The ITO, Ward-5(2), RAJKOT-GUJARAT V. Shri Dilipbhai Vallabhdas Pujara, RAJKOT-GUJARAT

ITA 320/RJT/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4356 (ITAT-RAJKOT)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR I
• Assessee Lawyers: D R ADHIA T
• Keywords: Period of limitation; Deemed to accrue or arise in india; Time period of passing order
• Section: 142(1); 5(2); 68; 144

Judgement Text

T K, IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT. .. A, R T . . T , T BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 320 /RJT/20 1 2 . I I / ASSESSMENT YEAR - 200 6 - 07 INCOME TAX OFFICER WARD 5(2) , ROOM NO.115, 1ST FLOOR, AAYAKAR BHAVAN, RACE COURSE RING ROAD, RAJKOT. ( D / APPELLANT) VS. SHRI DI LIPBHAI VALABHDAS PUJARA PROP. OF MAYUR TRADERS, 4, NAVALN AGAR, MAVDI MAIN ROAD, RAJKOT PAN: A GCPP4886B BRD / RESPONDENT I / REVENUE BY SHRI AVINASH KUMAR I /ASSESSEE BY SHRI. D R ADHIA T / DATE OF HEARING 16.4.2013 T / DATE OF PRONOUNCEMEN T 16. 4 .2013 / ORDER .. A, R T / T. K. SHARMA, J. M THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A) - IV , RAJKOT , DATED 19.3.2012 FOR THE ASSESSMENT YEAR 200 6 - 07 . 2. FACTS RELATING TO CONTROVERSY INVOLVED IN THIS APPEAL ARE THAT , THE ASSESSEE FILED RETURN OF INCOME ON 5.6.2006 DECLARING TOTAL INCOME OF RS.1,20,190/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (FOR BREVITY THE ACT) . THE CASE WAS SELECTED FOR SCRUTINY AND THE NOTICE WAS SENT TO THE ASSESSEE U/S 142(1) OF THE ACT. THE ASSESSEE DID NOT COMPLY WITH THE NOTICE. FINAL NOTICE DATED 14.11.2008 WAS SERVED BY AFFIXTURE THROUGH INSPECTOR. DUE TO LIMITATION PERIOD, THE CASE WAS DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD. ON PERUSAL OF THE RETURN, THE AO OBSERVED THAT THE ASSESSEE DEBITED RS.6,45,700/ - FOR PURCHASE AND RS.25,490/ - FOR KHARAJAT EXPENSES TO THE TRADING ACCOUNT. RS.83,708/ - DEBITED TO THE PROFIT AND LOSS ACCOUNT UNDER THE VARIOUS HEADS. IN ABSEN CE OF ANY PROOF THE SAME IS DISALLOWED AND MADE ASSESSMENT U/S 144 OF THE ACT ASSESSING THE TOTAL INCOME AT ITA NO.320/RJT/2012. 2 RS.11,71,660/ - . ON APPEAL, THE LD. CIT(A) REJECTED THE GROUND OF NON - SERVICE OF NOTICE AND DECIDED THE MATTER ON MERITS. 3. WITH REGARD TO TH E ADDITION OF RS.6,45,700/ - , THE APPELLANT SUBMITTED A COPY OF TRADING ACCOUNT OF GENERAL GOODS WHICH SHOWS THAT THERE IS A SALE OF GOODS OF RS.7,05,260/ - AND CLOSING STOCK OF RS.90,270/ - BESIDES THERE IS A GROSS PROFIT OF RS.1,24,340/ - . THE APPELLANT S UBMITTED THAT WHEN THE AO HAS ACCEPTED ALL THESE FIGURES WHY HE HAS DISBELIEVED THE PURCHASE OF RS.6,45,700/ - AND ALSO SUBMITTED THAT THE AO HAS CONSIDERED THE ABOVE FIGURES AND THEREFORE, KHARAJAT EXPENSES OF RS.25,490/ - CANNOT BE IGNORED. WITH REGARD TO THE ADDITION OF RS.83,708/ - ON ACCOUNT OF VARIOUS EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT, WITHOUT SPENDING EXPENDITURES NO EARNING CAN BE MADE I.E. ELECTRICITY, TELEPHONE, PETROL, TRAVELING, ACCOUNTS FEE, LOAN INTEREST ETC. WITH REGARD TO THE ADDITION OF RS.2,57,146/ - FROM RAJKOT NAGRIK BANK . IN SUPPORT OF THIS THE APPELLANT SUBMITTED A COPY OF LAND AND BUILDING HOUSING ACCOUNT FROM RAJKOT NAGRIK BANK IN WHICH A LOAN OF RS.2,50,000/ - WAS TAKEN ON 11.11.2005 AND ON 31.3.200 6 AND BALANCE OF RS.2,52,233 WAS OUTSTANDING. WITH REGARD TO CREDIT OF RS.39,423/ - THE APPELLANT STATED THAT THE CONCERN FIRM M/S AMBAR COCONU T S, IS CLOSED AND THEREFORE IT IS DIFFICULT TO PRODUCE ANY RECORD FOR THE SA ME . IN SUPPORT OF THIS THE APPELLANT RELIED ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF STATE OF KERALA V/S VELUKUTTY REPORTED IN 60 ITR 239(SC), BRIJ BHUSHAN LAL PARDUMAN KUMAR V/S CIT 115 ITR 524 (SC), K BALIAH V/S CIT 56 ITR 182 (MYS), CIT V /S LAXMINARAIN BADRIDAS 5 ITR 170 (SC). 4. THE LD. CIT(A) OBSERVED AND HELD THAT THE AO SERVED THE NOTICE TO THE ASSESSEE U/S 143(2) AND BY AFFIXTURE . BUT DUE TO CLOSURE OF BUSINESS THE NOTICE COULD NOT BE SERVED ON THE ASSESSEE, THEREFORE, THE LD. CIT(A) UPHELD THE ACTION OF ESTIMATION U/S 144 OF THE ACT. WITH REGARD TO THE ADDITION OF RS.2,57,146/ - TAKEN FROM RAJKOT NAGRIK BANK, THE LD. CIT(A) OBSERVED AND HELD THAT THE LOAN OF RS.2,50,000/ - WAS TAKEN ON 11.11.2005 AND ON 31.3.2006. THE RAJKOT NAGRIK BANK IS A WELL KNOWN BANK AND HENCE NO NECESSITY TO VERIFY THE IDENTITY AND CREDITWORTHINESS OF THE SAID BANK AND HENCE NO REASON FOR TREATING THE SAME AS DEEMED INCOME U/S 68 OF THE ACT. WITH REGARD TO THE ESTIMATION OF INCOME IS CONCERNED, THE LD. CIT(A) OBSERVED THAT SELL GOODS OF RS .7,05 LAKHS IS NOT POSSIBLE WITHOUT MAKING ANY PURCHASES AND WITHOUT INCURRING NORMAL OFFICE AND SALE AND PURCHASE RELATED EXPENSES. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE FAILED TO ESTABLISH CONFIRMATION FROM AMBER COCONUT FOR RS.39,423/ - . THEREFORE , HE CONFIRMED THE ADDITION OF RS.40,000/ - AND ITA NO.320/RJT/2012. 3 DELETED THE ADDITION OF RS.10,51,467/ - . AGGRIEVED WITH SUCH DELETION, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL WITH THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTING THE AO IN DELETING THE ADDITION OF RS.10,11,467/ - OUT OF THE TOTAL ADDITION OF RS.10,51,467/ - MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED PURCHASE/KHARAJAT EXPENSES AND UNEXPLAINED LOAN , WITHOUT CONSIDERING THE FACT THAT THE ASSESSMENT WAS FINALIZED U/S 1 44 OF THE ACT ON THE BASIS OF MATERIALS AVAILABLE WITH THE AO: . 5. AT THE TIME OF HEARING BEFORE US, SHRI AVINASH KUMAR, THE LD. DR , RELYING ON THE REASONING GIVEN BY THE AO IN THE ASSESSMENT FRAMED U/S 144 CONTENDED THAT THE AO RIGHTLY ASSESSED THE AFORESAID INCOME AMOUNTING TO 10,51,467/ - . AS AGAINST THIS, SHRI D.R.ADHIA, THE LD.AR , APPEARED ON BEHALF OF THE ASSESSEE, VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). THE LD. DR COULD NOT BRING ANY MATERIAL TO CONTROVERT THE FINDING OF THE LD.CIT(A ). WE FIND THAT THE LD. CIT(A) WHILE DELETING THE ADDITION OF RS.10,11,467/ - HAS GIVEN COGENT REASONS. THEREFORE, THERE IS A NO CASE FOR OUR INTERFERENCE . ACCORDINGLY, WE UPHOLD THE ACTION OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 6 . IN THE RESULT, REVENUES APPEAL STAND S DISMISSED. T HIS O RDER IS PRONOUNCED IN THE O PEN COURT ON THE DATE MENTIONED HEREINABOVE. SD SD ( CI / D. K. SRIVASTAVA) ( T I / T. K. SHARMA) / ACCOUNTANT MEMBER I / JUDICIAL MEMBER N/ ORDER DATE 18. 4. 2013 . /RAJKOT SRL RJO O / COPY OF ORDER F ORWARDED TO: - 1 D / APPELLANT - 2 BRD / RESPONDENT - 3 K / CONCERNED CIT 4. - / CIT (A) . 5 BK, T K, / DR, ITAT, RAJKOT 6 I / GUARD FILE. / BY ORD ER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.