ACIT, Agra V. M/s Pushpanjali Construction P.Ltd, Agra

ITA 272/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7058 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SRIVASTAVA
• Keywords: Unexplained cash credit; Deemed to accrue or arise in india
• Section: 143(3); 142(1); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.272/AGR/2009 ASST. YEAR: 2004-05 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S PUSHPAN JALI CONSTRUCTION (P) CIRCLE 4(1), AGRA. LIMITED, 8, JAIPUR HOUSE, PRABHU NAGAR, AGRA. (PAN : AAACP 9604 J). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K. SRIVASTAVA, SR. D.R. RESPONDENT BY : SHRI MRADUL PATHAK, C.A. ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 23.03.2009 PASSED BY THE LD. CIT(A)-I, AGRA ON THE FOLLOWING G ROUNDS :- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN DELETING THE ENTIRE ADDITION MADE ` 7,14,350/- (3,26,260 + 3,89,090) MADE ON ACCOUNT OF DISALLOWANCE OUT OF CONTRACT EXPENSES/PA YMENTS MADE TO CONTRACTORS NAMELY SHRI PUNEET AGARWAL AND SHRI MAY ANK AGARWAL, HOLDING THAT THE ASSESSING OFFICER HAS NOT FURNISHE D ANY MATERIAL OR EVIDENCE TO SHOW THAT THE WORK CLAIMED TO HAVE BEEN CARRIED OUT BY THE SAID TWO CONTRACTORS AT THE SITE OF THE ASSESSEE CO MPANY, WERE NOT CARRIED OUT BY THEM BUT BY OTHER CONTRACTOR WITHOUT PROPERLY APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E DISCUSSED IN THE 2 ASSESSMENT ORDER AND IGNORING THE PROVISIONS OF LAW OF EVIDENCES ACT THAT THE ONUS IS ON THE ASSESSEE TO SUBSTANTIATE AN D JUSTIFY ITS CLAIM. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 AMOUNTING TO ` 47,50,000/- (7,50,000 + 40,00,000) BEING UNEXPLAINE D LOANS TAKEN FROM M/S ESCO REAL ESTATE AND EMINENT REALTORS PVT. LTD. WITHOUT PROPERLY APPRECIATING THE FACTS AND CIRCUMSTANCES O F THE CASE AND RELYING ON THE SUBMISSION MADE BY THE ASSESSEE AND ALSO WITHOUT PROPERLY ADJUDICATING THE ISSUES TAKEN UP BY THE AS SESSING OFFICER IN THE ASSESSMENT ORDER. 3. THAT THE DECISION OF LEARNED COMMISSIONER OF INC OME TAX (A), AGRA BEING ERRONEOUS IN LAW AND ON FACTS DESERVES T O BE QUASHED AND THAT OF THE ASSESSING OFFICER DESERVES TO BE RESTOR ED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE DERIVED INCOME FROM REAL ESTATE BUSINESS, LETTING OF PROPER TY AND FROM OTHER ALLIED ACTIVITIES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.10.20 04 DECLARING INCOME OF ` 68,45,240/-. THE ASSESSING OFFICER ISSUED NOTICE U NDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 23.08.2005 FIXING THE DATE ON 01.09.2005. IN RESPONSE TO THE SAME, THE LD. A.R. OF THE ASSESSEE APPEARED AND FILED DOCUMENTARY EVIDENCE AS REQUIRED BY THE ASSESSING O FFICER. THE ASSESSING OFFICER ALSO ISSUED NOTICE AND QUESTIONNAIRE UNDER SECTION 142(1) DATED 21.08.2006 FIXING THE DATE FOR HEARING ON 08.09.2006. THE ASSESSEE A PPEARED VARIOUS TIME BEFORE THE 3 ASSESSING OFFICER AND FILED ALL NECESSARY EVIDENCES . AFTER EXAMINING THE SAME, THE ASSESSING OFFICER MADE VARIOUS ADDITIONS INCLUDING THE ADDITION IN DISPUTE IN THE PRESENT APPEAL AND COMPLETED THE ASSESSMENT ON 29.1 2.2006 UNDER SECTION 143(3) OF THE ACT. AGGRIEVED BY THE SAME, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO, VIDE ORDER DATED 23.03.200 9, DELETED THE ADDITION IN DISPUTE. NOW THE REVENUE, AGGRIEVED BY THE DELETIO N MADE BY THE LD. FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER, FIELD TH E PRESENT APPEAL. 3. AT THE TIME OF HEARING, THE LD. D.R. RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND, ON THE CONTRARY, THE LD. COU NSEL FOR THE ASSESSED RELIED UPON THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLAT E AUTHORITY. HE HAS ALSO FILED A PAPER BOOK CONTAINING PAGE NOS.1 TO 172, IN WHICH, HE HAS ATTACHED THE FOLLOWING :- 1. COPY OF SUBMISSIONS MADE BEFORE CIT(A)-I REJO INDER TO REMAND REPORT 2. COPY OF REMAND REPORT 3. COPY OF SUBMISSIONS MADE BEFORE CIT(A)-I 4. COPY OF ITR, COMPUTATION OF INCOME, TDS CERTIFIC ATES, AFFIDAVITS AND BILLS OF SHRI PUNEET AGARWAL, PROP. M/S P.P. CO NSTRUCTIONS 5. COPY OF ITR, COMPUTATION OF INCOME. TDS CERTIFIC ATE, AFFIDAVITS AND BILLS OF SHRI MAYANK AGARWAL, PROP. M/S M.B. CO NSTRUCTIONS 6. COPY OF STATEMENT OF ACCOUNT DULY CONFIRMED, ACK NOWLEDGMENT OF RETURN AND BANK ACCOUNT OF M/S ESCO REAL ESTATE 7. COPY OF STATEMENT OF ACCOUNT DULY CONFIRMED, ACK NOWLEDGEMENT OF RETURN AND BANK ACCOUNT OF M/S EMINENT REALTORS (P) LTD. 8. COPY OF PURCHASE DEED EXECUTED IN FAVOUR OF M/S PUSHPANJALI CONSTRUCTIONS (P) LTD. (FINANCIAL TRANSACTION SHOWN AT PAGE NOS. 51-52 & 64) OF DEED AND 100-101 AND 112 OF PAPER BO OK. 4 9. COPY OF SALE DEED EXECUTED IN FAVOUR OF M/S EMIN ENT REALTORS (P) LTD. RELEVANT PAGES 166 TO 167DATED 5/6/2006. 4. HE HAS ALSO CERTIFIED THAT THE AFORESAID DOCUMEN TS THE ASSESSEE HAS ALREADY FIELD BEFORE THE ASSESSING OFFICER/CIT(A), AGRA. I N ADDITION TO THE AFORESAID PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE ALSO FILED S YNOPSIS IN THE SHAPE OF BRIEF FACTS AND WRITTEN ARGUMENTS ON THE GROUNDS RAISED BY THE DEPARTMENT AND MAINLY HE HAS RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPEL LATE AUTHORITY. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. AS REGARDS TO THE DELETION OF ` 7,14,350/- (3,26,260 + 3,89,090) MADE ON ACCOUNT OF DISALLOWANCE OUT OF CONTRACT EXPENSES/PA YMENT MADE TO THE CONTRACTOR NAMELY SHRI PUNEET AGARWAL AND SHRI MAYANK AGARWAL, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS MADE PAYMENT OF ` 3,25,260/- TO SHRI PUNEET AGARWAL AND RS,.3,89,090/- TO SHRI MAYANK AGARWAL ON ACCOUNT OF EXECUTION OF CONTRACT WORK FOR THE ASSESSEE. SHRI PUNEET AGARWAL AND SHRI MAYANK AGARWAL ARE SONS OF MAIN DIRECTOR SHRI V.D. AGARAL. THE ASSESSEE WAS REQUIR ED TO FURNISH DETAILS OF WORK DONE BY SHRI MAYANK AGARWAL AND SHRI PUNEET AGARWAL AND ALSO FURNISHED DETAILS OF PAYMENT MADE TO THEM AND PRODUCED COPY OF BILLS RAISED BY THEM FOR THE WORK DONE. BUT THESE DETAILS HAVE NOT BEEN FURNISHED IN SPITE OF BEING PROVIDED SEVERAL OPPORTUNITIES IN THIS REGARD. ONLY AFFIDAVITS HAVE BEEN FURNISHED. EVEN THE ASSESSEE 5 HAS NOT SPECIFIED AS TO WHAT EXACT WORK WAS DONE BY THEM AND AT WHICH SITE. THE ASSESSING OFFICER HAS ALSO HELD IN THE ASSESSMENT O RDER THAT THE ASSESSEE HAS NOT PRODUCED THEIR BOOKS OF ACCOUNTS AND OTHER EVIDENCE S REGARDING SERVICE RENDERED BY THEM. THEREFORE, THE ASSESSING OFFICER DISALLOWED THESE EXPENSES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. BUT, THE LD. F IRST APPELLATE AUTHORITY, AFTER HEARING BOTH THE PARTIES AND PERUSING THE EVIDENCES AVAILABLE ON RECORD, HAS HELD THAT THE ASSESSEE HAS FURNISHED AFFIDAVIT DATED 22.12.20 06 OF SHRI PUNEET AGARWAL, PROP. M/S P.P. CONSTRUCTION STATING THEREIN THAT HE IS EN GAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORK AND HAS DONE CIVIL CONSTRUCTION W ORK OF ` 3,26,260/- FOR M/S. PUSHPANJALI CONSTRUCTION PVT. LTD. HE HAS ALSO PRO DUCED THE PHOTOCOPIES OF BILLS SUPPORTING THE SAID VERSION. SIMILARLY, SHRI MAYAN K AGARWAL, PROP. M/S. M.B. CONSTRUCTION ALSO FURBISHED AFFIDAVIT ALONG WITH SI MILAR DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CIVIL CONSTRUCTION WORK DONE BY HI M AMOUNTING TO ` 3,89,090/- FOR M/S PUSHPANJALI CONSTRUCTION PVT. LTD. HE HAS ALSO FILED PHOTOCOPY OF THE BILLS BEFORE THE ASSESSING OFFICER. THE LD. FIRST APPELL ATE AUTHORITY HAS ALSO CONFRONTED ALL DOCUMENTARY EVIDENCES TO THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER HAS NOT PRODUCED ANY CONTRARY EVIDENCE OR MAD ANY STATE MENT DENYING THE CLAIM OF THE ASSESSEE. HE HAS NOT REBUTTED THE CLAIM OF THE ASS ESSEE WITH ANY COGENT REASON OR EVIDENCE TO THE CONTRARY. AFTER GOING THROUGH THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS 6 RIGHTLY DELETED THE ADDITION IN DISPUTE BY APPRECIA TING THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL AS BE FORE LD. FIRST APPELLATE AUTHORITY. THEREFORE, WE UPHOLD THE ORDER ON THE ISSUE INVOLVE D IN GROUND NO.1. 6. AS REGARDS TO THE DELETION AMOUNTING TO ` 47,50,000/- (7,50,000 + 40,00,000) MADE BY THE LD. FIRST APPELLATE AUTHORITY AND ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED LOAN TAKEN FROM M/S ESCO REA L ESTATE AND EMINENT REALTORS PVT. LTD., THE ASSESSING OFFICER TREATED THE LOAN A S UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT AND ADDED THE SAME AS THE ASS ESSEES DEEMED INCOME. BUT THE LD. FIRST APPELLATE AUTHORITY DELETED THE ADDITION IN DISPUTE BY HOLDING THAT OPPORTUNITY WAS GIVEN TO THE ASSESSING OFFICER TO RE-EXAMINE THE GENUINENESS OF THE IMPUGNED LOAN OF ` 7,50,000 AND ACCORDINGLY, THE ASSESSING OFFICER ISS UED SUMMONS UNDER SECTION 131 OF THE ACT TO THE CREDITO R M/S ESCO REAL ESTATE. IN RESPONSE TO THE SAME, THE DIRECTOR SHRI RAKESH MANG AL ATTENDED BEFORE THE ASSESSING OFFICER AND PRODUCED THE BOOKS OF ACCOUNT S TO SUBSTANTIATE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS PROVED THE IDEN TITY OF THE CREDITOR AND GENUINENESS OF TRANSACTION BEFORE THE ASSESSING OFF ICER AND THE LD. FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION IN DISPUTE BECAU SE THE ASSESSEE HAS PROVED THE IDENTIFY OF THE CREDITOR AND GENUINENESS OF THE TRA NSACTION. AFTER GOING THROUGH THE IMPUGNED ORDER AND THE RELEVANT EVIDENCES PRODUCED BY THE ASSESSEE IN THE SHAPE OF 7 PAPER BOOK FILED BEFORE US, WE ARE OF THE CONSIDERE D OPINION THAT THE ADDITION OF ` 7,50,000/- PLUS ` 40,00,000/- TREATED AS UNEXPLAINED LOAN FROM THE SA ID CREDITORS BY THE ASSESSING OFFICER IS WITHOUT ANY BASIS AND EVID ENCE. THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE ADDITION IN DISPU TE BY GIVING FULL OPPORTUNITY TO THE ASSESSING OFFICER TO PRODUCE ANY CONTRARY EVIDENCE TO THE CLAIM OF THE ASSESSEE FOR WHICH THE ASSESSING OFFICER FAILED TO DO THE SAME. ON THE CONTRARY, THE ASSESSEE HAS FURNISHED ALL THE NECESSARY EVIDENCES SUPPORTING IT S CLAIM BY FILING THE COPY OF ACCOUNTS, COPY OF BANK ACCOUNT AND RETURN OF INCOME . THE ASSESSEE HAS ALSO PRODUCED THE CREDITORS BEFORE THE ASSESSING OFFICER WHO CONFIRMED THE TRANSACTIONS AND ESTABLISHED THE IDENTITY AND CREDITWORTHINESS O F THE CREDITORS. KEEPING IN VIEW OF THE DETAILED DISCUSSIONS BY THE LD. FIRST APPELL ATE AUTHORITY IN THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE, WE ARE OF THE CONSIDERED O PINION THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. FI RST APPELLATE AUTHORITY. THEREFORE, WE UPHOLD THE SAME BY DISMISSING THE ISSUE INVOLVED IN GROUND NO.2. 7. IN THE RESULT, APPEAL FIELD BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2011) SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 21 ST APRIL, 2011 8 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRI BUNAL, AGRA TRUE COPY