Rajendra Shamsunder Bihani, Pune V. Deputy Commissioner of Income-tax, Circle - 3, Pune

ITA 2180/PUN/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8904 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 05-01-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 18-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.2180/PUN/2017 / ASSESSMENT YEAR : 2011-12 RAJENDRA SHAMSUNDER BIHANI, 831, SADASHIV PETH, NEAR ASHIRVAD HOTEL, PUNE-411030. PAN : ABGPB3900M ....... / APPELLANT / V/S. DCIT, CIRCLE-3, PUNE. / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI S. P. WALIMBE / DATE OF HEARING : 05.01.2021 / DATE OF PRONOUNCEMENT : 06.01.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-5, PUNE (CIT(A) FOR SHORT) DATED 29.06.2017 FOR THE ASSESSMENT YEAR 2011-12. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRANSPORT AND SHARE OF PROFIT FROM THE PARTNERSHIP FIRM. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 WAS FILED ON 30.03.2013 DECLARING TOTAL INCOME OF RS.79,34,451/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-3, PUNE (THE ASSESSING OFFICER FOR SHORT) VIDE ORDER DATED 11.03.2014 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT) AT A TOTAL INCOME OF RS.91,48,678/-. WHILE DOING SO, THE ASSESSING OFFICER 2 ITA NO.2180/PUN/2017 MADE ADDITION OF RS.2,24,694/- BEING 1/3 RD OF TANKER EXPENSES OF RS.6,74,081/- AS THE APPELLANT HAD FAILED TO SUBSTANTIATE THE EXPENDITURE. FURTHER, THE ASSESSING OFFICER MADE ADDITION OF RS.9,89,533/- BEING THE ADDITION TO THE CAPITAL DISBELIEVING THE EXPLANATION OF THE ASSESSEE THAT THE SAME REPRESENTS THE CAPITAL OF BUSINESS M/S GANESH AGENCY, PROPRIETOR LATE SHRI SHYAMSUNDER BIHANI, WHO IS FATHER OF THE ASSESSEE ON HIS DEMISE. THE ASSESSING OFFICER OBSERVED THAT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE SHRI LATE SHYAMSUNDER BIHANI IT IS MENTIONED THAT THE BUSINESS WAS GIFTED TO ONE SHRI RAMKISHAN BIHANI AND THE APPELLANT HAD FAILED TO FURNISH THE BANK ACCOUNT STATEMENT OF SHRI SHYAMSUNDER BIHANI AND THE WILL OF SHRI RAMKISHAN BIHANI THROUGH THE TAKEOVER THE BUSINESS. 3. ON APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) AFTER CONSIDERING THE EVIDENCE FILED BY THE ASSESSEE IN SUPPORT OF THE TANKER EXPENSES CONFIRMED THE DISALLOWANCE ONLY TO THE EXTENT OF 10% OF THE EXPENDITURE AS AGAINST 1/3 RD OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. THE LD. CIT(A) ALSO CONFIRMED THE ADDITION ON ACCOUNT OF CAPITAL INTRODUCTION NOTICING THE CERTAIN DISCREPANCIES IN THE EXPLANATION FILED BY THE APPELLANT. 4. BEING AGGRIEVED BY THE ABOVE DECISION OF THE LD. CIT(A), THE ASSESSEE IS BEFORE US IN THE PRESENT APPEAL. 5. WHEN THE APPEAL WAS CALLED FOR HEARING NONE APPEARED ON BEHALF OF THE APPELLANT-ASSESSEE DESPITE DUE SERVICE OF NOTICE. AFTER HEARING THE LD. SR. CIT- DR AND PERUSED THE MATERIAL ON RECORD, WE PROCEED TO DISPOSE OF THIS MATTER. GROUND NO.1 CHALLENGES THE DISALLOWANCE OF 10% TANKER EXPENSES. FROM THE MATERIAL ON RECORD, WE FIND THAT THE APPELLANT SHOWN PROFIT OF RS.4,82,231/- AS AGAINST THE GROSS RECEIPTS FROM THE BUSINESS OF TANKER OF RS.11,56,312/- RESULTING INTO PROFIT OF APPROXIMATELY 42%, WHICH, IN OUR CONSIDERED OPINION IS MORE REASONABLE, ALSO HAVING REGARD TO THE NATURE OF THE EXPENDITURE 3 ITA NO.2180/PUN/2017 CLAIMED, WE ARE OF THE CONSIDERED OPINION THAT NO AD-HOC DISALLOWANCE IS REQUIRED TO BE MADE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION @ 10% OF THE EXPENDITURE AS CONFIRMED BY THE LD. CIT(A). ACCORDINGLY, THIS GROUND NO.1 IS ALLOWED. 6. GROUNDS NO.2 AND 3 CHALLENGE THE ADDITION OF RS.9,89,533/- ON ACCOUNT OF CAPITAL INTRODUCTION. CONSIDERING THE SUBMISSIONS MADE BY THE APPELLANT, THE LD. CIT(A) CATEGORICALLY GAVE FINDING THAT THE APPELLANT HAD FAILED TO SUBSTANTIATE HIS CLAIM THAT THE ADDITION TO CAPITAL IS ONLY ON ACCOUNT OF TAKEOVER OF THE BUSINESS OF HIS LATE FATHER. WE DO NOT FIND ANY PERVERSITY IN THE FINDING OF THE LD. CIT(A). ACCORDINGLY, THE GROUNDS NO.2 AND 3 ARE STAND DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 06 TH DAY OF JANUARY, 2021. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 06 TH JANUARY, 2021. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-5, PUNE. 4. THE PR. CIT-4, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.