Anil Kumar, Daltonganj V. ITO WARD-3(3), Daltonganj

ITA 164/RAN/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9618 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 30-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P R MONAL
• Assessee Lawyers: S K PODDAR
• Keywords: Proportionate interest; Corroborative evidences; TDS; Set aside
• Section: 234B; 68; 11

Judgement Text

1 ITA NO. 164 /RAN/ 2016 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 164 / RAN/20 1 6 A .Y. : 20 04 - 2005 M/S ANIL KUMAR, BELWATIKA, DALTONGANJ - 822101 V S THE ITO, WARD - 3(3), DAL TONGANJ T AN NO. : AAJFA 4550 E (APPELLANT ) .. RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR, AR REVENUE BY : SHRI P.R.MONAL, JCIT DATE OF HEARING : 21 . 05 .201 8 DATE OF PRONOUNCEMENT : 22.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT(A), RANCHI, DATED 04.04.2016 , IN IT APPEAL NO. 402 /RAN/OTH/ 10 - 11 , PASSED U/S. 254/144/250 OF THE I.T. ACT . 2. AT THE TIME OF HEARING, LD. AR OF THE ASSESSEE DID NOT PRESS THE GROUNDS NO.1 & 2, THEREFORE, WE DISMISS GROUNDS NO.1 & 2 AS NOT PRESSED. 3. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER : - 3. F OR THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AN ADDITION OF RS,4,00,545/ - ON ACCOUNT OF MATERIAL SUPPLIED. APPELLANT EXPLAINED THAT THERE WAS NO DIFFERENCE IN THE MATERIAL SUPPLIED, AS SUCH, ADDITION MADE IS ILLEGAL. LD. CIT(A) MISUNDERSTOOD THE FACTS AND CONFIRMED THE ADDITION. 4. FOR THAT THE ADDITION OF RS.34,97,267/ - BEING THE CAPITAL CONTRIBUTION BY THE NEW PARTNERS AND OLD PARTNERS IS UNJUSTIFIED 2 ITA NO. 164 /RAN/ 2016 AND ILLEGAL. ALL THE PARTNERS WERE ASSESSED TO TAX, THEIR BALANCE SHEET AND COMPUTATION OF INCOME WAS FILED, THE GENUINENESS OF TRANSACTION IS NOT IN DOUBT, IDENTITY STANDS PROVED, AND CREDI TWORTHINESS ALSO STANDS PROVED. AS SUCH, ADDITION MADE IS UNJUSTIFIED AND ILLEGAL. IN ANY VIEW OF THE CASE, FOR THE CAPITAL CONTRIBUTION BY THE PARTNERS ADDITION CANNOT BE MADE IN THE HANDS OF THE FIRM. 5. FOR THAT ADDITION OF PROPORTIONATE INTEREST ON TH E CAPITAL CONTRIBUTION BY THE PARTNERS IS UNJUSTIFIED, ILLEGAL AND INCORRECT. 6. FOR THAT INTEREST U/S 234A AND 234B CAN ONLY BE CHARGED ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HONBLE JHARKHAND HIGH COURT. 4. BRI EF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM HAVING FIVE PARTNERS AND ENGAGED IN CIVIL CONTRACT AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004 - 2005 ON 30.09.2004 WITH TOTAL INCOME OF RS.47,020/ - ONLY. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND ASSESS ED TOTAL INCOME OF RS.1,18,33,750/ - . AGGRIEVED WITH THE ASSESSMENT ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO ALLOWED THE APPEAL VIDE APPEAL NO.349/RAN/OTH/2007. AGAINST THE APPELLATE ORDER OF CIT( A) THE DEPARTMENT PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL SET ASIDE THE ORDER OF CIT(A) AND RESTORED THE CASE TO THE FILE OF ASSESSING OFFICER. ACCORDINGLY, THE AO ISSUED NOTICED U/S.142(1) OF THE ACT ALONG WITH REMINDERS. IN COMPLIANCE THE AR OF THE ASSESSEE APPEARED AND SOUGHT ADJOURNMENT. THE AO HAS CALLED FOR VARIOUS INFORMATION WITH RESPECT TO DIFFERENCE BETWEEN GROSS RECEIPT IN HINDALCOS ACCOUNT AND THE ASSESSEES ACCOUNT AND ALSO CALLED FOR THE CLARIFICATION IN RESPECT OF DIFFERENCE I N TDS CERTIFICATE ISSUED. IN REPLY, THE AR OF THE ASSESSEE FILED EXPLANATION WHICH WAS REFERRED TO AT PAGES 2 & 3 3 ITA NO. 164 /RAN/ 2016 OF THE ASSESSMENT ORDER. THE AO WAS NOT SATISFIED WITH THE SUBMISSIONS AND ALSO DEALT ON THE ADDITIONS MADE ON THE VARIOUS ISSUES AND ASSESSED THE TOTAL INCOME AT RS.1,09,36,350/ - AND PASSED ORDER U/S.254/144 OF THE ACT, DATED 27.12.2010. 5 . AGGRIEVED BY THE ASSESSMENT ORDER , THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). I N THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS AND LD.CIT(A) HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUE S AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 6 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 7 . BEFORE US, LD. A R SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS,4,00,545/ - ON ACCOUNT OF MATERIAL SUPPLIED , WHEREAS THE ASSESSEE HAS EXPLAINED THAT THERE WAS NO DIFFERENCE IN THE MATERIAL SUPPLIED . WIT H RESPECT TO GROUND NO.4, LD. AR SUBMITTED THAT THE CIT(A) HAS ERRED IN MAKING ADDITION OF RS.34,97,267/ - BEING THE CAPITAL CONTRIBUTION BY THE NEW PARTNERS AND OLD PARTNERS . LD. AR SUBMITTED THAT A LL THE PARTNERS WERE ASSESSED TO TAX, THEIR BALANCE SHEET AND COMPUTATION OF INCOME WAS FILED, THE GENUINENESS OF TRANSACTION IS NOT IN DOUBT, IDENTITY STANDS PROVED, AND CREDITWORTHINESS ALSO STANDS PROVED. AS SUCH, ADDITION MADE IS UNJUSTIFIED AND ILLEGAL. IN ANY VIEW OF THE CASE, ON THE CAPITAL CONTRIBUTION B Y THE PARTNERS ADDITION CANNOT BE MADE IN THE HANDS OF THE FIRM. WITH RESPECT TO GROUNDS NO.5 & 6, LD. AR SUBMITTED THAT THE CIT(A) 4 ITA NO. 164 /RAN/ 2016 HAS ERRED IN MAKING ADDITION OF PROPORTIONATE INTEREST ON THE CAPITAL CONTRIBUTION BY THE PARTNERS AND PRAYED FOR ALLOWING T HE APPEAL OF ASSESSEE. 8 . CONTRA, LD. DR RELIED ON THE ORDER OF LOWER AUTHORITIES. 9 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE MATRIX OF THE DISPUTED ISSUE WITH RESPECT TO ADDITION OF RS.4,00,545/ - ON ACCOUNT OF MAT ERIAL SUPPLIED, THE CIT(A) DEALT ON THE ISSUE THAT THE ASSESSEE COULD NOT SUBSTANTIATE WITH PROPER EVIDENCE, WHEREAS LD. AR MADE SUBMISSION THAT THE ASSESSEE HAS ALREADY FILED RECONCILIATION STATEMENT OF M/S HINDALCO AND ALSO SUBMITTED BEFORE THE A O. ACCORDINGLY, CONSIDERING THE FACTS OF THE CASE AND THE CIRCUMSTANCES AND THE TRANSACTION BETWEEN THE M/S HINDALCO AND THE ASSESSEE, WE ARE OF THE OPINION THAT THE ASSESSEE SHOULD NOT BE DEPRIVED TO EXPLAIN THE RECONCILIATION STATEMENT FILED BEFORE AO . ACCORDINGLY, WE IN THE INTEREST OF JUSTICE, REMIT THE ISSUE TO THE FILE OF AO, WHO SHALL VERIFY AND EXAMINE AND IF THE AO SATISFIES WITH THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE , THE ADDITION MADE ON ACCOUNT OF MATERIAL SUPPLIED SHOULD BE DEL ETED. THE ASSESSEE IS ALSO DIRECTED TO SUBSTANTIATE IT CLAIM AND COOPERATE IN COMPLETING THE ASSESSMENT. 10 . IN RESPECT TO GROUND NO.4 & 5, WHEREBY THE CIT(A) HAS CONFIRMED THE ADDITION BEING THE CAPITAL CONTRIBUTION BY THE NEW PARTNERS AND OLD PARTNERS, T HE LD. AR OF THE ASSESSEE SUBMITTED THAT A LL THE PARTNERS WERE ASSESSED TO TAX, THEIR BALANCE SHEET AND COMPUTATION OF INCOME WAS FILED, 5 ITA NO. 164 /RAN/ 2016 FURTHER THE GENUINENESS OF TRANSACTION IS NOT IN DOUBT, IDENTITY PROVED, AND CREDITWORTHINESS ALSO STANDS PROVED. WE FIN D THAT THE CIT(A) HAS DEALT ON THE DISPUTED ISSUE HAVING CONSIDERED THE INFORMATION FROM THE ASSESSEE AND ALSO DEALT ON THE JUDICIAL DECISION AND DISMISSED THE GROUND, WHEREAS LD. AR PLACED AN ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL ON THE SIMILAR IS SUE IN ASSESSEES OWN CASE AND PRAYED FOR ALLOWING THE APPEAL. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 158/RAN/2016, ORDER DATED 04.05.2018, WHEREIN THE TRIBUNAL HAS HELD AS UNDER : - 6. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTICED THAT AS RIGHTLY POINTED OUT BY THE ID. DR NO EVIDENCE WHATSOEVER WAS FILED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS FOR DUE VERIFICATION OF CAPITAL INTRODUCTION BY SMT. CHAYA GUPTA, SMT. RAJRANI GUPTA AND THE OLD PARTNER SMT. UMA RANI GUPTA, SHRI ANUPAM GUPTA AND SHRI NAVEEN GUPTA. THEREFORE IT IS VERY MUCH CLEAR FROM THE ASSESSMEN T RECORDS THAT THE ASSESSEE COULD NOT PRODUCE SUPPORTING EVIDENCE FOR SOURCE OF CAPITAL INTRODUCTION BY THE AFORESAID PARTIES. THE CIT(A) HOWEVER CONSIDERING THE EVIDENCE SAID TO HAVE BEEN FILED BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS WAS OF THE OPINION THAT THE SAID PARTIES PROVED THEIR IDENTITY AND GENUINENESS OF THE TRANSACTIONS BUT HOWEVER NOT SATISFIED WITH THE OTHER CREDITWORTHINESS OF THE PARTIES. IT IS NOTICED FROM THE ASSESSMENT ORDER THAT GUPTA WAS ADMITTED AS NEW PARTNER IN THE FIR M AND INTRODUCED CAPITAL TO RS.20,00,000/ - . SMT. CHAYA GUPTA IS THE DAUGHTER OF SMT. RAJARANI GUPTA, WHO HAS ALSO JOINED AS A PARTNER IN THE FIRM ALONG WITH SMT. CHAYA GUPTA. THE DETAILS OF SMT. CHAYA GUPTA WERE NOT AT ALL BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS EXCEPT THE FACT THAT THE SAID CAPITAL WAS INTRODUCED BY A CHEQUE. BEFORE CIT(A) RETURN OF INCOME FOR A.Y.2005 - 06 WERE FILED AND ON EXAMINATION OF THE SAID DETAILS THE CIT(A) FOUND THE SAID SMT. CHAYA GUPTA HAS INCOME FROM FIRM TOWARDS SALARY AN D INCOME FROM HOUSE PROPERTY AND FOR NOT FILING CAPITAL A.Y.2004 - 05, THE CIT(A) HELD SMT. CHAYA GUPTA HAS FAILED TO PROVE WELL AS CREDITWORTHINESS OF THE TRANSACTIONS. 6 ITA NO. 164 /RAN/ 2016 7. IN RESPECT OF SMT. RAJARANI GUPTA, WHO IS ALSO A NEW PARTNER SMT. CHAYA GUPTA, WHEREI N ON EXAMINATION OF THE CAPITAL ACCOUNT INCOME FOR A.Y.2005 - 06 THE CIT(A) HELD SMT. RAJARANI GUPTA FAILED TO PROVE CREDITWORTHINESS IN RESPECT OF CAPITAL INTRODUCTION TO THE EXTENT F RS.6,46,944/ - . 8. IN RESPECT OF THE PARTIES I.E. SMT. UMA RANI GUPTA, SH RI ANUPAM GUPTA AND SHRI NAVIN GUPTA, THE CIT(A) EXAMINED THE COPIES OF THE RETURN OF .INCOME FOR A.Y.2005 - 06 IN RESPECT OF SMT. UMARANI GUPTA WAS NOT SATISFIED WITH CAPITAL ACCOUNT AND HENCE THE JOINING OF THE CAPITAL INTRODUCTION. THE CIT(A) ALSO EXAMINE D THE RETURN OF INCOME FOR SHRI ANUPAM GUPTA AND SHRI NAVIN GUPTA WHEREIN HE FOUND THE SAME AS THAT OF SMT. UMARANI GUPTA AND HELD ALL THE PARTIES ABOVE FAILED TO PROVE CREDITWORTHINESS OF CAPITAL INTRODUCTION. 9. BEFORE US, THE ID. AR PLACED RELIANCE ON THE DECISION OF COORDINATE SMC BENCH IN THE CASE OF M/S. FAMILY SHOP IN ITA NO.L55/RAN/2015 AND BY REFERRING TO PARA 3.2 ARGUED THAT ADDITION U/S 68 IS NOT MAINTAINABLE AGAINST THE FIRM IF AT ALL THE AUTHORITIES ARE NOT SATISFIED WITH THE EXPLANATION AS OFFERED BY THE PARTNERS ABOUT THE SOURCE OF INTRODUCED AS CAPITAL IN THE FIRM THE ADDITION CAN BE MADE IN THE HANDS OF THE PARTNERS BUT NOT IN THE HANDS OF THE ASSESSEE I.E. FIRM. ON PERUSAL OF THE DECISION OF THE COORDINATE BENCH WE FIND IN THE SAID CASE OF THE PARTNERS, WHO WERE ASSESSED TO TAX AND CONFIRMED THEIR CAPITAL INTRODUCTION BEFORE THE AUTHORITIES AND AS SUCH THE COORDINATE BENCH HELD THE ADDITION IS NOT MAINTAINABLE IN THE HANDS OF THE FIRM. IN THE PRESENT CASE WE FIND FROM THE RECORD THAT NO PROPER EXPLANATION WAS OFFERED TO THE AO IN RESPECT OF SUBMITTING ALL THE DETAILS REGARDING THE CASH BALANCE, BANK BALANCE AS PER THE BANK STATEMENT AND COPIES OF RETURNS OF INCOME. THE SAID DETAILS APPEARS TO HAVE BEEN FILED BEFORE CIT(A) AND ON EXAMINAT ION OF SUCH DETAILS AS. DISCUSSED ABOVE, WE FIND THE CIT(A) DID NOT SATISFY HIMSELF IN RESPECT OF CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS INVOLVING THE ADDITION MADE U/S 68 OF THE ACT. IN SUCH CIRCUMSTANCES WE FIND THE DECISION OF THE COORDINA TE BENCH AS POINTED OUT BY THE ID. AR IN THE CASE OF M/S FAMILY SHOP FOR THE PROPOSITION ADDITION CANNOT BE MADE IN THE HANDS OF THE FIRM IS APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID D OWN BY THE COORDINATE BENCH OF TRIBUNAL IN THE CASE OF M/S FAMILY SHOP SUPRA, WE DELETE THE ADDITION. ADDITION, IF ANY, MAY BE CONSIDERED IN THE HANDS OF PARTNERS ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. WE FIND THE ABOVE JUDICIAL DECISIO N OF THE COORDINATE BENCH OF THE TRIBUNAL IS APPLICABLE TO THE PRESENT FACTS OF THE CASE AND, THEREFORE, WE RELY ON THE RATIO LAID 7 ITA NO. 164 /RAN/ 2016 DOWN IN THE ABOVE DECISION OF THE TRIBUNAL AND SET ASIDE THE ORDER OF CIT(A) AND ALLOW BOTH THESE GROUNDS OF APPEAL AND DIREC T THE AO TO DELETE THE ADDITION AND G ROUNDS NO.4 & 5 ARE ALLOWED. 11 . GROUND NO.6 IS WITH RESPECT TO CHARGING OF INTEREST U/S.234A & 234B OF THE ACT, IS CONSEQUENTIAL. THE AO IS DIRECTED ACCORDINGLY. 12 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 22 / 05 /201 8 S D/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACC OUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 22 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, IT AT, RANCHI 1. THE APPELLANT M/S AN IL KUMAR, BELWATIKA, DALTONGANJ - 822101 2. THE RESPONDENT THE ITO, WARD - 3(3), DALTONGANJ 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.