Shri Vinod Kumar Patidar, Shajapur V. The Addl. CIT, Range-2, Ujjain

ITA 289/IND/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5655 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained cash credit; Loose papers; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI VINOD KUMAR PATIDAR PP. M/S. SHIVAM TYRE AGENCY, BERCHHA ROAD , SHAJAPUR (MP) PAN:ACQPP2938J VS. ADDL. CIT RANGE-2 UJJAIN APPELLANT RESPONDENT APPELLANTS BY SHRI S. S. DESHPANDE, CA RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 27.07.2016 DATE OF PRONOUNCEMENT 27.07.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-UJJAIN [HEREIN AFTER REFERRED TO AS THE CIT (A)] DATED 18.02.2013 AND PE RTAINS TO ASSESSMENT YEAR 2008-09 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER U/S.143 (3) DATED 24.10.2010 OF IN COME TAX ACT, 1961(HEREIN AFTER REFERRED TO AS 'THE ACT) OF ADDL CIT RANGE-2 UJJAIN [HEREINAFTER REFERRED TO AS THE AO]. I.T.A. NO.289/IND/2013 ASSESSMENT YEAR: 2008-09 ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 2 OF 7 2 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE READS A S UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS.4, 00,000/- AS AMOUNT NOT RECORDED IN BOOKS OF ACCOUNTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF RS.40,000/- AS EXPENDITURE INCURRED BY THE ASSESSEE ON HIS DAUGHTER`S BIRTHDAY NOT RECORDED IN BOOKS OF ACCOUNTS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS.2, 77,984/- AS STOCK NOT RECORDED IN BOOKS OF ACCOUNTS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS.2, 71,000/- AS PURCHASES OF TRALLA AMOUNT NOT RECORDED IN BOOKS OF ACCOUNTS. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.10,09,170/- AS ENTRIES APPEARING THE LOOSE PAPER S NOT ENTERED IN BOOKS OF ACCOUNTS AS DISCUSSED IN PARA 14 OF THE ASSESSMENT ORDER. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS.20, 95,000/-AS UNEXPLAINED CASH CREDIT U/S.68. 3. DURING THE CURRENCY OF APPEAL PROCEEDING BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED AN ADDITIONAL GRO UND OF APPEAL WHICH SAYS THAT THE LEARNED CIT(A) HAS NOT GIVEN BE NEFIT OF TELESCOPING FOR THE INCOME FOR WHICH ADDITIONS WERE UPHELD AGAINST INVESTMENT MADE, HENCE, SAME INCOME TAXED D OUBLY ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 3 OF 7 3 ONCE AS IN INCOME AND SECONDLY AS AN INVESTMENT. AS SUCH, ADDITION MADE BECAUSE OF INVESTMENT MAY PLEASE BE D ELETED BY GIVING THE TELESCOPING BENEFIT FOR THE INCOME EARNE D. 4. THE LD. A.R. SUBMITTED THAT THIS BEING A LEGAL GROU ND, HENCE IT BE ALLOW TO BE ADMITTED. 5. WE HAVE CONSIDERED THE FACTS AND MATERIAL ON RECORD . THE ADDITIONAL GROUND BEING LEGAL ONE, HENCE, ADMIT TED. RELIANCE IN PLACED ON THE DECISION OF APEX COURT I N THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 I TR 383(SC) WHEREIN IT WAS HELD THAT THE ADDITIONAL GROUND OF APP EAL CAN BE ADMITTED WHERE THE ISSUE INVOLVED IS PURE QUEST ION OF LAW NOT INVOLVING ANY INVESTIGATION OF FACTS. 6. NOW WE ARE DEALING WITH ALL THE GROUNDS OF APPEALS. 7. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS INDIVIDUAL, DERIVING INCOME FROM AGENCY BUSINESS OF TYRES IN THE NAME OF PROPRIETORSHIP STYLED AS M/ S. SHIVAM TYRE AGENCY AND TRADING IN ONION AND POTATO. THE RE TURN OF INCOME WAS FILED ON 29.09.2008, DECLARING TOTAL INCO ME OF RS.28,88,260/-. A SURVEY U/S.133A WAS CONDUCTED ON 21.02.2009, WHEREIN THE ASSESSEE HAS SURRENDERED AN INCOME ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 4 OF 7 4 OF RS.40 LAKHS. HOWEVER, SUBSEQUENT TO SURVEY, THE INCOME WAS FILED DISCLOSING INCOME AT RS.26,94,046/- ONLY [ BEING INVESTMENT IN TRALLA AT RS. 3,26,326/-, AS PER ANSW ER TO QUESTION NO. 15 OF STATEMENT DURING THE COURSE OF SURVEY AT RS. 7,90,000/-, AS PER ANSWER TO QUESTION NO. 15 OF STATEMENT DURING SURVEY AT RS. 2,44,200/-,RS.13,33 500/- AGAINST OTHER LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY]. THE AO HAS MADE ADDITION OF RS.92, 36,518/- BASED O N LOOSE PAPERS AND DIARIES IMPOUNDED DURING THE COURSE OF S URVEY. THE A.O., HOWEVER BESIDE ABOVE, ALSO MADE ADDITION OF RS.4 LAKH BEING ENTRIES FOUND RECORDED IN THE REGISTER N AMED AS SUVIDHA FOUND DURING THE COURSE OF SURVEY AND IT WE RE ADMITTED TO BE UNEXPLAINED IN REPLY TO QUESTION NO. 20 OF THE STATEMENT RECORDED DURING SURVEY. THE AO ALSO MADE ADDITION OF RS.2,77,984/-ON ACCOUNT OF VARIATION IN STOCK, RS.2,71,000/- FOR PURCHASE OF TRALLA, RS.20,95,000/ - ON ACCOUNT CASH CREDIT ENTRIES REFLECTED IN LOOSE PAPE RS, RS. 40,000/- BEING EXPENDITURE ON BIRTHDAY. THE ASSESSM ENT WAS MADE U/S.143(3) AND INCOME WAS ASSESSED AT RS.1,51,08,762/- BY MAKING ADDITION OF RS.1,22,20,5 02/- ON ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 5 OF 7 5 THE BASIS OF INCRIMINATING DIARIES FOUND DURING THE COURSE OF SURVEY. 8. THE LD. CIT(A) AT PAGE 10 OF THE ORDER HAS BIFURCAT ED THE ENTRIES IN RESPECT OF SALE AND PURCHASE OF ALOO AND PYAJ AND OBSERVED THAT UNRECORDED SALES CANNOT BE TREATE D AS UNDISCLOSED INCOME, HENCE ,SHE ESTIMATED THE INITIA L INVESTMENT IN SALES AT RS.3,30,000/- AND GP OF RS. 5 LAKHS. SHE ALSO MAINTAINED ADD ITION OF RS.4 LAKHS ON THE BASIS OF ENTRIES IN LOOSE PAPERS AND RS. 5,40,0 00/- IN RESPECT OF CASH CREDIT WHICH WERE NOT RECORDED IN BO OKS OF ACCOUNTS, AND THUS MAINTAINED THE ADDITION TO THE E XTENTS OF RS.17,70,000/- AS AGAINST THE ADDITION OF RS. 92,36 ,518/-. 9. THE LD. CIT (A) NOTED THAT THE ASSESSEE HAS ALREADY DISCLOSED RS.13, 33,500/-HENCE; SHE CONFIRMED ADDIT ION OF RS.1, 79,170/- BASED ON LOOSE PAPERS AND DIARIES. T HE LD. CIT (A) HAS FURTHER CONFIRMED THE ADDITION OF RS. 20, 9 5,000/- MADE U/S. 68 OF THE ACT, AS CREDITWORTHINESS OF THE CREDITOR WAS NOT PROVED. THE ASSESSEE HAS TRIED TO EXPLAIN TH AT CERTAIN LOANS WERE ENTERED IN TO REGULAR BOOKS OF ACCOUNTS, BUT FAILED TO FURNISH EVIDENCE IN SUPPORT OF GENUINENESS OF TH E LOANS. THE ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 6 OF 7 6 LD. CIT (A) AFTER CITING NUMBER OF CASE LAWS AT PAG E NO. 30 TO 32 AND REASONS DISCUSSED THEREON CONFIRMED THE SAID ADDITION. THE LD. AR, CONTENDED THAT THE LD. CIT (A) HAS CONF IRMED ADDITION OF RS.17, 70,000/- ON ACCOUNT OF INCOME, H ENCE SHE SHOULD HAVE GIVEN BENEFIT OF TELESCOPIC IN RESPECT OF ADDITION MAINTAINED IN RESPECT OF STOCK, TRALLA AND BIRTHDAY EXPENDITURE AND THE ASSESSEE BE ALLOWED TO ADDUCE N ECESSARY EVIDENCE TO PROVE THE CREDITWORTHINESS OF CASH CRED ITORS. THEREFORE, IT HAS BEEN URGED UPON US TO REMIT BACK THE MATTER TO THE AO TO CONSIDER THE TELESCOPIC. 10. PER CONTRA, THE LD. DR FOR REVENUE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE CONSIDERED THE FACTS AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT BENEFIT OF TELESCOPIC IS GIVEN WHEN THERE IS CORRESPONDING INVESTMENT IS MADE FROM THE SAID INCO ME IF SO EARNED. THE AR HAS ALSO CONTENDED THAT THE ASSESSEE HAS TAKEN LOANS AMOUNTING TO RS.20,95,000/- OUT OF WHICH SOME OF THEM ENTERED IN REGULAR BOOKS OF ACCOUNTS AND SO ME OF THEM NOT AT ALL ENTERED IN THE BOOKS OF ACCOUNTS WE RE FOUND. HOWEVER, THE CLAIM OF TELESCOPIC OF INCOME AGAINST INVESTMENT HAS NOT BEEN EXAMINED BY THE LD. AO. FURTHER, THE ADDITIONAL GROUND OF APPEAL WAS NOT TAKEN BEFORE THE AO, HENCE SAME IS REQUIRED TO BE SENT BACK FOR ADJUDICATION AS FRESH. THEREFORE, ITA NO.289/IND/2013/AY:08-09/VINOD KUMAR PATIDAR PAGE 7 OF 7 7 WE, WITH FAIRNESS, DEEM IT FIT TO RESTORE, THE WHOLE M ATTER TO THE FILE OF THE AO TO MAKE ASSESSMENT DE NOVO. NEVERTHE LESS, THE AO WILL CONSIDER THE CLAIM OF TELESCOPIC AND OTHER E VIDENCE AS MAY BE FILED BY THE ASSESSEE, IN ACCORDANCE WITH LAW AND AFTER ALLOWING OPPORTUNITY OF BEING HEARD, TO THE ASSESSEE , FOR RECONCILIATION OF CASH CREDIT ENTRIES WITH BOOKS OF ACCOUNTS. WE ORDER ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH DAY OF JULY,2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED: 27 TH JULY, 2016. OPM* COPY FORWARDED TO:-1. THE ASSESSEE/2. THE AO CONCERN ED/3. THE LD. PCIT CONCERNED/4. THE LD. CIT (A)/ 5. THE L D. DR, INDORE/6. THE GUARD FILE BY ORDER A.R. ITAT, INDORE