AMIT BALKRISHNA TAWAL, MUMBAI V. ITO 17(1)(1), MUMBAI

ITA 2079/MUM/2013

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6974 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 15-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA LD
• Keywords: Business expenditure
• Section: 40A(3); 143(3)

Judgement Text

ITA.NO.2079/MUM/2013 AMIT BALKRISHNA TAWAL ASSESSMENT YEAR- 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.2079/MUM/2013 ( / ASSESSMENT YEAR:2007-08) AMIT BALKRISHNA TAWAL ROOM NO.42,206/2 SEEDAT MANSION, 2 ND FLOOR DR. BB.A. ROAD, DADAR (E) MUMBAI-400 014 / VS. INCOME TAX OFFICER - 17(1)(1) PRATYAKSHKAR BHAVAN B.K.C., BANDRA(E) MUMBAI- 400 051 ! ./ ./PAN/GIR NO. ADLPT-3307-R ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : N. HEMALATHA, LD. DR / DATE OF HEARING : 23/05/2018 / DATE OF PRONOU NCEMENT : 23/05/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2007-08 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-17 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-17/IT-129/2011-12 DATED 08/01/2013 QUA CONFIRMATION OF CERTAIN ADDITIONS. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER-17(1)(1), ITA.NO.2079/MUM/2013 AMIT BALKRISHNA TAWAL ASSESSMENT YEAR- 2007-08 2 MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ACT,1961 ON 31/12/2009 WHEREIN THE INCOME OF THE ASSESSEE HAS BEEN DETERMI NED AT RS.5.72 LACS AFTER CERTAIN ADDITIONS / DISALLOWANCES AS AGA INST RETURNED INCOME OF RS.1.58 LACS FILED BY THE ASSESSEE ON 31/12/2008 . NONE HAS APPEARED FOR ASSESSEE DESPITE BEING PROVIDED WITH S EVERAL OPPORTUNITIES OF BEING HEARD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE-OFF THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AF TER HEARING LD. DEPARTMENTAL REPRESENTATIVE, MS. N.HEMALATHA. 2. THE ASSESSEE HAS RAISED ARGUMENTATIVE GROUNDS OF APPEAL WHICH ARE NOT PROPER AS PER RULES. HOWEVER, IN SUM & SUBS TANCE, THE ASSESSEE, IS AGGRIEVED BY ADDITION OF RS.3.99 LACS U/S 68, AD DITION OF RS.4.27 LACS U/S 40A(3) AND ADHOC ADDITION OF RS.0.15 LACS AGAINST TELEPHONE AND CONVEYANCE EXPENSES. 3.1 DURING IMPUGNED AY, THE ASSESSEE WAS ENGAGED IN LABOR JOB CONTRACT OF PAINTING, PLUMBING AND CIVIL WORK PRIMARILY FOR SMALL RESIDENCES. HENCE, THE ASSESSEES BUSINESS WAS PRIM ARILY CASH BUSINESS. AS PER ANNUAL INFORMATION RETURN [AIR] INFORMATION, IT WAS FOUND THAT THE ASSESSEE MADE CASH DEPOSIT OF RS.12. 84 LACS IN ONE OF THE BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD., MUMBAI AS AGAINST JOB WORK INCOME OF RS.8.50 LACS REFLECTED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT. AGAINST THE SAME, THE ASSESSEE REFL ECTED NET PROFIT OF RS.1,67,281/- WHICH TRANSLATED INTO NET PROFIT RATE OF 19.6%. 3.2 TO SUBSTANTIATE THE CASH DEPOSIT, THE ASSESSEE SUBMITTED CASH FLOW STATEMENT WHICH IS EXTRACTED AT PAGE-3 OF THE QUANTUM ASSESSMENT ORDER. THE ASSESSEE ALSO FILED CASH BOOK SUMMARY . AFTER PERUSING THE SAME, IT WAS FOUND THAT THE ASSESSEE MADE CASH WITH DRAWALS OF RS.7.13 ITA.NO.2079/MUM/2013 AMIT BALKRISHNA TAWAL ASSESSMENT YEAR- 2007-08 3 LACS FROM THE BANK, OUT OF WHICH RS.5.89 LACS WERE STATED TO BE RE- DEPOSITED INTO THE BANK ACCOUNT. HOWEVER, THE LD. A O WORKED OUT EXCESS CASH OF RS.3.99 LACS AND ADDED THE SAME TO T HE INCOME OF THE ASSESSEE. THE ADHOC DISALLOWANCES OF RS.15,000/- WERE MADE TO ACCOUNT FOR PERSONAL ELEMENT IN TELEPHONE & CONVEYANCE EXPENSES. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 08/01/2 013 WHERE LD. CIT(A) WHILE CONFIRMING THE STAND OF LD. AO, ENHANC ED THE ASSESSMENT BY RS.4,27,350/- U/S 40A(3). AGGRIEVED, THE ASSESSE E IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS PLACED RELIANCE ON THE ST AND OF LOWER AUTHORITIES. 5. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ASS ESSEE HAS WITHDRAWN AN AMOUNT OF RS.5.79 LACS FROM THE ATM OF THE BANK , WHICH HAS NOT BEEN CONSIDERED BY LD. FIRST APPELLATE AUTH ORITY WHILE ARRIVING AT CASH BALANCES FOR THE SIMPLE REASON THAT THE SAME W ERE WITHDRAWN FROM THE ATM . THE SAME, UNDER THE CIRCUMSTANCES, IS NOT FAIR SI NCE THE ASSESSEE WAS SMALL LABOR CONTRACTOR AND WAS REQUIRE D TO INCUR PETTY EXPENDITURE FOR THE BUSINESS. THE POSSIBILITY OF RE -DEPOSIT OF THE SAME INTO THE BANK ACCOUNT ALSO COULD NOT BE RULED OUT K EEPING IN VIEW THE NATURE OF ASSESSEES BUSINESS. THEREFORE, BY GIVING THE CREDIT OF THE SAME, WE DELETE IMPUGNED ADDITION OF RS.3.99 LACS. 6. SO FAR AS THE ENHANCEMENT U/S 40A(3) FOR RS.4,27 ,350/- AS MADE BY LD. CIT(A) IS CONCERNED, THE SAME IS UNWARRANTED SINCE THE MATERIAL ON RECORD REVEAL THAT THESE PAYMENT PRIMARILY REPRE SENT PETTY LOANS ONLY AND DO NOT CONSTITUTE BUSINESS EXPENDITURE SO AS TO ATTRACT THE PROVISIONS OF SECTION 40A(3). THEREFORE, THE SAME S TAND DELETED. ITA.NO.2079/MUM/2013 AMIT BALKRISHNA TAWAL ASSESSMENT YEAR- 2007-08 4 6. THE ADHOC DISALLOWANCE OF RS.15,000/- AGAINST TELEPHONE / CONVEYANCE EXPENSES STAND CONFIRMED SINCE THE POSSIBILITY OF PERSONAL ELEMENT IN THESE EXPENDITURE COULD NOT BE RULED OUT . 7. RESULTANTLY, THE ASSESSEES APPEAL STANDS PARTLY AL LOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018 SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23.05.2018 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. $- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI