Sh. Vijay Kumar Jain, Gwalior V. A.C.I.T., Circle-3, Gwalior

ITA 223/AGR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1025 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 27-08-2014
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA
• Assessee Lawyers: NK JAIN
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA SMC BENCH , AGRA BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 223 / AGRA /201 4 AY: 20 08 - 09 SH. VIJAY KUMAR JAIN VS. ACIT, CIRCLE 3 PROP. M/S ENGINEERS HUME PIPES GWALIOR 38, NEW KHEDAPATI COLONY LASHKAR, GWALIOR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. N.K. JAIN, C.A. RESPONDENT BY : SMT. BELU SINHA, SR. D.R. ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), GWALIOR DATED 18/06/2014 FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09 ON THE FOLLOWING GROUNDS. 1. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN CONFIRMING THE DISALLOWANCE FOR RS. 6,75,140/ - U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 (THE ACT) WHICH IS NOT APPLICABLE IN MY CASE IN VIEW OF JUDGEMENTS OF VARIOUS COURTS. 2 . HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION FOR RS.48,675/ - U/S 69 OF THE ACT. 3 . HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION FOR RS.22,255/ - OUT OF RS.56,387/ - (RESTRICTING THE DISALLOWANCE TO 10% OF VARIOUS EXPENSES) ON AD HOC BASIS WITHOUT MENTIONING THE PARTICULAR EXPENDITURE. 2 4 . THAT THE ORDER IS AGAINST THE LAW AND NATURAL JUSTICE. 5 . THAT YOUR APPELLANT RESERVES HIS RIGHT TO ADD, DELETE AND TO PREFER FURTHER GROUNDS OF APPEAL AT THE TIME OF HEARING WITH THE KIND PERMISSION OF THE CHAIR. 2. I HAVE HEARD SHRI NK JAIN, THE LD.COUNSEL FOR THE ASSESSEE AND SMT.BELU SINHA, THE LD.SR.D.R. ON BEHALF OF THE REVENUE. 3. THE FIRST ISSUE THAT COMES FOR ADJUDICATION IS WHETHER THE LD.CIT(A) WAS RIGHT IN LAW IN CONFIRMING A DISALLOWANCE OF RS.6,75,140/ - UNDER SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE SUBMITTED THAT THERE IS NO AMOUNT PAYABLE AS ON 31 ST MARCH, 2008. BEFORE ME THE LD.COUNSEL FILED COPIES OF THE ACCOUNTS ALONG WITH THE BILLS, TO DEMONSTRATE THAT NO AMOUNT WAS PAYABLE AT THE CLOSE OF THE YEAR. THE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. VECTOR SHIPPING SERVICES (P) LTD. 357 ITR 652 (ALL) HAS HELD THAT, FOR DISALLOWING EXPENSES FROM BUSINESS OR PROFESSION ON THE GROUND THAT T.D.S. HAS NOT BEEN DEDUCTED, THE AMOUNT SHOULD BE PAYABLE AND NOT WHICH HAS ALREADY BEEN PAID, BY THE END OF THE YEAR. THE SPECIAL BENCH JUDGEMENT IN THE CASE OF M/S MERILYN SHIPPING AND TRANSPORT LTD. 136 ITD 23 (SB) WAS APPROVED BY THE JURISDICTIONAL HIGH COURT. RESPECTFULLY FOLLOWING THE SAME, GROUND NO.1 OF THE ASSESSEE IS ALLOWED. 4. GROUND NO. 2 IS AGAINST AN ADDITION ON ACCOUNT OF UNACCOUNTED INCOME USED TO PAY CREDITORS U/S 69 OF THE ACT. THE SUBMISSIONS OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT, NO CASH WAS PAID DURING THE IMPUGNED A.Y. THE LD.D.R. SUBMITS THAT THE ASSESSEE HAS NOT FILED A NY EVIDENCE TO SUBSTANTIATE THE CONTENTION THAT THE PAYMENT WAS NOT MADE DURING THE YEAR. AS NO FURTHER EVIDENCE HAS BEEN PRODUCED BEFORE ME, I SEE NO REASON TO INTEREFERE WITH THE ORDERS OF THE LD.CIT(A). IN THE RESULT THIS GROUND OF THE ASSESSEE IS DISM ISSED. 5. GROUND NO.3 IS AGAINST THE ADHOC DISALLOWANCE OF CERTAIN EXPENDITURE. THE LD.CIT(A) HAS RESTRICTED THE DISALLOWANCE TO 10% OF THE CLAIM. I SEE NO 3 REASON TO INTERFERE WITH THIS ORDER OF THE FIRSTAPPELLATE AUTHORITY. HENCE THIS GROUND OF THE AS SESSEE IS DISMISSED. 6. GROUND NOS. 4 AND 5 ARE GENERAL IN NATURE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. PRONOUNCED ON 0 1 S T A U G U S T , 2016. S D / - (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: 0 1 S T A U G U S T , 2016. MANGA COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR