Sri Mahesh Fatesaria., Kolkata V. I.T.O Wd - 38(2),kolkata., Kolkata

ITA 193/KOL/2013

• Counselvise Citation: 19323514 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 28-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: FARHAN
• Keywords: Unexplained cash credit
• Section: 37

Judgement Text

I.T.A. NO . 1 9 3 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 200 9 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER I.T.A. NO. 1 93 / KOL / 20 1 3 ASSESSMENT YEAR : 200 8 - 20 0 9 MAHESH FATESARIA,............. . ................ ........ . APPELLANT SHREE SANTOSHI SAR EE, 7/2. BABULAL LANE, 1 ST FLOOR, KOLKATA - 700 007 [PAN : A AEPF 4169 M ] - VS. - INCOME TAX OFFICER................................ , . ...... ..... . RESPONDENT WARED - 38(2), KOLKATA, 18, RABINDRA SARANI, KOLKATA - 700 001 APPEARANCES BY: FARHAN, A.R., FOR THE ASSESSEE S MT. MADHUMALATI GHOSH , JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : JUNE 01 , 2 01 5 DATE OF PRONOUNCING THE ORDER : JUNE 01 , 201 5 O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS) - XX I V , KOLKATA D ATED 2 0 . 11 .20 1 2 FOR THE ASSESSMENT YEAR 200 8 - 0 9 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - ( 1 ) FOR THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT IN CONFIRMING THE ADDITION TO THE TUNE OF RS.2,35,000/ - AS UNEXPL AINED CASH CREDIT. ( 2 ) FOR THAT THE LD. CIT(A) HAS NOT APPLIED HIS MIND IN UPHOLDING THE ADDITION OF OUTSTANDING LIABILITIES TO THE TUNE OF RS.20,008/ - AS NON - EXISTENT. ( 3 ) FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE AN AMOUNT OF RS .40,247/ - IN RESPECT OF LABOUR CHARGE PAYMENTS AND AN AMOUNT OF RS.1,02,111/ - FOR THREAD & OTHER JOB MATERIALS EXPENSES ON THE BASIS OF CONJECTURE AND SURMISE. 2. GROUND NO. 1 RELATES TO THE ADDITION OF RS.2,35,000/ - . BRIEF FACTS RELATING TO THIS GROUND A RE THAT THE ASSESSING OFFICER NOTED THAT THE I.T.A. NO . 1 9 3 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 200 9 PAGE 2 OF 5 ASSESSEE HAS INTRODUCED A CAPITAL OF RS.2,35,000/ - DURING THE YEAR, THEREFORE, HE ADDED THE SAME IN THE INCOME OF THE ASSESSEE AS THE ASSESSEE COULD NOT ADDUCE ANY EVIDENCE. WHEN THE MATTER WENT BEFORE THE CIT(A PPEALS), THE ASSESSEE CONTENDED THAT THE SAID AMOUNT HAS BEEN DEPOSITED BY HIS PREVIOUS SAVINGS AS WELL AS CURRENT YEAR S WITHDRAWALS. THIS IS NOTHING BUT A CHANGE IN THE FORM OF PRESENTATION SHOWING DEBIT AND CREDIT FIGURES OF CAPITAL ACCOUNT SEPARATELY I NSTEAD OF PRESENTING THE NET FIGURE I.E. RS.65,974/ - (RS.3,00,000/ - MINUS RS.2,35,000/ - AS CURRENT YEAR S DRAWINGS. 3. CIT(APPEALS) ASKED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER WHICH IS PRODUCED UNDER PARA 3.2.1 OF THE ORDER OF CIT(APPEALS). AFTE R CONSIDERING THE REMAND REPORT, CIT(APPEALS) SUSTAINED THE ADDITION AS UNEXPLAINED CASH CREDIT. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. I NOTED FROM THE REMAND REPORT THAT THE ASSESSEE HAS MADE A DRAWING FROM HIS CAPITAL ACCOUNT OF BUSINESS TO THE EXTENT OF RS.3,00,974/ - EXCEPT RS.50,000/ - BY CHEQUE. THE ASSESSEE HAS INTRODUCED THE CAPITAL IN BUSINESS ON 01.07.2007 RS.35,000/ - IN CASH AND RS.18,000/ - ON 11.12.2007 BY CREDIT CAR D. THE ASSESSING OFFICER ALSO NOTED IN THE REMAND REPORT THAT FROM THE PERSONAL CASH BOOK OF THE ASSESSEE IT APPEARS THAT THERE WAS DRAWING TO THE EXTENT OF RS.2,91,438/ - BUT AS PER HIS ACCOUNTS HIS DRAWING WAS ONLY RS.42,802/ - . EVEN THE ASSESSEE HAS TAKEN A PERSONAL LOAN FROM HSBC AMOUNTING TO RS.2,50,974/ - , WHICH HAS DULY BEEN CREDITED TO HIS PERSONAL BANK ACCOUNT OF SBI. I , THEREFORE, IN VIEW OF THE FACTS THAT THE DRAWING MADE AS WELL AS THE LOAN TAKEN BY THE ASSESEE FROM HSBC IS MUCH MORE THAN RS.2,35,0 00/ - , WHICH HAS BEEN INTRODUCED BY THE ASSESSEE AS HIS CAPITAL. I ACCORDINGLY DELETE THE SAID ADDITION. THUS THIS ADDITION STANDS DELETED AS IN MY OPINION THE ASSESSEE IS ABLE TO PROVE THE NATURE AND SOURCE OF THE DEPOSIT. RESULTANTLY THIS GROUND STANDS AL LOWED. I.T.A. NO . 