The ACIT, Circle-2, RAJKOT-GUJARAT V. Shri Jayantkumar M. Doshi, RAJKOT-GUJARAT

ITA 1260/RJT/2010

• Counselvise Citation: 126024914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JM SAHAY
• Assessee Lawyers: RANJIT LALCHANDANI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI D. K. SHRIVAS TAVA (AM) ITA NOS. 1260,1261 & 1262/RJT/2010. (ASSESSMENT YEARS 2003-04, 2004-05 & 2007-08) THE ASSTT.C.I.T., VS SHRI JAYANTKUMAR MOTICHAND D OSHI, CIR.-2, RAJKOT. ILLA VILLA, ASHAPURA ROAD, B/H. KARANSINHJI SCHOOL, RAJKOT. PAN:ABIPD9933E. (APPELLANT) (RESPONDENT) C.O. NO.08/RJT/2011. (ASSESSMENT YEAR 2007-08) SHRI.JAYANTKUMAR MOTICHAND DOSHI VS. THE ASSTT. C.I .T., ILLA VILLA, ASHAPURA ROAD, CIR.-2, RAJKOT. B/H. KARANSINHJI SCHOOL, RAJKOT. PAN:ABIPD9936B. (APPELLANT) (RESPONDENT) DATE OF HEARING : 12-03-2012. DATE OF PRONOUNCEMENT : 23-03-2012. REVENUE BY : SHRI J. M. SAHAY, D.R. ASSESSEE BY : SHRI RANJIT LALCHANDANI, O R D E R PER BENCH THESE THREE APPEALS BY THE REVENUE FOR THE A.YS. 2 003-04, 2004-05 AND 2007-08 RESPECTIVELY AND CROSS OBJECTION BY THE ASSESSEE FOR A.Y. 2007-08 ARE AGAINST THE ORDER DATED 31-08-2010 OF CIT (A)-I II, RAJKOT WERE HEARD ON THE SAME DATE, ARGUED BY COMMON REPRESENTATIVE. THEREF ORE, THESE ARE DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE YEARWISE GROUNDS RAISED BY THE REVENUE IN IT S APPEAL ARE AS UNDER:- A. Y. 2003-04:- (I) THE LD. CIT(A)-III HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.1,80,00,000/- CREDITED AS LABOUR INC OME AND TREATED AS INCOME EARNED OUT OF UNDISCLOSED SOURCES. ITA NO 1260 TO 1262/RJT/2010 & CO 08-RJT-2011 2 (II) THE LD. CIT(A)-III HAS ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE OF RS.1,78,15,440/- MADE ON ACCOUNT OF INTEREST EXPENSES. (III) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. A. Y. 2004-05:- (I) THE LD. CIT(A)-III HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.1,79,01,000/- CREDITED AS LABOUR INC OME AND TREATED AS INCOME EARNED OUT OF UNDISCLOSED SOURCES. (II) THE LD. CIT(A)-III HAS ERRED IN LAW AND ON FAC TS IN DELETING THE DISALLOWANCE OF RS.1,74,65,359/- MADE ON ACCOUNT OF INTEREST EXPENSES. (III) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. A. Y. 2007-08:- (I) THE LD. CIT(A)-III HAS ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.67,00,000/- CREDITED AS LABOUR INCOM E AND TREATED AS INCOME EARNED OUT OF UNDISCLOSED SOURCES. (II) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. 3. THE ONLY GROUND OF CROSS-OBJECTION BY THE ASSESS EE FOR THE A.Y. 2007-08 IS AS UNDER:- (1) THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N HOLDING THAT THE CHARGING OF INTEREST WAS CONSEQUENTIAL. ON THE FACT S AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCO ME TAX (APPEALS) SHOULD HAVE DELETED THE SAME. ITA NO 1260 TO 1262/RJT/2010 & CO 08-RJT-2011 3 4. BRIEFLY STATED THE FACTS ARE THAT IN ALL THE THR EE ASSESSMENT YEARS UNDER APPEAL, IN THE ASSESSMENT ORDER, AO TREATED THE INC OME DERIVED FROM LABOUR AS INCOME EARNED OUT OF UNDISCLOSED SOURCES AND DISALL OWED THE INTEREST EXPENSE CLAIMED AMOUNT TO RS.1,78,15,440/-. ON APPEAL, IN THE IMPUGNED ORDER LD. CIT(A) FOLLOWING THE DECISION OF TRIBUNAL IN ASSESS EES OWN CASE IN ITA NO.298/RJT/2008 DATED 13-11-2008 IN THE ASSESSEES CASE FOR A.Y.2005-06 HELD THAT INCOME DERIVED FROM LABOUR IS ASSESSABLE UNDER THE HEAD BUSINESS INCOME AND EXPENSES INCURRED TO EARN THIS INCOME A RE ALLOWABLE AGAINST THE SAID INCOME. AGGRIEVED WITH THE ORDERS OF LD. CIT( A) FOR ALL THE THREE ASSESSMENT YEARS, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE OUTSET, SHRI RANJIT LALCHANDANI APPEARED ON BEHALF OF THE ASSESSEE POINTED OUT THAT BOTH THE ISSUES INVOLVED IN ALL TH E THREE APPEARS OF THE REVENUE ARE COVERED IN FAVOUR OF THE ASSESSEE BY DECIDE OF TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 IN THE RELEVANT ITAT IN ITA N O.298/RJT/2008, DATED 13-11- 2008. HE FURTHER POINTED OUT THAT HONBLE GUJARAT HIGH COURT, IN TAX APPEAL NO.612 OF 2009, DATED 26-07-2010 FOR THE A.Y. 2005- 06 UPHELD THE VIEW TAKEN BY THE TRIBUNAL IN THIS REGARD. THUS, NOW THE MATER I S COVERED BY ORDER OF HONBLE GUJARAT HIGH COURT IN ASSESSEES OWN CASE. 6. SHRI J. M. SAHAY, D.R. APPEARED FOR THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE ASSESSEE. 7. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT RE ASONING GIVEN BY AO FOR ALL THE THREE ASSESSING YEARS FOR TREATING LABOUR INCOME AS UNDISCLOSED INCOME U/S.68 AND CONSEQUENTLY, DISALLOWING EXPENSES THEREFROM AR E SIMILAR TO THE ASSESSMENT YEAR 2005-06. IN THE IMPUGNED ORDER, THE LD.CIT(A) HAS FOLLOWED THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 2005-06 AND HELD THAT THE INCOME DERIVED FROM LABOUR IS INCOME OF BUSINESS AND EXPENSES INCURRED TO EAR THIS INCOME ARE ALLOWABLE AGAINST T HIS INCOME. WE THEREFORE, DO ITA NO 1260 TO 1262/RJT/2010 & CO 08-RJT-2011 4 NOT FIND ANY INFIRMITY WITH THE VIEW TAKEN BY THE L D. CIT(A). HENCE, WE INCLINED TO INTERFERE. 8. THE CROSS-OBJECTIONS FOR THE A.Y. 2007-08 WERE N OT PRESSED BY THE LD. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING THER EFORE, THESE ARE DISMISSED BEING NOT PRESSED. 9. IN THE RESULT, THE APPEALS OF THE REVENUE AND CR OSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN THE OPEN COURT ON 23-03-20 12. SD/ SD/- ( D. K. SHRIVASTAVA ) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 23-03-2012. NVA/- COPY TO: 1. THE ASSTT. CIT, CIR.-2, RAJKOT. 2. SHRI JAYANTKUMAR MOTICHAND DOSHI, RAJKOT. 3. THE CIT-II, RAJKOT 4. THE CIT-(A-)III, RAJKOT 5. THE DR, I.T.A.T., RAJKOT 6. THE GUARD FILE. (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT