Shri Gopal Munghra, Surat V. The Income Tax Officer, Ward -2(4), Surat

ITA 1514/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0573 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI S.S. GODARA, JM, & SHRI MANISH BORAD , AM. ITA NO. 1514/AHD/2013 ASST. YEAR: 2008-09 SHRI GOPAL MUNGHRA, 3048, WORLD TRADE CENTRE, RING ROAD, SURAT. VS. ITO, WD-2(4), SURAT. APPELLANT RESPONDENT PAN AHRPM1568K APPELLANT BY SHRI M. K. PATEL, AR RESPONDENT BY SHRI PRASOON KABRA, SR.DR DATE OF HEARING: 15/9/2016 DATE OF PRONOUNCEMENT: 16/9/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL BY THE ASSESSEE FOR ASST. YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II, SURAT, DATED 28 .03.2013 VIDE APPEAL NO. CAS-II/465/2010-11 PASSED AGAINST ORDER U/S 143 (3) OF THE IT ACT, 1961 (IN SHORT THE ACT) FRAMED ON 23.12.2010 B Y ITO WD-2(4), SURAT. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL :- 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS AN INDIVIDUAL EARNING INCOME FROM PROVIDING SERVICES A S VALUER AND CONSULTING ENGINEER. RETURN OF INCOME WAS FOR ASST. YEAR 2008-09 WAS FILED ON 6.10.2008 DECLARING TOTAL INCOME AT RS .4,41,728/-. THE ITA NO. 1514/AHD/2013 ASST. YEAR 2008-09 2 CASE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CAS S. AFTER DISCUSSION INCOME WAS ASSESSED AT RS.7,01,587/- AFT ER MAKING ADDITION AT RS.2,59,859/- TOWARDS DISALLOWANCE OF E XPENSES AT RS.1,07,859/- AND UNEXPLAINED CASH CREDIT AT RS.1,5 2,000/-. WHEN THE MATTER CAME UP BEFORE LD. CIT(A) ASSESSEE COULD NOT PLACE ANY MATERIAL INFORMATION IN SUPPORT OF HIS GROUNDS TOWA RDS ADDITION OF RS.1,52,000/- U/S 68 OF THE ACT FOR UNEXPLAINED CAS H CREDIT AND THE SAME WAS THEREFORE, DISMISSED. AS REGARDS DISALLOW ANCE OF EXPENSES OF RS.1,07,587/- CALCULATED BY LD. ASSESSI NG OFFICER BY MAKING 20% DISALLOWANCE ON TOTAL EXPENSES OF RS.5,3 9,298/-. LD. CIT(A) PARTLY DELETED THE ADDITION BY SUSTAINING TH E DISALLOWANCE OF EXPENSES TO 10% I.E. @ 50%. 3. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. FIRST WE TAKE GROUND NO.1 WHICH READS AS UNDER : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER T O DISALLOW 10% OF VARIOUS EXPENSES WHICH WORK OUTTORS.53,929/-. 5. LD. AR SUBMITTED THAT EXPENDITURE OF RS.5,39,298 /- ARE GENERAL EXPENSES AND WERE INCURRED FOR DAY TO DAY BUSINESS PURPOSES. HOWEVER, LD. ASSESSING OFFICER MADE AD HOC DISALLOW ANCE AT 20%. 6. LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES . ITA NO. 1514/AHD/2013 ASST. YEAR 2008-09 3 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE OBSERVE THAT LD. ASSESSING OFFICER HA S JUST MADE AN AD HOC DISALLOWANCE TOWARDS ELEMENT OF PERSONAL EXPEND ITURE BUT COULD NOT PLACE ANY SPECIFIC FINDING TO DISPROVE THE CLAI M OF THE ASSESSEE. THIS AD HOC DISALLOWANCE WAS FURTHER RESTRICTED TO 10%. IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IN ORDER TO MEET THE ENDS OF JUSTICE, A DISALLOWANCE OF RS. 26965 BEING 5% OF RS.5,39,298/- WILL BE SUFFICIENT TO COVER THE PERSO NAL ELEMENT OF EXPENDITURE. WE ACCORDINGLY DO SO. AS A RESULT, THI S GROUND IS PARTLY ALLOWED. 8. GROUND NO.2 READS AS UNDER 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS. 1,52,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDI T U/ S.68 OF THE I.T. ACT. 9. DURING THE COURSE OF ASSESSMENT PROCEEDINGS LD. ASSESSING OFFICER OBSERVED THAT UNSECURED LOAN OF RS.1,52,000 /- WAS SHOWN. ON GOING THROUGH THE DETAILS IT WAS OBSERVED THAT U NSECURED LOAN IN CASH OF RS.19,000/- EACH FROM 8 PARTIES WERE TAKEN DURING THE YEAR. HOWEVER, ASSESSEE WAS UNABLE TO FURNISH ANY DETAIL TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE A FORESAID DEPOSITORS. FURTHER BEFORE LD. CIT(A) ALSO NOTHING WAS FURNISHED BY THE ASSESSEE TOWARDS IDENTITY, GENUINENESS AND CRED ITWORTHINESS OF THE CREDITORS OF RS.1,52,000/-. NOW WHEN THE ASSESS EE IS IN APPEAL ITA NO. 1514/AHD/2013 ASST. YEAR 2008-09 4 BEFORE THE TRIBUNAL, LD. AR COULD NOT MAKE ANY CONT ENTION TO SUPPORT THE GROUND TAKEN IN THE APPEAL. 10. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT AGAINST THE IMPUGNED ADDITI ON MADE BY LD. ASSESSING OFFICER AND FURTHER CONFIRMED BY LD. CIT( A) TOWARDS CASH CREDIT OF RS.1,52,000/- U/S 68 OF THE ACT LD. AR HA S NOTHING TO SUBSTANTIATE IN ORDER TO PROVE THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE UNEXPLAINED CASH CREDIT OF RS.1, 52,000/- IS NOT PROVED. WE FIND NO REASON TO INTERFERE WITH THE ORD ER OF LD. CIT(A). THIS GROUND IS DISMISSED. 12. GROUND NOS. 3 & 4 ARE OF GENERAL NATURE, WHICH NEED NO ADJUDICATION. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH SEPTEMBER, 2016 SD/- SD/- (S.S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 16/9/2016 MAHATA/- ITA NO. 1514/AHD/2013 ASST. YEAR 2008-09 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 15/09/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 16/09/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK:1 6/9/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: