The ITO, Ward-9(3), Surat V. Shri Narendra Shamjibhai Majithiya, Surat

ITA 3093/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89470 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: R N VEPARI
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO.3093/AHD/2011 / ASSESSMENT YEAR: 2008-09 ITO, WARD-9(3), SURAT SHRI NARENDRA SHAMJIBHAI MAJITHIYA, PROP: POOJA TEXTORIUM, 11/54, CHOWK BAZAR, MAIN ROAD, SURAT PAN : ACZPM 0774 G / // / (APPELLANT) / // / (RESPONDENT) REVENUE BY : SHRI M.K. SINGH, SR. DR. ASSESSEE(S) BY : SHRI R.N. VEPARI, AR ! '#$ ! '#$ ! '#$ ! '#$ / DATE OF HEARING : 18/05/2015 %& ! '#$ / // / DATE OF PRONOUNCEMENT: 22/05/2015 '( '( '( '(/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, SURAT DATED 08.08.2011, PERTAINING TO THE ASSESSMENT YEAR 2008- 09. 2. GROUND NO. 1 OF THE REVENUES APPEAL READS AS UN DER:-:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,7 6,453/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. BEFORE THE ASSESSING OFFICER, THE ASSES SEE DID NOT APPEAR AND DID NOT FURNISH ANY DETAILS OR EVEN DID NOT PRODUCE THE BOOKS OF ACCOUNTS. THE ITA NO.3093/AHD/2011 ITO VS. SHRI NARENDRA SHAMJIBHAI MAJITHIYA AY: 2008-09 2 ASSESSING OFFICER, THEREFORE, DISALLOWED 25% OF THE EXPENDITURE. ON APPEAL, THE CIT(A) DELETED THE SAME WITH THE FOLLOWING FIND INGS:- II. INSTEAD OF DISALLOWING 25% OF EXPENDITURE IN S TRAIGHT WAY, THE A.O. SHOULD HAVE THOUGHT OF COMPARING IT WITH EARLIER YE ARS. I FIND THE EXPENDITURE REASONABLE COMPARED TO EARLIER YEAR. HENCE, THE ADD ITION MADE ON THIS ACCOUNT IS HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 4. HOWEVER, AT THE TIME OF HEARING BEFORE US, WE AS KED THE LD. COUNSEL FOR THE ASSESSEE TO POINT OUT FROM THE FIGURES OF T HE RECEIPT AS WELL AS THE EXPENDITURE OF THE YEAR UNDER CONSIDERATION AND THE PRECEDING YEAR SO AS TO JUSTIFY THAT THE EXPENDITURE IS REASONABLE AS COMPA RED TO EARLIER YEARS. WE ALSO ASKED WHETHER ANY SUCH DETAILS WERE FURNISHED BEFORE THE CIT(A) ON THE BASIS OF WHICH THE CIT(A) RECORDED THE FINDING THAT THE EXPENDITURE WAS REASONABLE COMPARED TO EARLIER YEARS. THE LD. COUNS EL FAIRLY STATED THAT NO SUCH DETAILS WERE FURNISHED BEFORE THE CIT(A) AND E VEN IN THE PAPER-BOOK FILED BY THE ASSESSEE BEFORE US, NO SUCH DETAILS HA VE BEEN INCLUDED. HE, THEREFORE, SUBMITTED THAT THIS GROUND MAY BE DECIDE D ON MERITS. 5. WE FIND THAT THE ASSESSING OFFICER HAS RECORDED THE FINDING THAT THE ASSESSEE HAS DEBITED THE TOTAL EXPENSES OF RS.7,05, 813/- UNDER VARIOUS HEADS. BUT, NO BOOKS OF ACCOUNTS AND NO LEDGER ACCO UNTS HAVE BEEN FURNISHED. WITHOUT BOOKS AND VOUCHERS, NATURALLY TH E ASSESSING OFFICER COULD NOT VERIFY WHETHER THE EXPENSES WERE INCURRED FOR THE PURPOSE OF BUSINESS OR NOT AND THEREFORE, HE DISALLOWED 25% OF THE EXPENSES. NO SUCH DETAILS HAVE BEEN FURNISHED EITHER BEFORE THE CIT(A ) OR BEFORE US. THEREFORE, WE ARE OF THE OPINION THAT THE CIT(A) WA S NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF EXPENSES. WE, THEREFORE, REVERS E GROUND NO.1 OF THE REVENUES APPEAL AND RESTORE THE DISALLOWANCE OF RS .1,76,453/-. ITA NO.3093/AHD/2011 ITO VS. SHRI NARENDRA SHAMJIBHAI MAJITHIYA AY: 2008-09 3 6. GROUND NO.2 OF THE REVENUES APPEAL READS AS UND ER:- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.16, 07,000/- ON ACCOUNT OF UNSECURED LOAN. 7. THE FINDING OF THE CIT(A) IN THIS REGARD READS A S UNDER:- III. SO FAR AS THE ADDITION ON ACCOUNT OF UNSECURE D LOAN U/S 68 IS CONCERNED, IT IS FOUND THAT ALL THE LOANS ARE OLD ONES EXCEPT ONE LOAN OF RS.4,00,000/-. FOR THIS NEW LOAN ALL THE NECESSARY EVIDENCES HAVE BEEN SUBMITTED. THEREFORE, THE SOURCE OF THIS UNSECURED LOAN STANDS EXPLAINED AND ACCORDINGLY THE ADDITION MADE ON THIS ACCOUNT IS HEREBY DELETED AND THE GROU ND OF APPEAL IS ALLOWED. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT AT PAGE NO.31, THE ASSESSE E HAS GIVEN THE SUMMARY OF UNSECURED LOANS WHICH READS AS UNDER:- SR. NO. NAME AMOUNT RS. REMARK 1. BINITA N. MAJITHIA 50,000 OLD 2. DAMYANTIBEN N. MAJITHIA 4,00,000 CONFIRMATION, PA NO ETC GIVEN 3. MANHARBHAI S. MAJITHIA 6,72,000 OLD 4. N.S. MAJITHIA 3,50,000 OLD 5. SHOBHNABEN N. MAJITHIA 1,35,000 OLD TOTAL 16,07,000 9. FROM THIS SUMMARY, IT IS EVIDENT THAT EXCEPT THE LOAN OF RS.4,00,000/- FROM DAMYANTIBEN N. MAJITHIA, ALL OTHER CREDITS ARE OLD CREDITS. AT PAGE NO.32, THE ASSESSEE HAS GIVEN THE ACCOUNTS OF ALL O THER CREDITORS, EXCEPT DAMYANTIBEN N. MAJITHIA. FROM THESE COPIES OF ACCO UNTS, IT IS EVIDENT THAT ALL THE CREDITS ARE OPENING BALANCE BROUGHT FORWARD AND THERE IS NO FRESH CREDIT DURING THE YEAR UNDER CONSIDERATION. NOW, F ROM PAGE NO.33 ONWARDS, THERE IS EVIDENCE WITH REGARD TO DAMYANTIB EN N. MAJITHIA; AT PAGE NO.33, THERE IS HER CONFIRMATION IN WHICH HER PAN I S MENTIONED; AT PAGE NO.34, HER IT RETURNS; AT PAGE NO.36, HER BANK PASS -BOOK FROM WHERE THE ITA NO.3093/AHD/2011 ITO VS. SHRI NARENDRA SHAMJIBHAI MAJITHIYA AY: 2008-09 4 CHEQUE OF RS.4,00,000/- WAS ISSUED; AT PAGE NO.37, THERE IS PHOTOCOPY OF PAN CARD; AT PAGE NO.39, THERE IS HER BALANCE-SHEET IN WHICH THE ADVANCE OF RS.4,00,000/- TO THE ASSESSEE HAS BEEN DISCLOSED. F ROM THESE EVIDENCES, THE WE CONCUR WITH THE FINDING OF THE CIT(A) THAT, EXCE PT ONE LOAN OF RS.4,00,000/-, ALL OTHER LOANS ARE OLD LOANS AND WI TH REGARD TO LOAN OF RS.4,00,000/- THE ASSESSEE HAS FILED NECESSARY EVID ENCES TO DISCHARGE THE ONUS OF PROVING THE CASH CREDIT. THEREFORE, WE UPHO LD THE ORDER OF CIT(A) IN THIS REGARD AND REJECT THE GROUND NO.2 OF THE REVEN UES APPEAL. 10. GROUND NO.3 OF THE REVENUES APPEAL READS AS UN DER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.14, 19,274/- ON ACCOUNT OF DISALLOWANCE OF INTEREST. 11. AT THE TIME OF HEARING BEFORE US, THE LD. DEPAR TMENTAL REPRESENTATIVE STATED THAT THERE IS SOME TYPOGRAPHICAL ERROR IN TH IS GROUND AND THE ADDITION OF RS.14,19,274/- WAS NOT ON ACCOUNT OF DISALLOWANC E OF INTEREST BUT IT WAS ON ACCOUNT OF DISALLOWANCE OF SUNDRY CREDITORS. HE, THEREFORE, SUBMITTED THAT INSTEAD OF THE WORD INTEREST, THE WORD SUND RY CREDITORS MAY BE DEEMED TO BE SUBSTITUTED. THE LD. COUNSEL FOR THE A SSESSEE HAS NO OBJECTION TO THIS REQUEST OF THE LD. DEPARTMENTAL REPRESENTAT IVE. WE, THEREFORE, TREAT THE GROUND NO.3 TO BE MODIFIED AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.14, 19,274/- ON ACCOUNT OF DISALLOWANCE OF SUNDRY CREDITORS. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE CIT(A) DELETED THE ADDI TION WITH THE FOLLOWING OBSERVATIONS:- ITA NO.3093/AHD/2011 ITO VS. SHRI NARENDRA SHAMJIBHAI MAJITHIYA AY: 2008-09 5 IV. SO FAR AS THE ADDITION ON ACCOUNT OF SUNDRY CR EDITORS IS CONCERNED, THEY ARE ALL RELATED TO PURCHASES AND ARE REFLECTED IN T HE BOOKS OF ACCOUNT. HENCE, THE ADDITION MADE ON THIS ACCOUNT IS HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 13. WE FIND THAT AT PAGE NO.40 OF THE PAPER-BOOK, T HE ASSESSEE HAS GIVEN THE LIST OF SUNDRY CREDITORS AND THEREAFTER FROM PA GE NO.41 ONWARDS, HE HAS GIVEN THE COPY OF ACCOUNT OF EACH AND EVERY CREDITO RS AND FROM WHICH HE POINTED OUT THAT THERE WAS A RUNNING ACCOUNT IN RES PECT OF EACH AND EVERY PERSON. THE CREDIT WAS MAINLY ON ACCOUNT OF PURCHAS ES. THESE COPIES OF ACCOUNTS HAVE BEEN FORWARDED TO THE ASSESSING OFFIC ER IN REMAND PROCEEDINGS AND NO ADVERSE COMMENTS HAVE BEEN GIVEN BY HIM. IN THE ABOVE CIRCUMSTANCES, IN OUR OPINION, THE CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION WHICH WAS MADE BY THE ASSESSI NG OFFICER ON THE PRESUMPTION THAT THE ENTIRE SUNDRY CREDITORS SHOWN IN THE BALANCE-SHEET WAS BOGUS. WE, THEREFORE, UPHOLD THE ORDER OF THE C IT(A) IN THIS REGARD AND REJECT THE GROUND NO.3 OF THE REVENUES APPEAL. 14. GROUND NO.4 OF THE REVENUES APPEAL READS AS UN DER:- 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.41, 962/- ON ACCOUNT OF INTEREST EXPENSES. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSEE HAS CLAIMED INTEREST OF RS .41,962/- WHILE COMPUTING THE INCOME FROM HOUSE PROPERTIES. THE ASSESSING OFF ICER DISALLOWED THE INTEREST ON THE GROUND THAT THE ASSESSEE DID NOT FU RNISH THE CERTIFICATE FROM FINANCIAL INSTITUTION. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE FURNISHED THE CERTIFICATE FROM STANDARD CHARTERED BANK IN WHICH T HE BANK HAS CERTIFIED THE INTEREST AMOUNT OF RS.41,962/-. THIS ADDITIONAL EVI DENCE WAS FORWARDED BY ITA NO.3093/AHD/2011 ITO VS. SHRI NARENDRA SHAMJIBHAI MAJITHIYA AY: 2008-09 6 THE CIT(A) TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT GIVEN ANY ADVERSE REMARKS ON THIS CERTIFICATE OF STANDARD CHARTERED BANK WITH REGARD TO INTEREST PAYABLE BY THE ASSESSEE. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A) WITH REGARD TO GROUND NO.4 AND THE SAME IS UPHELD. THUS, THE GROUN D NO.4 OF THE REVENUES APPEAL IS REJECTED. 16. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND MAY, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 22/05/2015 BIJU T., PS '( ! ') *')' '( ! ') *')' '( ! ') *')' '( ! ') *')'/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ++ ' , / CONCERNED CIT 4. , ( ) / THE CIT(A) 5. )/0 ' , , / DR, ITAT, AHMEDABAD 6. 02 3 / GUARD FILE . '( '( '( '( / BY ORDER, TRUE COPY 4 44 4/ // / +5 +5 +5 +5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD