Shri Manish Chandak P/o M/s. Shree Industries, HANUMANGARH V. ITO, HANUMANGARH

ITA 289/JODH/2009

• Counselvise Citation: 28923314 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R H GOHEL
• Keywords: Depreciation; Income from undisclosed sources

Judgement Text

1 ITA 289-09 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 289/JODH/2009 ASSTT. YEAR : 2006-07 SHRI MANISH CHANDAK VS. THE INCOME-TAX OFFICER, C/O M/S. SHREE INDUSTRIES, WARD-1, A-17, INDUSTRIAL AREA, HANUMANGARH JN. HANUMANGARH . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURESH OJHA RESPONDENT BY : SHRI R.H. GOHEL DATE OF HEARING : 07.12.2011. DATE OF PRONOUNCEMENT : 15.12.2011. ORDER DATED : 15/12/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2006-07. 2. GROUND NO. 1 WAS NOT PRESSED. THEREFORE, THE SAM E IS DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 IS AGAINST CONFIRMING ADDITION OF R S. 16,10,000/- UNDER SECTION 68. 4. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED A SUM OF RS. 16,10,000/- FROM FIVE PAR TIES I.E. M/S. DEV WIRE INDUSTRIES AT RS. 3,10,000/-, SHRI RAHUL VAJPAYEE AT RS. 3,00,000 /-, SMT. MOHINIDEVI AT RS. 2,00,000/-, SHRI PRABHU SIVRAMJI SINGH AT RS. 5,00,000/- AND M/ S. K. NARENDER & CO. AT RS. 3,00,000/-. THE ASSESSEE WAS REQUIRED TO EXPLAIN T HE GENUINENESS AND CREDITWORTHINESS OF 2 THE CREDITORS. THE ASSESSEE FILED CONFIRMATION ALON G WITH THEIR COMPLETE ADDRESS AND PAN. HOWEVER, ASSESSING OFFICER WAS NOT SATISFIED AS THE CREDITORS COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AND IN HIS VI EW, THE ASSESSEE FAILED TO FILE DETAILS OF CREDITS AND COMPLETE ADDRESS ALSO. BEFORE LD. C IT (A) ALSO COPY OF CONFIRMATIONS, LIST OF CREDITORS ALONG WITH THEIR COMPLETE ADDRESSES, P AN, BANK ACCOUNT THROUGH WHICH THE AMOUNTS WERE COLLECTED. THE LD. CIT (A) MENTIONED IN HIS ORDER THAT ASSESSEE HAS FILED DETAILS AND PARTICULARS ABOUT THEIR ADDRESSES, PAN, DATE, AMOUNT AND CHEQUE NUMBER UNDER WHICH LOAN/DEPOSIT AMOUNTS WERE GIVEN AND BAN K THROUGH WHICH CHEQUE WAS COLLECTED IN RESPECT OF ALL THE FIVE CREDITORS BEFO RE THE ASSESSING OFFICER. DETAILS OF ALL THESE PARTIES WERE DISCUSSED BY LD. CIT (A) IN HIS ORDER AT PAGE 7. HOWEVER, THE LD. CIT (A) OBSERVED THAT ASSESSING OFFICER WANTED TO HAVE DETAILS REGARDING NAME OF THE ASSESSING OFFICER & WARD WHERE THESE PARTIES WERE A SSESSED, WHICH THE ASSESSEE FAILED TO DISCLOSE. ACCORDINGLY HE CONFIRMED THE ADDITION. 5. AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT ASSESSEE HAS DISCHARGED HIS ONUS BY FILING ALL THE DETAILS ALONG WITH CONFIRMATION. MERELY NOT MENTIONING THE NAME OF THE ITO AND WARD DOES NOT CHANGE THE NATURE OF PAYMENT RECEIVED BY ASSESSEE AND NATURE OF TRANSACTION AND THEIR GENUINENESS. PAN NUMBER IS G IVEN AND IF THE ASSESSING OFFICER WANTED TO FIND THE WARD AND NAME OF THE ITO, HE COU LD HAVE EASILY FOUND THE SAME BY PUTTING THE PAN IN THE COMPUTER SYSTEM. IT SEEMS T HAT ASSESSING OFFICER DID NOT WANT TO DO ANY EXERCISE IN THIS RESPECT AND LD. CIT (A) HAS ALSO NOT BOTHERED TO EXAMINE THESE DETAILS. IF THEY WERE NOT SATISFIED, THEY COULD HAV E ISSUED SUMMON TO THE RESPECTIVE PARTIES DIRECTLY AND COULD HAVE VERIFIED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT ASSESSEE HAS DISCHARGED HIS ONUS BY FILIN G ALL THE DETAILS AND THE DECISION OF 3 HONBLE SUPREME COURT IN CASE OF ORISSA CORPORATION IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE AND ACCORDINGLY WE DELETE THE A DDITION OF RS. 16,10,000/- MADE AND SUSTAINED BY THE LOWER AUTHORITIES. 6. NEXT ISSUE RELATES TO CONFIRMING THE ADDITION OF RS. 90,000/- CREDITED IN THE CAPITAL ACCOUNT OF THE PARTNERS. 7. THE ASSESSING OFFICER MADE ADDITION OF RS. 90,00 0/- AS INCOME FROM UNDISCLOSED SOURCES ON THE REASON THAT THE INCOME EARNED FROM S ALE OF PROPERTY WAS BENAMI PROPERTY PURCHASED IN THE NAME OF THE ASSESSEE BY HIS GRANDF ATHER WHEN HE WAS MINOR. THEREFORE, IT WAS LIABLE TO BE TAXED IN THE HANDS OF GRANDFATH ER OR IN THE HANDS OF LEGAL HEIR. THE LD. CIT (A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT SINCE THE PROPERTY IN QUESTION WAS ACQUIRED BY ASSESSEE WHEN HE WAS A MINOR, THE ACTION OF THE ASSESSING OFFICER IN TAXING THE SALE PROCEEDS AS IN COME FROM UNDISCLOSED SOURCES IS FOUND TO BE JUSTIFIED. 8. AFTER CONSIDERING THE SUBMISSIONS, WE FIND THAT THIS ADDITION HAS NO LEG TO STAND. THE UNDISPUTED FACTS ARE THAT THE PROPERTY WAS PURC HASED IN THE NAME OF THE ASSESSEE WHEN HE WAS MINOR. NOW ASSESSEE HAS SOLD THIS PROP ERTY. THE ASSESSEES GRANDFATHER HAS DIED. THEREFORE, IT CAN NOT BE SAID THAT SALE PROCE EDS ARE FROM UNDISCLOSED SOURCES. THE ASSESSING OFFICER AND LD. CIT (A) ADMITTED THAT THE PROPERTY WAS PURCHASED BY GRANDFATHER, THEREFORE, INVESTMENT IS NOT DOUBTED A ND THE PROPERTY IS THERE. HOW IT CAN BE SAID THAT THE INCOME FROM SALE OF PROPERTY IS UNDIS CLOSED IS NOT UNDERSTOOD. ACCORDINGLY, THE ADDITION IS DELETED. 9. NEXT ISSUE IS AGAINST CONFIRMING THE ADDITION OF RS. 13,000/- AND RS. 25,037/- OUT OF TELEPHONE EXPENSES AND CAR EXPENSES INCLUDING DE PRECIATION. 4 10. THE ASSESSING OFFICER DISALLOWED 1/5 TH OF THE EXPENSES ON ACCOUNT OF TELEPHONE AND CAR EXPENSES INCLUDING DEPRECIATION. THE LD. C IT (A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 11. AFTER CONSIDERING THE ORDERS OF THE ASSESSING O FFICER AND LD. CIT (A) AND SUBMISSIONS, WE FIND THAT DISALLOWANCES ARE ON HIGH ER SIDE. THE ASSESSING OFFICER AND LD. CIT (A) CONFIRMED 1/5 TH DISALLOWANCE. WE FEEL THAT IF DISALLOWANCES ARE R ESTRICTED TO 1/10 TH THEN IT WILL MEET THE ENDS OF JUSTICE. WE ORDER A CCORDINGLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 13. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 .12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- SHRI MANISH CHANDAK, HANUMANGARH JN. THE ITO WARD-1, HANUMANGARH. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 289/JODH/2009) BY ORDER, AR ITAT JODHPUR.