RAM AVTAR PAREEK, Jaipur V. ITO, Jaipur

ITA 129/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2156 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 09-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Rejection of books of accounts; Depreciation
• Section: 44AD; 143(3); 68; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 129/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. M/S RAM A VTAR PAREEK, 4F, NATRAJ COLONY, TONK ROAD, JAIPUR. CUKE VS. THE ITO, WARD-6(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABFR 6301 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.04.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/04/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-2, JAIPUR DATED 24.12.2014 PERTAINING TO A.Y. 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING REVISED GROUN DS OF APPEAL :- 1. THE LD. AO ERRED IN FACTS AND LAW BY APPLYING P ROVISIONS OF SECTION 145(3), WHEREAS ALL THE MATERIAL FACTS REQUIRED AT THE TIME HEARING IS PROVIDED WITH THIRD PARTY EVIDENCE. 2. THE LD. AO ERRED IN FACTS AND LAW BY DISALLOWIN G DEPRECIATION TO THE TUNE OF RS. 323450.00 ON BUILDING MACHINERY FOR WAN T OF EVIDENCE FOR PURCHASE OF BUILDING MACHINERY WHEREAS SAME HAS BEE N BROUGHT FORWARD FROM PREVIOUS YEAR/S AND NOT ACQUIRED DURIN G THE YEAR UNDER CONSIDERATION AND IN PREVIOUS YEARS RETURN HAS BEEN FILED U/S 44AD WHICH NOT REQUIRED TO SHOW THESE SEPARATELY. 3. THE LD. AO ERRED IN FACTS AND LAW BY MAKING ADDI TION OF RS. 4.00 LACKS CASH DEPOSITED OUT OF BOOKS AS UNEXPLAINED. 4. THE COMMISSIONER APPEALS ERRED IN FACTS AND LAW BY DIRECTING AO TO INCREASE THE INCOME BY RS. 28.00 LACKS U/S 68 AS UN DISCLOSED CASH BALANCE WHEREAS SAME WAS NO WHERE GROUND OF APPEAL BEFORE HIM. 2 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. 5. THE APPELLANT CRAVES RIGHT TO ADD, ALTER, OR AME ND ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO. 1. THE REVENUE H AS NO OBJECTION. THE GROUND NO.1 OF THE ASSESSEES APPEAL IS DISMISSED HAS NOT PRESSED. 3. GROUND NO. 4, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 4. GROUND NO. 5 IS PRAYER OF AWARDING COST OF THE A SSESSEE. THE ASSESSEE HAS NOT MADE ANY SUBMISSION WITH REGARD TO AWARDING OF COST. THEREFORE THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 5. THE ONLY GROUND ARE TO BE ADJUDICATED IS GROUND NOS. 2 AND 3. 6. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT, T HE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T WAS FRAMED UNDER SECTION 143(3) OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDER DATED 25.10.2011. WHILE FRAMING THE ASSESSMENT, THE AO AF TER NOTICING VARIOUS DEFECTS REJECTED THE BOOKS OF ACCOUNTS OF ESTIMATING NET PR OFIT @ OF 10%. FURTHER, THE ASSESSING OFFICER ALSO MADE DISALLOWANCE OF DEPRECI ATION OF RS. 3,23,450/- AND MADE ADDITION IN RESPECT OF OPENING CASH BALANCE OF RS. 34 LAKHS. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS CONFIRMED THE DISALLOWANCE OF DEPRECIAT ION, REJECTION OF BOOKS OF ACCOUNTS AND REDUCED THE ADDITION OUT OF RS. 34 LAK HS BY SUSTAINING AMOUNT OF RS. 28 LAKHS. AGGRIEVED BY THIS, THE ASSESSEE IS IN PR ESENT APPEAL. 7. GROUND NO. 2 OF THE ASSESSEES APPEAL IS WITH RE GARD TO CONFIRMING THE DISALLOWANCE OF CLAIM DEPRECIATION TO THE EXTENT OF RS. 3,23,450/-. THE LD. COUNSEL 3 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. THE WRITTEN SYNOPSIS ARE REPRODUCED AS UNDER: FACTS AND SUBMISSION :- 1. DURING THE YEAR ASSESSEE CLAIMED DEPRECIATION OF RS .3,46,571/- WHICH INCLUDE DEPRECIATION OF RS. 23,121/- ON MARUTI CAR AND DEPR ECIATION OF RS. 3,23,450/- ON BUILDING MACHINERY (SHUTTERING MATERIAL). ASSESS EE WAS REQUIRED TO PRODUCE EVIDENCE IN RESPECT OF ASSETS ACQUIRED TO V ERIFY THEIR EXISTENCE AND THE YEAR OF ACQUISITION. THE EVIDENCE IN RESPECT O F CAR PURCHASED DURING THE YEAR WAS FURNISHED BUT NO EVIDENCE FOR PURCHASE OF BUILDING MACHINERY WAS PRODUCED. ACCORDINGLY, ASSESSEE WAS REQUIRED TO SH OW CAUSE AS TO WHY DEPRECIATION OF RS. 3,23,450/- SHOULD NOT BE DISALL OWED IN RESPECT OF BUILDING MACHINERY. 2. ASSESSEE VIDE LETTER DT. 12.10.2011 (PB 18-19) SUBM ITTED THAT SHUTTERING MATERIAL (BUILDING MACHINERY) WAS PURCHASED GRADUAL LY IN EARLIER YEARS SINCE AY 1998-99 AND SINCE RETURN WAS FILED U/S 44AD IN E ARLIER YEARS, DETAILS OF FIXED ASSETS WERE NOT SHOWN IN THE RETURN. FURTHER , COPY OF WORK ORDER AWARDED & EXECUTED DURING THE YEAR UNDER CONSIDERAT ION IN WHICH MAJOR WORK IS RCC IN WHICH SHUTTERING MATERIAL (BUILDING MACHI NERY) IS USED WAS ALSO PROVIDED. NO HIRE CHARGES HAS BEEN CLAIMED IN THE P & L A/C ON THIS TYPE OF MACHINERY WHICH SHOWS THAT ASSESSEE IS HAVING SUCH ASSETS WHICH IS BEING USED FOR EXECUTION OF WORK. HOWEVER, AO DID NOT AC CEPT THE CONTENTION OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE HAS NOT P RODUCED ANY EVIDENCE OF HAVING SHUTTERING MATERIAL. SECTION 44AD DOES NOT SAY THAT EVIDENCE FOR FIXED ASSETS ARE NOT REQUIRED OR WILL HAVE NO RELEVANCE I N FUTURE ALSO. IT IS ACCEPTED THAT ASSESSEE HAS NOT CLAIMED ANY SHUTTERING HIRE C HARGES BUT THAT DOES NOT PROVE THE EXISTENCE OF SHUTTERING MATERIAL OWNED B6 Y THE ASSESSEE. CONSIDERING THE YEARS TURNOVER AND OF PRECEDING YE ARS, THE REQUIREMENTS OF KEEPING SHUTTERING MATERIAL AMOUNTING TO RS. 21,56, 630/- CANNOT BE ACCEPTED. THUS, IN THE ABSENCE OF ANY EVIDENCE, AS SESSEES CLAIM OF DEPRECIATION OF RS. 3,23,450/- ON BUILDING MACHINER Y IS NOT ALLOWED. 4 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. 3. THE LD. CIT(A) CONFIRMED THE DISALLOWANCE BY HOLDIN G THAT THE ONLY DETAILS GIVEN BY THE APPELLANT IN SUPPORT OF THE CLAIM OF D EPRECIATION IS THE DEPRECIATION CHART OF THIS YEAR WHICH MERELY STATES THAT THE OPENING BALANCE OF THE PLANT & MACHINERY IS RS. 21,56,630/-. NO EV IDENCE OR DETAILS HAS BEEN SUBMITTED IN RESPECT TO THE ABOVE OPENING BALANCE. NO WORKING SHOWING HOW THIS OPENING BALANCE HAS BEEN ARRIVED AT HAS BEEN S UBMITTED. ALSO NO DEPRECIATION CHART OF THE PRECEDING YEARS HAVE BEEN SUBMITTED WHICH COULD JUSTIFY THE COMPUTATION OF THE OPENING BALANCE. TH E CONTENTION OF THE ASSESSEE THAT IT WAS FILING RETURN U/S 44AD PRIOR T O THIS YEAR DOES NOT SHOW AS TO HOW HE HAS ARRIVED AT THE FIGURE OF THE OPENING BALANCE. 4. IT IS SUBMITTED THAT ASSESSEE IS A CIVIL WORK CONTR ACTOR AND IS ENGAGED IN THIS BUSINESS SINCE 1997. THE TURNOVER OF THE ASSESEE R ANGES FROM RS. 2 LACS TO RS. 33 LACS. THE SHUTTERING MATERIAL(BUILDING MACH INERY) IS PURCHASED IN PARTS AS PER THE REQUIREMENT OF BUSINESS ON YEAR TO YEAR BASIS. COPY OF WORK ORDER AWARDED & EXECUTED DURING THE YEAR UNDER CONSIDERAT ION IN WHICH MAJOR WORK IS RCC IN WHICH SHUTTERING MATERIAL(BUILDING MACHIN ERY) IS USED WAS PROVIDED BY THE ASSESSEE VIDE LETTER DT. 12.10.2011 (PB 18-1 9). THUS, LOOKING TO THE NATURE OF BUSINESS AND QUANTUM OF TURNOVER, THE OWN ERSHIP OF SUCH ASSET AND THE AMOUNT OF OPENING WDV OF SUCH ASSET CANNOT BE D OUBTED MORE PARTICULAR WHEN THE ASSESSEE HAS NOT CLAIMED ANY HIRE CHARGED IN THE P & L A/C ON THIS TYPE OF MACHINERY. THE DEPRECIATION CHART OF PREVI OUS YEAR HAS ALSO BEEN PROVIDED WHICH SHOW THAT THESE ARE BROUGHT FORWARD FROM EARLIER YEARS. IN EARLIER YEARS, THE ASSESSEE WAS FILING THE RETURN U /S 44AD WHICH DOES NOT REQUIRE MAINTENANCE OF BOOKS OF ACCOUNTS AND THUS T HE EVIDENCE OF PURCHASE OF SUCH ASSETS COULD NOT BE PRODUCED. HOWEVER, LOO KING TO THE REASONABLENESS OF THE CLAIM THE DEPRECIATION BE DIR ECTED TO BE ALLOWED. 7.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT, THERE IS NOT ILLEGA LITY INTO THE ORDER OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN A FINDING THAT 5 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. NO EVIDENCE HAS BEEN FURNISHED IN RESPECT OF ASSESS EES CLAIM OF DEPRECIATION, IN RESPECT OF BUILDING AND MACHINERY. THE LD. DR SUBM ITTED THAT NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. CIT(A), ANY EV IDENCE WAS PLACED BY THE ASSESSEE IN SUPPORT OF THE CLAIM OF THE DEPRECIATIO N. HE SUBMITTED EVEN BEFORE THIS TRIBUNAL NO SUCH EVIDENCE HAS BEEN PLACED. THEREFO RE, THE LD. CIT(A) HAS RIGHTLY SUSTAINED THE DISALLOWANCE. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE AUTHORITIES BELOW. THE LD. CI T(A) HAS DECIDED THE ISSUE BY OBSERVING AS UNDER: 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THIS IS A CASE W HERE THE APPELLANT HAS BEEN DISCLOSING PROFIT U/S 44AD PRIOR TO THIS Y EAR. IN THIS YEAR, THE ASSESSEE HAS SHOWN OPENING BALANCE OF BUILDING, MAC HINERY AND CAR AT RS. 21,56,630/- AND HAS CLAIMED DEPRECIATION ON THE SAME AT RS. 3,23,450/-. THE ONLY DETAIL GIVEN BY THE APPELLANT IN SUPPORT OF THE ABOVE CLAIM OF DEPRECIATION IS THE DEPRECIATION CHA RT OF THIS YEAR WHICH MERELY STATES THAT THE OPENING BALANCE IN THIS YEAR FOR THE ABOVE PLANT AND MACHINERY IS RS. 21,56,630/-. NO EVIDENCE OR DE TAILS WHATSOEVER HAS BEEN SUBMITTED IN RESPECT TO THE ABOVE OPENING BALANCE. IN FACT NO WORKING SHOWING HOW THIS OPENING BALANCE HAS BEE N ARRIVED AT, HAS BEEN SUBMITTED. ALSO, NO DEPRECIATION CHARS OF THE PRECEDING YEARS HAVE BEEN SUBMITTED WHICH WOULD JUSTIFY THE COMPUTA TION OF THE OPENING BALANCE OF RS. 21,56,630/-. THE CONTENTION THAT HE WAS FILING RETURN OF INCOME U/S 44AD PRIOR TO THIS YEAR, DOES NOT SHOW AS TO HOW HE HAS ARRIVED AT THE FIGURE OF THE OPENING BALANCE . IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION OF DISALLOWANCE OF D EPRECIATION MADE BY THE ASSESSING OFFICER IS UPHELD. GROUND NO. 3 IS DI SMISSED. 7.4 THE ABOVE FINDING OF THE LD. CIT(A) WAS NOT CON TROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE BY PLACING ANY MATERIAL EVIDENCE I N SUPPORT OF HIS CLAIM OF THE DEPRECIATION. THEREFORE, IN OUR CONSIDERED VIEW, T HE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION. THERE FORE, WE DO NOT SEE ANY REASON 6 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THUS, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 8. GROUND NO. 3 IS AGAINST CONFIRMING THE ADDITION OF RS. 4 LAKHS AND ENHANCING THE SAME BY 28 LAKHS U/S 68 OF THE ACT. THE LD. CO UNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SYNOPSIS. TH E SUBMISSIONS ARE REPRODUCED AS UNDER: FACTS AND SUBMISSION:- 1. AO OBSERVED THAT ASSESSEE HAS DEPOSITED RS. 4 LACS IN THE BANK ACCOUNT OPENED IN THE NAME OF PARTNER ON 17.11.2008. THE A SSESSEE EXPLAINED THAT THE SAME IS OUT OF OPENING CASH BALANCE AS ON 01.04.08 OF RS. 34 LACS. 2. THE AO VIDE SHOW CAUSE NOTICE DT. 05.10.2011 (PB 15-17) REQUIRED THE ASSESSEE TO EXPLAIN THAT AS TO WHY THIS AMOUNT SHOU LD NOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE AS IN THE RETURN FOR AU 07-08 & 08-09 FILED U/S 44AD, COLUMN WHICH REQUIRES THE DETAILS O F CASH BALANCE AT THE CLOSE OF THE YEAR HAS BEEN LEFT BLANK. DETAILS OF GROSS RECEIPTS, PROFIT, SUNDRY DEBTORS, CREDITORS SHOWN IN ROI FOR BOTH THE PRECEDING AYS SHOWS THAT THE FIRM COULD NOT HAVE RS. 4 LACS A OPEINING CASH BALANCE AS ON 01.04.2008. THE OPENING CASH BALANCE SHOWN BY THE FIRM IS BASELESS. IN RESPONSE TO SAME, ASSESSEE VIDE REPLY DT. 12.10.201 1 (PB 18-19) EXPLAINED THAT COLUMN WHICH REQUIRES DETAILS OF CLO SING CASH BALANCE IN THE RETURN FOR AYS 07-08 & 08-09 HAS BEEN LEFT BLANK BY MISTAKE. THE ASSESSEE IS RUNNING ITS PARTNERSHIP BUSINESS SINCE AY 1998-99 AND IT IS NATURAL THAT HE IS HAVING SOME CASH BALANCE. HOWEV ER, AO HELD THAT THE ARGUMENT OF ASSESSEE THAT THE FIRM IS IN EXISTENCE SINCE 1998-99 IS NOT SUFFICIENT TO PROVE PROBABILITY OF CASH BALANCE TO THE EXTENT OF RS. 34 LACS. THE POSSIBILITY OF FIRM HAVING TURNOVER OF BARELY R S. 1 LACS OR RS. 2 LACS IN THE LAST COUPLE OF YEARS TO HAVE CASH BALANCE OF RS . 34 LACS IS BEYOND 7 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. IMAGINATION. ACCORDINGLY, HE TREATED RS. 4 LACS AS UNEXPLAINED INCOME OF ASSESSEE U/S 68 OF THE ACT. 3. THE LD. CIT(A) HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW HOW THIS HUGE CASH BALANCE HAS BEEN BROUGHT FORWARD AS ON 1 ST APRIL. THE AMOUNT OF PROFIT DISCLOSED IN THE PRECEDING YEARS CANNOT R ESULT IN HUGE CASH BALANCE OF RS. 34 LACS. MOREOVER IN THE RETURN OF I NCOME FOR AY 07-08 & 08-09, THIS HUGE CASH BALANCE HAS NOT BEEN DISCLOSE D IN THE COLUMN. ACCORDINGLY, HE CONFIRMED THE ADDITION OF RS. 4 LAC S BY TREATING IT AS UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT. 4. THE LD. CIT(A) FURTHER VIDE SHOW CAUSE NOTICE DT. 1 1.11.2014 REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY THE OPENING CASH BALA NCE SHOULD NOT BE TAXED U/S 68 AS LOOKING TO THE PROFIT DISCLOSED IN THE PRECEDING YEARS, IT DOES NOT SUPPORT THE OPENING CASH BALANCE OF RS. 34 LACS. IN RESPONSE TO SAME, ASSESSEE VIDE LETTER DT. 10.12.2014 EXPLAINED THAT CAPITAL ACCOUNT FOR THE YEAR ENDED 31.03.08 SHOWS THE CAPITAL BALAN CE OF RS. 33.50 LACS AND BANK BALANCE AS ZERO WHICH SHOWS THAT WHATEVER BALANCE WAS IN CAPITAL ACCOUNT IS AVAILABLE AS CASH WITH THE FIRM. FURTHER, PARTNERS OF THE FIRM ARE ALSO DOING THE AGRICULTURAL ACTIVITY ON TH EIR 40 BIGHAS AGRICULTURE LAND AT KUCHAMAN CITY AND HAVING ANNUAL INCOME OF R S. 4-5 LACS WHICH IS ALSO INVESTED IN THE FIRM. 5. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE INITIALLY STATED THAT THIS OPENIN G CASH BALANCE OF RS. 34 LACS WAS ON ACCOUNT OF PROFITS OF THE FIRM OF THE P RECEDING YEARS BUT NOT IT IS STATING THAT THE SOURCE OF THIS OPENING CASH BAL ANCE IS THE CAPITAL OF THE PARTNER TOTALING TO RS. 33,50,778/- AND THE AGRICUL TURE INCOME, WHEREAS NO SUCH CASH BALANCE HAS BEEN DISCLOSED IN THE RETURNS OF INCOME FOR AY 07- 08 & 08-09. IT IS THEREFORE, DIFFICULT TO FATHOM T HAT THE APPELLANT FIRM WOULD CARRY AN ACCOUNTED BALANCE OF RS. 34 LAKHS IN CASH FOR A LONG PERIOD OF TIME ESPECIALLY WHEN IT HOLDS A BANK ACCOUNT SIN CE 2006. NO DETAILS HAS BEEN FURNISHED WITH RESPECT TO THE SOURCE OF THE OP ENING CASH BALANCE OF RS. 34 LACS INTRODUCED IN THE BOOKS OF ACCOUNTS ON 01.04.08 EXCEPT THE 8 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. CAPITAL ACCOUNT OF THE PARTNERS WHICH IS FOUND NOT SATISFACTORY. ACCORDINGLY, SINCE AN AMOUNT OF RS. 4 LACS HAS ALRE ADY BEEN ADDED BY THE AO WHICH HAS BEEN UPHELD AND LOOKING TO THE TURNOVE R & THE PAST PROFITS OF THE APPELLANT FIRM, AN OPENING CASH BALANCE OF R S. 2 LACS IS A FAIR ESTIMATE, THE REMAINING AMOUNT OF %RS. 28 LACS IS A DDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 6 ON ACCOUNT OF UNEXPLAI NED OPENING CASH BALANCE. THUS, THE LD. CIT(A) ENHANCED THE ADDITIO N OF RS. 4 LACS MADE BY THE AO TO RS. 32 LACS. 6. IT IS SUBMITTED THAT THE FINDING OF THE LD. CIT(A) THAT THE ASSESSEE INITIALLY STATED THAT OPENING CASH BALANCE OF RS. 34 LACS WAS ON ACCOUNT OF PROFITS OF THE FIRM IN THE PRECEDING YEAR IS INCORRECT. AS SESSEE NOWHERE STATED SO. THE OPENING CASH BALANCE WAS BOTH OUT OF THE E ARLIER YEARS INCOME AND OUT OF CAPITAL INTRODUCED BY THE PARTNERS OUT O F THEIR AGRICULTURE INCOME WHICH AS ON 31.03.08 STOOD AT RS. 33,50,778/ -. ONLY BECAUSE IN THE RETURN FOR AY 07-08 & 08-09 FILED U/S 44 AD, DE TAILS OF CASH BALANCE AT THE END OF THE YEAR HAS NOT BEEN SHOWN CANNOT BE A GROUND FOR MAKING THE ADDITION. THE ASSESSEE HAS BEEN CARRYING ON TH E BUSINESS FROM LAST 10-12 YEARS AND THUS THE AVAILABILITY OF CASH AS ON 01.04.200 OF RS. 34 LACS CANNOT BE SAID TO BE UNREASONABLE. OTHERWISE ALSO, WHERE BOOKS OF ACCOUNT OF ASSESSEE HAD BEEN REJECTED, SAME BOOKS O F ACCOUNT COULD NOT BE RELIED UPON FOR MAKING THE ADDITION. FOR THIS R ELIANCE IS PLACED ON THE FOLLOWING CASES:- CIT VS. G.K. CONTRACTOR 19 DTR 305 (RAJ.) (HC) AO HAVING ESTIMATED THE PROFIT BY APPLYING A HIGHER NET PROFIT RATE TO TOTAL CONTRACT RECEIPTS AFTER REJECTING ASSESSEES BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF S. 145(3), NO SEPARATE ADDITION C AN BE MADE ON ACCOUNT OF CASH CREDIT UNDER S. 68 EVEN THOUGH THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF PROOF IN EXPLAINING THE AMOUN T SHOWN IN THE BOOKS OF ACCOUNT AS MARKET OUTSTANDING. CIT VS. BAHUBALI NEMINATH MUTTIN (2016) 388 ITR 608 (KAR.)(HC) 9 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. WHERE BOOKS OF ACCOUNT OF ASSESSEE HAD BEEN REJECTE D BY ASSESSING AUTHORITY, SAME BOOKS OF ACCOUNT COULD NOT BE RELIE D UPON IN AN ADDITION ON ACCOUNT OF TRADE CREDITORS AND ALSO FOR ARRIVING AT CLOSING STOCK. 7. IT IS ALSO SUBMITTED THAT IN THE CASH BOOK, OPENING BALANCE AS ON 01.04.2208 IS SHOWN AT RS. 34,45,431/-. THUS, THIS BALANCE IS COMING FROM THE LAST YEAR. IT IS NOT THE CASE OF THE AO T HAT THIS AMOUNT IS CREDITED IN THE BOOKS OF ACCOUNTS ON 01.04.2008. T HUS, NO ADDITION FOR THIS AMOUNT CAN BE MADE IN THE YEAR UNDER CONSIDERA TION AS IT IS BROUGHT FORWARD AMOUNT OF PREVIOUS YEAR. FURTHER, THE LD. CIT(A) HAS MADE THE ADDITION U/S 68. THE CASH BALANCE IS AN ASSET OF A FIRM AND NOT A LIABILITY AND THEREFORE SEC. 68 IS OTHERWISE NOT APPLICABLE. 8.1 THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSE SSEE IS THAT, WHEN THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED NO SEPARATE ADDITION CAN BE MADE ON ACCOUNT OF CASH CREDIT U/S 68. IN SUPPORT OF THIS, THE LD. CO UNSEL FOR THE ASSESSEE HAS RELIED UPON THE JUDGMENT OF THE HONBLE RAJSTHAN HIGH COUR T RENDERED IN THE CASE OF CIT VS. G. K. CONTRACTOR 19 DTR 305 (RAJ.)(HC). THE LD . COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE JUDGMENT OF THE HONBLE KARNATAKA H IGH COURT RENDERED IN THE CASE OF CIT VS. BAHUBALI NEMINATH MUTTIN (2016) 388 ITR 608 (KAR.) (HC). 8.2 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT LD. CIT(A) WAS JUSTI FIED IN SUSTAINING THE ADDITION. HE SUBMITTED THAT THE CLAIM OF THE ASSESSEE IS THAT , WITH REGARD TO OPENING BALANCE FOR THIS THE ASSESSEE IS REQUIRED TO PROVE THE CLOS ING BALANCE OF THE LAST YEAR. THE ASSESSEE HAS NOT PLACED ANY MATERIAL ON RECORD, SUG GESTING THAT, THERE WAS ANY CLOSING BALANCE IN THE LAST YEAR. THE LD. DR HAS R ELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT REPORTED IN THE CASE OF COMMI SSIONER OF INCOME TAX VS. DEVI PRASAD VISHNUNATH PRASAD 72 ITR 194 (SC) AND 56 ITR 01 (SC), IN SUPPORT OF THE 10 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. CONTENTION THAT EVEN THE BOOKS OF ACCOUNTS ARE REJE CTED. THE ADDITION OF ACCOUNT OF CASH CREDIT CAN BE MADE. 8.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTE NDED THAT, AFTER REJECTION OF BOOKS OF ACCOUNT NO ADDITION CAN BE MADE RELYING ON THE BOOKS OF ACCOUNTS. HOWEVER, THE LD. DEPARTMENTAL REPRESENTATIVES HAS R ELIED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF COMMI SSIONER OF INCOME TAX VS. DEVI PRASAD VISHNUNATH PRASAD 72 ITR 194(SC). IT IS FOR THE ASSESSEE TO PROVE THAT EVEN IF THE CASH CREDIT REPRESENTS INCOME IT IS THE INCO ME FROM A SOURCE WHICH HAS ALREADY BEEN TAXED IN THE PRESENT CASE, THE ASSESSEE HAS NO T PROVED THAT THE VERACITY OF THE OPENING BALANCE. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSEESSEE. HENCE, WE DO NOT SEE, A NY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 129/JP/2015 IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 27TH DAY OF APRIL 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27 /04/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S RAMAVTAR PAREEK, TONK ROAD, JAIPUR. 2. THE RESPONDENT THE ITO, WARD-6(2), JAIPUR. 3. THE CIT(A). 11 ITA NO. 129/JP/2015 M/S RAMAVTAR PAREEK, JAIPUR. 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 129/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR