Mansukhbhai Virjibhai Vekaria, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(3), RAJKOT-GUJARAT

ITA 132/RJT/2012

• Counselvise Citation: 13224914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 11-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: J C RANPURA CA S

Judgement Text

I , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. 6 . . R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 1 3 2/RJT/2012 V V / ASSESSMENT YEAR 200 5 - 06 MANSUKHBHAI VIRJIBHAI VEKARIA PROP. M/S. KHODIYAR METAL 2 - 3, JAY INDUSTRIAL ESTATE, VERAVAL (SHAPAR). PAN : ABQPV4410J ( / APPELLANT) THE INCOME - TAX OFFICER, WARD - 1 (3), R AJKOT. R / RESPONDENT VAS / ASSESSEE BY SHRI J. C. RANPURA, , CA. 6 S / REVENUE BY SHRI K. C. MATHEWS, DR. S / DATE OF HEARING 11 - 06 - 2013 S / DATE OF PRONOUNCEMENT 14 - 06 - 2013 / ORDER 6 . . , R / T. K. SHARMA, J. M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 22 - 02 - 2012 OF CIT (A) - II, RAJKOT FOR THE ASSESSMENT YEAR 200 5 - 06. 2. THE VARIOUS GROUNDS RAISED IN THIS APPEAL ARE AS UNDER: - 1. THE GROUND S OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - II, RAJKOT [HEREINAFTER REFERRED TO AS THE CIT (A)] WAS NOT JUSTIFIED IN DISMISSING THE APPEAL IN LIMELINE HOLDING THAT APPELLANT HAS NOT SUBMITTED DETAILS. 3. THE LEARNED CIT (A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF RS.3,39,121/ - MADE U/S. 68 OF THE ACT ON ACCOUNT OF ALLEGED UNEXPLAINED UNSECURED LOANS. THE A D DITION MAY KINDLY BE DELETED. ITA 1 3 2 - 201 2 2 4. THE LEARNED CIT (A) E RRED ON FACTS AS ALSO IN LAW IN CONFIRMING DISALLOWANCE OF RS.3,118/ - FROM PETROL AND MISC. EXPENDITURE. THE DISALLOWANCE MAY KINDLY BE DELETED. 5. THE LEARNED CIT (A) ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING ADDITION OF RS.3 0 , 000 / - ON ACCOUNT OF ALLE GED LOW HOUSEHOLD WITHDRAWALS. THE ADDITION MAY KINDLY BE DELETED. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF ASSESSEE SHRI J. C. RANPURA, CA APPEARED AND CONTENDED THAT THE GROUND NOS.4 AND 5 ARE NOT PRESSED. 4. WITH REGARD TO GROUND NO.3, COUNS EL OF THE ASSESSEE POINTED OUT THAT AO MADE THE ADDITION OF RS.3,39,121/ - U/S.68 OF THE I.T. ACT, 1961 AS THE ASSESSEE FAILED TO FURNISH DETAILS WITH CONFIRMATION FROM THE FOLLOWING THREE PARTIES: - SR.NO. PARTICULARS OPENING BALANCE (RS) CLOSING BALANCE RS .) 1. BIPINBHAI R. VEKARIA 1,13,041/ - 1,13,041/ - 2. JAYANTIBHAI R. VEKARIA 1,13,040/ - 1,13,040/ - 3. KANTILAL R. VEKARIA 1,13,040/ - 1,13,040/ - 5. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT AO MADE THE ABOVE ADDITION WITHOUT PROPER VERIFICATION OF THE RECORD. FROM THE BALANCE SHEET ON RECORD, IT IS APPARENT THAT ASSESSEE WAS CARRYING ON BUSINESS WITH AFORESAID THREE PERSONS IN PARTNERSHIP FIRM VIZ. KHODIYAR METAL. THE SAID FIRM WAS DISSOLVED IN 2003 AND AFORESAID PERSONS WERE RETIRED FROM THE FIRM AND PARTNERSHIP FIRM BECAME PROPRIETORSHIP CONCERN OF THE ASSESSEE. AFTER THE DISSOLUTION OF THE FIRM, THE AMOUNT STANDING AS CREDIT IN CAPITAL ACCOUNTS OF THE RETIRING PARTNERS WERE REFLECTED AS UNSECURED LOANS PAYABLE SINCE LAST TWO YEARS. HE SUBMITTE D THAT IN FACT NO NEW UNSECURED LOANS WERE TAKEN FROM THE RETIRING PARTNERS THEREFORE ADDITION OF RS.3,39,121/ - MADE BY AO U/S.68 OF THE I.T. ACT, 1961 BE DELETED. ALTERNATIVELY, THE MATTER BE RESTORED TO THE FILE OF AO FOR VERIFICATION. 6. ON THE OTHER HAND, SHRI K. C. MATHEWS, LD. DR POINTED OUT THAT SINCE NONCOMPLIANCE WAS MADE BEFORE THE AO, THE VIEW TAKEN BY LD. CIT (A) CONFIRMING THE ADDITION OF RS.3,39,121/ - U/S. 68 OF THE I.T. ACT, 1961 BE UPHELD. ITA 1 3 2 - 201 2 3 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTHORITIES BELOW. IT IS WELL SETTLED LAW THAT IN RESPECT OF OPENING BALANCE, NO ADDITION CAN BE MADE U/S.68 OF THE I.T. ACT, 1961. THE FACTS POINTED OUT BY LD. COUNSEL OF THE ASSESSEE NEED VERIFICATION AT THE END OF THE AO. WE THEREFORE, RESTORE THE ADDITION OF RS.3,39,121/ - MADE BY AO U/S.68 TO THE FILE OF AO WITH THE DIRECTION THAT ASSESSEE SHALL FURNISH THE NECESSARY DOCUMENT. AO WILL VERIFY THE SAME AND RE - ADJUDICATE THE ADDITION OF RS.3,39,121/ - AFRESH IN ACCORDANCE WITH LAW. THE GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSE. 8. THE GROUND NOS. 4 AND 5 ARE BEING DISMISSED AS NOT PRESSED. 9. THE REMAINING GROUNDS OF APPEAL ARE BEING DISMISSED AS NOT PRESSED. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF TH E ASSESSEE IS PARTLY ALLOWED. 1 1 . THIS O RDER IS PRONOUNCED IN OP EN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . P6 D. K. SRIVASTAVA ) ( . . V / T. K. SHARMA) / ACCOUNTANT MEMBER 6 / JUDICIAL MEMBER / ORDER DATE 14 - 0 6 - 2013. /RAJKOT NVA/ - 4 PRJO O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE INCOME - TAX OFFICER, WARD - 1 (3), RAJKOT. 2 . R / RESPONDENT - MANSUKHBHAI VIRJIBHAI VEKARIA, PROP. M/S. KHODIYAR METAL, 2 - 3, JAY INDUSTRIAL ESTATE, VERAVAL (SHAPAR). 3 . I T / CONCERNED CIT - I, RAJKOT. 4 . T - / CIT (A) - II, RAJKOT. . 5 . I , I , / DR, ITAT, RAJKOT 6 . V / GUARD FILE. / BY ORDER TRUE COPY. SENIOR PRIVATE SECRETARY, ITAT, RAJKOT