The ITO, Ward-9(2), Ahmedabad V. Shri Abdulbhai Ganibhai Bhatt, Ahmedabad

ITA 2501/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94888 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2501/AHD/2012 / ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER WARD-9(2) AHMEDABAD .. APPELLANT VS ABDULBHAI GANIBHAI BHATT PROP: A.G. BHATT, 129, SARVODAYA COMM. CENTRE, NR. RELIEF CINEMA, AHMEDABAD .. RESPONDENT PAN : AAWPB 5737 D REVENUE BY : MS. SANYOGITA NAGPAL , SR - DR ASSESSEE(S) BY : NONE / DATE OF HEARING 30/11/2015 /DATE OF PRONOUNCEMENT 11/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XV, AHMEDA BAD DATED 07.08.2012 FOR ASSESSMENT YEAR 2009-10, ON TH E FOLLOWING GROUNDS:- 1) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.19,105/- MADE ON ACCOUNT OF E.P.F. EXPENSES OF EARLIER YEAR. ITA NO. 2501/AHD/ 2012 ITO VS. ABDULBHAI GANIBHAI BHATT AY 2009-10 - 2 - 2) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.23,39,001/- MADE ON ACCOUNT OF BOGUS LIABILITIES. 3) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20,91,838/- MADE ON ACCOUNT OF CESSATION OF LIABILITY. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 5) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF ROAD CONSTRUCTION WORK. THE ASS ESSEE HAS SHOWN TOTAL RECEIPTS OF RS.2,26,27,424/- AND DECLAR ED NET PROFIT OF RS.5,54,440/-. THE ASSESSEE GOT ITS ACCO UNTS AUDITED AS PER PROVISIONS OF SECTION 44AB OF THE ACT AND FI LED THE TAX AUDIT REPORT ALONGWITH BALANCE-SHEET, PROFIT & LOSS ACCOUNT ETC, DURING THE ASSESSMENT PROCEEDINGS. 3. THE FIRST ISSUE IS WITH REGARD TO DISALLOWANCE R S.19,105/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF E.P.F. EXPENSES OF EARLIER YEAR. IN THIS REGARD, THE STAND OF THE AS SESSEE HAS BEEN THAT IN RESPECT OF ADDITION OF RS.19,105/-, BEING E PF RELATED TO ITA NO. 2501/AHD/ 2012 ITO VS. ABDULBHAI GANIBHAI BHATT AY 2009-10 - 3 - EARLIER YEAR, WAS VERIFIED BY THE CIT(A) FROM THE D ETAILS SUBMITTED BY THE ASSESSEE IN THIS REGARD . IT WAS FOUND THAT THESE EXPENSES RELATED TO ASSESSMENT YEAR 2008-09 A ND SUCH EXPENSES WERE NEITHER CLAIMED NOR ALLOWED IN THAT Y EAR; THEREFORE, IT WAS ON PAID BASIS AS PER SECTION 43B OF THE ACT AND SUCH DEDUCTIONS WERE ACCORDINGLY ALLOWED BY THE CIT(A). THIS REASONED FINDING OF THE CIT(A) NEEDS NO INTERF ERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 4. NEXT ISSUE IS WITH REGARD TO THE ADDITION OF RS.23,39,001/- AS CREDIT BALANCE OF M/S. VITRAG CON STRUCTION DEPO BEING BOGUS LIABILITY. IN THIS REGARD, IT WAS FOUND BY THE CIT(A) THAT M/S. VITRAG CONSTRUCTION DEPO IS A FIRM IN WHICH ASSESSEE IS A PARTNER. DURING THE PREVIOUS YEAR T HERE WAS AN OUTSTANDING LIABILITY OF RS.22,11,578.01 AND DURING THE PREVIOUS YEAR THERE WERE TRANSACTIONS OF RS.2,92,43 3 AND THE ASSESSEE MADE A PAYMENT OF RS.1,65,010 ON 15.11.200 8 THROUGH CHEQUE OF SYNDICATE BANK RESULTING INTO BAL ANCE OF RS.23,39,001/-. BUSINESS TRANSACTION CONTINUED IN A SSESSMENT YEAR 2010-11 ALSO AND AS AGAINST OPENING BALANCE OF RS.23,39,001.01 LACS ON 01.04.2009 THE CLOSING BALA NCE WAS OF RS.18,40,468.01. THEREFORE, AFTER CONTRA ACCOUNT AN D CONFIRMATION, THE IDENTITY AND BUSINESS RELATION WITH THE PARTY ITA NO. 2501/AHD/ 2012 ITO VS. ABDULBHAI GANIBHAI BHATT AY 2009-10 - 4 - WERE MADE CLEAR. IT WAS ONLY RS. 2,92,433/- BEING D EBITED IN PREVIOUS YEAR AND NOT THE ENTIRE AMOUNT OF RS. 23,3 9,001/- BECAUSE IT WAS AN OUTSTANDING OPENING BALANCE OF RS.22,11,578/- DULY CONSIDERED AND ACCEPTED BY THE ASSESSING OFFICER IN THE SCRUTINY PROCEEDINGS OF ASSESSMENT Y EAR 2008- 09. SO, THE CIT(A) WAS RIGHTLY DIRECTED THE ASSESSI NG OFFICER TO DELETE THE ADDITION SINCE THE SAME WAS NOT BASED ON PROPER FACT AND REASONING. THIS REASONED FINDING OF THE CIT(A ) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. NEXT ISSUE IS WITH REGARD TO THE ADDITION OF RS. 20,91,838 U/S 41(1) OF THE ACT FOR CESSATION OF LIABILITY OF M/S. VITRAG CONSTRUCTION, JABALPUR. AS PER THE DETAILS SUBMITT ED BY ASSESSEE, IT WAS FOUND THAT THAT THERE WAS OPENING CREDIT BALANCE AS ON 01.04.2008 AT RS.20,91,838/- WHICH RE MAINED AS SUCH TILL 31.03.2009; BUT THE ASSESSEE PAID THIS OUTSTANDING ON 14.11.2009 VIDE J.V. ENTRY BY WHICH THE AMOUNT W AS TRANSFERRED TO CAPITAL ACCOUNTS OF THE ASSESSEE ITS ELF. THE ASSESSEE IS A PARTNER IN THE SAID FIRM. THE ASSESSE E WAS IN DISPUTE WITH OTHER PARTNERS OF M/S VITRAG CONSTRUCT ION CO. WHICH PREVENTED HIM TO SUBMIT SUCH DETAIL DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. MOREOVER, THIS OPENING B ALANCE OF LIABILITY WAS SUBJECTED TO SCRUTINY IN ASSESSMENT Y EAR 2008-09. ITA NO. 2501/AHD/ 2012 ITO VS. ABDULBHAI GANIBHAI BHATT AY 2009-10 - 5 - THEREFORE, THE ASSESSING OFFICERS TREATING THIS LI ABILITY AS RELINQUISHED ONE U/S. 41(1) OF THE ACT WAS NEITHER BASED ON FACT NOR JUSTIFIED. IN FACT, THERE WAS NO RELINQUIS HMENT OF LIABILITY AND ASSESSEE HAS NOT DERIVED ANY BENEFIT DIRECTLY BY OR INDIRECTLY IN ANY MANNER; RATHER THE ASSESSEE DISCH ARGED THE LIABILITY THROUGH DEBIT OF HIS CAPITAL ACCOUNT WITH THIS FIRM. IN VIEW OF THESE FACTS, THE CIT(A) WAS JUSTIFIED IN DI RECTING THE ASSESSING OFFICER TO DELETE THE ADDITION IN QUESTIO N. WE UPHOLD THE ORDER OF THE CIT(A) IN THIS REGARD. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 11TH OF DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 11/12/2015 *BT / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD