Khenat Money Changer (P) Ltd., Bharuch V. The Income tax Officer,Ward-2, Bharuch

ITA 193/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6427 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER DATE OF HEARING : 08/06/2011 DRAFTED ON: 10 /06/2011 ITA NO.193/AHD/2009 ASSESSMENT YEAR : 2005-06 KHENAT MONEY CHANGER (P) LTD. PURA,BHARUCH VS. THE I.T.O. WARD-2 BHARUCH PAN/GIR NO. : AACCK 3188 N ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI KIRAN K.SHAH, A.R. RESPONDENT BY: SHRI B.L. YADAV, SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VI, BARODA D ATED 26/11/2008 PASSED FOR ASSESSMENT YEAR 2005-06. 2. GROUND NO.1 READS AS UNDER: 1) THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING ADDITION OF RS.1,48,301/- IN RESPECT OF ALLEGED PURCHASE OF 340 0 US $ AS PER PARA 4.3 OF THE APPEAL ORDER. 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 18/ 12/2007 WERE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF FOR EIGN CURRENCY MONEY CHANGER. ITA NO .193/AHD/2009 KHENAT MONEY CHANGER (P) LTD. VS. ITO ASST.YEAR - 2005-06 - 2 - 3. IT WAS NOTED BY THE ASSESSING OFFICER THAT THERE WAS DISCREPANCY IN PURCHASE AND SALE OF US $ (U.S.DOLLARS). THAT DISC REPANCY WAS DESCRIBED BY THE ASSESSING OFFICER AS FOLLOWS:- 3.2. THE ASSESSEE HAS PURCHASED ONLY 19,100 US DOL LAR C.N. ON 11.02.2005 AND SOLD 22,500 U.S. DOLLAR C.N. THE AS SESSEE IS ISSUING THE BILLS OF PURCHASE OF FOREIGN CURRENCY. AS PER THE BILLS, THE ASSESSEE HAS PURCHASED ONLY 19,100 U.S. DOLLAR C.N. ON 11.02.2005, WHEREAS HE HAS SOLD 22,5600 US DOLLAR C .N. TO M/S.WALL STREET INTER CHANGE PVT.LTD., SURAT, VIDE THEIR BILL NO.31825 DATED 11.02.2005. THE ASSESSEE HAS SUBMITT ED A GENERAL REPLY THAT PURCHASE IS WRONGLY TAKEN ON 12.02.2005, WHICH IS NO ACCEPTABLE. THE PURCHASE BILL ISSUED BY THE ASSESS EE CLEARLY SHOWS THAT THE ASSESSEE HAS PURCHASED ON 11,900 US DOLLAR C.N. ON 11.02.2005 AND AS PER PURCHASE BILL OF M/S.WALL STR EET INTER CHANGE PVT.LTD., THE ASSESSEE HAS SOLD 22,500 US DO LLAR C.N. TO THEM. THUS IT IS CLEAR THAT THE ASSESSEE HAS INTRO DUCED ITS UNACCOUNTED MONEY OF RS.1,48,301/- IN ITS BUSINESS. ACCORDINGLY, AN AMOUNT OF RS.1,48,301/- IS ADDED TO THE TOTAL IN COME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT ARE INITIATED FOR CONCEALING INCOME BY WAY OF FURNISHIN G INACCURATE PARTICULARS OF INCOME. 4. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE ACTION OF THE ASSESSING OFFICER WAS CONFIRMED. 5. CERTAIN FINDINGS OF THE ASSESSING OFFICER REMAIN ED UNDISPUTED THAT AS AGAINST THE SALE OF 22,500 US $, THE PURCHA SE ON THAT DATE WAS ONLY OF 19,100 US $. THERE WAS A DISCREPANCY OF 3, 400 US $ WHICH COULD NOT BE RECONCILED. THE IMPUGNED DATE WAS 11. 2.2005 AND IT WAS ALSO FOUND BY THE ASSESSING OFFICER THAT THERE WAS NO OPENING STOCK OF US $. ON THE BASIS OF THOSE FACTS, ONCE IT WAS AN ADMITTED FACTUAL ITA NO .193/AHD/2009 KHENAT MONEY CHANGER (P) LTD. VS. ITO ASST.YEAR - 2005-06 - 3 - POSITION THAT THERE WAS AN UNRECORDED TRANSACTION, HENCE, WE ARE OF THE VIEW THAT THE ADDITION WAS RIGHTLY MADE. THIS GROU ND OF THE ASSESSEE IS, THEREFORE, DISMISSED. 6. GROUND NO.2 READS AS UNDER: 2) THE LEARNED CIT(A) FURTHER ERRED IN CONFIRMING ADDITION OF RS.10,01,325/- ON ACCOUNT OF PEAK ON PURCHASE OF FO REIGN CURRENCIES AS PER PARA 6.3 OF THE APPEAL ORDER. 6.1. IN THIS REGARD, THE OBSERVATION OF THE ASSESSI NG OFFICER WAS THAT THE ASSESSEE HAD PURCHASED FOREIGN CURRENCY FROM CERTAI N PERSONS; LIST OF THOSE PERSONS WERE MADE AVAILABLE IN THE ASSESSMENT ORDER. IT WAS ALSO NOTED BY THE ASSESSING OFFICER THAT THE PHOTOCOPIES OF PASSPORT OF THOSE PERSONS WERE OBTAINED BY THE ASSESSEE AT THE TIME O F PURCHASE OF FOREIGN CURRENCY. THE ASSESSING OFFICERS OBJECTION WAS TH AT THOSE PHOTOCOPIES HAVE NOT BEEN SIGNED BY THE RESPECTIVE PASSPORT-HOL DERS. AS PER ASSESSING OFFICER, THE ASSESSEE HAS ALSO NOT OBTAIN ED THE DECLARATION FORM FURNISHED AT THE TIME OF ARRIVAL. IT WAS CONTESTED THAT MERELY ON CERTAIN TECHNICAL DEFECTS THE ADDITION SHOULD NOT HAVE BEEN MADE BECAUSE THE ASSESSEE WAS NOT AWARE THAT SUCH FORMALITIES WERE A SKED AT THE TIME OF ASSESSMENT. HOWEVER, IT WAS INFORMED TO THE ASSESS ING OFFICER THAT PURCHASE OF FOREIGN EXCHANGE WAS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER WAS NOT CONVINCED A ND MADE THE ADDITION AS PER THE FOLLOWING OBSERVATION:- 5.2. THE SUBMISSION OF THE ASSESSEE IS CONSIDERED CAREFULLY. THE ASSESSEE HAS SUBMITTED A GENERAL REPLY THAT THE DEF ECT IS IMMATERIAL FOR ASSESSMENT OF THE INCOME OF THE ASSE SSEE. IT IS THE PRIMA FACIE DUTY OF THE ASSESSEE TO JUSTIFY ANY SUM CREDITED OR DEBITED IN ITS BOOKS OF ACCOUNT. IN THE INSTANT CASE THE ASSESSEE HAS NOT JUSTIFIED IN ITS CLAIM, AS THE ASSESSEE IS NOT HAVING ANY ITA NO .193/AHD/2009 KHENAT MONEY CHANGER (P) LTD. VS. ITO ASST.YEAR - 2005-06 - 4 - DETAILS WITH THEM ABOUT THE PURCHASE OF THE FOREIGN CURRENCY. IN ABSENCE OF DETAILS OF PERSON FROM WHOM FOREIGN CURR ENCY IS PURCHASED, IT IS NOT POSSIBLE TO VERIFY WHETHER THE Y HAD PURCHASED THE FOREIGN CURRENCY OR NOT. THUS, THE ASSESSEE FA ILED TO DISCHARGE ITS ONUS TO PROVE THE TRANSACTION AS GENUINE ONE. ACCORDINGLY, PEAK AMOUNT OF THESE PURCHASES, WHICH COMES TO RS.1 0,01,325/-, IS ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCE EDINGS U/S.271(1)(C) OF THE ACT ARE INITIATED FOR CONCEALI NG INCOME BY WAY OF FURNISHING INACCURATE PARTICULARS OF INCOME. 7. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE ACTION OF THE ASSESSING OFFICER WAS AFFIRMED. 8. FROM THE SIDE OF THE ASSESSEE, LEARNED AUTHORISE D REPRESENTATIVE MR. KIRAN K.SHAH APPEARED AND VEHEMENTLY CONTESTED THAT ON TECHNICAL GROUNDS THE IMPUGNED ADDITION WAS MADE THOUGH THE P URCHASES HAVE DULY BEEN REFLECTED. HE HAS ALSO PLEADED THAT THER E WAS NO VIOLATION OF ANY LAW AND THE ASSESSEE HAS OTHERWISE OBTAINED ALL THE INFORMATION IN RESPECT OF THE PERSONS FROM WHOM THE FOREIGN EXCHAN GE WAS PURCHASED. IT WAS ALSO PLEADED THAT THE ASSESSING OFFICER DID NOT FIND ANY DEFECT IN THE BOOKS OF ACCOUNT. THE LEARNED AUTHORISED REPRE SENTATIVE HAS PLACED RELIANCE ON A DECISION OF HON'BLE ITAT AHMEDABAD B BENCH IN THE CASE OF ITO VS. SUNSTEEL REPORTED AT (2005)92 TTJ (AHD) 1126 FOR THE PROPOSITION THAT IN THE ABSENCE OF ANY MATERIAL TO PROVE THAT THE PAYMENTS OF PURCHASES HAVE COME TO THE ASSESSEE, ENTIRE ADDI TION COULD NOT BE SUSTAINED AND RESTRICTED TO AN ESTIMATED AMOUNT. 9. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE MR. G.L. YADAV APPEARED AND HAS PLACED RELIANCE ON THE ORDER S OF THE ASSESSING OFFICER AND LEARNED CIT(APPEALS). HAVING HEARD THE SUBMISSIONS OF ITA NO .193/AHD/2009 KHENAT MONEY CHANGER (P) LTD. VS. ITO ASST.YEAR - 2005-06 - 5 - BOTH THE SIDES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER HAS PROCEEDED MERELY ON AN ASSUMPTION THAT SINCE TH E ASSESSEE HAS NOT OBTAINED PROPER SIGNATURES ON THE PHOTOCOPIES OF TH E PASSPORT, THEREFORE, THOSE PURCHASES OF FOREIGN EXCHANGE WERE DOUBTFUL. THE ASSESSEE HAS PLEADED THAT THE DEFECTS WHICH WERE POINTED OUT BY THE ASSESSING OFFICER WERE TECHNICAL DEFECTS BUT DID NOT ADVERSELY EFFECT THE ASSESSEE SINCE ALL THE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT. WE ALSO AGREE WITH THOSE CONTENTIONS OF THE ASSESSEE PARTIC ULARLY WHEN THE TRANSACTIONS AS SUCH WERE NOT FOUND TO BE FALSE BU T DULY RECORDED IN THE BOOKS OF ACCOUNT. ACCORDING TO US, THE ADDITION WA S UNCALLED FOR BEING BASED UPON AN UNJUSTIFIED REASONING, HENCE, WE HERE BY DIRECT TO DELETE THE SAME. THIS GROUND OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 17 TH JUNE, 2011. SD/- SD/- ( A.N. PAHUJA ) ( MU KUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED / /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DE PARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT( APPEALS)-VI, BARODA 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO .193/AHD/2009 KHENAT MONEY CHANGER (P) LTD. VS. ITO ASST.YEAR - 2005-06 - 6 - 1. DATE OF DICTATION..08/06/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10/06/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 17/6/2011. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 17/6/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER