Mohammed Rafique, V. ITO,

ITA 1214/BANG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90008 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DHIVAHAR J
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER A ND SHRI JASON P.BOAZ, ACCOUNTANT MEMBER ITA NO. 1214 / BANG/20 13 (ASSESSMENT YEAR: 20 0 9 - 10 ) MR. MOHAMMED RAFIQQUE, CONTRACTOR, MUTT ROAD, BALEHONNUR. APPELLANT PAN:ADHPR9411J VS. INCOME - TAX OFFICER, WARD - 1, CHIKMAGALUR. RESPONDENT APPELLANT BY: SHRI H.GURUSWAMY, ITP. RESPONDENT BY: SHRI P.DHIVAHAR, JCIT(DR). DATE OF HEARING : 22/06/2015 DATE OF PRONOUNCEME NT: 10 /0 7 /2015 O R D E R PER SMT. P. MADHAVI DEVI, JM: THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), MYSORE, DATED 19/03/2013 FOR THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THE APPELLATE ORDER DATED 19/03/2013 IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO . 1 214 /BANG/2 0 1 3 MR. MOHAMMED RAFIQQUE. PAGE 2 OF 5 2. THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.11,90,468/ - BEING THE AD HOC ADDITION MADE BY DISALLOWANCE OF 10% OF LABOUR WITHOUT APPRECIATING THE FACT THAT THE ADDITION LIABLE TO BE MADE WAS ONLY RS.1,30,468/ - AS PER THE FINDINGS OF THE LD.AO. 3. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS), MYSORE HAS ERRED IN UPHOLDING THE ASSESSMENT ORDER COMPLETED UNDER SECTION 144 OF THE ACT WHICH IS OPPO SED TO THE ACCEPTED PRINCIPLES OF JUDICIAL DECISIONS. 4. THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS), MYSORE, HAS ERRED IN CONFIRMING THE ADDITION OF RS.21,55,292/ - HELD BY THE ITO AS INCOME FOR UNPROVED LIABILITY CLAIMED TO BE PAYABLE TO THE CREDITO RS WITHOUT APPRECIATING THE FACT THAT THE LIABILITY WAS NOT AN UNEXPLAINED CASH CREDIT FOUND IN THE BOOKS OF ACCOUNT OF THE APPELLANT. 5. THE LD.CIT(A), MYSORE WAS NOT JUSTIFIED TO HOLD THAT THE APPELLANT HAS NOT DISCHARGED HIS ONUS IN RESPECT OF THE ID ENTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR WITHOUT APPRECIATING THE FACT THAT THE SAID CONDITIONS ARE APPLICABLE ONLY IN RESPECT OF CASH FOUND CREDITED IN THE BOOKS OF ACCOUNT OF APPELLANT AND NOT APPLICABL E TO THE PART OF EXPENDITURE SHOWN AS LIABILITY PAYABLE. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING. 2. GROUNDS NO.1 AND 6 ARE GENERAL IN NATURE AND NEED NO ADJUDICATION. AS REGA RDS GROUND NOS. 2 TO 5 ARE CONCERNED, BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PWD CONTRACTOR AND FILED HIS RETURN OF INCOME ON 13/09/2009 DECLARING AN INCOME OF RS.6,43,840/ - . THE RETURN WAS INITIALLY PROCESSED U/S 143(1) ON 20/09/2010 AND SUBS EQUENTLY TAKEN UP FOR SCRUTINY. DURING THE ITA NO . 1 214 /BANG/2 0 1 3 MR. MOHAMMED RAFIQQUE. PAGE 3 OF 5 SCRUTINY PROCEEDINGS U/S 143(3) OF THE ACT , THE ASSESSING OFFICER (AO) ISSUED VARIOUS NOTICES TO THE ASSESSEE BUT THERE WAS NO COMPLIANCE FROM THE ASSESSEE AND THEREFORE THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT IN SHORT]. DURING THE 144 ASSESSMENT, THE AO OBSERVED THAT A SUM OF RS.21,55,292/ - WAS SHOWN AS SUNDRY CREDITORS AND THE ASSESSEE HAS ONLY FURNISHED A LIST OF SUNDRY CREDITORS BUT NO CONFIRMA TION S FROM THEM WERE FILED. HE, THEREFORE, TREATED IT AS UNPROVED LIABILITY AND BROUGHT IT TO TAX. FURTHER, THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED LABOUR CHARGES OF RS.1,19,04,689/ - BUT NO EVIDENCE WITH REGARD TO THE SAME WAS FILED. HE, THEREFORE , DISALLOWED 10% OF THE LABOUR CHARGES WHICH WORKED OUT TO RS.11,90,468/ - AND SINCE HE HAD DISALLOWED A SUM OF RS.10,60,000/ - ON ACCOUNT OF UNPROVED CREDITORS OF LABOUR PAYMENT, HE BROUGHT THE DIFFERENCE OF RS.1,30,468/ - TO TAX. HOWEVER, IN THE COMPUTATIO N OF INCOME, THE AO ADDED THE SUM OF RS.11,90 ,468/ - AS WELL AS RS.1,30,468/ - 3. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE SAME AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. AS REG ARDS GROUND NO.2 WITH REGARD TO THE ADDITION OF RS.11,90,468/ - IS CONCERNED, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED AN APPLICATION U/S 154 BEFORE THE AO AGAINST THE DOUBLE ADDITION AND THAT THE SAME IS ITA NO . 1 214 /BANG/2 0 1 3 MR. MOHAMMED RAFIQQUE. PAGE 4 OF 5 PENDING CONSIDERATIO N BY THE AO AND THEREFORE THE ASSESSEE DOES NOT WISH TO PRESS GROUND NO.2 AT THIS STAGE . AS REGARDS GROUND NOS.3 TO 5 ARE CONCERNED, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE COULD NOT FURNISH NECESSARY DETAILS BEFORE THE AO OR THE CIT(A ) BUT HAS NOW FILED ALL THE DETAILS BEFORE US IN THE FORM OF PAPER BOOK ALONG WITH AN APPLICATION UNDER RULE 29 OF THE ITAT RULES FOR ADMISSION OF THE SAID EVIDENCE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT CONFIRMATION S OF THE RESPECTIVE CREDI TORS CLEARLY SHOW THAT THE LIABILITIES WERE REPAID BY CHEQUE S ON VARIOUS DATES IN 2009. THEREFORE THEY GO TO THE ROOT OF THE MATTER AND NEED TO BE CONSIDERED. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, OPPOSED ADMISSION OF THE ADDITIONAL EVIDENC E AND PLACED RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW AS REGARDS THE CONFIRMATION OF THE ADDITION. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD CLAIMED VARIOUS PAR TIES AS SUNDRY CREDIT ORS BUT HAD NOT FILED THE IR CONFIRMATION S EITHER BEFORE THE AO OR THE CIT(A). HOWEVER, BEFORE US, CONFIRMATION S FROM THE SAID SUNDRY CREDITORS ARE FILED WHEREIN IT IS CONFIRMED THAT THE LIABILITY HAS BEEN REPAID BY THE ASSESSEE BY VARIOUS CHEQUES AND THE CHEQUE NUMBERS ARE ALSO GIVEN ALONG WITH DATES. WE FIND THAT THESE PAYMENTS WERE MADE IN 2009 I.E. PRIOR TO THE ITA NO . 1 214 /BANG/2 0 1 3 MR. MOHAMMED RAFIQQUE. PAGE 5 OF 5 ASSESSMENT ORDER DATED 26/12/2011. THEREFORE, WE ARE OF THE OPINION; THAT THOUGH THE CONFIRMATIONS ARE OBTAINED SUBSEQUENTLY IN 2014, SINCE P AYMENTS WERE MAD E EVEN PRIOR TO THE ASSESSMENT, THESE EVIDENCES NEED TO BE CONSI DERED BY THE AO IN THE INTEREST OF JUSTICE. IN VIEW OF THE SAME, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND REMAND THE ISSUE TO THE FILE OF THE AO FOR RECONSID ERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING AND THE ASSESSEE SHALL CO - OPERATE WITH THE AO BY PROVIDING ALL THE NECESSARY DETAILS, IF ANY, FURTHER REQUIRED BY THE AO 6. IN THE RESU LT, THE ASSESSEE S APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRO N OUNCED IN THE OPEN COURT ON 10 TH JULY , 201 5 . S D/ - SD/ - (JASON P BOAZ ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER E KSRINIVASULU COPY T O: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE