The ITO, Ward-8(1), Ahmedabad V. Sakar Glazed Tiles Pvt.Ltd., Ahmedabad

ITA 2151/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94638 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 23-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Assessee Lawyers: SAKAR SHARMAAR
• Keywords: Unexplained cash credit; Depreciation; Deemed to accrue or arise in india; Corroborative evidences; Assessment record; Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.2151/AHD/2010 A.Y. 2006-07 2. ./ I.T.A. NO.1848/AHD/2010 A.Y. 2006-07 1. ITO, WARD-8(1) AHMEDABAD 2. SAKAR GLAZED TILES PVT.LTD. 401, SHEFALI CENTRE PALDI CHAR RASTA AHMEDABAD / VS. 1. SAKAR GLAZED TILES PVT.LTD. 401, SHEFALI CENTRE PALDI CHAR RASTA AHMEDABAD 2. ITO WARD-8(1) AHMEDABAD ./ ./ PAN/GIR NO. AADCS 3760 K ( ' / APPELLANTS ) .. ( #' / RESPONDENTS ) REVENUE BY : SHRI D.C.MISHRA, SR.DR ASSESSEE BY : SHRI SAKAR SHARMA, AR $%& ' ( / DATE OF HEARING 24/09/2015 )*+ ' ( / DATE OF PRONOUNCEMENT 06/11/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE CROSS-APPEALS BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XIV, ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 2 - AHMEDABAD [CIT(A) IN SHORT] DATED 29/03/2010 PER TAINING TO ASSESSMENT YEAR (AY) 2006-07. THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED O RDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE REVENUES APPEAL IN ITA NO .2151/AHD/2010 FOR AY 2006-07. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 1) THE LD.COMMISSIONER OF INCOME-TAX()-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.240 8684/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON CAPITALIZATION OF INTEREST, LOAN PROCESSING FEES AND BANK CHARGES PAID FOR COMMENCEM ENT OF COMMERCIAL PRODUCTION. 2) THE LD.COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.17632/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SERVICE TAX OF DG SET, BEING CAPITAL EXPENDITURE. 3) THE LD.COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 20989000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDITS IN RESPECT OF DEPOSITS SHOWN FROM VARIOUS CUSTOMERS. 4) THE LD.COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.900 000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CREDITS IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM. 5) THE LD.COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1158603/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CLAIM OF EXPENDITURE OF GAS PURCHASE FROM ONGC LTD. 6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-XIV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 3 - 7) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CI T(A)-XIV, AHMEDABAD MAY BE SET-A-SIDE AND THAT OF THE ORDER O F THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT,1961 (H EREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 22/12/ 2008, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE VARIOUS DISALL OWANCES/ADDITIONS, I.E. DEPRECIATION ON CAR OF RS.1,11,020/-, DISALLOW ANCE OF CAPITAL EXPENDITURE IN RESPECT OF INTEREST AND LOAN PROCESS ING FEES AND BANK CHARGES OF RS.24,08,684/-, DISALLOWANCE OF SERVICE TAX ON DG SET OF RS.17,632/-, ADDITION ON ACCOUNT OF UNEXPLAINED CRE DITS IN RESPECT OF DEPOSITS OF RS.2,23,99,000/-, ADDITION ON ACCOUNT OF UNEXPLAINED CREDITS IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM OF RS .9,00,000/- AND ADDITION ON ACCOUNT OF EXCESS CLAIM OF EXPENDITURE IN RESPECT OF GAS PURCHASE FROM ONGC LTD. OF RS.11,58,603/-. THE ASS ESSEE BEING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APP EAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND MATERIAL PLACED BEFORE HIM PARTLY ALLOWED THE APPEA L. WHILE PARTLY ALLOWING THE APPEAL, THE LD.CIT(A) CONFIRMED THE DI SALLOWANCE OF DEPRECIATION ON CAR OF RS.1,11,020/-, DELETED THE D ISALLOWANCE OF CAPITAL EXPENDITURE OF INTEREST & LOAN PROCESSING FEES AD B ANK CHARGES OF RS.24,08,684/- AND DELETED THE DISALLOWANCE OF RS.1 7,632/- MADE ON ACCOUNT OF SERVICE TAX ON DG SET. THE LD.CIT(A) DE LETED THE ADDITION OF ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 4 - RS.2,09,89,000/- OUT OF RS.2,23,39,000/- MADE ON AC COUNT OF UNEXPLAINED CREDITS IN RESPECT OF DEPOSITS AND ALSO DELETED THE ADDITION OF RS.9 LACS MAD ON ACCOUNT OF UNEXPLAINED CREDITS IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM. THE LD.CIT(A) ALSO DELETED THE DIS ALLOWANCE OF RS.11,58,603/- MADE ON ACCOUNT OF EXCESS CLAIM OF E XPENDITURE IN RESPECT OF GAS PURCHASE FROM ONGC LTD. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW BOTH THE REVENUE AND ASSESSEE HAVE F ILED THE APPEALS. 3. FIRST GROUND IN REVENUES APPEAL IS AGAINST DELE TION OF ADDITION OF RS.24,08,684/- MADE ON ACCOUNT OF NON-CAPITALIZATIO N OF INTEREST, LOAN PROCESSING FEES AND BANK CHARGES PAID FOR COMMENCEM ENT OF COMMERCIAL PRODUCTION. THE LD.SR.DR VEHEMENTLY ARGUED THAT TH E LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. HE SUPPORTED T HE ORDERS OF THE AO. 3.1. ON THE OTHER HAND, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS GIVEN FINDING ON FACT AND HE SUPPORTE D THE ORDER OF THE LD.CIT(A). HE SUBMITTED THAT THE AO WAS NOT JUSTIF IED IN MAKING THE ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 5 - WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDING ON FAC T IN PARA 4.2 OF HIS ORDER, WHICH READS AS UNDER:- 4.2. I HAVE CAREFULLY CONSIDERED FINDINGS OF THE ASSESSING OFFICER, SUBMISSIONS OF THE APPELLANT, REMAND REPOR T OF A.O AND APPELLANTS REJOINDER THEREON. I AM IN FULL AGREEM ENT WITH THE SUBMISSIONS OF THE APPELLANTS COUNSEL THAT NEITHER THE ASSESSING OFFICER NOR THE AUTHORIZED REPRESENTATIVE OF THE AP PELLANT WHO APPEARED IN THE ASSESSMENT PROCEEDINGS LOOKED INTO THE FACTUAL ASPECTS. I HAVE EXAMINED THE RELEVANT ACCOUNTS OF THE APPELLANT AND FIND THAT SECOND UNIT GOT COMMENCED ON 01.01.20 06 AS PER THE DISCLOSURE MADE IN THE AUDITED ACCOUNTS. THE APPEL LANT HAS CAPITALIZED INTEREST; BANK CHARGES AND OTHER EXPENS ES PERTAINING TO SECOND UNIT (INCURRED UPTO DECEMBER, 2005) UPTO THE DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION AND HAS ALLOC ATED THE SAME TO RESPECTIVE ASSET ACCOUNTS AFTER CAPITALIZIN G THE SAME. INTEREST AND OTHER FINANCIAL EXPENSES DEBITED IN TH E PROFIT AND LOSS ACCOUNT REPRESENT INTEREST AND OTHER FINANCIAL EXPE NSES IN RESPECT OF FIRST UNIT (I.E. OLD UNIT) FOR ENTIRE PERIOD OF TWELVE MONTHS AND IN RESPECT OF SECOND UNIT (I.E. NEW UNIT) FOR THREE MO NTHS (I.E. FROM JANUARY, 2006 TO MARCH, 2006) ONLY. I FIND THAT EN TIRE ADDITION WAS MADE BY ASSESSING OFFICER OWING TO NON PRODUCTI ON OF RELEVANT ACCOUNTS BY THE APPELLANTS COUNSEL IN THE COURSE OF ASSESSMENT PROCEEDINGS WHO HIMSELF DID NOT VERIFY T HE FACTUAL POSITION WITH REGARD TO ACCOUNTING TREATMENT IN THE ACCOUNTS LEADING TO UNWARRANTED DISALLOWANCE. THE ADDITION MADE OF RS.24,08,684/- IS DIRECTED TO BE DELETED IN VIEW OF THE FACT THAT THERE IS NO INFIRMITY IN THE ACCOUNTING TREATMENT M ADE BY THE APPELLANT. 4.1. THE ABOVE FINDING OF THE LD.CIT(A) IS NOT CONT ROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD, THEREFOR E, WE DO NOT SEE ANY ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 6 - REASON TO INTERFERE WITH THE FINDING OF THE LD.CIT( A) ON THIS ISSUE, SAME IS HEREBY UPHELD. THUS, GROUND NO.1 OF REVENUES APPE AL IS REJECTED. 5. SECOND GROUND OF REVENUES APPEAL IS AGAINST DEL ETION OF DISALLOWANCE OF RS.17,632/- MADE ON ACCOUNT OF SERV ICE TAX OF DG SET. THE LD.SR.DR SUBMITTED THAT THE AO HAD DISALLOWED T HE CLAIM OF THE ASSESSEE ON THE BASIS THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.17,632/- AS SERVICE TAX ON DG SET. IT IS NOTICE D BY THE AO THAT THE AUDITOR IN HIS TAX AUDIT REPORT HAS NOTED THAT THE SAME NEEDS TO BE CAPITALIZED. 5.1. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSE SSEE HAS RELIED ON THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE NOTIN G OF THE AUDITOR WAS UNDER THE MISCONCEPTION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THE AMOUNT SO DISALLOWED REPRESENTS ANNUAL SERVICE CHARGES PAID T O SEALAND DIESEL P.LTD. WHICH IS NOTHING BUT EXPENSE OF RECURRING AN D ROUTINE IN NATURE FOR MAINTENANCE OF DG SET. THE TAX AUDITOR UNDER MISC ONCEPTION REPORTED SERVICE CONTRACT CHARGES FOR MAINTENANCE OF D.G.SET TO BE AS SERVICE TAX ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 7 - ON DG SET LEADING TO UNWARRANTED ADDITION. THIS FI NDING OF THE LD.CIT(A) IS NOT CONTROVERTED BY THE REVENUE BY PLA CING ANY MATERIAL ON RECORD, THEREFORE, WE DO NOT SEE ANY REASON TO INT ERFERE WITH THE FINDING OF THE LD.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHE LD. THUS, GROUND NO.2 OF REVENUES APPEAL IS DISMISSED. 7. THIRD GROUND OF REVENUES APPEAL IS AGAINST DELE TION OF ADDITION OF RS.2,09,89,000/- MADE ON ACCOUNT OF UNEXPLAINED CRE DITS IN RESPECT OF DEPOSITS SHOWN FROM VARIOUS CUSTOMERS. THE LD.SR.D R SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD.CIT(A) WA S NOT JUSTIFIED IN DELETING THE DISALLOWANCE. THE LD.SR.DR SUBMITTED THAT IN SUPPORT OF THE CLAIM, THE ASSESSEE HAD NOT SUBMITTED ANY EVIDENCE, THEREFORE THE AO WAS JUSTIFIED IN DELETING THE ADDITION. 7.1. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE LD.CIT(A) HAD OBTAINED CONTRA ACCOUNTS FROM THE CON CERNED PARTIES AND ALSO OBTAINED REMAND REPORT FROM THE AO. THE LD.CI T(A) HAS GIVEN A FINDING ON FACT THAT WHICH IS NOT REBUTTED BY THE R EVENUE BY PLACING ANY MATERIAL ON RECORD. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) EXAMINED THE ISSUE IN HI S ORDER ON THE BASIS OF ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 8 - MATERIAL AVAILABLE ON RECORD, SUCH AS FINDING GIVEN ON THE ASSESSMENT RECORD, SUBMISSION OF THE ASSESSEE AND REMAND REPOR T OF THE AO. THE LD.CIT(A) HAS GIVEN A FINDING ON EACH AND EVERY TRA NSACTION RELATED TO CREDITS. WE FIND THAT THE LD.CIT(A) HAS CONSIDERED THE MATERIAL AVAILABLE ON RECORD AND MORE PARTICULARLY CONTRA-ACCOUNTS OF THE CONCERNED PARTIES. THE REVENUE HAS NOT REBUTTED THE EVIDENCES PLACED B Y THE ASSESSEE, THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WI TH THE FINDING OF THE LD.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. T HUS, GROUND NO.3 OF REVENUES APPEAL IS DISMISSED. 9. FOURTH GROUND OF REVENUES APPEAL IS AGAINST DEL ETION OF ADDITION OF RS.9,00,000/- MADE ON ACCOUNT OF UNEXPLAINED CRE DITS IN RESPECT OF SHARE CAPITAL AND SHARE PREMIUM. THE LD.SR.DR SUPP ORTED THE ORDER OF THE AO. 9.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE LD.CIT(A) HAS EXAMINED THE ISSUE AND GIVEN A FINDING ON FACT WHICH IS NOT REBUTTED B Y THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. IN SUPPOR T OF HIS CONTENTION, HE DREW OUR ATTENTION TOWARDS APPELLATE ORDER. ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 9 - 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT WITH REGARD TO THE ADDITION OF RS.9 LACS THAT ON VERIFICATION OF CONTR A ACCOUNT WITH THE ACCOUNT OF PARTY APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE LD.CIT(A) OBSERVED THAT THE SAID PARTY HAD MAINTAIN ED ONLY ONE ACCOUNT IN THEIR BOOKS. HOWEVER, IT IS THE ASSESSEE WHO HA S TREATED SAID RECEIPTS UNDER DIFFERENT HEADS SUCH A DEALER DEPOSIT OR SHAR E CAPITAL/SHARE PREMIUM ACCOUNT. EFFECTIVELY, THERE IS NO UNEXPLAI NED RECEIPT IN THE HANDS OF THE ASSESSEE. THIS FINDING OF THE LD.CIT( A) IS NOT REBUTTED BY REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDING OF THE LD.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. THUS, GROUND NO.4 OF REVEN UES APPEAL IS REJECTED. 11. FIFTH GROUND OF REVENUES APPEAL IS AGAINST DEL ETION OF ADDITION OF RS.11,58,603/- MADE ON ACCOUNT OF EXCESS CLAIM OF E XPENDITURE OF GAS PURCHASE FROM ONGC LTD. THE LD.SR.DR SUPPORTED THE ORDER OF THE AO ON THIS ISSUE. 11.1. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE AO HAS MIS-DIRECTED ITSELF AND MADE ADDITION WI THOUT VERIFYING THE ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 10 - RECORDS. HE PLACED RELIANCE ON THE ORDER OF THE LD .CIT(A) ON THIS ISSUE AND SUBMITTED THAT THE LD.CIT(A) HAS VERIFIED FROM THE MATERIAL MADE AVAILABLE BEFORE HIM. HE SUBMITTED THAT THE ONGC L TD. HAS RECONCILED THE DIFFERENCE. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT THE ONGC HAD RECOVERED TRANSPORTATION CHARGES ON SUPPLY OF G AS FOR WHICH DUE PAYMENT WAS MADE BY THE ASSESSEE. THIS FINDING ON FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD, THEREFORE WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FIND ING OF THE LD.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. THUS, GROUND N O.5 OF REVENUES APPEAL IS REJECTED. 13. GROUND NOS.6 & 7 ARE GENERAL IN NATURE WHICH RE QUIRE NO INDEPENDENT ADJUDICATION. 14. IN THE RESULT, REVENUES APPEAL IN ITA NO.2151/ AHD/2010 FOR AY 2006-07 IS DISMISSED. ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 11 - 15. NOW, WE TAKE UP THE ASSESSEES APPEAL IN ITA NO .1848/AHD/2010 FOR AY 2006-07, WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE:- 1. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CO NFIRMING DISALLOWANCE OF RS.1,11,020/- ON ACCOUNT OF DEPRECI ATION; INTEREST AND INSURANCE IN RESPECT OF MOTOR CAR OWNED AND ACC OUNTED FOR IN THE BOOKS BY THE APPELLANT BUT REGISTERED IN THE NA ME OF DIRECTOR IN RTO RECORDS. 2. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CON FIRMING ADDITION IN RESPECT OF TWO PARTIES AMOUNTING TO RS.2,00,000/ - (GLOBE TRADE POINT) AND RS.11,50,000/- (S S ENTERPRISE, NEPAL) U /S.68 BEING RECEIVED AS DEALER DEPOSIT/ADVANCE RECEIVED FROM CU STOMERS HOLDING THE SAME TO BE DEEMED INCOME OF THE APPELLANT. 16. FIRST GROUND OF ASSESSEES APPEAL IS AGAINST CO NFIRMING DISALLOWANCE OF RS.1,11,020/-. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE. HE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF AS SESSEE BY THE DECISION OF COORDINATE BENCH (ITAT D BENCH AHMEDABAD) REN DERED IN THE CASE OF SWAGAT INFRASTRUCTURE LTD. VS. JT.CIT IN IT A NO.2084/AHD/2012 FOR AY 2009-10, DATED 28/06/2013. 16.1. ON THE OTHER HAND, SR.DR SUBMITTED THAT THE F ACTS IN THE PRESENT CASE ARE DIFFERENT THAN THE FACTS BEFORE THE COORDI NATE BENCH IN THE CASE OF SWAGAT INFRASTRUCTURE LTD.(SUPRA). ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 12 - 17. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION RELIED UPON BY THE LD.COUNS EL FOR THE ASSESSEE. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT THE ASSESSEE HAS NOT MAINTAINED ANY LOG BOOK WITH REGARD TO MOVEMENT OF VEHICLE SO AS TO PROVE ITS USE FOR BUSINESS PURPOSE. THE FIRST REQU IREMENT FOR ALLOWING THE DEPRECIATION OF EXPENDITURE ON ANY ASSETS IS THAT T HE ASSETS SHOULD BE UTILIZED FOR THE BUSINESS OF THE ASSESSEE. IN THE CASE IN HAND, THE LD.CIT(A) HAS GIVEN A FINDING ON FACT THAT NO EVIDE NCE IS PLACED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM THAT THE VEHICLE A LTHOUGH REGISTERED IN THE NAME OF THE DIRECT WAS UTILIZED FOR THE PURPOSE OF BUSINESS OF THE COMPANY. EVEN BEFORE THIS TRIBUNAL, NO SUCH EVIDEN CE IS PLACED BY THE ASSESSEE, THEREFORE, WE DO NOT SEE ANY REASON TO IN TERFERE WITH THE FINDING OF THE LD.CIT(A)ON THIS ISSUE , SAME IS HER EBY UPHELD. THUS, GROUND NO.1 OF ASSESSEES APPEAL IS REJECTED. 18. GROUND NO.2 OF ASSESSEES APPEAL IS AGAINST CON FIRMATION OF ADDITION IN RESPECT OF TWO PARTIES OF RS.2 LACS(GLO BE TRADE POINT) AND RS.11,50,000/- (S S ENTERPRISE, NEPAL) U/S.68 OF TH E ACT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL DETAILS WERE FU RNISHED BEFORE THE LD.CIT(A). HOWEVER, LD.CIT(A) HAS CONFIRMED THE AD DITION ON THE GROUND THAT NO CONTRA ACCOUNT WAS SUBMITTED. ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 13 - 18.1. ON THE CONTRARY, LD.SR.DR HAS SUPPORTED THE O RDER OF THE LD.CIT(A). 19. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN FINDING ON FAC T THAT THE ASSESSEE HAD NOT PRODUCED CONTRA ACCOUNT OF S.S.ENTERPRISE, THE REFORE HE CONFIRMED THE ADDITION. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT THIS SHOULD NOT BE THE GROUND FOR CONFIRMING THE ADDITIO N. 19.1. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL CONTENTIONS. THERE IS NO DISPUTE WITH REGARD TO TH E PROPOSITION THAT THE ASSESSEE IS REQUIRED TO GIVE SUPPORTING EVIDENCE. HOWEVER, IN THE CASE IN HAND, THE ASSESSEE HAS MERELY SUPPLIED THE PAN, NO CONFIRMATION OR CONTRA ACCOUNT WERE FURNISHED. THEREFORE, THEREFOR E, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE FINDING OF THE LD.CIT( A) ON THIS ISSUE, SAME IS HEREBY UPHELD. 19.2. IN RESPECT OF GLOBE TRADE POINT, THE LD.CIT(A ) HAS GIVEN A FINDING THAT THE ASSESSEE HAD DISCLOSED ADDRESS OF THE PART Y, NAMELY GLOBE TRADE POINT. WITH THIS PARTY, THE ASSESSEE HAD MADE CR EDIT SALES OF RS.1,13,218/- IN THE MONTH OF OCTOBOER-2005 AGAINST WHICH THE ASSESSEE RECEIVED RS.2 LACS IN THE MONTH OF OCTOBER-2005 PAR TLY AGAINST THE CREDIT SALES AND PARTLY AS ADVANCE. THE ASSESSEE INSTEAD OF ADJUSTING THE SAID ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 14 - RECEIPT AGAINST THE CREDIT SALES ACCOUNTED, THE SAM E AS DEALER DEPOSIT. SINCE IN SPITE OF GIVING SUFFICIENT OPPORTUNITY, NO CONTRA ACCOUNT WAS FURNISHED BY THE ASSESSEE, THE LD.CIT(A) CONFIRMED THE ADDITION. THIS FINDING OF LD.CIT(A) THAT THE ASSESSEE HAD MADE CRE DIT SALES AS WELL AS RECEIVED DEPOSITS FROM THE CONCERNED PARTY, THEREFO RE IN THE ABSENCE OF THE CONTRA ACCOUNT, THE LD.CIT(A) WAS JUSTIFIED IN SUSTAINING THE ADDITION. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WI TH THE FINDING OF THE LD.CIT(A) ON THIS ISSUE, SAME IS HEREBY UPHELD. T HUS, GROUND NO.2 OF ASSESSEES APPEAL IS REJECTED. 20. IN THE COMBINED RESULT, THE APPEAL OF THE REVEN UE AND THE APPEAL OF THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 06 TH DAY OF NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 06/ 11 /2015 /(..$ , %.$../ T.C. NAIR, SR. PS ITA NO.2151/AHD/2010 (BY REVENUE) AND ITA NO.1848/AHD/2010 (BY ASSESSEE) ITO VS. SAKAR GLAZED TILES P.LTD. (CROSS-APPEALS) ASST.YEAR 2006-07 - 15 - !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-XIV, AHMEDABAD 5. 4%5 $12 , ( 12 + , 0 / DR, ITAT, AHMEDABAD 6. 578 9& / GUARD FILE. / BY ORDER, #4 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 3.XI.15 (DICTATION-PAD 20- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 3.XI.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 6.XI.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 6.XI.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER