The ITO, Ward-6(1), Surat V. Shri Ashok Mahipatrao Gaikwad,

ITA 292/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60347 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: RAKESH R SHAH
• Keywords: Depreciation; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI, A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 29 2 /AHD/ 2009 & C.O. NO. 65/A/2009 (ARISING OUT OF ITA NO. 292/AHD/2009) ASSESSMENT YEAR :2005-06 INCOME TAX OFFICER WARD- 6(1), SURAT, ROOM NO.614, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT SHRI ASHOK MAHIPATRAO GAIKWAD N.R. RESIDENCE COMPLEX PAREKH FADIA, JUNA GAM, SONGADH, DIST. SURAT. V/S . V/S . SHRI ASHOK MAHIPATRAO GAIKWAD N.R. RESIDENCE COMPLEX PAREKH FADIA, JUNA GAM, SONGADH, DIST. SURAT. INCOME TAX OFFICER WARD-6(1), SURAT, ROOM NO.614, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT PAN NO. AAWPG3274C (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI B.L.YADAV, SR.D.R. /BY ASSESSEE SHRI RAKESH R. SHAH, A.R. /DATE OF HEARING 0 2.05.2012 /DATE OF PRONOUNCEMENT 18.05.2012 ITA NO.292/AHD/2009 & C.O.NO.65/A/2009 PAGE 2 O R D E R PER : A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE C.O. IS FILED BY THE ASSESSEE. BOTH ARE DIRECTED AGAINST THE ORDER OF L D. CIT (A)-IV, SURAT, DATED 26.11.2008 FOR THE ASSESSMENT YEAR 2005-06. 2. THE C.O. FILED BY THE ASSESSEE WAS NOT PRESSED A ND ACCORDINGLY DISMISSED AS NOT PRESSED. 3. NOW WE CONSIDER THE APPEAL FILED BY THE REVENUE. 4. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.200,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CRE DITS U/S 68 OF THE IT ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.1,36,917/- MADE BY THE A.O. ON ACCOUNT OF ESTIMATION OF NET PR OFIT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.4,12,500/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWED DEPRECIAT ION ON JCB MACHINE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.62,680/- MADE BY THE A.O. ON ACCOUNT OF DISALLOWED INTEREST ON THE LOAN RAISED FOR PURCHASING JCB MACHINE. ITA NO.292/AHD/2009 & C.O.NO.65/A/2009 PAGE 3 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDIT ION OF RS.88,000/- MADE BY THE A.O. ON ACCOUNT OF HOUSEHOLD AND PERSO NAL EXPENSES TO RS. 28,000/- ONLY. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-IV, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. REGARDING ALL THE GROUNDS, LD. D.R. OF THE REVEN UE SUPPORTED THE ASSESSMENT ORDER WHEREAS LD. A.R. OF THE ASSESSEE S UPPORTED THE ORDER OF LD. CIT (A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSEMSSMENT ORDER WAS PASSED BY TH E A.O. UNDER SECTION 144. BEFORE LD. CIT (A), A FRESH EVIDENCE WAS PLACED BY THE ASSESSEE AND IT WAS ADMITTED BY LD. CIT (A) UNDER R ULE 46A AND REMAND REPORT WAS OBTAINED BY HIM. LD. CIT (A) HAS NOTED THAT THE A.O. HAS NOT OFFERED ANY ADVERSE COMMENT ON THE SAID ADDITIONAL EVIDENCE. 5. REGARDING THE FIRST GROUND I.E. BEING THE DELETI ON OF RS.200,000/- BY THE A.O. UNDER SECTION 68, WE FIND THAT LD. A.R. OF THE ASSESSEE HAS SUBMITTED A COPY OF ACKNOWLEDGEMENT OF RETURN OF IN COME ALONG WITH BALANCE SHEET OF THE LOAN CREDITOR TO PROVE THE IDE NTITY AND CREDITWORTHINESS OF LOAN CREDITOR AND GENUINENESS O F THE TRANSACTION. NO ADVERSE COMMENTS WERE OFFERED BY THE A.O. ON THIS A DDITIONAL EVIDENCE. SINCE THE SAID LOAN IS APPEARING FOR THE BALANCE SH EET OF LOAN CREDITOR AND HE IS BEING ASSESSED TO TAX AND THERE IS NO ADVERSE COMMENT BY ANY OF ITA NO.292/AHD/2009 & C.O.NO.65/A/2009 PAGE 4 THE AUTHORITIES BELOW THAT IDENTITY OR CREDITWORTHI NESS OF THE LOAN CREDITOR AND GENUINENESS OF THE TRANSACTION WAS NOT ESTABLIS HED, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT (A) ON THIS ISSUE. ACCORDINGLY, GROUND NO.1 OF THE REVENUE IS REJECTED . 6. THE SECOND GROUND OF THE REVENUE IS REGARDING TH E DELETION OF ADDITION OF RS.1,36,917/- MADE BY THE A.O. ON ACCOUNT OF ESTIMATION OF NET PROFIT. WE FIND THAT GROSS RECEIPT OF ASSESSEE WAS RS. RS.13,69,166/- AND ASSESSEE HAS DECLARED INCOME OF RS. 117892/- IN TH E RETURN OF INCOME FILED BY THE ASSESSEE. IT IS MORE THAN 8% OF THE GROSS R ECEIPT OF RS. 13,69,166/-. HOWEVER, IN ADDITION TO THIS AMOUNT OF INCOME DECLA RED BY THE ASSESSEE IN RETURN OF INCOME, THE A.O. HAS MADE THE ADDITION OF RS.1,36,917/- TO THE EXTENT OF 10% OF GROSS RECEIPT. SINCE, THE INCOME DECLARED BY THE ASSESSEE IS MORE THAN 8% OF THE GROSS RECEIPT, WE ARE OF THE OP INION THAT NO FURTHER ADDITION IS CALLED FOR AND HENCE ON THIS ISSUE, ALS O WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT (A). THE GROUND NO.2 IS ALSO REJECTED. 7. AS PER GROUND NO.3, THE ISSUE RAISED BY THE REVE NUE IS REGARDING DELETION OF THE ADDITION OF RS.4,12,500/- MADE BY T HE A.O. BY DISALLOWING THE DEPRECIATION ON JCB MACHINE. 8. AS PER GROUND NO.4, THE ISSUE RAISED BY THE REVE NUE IS REGARDING DELETION OF THE ADDITION OF RS.62,680/- MADE BY THE A.O. BY DISALLOWING THE INTEREST ON THE LOAN RAISED FOR PURCHASING JCB MACH INE. 9. BOTH THE DISALLOWANCES WERE MADE BY THE A.O. ON THIS BASIS THAT NO INCOME WAS DECLEARED BY THE ASSESSEE IN RESPECT OF JCB MACHINE. BEFORE LD. ITA NO.292/AHD/2009 & C.O.NO.65/A/2009 PAGE 5 CIT (A), IT WAS SUBMITTED THAT THE TURN OVER OF THE MACHINE WAS INCLUDED IN THE JOB WORK ITSELF SINCE THE ASSESSEE WAS INTO THE BUS INESS OF BORING OF THE WELLS FOR WHICH JCB MACHINE WAS REQUIRED. IT WAS SUBMITT ED THAT THE MACHINE WAS PUT TO USE DURING THE PRESENT YEAR AND THE SAME WAS PURCHASED IN MAY 2004 AND THEREFORE, THE ASSESSEES CLAIM FOR DEPRECIATIO N AS WELL AS INTEREST SHOULD BE ALLOWED. 10. CONSIDERING THESE FACTS, WE ARE OF THE CONSIDER ED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT (A) REGARDING THESE TWO ISSUES ALSO AND THEREFORE, GROUND NOS. 3 AND 4 OF THE REVE NUE ARE ALSO REJECTED. 11. AS PER GROUND NO.5, THE REVENUE IS AGGRIEVED RE GARDING REDUCING THE ADDITION OF RS. 88,000/- MADE BY THE A.O. ON ACCOUN T OF HOUSEHOLD AND PERSONAL EXPENSES TO RS. 28,000/- ONLY. WE FIND TH AT THE A.O. HAS ESTIMATED THE HOUSEHOLD EXPENDITURE OF THE ASSESSEE AT RS. 1, 20,000/- AND AFTER DEDUCTING THE WITHDRAWAL SHOWN BY THE ASSESSEE OF R S. 32,000/-, HE MADE AN ADDITION OF RS. 88,000/-. BEFORE LD. CIT (A), IT WAS SUBMITTED BY THE ASSESSEE THAT IN ADDITION OF WITHDRAWAL OF RS. 32,000/- BY T HE ASSESSEE, HIS WIFE WAS ALSO CONTRIBUTING RS. 60,000/- FROM HER CAPITAL AMO UNT. THIS MUCH RELIEF IS ALLOWED BY LD. CIT (A). LD. D.R. OF THE REVENUE CO ULD NOT CONTROVERT THE FINDING OF LD. CIT (A) . WE ALSO FIND THAT AS PER THE RETU RN OF INCOME AND BALANCE SHEET OF THE WIFE OF THE ASSESSEE MRS. SHITABEN ASH OK GAIKWAD WHICH IS PLACED ON PAGE NO. 29-31 OF THE PAPER BOOK, SHE HAS SHOWN WITHDRAWAL OF RS. 60,000/-. ITA NO.292/AHD/2009 & C.O.NO.65/A/2009 PAGE 6 12. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT (A) ON THIS ISSUE ALSO. THE GROUND NO.5 IS ALSO REJECT ED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E C.O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (KUL BHARAT) ( A.K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * <