KUSUM SINGH, ALLAHABAD V. INCOME TAX OFFICER, WARD-1(2), ALLAHABAD

ITA 156/ALLD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4007 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 06-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Capital asset; Principle of natural justice; Additional evidence; Wrong claim; Bogus
• Section: 133(6); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD SMC BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA NOS.156/ALLD/2019 ASSESSMENT YEAR: 2015-16 KUSUM SINGH, R/O LIDDLE ROAD ROAD, GEORGE TOWN, ALLAHABAD, U.P. PAN-AUCPS4501L V. INCOME TAX OFFICER, WARD-1(2), ALLAHABAD (APPELLANT) (RESPONDENT) APPELLANT BY: MR. ASIT HAJELA, C.A. RESPONDENT BY: MR. A.K. SINGH, SR. DR DATE OF HEARING: 12.08.2021 DATE OF PRONOUNCEMENT: 07.10.2021 O R D E R VIJAY PAL RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.09.2019 OF CIT(A), ALLAHABAD FOR THE ASSESSMENT YEAR 2015-16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1.1) BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING A SUM OF RS. 14,10,000/- FOR ALLEGED PAYMENT OF MARGIN MONEY. 1.2) BECAUSE NO PAYMENT OF MARGIN MONEY SHOWN IN LOAN PROPOSAL TO BANK WAS MADE TO THE SUPPLIERS, NO ADDITION WAS CALLED FOR. 2.) BECAUSE THE CIT HAS ERRED IN LAW AND ON FACTS IN ENHANCING THE ADDITION TO RS. 15,38,880/- FROM RS. 14,10,000/- IN CONTRAVENTION OF SECTION 251 OF THE INCOME TAX ACT, 1961. 3.1) BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 4,21,290/- ON ACCOUNT OF PAYMENT TO M/S SPARK ENGINEERS, PUNE. 3.2) BECAUSE THE PAYMENT MADE TO M/S SPARK ENGINEERS, PUNE AMOUNTING TO RS. 9,70,000/- FOR FABRICATION OF TWO LPG TANKERS WAS AGAINST INVOICES AMOUNTING TO RS. 4,21,290/- AND RS. 5,48,710/-, NO INCOME AROSE, HENCE, NO ADDITION WAS CALLED FOR. ITA NO.156/ALLD/2019 KUSUM SINGH 2 4.) BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DISCUSSING ADDITIONAL EVIDENCES SUBMITTED UNDER RULE 46A OF THE INCOME TAX RULES, 1962, IN THE FORM OF COPY OF ACCOUNTS FORM THE SUPPLIERS. 5.) BECAUSE WHILE CONFIRMING THE ADDITIONS THE CIT(A) DID NOT CONSIDER THE SUBMISSIONS FILED BY THE APPELLANT IN RESPONSE TO THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER. 6.) BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO LAW, FACTS AND PRINCIPLES OF NATURAL JUSTICE. 2. GROUND NOS. 1 TO 3 ARE REGARDING ADDITION MADE BY THE ASSESSING OFFICER OF RS. 14,10,000/- AND RS. 04,21,290/- ON ACCOUNT OF UNEXPLAINED PAYMENT OF MARGIN MONEY AND EXCESS PAYMENT FOR PURCHASE OF TWO LPG TANKERS WHICH WAS CONFIRMED BY THE CIT(A) TO THE EXTENT OF RS. 15,38,880/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE PURCHASED TWO LPG TANKERS BY TAKING LOAN FROM ORIENTAL BANK OF COMMERCE, JOHNSTONGANJ, ALLAHABAD. THE ASSESSEE HAS CLAIMED THE TOTAL COST OF PURCHASE OF TWO LPG TANKERS AT RS. 50,50,000/- OUT OF WHICH RS. 50,00,000/- WAS PAID FROM THE LOAN TAKEN FROM ORIENTAL BANK OF COMMERCE, ALLAHABAD AND THE BALANCE OF RS. 50,000/- WAS PAID IN CASH. THE ASSESSING OFFICER NOTED VARIOUS DISCREPANCIES IN THE COST OF LPG TANKERS AS SHOWN IN THE QUOTATION SUBMITTED BY THE ASSESSEE TO THE BANK WITH THE LOAN PROPOSAL / APPLICATION IN COMPARISON TO THE PAYMENT CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE BASED ON THE SUBSEQUENT BILLS PRODUCED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE PAYMENT OF MARGIN MONEY OF RS. 14,10,000/- AS UNDERTOOK BY THE ASSESSEE AT THE TIME OF APPLYING FOR LOAN. AS PER THE QUOTATIONS SUBMITTED BY THE ASSESSEE FOR TAKING THE LOAN FROM BANK, THE TOTAL COST OF THE TANKERS WAS SHOWN AT RS. 64,60,000/- OUT OF WHICH THE MARGIN MONEY OF RS. 14,60,000/- WAS TO BE PAID BY THE ASSESSEE AND BALANCE OF RS. 50,00,000/- WAS THE LOAN AMOUNT SANCTIONED BY THE BANK. SINCE THE ASSESSEE HAS PAID RS. 50,000/- IN CASH THEREFORE, THE ASSESSING OFFICER NOTED THAT THE BALANCE OF RS. 14,10,000/- REMAINED UNEXPLAINED. APART FROM THE UNEXPLAINED PAYMENT OF RS. 14,10,000/- AS A MARGIN MONEY FOR PURCHASE OF TWO LPG TANKERS, THE ASSESSING OFFICER ALSO NOTED THAT THE ASSESSEE CLAIMED TO HAVE PAID RS. 9,70,000/- TO M/S SPARK ENGINEERING FOR FABRICATION OF THE ITA NO.156/ALLD/2019 KUSUM SINGH 3 TANKERS BUT AN AMOUNT OF RS. 4,21,290/- IS NOT SUPPORTED BY THE VALID BILLS. THE BILLS PRODUCED BY THE ASSESSEE AFTER THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER WERE TREATED AS BOGUS WITHOUT ACTUAL EXPENDITURE INCURRED BY THE M/S SPARK ENGINEERING AND THE ALLEGED MATERIAL USED IN THE FABRICATION WORK. THE ASSESSING OFFICER CONDUCTED AN ENQUIRY FROM THE SUPPLIER AND FOUND THAT THE FABRICATOR HAS NOT PRODUCED AN EVIDENCE TO SHOW THAT THE MATERIAL TO THE TUNE OF RS. 4,21,290/- WAS PROCURED AND USED IN THE PROCESS OF THE FABRICATION OF THE TANKERS. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 14,10,000/- ON ACCOUNT OF MARGIN MONEY AND RS. 4,21,290/- TOWARDS BOGUS CLAIM OF BILLS ISSUED BY M/S SPARK ENGINEERS. 2.1 ON APPEAL, THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE BEFORE CIT(A) AND CONTENDED THAT THE ASSESSING OFFICER HAS NOT CONFRONTED THE ASSESSEE WITH THE RECORD OBTAINED FROM THE SUPPLIER BY ISSUING NOTICE UNDER SECTION 133(6) OF THE ACT. THE MATERIAL RECEIVED BY THE ASSESSING OFFICER IN RESPONSE TO NOTICE UNDER SECTION 133(6) WAS USED AGAINST THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER AFTER CONSIDERING THE ADDITIONAL EVIDENCE AND CONTENTION OF THE ASSESSEE IN THE REMAND REPORT, THE ASSESSING OFFICER REITERATED ITS STAND AND ARGUED FOR THE CONFIRMATION OF THE ADDITIONS. THE CIT(A) AFTER CONSIDERING THE REMAND REPORT CONFIRMED THE TOTAL ADDITION OF RS. 15,38,880/- AS AGAINST THE TWO ADDITIONS OF RS. 14,10,000/- AND RS. 4,21,290/- MADE BY THE ASSESSING OFFICER. 3. BEFORE THE TRIBUNAL, THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS SUBMITTED A PROPOSAL OF RS. 50,00,000/- TO THE BANK THROUGH LOAN APPLICATION DATED 2 ND JUNE, 2014 ALONGWITH THE QUOTATIONS FROM THE PROSPECTIVE SUPPLIER FOR PURCHASE OF TWO LPG TANKERS FOR A TOTAL COST OF RS. 64,10,000/-. THE LEARNED AR HAS FURTHER CONTENDED THAT AS PER THE QUOTATION OF THE SUPPLIERS, THE ESTIMATED COST OF TWO LPG TANKERS WAS RS. 64,10,000/- HOWEVER, THE TOTAL AMOUNT OF RS. 51,71,000/- WAS PAID BY THE ASSESSEE AS COST OF TWO TANKERS. HE HAS REFERRED TO THE BILLS / INVOICES ISSUED BY M/S BAFNA MOTORS (MUMBAI) PRIVATE LIMITED, M/S TATA ITA NO.156/ALLD/2019 KUSUM SINGH 4 INTERNATIONAL DLT PRIVATE LIMITED AND M/S SPARK ENGINEERS. THIS COST OF RS. 51,70,212/- INCLUDES TWO NUMBER OF AXLE RUNNING CHASSIS, ENGINE AND DOUBLE AXLE RUNNING GEAR, SUSPENSION, TYRE ETC., SUPPLIED BY M/S BAFNA MOTORS (MUMBAI) PRIVATE LIMITED AS WELL AS TATA INTERNATIONAL DLT PRIVATE LIMITED. THE FABRICATION WORK OF ROAD TANKERS FOR GAS WAS COMPLETED BY SPARK ENGINEERS. THE ASSESSEE HAS PRODUCED ALL THE BILLS / INVOICES IN SUPPORT OF THE TOTAL COST OF PURCHASE OF TWO LPG TANKERS WHICH IS RS. 51,70,212/- AND NOT RS. 64,60,000/- AS TAKEN BY THE ASSESSING OFFICER. THE LEARNED AR HAS SUBMITTED THAT THE ASSESSING OFFICER ASSUMED THE COST OF TWO TANKERS AT RS. 64,60,000/- AS AGAINST THE ACTUAL COST OF PURCHASE AT RS. 51,70,212/- WHICH WAS PAID BY THE ASSESSEE THROUGH BANKING CHANNEL EXCEPT A MINOR SUM OF RS. 1,62,686/- IN CASH. IN THIS TOTAL COST, THE INSURANCE AS WELL AS REGISTRATION CHARGES ARE INCLUDED WHICH WERE PAID BY THE ASSESSEE SEPARATELY APART FROM THE PAYMENT OF RS. 50,50,000/- TO THE SUPPLIER. THUS, THE LEARNED AR HAS CONTENDED THAT WHEN THE ASSESSEE HAS PAID RS. 50,50,000/- TO THE SUPPLIER THEN THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF MARGIN MONEY OF RS. 14,10,000/- IS NOT JUSTIFIED AS THE SAME IS BASED ONLY ON ASSUMPTION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS PAID THE MARGIN MONEY FROM UNEXPLAINED SOURCE. AS REGARDS THE ADDITION MADE BY THE ASSESSING OFFICER TOWARDS THE PAYMENT OF RS. 4,21,290/- BASED ON THE TWO INVOICES OF THE ISSUED BY M/S SPARK ENGINEERS TOWARDS SUPPLY OF SAFETY FITTING, FIRE BOTTLE AND OTHER PARTS USED IN THE PROCESS OF FABRICATION OF TANKERS, THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE ONCE THE ASSESSEE HAS PAID THIS AMOUNT THROUGH BANKING CHANNEL AND THE SUPPLIER AS ACCEPTED THE SAME. EVEN IF INVOICES / BILLS ISSUED BY THE SUPPLIER ARE NOT ACCEPTED BY THE ASSESSING OFFICER AND TREATED AS BOGUS ONCE THE ASSESSEE HAS NOT CLAIMED THIS PAYMENT AS AN EXPENDITURE BUT THE SAME IS CAPITALIZED TO THE COST OF THE TWO TANKERS THIS CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE. THUS, THE LEARNED AR HAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS NOT JUSTIFIED. ITA NO.156/ALLD/2019 KUSUM SINGH 5 4. ON THE OTHER HAND, LEARNED DR HAS SUBMITTED THAT M/S SPARK ENGINEERS HAS ISSUED TWO INVOICES DATED 2.7.2014 FOR FABRICATION OF EACH LPG TANKERS WHICH GIVES THE TOTAL AMOUNT OF SALES OF RS. 2,74,355/- EACH. HOWEVER, THE ASSESSEE HAS CLAIMED TO HAVE PAID THE TOTAL AMOUNT OF RS. 9,70,000/- FOR TWO LPG TANKERS WHICH IS RS. 4,21,290/- MORE THAN THE TOTAL AMOUNT SHOWN IN THE INVOICES DATED 2 ND JUNE, 2014. THE ASSESSEE THEN PRODUCED TWO MORE INVOICES OF M/S SPARK ENGINEERS OF RS. 2,10,645/- EACH TOTAL AMOUNTING TO RS. 4,21,290/- TO MAKE UP THE EXCESS PAYMENT. HE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4.1 AS REGARDS THE ADDITION ON ACCOUNT OF MARGIN MONEY, THE ASSESSEE HAS NOT EXPLAINED HOW THE TOTAL COST OF THESE TWO TANKERS IS REDUCED FROM 64,60,000/- TO 50,50,000/-. HE HAS REFERRED TO THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE IN THE UNDERTAKING GIVEN TO THE BANK AT THE TIME OF TAKING THE LOAN HAS STATED THAT THE MARGIN MONEY OF RS. 14,60,000/- WILL BE PAID BY THE ASSESSEE FROM HER OWN SOURCE AND THE BALANCE OF RS. 50,00,000/- WAS TO BE PAID FROM THE LOAN AMOUNT. THE ASSESSING OFFICER HAS CONDUCTED THE ENQUIRY FROM THE BANK WHICH HAS PRODUCED THE RELEVANT RECORD SHOWING THAT AS PER QUOTATIONS PRODUCED BY THE ASSESSEE, THE TOTAL COST OF TWO TANKERS WAS RS. 64,60,000/-. SINCE THE ASSESSEE HAS PAID RS. 50,000/- IN CASH THEREFORE, THE BALANCE OF RS. 14,10,000/- WAS ADDED BY THE ASSESSING OFFICER AS UNEXPLAINED PAYMENT OF MARGIN MONEY. THE CIT(A) HAS TAKEN THE CORRECT FIGURES OF THE COST OF THE TANKERS WHICH IS REFLECTED IN THE INVOICES / QUOTATIONS ISSUED BY THE SUPPLIERS AND FABRICATORS AND FOUND THAT THE TOTAL COST OF TWO TANKERS AS PER THE BILLS COMES TO RS. 65,38,880/-. THEREFORE, THE CIT(A) HAS CONFIRMED THE ADDITION OF THE DIFFERENTIAL AMOUNT OF RS. 15,38,880/- BEING UNEXPLAINED WHICH SUBSUMES THE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 4,21,290/- ON ACCOUNT OF THE EXCESS PAYMENT TO M/S SPARK ENGINEERS. HE HAS RELIED UPON THE ORDER OF THE CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AS FAR AS THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENT OF RS. 4,21,290/- BASED ON THE INVOICES ISSUED ON THE M/S SPARK ENGINEERS BY TREATING ITA NO.156/ALLD/2019 KUSUM SINGH 6 THE SAME AS BOGUS THE SAID ADDITION IS UNWARRANTED AS THE ASSESSEE HAS SHOWN THE SAID PAYMENT AS PART OF THE TOTAL COST OF THE TANKERS. THE TOTAL COST OF THE TANKERS ARE CAPITALIZED AND NOT CLAIMED AS AN EXPENDITURE AGAINST THE INCOME THEREFORE, THE SAID ADDITION MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE IS UNWARRANTED. THE CIT(A) HAS THOUGH TAKEN UP THIS ISSUE BUT HAS NOT CONFIRMED THE SAID ADDITION BUT ENHANCED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE MARGIN MONEY. EVEN OTHERWISE, ONCE THE PAYMENT OF THE SAID AMOUNT OF RS. 4,21,290/- IS NOT IN DISPUTE AS THE SAID PAYMENT WAS MADE THROUGH BANKING CHANNEL THEN THE SAID PAYMENT CONSIDERED BY THE ASSESSING OFFICER AS EXCESS CANNOT BE TREATED AS INCOME OF THE ASSESSEE BECAUSE THE SOURCE OF THE SAID PAYMENT IS NOT DISPUTED. IT MAY BE AN ISSUE FOR DETERMINING THE TOTAL COST OF THE CAPITAL ASSET IN THE SHAPE OF THE TWO LPG TANKERS BUT THE AMOUNT CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE MERELY BECAUSE THE ASSESSEE HAS PAID THIS AMOUNT IN EXCESS. 6. AS REGARDS THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF MARGIN MONEY OF RS. 14,10,000/-, THERE IS NO DISPUTE THAT THE ASSESSEE HAS FURNISHED DIFFERENT DETAILS AND FACTS BEFORE THE BANK FOR OBTAINING LOAN FOR PURCHASE OF TWO LPG TANKERS AND A DIFFERENT SET OF DETAILS AND BILLS WERE PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THERE ARE SIGNIFICANT DISCREPANCIES IN THE DOCUMENTS PRODUCED BY THE ASSESSEE BEFORE THE BANK AND BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS POINTED OUT VARIOUS DISCREPANCIES IN THE SHOW CAUSE NOTICE DATED 17.11.2017 AND THE RELEVANT DETAILS ARE AS UNDER:- THE INVOICES SUBMITTED TO THE BANK OF PROCURING LOAN ARE AS `UNDER:- I. BAFNA MOTORS FOR PURCHASE OF LPG TANKERS RS. 18,83,763/- FOR EACH TANKER AND RS. 37,67,526/- FOR TWO TANKERS. II. TATA DLT FOR PURCHASE OF TANDEM AXLE RUNNING GEAR RS. 4,82,478/- FOR EACH TANKER AND RS. 9,64,956/- FOR TWO TANKERS. ITA NO.156/ALLD/2019 KUSUM SINGH 7 III. SPARK ENGINEERS PUNE TO FABRICATE LPG MOBILE ROAD TANKER AS PER DRAWING AND MOUNTING THE SAME ON RUNNING GEAR PROVIDED BY YOU RS. 6,90,000/- FOR EACH TANKER AND RS. 13,80,000/- FOR TWO TANKERS. A TOTAL SUM OF RS. 61,12,482/- WAS TO BE PAID TO THE THREE PARTIES AS PER THE PROPOSAL SENT TO THE BANK. THE BANK HAS SHOWN THE TOTAL AMOUNT SHOWN IN THE PROPOSAL AT RS. 64.10 LAKHS WHEREAS IN YOUR LETTER DATED 22.09.2017, YOU HAVE MENTIONED THAT THE TOTAL COST OF PROPOSAL SUBMITTED TO THE BANK IS 64.60 LAKHS WHICH IS CONTRADICTORY STATEMENT IN ITSELF. WHEN ASKED TO EXPLAIN ABOUT THE PAYMENTS MADE TO THE PARTIES AS PER THE BANK STATEMENTS YOU HAVE PRODUCED BILLS OF ALL THE THREE PARTIES WHICH ARE AS UNDER:- AS PER BANK STATEMENT THE PAYMENTS MADE TO THE THREE PARTIES IS AS UNDER:- 1. BAFNA MOTORS : RS. 32,80,000/- INSTEAD OF RS. 37,67,526/- AS INFORMED IN THE BANK . 2. M/S TATA DLT : RS. 8,00,000/- INSTEAD OF 9,64,956/- AS INFORMED TO THE BANK. 3. SPARK ENGINEERS : RS. 9,20,000/- INSTEAD OF RS. 13,80,000/- AS SHOWN TO THE BANK. THE BANK AS PER THEIR LETTER DATED 30.10.2017, STATED THAT THE LOAN DISBURSEMENT WAS MADE IN THE SAVINGS BANK OF THE ASSESSEE AND NOT DIRECTLY TO THE PARTIES INVOLVED. AS PER THE TAX INVOICES SUBMITTED BY THE ASSESSEE FROM EACH PARTY, THE COST OF THE WORK DONE BY THEM HAS BEEN SPECIFIED AS UNDER VIDE LETTER DATED 13.09.2017: 1. BAFNA MOTORS COST OF ONE TANKER BEING RS. 16,40,000/- AMOUNTING TO RS. 32,80,000/- 2. TATA DLT RUNNING GEARS COST FOR ONE TANKER IS RS. 4,05,000/- AMOUNTING TO RS. 8,10,000/- PAYMENT MADE BY BANK RS. 8,00,000/- 3. SPARK ENGIEERS COST OF FABRICATION OF ONE TANKER RS. 2,74,355/- AMOUNTING TO RS. 5,48,710/- BUT PAYMENT MADE AT RS. 9,20,000/- THROUGH BANK AND 50,000/- BY CASH. THE ASSESSEE TOOK A STAND THAT THE TOTAL COST OF TWO LPG TANKERS IS RS. 50,50,000/- AND NOT RS. 64,60,000/- AS SHOWN IN LOAN APPLICATION FILED WITH THE BANK. THIS STAND OF THE ASSESSEE IS A COMPLETE DEPARTURE OF THE FACTS PRESENTED BEFORE THE BANK AND ALSO A DECLARATION MADE BY THE ASSESSEE FOR PAYMENT OF THE MARGIN MONEY OF RS. 14,60,000/-. IT IS APPARENT THAT THE CLAIM OF TOTAL COST OF TWO LPG TANKERS AT RS. ITA NO.156/ALLD/2019 KUSUM SINGH 8 50,50,000/- IS BASED ON THE PAYMENT MADE BY THE ASSESSEE TO THE EXTENT OF THE LOAN AMOUNT AND A FURTHER PAYMENT OF RS. 50,000/- IN CASH. IT IS APPARENT THAT THE ASSESSEE HAS PRODUCED THE INVOICES BEFORE THE ASSESSING OFFICER BY SUPPRESSING THE TOTAL COST OF TWO LPG TANKERS SO AS TO MATCH THE AMOUNT OF PAYMENT BEING THE LOAN AMOUNT OF RS. 50,00,000/- AND CASH PAYMENT OF RS. 50,000/-. WHEREAS AT THE TIME OF TAKING THE LOAN, THE ASSESSEE HAS PRODUCED THE INVOICES SHOWING THE TOTAL COST OF TWO TANKERS AT RS. 64,60,000/- OUT OF WHICH ASSESSEE UNDERTOOK TO PAY RS. 14,60,000/- AS MARGIN MONEY FROM HER OWN SOURCE. SINCE THE ASSESSEE HAS PAID ONLY RS. 50,000/- OUT OF RS. 14,60,000/- AND THE BALANCE OF RS. 14,10,000/- WAS TREATED BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT / PAYMENT. THE ASSESSING OFFICER CONDUCTED AN ENQUIRY FROM THE BANK WHICH HAS CONFIRMED THE FACT THAT THE TOTAL COST OF TWO LPG TANKERS AS PER THE INVOICES / QUOTATIONS FILED BY THE ASSESSEE IS RS. 64,60,000/- OUT OF WHICH A MARGIN MONEY OF RS. 14,60,000/- WAS DIRECTLY PAID BY THE ASSESSEE TO THE SUPPLIER. ONCE THE BANK HAS CONFIRMED THE PAYMENT OF MARGIN MONEY BY THE ASSESSEE TO THE SUPPLIERS THEN IN THE ABSENCE OF EXPLANATION OF SOURCE, THIS AMOUNT OF RS. 14,10,000/- IS RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER. THE CIT(A) ENHANCED THE ADDITION FROM RS. 14,10,000/- TO 15,38,880/- WITHOUT ISSUING A SHOW CAUSE NOTICE AS REQUIRED UNDER SECTION 251(2) OF THE INCOME TAX ACT. THEREFORE, IN THE ABSENCE OF THE SHOW CAUSE NOTICE, THE ENHANCEMENT MADE BY THE CIT(A) IS NOT SUSTAINABLE AND LIABLE TO BE DELETED. 7. FURTHER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE DOCUMENT PRODUCED BY ASSESSEE AS WELL AS CONFIRMATION OF THE BANK REGARDING THE TOTAL COST OF TWO LPG TANKERS AND PAYMENT OF MARGIN MONEY BY THE ASSESSEE, THE ADDITION OF RS. 14,10,000/- IS RIGHTLY MADE BY THE ASSESSING OFFICER. AN EXPLANATION OF THE ASSESSEE IS THAT THE TOTAL COST OF THE TANKERS IS REDUCED TO RS. 50,50,000/- DOES NOT INSPIRE CONFIDENCE WHEN THERE IS SIGNIFICANT DISCREPANCIES IN THE TWO SET OF INVOICES PRODUCED BY THE ASSESSEE. ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS. 14,10,000/- IS CONFIRMED. ITA NO.156/ALLD/2019 KUSUM SINGH 9 8. GROUND NO. 4 IS REGARDING NON CONSIDERATION OF ADDITIONAL EVIDENCE BY THE CIT(A). I HAVE HEARD THE LEARNED AR AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS RAISED THIS GROUND TO CHALLENGE THE IMPUGNED ORDER OF THE CIT(A) ON MERIT WITHOUT CONSIDERING ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. HOWEVER, IT IS A MATTER OF RECORD THAT THE CIT(A) SENT ALL THE DOCUMENTS AND THE CONTENTIONS OF THE ASSESSEE TO THE ASSESSING OFFICER AND CALLED FOR REMAND REPORT. THE IMPUGNED ORDER HAS BEEN PASSED BY THE CIT(A) AFTER CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER AND THEREFORE, IT CANNOT BE SAID THAT THE CIT(A) HAS PASSED THE ORDER WITHOUT CONSIDERING THESE DOCUMENTS. EVEN OTHERWISE WHEN THE CONTRADICTORY RECORDS WERE FILED BY THE ASSESSEE THEN THE ALLEGED ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WOULD NOT HELP THE CASE OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.10.2021 THROUGH VIDEO CONFERENCING AT ALLAHABAD. SD/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 07/10/2021 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) , ALLAHABAD 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR