The Dy. Commissioner of Income-tax, Jammu V. Sh. Rakesh Kumar, Samba

ITA 29/ASR/2013

• Counselvise Citation: 2920914 RSA 2013
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Unexplained expenditure; Additional evidence; Corroborative evidences
• Section: 69C; 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.29(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :AJZPK5770F DY.COMMR. OF INCOME TAX, VS. SH. RAKESH KUMAR, PROP . CIRCLE-1, JAMMU. M/S. R.K. ENTERPRISES, SAMBA, (J&K). (APPELLANT) (RESPONDENT) APPELLANT BY:SH.MAHAVIR SINGH, DR RESPONDENT BY:SH. P.N.ARORA, ADVOCATE DATE OF HEARING: 02/01/2014 DATE OF PRONOUNCEMENT:17/01/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), JAMMU, DATED 05.11.2012 RELATING TO ASSESSMENT YEAR 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ADMITTING THE ADDITIONAL EVIDENCES FILED B Y THE ASSESSEE DURING APPELLATE PROCEEDINGS WHEN THE ASSESSEE HAD FAILED TO OFFER ANY PLAUSIBLE REPLY BEFORE THE A.O. DURING TH E ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ADMITTING THE ADDITIONAL EVIDENCES FILED B Y THE ASSESSEE ITA NO.29(ASR)/2013 2 DURING APPELLATE PROCEEDINGS WITHOUT AFFORDING OPPO RTUNITY TO THE A.O. UNDER RULE 46A OF THE INCOME TAX RULES, 1 962 WHEN THE ASSESSEE HAD FAILED TO OFFER ANY PLAUSIBLE REPL Y BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE AS ARISING FROM THE AOS ORDER ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: CASH PAYMENTS EXCEEDING RS.20,000/- IN CASH . THE PERUSAL OF DIESEL AND PETROL EXPENSES REVEALED THAT ASSESSEE HAD CASH PAYMENTS EXCEEDING RS.20,000/- ON DIFFEREN T DATES. THE TOTAL OF THESE PAYMENTS WORKED OUT TO RS.12,64, 526/-, THE ASSESSEE WAS INFORMED ABOUT THESE CASH PAYMENTS VID E ORDER SHEET ENTRY DATED 21/12/2011. SINCE THE PAYMENTS HA VE BEEN MADE IN VIOLATION OF PROVISIONS OF SECTION 40A(3), THE DISALLOWANCE @ 100% O THE SAME IS BEING MADE TO THE EXTENT OF RS.12,64,526/-. AN AMOUNT OF RS.48,500/- WAS PAID IN CASH ON 18/09/ 2008 BY THE ASSESSEE IN THE HEAD CARRIAGE EXPENSES. SINCE, THIS IS A CASE OF VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE I.T.ACT, 1961. THE ASSESSEE WAS ALSO APPRISED ABOUT THE SAME VIDE ORDER SHEET ENTRY DATED 21.12.2011. THEREFORE, DISALLOWAN CE OF RS.48,500/- IS BEING MADE. EXCESS PAYMENT OF ELECTRICITY BILLS PAYMENT. WHILE EXAMINING THE PROOF FOR PAYMENT OF ELECTRICIT Y BILL, IT WAS NOTICED THAT ASSESSEE HAD CLAIMED THE EXPENDITURE O F RS.26,000/- WHERE AS THE ACTUAL EXPENDITURE OF RS.3 ,00,000 HAD BEEN INCURRED AS PER CERTIFICATE OF ELECTRICAL DEPA RTMENT. THE DISCREPANCY WAS BROUGHT TO THE NOTICE OF THE ASSESS EE VIDE SHEET ENTRY DATED 21/12/2011 AND NO EXPLANATION WAS FILED . THUS, IT MEANS THAT ASSESSEE HAS INCURRED THIS EXPENDITURE F ROM THE SOURCES NOT DISCLOSED TO THE DEPARTMENT. THE EXCES S EXPENDITURE FOR WHICH NO EXPLANATION WAS FILED IS T REATED AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. PENALTY ITA NO.29(ASR)/2013 3 PROCEEDINGS U/S 271(1)(C) OF THE I.T.ACT, 1961 STAN DS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF HIS INC OME. 3. THE LD. CIT(A) DELETED THE ADDITION OF RS.12,64 ,526/- AND CONFIRMED THE ADDITION OF RS.48,500/- TOWARDS CARRIAGE EXPENS ES AND RS.40,000/- ON ACCOUNT OF ELECTRICITY BILL AS PER HIS ORDER IN PA RA 4.1 TO 4.3 WHICH IS REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: 4.1. I HAVE CONSIDERED THE OBSERVATIONS OF THE AO IN THE ASSESSMENT ORDER AND SUBMISSIONS MADE BY THE APPELLANT BEFORE ME. REGARDING ADDITION ON ACCOUNT OF DISALLOWANCE OF CASH PAYMENT S U/S 40A(3) FOR RS.12,64,526/-, IT IS STATED BY THE APPELLANT THAT FINDINGS OF THE AO ARE NOT BASED ON FACTS. THE DETAILS WERE NOT EXAMINED B Y THE AO. IN FACT, THE CASH PAYMENT IS NOT A SINGLE PERSON ON A DAY BU T TO DIFFERENT PERSONS WHICH ARE DULY SUPPORTED BY VOUCHER OF DIFF ERENT PARTIES WHICH WERE WITHIN THE PRESCRIBED LIMIT. DETAILS WER E PRODUCED BEFORE ME AND IT IS FOUND THAT THE PAYMENTS WERE MAINLY M ADE TO FUEL STATION FOR PURCHASE OF PETROL AND DIESEL. THE SUBMISSIONS MADE BY THE APPELLANT ARE FOUND TO BE CORRECT AND HENCE THE ADD ITION OF RS.12,64,526/- IS DELETED. 4.2. REGARDING THE ADDITION OF RS.48,500/- TOWARDS CARRIAGE EXPENSES FOR VIOLATION OF SECTION 40A(3) THE APPELL ANT COULD NOT FURNISH EVIDENCES TO JUSTIFY THE PAYMENTS. ON THE D ATE OF HEARING I.E. ON 02.11.2012 THE APPELLANT STATED THAT IN ABSENCE OF EVIDENCE AT PRESENT HE IS NOT PRESSING THIS GROUND OF APPEAL. T HUS, THE ADDITION OF RS.48,500/- IS CONFIRMED. 4.3. REGARDING THIRD ADDITION OF RS.48,500/- ON ACC OUNT OF ELECTRICITY BILLS, THE AO HAS OBSERVED THAT THE ASS ESSEE HAS CLAIMED EXPENDITURE OF RS.2,60,000/-WHEREAS THE ACTUAL EXPE NDITURE AS PER THE CERTIFICATE OF ELECTRICITY DEPARTMENT WAS RS.3, 00,000/-. THUS, THE EXCESS EXPENDITURE WAS ADDED U/S 69C OF THE ACT BUT THE AMOUNT WAS ERRONEOUSLY TAKEN AS RS.48,500/- INSTEAD OF RS.40,0 00/-. THE APPELLANT STATED THIS RS.40,000/- WAS PAID BY THE BROTHER OF THE APPELLANT ON BEHALF OF HIM. DURING THE COURSE OF HEARING ON 02.1 1.2012 THE SUPPORTING EVIDENCE WERE NOT FURNISHED AND HE STATE D THAT HE IS NOT ITA NO.29(ASR)/2013 4 PRESSING THIS GROUND OF APPEAL. IN VIEW OF THIS, TH IS GROUND IS DISMISSED AND ADDITION MADE BY THE AO IS CONFIRMED. 4. THE LD. DR, AT THE OUTSET, ARGUED THAT THE PAYME NTS MADE IN VIOLATION OF SECTION 40A(3) AMOUNTING TO RS.12,64,526/- AS PE R DETAILS AVAILABLE AT ASSESSEES PAPER BOOK (PAGES 7, 7A & 7B) ARE EXCEED ING RS.20,000/- EXCEPT FEW PAYMENTS WHICH ARE LESS THAN RS.20,000/- . EVEN SUCH EVIDENCE IS ADMITTED WITHOUT CONFRONTING TO THE AO. ONLY THE PA YMENTS LESS THAN RS.20,000/- PAID IN CASH CAN BE TREATED AS NOT VIO LATING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N.ARORA, ADVOCATE, ON THE OTHER HAND, ARGUED THAT ALL THE PAYMENTS ARE LESS T HAN RS.20,000/- AND THE ASSESSEE HAS NOT VIOLATED THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ONLY ISSUE WITH REGARD TO THE PAYMENTS OF RS.12 ,64,526/- BEING THE CASH PAYMENTS EXCEEDING RS.20,000/- IN VIOLATION OF SEC TION 40A(3) OF THE ACT. ON PERUSAL OF ADDITIONAL EVIDENCE OR DETAILS AVAILA BLE WITH REGARD TO THE PAYMENTS MADE IN ASSESSEES PAPER BOOK (PAGES 7, 7 A & 7B), WHICH ARE PAYMENTS TOTALING RS.15,31,190/- AND WHICH ARE HAVI NG PAYMENTS LESS THAN RS.20,000/- AND ALSO MORE THAN RS.20,000/-. FROM T HE DETAILS, IT IS EVIDENT THAT THE AO HAS ALREADY TAKEN INTO CONSIDERATION TH E PAYMENTS, WHICH HAVE BEEN MADE IN CASH EXCEEDING TO RS.20,000/- IN VIOL ATION OF SECTION 40A(3) ITA NO.29(ASR)/2013 5 OF THE ACT. IT IS SURPRISING HOW THE LD. CIT(A) HA D READ THE SAID DETAILS WHICH ARE APPARENTLY IN VIOLATION OF SECTION 40A(3 ) OF THE ACT, BEING CASH PAYMENTS EXCEEDING RS.20,000/-. ON PERUSAL OF THE D ETAILS, IT IS EVIDENT THAT THERE IS VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT, AS HAS RIGHTLY BEEN HELD BY THE A.O. ACCORDINGLY, THE ORDER OF TH E LD. CIT(A) IS PERVERSE ON THIS ACCOUNT AND THEREFORE, THE SAME IS REVERSED AND THE ORDER OF THE AO IS RESTORED. ACCORDINGLY, THE APPEAL OF THE REVENU E IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.29(ASR)/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH JANUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17TH JANUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.RAKESH KUMAR PROP. M/S. R.K. ENTERP RISES, SAMBA. 2. THE DCIT, CIRCLE-1, JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR)