T.D. Ramakrishna, Bangalore V. ITO, Bangalore

ITA 312/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8764 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 29-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Keywords: Business expenditure
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER ITA NO. 312/ BANG/20 14 (ASSESSMENT YEAR: 2009 - 10 ) SHRI T.D.RAMAKRISHNA, FLAT NO.203, R.K.HOYSALA RESIDENCY, 3 RD MAIN, 9 TH CROSS, HOYSALANAGAR, BANGALORE - 560016. PAN:ABLPR 5616 F VS. APPELLANT INCOME - TAX OFFICER, WARD 6(4), BANGALORE. RESPONDENT APPELLANT BY: SHRI KIRAN KUMAR, ADVOCATE. RESPONDENT BY: DR.P.K.SRIHARI, AD DL.CIT(DR) DATE OF HEARING : 29/12/2015 DATE OF PRONOUNCEMENT: 06 / 01 /201 6 O R D E R PER ABRAHAM P GEORGE, AM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - II, BANGALORE, DATED 16/01/2014. THE ASSESSEE HAS ALTOGETHER RAISED 5 GROUNDS . OF THESE , GROUND NOS.1 TO 4 RELATE TO AN ADDITION OF RS.83,20,000/ - MADE BY AO U/S 68 OF THE IT ACT, 1961, CONFIRMED BY LD.CIT(A). ITA NO . 312 /BANG/201 4 SHRI T.D.RAMAKRISHNA PAGE 2 OF 6 2. FACTS APROPOS ARE THAT ASSESSEE IN THE BUSINESS OF CONSTRUCTION, HAD FILED RETURN OF INCOME FOR IMPUG NED ASSESSMENT YEAR DECLARING INCOME OF RS.8,74,340/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO FOUND FROM BALANCE - SHEET AS ON 31/3/2009 THAT A SUM OF RS.1,95,21,071/ - W AS SHOWN BY THE ASSESSEE AS ADVANCE RECEIPT FOR CUSTOMERS. ASSESSEE PROVIDED A LIST CONTAINING 24 NAMES AGAINST THIS ADVANCE. AO REQUIRED ASSESSEE TO FILE CONFIRMATION AND FULL DETAILS FOR ADVANCE CLAIMED TO HAVE BEEN RECEIVED FROM ITS CUSTOMERS. HOWEVER, ASSESSEE, EXCEPT FOR STATING THAT SOME OF THE ADVANCES WERE CLOSED AFTER ADJ USTING THE SALE AMOUNT IN LATER YEARS , DID NOT GIVE A SATISFACTORY REPLY. AS PER AO, A SUM OF RS. 6 6,76,000/ - OUT OF THE TOTAL CREDITS OF RS.1,95,21,071/ - STOOD UNSUBSTANTIATED. 3. AO ALSO VERIFIED UNSECURED LOANS OF RS.20,44,000/ - SHOWN B Y THE ASS ESSEE IN ITS BALANCE - SHEET. EXPLANATION OF THE ASSESSEE WAS THAT THESE AMOUNTS WERE RECEIVED FROM ITS LABOURERS THROUGH DDS AND THEY HA D LEFT IN 2010. AO WAS OF OPINION THAT EXPLANATION OF THE ASSESSEE WAS UNACCEPTABLE AS THE LABOURERS WHO WERE RECEIVING DAILY WAGES FROM ASSESSEE WOULD NOT HAVE HAD THE WHEREWITHAL MEANS TO GIVE ANY ADVANCE OR LOAN TO ASSESSEE. HE, THUS CONCLUDED THAT ASSESSEE WAS UNABLE TO SHOW ANY EVIDENCE FOR GENUINENESS OF ADVANCE OF RS.66,76,000/ - CLAIMED TO HAVE BEEN RECEIVED FROM H IS CUSTOMERS AND A SUM OF RS.20,44,000/ - CLAIMED TO HAVE BEEN RECEIVED AS LOAN FROM HIS LABOURERS. AN ADDITION OF RS.87,20,000/. - WAS MADE. ITA NO . 312 /BANG/201 4 SHRI T.D.RAMAKRISHNA PAGE 3 OF 6 4 . AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE CIT(A). ONE OF THE ADDITIONAL GROUNDS T AKEN BY ASSESSEE BEFORE CIT(A) WA S AS UNDER: SINCE RS.62,76,000/ - BEING ADVANCE FOR FLATS AND RS.20,44,000/ - BEING SECURITY DEPOSITS, WERE OPENING BALANCE AS ON 01.04.2008 AND SINCE THERE WAS NO SUM CREDITED DURING THE PREVIOUS YEAR, THE ADDITION OF THE SAME AS CASH CREDIT WIT HIN THE MEANING OF SEC.68 OF THE INCOME - TAX ACT, 1961 IS UNJUSTIFIED. FURTHER, AS PER ASSESSEE, MONEY RECEIVED BY HIM IN EARLIER YEARS COULD NOT HAVE BEEN CONSIDERED AS ADDITION FOR IMPUGNED ASSESSMENT YEAR. HOWEVER, IN RESPECT OF ONE ADVANCE CLAIMED T O HAVE BEEN RECEIVED FROM ONE SMT. P.GEETHA, ASSESSEE WAS ABLE TO PRODUCE EVIDENCE BEFORE LD.CIT(A). LD.CIT(A) CONFIRMED THE ADDITION MADE BY AO BUT FOR THE SUM OF RS.4 LAKHS BASED ON THE EVIDENCE FURNISHED BY ASSESSEE BEFORE HIM. 5. VIS - - VIS UNSECURED LO AN OF RS.20,44,000/ - , IT SEEMS, ASSESSEE WAS UNABLE TO PROVIDE ANY EVIDENCE BEFORE THE LD. CIT(A). SHE THUS CONFIRMED ADDITION TO THE EXTENT OF RS.83,20,000/ - . 6 . BEFORE US, LEARNED AR STRONGLY ASSAILING ORDERS OF THE LOWER AUTHORITIES SUBMITTED THAT THE AMOUNTS WHICH WERE ADDED ONLY REPRESENTED OPENING BALANCE S . ACCORDING TO HIM, TH IS GROUND , THOUGH RAISED BEFORE LD. CIT(A), WAS NOT ADJUDICATED BY HER. LD.AR RELYING ON SEC.68 OF THE ACT SUBMITTED THAT ONLY CREDITS DURING RELEVANT PREVIOUS YEAR COULD BE CONSIDERED FOR SUCH AN ADDITION. ITA NO . 312 /BANG/201 4 SHRI T.D.RAMAKRISHNA PAGE 4 OF 6 7 . PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . 8 . WE HAVE PERUSED THE ORDERS AND CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ASSESSEE HAD RAISED A GROUND BEFORE CIT(A) THAT A SUM OF RS.62,76,000/ - RECEIVED AS ADVANCE FOR LAND AND RS.20,44,000/ - RECEIVED AS DEPOSITS FROM ITS LABOURERS WERE OPENING BALANCE AS ON 31/3/2008. HOWEVER, CIT(A) HAS NOT GIVEN ANY FINDING IN THIS REGARD. W HETHER THESE AMOUNTS WE RE PART OF BALANCE SHEET OF THE ASSESSEE AS ON 31/3/2008 FILED BEFORE THE AUTHORITIES ALONG WITH RETURN FOR ASSESSMENT YEAR 2008 - 09 AND WHETHER PROVED BY THE ASSESSEE IN EARLIER YEARS WHEN IT WAS TAKEN, HAS NOT BEEN VERIFIED BY LOWER AUTHORITIES. WE ARE O F THE OPINION THAT THE CIT(A) OUGHT TO HAVE CONSIDERED THE MERITS OF THE GROUND AND DECIDED THE ISSUE. WE, THEREFORE, SET ASIDE ORDER OF THE CIT(A) WITH REGARD TO ADDITION MADE U/S 68 AND REMIT IT BACK TO THE CIT(A) FOR ADJUDICATING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE REPRODUCED BY US AT PARA .4 A BOVE, IN ACCORDANCE WITH LAW. GROUND S NO.1 TO 4 OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9 . IN HIS GROUND NO.5, ASSESSEE IS ASSAILING DISALLOWANCE OF RS.43,024/ - BEING MEDICAL EXPENDITU RE CLAIMED BY IT, WHICH WAS CONFIRMED BY CIT(A). AO HAD FOUND THAT THE ASSESSEE HAD DEBITED A SUM OF RS.43, 024 / - AS MEDICAL EXPENDITURE. SINCE ASSESSEE COULD NOT ESTABLISH NATURE OF EXPENDITURE AND HOW IT WAS RELATED TO HIS BUSINESS, AO RESORTED TO A DIS ALLOWANCE OF SUCH ITA NO . 312 /BANG/201 4 SHRI T.D.RAMAKRISHNA PAGE 5 OF 6 AMOUNT. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE CIT(A). BEFORE CIT(A) ALSO, ASSESSEE WAS NOT ABLE TO SUBSTANTIATE HIS CLAIM. CIT(A) CONFIRMED THE DISALLOWANCE. 10 . NOW BEFORE US, LEARNED AR SUBMITTED THAT MEDICAL EXPENDITURE IS EX PENDITURE WERE INCURRED FOR ASSESSEE S LABOURERS AND WAS A BUSINESS EXPENDITURE . P A R CONTRA, LEARNED DR SUPPORTED ORDERS OF THE AUTHORITIES BELOW. 11 . WE HAVE PERUSED THE ORDERS AND CONSIDERED THE RIVAL CONTENTIONS. ASSESSEE WAS NOT ABLE TO PRODUC E ANY EVIDENCE BEFORE LOWER AUTHORITIES FOR THE SUM OF RS.43,024/ - SHOWN BY HIM AS MEDICAL EXPENDITURE. IT IS TH E ONUS OF THE ASSESSEE TO PRODUCE EVIDENCE TO THE SATISFACTION OF THE AO FOR JUSTIFYING A CLAIM OF EXPENDITURE. ASSESSEE HAVING NOT DONE SO, W E ARE OF OPINION THAT LOWER AUTHORITIES WERE JUSTIFIED IN DISALLOWING THE SAME. WE DO NOT FIND ANY REASON TO INTERFERE. GROUND NO.5 OF THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 06 TH JANUARY, 2016 . SD/ - SD/ - ( N.V.VASUDEVAN ) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER E KSRINIVASULU ,SPS ITA NO . 312 /BANG/201 4 SHRI T.D.RAMAKRISHNA PAGE 6 OF 6 COPY TO: 1. AP PELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE