INCOME TAX OFFICER, JANJGIR CHAMPA V. SHRI PRITAM SINGH GABEL, SAKTI

ITA 272/RPR/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5633 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु रमɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 272/RPR/2017 Ǔनधा[रण वष[ / Assessment Year : 2008-09 The Income Tax Officer, Ward-Janjgir, Champa .......अपीलाथȸ / Appellant बनाम / V/s. Shri Pritam Singh Gabel, Prop. M/s. Preetam Tractors Road, Sakti, Dist. Janjgir, Champa (C.G.) PAN : AGIPG1118M ......Ĥ×यथȸ / Respondent Assessee by : Shri G.S. Agarwal, AR Revenue by : Shri Sanjay Kumar, DR 2 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 स ु नवाई कȧ तारȣख / Date of Hearing :14.03.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 30.03.2022 आदेश / ORDER PER RAVISH SOOD, JM : The present appeal filed by the revenue is directed against the order passed by the CIT(Appeal)-1, Bilaspur, dated 18.08.2017, which in turn arises from the order passed by the A.O under Sec.143(3)/147 of the Income-tax Act, 1961 (in short ‘the Act’), dated 05.11.2015 for assessment year 2008-09. Before us the Revenue has assailed the impugned order on the following grounds of appeal: “1. Whether on the facts and circumstances of the case and on points of the law, the Ld. CIT(A) was justified deleting the addition of Rs.4,77,755/- made by the AO on account of difference in liability against creditor ITL ( International Tractors Ltd.), Hosiyarpur as assessee had shown an amount of Rs.73,62,062.49/- in liability side of balance sheet under the head sundry creditors in the name of ITL ( International Tractors Ltd.), Hosiyarpur whereas as per ledger account of the said party, closing balance was shown at Rs.78,39,817.61/- 2. The order of the Ld. CIT(A) is erroneous both in law and facts. 3. Any other ground that may be adduced at the time of hearing of appeal.” 2. Original assessment in the case of the assessee was framed by the A.O vide his order passed u/s.143(3) of the Act, dated 22.11.2010, determining the total income of the assessee at Rs.4,56,930/-. 3 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 Observing, that the income of the assesee chargeable to tax had escaped assessment, the A.O reopened his case under Section 147 of the Act for the following reasons : “(a) Assessee has shown international tractors Ltd. Hosiyarpur as creditor for Rs.73,62,062/- in his balance sheet as on 31.03.2008 whereas as per ledger account of the said party, balance shown is Rs.78,39,817/-. (b) Assesee has claimed Rs.61,505/- in P & L account towards loss on vehicle sales. This should have been adjusted in fixed asset itself instead of debiting it P & L account.” 3. During the course of the assessment proceedings, it was noticed by the A.O that while for the assessee in his “balance sheet” had shown International tractors Ltd. Hoshiarpur as a creditor for Rs.73,62,062/- in his “balance sheet” for the year under consideration, but the aforesaid party had in its books shown the balance recoverable from the assessee at Rs.78,39,817/-. As the assessee failed to come forth with any plausible explanation as regards the difference in the accounts, the A.O added the same i.e, Rs.4,77,755/- [Rs. 78,39,817/- (-) Rs. 73,62,062/-] to the returned income of the assessee; and vide his order passed u/s.143(3) r.w.s 147, dated 05.11.2015 assessed his total income at Rs.9,96,190/-. 4 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 4. Aggrieved, the assessee carried the matter in appeal before the CIT (Appeals). As is discernible from the records, the CIT(Appeals) after deliberating at length on the issue in hand, observed, that the aforesaid creditor, viz. M/s. International Tractors Ltd., Hoshiarpur had by way of a consistent trade practice i.e, since F.Y.2000-01 raised ‘debit notes’ towards interest on the assessee for its failure in not meeting out the target of sales of the tractors, which thereafter on achieving of the target was obliterated by way of a corresponding credit note for interest. Backed by the aforesaid facts, the CIT(Appeals) was of the view that as the respective entries which had resulted to the impugned difference of Rs.4,77,756/- (supra) was not in the nature of income but was an incentive/encouragement to the assessee to increase its turnover, thus, found favor with the claim of the assessee that no addition of the said amount could have validly been made in his hands. For the sake of clarity the relevant findings of the CIT (Appeals) regarding the issue in hand are reproduced as under: 5 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 “I have considered the rival submission and find that only twice in the year the tractors had been returned by the assessee and on account of debit note for interest he had only raised the sales of tractors and meeting the target fixed by the seller. Since such entry is not of income in nature rather encouragement to increase the turnover and if turnover is met the same debit note is reverted. Thus, I do not find that the AO could analyse the facts correctly. As such the entry which is reverted without any transfer of fund from the assessee could not be fastened as difference in the balance. Thus, addition made by the AO is hereby deleted. Relief Rs.4,77,755/-.” We have given a thoughtful consideration to the aforesaid observations of the CIT (Appeals) and finding ourselves to be in agreement with the view therein taken, thus, uphold his order. Thus, the Ground of appeal No.1 raised by the revenue is dismissed in terms of our aforesaid observations. 5. Grounds of appeal No.(s) 2 and 3 being general in nature are dismissed as not pressed. 6. In the result, appeal of the revenue is dismissed in terms of our aforesaid observations. Order pronounced in the open court on 30 th day of March, 2022. Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 30 th March, 2022 SB 6 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeal), Bilaspur (C.G) 4. The Pr. CIT, Bilaspur (C.G) 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु रबɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 7 ITO Vs. Shri Pritam Singh Gabel ITA No. 272/RPR/2017 Date 1 Draft dictated on 23.03.2022 Sr.PS/PS 2 Draft placed before author 24.03.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order