M/S M/S EICS CONSULTANCY PVT LTD., BILASPUR(CG) V. THE DY. COMMISSIONER OF INCOME TAX, BILASPUR(CG)

ITA 188/BIL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7763 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 13-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G S AGRAWAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH , RAIPUR BEFORE S HRI N.K. BILLAIYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 188/RPR /20 1 6 ASSESSMENT YEAR: 2011 - 12 M/S EICS CONSULTANCY PVT. LTD., FLAT NO. 103 - 106, OM RESIDENCY, RING ROAD NO. 2, BILASPUR (C.G.) PAN: AABCE8705A VS. THE DY. COMMISSIONER OF INCOME TAX - CIRCLE 1(1), MAHIMA COMPLEX, VYAPAR VIHAR, BILASPUR (C.G.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.S. AGRAWAL ( CA ) REVENUE BY : SHRI SANJAY KUMAR (DR ) DATE OF HEARING: 08 /03 /201 8 DATE OF PRONOUNCEMENT: 04 / 06 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 14.03.2016 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS), BILASPUR , FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED BY THE AO U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 83,80,600/ - . SINCE THE CASE WAS SELECTED FOR SCRUTINY, THE AO ISSUED NOTICE U/S 143 (2) AND 142 (1) OF THE ACT. IN RESPONSE THEREOF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE 2 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 AO AND SUBMITTED THE DETAILS CALLED FOR BY THE AO. THE AR ALSO FILED WRITTEN SUBMISSIONS. IT WAS NOTICE THAT DURING THE YEAR THE ASSESSEE HAD RECEIVED UNSECURED LOAN OF RS. 1,00,00,000/ - FROM DELTA VE NTRADE PVT. LTD., KOLKATA, A SISTER CONCERN OF THE ASSESSEE AND THE ASSESSEE HAD NOT PAID ANY INTEREST AGAINST THE SAID LOAN . ACCORDINGLY, THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATION, BALANCE SHEET AND BANK ACCOUNT OF THE CREDITOR. THE ASSESSEE SUBMITTED CONFIRMATION FROM THE CREDITOR COMPANY , H OWEVER, FAILED TO FURNISH BANK ACCOUNT AND BALANCE SHEET OF THE CREDITOR COMPANY. T HE AO ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED CASH CREDIT U /S 68 OF ACT , HOLDING THAT MERE FURNISHING OF CONFIRMATORY LETTER BY ITSELF IS NOT ENOUGH TO DISCHARGE THE ONUS OF ESTABLISHING IDENTITY OF THE CREDITOR , CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION. SIMILARLY, THE ASSESSEE HAD CLAIMED RS . 25,12,512/ - UNDER THE HEAD TRAVELLING RS. 30,70,007/ - UNDER THE HEAD TRAVELLING (LOCAL) AND RS. 7,12,440/ - UNDER THE HEAD TRAVELLING EXPENSES AND MAINTENANCE EXPENSES (KOLKATA). THE AO REJECTED THE EXPLANATIONS GIVEN BY THE ASSESSEE AND DISALLOWED RS. 6, 00,000/ - OUT OF THE TOTAL CLAIM OF RS. 62,94,363/ - AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 3. APART FROM THE AFORESAID ADDITIONS THE AO MADE OTHER DISALLOWANCES AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 1,91,22,636/ - . THE ASSESSEE CHALL ENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) CONFIRMED BOTH THE ADDITIONS. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER PASSED BY THE LD. CIT(A). 4. T HE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GRO UNDS: - 3 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 1. THAT UNDER THE FACTS THE LEARNED CIT ( A) ERRED IN MAINTAINING THE ADDITION OF RS. 1,00,00,000/ - MADE BY THE LEARNED ASSESSING OFFICER BEING CREDIT IN THE ACCOUNT OF M/S DELTA VENTRADE PVT. LTD. BY REJECTING THE EXPLANATION AND SUPPORTINGS FILED. PRAYED TO DELETE THE ADDITION OF RS. 1,00,00,000/ - . 2. THAT UNDER THE FACTS AND THE LAW, THE LEARNED CIT (A) FURTHER ERRED IN NOT ACCEPTING THE ADDITIONAL EVIDENCES FILED U/R 46A VIZ. BANK STATEMENTS, ITR, AUDITED BALANCE SHEET, LEDGER ACCOUNT AND CONFIRMAT ION ETC. OF ABOVE CREDITOR I.E. M/S DELTA VENTURES PVT. LTD. AND OTHERS, THOUGH SPECIFIC PRAYER U/R 46A TO ADMIT THE SAME, WAS MADE BEFORE HIM. PRAYED TO DELETE THE ADDITION. 3. THE LD. CIT (A) FURTHER ERRED IN OBSERVING THAT PRAYER U/R 46A TO ADMIT ADDITIO NAL EVIDENCES WAS NOT MADE. PRAYED TO DELETE THE ADDITION OF RS. 1,00,00,000/ - . 4. THAT UNDER THE FACTS AND THE LAW, THE LEARNED CIT (A) FURTHER ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 6,00,000/ - OUT OF RS. 62,94,363/ - MADE BY THE LD. AO UNDER THE HEAD TRAVELLING EXPENSE ON ADHOC BASIS. PRAYED THAT DISALLOWANCE OF RS. 6,00,000/ - BE DELETED. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) IS ERRONEOUS AND BAD IN LAW AS THE LD. CIT (A) HAS ERRED IN NOT ALLOWING THE ADDITIONAL EVIDENCE FILED UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (RULES) I.E., ITR AUDITED BALANCE SHEET, LEDGER ACCOUNT AND CONFIRMATION OF THE CREDITOR M/S DELTA V ENTRADE PVT. LTD. THE LD. COUNSEL FURTHER SUBMITTED THAT SI NCE 4 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 EXAMINATION OF THESE DOCUMENTS WAS ESSENTIAL FOR ADJUDICATING THE ASSESSEES APPEAL, THE LD. CIT (A) OUGHT TO HAVE ADMITTED THE SAME U/S 46A OF THE RULES. IN THE LIGHT OF THE AFORESAID FACTS, THE LD. COUNSEL SUBMITTED THAT THE IMPUGNED ORDER MAY BE SET ASIDE OR IN ALTERNATIVE, THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE CIT (A) MAY BE ALLOWED AND THE ASSESSEE MAY BE PERMITTED TO PRESENT ITS CASE IN THE LIGHT OF THE AFORESAID ADDITIONAL EVIDENCE. 6. REGARDING DISALLOWANCE OF 6,00,000/ - OUT OF RS. 62,94, 363/ - MADE BY THE LD. AO UNDER THE HEAD TRAVELLING EXPENSE ON ADHOC BASIS , THE LD. COUNSEL SUBMITTED THAT SINCE ALL THE RELEVANT DETAILS WERE SUBMITTED BEFORE THE AO THE LD. CIT(A) OUGHT TO HAVE DELETED THE DISALLOWANCE MADE BY THE AO. THE LD. COUNSEL FURT HER SUBMITTED THAT SINCE, THE LD. CIT(A) HAS CONFIRMED THE ADDITION WITHOUT GIVING ANY VALID REASON, THE FINDINGS OF THE LD. CIT(A) IS LIABLE TO BE SET ASIDE. 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE CONCURRENT FINDING S OF THE AUTHORITIES BELOW SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CONTENTION BEFORE THE AUTHORITIES BELOW, THERE IS NO INFIRMITY IN THE IMPUGNED ORDER. HENCE, THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. SO FOR AS THE FIRST GROUND OF APPEAL IS CONCERNED, W E NOTICE THAT THE ASSESSEE HAD MADE A REQUEST VIDE APPLICATION DATED 22.07.2015 TO THE LD. COMMISSIONER OF INCOME TAX FOR ADMITTING THE ADDITIONAL EV IDENCE SUBMITTED BEFORE HIM. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT FILE THE AFORESAID DOCUMENTS BEFORE THE AO AS THE 5 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 ASSESSMENT ORDER WAS PASSED IN HURRY BY THE AO WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE THE AFORESAID EVIDENCE. HOWEVER, THE LD. CIT (A) REJECTED THE REQUEST OF THE ASSESSEE AND CONFIRMED THE ADDITIONS WITHOUT ASSIGNING ANY COGENT REASON . UNDER RULE 46A THE ADDITIONAL EVIDENCE CAN BE PRODUCED DURING THE COURSE OF APPELLATE PROCEEDINGS, UNDER THE FOLLOWING CIRCUMSTANCES: - (A) WHERE THE [ ASSESSING OFFICER] HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTING, OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ ASS ESSING OFFICER] OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVIN G SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. 9. WE NOTICE THAT THE LD. CIT(A) HAS REJECTED THE ADDITIONAL EVIDENCE FOR THE REASON THAT THE ASSESSEE HAD SUBMITTED THE DOCUMENTS WITHOUT ANY APPLICATION UNDER RULE 46A OF THE RULES. HOWEVER, PERUSAL OF THE COPY OF APPLICATION FOR ADDITIONAL EVIDENCE, WHICH IS AT PAGE 37&38 OF THE PAPER BOOK, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT MADE ANY REQUEST FOR ADMISSION OF ADDITIONAL GROUND. UNDER THESE CIRCUMSTANCE S, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD GET AN OPPORTUNITY TO PRESENT ITS CASE IN THE LIGHT OF THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE LD. CIT (A). WE ACCORDINGLY SET ASIDE THIS GROUND OF APPEAL TO THE FILE OF AO WITH THE DIRECTION TO DECIDE THIS GROUND OF APPEAL AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE LD. CIT (A) AFTER HEARING THE ASSESSEE. 6 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 10. THE SECOND GROUND OF APPEAL PERTAINS TO DISALLOWANCE OF RS. 6,00,000/ - OUT OF THE TOTAL AMOUNT OF RS. 62,94,363/ - CLAIMED AS EXPENSES ON TRAVELLING. WE NOTICE THAT THE LD. CIT (A) HAS CONFIRMED THE ADDITION HOLDING THAT THE EXPENSES ON PERSONAL VISIT OF DIRECTOR ARE ALSO INCLUDED IN THESE EXPENSES CLAIMED BY THE ASSESSEE AND THE ASSESSEE HAS NOT MAINTAINED THE PROPER RECORD TO ESTABLISH THE BUSINESS NECESSITY OF SUCH TOURS. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US CONTENDED THAT ALL THE RELEVANT RECORDS WERE PRODUCED BEFORE THE AUTHORITIES BELOW TO SUBSTANTIATE THE CLAIM OF EXPENSES ON TRAVELLING. HOWEVER, NO DOCUMEN TARY EVIDENCE WAS SHOWN BY THE LD. COUNSEL TO REBUT THE FINDINGS OF THE AUTHORITIES BELOW. IN OUR CONSIDERED OPINION, THE DISALLOWANCE CONFIRMED BY THE LD. CIT (A) IS BELOW 10% OF THE TOTAL EXPENDITURE CLAIMED , WHICH IN OUR CON SIDERED VIEW IS JUST AND REAS ONABLE IN THE LIGHT OF THE FACTS OF THE CASE AND THE EVIDENCE AVAILABLE ON RECORD . THEREFORE, WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE. ACCORDINGLY, WE SUSTAIN THE ADDITION CONFIRMED BY THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2011 - 2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE , 2018 . SD/ - SD/ - ( N. K. BILLAIYA) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAIPUR, DATED: 04 / 06 / 201 8 ALINDRA, PS 7 ITA NO. 188 / RPR/2016 ASSESSMENT YEAR: 2011 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , RAIPUR / DR, ITAT, RAIPUR 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./A SSTT. REGISTRAR) / PS , RAIPUR / ITAT, RAIPUR