The ITO, 3(1), Indore V. M/s. Malwa Constructions, Indore

ITA 205/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5839 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Unexplained investment; Additional evidence

Judgement Text

ITA 205 OF 2014 MALWA CONSTRUCTION 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.205/IND/2014 A.Y. 2005-06 ITO-3(1), INDORE :: APPELLANT VS M/S. MALWA CONSTRUCTIONS, INDORE PAN AAIFM 9161 A :: RESPONDENT DEPARTMENT BY SHRI R.A. VERMA, DR RESPONDENT BY NONE DATE OF HEARING 20.1.2016 DATE OF PRONOUNCEMENT 20.1.2016 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL IS FILED BY THE REVENUE CHALLENGING TH E ORDER OF LD. CIT(A)-I, INDORE, DATED 16.12.2013. NOTICE FOR HEAR ING WAS SENT TO ASSESSEE WHICH WAS BACK AS UNSERVED, THEREFORE, NOT ICES THROUGH THE DEPARTMENT WERE ISSUE TO THE ASSESSEE, WHICH WE RE SERVED ON THE ASSESSEE BY THE DEPARTMENT AS IS EVIDENT FROM T HE SERVICE ITA 205 OF 2014 MALWA CONSTRUCTION 2 REPORT FILED BY THE LD. DR. HOWEVER, ASSESSEE CHOSE NOT TO REPRESENT THE CASE, THUS, ASSESSEE WAS PROCEEDED EX PARTE. 2. FIRST GROUND RAISED BY THE REVENUE IS THAT LD. C IT(A) HAS ERRED IN RESTRICTING THE ADDITION TO RS.4,25,133/- FROM R S.10,62,832/- OUT OF VARIOUS EXPENSES. FACTS, IN BRIEF, ARE THAT THE AO MADE A DISALLOWANCE OF RS.10,62,832/- AS 25% DISALLOWANCE OUT OF VARIOUS EXPENSES AT RS.42,51,338/- AS THE ASSESSEE FAILED T O PRODUCE RELEVANT VOUCHERS AND BOOKS OF ACCOUNT BEFORE THE A O. LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCES AND TAKING INTO C ONSIDERATION OF SOME DISCREPANCIES NOTED BY THE AO, RESTRICTED THE ADDITION TO RS.4,25,133/-. BEFORE US, LD. DR SUBMITTED THAT LD. CIT(A) WAS NOT RIGHT IN RESTRICTING THE ADDITION BECAUSE THE AO, I N REMAND REPORT, OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES O N THE GROUND THAT BILLS OF DIESEL DID NOT SHOW ANY DIESEL FILLIN G IN DUMPERS/JCB OWNED BY THE ASSESSEE AND ENTIRE SUCH EXPENSES BELO NG TO HIRED VEHICLES, THEREFORE, EXPENSES WERE MANIPULATED. BES IDES THIS, VOUCHERS OF EXPENSES WERE SELF MADE VOUCHERS/ESTIMA TE BEING NO SERIAL NUMBER AND NOT UNVERIFIABLE. IN TYRE MOULDIN G CHARGES, SOME OF VOUCHERS WERE NOT FURNISHED. ON CONSIDERATION OF ABOVE, WE FIND THAT THE ISSUE REQUIRES RECONSIDERATION AT THE LEVE L OF THE AO. THE ITA 205 OF 2014 MALWA CONSTRUCTION 3 ASSESSEE HAS FILED ADDITIONAL EVIDENCES BEFORE LD. CIT(A), BUT THE LD. CIT(A) DID NOT APPRECIATE THE OBJECTION OF THE AO IN PROPER PERSPECTIVE. THEREFORE, WE SET ASIDE THE ORDER OF T HE LD. CIT(A) ON THIS ISSUE. THE ISSUE IS RESTORED BACK TO THE FILE OF THE LD. AO WITH DIRECTION TO DECIDE THE ISSUE AFRESH. THE AO SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSE SSEE. THE ASSESSEE SHALL BE AT LIBERTY TO FILE ANY FURTHER EV IDENCE, IF ANY, IN SUPPORT OF THE CLAIM. THUS, GROUND NO.1 OF THE APPE AL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 3. SECOND GROUND RAISED BY THE REVENUE IS THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION TO RS.4,18,993/- ON ACCOUNT OF SUNDRY CREDITORS. FACTS, IN BRIEF, ARE THAT THE AO MADE TH E ADDITION AS THE ASSESSEE FAILED TO FILE CONFIRMATION LETTERS FROM S UCH CREDITORS. BEFORE LD. CIT(A), THE ASSESSEE EXPLAINED THAT IN A BUSINESS TURNOVER OF RS.50 LACS, SUNDRY CREDITORS OF RS.4,18 ,993/- IS QUITE NORMAL. THE ASSESSEE ALSO FURNISHED SOME CONFIRMATI ON LETTERS. LD. CIT(A), CONSIDERING THE SAME, DELETED THE ADDITION. BEFORE US, LD. DR SUBMITTED THAT LD. CIT(A) WAS NOT RIGHT IN DELET ING THE ADDITION BECAUSE BEFORE THE AO, THE ASSESSEE WAS UNABLE TO A DDUCE ANY SUPPORTING DOCUMENTARY EVIDENCE IN SUPPORT OF ITS C LAIM EITHER ITA 205 OF 2014 MALWA CONSTRUCTION 4 DURING THE ASSESSMENT PROCEEDING OR DURING REMAND P ROCEEDINGS. ON CONSIDERATION OF ABOVE, WE FIND THAT THE ISSUE R EQUIRES RECONSIDERATION AT THE LEVEL OF THE AO AS THE LD. C IT(A) DID NOT DISCUSS THE VIEW OF THE AO IN PROPER PERSPECTIVE. T HEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. TH E ISSUE IS RESTORED BACK TO THE FILE OF THE LD. AO WITH DIRECTION TO DE CIDE THE ISSUE AFRESH. THE AO SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL BE AT L IBERTY TO FILE ANY FURTHER EVIDENCE, IF ANY, IN SUPPORT OF THE CLAIM. THUS, GROUND NO.2 OF THE APPEAL OF THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSES. 4. THIRD GROUND RAISED BY THE REVENUE IS THAT LD. C IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,21,153/- ON ACCOUNT OF SUNDRY DEBTORS. FACTS, IN BRIEF, ARE THAT THE AO MADE THE ADDITION AS THE ASSESSEE FAILED TO FILE CONFIRMATION OF PARTIES. BE FORE LD. CIT(A), THE ASSESSEE EXPLAINED THAT SUCH SUNDRY DEBTORS ARE COM ING FROM LAST YEAR, WHICH ARE DEBIT ENTRIES, THUS, COULD NOT BE A DDED. LD. CIT(A), CONSIDERING THE SAME, DELETED THE ADDITION. BEFORE US, LD. DR SUBMITTED THAT LD. CIT(A) WAS NOT RIGHT IN DELETING THE ADDITION BECAUSE BEFORE THE AO, THE ASSESSEE WAS UNABLE TO A DDUCE ANY SUPPORTING DOCUMENTARY EVIDENCE IN SUPPORT OF ITS C LAIM EITHER ITA 205 OF 2014 MALWA CONSTRUCTION 5 DURING THE ASSESSMENT PROCEEDING OR DURING REMAND P ROCEEDINGS. ON CONSIDERATION OF ABOVE, WE FIND THAT THE ISSUE R EQUIRES RECONSIDERATION AT THE LEVEL OF THE AO AS THE LD. C IT(A) DID NOT DISCUSS THE VIEW OF THE AO IN PROPER PERSPECTIVE. T HEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. TH E ISSUE IS RESTORED BACK TO THE FILE OF THE LD. AO WITH DIRECTION TO DE CIDE THE ISSUE AFRESH. THE AO SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL BE AT L IBERTY TO FILE ANY FURTHER EVIDENCE, IF ANY, IN SUPPORT OF THE CLAIM. THUS, GROUND NO.3 OF THE APPEAL OF THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSES. 5. SO FAR AS THE GROUND NO.4 OF THE APPEAL OF THE R EVENUE IS CONCERNED, THE SAME RELATES TO ADDITION OF RS.23 LA CS ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF JCB AND DUMPE RS. FACTS, IN BRIEF, ARE THAT FROM THE DETAILS, THE AO OBSERVED T HAT THE ASSESSEE HAS PURCHASED DUMPERS AND INVESTMENT IN THEM WAS UN EXPLAINED. BEFORE LD. CIT(A), THE ASSESSEE EXPLAINED THAT THIS AMOUNT OF RS.23 LACS DOES NOT REPRESENT PURCHASE OF DUMPERS BUT IT IS SALE OF OLD DUMPERS. LD. CIT(A) FORWARDED THE SUBMISSION OF THE ASSESSEE BEFORE THE AO, WHO ADMITTED IN REMAND REPORT DATED 27.5.2009 THAT ASSESSEE HAS SOLD FIVE OLD DUMPERS. HENCE, THE AMOU NT COULD NOT ITA 205 OF 2014 MALWA CONSTRUCTION 6 BE CONSIDERED AS UNACCOUNTED INVESTMENT. SUCH SALE IS REFLECTED IN SCHEDULE F OF AUDIT REPORT WAS ALSO FURNISHED WITH RETURN OF INCOME, AS SUBMITTED IN THE REMAND REPORT. LD. CIT(A), CONS IDERING THESE FACTS, DELETED THE ADDITION. BEFORE US, LD. DR COUL D NOT CONTROVERT THE FACT FINDING AS RECORDED BY THE LD. CIT(A) BY B RINING ANY CONTRARY MATERIAL ON RECORD. THEREFORE, WE CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. GROUND NO.4 OF THE APPEAL OF THE REV ENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20.1.2016 . SD/- ( D.T. GARASIA) JUDICIAL MEMBER SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 20.1.2016 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE