I.T.O.-4(1), Agra V. Gupta Academic Pvt. Ltd., Agra

ITA 287/AGR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50336 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 17-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: R K JAIN
• Keywords: Rejection of books of accounts; Corroborative evidences; Assessment record
• Section: 133A

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 NOS.286, 287, 288 & 289/AGR/2010 ASSESSMENT YEARS: 2001-02, 2003-04, 2004-05 & 2005 -06 RESPECTIVELY INCOME TAX OFFICER 4(1), VS. M/S. GUPTA ACADEMIC PVT. LTD. AGRA. 7, DEV NAGAR, AGRA. (PAN : AABCG 4361 J) (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI HOMI RAJ VANSH, C.I.T. (D.R.) RESPONDENTS BY : SHRI R.K. JAIN, C.A. ORDER PER BENCH : THE REVENUE HAS FILED THE AFORESAID APPEALS AGAINST THE DIFFERENT IMPUGNED ORDERS PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASS ESSMENT YEARS 2001-02, 2003- 04, 2004-05 & 2005-06 RESPECTIVELY. 2. SINCE THE ISSUES INVOLVED AND THE GROUNDS RAISED IN ALL THE AFORESAID APPEALS BY THE REVENUE ARE ALMOST SIMILAR, EXCEPT FOR AMOUN TS IN DISPUTE, THEREFORE, ALL THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 3. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.286/ AGR/2010 FOR ASSESSMENT YEAR 2001-02 READ AS UNDER :- 1. THAT THE LEARNED CIT(A)-1, AGRA HAS ERRED IN LA W AND ON FACTS IN HOLDING THE REJECTION OF THE BOOKS OF ACCOUNT AN D INVOKING OF THE PROVISIONS OF SECTION 145(3) BY THE ASSESSING OFFIC ER AS UNJUSTIFIED WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE . 2. THAT THE LEARNED CIT(APPEALS)-I, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 37,07,334/- BEING UNDISCLOSED RECEIPTS WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE MENTIONED IN THE ASSESSMENT ORDER. 3. THAT THE ORDER OF THE LEARNED CIT(APPEALS)-I, AG RA DESERVES TO BE CANCELLED AND THAT OF THE A.O. BE RESTORED. 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. 4. THE FACTS OF ALL THE AFORESAID APPEALS ARE ALMOS T SIMILAR AND, THEREFORE, NO NEED TO NARRATE THE SAME IN EACH AND EVERY CASE. B UT, FOR THE SAKE OF CONVENIENCE, WE ARE NARRATING THE BRIEF FACTS IN 286/AGR/2010 FO R THE ASSESSMENT YEAR 2001-02. 5. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT A SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 (THE ACT HEREINA FTER) WAS CONDUCTED ON 16.09.2004 AT THE PREMISES OF THE ASSESSEE COMPANY. A SEARCH OPERATION UNDER SECTION 132(1) OF THE ACT WAS CONDUCTED ON 16.09.20 04 AT THE PREMISES OF SHRI 3 RISHI KUMAR GUPTA, ONE OF THE DIRECTORS OF THE ASSE SSEE COMPANY FROM WHERE CERTAIN INCRIMINATING DOCUMENTS (AS MENTIONED IN PA RAGRAPH NO.1 OF THE ASSESSMENT ORDER) PERTAINING TO THE ASSESSEE COMPAN Y WERE FOUND AND SEIZED. THE ASSESSING OFFICER ISSUED NOTICE FOR PRODUCTION OF BOOKS OF ACCOUNTS, BILL BOOK, VOUCHERS OF EXPENSES AND OTHER NECESSARY EVIDENCES FROM THE ASSESSEE WHICH, ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HA S NOT FULLY PRODUCED BEFORE HIM AND FINALLY THE ASSESSING OFFICER REJECTED THE BOOK S OF ACCOUNTS OF THE ASSESSEE UNDER SECTION 145(3) OF THE ACT ON THE GROUND THAT BILL BOOKS AND VOUCHERS OF EXPENSES WERE NOT PRODUCED AND THE ASSESSEE HAS NOT FURNISHED ANY DETAILS AND EXPLANATION ABOUT THE LUMP SUM FEE AND THE FEE FOR TEST SERIES. THE ASSESSEE HAS NOT FURNISHED THE NAMES AND ADDRESS OF THE STUDENTS , NUMBER OF BATCHES AND FEE RECEIPTS. THE ASSESSING OFFICER APPLIED THE PROVIS IONS OF SECTION 143 ON ACCOUNT OF NON-AVAILABILITY OF RELEVANT INFORMATION AND COM PLETED THE ASSESSMENT UNDER SECTION 143(A) OF THE ACT ON THE INCOME OF RS.37,07 ,970/- AS AGAINST THE RETURNED INCOME OF RS.580/-. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER WHILE REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESS EE ESTIMATED THE RECEIPTS OF THE COMPANY AT RS.88,00,000/-. AFTER ADJUSTING THE REC EIPTS SHOWN BY THE ASSESSEE AND ALLOWING 10% DISCOUNT FOR NON-RECOVERY OF FEES FROM POOR STUDENTS, THE ASSESSING OFFICER COMPUTED THE UNDISCLOSED RECEIPTS TO THE TUNE OF RS.37,07,334/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE VIDE ORDER DATED 4 29.12.2006. AGGRIEVED BY THE SAME, THE ASSESSEE FI LED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO, VIDE THE IMPUGNED ORDER DA TED 19.03.2010, HELD THAT THE REJECTION OF BOOKS OF ACCOUNTS AND INVOKING OF SECT ION 153 OF THE ACT IS NOT JUSTIFIED. ACCORDINGLY, THE ESTIMATION OF NUMBER O F STUDENTS, ESTIMATION OF GROSS RECEIPTS AND THE ESTIMATION OF THE UNDISCLOSED INCO ME WERE FOUND TO BE UNSUSTAINABLE AND CONSEQUENTLY DELETED THE ADDITION OF RS.37,07,334/-. NOW THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IM PUGNED ORDER. 6. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REP RESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND, ON THE C ONTRARY, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD . FIRST APPELLATE AUTHORITY. 7. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ASS ESSING OFFICER HAS WRONGLY APPLIED THE PROVISIONS OF SECTION 145(3) OF THE ACT IN THE CASE OF THE ASSESSEE BECAUSE THE ASSESSEE HAS MAINTAINED COMPLETE BOOKS OF ACCOUNTS AS REQUIRED UNDER THE PROVISIONS OF COMPANIES ACT AND UNDER THE PROVI SIONS OF INCOME TAX ACT. HE FURTHER STATED THAT THE ASSESSEE IS REQUIRED TO GET ITS ACCOUNTS AUDITED NOT ONLY UNDER THE COMPANIES ACT, 1956 BUT ALSO UNDER THE PROVISIO NS OF SECTION 44AB OF THE INCOME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE F URTHER STATED THAT THE ASSESSEE HAS PRODUCED ALL THE NECESSARY EVIDENCES ALONG WITH BOOKS OF ACCOUNTS BEFORE THE 5 LD. FIRST APPELLATE AUTHORITY, BUT THE ASSESSING OF FICER HAS WRONGLY APPLIED THE PROVISIONS OF SECTION 145(3) OF THE ACT IN THE CASE OF THE ASSESSEE. HE STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY APPRE CIATED THE FACTS AS WELL AS RECORDS PRODUCED BY THE ASSESSEE BEFORE THE LD. FIR ST APPELLATE AUTHORITY AND HAS RIGHTLY DELETED THE ADDITION IN DISPUTE BY RIGHTLY HOLDING THE REJECTION OF BOOKS OF ACCOUNTS AND INVOKING OF PROVISIONS OF SECTION 145( 3) OF THE ACT. THE ACTION OF THE ASSESSING OFFICER IS NOT JUSTIFIED. ACCORDINGLY, T HE ADDITION OF RS.37,07,334/- THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE IMPUGNED ORDER PASSED BY TH E LD. FIRST APPELLATE AUTHORITY. FOR THE SAKE OF CONVENIENCE, THE FINDING OF THE LD CIT(A) CONTAINED ON PAGE NOS.7 TO 9, AT PARAGRAPH NO.4.3 IS REPRODUCED AS UNDER :- 4.3 I HAVE CONSIDERED THE RELEVANT FACTS AND RIVAL CONTENTIONS AND FIND THAT THE REJECTION OF BOOKS OF ACCOUNTS AS PER SECTION 145(3) OF THE ACT AND ESTIMATION OF INCOME BY THE AO ARE NOT TENA BLE FOR THE FOLLOWING REASONS:- IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND RE PORT DATED 27.04.2009, THE AO HAS STATED THAT BOOKS OF ACCOUNT S WERE NOT PRODUCED AND ON THIS BASIS, INVOKING OF PROVISIONS U/S.145 IS .JUSTIFIED. HOWEVER, THIS OBSERVATION OF THE AO IS NOT JUSTIFIE D SINCE THE APPELLANT HAD PRODUCED ITS BOOKS OF ACCOUNT BEFORE THE AO. IN THE ORDER SHEET FOR A.Y. 2005-06, THE AO HAS HAS NOTED AS UNDER :- 6 '30.11.2006 SRI RAKESH KR. JAIN, CA ATTENDS & FILE S WRITTEN EXPLANATIONS IN R/O ANN.A-1 TO A-25. PARTLY DISD. REQUIRE TO RECONCILE WITH THE RECORDS. CASE ADJ. TO 05.12.2006 FOR A. Y. 1999-2000 TO 2005-06. 11.12.2006 SHRI RAKESH JAIN, CA ATTENDS. REQUIRED TO FILE/EXPLAIN CONFIRMATION, JUSTIFICATION OF INCOME IN THE LIGHT OF BOOKS OF ACCOUNTS, DOCUMENTS FOUND AT THE TIME OF SEARCH IN THE CASE OF SHRI RISHI KUMAR GUPTA AT THE TIME OF SURVEY ON 16.09.20 04 FOR A.Y. 1999- 2000 TO 2005-06. CASE ADJ. TO 15.12.2006 18.12.2006 SHRI RAKESH JAIN, CA ATTENDS AND REQUI RE TO FILE DETAILS AS PER ANN. A. PLEASE MAKE COMPLIANCE AND PRODUCE ALL THE BOOKS OF ACCOUNTS FOR A. Y. 1999-2000 TO 2005-06. ADJ. TO 21.12.2006 26.12.2006 SHRI RAKESH JAIN CA ATTENDS AND FILES W RITTEN REPLY. CASH BOOK, LEDGER (COMPUTERIZED) FOR F.Y. 2 000-01 TO 2004-05 PRODUCED. TEST CHECKED. CASE DISCUSSED FOR A.Y. 1 999-2000 TO 2005- 06 CROSS REFERENCE TO THE ABOVE IS MADE IN THE ORDER S HEET FOR A.Y. 2001- 02 AS UNDER:- '30.11.06 11.12.06 LIKE A.Y. 2005-06 18.12.06 26.12.06 ON THIS BASIS, I FIND MERIT IN THE APPELLANT'S CLAI M THAT BOOKS OF ACCOUNT HAD BEEN PRODUCED BEFORE THE AO. AS EVIDENT FROM THE CHART GIVEN IN PARA 3 OF THE AS SESSMENT ORDER, THE APPELLANT HAS FURNISHED DETAILS AS TO - (A) NUMBER OF STUDENTS WHO HAD TAKEN REGULAR COACHING (B) NUMBER OF STUDENTS WHO H AD TAKEN SPECIAL, COMPREHENSIVE COACHING AND (C) NUMBER OF STUDENTS W HO HAD TAKEN TEST SERIES. THE AO HAS ESTIMATED THE NUMBER OF STU DENTS AT 200 WITHOUT CONTROVERTING THE ABOVE CLAIM OF THE APPELL ANT WITH SUPPORTING EVIDENCE. 7 THE APPELLANT STATED BEFORE THE AO THAT IT CHARGES RS.750/-, RS.700/- AND RS.800/- AS MONTHLY COACHING FEES. THE AO ADOP TED MONTHLY FEES UNIFORMLY AT RS.750/- WITHOUT REFUTING THE ABOVE CL AIM. OF THE APPELLANT WITH SUPPORTING EVIDENCE. THE APPELLANT STATED BEFORE THE AO THAT IT CHARGED RS.5,000/- TO RS.15,000/FROM STUDENTS WHO WERE TAKING TEST SERIES . NO ADVERSE INFERENCE HAS BEEN DRAWN IN THE ASSESSMENT ORDER WI TH REGARD TO - (A) NUMBER OF STUDENTS TAKING TEST SERIES AND (B) FEES CHARGED FOR TEST SERIES. THUS, THE NUMBER OF STUDENTS AS WELL AS RE CEIPTS DISCLOSED BY THE APPELLANT IN RESPECT OF TEST SERIES HAS BEEN AC CEPTED BY THE AO WHICH IS CONTRADICTORY TO HIS VIEW IN RESPECT OF GE NERAL AND SPECIAL COACHING. AS EVIDENT FROM THE CHART GIVEN IN PARA 3 OF THE AS SESSMENT ORDER, THE APPELLANT CLAIMED THAT 68 STUDENTS HAD TAKEN COMPRE HENSIVE COACHING FOR WHICH ONE TIME FEES WERE CHARGED AT RS.35,000/- TO RS.40,000/- PER STUDENT. THE AO REJECTED THE APPELLANT'S CLAIM AND ASSUMED THE NUMBER OF STUDENTS TO BE 200 AND FURTHER ASSUMED TH AT ALL OF THEM HAD TAKEN SPECIAL, COMPREHENSIVE COACHING AND HAD BEEN CHARGED ` 35,000/- PER HEAD. HOWEVER, THERE IS NO EVIDENCE O N RECORD TO - (A) CONTROVERT THE CLAIM OF THE APPELLANT AND/OR (B) SUPPORT THE ABOVE ASSUMPTIONS MADE BY THE ASSE SSING OFFICER. IN VIEW OF THE ABOVE FACTS, I HOLD THAT REJECTION O F BOOKS OF ACCOUNT AND INVOKING OF SECTION 145(3) OF THE ACT IS NOT JU STIFIED. ACCORDINGLY, THE ESTIMATION OF NUMBER OF STUDENTS, THE ESTIMATIO N OF GROSS RECEIPTS AND THE ESTIMATION OF THE UNDISCLOSED INCOME ARE FOUND TO BE UNSUSTAINABLE AND CONSEQUENTLY, THE ADDITION OF ` 37,07,334/- IS DELETED. 9. AFTER GOING THROUGH THE FINDINGS GIVEN BY THE LD . FIRST APPELLATE AUTHORITY ON THE ISSUE IN DISPUTE, WE ARE OF THE CONSIDERED O PINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS THOROUGHLY GONE THROUGH AND CONSIDERED THE WRITTEN SUBMISSIONS ALONG WITH THE DOCUMENTARY EVIDENCES FI LED BY THE ASSESSEE, WHICH THE 8 ASSESSEE HAS ALREADY FILED BEFORE THE ASSESSING OFF ICER, AND FINALLY DELETED THE ADDITION IN DISPUTE AFTER PASSING A WELL REASONED A ND ELABORATE ORDER. IT IS A MATTER ON RECORD THAT THE LD. FIRST APPELLATE AUTHORITY HA S ALSO CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AS WELL AS THE NOTING OF THE ASSESSMENT RECORD WHICH SHOWS THAT THE LD. COUNSEL FOR THE ASSESSEE APPEARE D MANY TIMES BEFORE THE ASSESSING OFFICER AND ALSO FILED HIS WRITTEN EXPLAN ATION BY NOTE DATED 18.12.2006. SHRI RAKESH JAIN, CHARTERED ACCOUNTANT ATTENDED THE ASSESSMENT PROCEEDINGS AND WAS ASKED TO PRODUCE ALL THE BOOKS OF ACCOUNTS FOR THE ASSESSMENT YEARS 1999- 2000 TO 2005-06 AND THE ASSESSING OFFICER ADJOURNED THE CASE FOR 21.12.2006 AND THEREAFTER ON 26.12.2006. SHRI RAKESH JAIN, CHARTE RED ACCOUNTANT ATTENDED THE PROCEEDINGS AND FILED A WRITTEN REPLY AND PRODUCED CASH BOOK, COMPUTERIZED LEDGER FOR THE FINANCIAL YEARS 2000-01 TO 2004-05 WHICH WA S CHECKED BY THE ASSESSING OFFICER AND THE CASE OF THE ASSESSEE FOR THE ASSESS MENT YEAR 1999-2000 TO 2005-06 WAS ALSO DISCUSSED WITH THE LD. COUNSEL FOR THE ASS ESSEE. AFTER THOROUGHLY GONG THROUGH THE EVIDENCES PRODUCED BY THE ASSESSEE, AS DISCUSSED ABOVE, THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DISAGREED WITH THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT IN THE CASE OF THE ASSESSEE AND HAS RIGHTLY DELETED THE ADDITION IN DISPUTE. WE FIND N O INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. THERE FORE, WE UPHOLD THE SAME BY DISMISSING THE APPEAL NO.286/AGR/2010 FILED BY THE REVENUE. 9 10. SINCE THE FACTS AND THE ISSUES INVOLVED IN ALL OTHER APPEALS ARE SIMILAR, WE ACCORDINGLY FOLLOWING THE DECISION TAKEN IN ITA NO. 286/AGR/2010 FOR ASSESSMENT YEAR 2001-02, DISMISS THE APPEAL NOS.287, 288 & 289 /AGR/2010 FOR ASSESSMENT YEARS 2003-04, 2004-05 & 2005-06 RESPECTIVELY. 11. IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE ARE DISMISSED (ORDER PRONOUNCED ON 12.08.2011). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 12 TH AUGUST, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY