M/s Taneja Steels Pvt. Ltd., Indore V. The ACIT 5(1), Indore

ITA 308/IND/2011

• Counselvise Citation: 30822714 RSA 2011
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 14-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S DESHPANDE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAACT6041K I.T.A.NO. 308/IND/2011 A.Y. : 2007 - 08 M/S.TANEJA STEELS ACIT, PVT.LTD., VS 5(1), 315, TRANSPORT NAGAR , INDORE. INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.DESHPANDE, C. A. RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 16 . 02 .201 2 DATE OF PRONOUNCEMENT : 21 . 0 2 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 30.08.2011 FOR THE ASSESSMENT YEAR 2007-08, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY TH E ASSESSEE :- 1. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDITIONS OF RS 1,85,146/- AND RS. 1,35,971/- ON -: 2: - 2 ACCOUNT OF DIFFERENCE IN CASH BALANCES. 1.1 IT WAS PROVED BEFORE THE LD. AO AND THE LD. CIT(A) THAT THE AMOUNTS IN QUESTION WERE CORRECTLY SHOWN IN THE BOOKS SINCE THE ASSESSEE HAD RECEIVED THE AMOUNTS EARLIER. IN ANY CASE THE AMOUNTS WERE ALREADY COVER ED IN THE INCOME SURRENDERED BY THE ASSESSEE. 1.2 THE ADDITIONS OF RS. 1,85,146/- AND RS. 1,35,97 1/- MAY PLEASE BE DELETED. 2 THE LD. CIT(A) ERRED IN MAINTAINING THE ADDITION OF RS. 35,000/- U/S 40 (A)(IA) ON THE GROUND THAT THE TDS IS NOT MADE. THE ADDITION MAINTAINED BY THE LD. CIT(A) MAY PLEASE BE DELETED. 3 THE LD. CIT(A) HAS ERRED IN MAINTAINING THE DIS-A LLOWANCE OF RS. 34,500/- OUT OF INTEREST PAYMENTS. SINCE THE NEXUS IS NOT PROVED THE ADDITION IS UNCALLED FOR. THE ASS ESSEE HAD FUNDS AVAILABLE AND AS SUCH NO DIS-ALLOWANCE CO ULD BE MADE. THE ADDITION OF RS. 34,500/- MAY PLEASE BE DELETED. -: 3: - 3 4. THE ADDITION OF RS. 2,449/- IS UNCALLED FOR AND HENCE BE DELETED. 1. 2. FACTS IN BRIEF ARE THAT THERE WAS SURVEY AT ASSESSE ES BUSINESS PREMISES, THEREAFTER VARIOUS ADDITIONS WER E MADE BY THE ASSESSING OFFICER. MOST OF THE ADDITIONS WERE D ELETED BY THE LD.CIT(A) AGAINST WHICH REVENUE IS NOT IN APPEA L BEFORE US. HOWEVER, THE ASSESSEE IS AGGRIEVED FOR THE ADDITION S SO RETAINED BY THE LD.CIT(A). 3. IN THE FIRST GROUND, THE ASSESSEE IS AGGRIEVED FOR ADDITION OF RS. 1,35,971/- ON ACCOUNT OF EXCESS CAS H. THE LD. AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO TH E EXCESS CASH OF RS. 4,59,840/- DECLARED DURING SURVEY, WHIC H INCLUDES CASH TRANSACTION DIFFERENCE AS ON 1.9.2009 OF RS. 1 ,85,146/- AND RS. 1,35,971/- DIFFERENCE AS ON 27.11.2006, SIN CE CASH BOOK WAS NOT WRITTEN UP TO DATE. FROM THE RECORD, W E FOUND THAT THE ASSESSING OFFICER HAS MADE THIS ADDITION B Y OBSERVING THAT THERE ARE NUMBER OF ENTRIES WHICH ARE REFLECTE D IN THE RECEIPT SIDE OF THE CASH BOOK SUBMITTED DURING SCRU TINY OF ASSESSMENT PROCEEDINGS BUT NOT REFLECTED IN THE CAS H BOOK -: 4: - 4 SUBMITTED ON THE DATE OF SURVEY ON 27.11.2006. WE F OUND THAT AMOUNT OF RS. 1,35,971/- PERTAINS TO COLLECTION FRO M DEBTORS WHICH WERE NOT FOUND TO BE ENTERED IN THE BOOKS AS ON DATE OF SURVEY ON 27.11.2006. SUBSEQUENTLY, THE ASSESSEE EN TERED THIS CASH IN THE CASH BOOK, INCOME OF WHICH WAS ALR EADY ACCOUNTED IN THE FORM OF SALES. DUE RECONCILIATION WAS FILED BY THE ASSESSEE TO SUBSTANTIATE THE STAND THAT DIFFERE NCE OF RS. 1,35,971/- ACTUALLY REFLECTED THE CASH COLLECTED FR OM CUSTOMER IN RESPECT OF TRANSACTION OF SALE WHICH ENTRY HAS A LREADY BEEN MADE IN THE BOOKS OF ACCOUNT. ACCORDINGLY, THERE IS NO JUSTIFICATION FOR MAKING SAME ADDITION ON ANOTHER P LEA OF ENTRY BEING NOT REFLECTED IN CASH BOOK. THE ASSESSING OFF ICER IS DIRECTED TO DELETE THE SAME. 4. THE ASSESSEE IS ALSO AGGRIEVED FOR DISALLOWANCE OF RS. 35,000/- U/S 40(A)(IA) ON THE GROUND THAT TDS WAS N OT DEDUCTED. 5. FROM THE RECORD, WE FOUND THAT THE ASSESSEE HAS MAD E PAYMENT TO M/S.ASHU IMPEX SERVICES AMOUNTING TO RS. 17,000/-, WHICH WAS IN THE NATURE OF CONSULTANCY CH ARGES COVERED BY PROVISIONS OF SECTION 194C. A PAYMENT OF RS. -: 5: - 5 18,000/- WAS MADE ON ACCOUNT OF PACKING AND FORWARD ING CHARGES, WHICH IS COVERED U/S 194J. AS BOTH THE PAY MENTS WERE BELOW RS. 20,000/-, THERE WAS NO LIABILITY ON THE PART OF THE ASSESSEE TO DEDUCT TAX THEREON. EVEN THOUGH BOT H THE PAYMENTS WERE MADE TO SAME PARTY, SINCE THE NATURE OF PAYMENT WAS DIFFERENT AND COVERED UNDER DIFFERENT P ROVISIONS, DISALLOWABILITY OF SAME IS TO BE SEEN IN TERMS OF R ELEVANT PROVISION BY WHICH IT WAS COVERED. ACCORDINGLY, DI SALLOWANCE MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVI SIONS U/S 40A(IA) WAS NOT JUSTIFIED. 6. THE ASSESSING OFFICER HAS ALSO MADE DISALLOWANCE OF RS. 34,500/- OUT OF INTEREST EXPENSES ON THE PLEA T HAT THE ASSESSEE HAS DIVERTED INTEREST BEARING FUNDS FOR NO N BUSINESS PURPOSES. 7. THE FINDINGS SO RECORDED BY THE ASSESSING OFFICER W AS CONFIRMED BY THE LD.CIT(A) AND NOTHING WAS BROUGHT ON RECORD BY THE LD. AUTHORIZED REPRESENTATIVE TO PERSUADE U S TO DEVIATE FROM THE FINDINGS SO RECORDED BY LOWER AUTHORITIES. ACCORDINGLY, DISALLOWANCE OF INTEREST EXPENDITURE I S CONFIRMED. -: 6: - 6 8. THE ASSESSING OFFICER HAS ALSO MADE AN ADDITION OF RS. 2449/- ON THE PLEA THAT THERE WAS DIFFERENCE IN STO CK. WE FOUND THAT CLOSING STOCK OF WORK IN PROGRESS ON THE DATE OF SURVEY WAS SHOWN AT RS. 2,35,45,15/-. HOWEVER, ON P HYSICAL VERIFICATION BY THE SURVEY TEAM, THEY HAVE VALUED T HE WORK IN PROGRESS AT RS. 2,35,47,600/-. ACCORDINGLY, DIFFERE NCE OF RS. 2449/- WAS ADDED TO THE ASSESSEES INCOME. KEEPING IN VIEW THE HUGE STOCK CARRIED OUT BY THE ASSESSEE WHICH IS WORTH RS. 2.35 CRORES, A MEAGER DIFFERENCE OF RS. 2449/- IS V ERY INSIGNIFICANT, WHICH MAY BE ARRIVED DUE TO ESTIMATI ON OF WORK IN PROGRESS. WE DO NOT FIND ANY JUSTIFICATION FOR S UCH ADDITION. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAM E. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2012. SD/ - SD (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST FEBRUARY, 2012. CPU* 1617