE E XTENT OF RS. 15,000/- SUBJECT TO VERIFICATION OF THE CONFIRMATORY LETTER OF THE CREDITOR MR. RAJESH JOSHI AND CONFIRMED THE BALANCE ADDITION OF RS. 85, 000/- FOR WANT OF EVIDENCE IN THIS RESPECT. SINCE BEFORE US ALSO NO EVIDENCE HAS BEEN BROUGHT ON RECORD IN THIS RESPECT, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY U PHELD. SECOND GROUND OF ASSESSEES APPEAL IS DISMISSED. 11. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 30/05/2014 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/ , / ,