1 9 3 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 200 9 PAGE 3 OF 5 5. IN RESPECT OF GROUND NO. 2, THE ASSESSING OFFICER TREATED THE OUTSTANDING EXPENSES AS NON - EXISTENT LIABILITY TO THE EXTENT OF RS.20,018/ - AS THE ASSESSEE COULD NOT FURNISH THE EVIDENCE TO THE TUNE OF RS.20,018/ - AND ADDED THE SAME IN THE INCOME OF THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 6. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT THE OUTSTANDING EXPENSES DISALLOWED BY THE INCOME TAX OFFICER CONSIST OF AUDIT FEES AND SOME PAYMENTS OF LABOUR CHARGES WHICH WER E SUBSEQUENTLY PAID. THE ASSESSEE ALSO SUBMITTED THE LIST OF THESE PAYMENTS. WHEN THE REMAND REPORT WAS CALLED FOR IT WAS NOTED BY THE ASSESSING OFFICER THAT THE OUTSTANDING LIABILITY CONSIST OF SALARY PAYABLE OF RS.14,400/ - AND AUDIT FEES PAYABLE OF RS.5, 618/ - . THE CIT(APPEALS) CONFIRMED THE ADDITION. 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF TAX AUTHORITIES BELOW. IT IS A CASE WHERE THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINITY OF THE EXPEN DITURE AND THE EXPENDITURE HAS DULY BEEN ALLOWED AS PER PROVISIONS OF SECTION 37 OF THE INCOME TAX ACT. THEREFORE, I AM OF THE VIEW THAT THE LIABILITY WHICH IS DUE IN RESPECT OF SUCH EXPENDITURE CANNOT BE DISALLOWED UNTIL AND UNLESS THE LIABILITY HAS BEEN REMITTED, IF ANY, ONLY IF THE CONDITIONS LAID DOWN UNDER SECTION 41(1) ARE COMPLIED WITH , NEITHER THE AUTHORITIES BELOW HAS GONE THROUGH THE PROVISIONS OF SECTION 41 BUT DISALLOWED THE EXPENDITURE WHICH IS NOT ACCORDING TO THE MANDATE OF SECTION 41 OF THE ACT. I, THEREFORE, DELETE THE DISALLOWANCE. THUS THIS GROUND STANDS ALLOWED. 8. GROUND NO. 3 RELATES TO THE DISALLOWANCE OF AN AMOUNT OF RS.40,247/ - IN RESPECT OF PAYMENT OF LABOUR CHARGES AND AN AMOUNT OF RS.1,02,111/ - FOR THREAD & OTHER JOB MATERIAL EXP ENSES. I.T.A. NO . 1 9 3 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 200 9 PAGE 4 OF 5 9. SO FAR AS THE DISALLOWANCE OF RS.40,247/ - IS CONCERNED, I NOTED THAT THE ASSESSEE HAS INCURRED LABOUR CHARGES TO THE TUNE OF RS.4,02,467/ - . IN THE ABSENCE OF CASH BOOK, LABOUR CHARGES REGISTER, BILLS AND VOUCHERS BEING PRODUCED, THE ASSESSING OF FICER DISALLOWED 10% OF THE EXPENDITURE. WHEN THE MATTER WENT BEFORE THE CIT(APPEALS), CIT(APPEALS) CONFIRMED THE DISALLOWANCE. 10. I HAVE HEARD THE RIVAL SUBMISSIONS. IN MY OPINION, THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINITY OF THE EXPENDITURE IN CURRED AND CLAIMED BY HIM. I NOTED THAT IN THIS CASE THE ASSESSEE HAS NOT PRODUCED ANY BILL OR VOUCHER, EVEN THE DETAILS OF LABOUR EXPENSES. IN THE ABSENCE OF SUPPORTING DOCUMENTS BEING DISCHARGED, I AM OF THE VIEW THAT THE AUTHORITIES BELOW HAD FAIR ENOUG H TO SUSTAIN THE DISALLOWANCE TO 10% OF THE TOTAL EXPENDITURE ON ACCOUNT OF LABOUR CHARGES. SIMILARLY I NOTED THAT 10% OF THE THREAD AND OTHER JOB MATERIAL EXPENSES HA VE BEEN ALLOWED BY THE ASSESSING OFFICER . IN RESPECT OF THESE EXPENSES ALSO, THE ASSESS EE HAS NOT DISCHARGED HIS ONUS, NEITHER PRODUCED ANY BILL OR VOUCHER OR PURCHASE REGISTER TO SHOW THE GENUINITY OF THE EXPENDITURE WHICH COULD NOT BE VERIFIED BY THE AUTHORITIES BELOW. UNDER THESE CIRCUMSTANCES, I AM OF THE VIEW THAT THE CIT(APPEALS) WAS F AIR ENOUGH TO SUSTAIN THE DISALLOWANCE OF RS.1,02,111/ - IN RESPECT OF THREADS AND OTHER JOB MATERIALS PURCHASE EXPENSES BEING 10% OF THE TOTAL EXPENDITURE INCURRED IN THIS REGARD BY THE ASSESSEE. I, THEREFORE, CONFIRM THE ORDER OF CIT(APPEALS). THUS THIS G ROUND TAKEN BY THE ASSESSEE STANDS DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 01 , 201 5 . SD/ - P.K. BANSAL ( ACCOUNTANT MEMBER) KOLKATA, THE 1 ST D AY OF JUNE , 201 5 I.T.A. NO . 1 9 3 / KOL ./20 1 3 ASSESSMENT YEAR: 200 8 - 200 9 PAGE 5 OF 5 COPIES TO : (1) MAHESH FATESARIA, SHREE SANTOSHI SAREE, 7/2. BABULAL LANE, 1 ST FLOOR, KOLKATA - 700 007 (2) INCOME TAX OFFICER , WARED - 38(2), KOLKATA, 18, RABINDRA SARANI, KOLKATA - 700 001 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCO ME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .