Sanjay Kumar Thakur, Ranchi V. ITO, Ranchi

ITA 143/RAN/2015

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9992 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: S K PODAR DEVESH PODAR
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 143/RAN/2015 ASSESSMENT YEAR : 2009 - 2010 SANJAY KUMAR THAKUR, M/S. OM ENTERPRISES, FLAT NO.2D, SHYAMA ENCLAVE, NEAR ARMY SCHOOL, BARIATU, RANCHI. VS. ITO, WARD 3(1), RANCHI PAN/GIR NO. ACGPT 4576 Q (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 14 /12/ 2016 DATE OF PRONOUNCEMENT : 14 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - RANCHI , DATED 29.7.2015 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD CIT(A) HAS PASSED ORDER ON 29.7.2015 AGAINST APPEAL NO.260/RAN/OTH/11 - 1 2 AND A SUM OF CREDITORS ARE UP HELD. 2. THAT MR K.L.PANDEY WAS CREDITORS AND OUR CONCERN HAS PURCHASED MATERIALS RS.87,143/ - BUT DUE TO NOT VERIFIED BY THE PROOF OF IDENTITY. HENCE, LD CIT(A) NOT GIVEN RELIEF RS .87,143/ - AND UPHELD. 3. THAT THE MR KAMLENDER SINGH ONE OF THE SUPPLIER OF OUR CONCERN AND RS.441,135/ - OUTSTANDING BALANCE ON 31.3.2009 BUT MR KAMLENDER 2 ITA NO. 143/RAN/2015 ASSESSMENT YEAR :2009 - 2010 SINGH SUPPLY MATERIAL RS.177,335/ - DURING THE FINANCIAL YEAR 2008 - 09 BUT LD CIT(A) PARTLY RELIEF AND RS.177,335/ - HAS UPHELD BY THE CIT(A). 4. THAT SATISH KUMAR, LATMA SINGH MORE, HATIA, RANCHI ONE OF THE SUPPLIER OF OUR CONCERN AND RS.194500 OUTSTANDING BALANCE ON 31.3.2009 BUT SATISH KUMAR SUPPLY MATERIAL RS.194500/ - DURING THE FINANCIAL YEAR 2008 - 09 BU T LD CIT(A) NOT JUSTIFIED AND UPHELD RS.194,500/ - . 5. THAT A.K.PANDEY NEAR PUTAMBARA PALACE, BOOTY MORE, RANCHI ONE OF THE SUPPLIER OF THE OUR CONCERN AND RS.631295 OUTSTANDING BALANCE ON 31.3.2009 BUT A.K.PANDEY SUPPLY MATERIAL RS.663000/ - AND PAID RS.92, 705 DURING THE FINANCIAL YEAR 2008 - 09 BUT LD CIT(A) NOT JUSTIFIED THE TRANSACTION AND NOT RELIEF RS.631,295/ - . 3. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT DURING THE YEAR, THE ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS.28,27,197/ - . THE ASSESSING OFFICER FURTHER OBSERVED THAT NO LIST OF CREDITORS IN THE AUDITED ACCOUNTS FOR THE IMMEDIATELY PREVIOUS YEAR HAS BEEN FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO OBSERVED THAT THERE WAS NO PAYMENT FOR A SUSTAINED PERIOD OF TIME TO SUPPLIERS OF STONE CHIPS, BOLDERS, BRICKS AND SANDS, WHICH COULD NOT BE ACCEPTED CONSIDERING THE NATURE OF SUCH SUPPLIES AND T HE SIZE OF ECONOMIC ACTIVITY OF THE SUPPLIERS . HENCE, HE ADDED RS.28,27,197/ - TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, LD CIT(A) SUSTAINED THE ADDITION PARTLY FOR RS.10,10,90,543/ - AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS.17,36,654/ - . BEING A GGRIEVED BY THE SAID ORDER OF LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE ME. 3 ITA NO. 143/RAN/2015 ASSESSMENT YEAR :2009 - 2010 5. LD A.R. OF THE ASSESSEE SUBMITTED THAT IN THE ASSESSMENT YEAR 2005 - 06, IN THE CASE OF AMITABH CONSTRUCTION PVT LTD. VS ACIT, THE HON'BLE JURISDICTIONAL JHARKHAND HIGH COURT IN TAX APPEAL NO.16 OF 2010 ORDER DATED 10.5.2011 HELD AS UNDER: 11. HOWEVER, SO FAR AS ASSESSMENT OF THE INCOME OF THE ASSESSEE IS CONCERNED, FOR THAT PURPOSE FEW FACTS ARE VERY RELEVANT AND WHICH ARE THAT THE TOTAL GROSS RECEIPT OF THE ASSESSEE WAS RS.4,5 1,01,011/ - THE DISCLOSURE OF HIS INCOME IS RS.14,13,624/ - AND INTERESTINGLY THIS INCOME WAS ACCEPTED BY THE ASSESSING OFFICER ITSELF WHICH IS APPARENT FROM THE ASSESSMENT ORDER. THEN THE ASSESSING OFFICER ADDED THE AMOUNT SHOWN IN THE ACCOUNTS OF SUNDRY CR EDITORS TO THE TUNE OF RS.1,59,90,274/ - AND ASSESSED THE TOTAL INCOME AS RS.1,74,03,900/ - MEANING THEREBY BY THIS ORDER OF ASSESSMENT THE ASSESSING OFFICER ACCEPTED THE BOOKS OF ACCOUNTS FOR THE PURPOSE OF FINDING OUT THE PROFIT SHOWN BY THE ASSESSEE TO BE CORRECT AS DISCLOSED IN THE RETURN AND THEREAFTER ADDED THE AMOUNT OF THE CREDIT SHOWN IN THE ACCOUNT OF SUNDRY CREDITORS. IN VIEW OF THE ABOVE IT APPEARS THAT THE ASSESSING OFFICER HAS PASSED THE CONTRADICTORY ORDER BY HOLDING THAT THE BOOKS OF ACCOUNTS ARE NOT RELIABLE WHILE DECIDING THE ISSUE OF SUNDRY CREDITORS BUT RELIED UPON THE RETURN FOR ACCEPTING PROFIT SHOWN TO BE CORRECT WHICH IS SUPPORTED BY THE BOOKS OF ACCOUNTS. THE OTHER FACT RELEVANT IS THAT FOR GROSS RECEIPT OF RS.4,51,01,011/ - THE ASSESSI NG OFFICER HAS NOT DECLARED THAT GROSS RECEIPT IS THE CORRECT FIGURE AND YET ADDED THE INCOME OF RS.1,59,90,274/ - MERELY AN ACCOUNT OF CASE ENTRIES. 12. IN THE FACTS OF THE CASE, THE ASSESSING OFFICER HAS COMMITTED AN ERROR OF LAW BY ADDING THAT AMOUNT U/ S 68 OF THE ACT OF 1961 STRAIGHTWAY MERELY BECAUSE OF THE REASON THAT THE GENUINENESS OF THE TRANSACTION SHOWN IN THE HEADING OF THE SUNDRY CREDITORS WAS NOT FOUND GENUINE. 13. IN VIEW OF THE ABOVE REASONS, FOLLOWING SECTION 145(3) THE ASSESSING OFFICER S HOULD HAVE PROCEEDED U/S 144 AND SHOULD HAVE FOLLOWED THE PROCEDURE OF ASSESSMENT OF THE TAX. 6. HE FURTHER SUBMITTED THAT AFTER THE ORDER PASSED BY THE ASSESSING OFFICER, SUBSEQUENTLY, THE ASSESSING OFFICER ESTIMATED THE INCOME BY APPLYING NET PROFIT RATE SHOWN BY THE ASSESSEE ON THE BALANCE OF SUNDRY CREDITORS AND SUSTAINED THE ADDITION TO THAT EXTENT. HENCE, HE SUBMITTED 4 ITA NO. 143/RAN/2015 ASSESSMENT YEAR :2009 - 2010 THAT THE PRECEDENT SHOULD BE FOLLOWED IN THE YEAR UNDER APPEAL IN THE CASE OF THE ASSESSEE. 7. LD D.R. COULD NOT CONTROVERT THE SUBMISSION OF LD A.R. OF THE ASSESSE BUT DUTIFULLY SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. I FIND THAT HON'BLE JURISDICTIONAL J HARKHAND HIGH COURT IN THE CASE OF AMITABH CONSTRUCTION PVT LTD (SUPRA) HAS HELD THAT AFTER THE ASSESSING OFFICER ACCEPTED THE INCOME SHOWN BY THE ASSESSEE MADE ADDITION OF SUNDRY CREDITORS, THE ASSESSING OFFICER HAS ACCEPTED THE NET PROFIT SHOWN BY THE AS SESSEE IN THE BOOKS OF ACCOUNT BUT HAS NOT ACCEPTED THE SUNDRY CREDITORS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. WITHOUT REJECTING THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS COMMITTED AN ERROR OF LAW BY ADD ING THE AMOUNT U/S.68 OF THE I.T.AC T 1961 STRAIGHTWAY MERELY BECAUSE OF THE REASON THAT THE GENUINENESS OF THE TRANSACTION SHOWN IN THE HEADING OF THE SUNDRY CREDITORS WAS NOT FOUND GENUINE. THE HON'BLE HIGH COURT HELD THAT THE ASSESSING OFFICER FOLLOWING SECTION 145(3), SHOULD HAVE PROCEED ED AND SHOULD HAVE FOLLOWED THE PROCEDURE OF ASSESSMENT OF THE TAX. I FIND THAT IN THE PRESENT YEAR OF APPEAL OF THE ASSESSEE, THE FACTS ARE IDENTICAL TO THE CASE OF AMITABH CONSTRUCTION PVT LD (SUPRA). THE ASSESSING OFFICER HAS ACCEPTED THE NET PROFIT A S PER PROFIT AND LOSS ACCOUNT OF RS.5,94,535/ - AND THEREAFTER, MADE ADDITION OF SUNDRY CREDITORS OF RS. 28,27,197/ - ON THE GROUND THAT THEY ARE NOT GENUINE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE HIGH 5 ITA NO. 143/RAN/2015 ASSESSMENT YEAR :2009 - 2010 COURT IN THE CASE OF AMITABH CONST RUCTION PVT LTD (SUPRA), I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO ASSESS THE INCOME OF THE ASSESSEE BY TAKING NET PROFIT AS PER PROFIT AND LOSS ACCOUNT OF RS.5,94,535/ - AND ADDITION OF RS.1,25,000/ - UNDER THE HEAD R EGISTRATION EXPENSES AND ADDITION OF RS.2 LAKHS ON ACCOUNT OF SUNDRY CREDITORS TO WHICH BOTH THE PARTIES HAVE AGREED DURING THE COURSE OF HEARING. HENCE, THE TOTAL INCOME OF THE ASSESSEE IS DETERMINED AT RS.9,19,535/ - . THUS, THE APPEAL OF THE ASSESSEE I S PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO N OUNCED IN THE OPEN COURT ON 14 /12/2016 IN THE PRESENCE OF PARTIES. S D / - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 14 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : SANJAY KUMAR THAKUR, M/S. OM ENTERPRISES, FLAT NO.2D, SHYAMA ENCLAVE, NEAR ARMY SCHOOL, BARIATU, RANCHI 2. THE RESPONDENT. ITO, WARD 3(1), RANCHI 3. THE CIT(A) RANCHI 4. CIT , ANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//