Sudhakar Motiram Kadam, Solapur V. Income-tax Officer, Ward - 1 (4), Pandharpur

ITA 1397/PUN/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6796 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-02-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 20-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ELSY MATHEW ACIT
• Assessee Lawyers: PRATIK B SANDBHOR
• Keywords: Additional evidence; Agreed addition
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL , VICE PRESIDENT . / ITA NO.1 397 /PUN/2019 / ASSESSMEN T YEA R : 20 07 - 08 SUDHAKAR MOTIRAM KADAM KADAM NIWAS, PATIL VASTI, A/P AKLUJ, SOLAPUR 413101 PAN : A JUPK3907D .... / APPELLANT / V/S. THE INCOME TAX OFFICER , WARD 1(4), PANDHARPUR / RESPONDENT A SSESSEE BY : SHRI PRATIK B. SANDBHOR REVENUE BY : SMT. ELSY MATHEW, ACIT / DATE OF HEARING : 0 6 . 0 2 .20 20 / DATE OF PRONOUNCEMENT : 07 .0 2 .2020 / ORDER PER R.S. SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(APPEALS) - 9 , PUNE ON 1 7 .0 6 .2019 IN RELATION TO THE ASSESSMENT YEAR 20 07 - 08 . 2. THE FIRST ISSUE RAISED IN THE APPEAL IS AGAINST CONFIRMATION OF ADDITION OF RS.2,69,000 / - MADE BY THE ASSESSING 2 ITA NO. 1 397 /PUN/20 1 9 A.Y. 20 07 - 08 OFFICER (AO) U/S 68 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE I S A CIVIL CONTRACTOR CARRYING OUT THE BUSINESS IN THE NAME AND STYLE OF M/S. S.M. K ADAM. RETURN WAS FILED DECLARING TOTAL INCOME AT RS.9,40,760/ - . IN THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT SUNDRY CREDITORS TO THE TUNE OF RS.50,86,860/ - WERE APPEARING IN THE ASSESSEES BALANCE SHEET. ON BEING CALLED UPON TO FURNISH CONFIRMATI ON S FROM THE SUNDRY CREDITORS, THE ASSESSEE FURNISHED ALL EXCEPT IN THE CASE OF M/S. YASHODA CONSTRUCTION WITH OUTSTANDING AMOUNT OF RS.2,69,000/ - . THE AO MADE THE ADDITION. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE TIME LIMIT PROVIDED BY TH E AO WAS TOO SHORT FOR ENABLING HIM TO FILE NECESSARY CONFIRMATIONS. THE ASSESSEE FURNISHED COPIES OF PROFIT AND LOSS ACCOUNT AND BALANCE SHEET OF M/S. YASHODA CONSTRUCTION, IN WHICH THE ASSESSEE WAS SHOWN AS A DEBTOR FOR RS.2,69,000/ - . THE LD. CIT(A) CA LLED FOR A REMAND REPORT FROM THE AO WHO HARPED ON RULE 46A OF THE INCOME - TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES) FOR MAKING OUT A CASE FOR THE REJECTION OF THE ADDITIONAL EVIDENCE. WITHOUT PREJUDICE , T HE AO ALSO REFERRED THE MATTER TO TH E CONCERNED AO OF THE PROPRIETOR OF M/S. YASHODA CONSTRUCTION . THE OTHER AO ENDORSED THE VIEW THAT THE RETURN WAS FILED I N TIME. HE HOWEVER, EXPRESSED INABILITY TO FURNISH THE NECESSARY RECORD WHICH WE RE MORE THAN 10 YEARS OLD. THE LD. 3 ITA NO. 1 397 /PUN/20 1 9 A.Y. 20 07 - 08 CIT(A), CONSIDERIN G THE REMAND REPORT , CHOSE TO CONFIRM THE ADDITION. AGGRIEVED THEREBY, THE ASSESSEE HAS APPROACHED THE TRIBUNAL. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE ASSESSEE DECLARED , INTER - ALIA, LOAN CREDIT OF RS.2,69,000/ - IN THE NAME OF M/S. YASHODA CONSTRUCTION. THOUGH, THE RELEVANT EVIDENCE WAS NOT FILED AT THE ASSESSMENT STAGE BECAUSE OF PAUCITY OF TIME, THE ASSESSEE DID FURNISH COPY OF RETURN OF M/S. YASHODA CONSTRUCTION ALONG W ITH PROFIT AND LOSS ACCOUNT AND BALANCE SHEET , INDICATING THAT THE SAID CREDITOR HAD ACKNOWLEDGED SUCH A BALANCE RECEIVABLE FROM THE ASSESSEE, WHICH WA S ALSO REFLECTED IN HIS BALANCE SHEET. ONCE THE CREDITOR HAD ADMITTED THE TRANSACTION AND ALSO INCORPORA TED THE SAME IN HIS ACCOUNTS, THE RE REMAINED NOTHING MORE TO PROVE THE GENUINENESS OF THE TRANSACTION , MORE SO , WHEN THE AO OF THE CREDITOR ALSO DID NOT RAISE ANY DOUBT OVER IT . CONSIDERING THE ABOVE FACTS, I ORDER TO DELETE THE ADDITION. 5. THE ONLY OT HER GROUND IS AGAINST CONFIRMATION OF AD HOC DISALLOWANCE OF RS.25,000/ - OUT OF EXPENSES. 6. THE FACTS A PROPOS THIS GROUND ARE THAT THE ASSESSEE DEBITED RS.92,65,070/ - TOWARDS S ALARY TO LABOURERS. T HE AO FOUND CERTAIN INFIRMITIES IN THE DETAILS FURNISH ED IN AS MUCH AS THE EXPENSES WE RE MOSTLY BACKED B Y SELF - MADE VOUCHERS. T HE ASSESSEE AGREED FOR AD HOC DISALLOWANCE OF RS.25,000/ - BEFORE 4 ITA NO. 1 397 /PUN/20 1 9 A.Y. 20 07 - 08 THE AO , WHICH ADDITION WAS MADE AND CAME TO BE COUNTENANCED IN THE FIRST APPEAL. NOW THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF SUCH AN ADDITION. 7. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSEE HAD RECORDED RS.92,65,070/ - TOWARDS SALARY TO LABOURERS , WHICH EXPENSES WE RE NOT PROPERLY BACKED BY EXTERNAL VOUCHERS. WHEN CONFRONTED, THE ASSESSEE AGREED FOR AN AD HOC DISALLOWANCE OF RS.25,000/ - DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY CONSIDERING THE MAGNITUDE OF TOTAL EXPENSES VIS - - VIS EXPENSES NOT PROPERLY SUPPO RTED BY VOUCHERS. THIS BEING A FACTU AL ADMISSION BY THE ASSESSEE, C ANNOT BE RAKED UP IN THE APPELLATE PROCEEDINGS. THOUGH, THERE IS NO LEGAL BAR ON CHALLENGING AN AGREED ADDITION, BUT THE FACT OF THE MATTER IS THAT A VALID CHALLENGE CAN BE LAID BEFORE THE APPELLATE AUTHORIT IES ONLY IF SUCH AN ADMISSION BEFORE THE AO WAS NOT IN CONSONANCE WITH LAW . IF , ON THE OTHER HAND, AN ADMISSION IS BASED PURELY ON FACTUAL MATRIX , THEN THE ASSESSEE CANNOT CHALLENGE THE SAME BEFORE THE APPELLATE AUTHORITIES WITHOUT TH ERE BEING ANY CONTRARY EVIDENCE . T HE REASON IS OBVIOUS THAT WHEN AN ASSESSEE AGREES FOR AN ADDITION, THE AO DOES NOT PROCEED FURTHER IN HIS EXAMINATION ON THAT ISSUE AND CLOSE S IT BY RECORDING THE CONCESSION OF THE ASSESSEE. THE LATER CHALLENGE TO SUCH AN ADMISSION DE HORS ANY CONTRARY EVIDENCE CANNOT BRING THE ARMS OF THE CLOCK BACK ENABLING THE AO TO CONTINUE FROM THE STAGE WHERE HE LEFT THE ISSUE ON THE ASSESSEE AGREEING FOR THE SURRENDER. IN SUCH A SCENARIO, THE ASSESSEE CANNOT BE ALLOWED TO RESILE FROM THE AGREED ADDITION MADE BEFORE THE AO I N THE BACKDROP OF A PURE FACTUAL PANORAMA . THE EXTANT ADDITION, BEING AN AGREED ADDITION ON PURELY 5 ITA NO. 1 397 /PUN/20 1 9 A.Y. 20 07 - 08 FACTUAL ASPECTS WITHOUT ANY THING CONTRA RY , CANNOT , ERGO, BE INTERFERED WITH. I, THEREFORE, COUNTENANC E THE IMPUGNED ORDER ON THIS SCORE. THIS GROUND FAILS. 8 . IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRO NOUNCED ON 7 TH DAY OF FEBRU ARY , 20 20 . SD/ - R.S. SYAL /VICE - PRESIDENT / PUNE; / DATED : 7 TH FEBR UARY , 20 20 . GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT 3. THE CIT (APPEALS) - 9 , PUNE . 4. THE PR. CIT - 6 , PUNE . 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE 6 ITA NO. 1 397 /PUN/20 1 9 A.Y. 20 07 - 08 * * DATE 1 DRAFT DICTATED ON 0 6 . 0 2 .20 20 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 0 6 . 0 2 .20 20 SR. PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 DATE OF UPLOADING OF ORDER SR. PS/PS 8 FILE SENT TO BENCH CLERK SR. PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER