M/s Kanta Traders, Hamirpur V. ITO, Hamirpur

ITA 208/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80883 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 208/CHD/2013 ASSESSMENT YEARS : 2006-07 KANTA TRADERS V I.T.O. NEAR HIMFED GODOWN HAMIRPUR NALTI ROAD DISTT. HAMIRPUR AAHFK 7155 M (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VISHAL MOHAN RESPONDENT BY: SHRI MAHAVIR S INGH DATE OF HEARING 20.8.2014 DATE OF PRONOUNCEMENT 10. 9.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 24.12.2012 OF THE LD CIT(A), SHIMLA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN THE LAW AND FA CTS AND THE SAME IS LIABLE TO BE SET ASIDE IN INSTANT APPEAL. 2 THAT THE LD. CIT(A) HAS ERRED IN IMPOSING TAX AM OUNTING TO RS. 221,850/-. 3 THAT THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING T HE EXPLANATION OF THE ASSESSEE FOR CASH BALANCE OF RS. 360, 547 AND ASSESSED U/S 68 OF THE ACT. 4 THAT THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING T HE EXPLANATION OF THE ASSESSEE FOR VEHICLE REPAIR AND MAINTENANCE AND DISALLOWED RS. 30,000/-. 5 THAT THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING T HE EXPLANATION OF THE ASSESSEE AND DISALLOWED THE DISC OUNT EXPENSES AMOUNTING TO RS. 10,000/-. 2 6 THAT THE LD. CIT(A) HAS ERRED IN NOT ACCEPTING T HE EXPLANATION OF THE ASSESSEE AND DISALLOWED THE COLL ECTION/ORDER BOOKING EXPENSES AMOUNTING TO RS. 30,000/-. 7 THAT THE EXPLANATIONS GIVEN BY THE ASSESSEE ARE C ORRECT AS PER RECORD BUT LD. CIT(A) HAS ERRED IN NOT ACCEPTIN G THE EXPLANATIONS GIVEN BY THE ASSESSEE. 3 AT THE TIME OF HEARING THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT HE WAS PRESSING ONLY GROUND NO. 3 AN D REST OF THE GROUNDS MAY BE DISMISSED AND THEREFORE EXCEPT G ROUND NO. 3 ALL OTHER GROUNDS HAVE BEEN DISMISSED AS NOT PRE SSED. 4 GROUND NO. 3 - AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THERE WAS CASH IN HAND OF RS. 360, 548.86 AS O N 5.4.2005 AS PER THE CASH BOOK. THE ASSESSEE WAS ASKED TO JU STIFY THE INTRODUCTION OF THIS AMOUNT. IT WAS MAINLY EXPLAIN ED THAT EARLIER THE BUSINESS WAS BEING DONE AS PROPRIETARY CONCERN IN THE NAME AND STYLE OF KANTA TRADERS BY SMT. KANTA D EVI. LATER ON W.E.F. 1.4.2005 BUSINESS WAS CARRIED ON IN THE P ARTNERSHIP FIRM AND CASH WAS CARRIED FORWARD FROM PREVIOUS BAL ANCE SHEET. THE ASSESSING OFFICER DID NOT FIND FORCE IN THIS SU BMISSION AND OBSERVED THAT IN ASSESSMENT YEAR 2005-06 TOTAL SAL ES WERE SHOWN AT RS. 1125670/- AND PROFITS RETURNED U/S 44A F WERE ONLY RS. 61328/-. NO BALANCE SHEET OR COPY OF PROF IT AND LOSS ACCOUNT WAS FILED WITH THE RETURN OF INCOME. SMT. K ANTA DEVI HAD DECLARED INCOME OF RS. 60,000/- AND RS. 62,000/ - FOR ASSESSMENT YEAR 2003-04 & 2004-05 U/S 44AF AS WELL AS FROM OPERATION OF A TRUCK. THEREFORE THIS EXPLANATION W AS NOT 3 ACCEPTABLE AND ACCORDINGLY HE ADDED A SUM OF RS. 3 60547/- TO THE INCOME OF THE ASSESSEE. 5 ON APPEAL BEFORE THE LD. CIT(A) THE SUBMISSIONS M ADE BEFORE THE ASSESSING OFFICER WERE REITERATED AND IT WAS FURTHER STATED THAT COMPLETE OLD STOCK OF THE OLD BUSINESS WAS SOLD ON DISCOUNTED RATE AND CASH RECEIVED WAS INVESTED IN T HE NEW FIRM. IT WAS ALSO POINTED OUT THAT THE ASSESSING O FFICER HAS ACCEPTED OTHER FIGURES OF BALANCE SHEET OF SMT. KAN TA DEVI AND THEREFORE HE SHOULD HAVE ACCEPTED CASH BALANCE ALSO . 6 THE LD. CIT(A) CONSIDERED THESE SUBMISSIONS AND OBSERVED THAT FOR ASSESSMENT YEAR 2005-06 SMT. KAN TA DEVI HAS NOT FURNISHED ANY BALANCE SHEET ALONG WITH RETU RN. THEREFORE BALANCE SHEET GIVEN LATER ON DOES NOT CAR RY ANY SANCTITY. IT WAS FURTHER OBSERVED THAT SMT. KANTA DEVI WAS HAVING CASH CREDIT LIMIT AND IF CASH WAS REALIZED B Y HER FROM SALE OF GOODS AND THEN SHE WOULD HAVE DEPOSITED THE CASH IN THE BANK TO SAVE INTEREST. BUT THE CASH WAS DEPOSI TED ONLY AFTER 19 DAYS AND THAT TOO TO THE EXTENT OF RS. 2 L AKHS. UNDER THESE CIRCUMSTANCES THE ADDITION WAS CONFIRMED. 7 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND REFERRED TO PAGE 45 TO 48 OF PAPER BOOK WHICH IS THE COPY OF ACKNOWL EDGEMENT OF RETURN, COMPUTATION OF INCOME AND LETTER FURNISH ED BEFORE THE LD. CIT(A). 8 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE ST RONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 4 9 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND S OME FORCE IN THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSES SEE THAT IF THE BALANCE SHEET WAS FILED BEFORE THE LD. CIT(A) W HICH SHOWS CERTAIN ASSETS ETC. THEN SAME SHOULD HAVE BEEN EXAM INED BUT AT THE SAME TIME FACT REMAINS THAT THIS BALANCE SHE ET WAS NOT FILED IN THE EARLIER YEAR ALONG WITH RETURN OF INCO ME. THE ASSESSEE HAD ONLY PETTY INCOME IN EARLIER YEARS TO THE EXTENT OF RS. 60,000 AND RS. 62,000 IN ASSESSMENT YEAR 2003- 04 & 2004-05 AND IN 2005-06 THE ASSESSEE HAD FILED RETUR N OF INCOME OF RS. 104650/-. THEREFORE SAME BENEFIT HAS TO BE GIVEN FOR THE BROUGHT FORWARD CASH. CONSIDERING OVE RALL CIRCUMSTANCES AND FACTS OF THE CASE, WE ARE OF THE OPINION THAT A BENEFIT OF RS. 2,25,000/- IS GIVEN FOR OPENING CA SH THEN SAME WOULD MEET THE ENDS OF JUSTICE. THEREFORE WE SET A SIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO GIVE A RELIEF OF RS. 2,25,000/- OUT OF CASH OWNED BY THE A SSESSEE FROM PREVIOUS BUSINESS AND ADD THE BALANCE AMOUNT. 10 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.9.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10.9.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 5