M/S R2R SEVA, JAIPUR V. INCOME TAX OFFICER, KOTA

ITA 22/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6196 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DR DHK
• Keywords: Additional evidence; Revenue expenditure
• Section: 131; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 22/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2008-09 M/S. R 2 R SEVA D-4, IIND MANZIL, BANSAL ENCLAVE MOTILAL ATAL ROAD, LALPURA HOUSE, JAIPUR CUKE VS. THE ITO WARD- 1 (1) KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AWWPJ 0551 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY:SHRI J.C. KULHARI, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 3/04/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 6 /04/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 15-11-2017 FOR THE ASSESSMENT YEAR 2008 -09 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED IN FACT AND IN LAW IN CONFIRMING THE ADDITION OF RS. 26,68,461/- ON THE B ASIS OF FORM NO. 26AS, BEING THE AMOUNT RECEIVED FROM E-MITRA SOCIET Y, BIKANER EVEN WHEN IT VIDE LETTER DATED 15-09-2017 HAS ADMITTED T HAT THEY HAVE NOT MADE ANY SUCH PAYMENT TO THE ASSESSEE. HE HAS FURTH ER ERRED IN CONFIRMING THIS ADDITION ONLY FOR THE REASON THAT A SSESSEE HAS NOT EXPLAINED THAT WHY THE DETAILS WERE NOT PRODUCED BE FORE THE AO AND ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 2 HOW THIS EVIDENCE FURNISHED BEFORE HIM IS COVERED U NDER THE EXCEPTIONS PROVIDED IN RULE 46A. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 2 LACS ON ACCOUNT OF RECEIPTS FROM E- MITRA SERVICES, PALI ON THE BASIS OF FORM NO. 26AS EVEN WHEN NO SUCH AMOUNT IS RECEIVED BY THE ASSESSEE. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 2,56,000/- BY NOT AC CEPTING THE CLAIM OF WRITE OFF OF THE EARNEST MONEY FORFEITED BY THE GOV ERNMENT DEPARTMENT BEING BUSINESS LOSS, BY HOLDING THAT ASSESSEE HAS N OT ESTABLISHED THE DEBT/PAYMENT. 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- ON PERUSAL OF THE SUBMISSIONS RECEIVED IT IS SEEN THAT THE ASSESSEE APPELLANT HAS PRODUCED A CONFIRMATION RECEIVED UNDER RTI ACT FROM E-MITRA SOCIETY BIKANER MENTIONI NG THAT A PAYMENT OF RS. 26,68,461/-DID NOT PERTAIN TO R 2 R SERVICES. THE LETTER IS DATED 15-09-2017. THE SAME CONSTITUTED AN ADDITIONAL EVIDENCES U/R 46A. HOWEVE R, THE APPELLANT HAS NOT BEEN ABLE TO EXPLAIN WHY THIS DET AIL COULD NOT BE PRODUCED BEFORE THE AO AND HOW IT WAS COVERE D UNDER THE EXCEPTIONS AS PROVIDED IN RULE 46A SO AS TO BE CONSIDERED IN THE APPELLATE STAGE SINCE THE APPELLA NT WAS GIVEN SUFFICIENT OPPORTUNITIES BY THE AO IN THIS RE GARD & IT HAD UPWARD REVISED ITS RETURN AT THE TIME OF FILING U/S 148 SO IT COULD VERY WELL HAVE RECONCILED THE AMOUNT THEN BY GETTING CONFIRMATION BEFORE COMPLETION OF THE PROCEEDINGS U /S 148. UNDER THE CIRCUMSTANCES, THE EXPLANATION IS NOT CONSIDERED ADMISSIBLE AND GOOD. THE ADDITION OF RS. 26,86,461/- OUT OF THE TOTAL ADDITION IS THEREFORE, UPHELD. AS REGARDS THE RECEIPTS FROM E-MITRA SERVICES PALI, THE EXPLANATION OF THE APPELLANT OF ACCOUNTING RELATED TREATMENT APPEARS TO BE ACCEPTABLE TO THE EXTENT OF RS. 3,22, 584/- ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 3 ALREADY HAVING BEEN ACCOUNTED FOR IN A.Y. 2007-08. THE SAME IS THEREFORE, TO BE DELETED. AS REGARDS THE CO MPONENT OF REMAINING RS. 2,00,000/-, THE SAME NOT BEING RECEIV ED WAS NOT VERIFIABLE AS IT WAS NOT PRODUCED BEFORE THE AO IN RESPECT OF BANK ACCOUNT AND THE EXPLANATION WAS NOT CORROBORATED FROM THE PAYER ALSO. THIS PART OF THE ADDITION IS THEREFORE, CONFIRMED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING BOTH THE ADD ITIONS I.E. RS. 26,68,461/- AND RS. 2.00 LACS RESPECTIVELY WHICH SH OULD BE ALLOWED. THE LD.AR OF THE ASSESSEE FILED THE FOLLOWING WRITTEN S UBMISSIONS. 1. IN RESPECT OF THE DIFFERENCE OF RS.26,68,461/- IN T HE RECEIPT FROM E-MITRA SOCIETY, BIKANER AS PER BOOKS AND AS P ER FORM NO.26AS, ASSESSEE HAS FILED RELEVANT EVIDENCE IN FORM OF COP Y OF ACCOUNT OF E-MITRA SOCIETY, BIKANER AND THE BANK STATEMENT. AS PER THE SAME, ASSESSEE HAS NOT RECEIVED ANY PAYMENT OF RS.26,68,461/- WHICH IS CRE DITED ON 31.03.2008 AS PER FORM NO.26AS. INSPITE OF THIS VERIFICATION, AO MADE THE ADDITION. THEREFORE, ASSESSEE FILED AN APPLICATION UNDER THE RTI ACT SEEKING THE INFORMATION AS TO WHEN SUCH AMOUNT WAS RELEASED TO THE ASSESSEE. IN RESPONSE TO SUCH APPLICATION, THE GOVERNMENT OF RAJASTHAN TH ROUGH THE DEPUTY DIRECTOR, INFORMATION & TECHNOLOGY DEPARTMENT, BIKA NER, VIDE LETTER DT. 15.03.2017 INFORMED THAT THE AMOUNT OF RS.26,68,461 /- REFLECTED IN FORM NO.26AS DO NOT RELATE TO THE ASSESSEE. THEREFORE, T HIS EVIDENCE WHICH IS ONLY IN CONFIRMATION TO STAND OF ASSESSEE OUGHT TO HAVE BEEN CONSIDERED BY LD. CIT(A). EVEN AO OUGHT TO HAVE SOUGHT INFORMATION U/ S 133(6)/ 131 FROM E- MITRA SOCIETY, BIKANER TO ASCERTAIN THE REASONS FOR SUCH DIFFERENCE WHEN ASSESSEE HAS ALL THE TIME CLAIMED THAT THIS RECEIP T DO NOT PERTAIN TO IT. THE LD. CIT(A) HAS CO-TERMINUS POWER OF THE AO AND THEREFOR E, WHEN SUCH LETTER OBTAINED UNDER RTI IS FILED, THE SAME OUGHT TO HAVE BEEN CONSIDERED BY HIM AS ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR PROD UCING THIS LETTER BEFORE THE AO FROM THE GOVERNMENT DEPARTMENT WHICH PERTAIN TO AY 2008-09. IN VIEW OF THIS CONFIRMATION BY THE DEPUTY DIRECTOR, INFORM ATION & TECHNOLOGY DEPARTMENT, BIKANER, THE ADDITION OF RS.26,68,461/- BE DELETED. ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 4 2. IN RESPECT OF DIFFERENCE OF RS.2 LACS IN THE REC EIPT FROM E-MITRA SOCIETY, PALI ON THE BASIS OF FORM NO.26AS AND THE BOOKS OF ACCOUNTS, ASSESSEE HAS EXPLAINED THE AMOUNT RECEIVED BY IT BY FILING THE COPY OF LEDGER ACCOUNT, BANK STATEMENT, PAYMENT ADVICE AND THE COP Y OF CHEQUE. IT WAS THUS EXPLAINED THAT NO SUCH AMOUNT OF RS.2 LACS WHICH IS CREDITED ON 08.03.2008 IN FORM NO.26AS IS RECEIVED BY THE ASSESSEE. IN FACT I N FORM NO.26AS FOR THE PERIOD APRIL 2007 TO DECEMBER 2007, RS.2 LACS IS CR EDITED ON 08.03.2008 AND FOR THE SAME PERIOD, RS.4,19,111/- IS CREDITED ON 3 1.03.2008 WHEREAS IN FACT ASSESSEE HAS ONLY RECEIVED RS.4,19,111/- FOR THIS P ERIOD. THUS, APPARENTLY THE AMOUNT OF RS.2 LACS REFLECTED IN FORM NO.26AS IS IN CORRECT. THE LD. CIT(A) HAS NOT ACCEPTED THE EXPLANATION OF ASSESSEE FOR TH E REASON THAT THIS EXPLANATION WAS NOT CORROBORATED FROM THE PAYER IGN ORING THAT WHEN ASSESSEE HAS FURNISHED ALL THE EVIDENCES THAT NO SUCH AMOUNT OF RS.2 LACS IS RECEIVED BY THE ASSESSEE, THE AO SHOULD HAVE CALLED INFORMATION FROM E-MITRA SOCIETY, PALI TO ASCERTAIN THE FACT. HENCE, THE ADDITION OF RS.2 LACS CONFIRMED BY LD. CIT(A) BE DELETED. IN VIEW OF ABOVE, THE ADDITION OF RS.26,68,461 AND RS.2 LACS CONFIRMED BY LD. CIT(A) BE DELETED. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING E-MITRA SERVIC ES TO VARIOUS DISTRICT E-MITRA SOCIETIES OF GOVERNMENT OF RAJASTHAN AT VAR IOUS PLACES. THE AO AS PER FORM NO. 26AS NOTED THE GROSS RECEIPT OF RS. 98,98,820 AND TAX DEDUCTED AT RS. 7,81,771/- AS AGAINST RS. 5,46,500/ - CLAIMED BY THE ASSESSEE . THE AO THEREFORE OBSERVED THAT PROPORTIO NATE RECEIPT OF RS. 29,79,012/- CORRESPONDING TO THE DIFFERENCE IN THE TDS AMOUNT HAD ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 5 ESCAPED ASSESSMENT FOR WHICH NOTICE U/S 148 WAS ISS UED. IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE AGAIN FILED THE RETURN DECLARING RECEIPT OF RS. 87,26,067 (SERVICE COMMISSION RS.67, 05,963 + INTEREST RS. 20,20,103) AND LOSS OF RS. 1,38,696/-. THE ASSESSEE IN THIS RETURN CLAIMED TDS OF RS. 6,22,393/- AS PER FORM NO. 26AS DOWNLOAD ED ON 09-01-2012 WHICH IS MENTIONED AT PAGE 16 AND PARA 11 OF THE AS SESSMENT ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASS ESSEE VIDE LETTER DATED 22-03-2016 (AO PAGE 18, 19 AND PARA 12) SUBMITTED T HAT IT HAS FILED A RECONCILIATION STATEMENT FOR EXPLAINING THE DIFFERE NCE BETWEEN THE RECEIPT AS PER FORM NO. 26AS AND THAT AS PER BOOKS OF ACCOU NTS. SUCH RECONCILIATION STATEMENT IS AVAILABLE AT PAGE 12-16 OF THE AOS ORDER. IT IS NOTED THAT THE AO HAS REJECTED THE EXPLANATION OF T HE ASSESSEE ON THE GROUND THAT HE HAS NOT PRODUCED THE COMPLETE DETAIL S AND BOOKS OF ACCOUNTS IN RESPECT OF ITS CLAIM. THE AO THEREFORE, CONSIDERED THE TOTAL RECEIPT AT RS. 1,27,26,145/- (BEING RECEIPT OF RS. 98,98,820/- ON WHICH TDS DEDUCTED + RS. 28,27,325/- ON WHICH TDS NOT DED UCTED). THE AO AFTER REDUCING THE RECEIPT OF RS. 87,31,118 DECLARE D BY THE ASSESSEE (I.E. RS.87,26,067/- REBATE AND DISCOUNT RS. 5,051/-) MA DE THE ADDITION FOR THE DIFFERENCE AMOUNT OF RS. 39,95,027/- WHICH IS M ENTIONED AT PARA 14 ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 6 AND PAGE 30 OF THE ASSESSMENT ORDER. IN FIRST APPEA L, THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS. 26,68,461/- AND RS. 2 .00 LACS. AS REGARDS THE ADDITION OF RS. 26,68,461/-, IT IS NOTED THAT T HE ASSESSEE BEFORE THE LD. CIT(A) HAS FILED THE LETTER 15-03-2017OBTAINED THR OUGH RTI IN WHICH THE DY. DIRECTOR, GOVT. OF RAJASTHAN , INFORMATION & TE CHNOLOGY INFORMED THAT THE AMOUNT OF RS. 26,68,461/- REFLECTED IN THE FORM NO. 26AS DID NOT PERTAIN TO THE ASSESSEE. HOWEVER, TO WHOM IT WAS PA ID IS NOT MENTIONED. THE LD. CIT(A) HAD NOT INVESTIGATED THE VERACITY OF THIS DOCUMENT. IN VIEW OF THE SUBMISSIONS OF THE ASSESSEE AND THE FAC TS AVAILABLE ON RECORD, IT WILL BE IN THE INTEREST OF EQUITY AND JUSTICE TO RESTORE THIS MATTER OF ADDITION AMOUNT RS. 26,68,461/- TO THE AO TO DECIDE IT AFRESH AFTER ASCERTAINING THE RELEVANT FACTS IN THIS REGARD LIKE - TO WHOM THE PAYMENT WAS PAID, WHY IT WAS CREDITED IN ASSESSEE'S ACCOUNT , WHETHER RECTIFICATION HAS BEEN CARRIED OUT IN 26AS AND ALL OTHER RELEVANT FACTS. IN RESPECT OF DIFFERENCE OF RS. 2.00 LACS IN THE RECEIPT FROM E M ITRA SOCIETY, PALI, THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS. 2.00 LACS ON THE GROUNDS THE AMOUNT WAS NOT VERIFIABLE AND IT WAS NOT PRODUCED B EFORE THE AO IN RESPECT OF BANK ACCOUNT. THE EXPLANATION WAS NOT CO RROBORATED FROM THE PAYER ALSO. AFTER TAKING ALL THE RELEVANT FACTS IN TO CONSIDERATION, ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 7 CIRCUMSTANCES AND WRITTEN SUBMISSION OF THE ASSESS EE, WE FIND IT APPROPRIATE AND ALSO IN THE INTEREST OF EQUITY AND JUSTICE TO RESTORE THE ISSUE TO THE FILE OF THE AO FOR AFRESH ADJUDICATION . THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE RELEVANT RECORDS CONCERNING THE ADDITION OF RS. 2.00 LACS BEFORE THE AO. THUS GROUND NO. 1 AND 2 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 3.1 APROPOS GROUND NO. 3, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- AS REGARDS GROUND OF APPEAL NO. 4 RELATED TO EARNEST MONEY CLAIMED AS EXPENSES, THE APPELLANT NE ITHER BEFORE THE AO NOR IN THE APPELLATE PROCEEDINGS WAS ABLE TO PROVIDE ANY EVIDENCE OF DEPOSIT TO THE GOVERNMENT DEPARTMENTS. NO BREAKUP HAS BEEN PROVIDED, NOR ANY COMMUNICATION ETC. RELATED TO FOR FAILURE. IN THE G IVEN FACTS, I AGREE WITH THE AOS STAND IN NOT ALLOWING THESE EXP ENSES BEING WRITTEN OFF SINCE THESE WERE NOT EVEN PRIMA F ACIE ESTABLISHED DEBITS OR PAYMENTS. THE DISALLOWANCE OF RS. 2,56,000/- IS CONFIRMED. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2,56,000/- WHICH SHOULD BE ALLOWED. ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 8 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE HAS MADE EARNEST MONEY DEPOSIT OF RS. 2.56 LACS IN F.Y. 2005 -06 TO THE CONCERNED GOVT.DEPTT FOR PROCURING THE WORK RELATED TO E-MITR A. SINCE THE ASSESSEE WAS NOT PROVIDED THE WORK IN SOME DISTRICTS DUE TO CERTAIN REASONS, SUCH DEPOSIT WAS FORFEITED AND NOT REFUNDED. DURING THE ASSESSMENT PROCEEDING, THE AO DISALLOWED THE CLAIM OF WRITE OF F MADE BY THE ASSESSEE, BY HOLDING THAT SUCH EXPENDITURE CANNOT B E TREATED AS REVENUE EXPENDITURE IN INCOME TAX ACT WHICH IS NOT ALLOWA BLE. THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO HOLDING THAT THE ASS ESSEE HAS NOT FURNISHED ANY EVIDENCE OF DEPOSIT TO THE GOVT DEPAR TMENT. NO BREAK UP NOR ANY COMMUNICATION ETC. RELATING TO FORFEITURE O F THE AMOUNT IS PROVIDED. IT IS ALSO NOTED THAT DURING THE APPEAL B EFORE US, THE ASSESSEE HAS NOT SUBMITTED ANY RELEVANT MATERIAL. IN SUCH A SITUATION, WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A). THUS GROUND NO . 3 OF THE ASSESSEE IS DISMISSED. ITA NO.22/JP/2018 M/S. R2R S EVA VS ITO, WARD- 1(1), KOTA 9 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06-04-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 /04/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. R2R SEVA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1(1), KOTA 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.22/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR