The ACIT, Bhopal V. Shri Anish Gupta, Bhopal

ITA 262/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0100 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 21-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: O P SETHIYA
• Keywords: Depreciation; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI M.L. GUSIA, ACCOUNTANT MEMBER PAN NO. : ABDPG-0120D I.T.A.NO.262/IND/2009 A.Y.: 2005-06 ASSISTANT COMMISSIONER OF INCOME-TAX, SHRI ANISH GUPTA, 1(1), C-1, BDA, COLONY, BHOPAL. SHIVAJI NAGAR, BHOPAL. APPELLANT RESPONDENT C.O.NO.44/IND/2009 A.Y.: 2005-06 SHRI ANISH GUPTA, ACIT C-1, BDA, COLONY, 1(1), SHIVAJI NAGAR, BHOPAL. BHOPAL. APPELLANT RESPONDENT DEPARTMENT BY : SMT. APARNA KARAN, ADDL. CIT DR ASSESSEE BY : SHRI O.P.SETHIYA, C.A. - 2 - 2 O R D E R PER SAINI, J.M. BOTH THE DEPARTMENTAL APPEAL AND CROSS OBJECTION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-I, BHOPAL, DATED 20 TH MARCH, 2002, FOR ASSESSMENT YEAR 2005-06. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE P ARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. DEPARTMENTAL APPEAL : 3. THE REVENUE CHALLENGED THE DELETION OF ADDITION OF RS. 7,95,450/- ON ACCOUNT OF DIFFERENCE OF FEE RECOVERABLE. 4. THE A.O. EXAMINED THE BOOKS OF ACCOUNT AND VOUCHERS AND BILLS PRODUCED BY THE ASSESSEE BEFORE HIM. THE ASSESSEE A LSO FILED DETAILS OF THE COURSES AND FEE STRUCTURE WHICH IS REPRODUCED BY TH E ASSESSING OFFICER AT PAGE 2 OF THE ASSESSMENT ORDER. THE ASSESSEE IS RUN NING COACHING CLASSES IN THE NAME OF PHYSICS QUANTUM CLASSES. THE A.O. NOT ED THE EXPLANATION OF THE ASSESSEE THAT FEE IS COLLECTED IN THREE INSTALM ENTS, BUT SOMETIMES SOME OF THE STUDENTS, COULD NOT OFFER FULL FEE OR MERITORIO US STUDENTS ARE GIVEN CONCESSION. SOME STUDENTS DROP IN BETWEEN THE SESS ION OF THE COURSE, THEREFORE, NO FEE ARE RECEIVED. THE TOTAL FEE RECEI VED ARE REFLECTED IN THE - 3 - 3 BOOKS OF ACCOUNT ALONGWITH THE DETAILS OF THE RECEI PTS. THE A.O., HOWEVER, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE, BECAUSE THE DIFFERENCE OF THE FEE CLAIMED TO HAVE BEEN ACTUALLY RECEIVED AND THE MAXI MUM FEE WAS RS. 11.55 LAKHS, WHICH IS ABOUT 20 % OF THE MAXIMUM RECEIPTS AND ACCORDINGLY NOTED THAT THE ASSESSEE HAS NOT FURNISHED DETAILS OF THE STUDENTS, THEIR PARENTS & THEIR ADDRESS AND CONTACT NUMBERS, SO THAT CONTENTI ON OF THE ASSESSEE COULD BE VERIFIED. THE A.O., ACCORDINGLY, BY GIVING BENEF IT OF 5 % ON THIS ISSUE MADE THE ADDITION OF RS. 7,95,450/-. IT WAS SUBMITT ED BEFORE THE CIT(A) THAT THE CONCESSIONS ARE GIVEN TO SOME OF THE STUDENTS C ONSIDERING THEIR FINANCIAL STATUS, ACADEMIC RECORDS AND JOINING OF THE CLASSES ETC. ALL RECEIPTS ARE ISSUED TO THE STUDENTS IN RESPECT OF FEE RECEIVED B Y THEM AND ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND BOOKS ARE ALSO AUDITED IN WHICH NO DISCREPANCIES HAVE BEEN NOTED BY THE A.O. IT WAS ALSO SUBMITTED T HAT THERE IS NOR REQUIREMENT FOR THE ASSESSEE TO MAINTAIN THE DETAIL S, BECAUSE WHATEVER FEE HAVE BEEN RECEIVED FROM THE STUDENTS HAVE BEEN ACCO UNTED FOR. THE DETAILS OF THE STUDENTS ARE MAINTAINED IN THE ACCOUNTS, WHICH HAVE BEEN PRODUCED BEFORE THE A.O. SINCE THE BUSINESS OF THE ASSESSEE IS ON CASH BASIS I.E. PAY AND SIT IN THE CLASS, THEREFORE, THE ASSESSEE IS NO T REQUIRED TO MAINTAIN DETAILS OF THEIR PARENTS AND THAT NO SUCH DETAILS WERE CALL ED FOR BY THE ASSESSING - 4 - 4 OFFICER. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE DELETED THE ENTIRE ADDITION. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS SHOWN MAXIMUM FEE OF RS. 71,91,000/- BUT ONLY R ECEIPTS ARE SHOWN AT RS. 60,36,000/- IN WHICH THERE WAS A DIFFERENCE OF RS. 11,55,000/- BEING THE FEE NOT RECEIVED. THE LD. DEPARTMENTAL REPRESENTATI VE PRODUCED THE ASSESSMENT RECORD FOR PERUSAL OF THE BENCH, WHICH I S PERUSED. THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED TO QUERY OF TH E A.O. DATED 5 TH JULY, 2007 ( POINT NO. XVIII) IN WHICH DETAILS OF NUMBER OF STUDENTS AND FEE CHARGED HAVE BEEN CALLED FOR BY THE ASSESSING OFFIC ER. REPLY OF THE SAME IS FILED. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO REF ERRED TO THE ORDER SHEET DATED 13 TH AUGUST, 2007, AND SUBMITTED THAT THE ASSESSEE FAIL ED TO GIVE SPECIFIC REPLY BEFORE THE A.O. REGARDING FEE NOT CH ARGED FROM THE STUDENTS AND DETAILS OF THEIR PARENTS ETC. THEREFORE, THE A. O. WAS JUSTIFIED IN MAKING THE ADDITION. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT THE BOOKS OF ACCOUNT, RECEIPTS, VOUCHERS AND LEDGER WER E PRODUCED BEFORE THE A.O., WHICH HAVE BEEN TEST CHECKED. ALL RECEIPTS RE CEIVED FROM THE STUDENTS ARE ENTERED INTO THE BOOKS OF ACCOUNT AND VERIFIED BY THE ASSESSING OFFICER. - 5 - 5 HE HAS SUBMITTED THAT THE A.O. HAS COMPARED THE FEE STRUCTURE FROM THE ACTUAL FEE RECEIVED BY THE ASSESSEE. HE HAS SUBMITT ED THAT THERE ARE SEVERAL FACTORS LIKE BUSINESS COMPETITION, JOINING OF THE C LASS BY STUDENTS DURING THE COURSE OF SESSION, MERIT OF THE STUDENT, ANOTHER FA CTORS LIKE SOME STUDENTS DISAPPEARED DURING THE COURSE OF COURSES AND THAT S OME STUDENTS WERE NOT ABLE TO PAY FULL FEE WERE THE RELEVANT FACTORS ON W HICH THE ASSESSEE COULD NOT RECEIVE THE FULL FEE FROM THE STUDENTS. THEREFORE, PART FEE NOT RECEIVED FROM SOME OF THE STUDENTS COULD NOT BE CONSIDERED AS UND ISCLOSED INCOME OF THE ASSESSEE. HE HAS SUBMITTED THAT THE A.O. HAS NOT CA LLED FOR SPECIFIC DETAILS FROM THE ASSESSEE TO GIVE NAME, ADDRESS AND CONTACT NUMBER OF THE STUDENTS FOR VERIFICATION. 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE P ARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE ASSESSMENT RECORD, WE FIND THAT THE A.O. HAS ISSUED QUERY DATED 5 TH JULY, 2007, (POINT NO. XVIII) ASKING THE ASSESSEE FILE DETAILS OF NUMBER OF STUDENTS AND FEE CHARGED. THE ASSESSEE FI LED THE DETAILS, WHICH ARE ALSO INCORPORATED AT PAGE 2 OF THE ASSESSMENT ORDER . THE A.O. CONSIDERED THE MAXIMUM FEE PRESCRIBED FOR THE COURSE AND COMPARED THE SAME WITH THE ACTUAL RECEIPT RECEIVED BY THE ASSESSEE. THE ASSESS EE EXPLAINED THAT PART OF THE RECEIPTS ARE NOT RECEIVED, BECAUSE OF SOME STUD ENTS WERE NOT ABLE TO - 6 - 6 AFFORD FULL FEE AND WERE MERITORIOUS STUDENTS, SOME STUDENTS DROP IN THE SESSION AND SOME STUDENTS JOIN THE COURSES DURING T HE SESSION. THESE WERE THE RELEVANT FACTORS IN FAVOUR OF THE ASSESSEE FOR NOT RECEIVING THE TOTAL FEE FROM THE STUDENT. IT IS, THEREFORE, CASE OF NON-REC EIPT OF THE FEE BY THE ASSESSEE WHICH IS CONSIDERED BY THE ASSESSING OFFIC ER TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. SUCH AN APPROACH OF THE A.O . IS UNWARRANTED UNDER THE LAW. MOREOVER, NO SPECIFIC DETAILS WERE CALLED FOR FROM THE ASSESSEE BY THE ASSESSING OFFICER AS NOTED IN THE ASSESSMENT OR DER LIKE THEIR NAMES, ADDRESSES AND CONTACT NUMBERS. SAME IS ALSO NOT MEN TIONED IN THE ORDER SHEET OF THE A.O. DATED 13TH AUGUST, 2007. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THOUGH NO SPECIFIC DE TAILS WERE CALLED FOR, BUT THERE IS A PRESUMPTION THAT THE A.O. MIGHT HAVE CAL LED FOR SUCH DETAILS FROM THE ASSESSEE. SUCH CONTENTION OF THE LD. DEPARTMENT AL REPRESENTATIVE COULD NOT BE ACCEPTED. 8. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMST ANCES AND THAT ALL RECEIPTS ARE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND AUDITED BY THE AUDITORS AND NO SPECIFIC DEFECTS HAVE BEEN POINTED OUT IN THE ACCOUNTS OF THE ASSESSEE, THEREFORE, IT IS NOT A FIT CASE FOR INTER FERENCE. MOREOVER, IF THE A.O. WANTED TO TAX NON RECEIPT OF THE FEE AS TAXABLE INC OME OF THE ASSESSEE, THE A.O. SHOULD HAVE BROUGHT SUFFICIENT AND COGENT MATE RIAL ON RECORD IN SUPPORT - 7 - 7 OF HIS FINDING. AS A RESULT, WE DO NOT FIND ANY MER IT IN THE DEPARTMENTAL APPEAL. THE SAME IS, ACCORDINGLY, DISMISSED. C.O.NO.44/IND/2009 : 9. THE ASSESSEE CHALLENGED THE ADDITION OF RS. 50,000/ - ON ACCOUNT OF DISALLOWANCE OF EXPENSES LIKE DEPRECIATION, CONVEY ANCE AND TELEPHONE ETC. THE A.O. DISALLOWED RS.50,000/- ON THE ABOVE HEAD B ECAUSE THE ASSESSEE COULD NOT ESTABLISH THAT THE EXPENSES WERE INCURRED ENTIRELY FOR BUSINESS PURPOSES. THE ASSESSEE IS INDIVIDUAL. THEREFORE, PE RSONAL USE OF THESE EXPENDITURE COULD NOT BE RULED OUT. THE LD. CIT(A) CONFIRMED THE ADDITION ON THE SAME REASON. 10. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL EXPENSES ARE VOUCHED AND EVIDENCES WERE PRODUCED BEFORE THE A.O. AND THE ADDITION IS UNJUSTIFIED. ON THE OTHER HAND, THE LD. DEPARTME NTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMIT TED THAT NO LOG BOOK OF THE CARS IS MAINTAINED BY THE ASSESSEE AND THE ASSE SSEE COULD NOT ESTABLISH THAT THE ENTIRE EXPENSES WERE INCURRED FOR BUSINESS PURPOSES. 11. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE O F THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE AS SESSEE IS INDIVIDUAL AND ACQUIRED TWO NEW CARS. HOWEVER, NO DETAILS WERE FUR NISHED THAT CARS WERE ENTIRELY USED FOR BUSINESS PURPOSES. THE SAME IS TH E POSITION WITH REGARD TO - 8 - 8 THE TELEPHONE, PETROL AND DIESEL ETC. IN THE ABSENC E OF PRODUCTION OF LOG BOOK, AUTHORITIES BELOW WERE JUSTIFIED IN HOLDING T HAT PERSONAL EXPENSES OF THESE EXPENDITURE CANNOT BE RULED OUT. SINCE THE AS SESSEE FAILED TO ESTABLISH THAT ENTIRE EXPENDITURE WERE INCURRED FOR BUSINESS PURPOSES. THEREFORE, AUTHORITIES BELOW WERE JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 50,000/-. 12. AS A RESULT, CROSS OBJECTION OF THE ASSESSEE IS DIS MISSED. 13. AS A RESULT, THE DEPARTMENTAL APPEAL AND CROSS OBJE CTION OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2009. SD/- SD/- M. L. GUSIA BHAVNESH SAINI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH AUGUST, 2009. CPU* 24258