Praptai Properties(P)Ltd, Siliguri V. ITO, Circle-2, Jalpaiguri, Jalpaiguri

ITA 1213/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7867 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 21-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Wrong claim
• Section: 69

Judgement Text

I.T.A. NO S . 1 213 / KOL ./201 2 & 797/KOL/2013 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1 2 13 / KOL / 20 1 2 ASSESSMENT YEAR : 200 5 - 20 0 6 & I.T.A. NO. 797 /KOL/ 201 3 ASSESSMENT YEAR : 200 5 - 200 6 PRAPTI PROPERTIES PVT. LIMITED, .......... .... ............. .. .APP ELL ANT 661, KASTURI NISASH, PANJABI PARA, SEVOK ROAD, SILIGURI - 734001 [PAN : AACCP 9260 G] - VS. - ASSISTANT COMMISSIONER OF INCOME TAX, . ... ... . RESPONDENT CIRCLE - 2, JA LPAIGURI, CENTRAL REVENUE BUILDING, NAYA BASTI RACE COURSE ROAD, JALPAIGURI - 735101, WEST BENGAL APPEARANCES BY: SHRI ARVIND AGARWAL , ADVOCATE , FOR THE ASSESSEE S HRI RAVI JAIN, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : DEC EMBER 15 , 2 01 4 DATE OF PRONOUNCING THE ORDER : DECE MBER 18 , 201 4 O R D E R PER GEORGE MATHAN : ITA 1213/KOL/2012 IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) , JALPAIGURI IN APPEAL NO. 609 / CIT(A) /JAL/06 - 07 D ATED 12 . 0 1 .201 1 FOR THE ASSESSMENT YEAR 200 5 - 0 6 . ITA 797/KOL/2013 IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL - III, KOLKATA IN APPEAL NO. 72 - CC - XXII/CIT(A)C - III/2011 - 12/KOL. DATED 29 .0 1 .201 3 FOR THE ASSESSMENT YEAR 200 5 - 0 6 . I.T.A. NO S . 1 213 / KOL ./201 2 & 797/KOL/2013 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 2 OF 5 2. AS BOTH THE APPEALS OF THE ASSESSEE RELATE TO THE SAME ASSESSMENT YEAR AND ARE INTER - CONNECTED, BOTH THE APPEALS ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3 . SHRI ARVIND AGARWAL, ADVOCATE , REPRESENTED ON BEHALF OF THE A SSESSEE AND S HRI RAVI JAIN, CIT, D.R. REPRESENTED ON BEHALF OF THE REVENUE IN ITA NO. 1213/KOL/2012 AND SHRI VIJAY KUMAR, CIT, D.R. REPRESENTED ON BEHALF OF THE REVENUE IN ITA NO. 797/KOL/2013. 4. ITA 1213/KOL/2012 IS AN APPEAL FILED BY THE ASSESSEE IN R ESPECT OF THE OF THE ORDER OF LD. CIT(APPEALS), WHICH IS AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 144/143(3) DATED 31.12.2007. IT WAS THE SUBMISSION BY THE LD. A.R. THAT IN THE SAID APPEAL TWO ISSUES ARE AGITATED BEING ONE AGAINST TH E CONFIRMATION OF THE ADDITION REPRESENTING SHARE APPLICATION MONEY RECEIVED FROM VARIOUS PERSONS TO AN EXTENT OF RS.8,47,000/ - , AND THE SECOND ISSUE AGAINST THE CONFIRMATION OF THE AD HOC DISALLOWANCE OF 20% OUT OF THE DIRECT EXPENSES CLAIMED BY THE ASSES SEE. IT WAS THE SUBMISSION THAT THERE WAS A SEARCH ON THE ASSESSEE ON 22.03.2010 AND THE CONSEQUENTIAL ASSESSMENT ORDER CAME TO BE PASSED UNDER SECTION 153A/143(3) ON 14.12.2011. IT WAS THE SUBMISSION THAT NO INCRIMINATING DOCUMENTS AGAINST THE ASSESSEE HA D BEEN FOUND AND CONSEQUENTLY THE ASSESSMENT ORDER CAME TO BE PASSED RE - CONFIRMING THE TOTAL INCOME AS PER THE ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 144/143(3) DATED 31.12.2007. IT WAS THE SUBMISSION THAT AS THIS WAS A N ASSESSMENT ORDER PASSED AFT ER THE ORDER OF LD. CIT(APPEALS) AGAINST THE ORIGINAL ASSESSMENT ORDER PASSED ON 31.12.2007, THE SAME WAS ALSO THE SUBJECT MATTER OF APPEAL BEFORE THE LD. CIT(APPEALS) AND LD. CIT(APPEALS) HAD AGAIN CONFIRMED THE ASSESSMENT ORDER DATED 14.12.2011 HOLDING T HAT NO NEW FACTS OR EVIDENCES HAD BEEN ADDUCED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT IN RESPECT OF THE FIRST ISSUE BEING AGAINST THE ADDITION REPRESENTING THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE, THE ASSESSEE HAD GIVEN ALL THE DETAILS OF THE SHARE APPLICANTS AND THEIR I.T.A. NO S . 1 213 / KOL ./201 2 & 797/KOL/2013 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 3 OF 5 IDENTITY, GENUINENESS AND CREDITWORTHINESS HAD BEEN SUBSTANTIALLY PROVED. IT WAS THE SUBMISSION THAT NO ADDITION IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED FROM THE VARIOUS PERSONS WAS LIABLE TO BE ASSESSED IN THE HA NDS OF THE ASSESSEE. 5. IN REPLY, LD. CIT, D.R. SUBMITTED THAT THE CREDITWORTHINESS OF THE SHARE APPLICANTS HAD NOT BEEN PROVED AND CONSEQUENTLY THE ADDITION HAD BEEN MADE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE WAS LI ABLE TO BE SUSTAINED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS GIVEN THE DETAILS OF THE PERSONS, WHO ARE SHARE APPLICANTS. ADMITTEDLY THE IDENTITY OF THE SHARE APPLICANTS HAS NOT BE EN DISPUTED. HOWEVER, THE CREDIBILITY MORE SO THE CREDITWORTHINESS OF THE SHARE APPLICANTS HAD BEEN DISPUTED BY THE ASSESSING OFFICER AS BEING NOT BEYOND DOUBT AND NOT BEING SATISFACTORILY PROVED. EVEN BEFORE THE LD. CIT(APPEALS), THE ASSESSEE HAS BEEN UNA BLE TO PROVE SATISFACTORILY THE CREDITWORTHINESS OF THE SHARE APPLICANTS. EVEN BEFORE US, THE ASSESSEE HAS NOT BEEN ABLE TO PLACE ANY SUBSTANTIAL EVIDENCE TO PROVE BEYOND DOUBT THE CREDITWORTHINESS OF THE SHARE APPLICANTS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(APPEALS) ON THIS ISSUE IS ON THE RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. CONSEQUENTLY THE ISSUE OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AS DISALLOWED BY THE ASSESSING OFFICER BY INVO KING THE PROVISIONS OF SECTION 69 AND THE CONFIRMATION OF THE SAME BY THE LD. CIT(APPEALS) STANDS CONFIRMED. 7. IN RESPECT OF THE AD HOC DISALLOWANCE OF 20% OF THE DIRECT EXPENSES, IT WAS SUBMITTED BY THE LD. A.R. THAT NO DEFECTS IN RESPECT OF THE DIRECT EXPENSES CLAIMED HAVE BEEN POINTED OUT BY THE REVENUE. IT WAS THE SUBMISSION THAT ALL THE DETAILS OF THE DIRECT EXPENSES HAD BEEN PRODUCED I.T.A. NO S . 1 213 / KOL ./201 2 & 797/KOL/2013 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 4 OF 5 BEFORE THE ASSESSING OFFICER . W ITHOUT GIVING ANY REASON , T HE ASSESSING OFFICER HAD DISALLOWED ON AN AD HOC BASIS @ 20 % ON THE DIRECT EXPENSES. IT WAS THE SUBMISSION THAT THE AD HOC DISALLOWANCE WAS LIABLE TO BE DELETED. 8. IN REPLY, LD. CIT, D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS DISALLOWED 20% OF THE DIRECT EXPENSES HOLDING THAT NO EVIDENCE OF THE EXPENSES WAS PRODUCED. HOWEVER, EARLIER PORTION OF THE ASSESSMENT ORDER TALKS OF THE LEDGER BEING PRODUCED AS ALSO THE BOOKS OF ACCOUNTS BEING PRODUCED. THE ASSESSING OFFICER HAS NOT POINTED OUT AS TO WHICH OF THE EXPENSES CLAIMED UNDER THE HEAD DIRECT EXPENSES WAS NOT SUBSTANTIATED WITH EVIDENCES. IN FACT, THE LEDGER ACCOUNT IN RESPECT OF THE DIRECT EXPENSES AS FOUND IN THE PAPER BOOK CLEARLY SHOWS THE QUANTITY, BILL NUMBER AND THE RATE OF EACH OF THE ITEMS PURCHASED. EVEN BEFORE THE LD. CIT(APPEALS), LD. CIT(APPEALS) HAS NOT FOUND ANY DEFECTS IN THE BOOKS. LD. CIT(APPEALS), HOWEVER, SAYS THAT NO BOOKS OF ACC OUNTS WAS PRODUCED AT ANY STAGE OF THE PROCEEDINGS. HOWEVER, A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS OTHERWISE. EVEN THE SEARCH ON THE ASSESSEE DID NOT UNEARTH ANY BOGUS CLAIM. IN THESE CIRCUMSTANCES, AS NO DEFECTS HAVE BEEN POINTED OUT IN RESPECT OF ANY OF THE DIRECT EXPENSES, THE AD HOC DISALLOWANCE IS NOT PERMISSIBLE AND CONSEQUENTLY THE SAID ADDITION STANDS DELETED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 1213/KOL./2012 STANDS PARTLY ALLOWED. 11 AS WE HAVE ALREADY DELETED THE ADDITION REPRESENTING AD HOC DISALLOWANCE OUT OF THE DIRECT EXPENSES AND HAVE CONFIRMED THE ADDITION REPRESENTING THE ADDITION ON ACCOUNT OF THE SHARE APPLICATION MONEY, I.T.A. NO S . 1 213 / KOL ./201 2 & 797/KOL/2013 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 5 OF 5 CONSEQUENTIAL REDUCTION WOULD TAKE PLACE IN THE APPEAL OF THE ASSESSEE IN ITA NO. 7 97/ KOL/2013 ALSO. 12 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA 7 97/KOL/2013 STANDS PARTLY ALLOWED. 13 . TO SUM UP, BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DEC EMBER , 2014. SD/ - SD/ - SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, THE 18 TH DAY OF DECEMBER, 2014 COPIES TO : (1) PRAPTI PROPERTIES PVT. LIMITED, 661, KASTURI NISASH, PANJABI PARA, SEVOK ROAD, SILIGURI - 734001 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2, JALPAIGURI, CENTRAL REVENUE BUILDING, NAYA BASTI RACE COURSE ROAD, JALPAIGURI - 735101, WEST BENGAL (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF I NCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S .