Shri Shantilal K.Bhatt, Ahmedabad V. The Income tax Officer,Ward-10(4), Ahmedabad

ITA 2919/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60303 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: HARSHAD J THAKKAR
• Keywords: Depreciation; Third party statement
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' BEFORE SHRI D K TYAGI - JM AND SHRI A MOHAN ALANKAMONY - AM ITA NO.2919/AHD/2011 (ASSESSMENT YEAR:-2008-09) SHANTILAL KESHAVLAL BHATT, PROP. M/S SHAKSTI ELECTRO SERVICES, 1, TRADE CENTER, NR. STADIUM CROSS ROAD, OPP. MUNICIPAL SWIMMING POOL, NAVRANGPURA, AHMEDABAD-380009 V/S THE INCOME-TAX OFFICER, WARD-10(4), AHMEDABAD PAN: ACRPB 3290 J [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI HARSHAD J THAKKAR, AR REVENUE BY:- SHRI B L YADAV, SR. DR DATE OF HEARING:- 18-04-2012 DATE OF PRONOUNCEMENT:- 30-04-2012 O R D E R PER D K TYAGI (JM) :- THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST ORDER DATED 5 TH SEPTEMBER, 2011 PASSED BY LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, [HEREINAFTER REFERRED TO AS THE LEARNED CIT(A)] A HMEDABAD FOR ASSESSMENT YEAR (AY) 2008-09. 2 THE FIRST GROUND RELATES TO ADDITION OF RS.4,00,0 00/- U/S 68 MADE BY AO WHICH HAD BEEN CONFIRMED BY THE LEARNED CIT(A). THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASS ESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS T AKEN A LOAN OF 2 2 RS.4,00,000/- FROM ONE SHRI N I VYA. THE AO ASKED T HE ASSESSEE TO FURNISH THE COPY OF LEDGER ACCOUNT OF DEPOSITOR, CONTRA CONFIRMATION, COPY OF ACKNOWLEDGEMENT OF FILING OF RETURN, COPY OF HIS BANK STATEMENT / BALANCE SHEET TO PROVE THE IDENTITY, GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHI NESS OF THE DEPOSITOR. HOWEVER, THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE. AS THE ASSESSEE COULD NOT PRIMA FACIE ESTABLISH THE ID ENTITY OF THE DEPOSITOR, GENUINENESS OF THE TRANSACTION AND CREDI TWORTHINESS OF THE DEPOSITOR, THE AO CONSIDERED THIS DEPOSIT AS UN EXPLAINED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 3 BEFORE THE LEARNED CIT(A), THE ASSESSEES CONTENT ION WAS THAT THE ASSESSEE HAD TAKEN LOAN OF RS.4,00,000/- F ROM SHRI N I VYAS BY CHEQUE 469225 DRAWN ON CENTRAL BANK OF INDI A ON 01- 06-2007 AND THE SAME WAS APPEARING IN THEIR BANK ST ATEMENT. MR. VYAS IS A RETIRED STATE GOVERNMENT CLASS I OFFICER AND CLOSE RELATIVE OF THE ASSESSEE. IN SUPPORT OF HIS SUBMISS ION, THE ASSESSEE ALSO FILED A COPY OF LETTER OF CONFIRMATIO N, PA NUMBER CARD OF MR. VYAS ALONG WITH BANK PASSBOOK. IT WAS A LSO CONTENDED THAT THE AO DID NOT UTILIZE HIS POWERS TO COLLECT INFORMATION DIRECTLY FROM THE DEPOSITOR DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THE EVIDENCE NOW PRODUCED B EFORE HIM SHOULD BE CONSIDERED. HOWEVER, THESE EVIDENCES IN S UPPORT OF ASSESSEES CLAIM THAT THE SUM OF RS.4,00,000/- WAS RECEIVED FROM MR. VYAS - CLOSE RELATIVE OF THE ASSESSEE, WERE NOT ACCEPTED BY LEARNED CIT(A) AND THE ASSESSEES APPEAL WAS DISMIS SED. 4 FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE 3 3 PLACED RELIANCE ON THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A) AND THE DOCUMENTS LIKE BANK STATEMENT, PAN C ARD OF MR. VYAS, ETC. IN SUPPORT OF HIS CONTENTION. HE ALSO SU BMITTED THAT THIS AMOUNT OF RS.4,00,000/- HAS SUBSEQUENTLY BEEN REPAID TO THE DEPOSITOR THROUGH BANKING CHANNEL AND IN SUPPORT OF THAT ALSO NECESSARY DETAILS WERE FILED BEFORE US WHICH INCLUD ED THE LEDGER COPY OF MR. VYAS IN THE BOOKS OF THE ASSESSEE AND C OPY OF BANK STATEMENT OF THE ASSESSEE. CONCLUDING HIS ARGUMENTS , HE SUBMITTED THAT UNDER THESE CIRCUMSTANCES THE ADDITI ON MADE BY THE AO AND SUSTAINED BY THE LEARNED CIT(A) DESERVES TO BE DELETED. 5 THE LEARNED DR, HOWEVER, VEHEMENTLY SUPPORTED THE ORDER PASSED BY THE AO AND SUBMITTED THAT SINCE BEFORE TH E AO NECESSARY EVIDENCE IN SUPPORT OF ASSESSEES CLAIM W AS NOT FILED BY THE ASSESSEE, THEREFORE, THE MATTER MAY KINDLY B E RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN THE LI GHT OF THE SUBSEQUENT EVIDENCES FILED BY HIM BEFORE THE APPELL ATE AUTHORITY. 6 AFTER HEARING BOTH THE PARTIES AND PERUSING THE R ECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT T HE ASSESSEE RECEIVED THE SUM OF RS.4,00,000/- FROM SHRI N I VYA S THROUGH BANKING CHANNEL. IN SUPPORT OF HIS CLAIM, BANK PASS BOOK OF THE DEPOSITOR ALONG WITH PAN CARD AND LETTER OF CONFIRM ATION FROM SHRI VYAS ARE ALREADY ON RECORD. THUS, THE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITOR IS ESTABLISHED. W E FURTHER FIND THAT THE SUM HAS ALREADY BEEN REPAID BY THE ASSESSE E TO MR. VYAS THROUGH THE BANKING CHANNEL IN INSTALMENTS IN SUPPO RT OF WHICH NECESSARY EVIDENCE IS ALSO ON RECORD. THEREFORE, TH E GENUINENESS 4 4 OF THE TRANSACTION IS ALSO ESTABLISHED. IN THE LIGH T OF THESE UNDISPUTED FACTS OF THIS CASE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LEARNED CIT(A) IS HEREBY DELETED. THE FIRST GROUND OF ASSESSEES APPEAL IS ALLOWED. 7 THE SECOND GROUND RELATES TO CONFIRMATION OF DISA LLOWANCE OF TELEPHONE, MOBILE, PETROL, MOTOR VEHICLE EXPENSE S AND DEPRECIATION EXPENSES AMOUNTING TO RS.13,778/- BY T HE LEARNED CIT(A) OUT OF TOTAL DISALLOWANCE AMOUNTING TO RS.27 ,555/- I.E. 20% OF RS.1,37,777/- MADE BY THE AO, ON THE GROUND THAT PERSONAL USE BY THE ASSESSEE AND HIS FAMILY MEMBERS CANNOT BE DENIED. 8 IN APPEAL, THE LEARNED CIT(A) RESTRICTED THE DISA LLOWANCE TO 10% OF THE TOTAL EXPENSES. WE, HOWEVER, FEEL THAT E VEN 10% DISALLOWANCE IS ON HIGHER SIDE KEEPING IN VIEW THE FACT THAT THE ASSESSEE IS A SMALL RETAILER ENGAGED IN THE BUSINES S OF DISTRIBUTION OF CORDLESS PHONES, ETC. AND, THEREFOR E, WE DEEM IT PROPER THAT THE DISALLOWANCE SHOULD BE REDUCED TO 5 % OF THE TOTAL EXPENSES. WE ORDER ACCORDINGLY. 9 THE THIRD GROUND RELATES TO ADDITION MADE BY THE AO OF RS.4829/- PERTAINING TO SALES PROMOTION, STAFF WELF ARE AND REPAIR CHARGES. THE AO MADE A DISALLOWANCE OF RS.48 29/- I.E. 20% OF THE REPAIR CHARGES, STAFF WELFARE AND SALES PROMOTION EXPENSES ON THE GROUND THAT DETAILED VOUCHERS WERE NOT PRODUCED BEFORE THE AO AS CALLED FOR BY HIM. THIS ACTION OF THE AO WAS CONFIRMED BY THE LEARNED CIT(A). 5 5 10 THE ASSESSEES CONTENTION HAS CONSISTENTLY BEEN THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT REGULARLY AND HAS PRODUCED ALL EVIDENCES AND VOUCHERS CALLED FOR BY T HE AO. HOWEVER, THE AO HAS MADE AD HOC ADDITION OF 20% WIT HOUT SPECIFYING ANY PARTICULAR EXPENSES BEING NOT ELIGIB LE FOR DEDUCTION AND THEREFORE, HE WAS NOT JUSTIFIED IN MA KING THIS ADDITION. 11 KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAS I NCURRED A SMALL AMOUNT OF RS.24,142/- UNDER THE HEAD SALES P ROMOTION, STAFF WELFARE AND REPAIR CHARGES, AND MOST OF THE EXPENSES RELATES TO REPAIR CHARGES RS.16,000/- IN RESPECT OF WHICH, IT IS NOT POSSIBLE ALWAYS TO MAINTAIN ALL THE VOUCHERS, T HE AD-HOC ADDITION MADE IS DELETED. 12 IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 30-04-2012 SD/- SD/- (A MOHAN ALANKAMONY) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 30-04-2012 COPY OF THE ORDER FORWARDED TO: 1. SHANTILAL KESHAVLAL BHATT, PROP. M/S SHAKSTI ELE CTRO SERVICES, 1, TRADE CENTER, NR. STADIUM CROSS ROAD, OPP. MUNICIPAL SWIMMING POOL, NAVRANGPURA, AHMEDABAD- 380009 2. THE INCOME-TAX OFFICER, WARD-10(4), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XVI, AHMEDABAD 6 6 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD