M/s Pandey Construction Co., Sonebhadra V. ACIT-RANGE-III, Mirzapur

ITA 300/ALLD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3773 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 15-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD (SMC) BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A. NO.300/ALLD/2017 ASSESSMENT YEAR: 2004-05 M/S.PANDEY CONSTRUCTION CO., TURRA, PIPERI, SONEBHADRA [PAN: AACFP8806H] VS ASST. COMMISSIONER OF INCOME TAX, RANGE-III, MIRZAPUR (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI PRAVEEN GODBOLE, ADVOCATE FOR REVENUE : SHRI A.K.SINGH, SR.DR DATE OF HEARING : 05-11-2020 DATE OF PRONOUNCEMENT : 06-11-2020 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31-08-2017 OF THE COMMISSIONER OF INCOME TAX(APPEALS)-ALLAHABAD FOR THE AY.2004-05. IN THIS A PPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1-THAT IN ANY VIEW OF THE MATTER THE ASSESSMENT ORD ER DATED 22/10/2006 PASSED U/S 143(3) OF THE IT ACT BY THE A SSESSING OFFICER BY DETERMINING THE INCOME AT RS. 8,46,078/- AS AGAI NST THE RETUNED INCOME OF RS.6,33,482/- BY MAKING ARBITRARY ADDITIO NS/ DISALLOWANCES UNDER VARIOUS HEADS IGNORING THE CORR ECT FACTS AND HIS ACTIONS AS PARTLY MAINTAINED BY THE COMMISSIONER OF INCOME TAX (APPEAL) IS BAD BOTH ON THE FACTS AND IN LAW. 2-THAT IN ANY VIEW OF THE MATTER OBSERVATIONS AND F INDINGS OF THE TWO LOWER AUTHORITIES IN THEIR ORDERS FOR MAKING AND MA INTAINING THE ADDITIONS/ DISALLOWANCES UNDER VARIOUS HEADS ARE TO TALLY UNJUSTIFIED GENERAL , VAGUE, INCORRECT AND CONTRARY TO THE ACTU AL FACTS OF THE CASE ITA NO.300 /ALLD/2017 :- 2 -: HENCE THE ADDITIONS/DISALLOWANCES SO MADE AND MAINT AINED ARE LIABLE TO BE DELETED. 3-THAT IN ANY VIEW OF THE MATTER DISALLOWANCES OF R S. 4,533/- ON ACCOUNT OF DEPRECIATION ON ARMADA JEEP AS MADE AND MAINTAINED BY THE TWO LOWER AUTHORITIES IGNORING THE CORRECT FACT S IS HIGHLY UNJUSTIFIED AND ILLEGAL IN THE FACTS AND CIRCUMSTAN CES OF THE CASE HENCE THE SAME IS LIABLE TO BE DELETED. 4-THAT IN ANY VIEW OF THE MATTER DISALLOWANCES OF R S. 4,607/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CHARITY AND DONATION AND HIS ACTION AS CONFIRMED BY THE COMMISSIONER OF INCO ME TAX (APPEAL) IS UNJUSTIFIED AND ILLEGAL, THEREFORE THE DISALLOWA NCES SO MADE AND MAINTAINED IS LIABLE TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5-THAT IN ANY VIEW OF THE MATTER THE DISALLOWANCES OF RS. 18,012/- AS MADE U/S 40A(3) OF THE IT ACT BY THE ASSESSING OFFI CER IN ARBITRARY MANNER AND HIS ACTION AS CONFIRMED BY THE COMMISSIO NER OF INCOME TAX (APPEAL) WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE IS HIGHLY UNJUSTIFIED AND INCORRECT IN THE FACTS AND C IRCUMSTANCES OF THE CASE, HENCE THE SAME IS LIABLE TO BE DELETED. 6-THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS . 1,05,522/- AS MADE ON ACCOUNT OF UNSECURED LOAN BY THE ASSESSING OFFICER IGNORING THE CORRECT FACTS AND HIS ACTION AS CONFIRMED BY TH E COMMISSIONER OF INCOME TAX (APPEAL) WITHOUT APPRECIATING THE CORREC T FACTS IS HIGHLY UNJUSTIFIED, INCORRECT AND INJUSTICE AND HENCE THE SAME IS LIABLE TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7-THAT IN ANY VIEW OF THE MATTER THE INTEREST CHARG ED UNDER DIFFERECT SECTIONS OF THE IT ACT IS HIGHLY UNJUSTIFIED AND IL LEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 8- THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVES HIS RIGHT TO TAKE ANY FRESH GROUND BEFORE THE HEARING O F THE APPEAL. 2. AT THE TIME OF HEARING, LD.COUNSEL FOR THE ASSESSEE STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS ALL OTHER GROUN DS, EXCEPT GROUND NO.6 OF THE APPEAL. ACCORDINGLY, GROUN D NOS.1 TO 5, 7 & 8 ARE DISMISSED BEING NOT PRESSED. 3. GROUND NO.6 IS REGARDING ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UN-EXPLAINED CASH CR EDITS. ITA NO.300 /ALLD/2017 :- 3 -: LD.AR FOR THE ASSESSEE HAS SUBMITTED THAT THERE IS A CAS H CREDIT IN THE NAME OF RAMJI BAISHWAR UNDER THE HEAD SUNDRY CREDITORS WHICH IS THE OPENING BALANCE BROUGHT FORWAR DED FROM THE EARLIER YEAR AND DOES NOT RELATE TO THE YEAR U NDER CONSIDERATION. THUS, THE LD.AR HAS SUBMITTED THAT NO ADD ITION CAN BE CALLED-FOR FOR THE YEAR UNDER CONSIDERATION WH EN THE ASSESSEE HAS NOT INTRODUCED ANY CASH CREDIT IN THE BOOK S OF ACCOUNTS AND IT IS ONLY A BROUGHT FORWARD BALANCE FROM THE EARLIER YEAR. HENCE, THE LD.AR HAS SUBMITTED THAT THE ADD ITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND TO B E DELETED. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF THE MUMBAI BENCHES OF THE TRIBUNAL IN THE CASE OF JAMES P. DSILVA VS. DCIT [175 ITD 533]. 4. ON THE OTHER HAND, THE LD.DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO EXPLAIN T HE CREDIT SHOWN IN THE NAME OF RAMJI BAISHWAR BUT THE ASSESSEE HAS NOT PRODUCED ANY CONFIRMATION AND THEREFORE THE GENUIN ENESS OF THE CLAIM IS NOT ESTABLISHED BY THE ASSESSEE. SO, TH E LD.DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON RECORD, IT IS NOTED THAT AS PER THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION AS WELL AS FOR THE PRECEDING YEAR, IT IS CLEAR THAT THERE IS NO CHANGE OF THE CREDIT BALANCE IN THE NAME OF RAMJI BAISHWAR AS ON 31-03-2003 AND 2004. EVEN THE SAME BALANCE IS APPEARING IN THE BALAN CE SHEET FOR THE FINANCIAL YEAR 2004-05. THUS, THE CREDI T SHOWN IN THE NAME OF RAMJI BAISHWAR IS NOT INTRODUCED DURIN G THE ITA NO.300 /ALLD/2017 :- 4 -: YEAR UNDER CONSIDERATION, BUT IT IS ONLY A BROUGHT FOR WARD BALANCE FROM THE EARLIER YEAR HENCE, IT IS ONLY AN OP ENING BALANCE OF CREDIT. ONCE IT IS ESTABLISHED FROM THE REC ORD AND EVIDENT FROM THE BALANCE SHEET FOR THE FINANCIAL YEAR 2 002-03 AND 2003-04 THAT THIS CREDIT WAS NOT INTRODUCED DURING T HE YEAR UNDER CONSIDERATION, THEN, EVEN IF THE ASSESSEE H AS FAILED TO DISCHARGE ITS ONUS OF PROVING THE CREDITWORTHINESS, GENUINENESS AND IDENTITY OF THE CREDITOR, THE ADDITION CANNOT BE MADE FOR THE YEAR UNDER CONSIDERATION. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UN-EXPLAI NED CASH CREDIT IS DELETED. ONCE IT IS BROUGHT ON RECORD THAT THE CASH CREDIT IS NOT INTRODUCED DURING THE YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER WAS NOT REMEDILE SS AS TO CONSIDER THIS IN THE YEAR IN WHICH THE ASSESSEE HAS I NTRODUCED THE CASH CREDIT BY RE-OPENING OF THE ASSESSMENT. BUT, INSTEAD OF FOLLOWING THE CORRECT PROCESS OF LAW, THE ASSESSING OFFICER HAS MADE A WRONG ADDITION. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2020 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER ALLAHABAD, DATED: 06-11-2020 TNMM ITA NO.300 /ALLD/2017 :- 5 -: COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT 6. GUARD FILE TRUE COPY BY ORDER (ITAT, ALLAHABAD)