Shri Krishna Murari modi, Dhanbad V. ITO WARD-1(4), Dhanbad

ITA 255/RAN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7784 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: S K PODDAR; DEVESH PODDARADV
• Keywords: Unexplained cash credit; Unexplained expenditure; Income from undisclosed sources; Opportunity of being heard
• Section: 142(1); 234B

Judgement Text

1 ITA NO. 255 /RAN/ 201 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 255 /RAN/201 6 A .Y. : 20 1 0 - 201 1 SRI KRISHNA MURARI MODI, PROP: M/S SHREE DURGA VASTRALAY, HIRAPUR, DHAN BAD - 826001 V S ITO, WARD - 1(4), DHANBAD P AN NO. : A DLPM 0746 R (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR,ADV REVENUE BY :SHRI P.K.MONDAL, JCIT DATE OF HEARING : 2 2 . 05 .201 8 DATE OF PRONOUNCEMENT : 24.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), DHANBAD , DATED 22.06.2016 , FOR THE ASSESSMENT YEAR 201 0 - 2011 , WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . FOR THAT LD. A.O. WAS NOT JUSTIFIED IN MAKING AN ADDITION OF RS.3,75,000/ - ON THE GROUND OF ESTIMATE MADE FOR TOTAL INTRODUCTION OF OUR UNACCOUNTED CASH THROUGH LEDGER AT RS.3,75,000/ - , A SURVEY WAS CONDUCTED AT APPELLANT'S BUSINESS P LACE, HOWEVER, NO IRREGULARITY WAS FOUND. THE STOCK FOUND ALSO TALLIED AND THERE WAS NO DISCREPANCY FOUND. 2 . FOR THAT THAT LD. A.O. MADE OUT DETAILS OF SALES AS PER LEDGER AT THE TIME OF ASSESSMENT AND ALSO TALLIED THE SALES WITH CASH MEMOS. HOWEVER, COMPLE TE CASH MEMOS WERE NOT FOUND, AS SUCH, IT WAS PRESUMED THAT THE APPELLANT HAD GENERATED UNACCOUNTED INCOME FROM UNACCOUNTED SOURCE BY SHOWING EXCESS SALES COMPARED TO CASH MEMOS. THIS PRESUMPTION IS NOT 2 ITA NO. 255 /RAN/ 201 6 UNDERSTOOD AND THERE IS NO QUESTION OF ANY ESTIMATE O N UNACCOUNTED GENERATION OF CASH THROUGH SALES MENTIONED IN THE LEDGER, TRADING ACCOUNT OF WHICH WAS ACCEPTED. IN THE PROCESS, SALES DISCLOSED WAS ACCEPTED GP AND NET PROFIT WAS ACCEPTED. THE ADDITION MADE ON ESTIMATE IS UNJUSTIFIED, INCORRECT AND NO BASIS WHATSOEVER. 3 . FOR THAT THE LD. A.O. MADE DISALLOWANCE OF RS.4,000/ - OUT OF GENERAL EXPENSES, RS.8,100/ - OUT OF ADVERTISEMENT EXPENSES, RS.7,000/ - OUT OF PRINTING AND STATIONERY EXPENSES, RS. 10,000/ - AS UNEXPLAINED EXPENDITURE U/S 69C. ALL THE EXPENSES CLA IMED WERE REASONABLE AND THERE WAS NO JUSTIFICATION FOR MAKING DISALLOWANCE. 4. FOR THAT LD. A.O. FURTHER MADE AN ADDITION OF RS.5,293/ - U/S 68 AS UNEXPLAINED C ASH CREDIT ON THE GROUND THAT THERE WAS DIFFERENCE IN THE ACCOUNTS OF TWO CREDITORS FROM WHOM T HE APPELLANT WAS PURCHASING GOODS. NO EXPLANATION WHATSOEVER WAS ASKED FOR AND MINOR DIFFERENCE CAN ALWAYS HAPPEN IN RECONCILIATION OF SUNDRY CREDITORS ACCOUNTS. FURTHER SUCH DIFFERENCE CANNOT BE CONSIDERED AS UNEXPLAINED CASH CREDIT U/S.68. THE ADDITION M ADE IS UNJUSTIFIED AND ILLEGAL. 5. FOR THAT ABOVE TWO MENTIONED GROUNDS WERE NOT RAISED BEFORE LD.CIT(A) BY OVERSIGHT OF OUR AUTHORIZED ADVOCATE WHICH MAY KINDLY BE ENTERTAINED AND ADJUDICATED UPON. 6. FOR THAT THE INTEREST U/S.234A AND 234B CAN ONLY BE CHARGED ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HONBLE JHARKHAND HIGH COURT. 2. AT THE TIME OF HEARING LD. AR OF THE ASSESSEE HAS NOT PRESSED GROUND NO.3 & 4 AND MADE ENDORSEMENT TO THE GROUNDS OF APPEAL. ACCORDING LY, WE DISMISS GROUND NOS.3&4 AS NOT PRESSED. 3 . BRIEF FACTS RELATING TO THE EFFECTIVE GROUNDS NO.1, 2, 5 & 6 ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 201 0 - 201 1 ELECTRONICALLY ON 26.03.2011 SHOWING A TOTAL INCOME OF RS. 3,52 ,265/ - , AND THE RETURN OF INCOME WAS DULY PROCESSED U/S.143(1) OF THE ACT AND THE CASE WAS SELECTED FOR SCRUTINY SINCE THERE WAS A SURVEY U/S.133A IN THIS CASE ON 05.03.2010. SUBSEQUENTLY, NOTICE U/S.143(2 ) & 142(1) OF THE ACT WERE 3 ITA NO. 255 /RAN/ 201 6 ISSUED TO THE ASSESSEE. IN COMPLIANCE THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE RELEVANT DOCUMENTS. THE AO ON PERUSAL OF THE BOOKS OF ACCOUNTS/DOCUMENTS, MADE THE ADDITION OF RS.3,75,000/ - ON ACCOUNT OF UNACCOUNTED CASH ALONG WITH OTHER ADDITIONS, A SSESSED TOTAL INCOME AT RS. 8,07,560/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 08.03.2013. 4 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS LD. AR OF THE ASSESSEE ARGUED THE GROUNDS AND REI TERATED THE SUBMISSIONS AND LD.CIT(A) HAVING CONSIDERED THE FINDINGS AND THE SUBMISSIONS OF THE ASSESSEE DEALT ON THE DISPUTED ISSUES AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFOR E THE TRIBUNAL. 6 . BEFORE US, LD. AR SUBMITTED THAT NO IRREGULARITY WAS FOUND DURING THE SURVEY CONDUCTED AT ASSESSEES BUSINESS PREMISES. LD.AR FURTHER SUBMITTED THAT THERE IS NO QUESTION OF ANY ESTIMATE ON UNACCOUNTED GENERATION OF CASH THROUGH SALES MEN TIONED IN THE LEDGER, TRADING ACCOUNT WHICH WAS ACCEPTED AND IN THE PROCESS THE SALES DISCLOSED WAS ACCEPTED FURTHER GP AND NET PROFIT WAS ALSO ACCEPTED, THEREFORE, THE ADDITION MADE ON ACCOUNT OF UNACCOUNTED CASH BE DELETED. 7 . CONTRA, LD. D R SUPPORTED TH E ORDER S OF LOWER AUTHORITIES . 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, ON THE GROUND RAISED BEFORE US THE AO MADE THE 4 ITA NO. 255 /RAN/ 201 6 ADDITION ON THE GROUND OF ESTIMATE MADE FOR TOTAL INTRODUCTION OF UNACCOUNTED CASH THROUG H LEDGER. LD. AR SUBMITTED THAT THE ASSESSEE HAS PROVIDED PROPER EXPLANATION S IN DETAILS DURING THE ASSESSMENT PROCEEDINGS AND SUBMITTED THAT IN ADDITION TO THE SALE COUNTER OF THE SHOP THERE WERE FEW MORE COUNTERS AND AS THE ABOVE BUSINESS IS EXEMPT FROM SALES TAX, IT WAS NOT MANDATORY TO USE PRE - NUMBERED CASH MEMOS. ENTRIES WERE MADE IN SALE REGISTER FROM SOURCE DOCUMENTS WHICH COMPRISED OF CASH MEMOS AND LOOSE SHEETS (ONLY DURING THE STOCK CLEARANCE SALE). THE AO FOUND THAT THE ASSESSEE COULD NOT FURNISH EVEN THE LIST OF CLOTHES, LIST OF ITEMS BEING DELIVERED FOR SALE ETC. GIVE N TO THE SALE BOYS TO PROVE THE SALES BEING MADE. HOWEVER, HE TREATED 25% OF THE EXCESS SALE AS PER THE LEDGER AS SALE OF STOCK CLEARANCE THROUGH SALE BOYS AND CREDIT OF SALE DIRECT LY TO SALE LEDGER. THEREFORE, THE BALANCE I.E. 75% OF EXCESS SALE AS PER LEDGER WAS TREATED AS INTRODUCTION OF UNACCOUNTED INCOME GENERATED FROM UNACCOUNTED SOURCE. THE CIT(A) WHILE DEALING WITH THE ISSUE, HAS OBSERVED THAT THE AO WAS JUSTIFIED IN CON SIDER ING 25% FOR SUCH SALES BASED ON THE ENQUIRIES CONDUCTED BY HIM AND WHICH ALSO THE ASSESSEE WAS NOT ABLE TO PRODUCE THE CASH BOOK FOR THE FULL YEAR. HOWEVER, FROM THE ASSESSMENT ORDER WE FOUND THAT THE THOUGH THE AO HAS NOT TOTALLY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE BUT DUE TO NON - PRODUCTION OF LIST OF CLOTHES, LIST OF ITEMS BEING DELIVERED FOR SALE ETC. GIVEN TO THE SALE BOYS TO PROVE SO CALLED SALES BEING MADE, THE AO MADE THE ESTIMATION ON TOTAL INTRODUCTION OF UNACCOUNTED CASH THROUGH LEDGER FOR T HE WHOLE YEAR. 5 ITA NO. 255 /RAN/ 201 6 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD MADE STOCK CLEARANCE SALE IN THE MONTH OF MARCH, 2010 AND RECORDED THE DAILY SALES DIRECTLY IN THE SALE LEDGER, THEREFORE, THE EXCESS SALE FOUND IN THE LEDGER SHOULD NOT BE TREATED AS INTRODUCTION OF UNACCOUNTED INCOME. ON VERIFICATION THE AO FOUND THAT THERE WAS A STOCK CLEARANCE IN THE SHOP OF THE ASSESSEE DURING THE MONTH OF MARCH, 2010. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE IN THE INTERES T OF JUSTICE AND FAIRPLAY, PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM BEFORE THE AO, WHO SHALL VERIFY AND EXAMINE AND PASS ORDER ACCORDINGLY AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DI RECTED TO COOPERATE IN THE ASSESSMENT PROCEEDINGS. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . CHARGING OF INTEREST U/S.234A & 234B OF THE ACT IS CONSEQUENTIAL AND THE AO IS DIRECTED ACCORDINGLY. 10 . IN TH E RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 24 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS 6 ITA NO. 255 /RAN/ 201 6 COPY OF THE O RDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.