Shri Raj Kumar Agarwal, Bharuch V. The Income Tax Officer, Ward-3, Bharuch

ITA 193/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6109 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-07-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: ANKIT TALSANIA
• Section: 143(3)

Judgement Text

SMC-ITA NO. 193/AHD/2014 RAJ KUMAR AGARWAL VS. ITO ASSESSMENT YEAR: 2004-05 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO. 193/AHD/2014 ASSESSMENT YEAR : 2004-05 RAJ KUMAR AGARWAL ............APPELLA NT TECH FAB INSTRUMENTATION, D-15, NARAYAN ESTATE, BHARUCH- 392 001 [PAN : ABTPA 7859 D] VS. INCOME-TAX OFFICER .......................RESPONDENT WARD-3, BHARUCH, APPEARANCES BY: ANKIT TALSANIA FOR THE APPELLANT RAJESH MEENA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 17.11.2017 DATE OF PRONOUNCING THE ORDER : 14.02.2018 O R D E R 1. THIS APPEAL, FILED BY THE ASSESSEE, CHALLENGES C ORRECTNESS OF LEARNED CIT(A)S ORDER DATED 1 ST NOVEMBER 2013 IN THE MATTER OF ASSESSMENT UNDER SE CTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FO R THE ASSESSMENT YEAR 2004-05. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S:- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-VI , BARODA [HEREINAFTER REFERRED TO AS CIT (APPEALS)], ERRED I N CONFIRMING THE FINDINGS OF THE ASSESSING OFFICER THAT THE ASSESSEE S CLAIMED TRANSACTIONS WITH MESSRS HIMALAYA TEA ESTATE WERE B OGUS AND THAT THE CLAIMED RECEIPTS AS WELL AS EXPENSES WERE NOT GENUI NE. 2. THE LD. CIT (APPEALS), WHILST CONFIRMING THE FIN DINGS OF THE ASSESSING OFFICER, HAS OVERLOOKED THE PECULIAR FACTS OF THE C ASE OF THE ASSESSEE 3. IT IS HUMBLY PRAYED THAT THE ADDITION OF RS.14, 57,987/- MADE BY THE ASSESSING OFFICER IN AY 2004-05, AND CONFIRMED BY T HE CIT(APPEALS), BE DELETED. 3. TO ADJUDICATE ON THE ABOVE GRIEVANCES, ONLY A FE W MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE HAS MAINLY EARNED INCO ME EMBEDDED IN CONTRACT RECEIPTS FROM ONGC LIMITED, AGGREGATING TO RS.1,32, 38,175/-, SALE OF AGRICULTURAL PRODUCTS, AGGREGATING TO RS.26,23,493/-, CONTRACT F ROM HIMALAYA TEA ESTATES, AGGREGATING TO RS.14,57,987/-/ AND PETTY CONTRACT R ECEIPTS AGGREGATING TO SMC-ITA NO. 193/AHD/2014 RAJ KUMAR AGARWAL VS. ITO ASSESSMENT YEAR: 2004-05 PAGE 2 OF 3 RS.14,57,987/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER, INTER ALIA, WAS OF THE VIEW THAT THE TRANSACTION SHOWN BY THE ASSESSEE TOWARDS ALLEGED TEA GARDEN OF M/S. HIMALAYA TEA EST ATE ARE BOGUS. IT WAS ALSO NOTED THAT EXPENDITURE CLAIMED AGAINST THE ABOVE WO RK CONTRACTS ARE ALSO NOT GENUINE BUT NO SUCH EXPENDITURE WAS IDENTIFIED. QU ITE TO THE CONTRARY, IT WAS OBSERVED THAT THE ASSESSEE HAS NOT DEBITED ANY EXPENDITURE ON AC COUNT OF FERTILIZERS, PESTICIDES, TRACTOR, JCB FOR EXCAVATIO N, FENCING, IRRIGATION, LABOUR BONUS, MISCELLANEOUS EXPENSES LIKE FOOD, SNACKS, TEA ETC. TO THE LABOUR. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER PROCEEDED TO CO NCLUDE THAT IN VIEW OF THE ABOVE FACTUAL POSITION, IT IS CLEAR THAT THE ASSESSEE HAS INTRODUCED HIS OWN CASH IN THE NAME OF TRANSACTION WITH M/S HIMALAYA TEA ESTATE, T HE SOURCE OF WHICH IS UNEXPLAINED . ACCORDINGLY, AN ADDITION OF RS.14,57,987/- WAS MADE AS UNEXPLAINED CASH. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN A PPEAL BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APP EAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 5. AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY POIN TS OUT, THE AMOUNT OF RS.14,57,987/-, WHICH HAS BEEN ADDED TO THE RETURNE D INCOME, WAS ALREADY INCLUDED IN THE GROSS RECEIPTS DISCLOSED BY THE ASSESSEE. W HAT IS ALREADY INCLUDED IN THE COMPUTATION OF BUSINESS PROFITS CANNOT BE ADDED AGA IN TO THE INCOME RETURNED BY THE ASSESSEE. THE DISALLOWANCE, IF AT ALL, COULD ONLY BE FOR THE EXPENSES INCURRED ON EXECUTION OF A CONTRACT, WHICH IS FOUND TO BE A BOG US OR SHAM ARRANGEMENT, BUT THEN NO SUCH DISALLOWABLE EXPENSES HAVE BEEN IDENTIFIED BY THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAS ADDED ENTIRE CONTRACT RECEIPT AND THE LEARNED CIT(A) HAS CONFIRMED THE SAME. TO THIS EXTENT, ASSESSING OFFI CER AS WELL AS CITA WERE CLEARLY IN ERROR. THESE AUTHORITIES PROCEEDED ON THE ASSUM PTION THAT ENTIRE RECEIPTS WERE CLAIMED AS DEDUCTIONS IN EXPENSES BUT THEN THE ASSE SSING OFFICER HAS MADE OBSERVATION TO INDICATE THAT THE ASSESSEE HAS NOT C LAIMED DEDUCTION FOR EXPENSES. 6. IN VIEW OF THE ABOVE DISCUSSIONS, IN MY CONSIDER ED VIEW, THE MATTER DESERVES TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RESTRICT THE ADDITION TO DISALLOWANCE OF SUCH DIRECT EXPENSES, I N CONNECTION WITH THE WORKS CONTRACT WITH HIMALAYA TEA ESTATE, AS HAS BEEN CLAI MED AS DEDUCTION BY THE ASSESSEE. IN CASE THERE ARE NO SUCH EXPENSES CLAIM ED BY THE ASSESSEE, OBVIOUSLY THERE WILL BE NO OCCASION FOR DISALLOWANCE OF EXPEN SES. WITH THESE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. AS WE HAVE REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER ON THE ABOVE SHORT GROUND, ALL OTHER ISSUES REMAIN OPEN AND THE ASSESSEE IS AT LIBERTY TO SEEK ADJUDICATION ON THE SAME. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TOD AY ON THE 14TH FEBRUARY, 2018. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD, THE 14 TH DAY OF FEBRUARY, 2018 **TB8PBN SMC-ITA NO. 193/AHD/2014 RAJ KUMAR AGARWAL VS. ITO ASSESSMENT YEAR: 2004-05 PAGE 3 OF 3 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ....ORDER PREPARED AS PER FI VE PAGES MANUSCRIPTS OF HONBLE AM, WHICH IS ATTACHED ......12.02.2018.... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .. 12.02.2018.... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: ....14.02.2018.. . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .14.02.2018 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .. .14.02.2018.. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER: