Smt. Vandana Ashok Magdum, Belgaum V. Income Tax Officer, Ward-2(4), Belgaum

ITA 208/PAN/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1011 (ITAT-PANAJI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B BARTHAKUR LD
• Assessee Lawyers: S V HALBHAVI
• Keywords: Gross profit estimation; Rejection of books of accounts; Period of limitation

Judgement Text

1 ITA NO. 208 /PNJ/2014 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER ITA NO. 208 /PNJ/2014 (ASST. YEAR : 200 8 - 0 9 ) SMT . VANDANA ASHOK MAGADUM, PROP. ABHIJEET TRADERS, HINDAWADI, BELGAUM. VS. ITO , WARD - 2( 1 ), BELGAUM . PAN NO. AECPM 9427 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.V. HALBHAVI - CA DEPARTMENT BY : SHRI B. BARTHAKUR LD. DR DATE OF HEARING : 02 / 06/2015 . DATE OF PRONOUNCEMENT : 0 3 / 06 /201 5 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A), BELGAUM IN APPEAL NO. 655 /BGM/ 2010 - 11 DATED 25 /0 4 /201 4 FOR THE A.Y. 200 8 - 0 9 . 2. SHRI S.V. HALBHAVI, C.A. REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI B. BARTHAKUR, LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED A R THAT THERE WERE FIVE ISSUES IN THE ASSESSEES APPEAL. THE FIRST ONE IS AGAINST THE ADDITION TOWARDS 2 ITA NO. 208 /PNJ/2014 THE GROSS PROFIT AS CONFIRMED BY THE L D. CIT(A). THE SECOND WAS AGAINST THE CONFIRMATION OF THE DIFFERENCE IN THE CREDITORS, THE THIRD WAS AGAINST THE ACTION OF THE L D. CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN APPLYING THE PROVISIONS OF SEC. 41(1)(A) OF THE ACT IN RESPECT O F THE TWO CREDITORS AND FOURTH WAS AGAINST THE PARTIAL CONFIRMATION OF THE ADDITION IN RESPECT OF DISALLOWANCE OF INTEREST ON THE CAR LOAN AND THE FI FTH WAS AGAINST THE PARTIAL CONFIRMATION OF THE DISALLOWANCE IN RESPECT OF TRAVELLING EXPENSES. 4 . THE FIRST ISSUE BEING THE DIFFERENCE OF GROSS PROFIT , IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD MADE THE ADDITION OF RS. 4,23,317/ - ON THE GROUND THAT THE GROSS PROFIT FOR THE RELEVANT ASSESSMENT YEAR HAD GONE DOWN. IT WAS THE S UBMISSION THAT THE ASSESSING OFFICER HAD NOT REJECTED THE ASSESSEES BOOKS OF ACCOUNTS AND CONSEQUENTLY, NO ADDITION ON ACCOUNT OF LOW GROSS PROFIT COULD BE MADE IN THE HANDS OF THE ASSESSEE. 5. IN REPLY, LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE L D. CIT(A) . 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS . 3 ITA NO. 208 /PNJ/2014 7 AS IT IS NOTICED THAT THE ASSESSING OFFICER HAS NOT INVOKED THE PROVISIONS OF SEC. 145(3) OF THE ACT AND HAS NOT REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE, NO ADDITION ON ACCOUNT OF LOW GROSS PROFIT CAN BE MADE IN THE HANDS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE ADDITION MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE L D. CIT(A) STANDS DELETED. 8 . IN REGARD TO THE ISSUE OF DIFFERENCE IN THE CREDITORS , IT WAS THE SUBMISSION THAT THE BALANCES IN THE ASSESSEE BALANCE SHEET AND AS PER THE CONFIRMATION S PROVIDED BY THE TWO CREDITORS BEING SHRI MAHALAXMI ALUM IND USTRIES AND LALIT CHEMICALS RESULTED IN DIFFERENCE OF RS. 26,781/ - , IT WAS THE SUBMISSION THAT THE CREDIT SHOWN IN THE BALANCE SHEET OF THE ASSESSEE WAS HIGHER THAN THE CONFIRMATION S PROVIDED BY THE CREDITORS. IT WAS THE SUBMISSIO N THAT THE ADDITION MAY BE DELETED. 9 IN REPLY, LEARNED DR SUBMITTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE DIFFERENCE NOR RECONCILE THE SAME. IT WAS THE SUBMISSION THAT THE ADDITION IS LIABLE TO BE CONFIRMED. 10 I HAVE CONSIDERED THE RIVAL SUBMISSIONS . 4 ITA NO. 208 /PNJ/2014 11 AS IT WAS NOTICED THAT THE ASSESSEE HAS NOT BEEN ABLE TO RECONCILE THE DIFFERENCE BETWEEN THE BALANCE SHOWN IN THE NAME OF THE TWO CREDITORS AND THE CONFIRMATIONS AS PROVIDED BY THE CREDITORS, THE ADDITION MADE BY THE ASSESSING OFFIC ER AND AS CONFIRMED BY THE LD. CIT(A) TO THE EXTENT OF RS. 26,781/ - STANDS CONFIRMED. 12 IN REGARD TO THIRD ISSUE BEING INVOCATION OF THE PROVISIONS OF SEC. 41(1)(A) OF THE ACT IN RESPECT OF TWO CREDITORS , IT WAS SUBMITTED BY THE LEARNED AR THAT THE PROVISIONS OF SEC. 41(1) COULD BE INVOKED IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUGAULI SUGAR WORKS (P) LTD. REPORTED IN 236 ITR 518 WHEREIN THE HONBLE SUPREME COURT HAS CATEGORICALLY HELD THAT EXPIRY OF THE PERIOD OF LIMITATION PRESCRIBED UNDER THE LIMITATION ACT COULD NOT EXTINGUISH THE DEBT NO R WOULD IT CONFER ANY BENEFIT ON THE DEBTOR AS CONTEMPLATED IN SECTION 41(1) OF THE ACT. 13 IN REPLY, LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE L D. CIT(A) . 14 I H A VE CONSIDERED THE RIVAL SUBMISSIONS. 15 AS IT WAS NOTICED THAT THE ISSUE IN THE APPEAL IN RESPECT OF THE CREDITORS IN RESPECT OF WHOM THE PROVISIONS OF SEC. 41(1) OF THE ACT HAS 5 ITA NO. 208 /PNJ/2014 BEEN APPLIED IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SUGAULI SUGAR WORKS (P) LTD. (SUPRA) , THE ADDITION MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LD. CIT(A) STANDS DELETED. 16 IN RESPECT OF OTHER TWO ADD ITIONS REPRESENTING THE PARTIAL CONFIRMATION OF THE CAR INTEREST AND TRAVELLING EXPENSES MADE BY THE L D. CIT(A), LEARNED AR DID NOT RAISE ANY SERIOUS CONTENTIONS, CONSEQUENTLY THE SAME STAND CONFIRMED. 17 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 0 3 R D JUNE , 201 5 ). S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER DATED : 0 3 R D JUNE , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 6 ITA NO. 208 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 0 2 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 02 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER N/A JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER N/A JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 02 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 03 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 03 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER