Urmila Sahu, Berhampur V. ITO, Berhampur

ITA 265/CTK/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86435 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VENKATRAMANI L D
• Assessee Lawyers: P K MISHRA
• Keywords: Unexplained cash credit; Depreciation
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH ES , CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 265 / CTK /201 3 : (ASST. YEAR : 200 8 - 0 9 ) SMT URMILA SAHU, W/O BINOD CH. SAHU, DESIBEHERA STREET, BERHAMPUR 760009. PAN : A DQPS4511H . (APPELLANT) VS. INCOME TAX OFFICER , WARD - 3, BERHAMPUR . (RESPONDENT) A PPELLANT BY : SHRI P. K. MISHRA , A .R . RE SPONDENT BY : SHRI S.VENKATRAMANI, L D. D.R. DATE OF HEARING : 29 / 01 /201 5 DATE OF PRONOUNCEMENT : 04/03 /201 5 O R D E R PER P.K. BANSAL THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , BERHAMPUR , ODISHA DT D . 1 8 .0 1 .201 3 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : - 1 . FOR THAT AS AGAINST THE ALLEGATION OF THE LEARNED C.I.T(APPEALS), TWO AMOUNTS TOTALLING RS. 543068/ - AS BOGUS CREDITS FOR NO ACCEPTABLE EXPLANATION THE APPELLANT HEREWITH SUBMITS THAT FOR SUNDRY CREDITOR OF RS.284953/ - IN THE CA SE OF M/S SRINIVAS TRADING CO. , RAJMUNDRY A.P AND RS.258115/ - IN THE CASE OF M/S SAVALIA TRADING CO, GONDALA A.P, THE APPELLANT FURNISHED THE CONFIRMATION LETTERS OF THE ABOVE TWO GENUINE CREDITORS BEFORE THE CIT (APPEALS) ON 15. 01.2013 AND THE COPIES OF THE LEDGER ACCOUNTS WERE ALSO SUBMITTED BEFORE THE L E ARNED I.T.O WHICH WAS NOT TAKEN INTO CONSIDERATION BY THE LEARNED C.I.T(APPEALS) WHICH IS QUITE UNJUSTIFIED AS THE APPELLANT HAS REGULAR BUSINESS TRANSACTION TRANSACTION WITH TH E ABOVE CREDITORS AND ALL MOST ALL THE TRANSACTIONS WERE MADE THROUGH BANK . COPIES OF THE ABOVE TWO LEDGER ACCOUNTS ARE HEREWITH SUBMITTED FOR YOUR HONOURS KIND 2 ITA NO. 265 / CTK /201 3 (ASST. YEAR : 2008 - 0 9 ) CONSIDERATION. FOR THAT ADDITION OF RS. 543068/ - FOR MERE NON SERVICE OF NOTICE U/S 133(6) OF THE I.T. ACT AND NON PRINTING OF PHONE NUMBERS ETC ON THE CONFIRMATION LETTERS SHOULD NOT BE TREATED AS UNEXPLAINED CASH CREDIT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. FOR THAT REGARDING DEPRECIATION ON FURNITURE PURCHASED OF RS.452100/ - , RS 947200/ - RS.212500/ - , RS.506000/ - & RS.186475/ - AMOUNTING TOTAL OF RS.2304275/ - THE APPELLANT FURNISHED ALL THE DETAILS BEFORE THE LEARNED A.O AND BEFORE THE LEARNED C.I.T(APPEALS). AFTER DUE VERIFICATION OF THE ABOVE DETAILS IT WAS HELD THAT THE AGR EEMENT HAVE BEEN MADE BEFORE 30.09.07 FOR WHICH THE P AYMENTS HAVE BEEN MADE STARTING FROM OCT 2007. IN ABSENCE OF ANY POSITIVE FINDING THE FURNITURE WERE ACQUIRED IN OCT & NOV 2007 THE LEARNED CIT(APPEALS) CONFIRMED THE VIEWS OF THE L.A.O. IN FACT THE FURN ITURE WERE RECEIVED DURING SEPT 2007 WITH VALID AGREEMENTS WITH THE CARPENTERS WHICH FACT HAVE COMPLETELY IGN ORED BY THE LEARNED CIT(APPEALS) ON THE MERE PRESUMPTION THAT THE CARPENTERS WILL NOT DELIVER THE FURNITURE WITHOUT RECEIVING AT LEAST A SUBSTANTIAL PART OF THE COST. IN VIEW OF THE ABOVE THE APPELLANT PRAYS FOR ALLOWANCE OF DEPRECIATION @10% ON THE COST OF THE FURNITURE OF RS.2304275/ - IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DEALS IN WHOLESALE TRADING IN ONION, POTATO. THE ASSESSEE ALSO RUNS A GARMENTS SHOP IN THE NAME AND STYLE OF M/S SHAGUN. RETURN OF INCOME WAS FILED ON 30.10.2008 DISCLOSING INCOME AT RS.1,80,950/ - AND AGRICULTURAL INCOME OF RS.65,000/ - . 3. GROUND NO. 1 DEALS WITH THE ADDITION ON ACCOUNT OF THE SUNDRY CREDITORS. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHILE VERIFYING SUNDRY CREDITORS NOTED THAT NOTICES ISSUED TO M/S SRINIVAS TRADING CO. (RS.284953 AND SAVALIA TRADING CO.(RS.258 115)RETURNED UNSERVED. IN THE ABSENCE OF LEDGER AND VOUCHERS UNPRODUCED BY THE ASSESSEE. THE ASSESSING OFFICER TREATED THE SAME AS BOGUS CREDIT. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) REJECTED THE CONFIRMATION FILED BY THE ASSESSEE AS A CCORDING TO HIM THE CONFIRMATION DOES NOT GIVE COMPLETE ADDRESS, PHONE NUMBER OF THE ASSESSEE. EVEN THE NATURE OF THE OUTSTANDING IS NOT CLEAR. 3 ITA NO. 265 / CTK /201 3 (ASST. YEAR : 2008 - 0 9 ) 4. WE HEARD THE RIVAL SUBMISSIONS, ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW . WE NOTED THAT THE ASSESSE E HAS CLAIMED THAT HE HAD PRODUCED THE BOOKS OF ACCOUNTS AND THIS FACT IS ALSO APPARENT FROM PARA NO.2 OF THE ASSESSMENT ORDER . THE ASSESSEE EVEN PRODUCED THE LEDGER IN RESPECT OF CREDITORS AND VOUCHERS REGARDING THESE PARTIES BUT THE ADDITION WERE MADE AS AFTER THE NON SERVICE OF THE NOTICE ON THESE PARTIES DID NOT PRODUCE LEDGER ACCOUNTS COPIES AND CONFIRMATION LETTER FROM THEM. THE ASSESSING OFFICER DID NOT DENY THAT THESE WERE THE TRADE CREDITORS. PURCHASES MADE FROM THESE PARTIES WERE NOT DISALLOWED . I F THE TRADE CREDITORS ARE TO BE BOGUS THE PURCHASES MADE WOULD HAVE ALSO BEEN BOGUS. IN RESPECT OF THE CREDIT ARISING FOR THE PURCHASES ARISE BY DEBITING PURCHASE AND CREDITING PARTY. THE ASSESSING OFFICER HAS NOT DOUBTED THE PURCHASES MADE BY THE ASSESSEE BUT DISALLOWED THE TRADE CREDITORS. IN THE CASE OF SAVALIA TRADING CO., WE NOTED POSTAL REMARK IS TRY CHATRAPUR 761033 ODISHA. THIS MARK ITSELF PROVES THAT THE PARTY IS VERY MUCH IN EXISTENCE. WE ACCORDINGLY DELETE THE ADDITION ACCORDINGLY GROUND NO.1 STANDS ALLOWED. 5. SO FAR GROUND NO.2 IS CONCERNED IT RELATES TO DISALLOWANCE FOR PART OF DEPRECIATION. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THE ASSESSEE CLAIMED DEPRECIATION ON FURNITURE AT THE RATE OF 10% AMOUNTING TO RS.2,50,307/ - BUT WAS ALLOWED BY THE ASSESSING OFFICER AT THE RATE OF 5% AFTER OBSERVING THAT THESE ASSETS HAVE BEEN USED FOR LESS THAN 180 DAYS. THE CIT(A) VERIFYING THE BILLS ALLOWED DEPRECIATI ON OUT OF THE TOTAL OF RS.1,22,434/ - FOR RS.78,275/ - AT THE RATE OF 10% AND FOR THE BALANCE AT THE RATE OF 5%. THE CIT(A) DID NOT AGREE THAT THE AGREEMENT FOR FURNITURE BEFORE 30.09.2007 AND PAYMENT WERE MADE IN OCTOBER AND NOVEMBER AND THEREFORE HE SUS TAINED THE DEPRECIATION ON FURNITURE AT THE RATE OF 5%. BEFORE US EVEN THOUGH THE LD. A.R VEHEMENTLY CONTENDED THAT THE FURNITURE WERE DELIVERED BY THE CARPENTER PRIOR TO 30.09.2009 BUT NO EVIDENCE IN THIS REGARD WAS BROUGHT TO OUR KNOWLEDGE. WE THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A) IN DIS ALLOWING THE 4 ITA NO. 265 / CTK /201 3 (ASST. YEAR : 2008 - 0 9 ) DEPRECIATION . WE ACCORDINGLY CONFIRM THE ORDER ON SECOND GROUND. THUS THE GROUND NO.2 STANDS DISMISSED. 6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWE D. 7 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON THE NOTICE BOARD OF THE BENCH AT CUTTACK ON 04.03.2015. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI - GOA DATED : 04/03 /201 5 * A * COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ASSISTANT REGISTRAR ITAT, CUTTACK BENCH, CUTTACK