Shr Shrikant Chandrakant Ghate, Nagpur V. Income Tax Officer Ward -8(1),

ITA 324/NAG/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93303 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : NAGPUR BENCH : NAGPUR BEFORE SHRI MUKUL K. SHRAWAT JUDICIAL MEMBER & SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER. ITA NO. 324 / N A G /201 2 (A.Y. 200 6 - 07 ) SHRI SHRIKANT CHANDRAKANT GHATE, FLAT NO. T - 403, SHANTI APARTMENTS, GANESH NAGAR, NANDANVAN, NAGPUR. VS. ITO, WARD - 8(1), NAGPUR. PAN NO. AAQPG 3971 L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE. DEPARTMENT BY : SHRI NARENDRA KANE SR. DR DATE OF HEARING : 0 8 / 0 4 /201 5 . DATE OF PRONOUNCEMENT : 10 /0 4 /201 5 . O R D E R PER SHAMIM YAHYA , A.M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - II, NAGPUR , DATED 11 /0 1 /201 2 AND PERTAINS TO A.Y. 2006 - 07 . THE GROUNDS RAISED READ AS UNDER: - 1. LD. CIT(A) ERRED IN RETAINING THE ADDITION OF RS. 71,395/ - . THE SAME IS ARBITRARY, UNJUST AND NON - EXISTING. 2. LD. CIT(A) ERRED IN RETAINING THE ADDITION OF RS. 1 LAC AS BOGUS LIABILITY. 2 SHRIKANT CHANDRAKANT GHATE I.T.A.NO. 324/NAG/2012 3. ASSESSEE CRAVES LEAVE TO URGE ADDITIONAL GROUNDS AT THE TIME OF HEARING AS MAY BE NEC ESSARY. 2 IN THIS CASE ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT) . THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS AS CIVIL CONTRACTOR . THE ADDITIONS , WHICH ARE RELEVANT FOR THE PRESENT APPEAL , MADE BY THE ASSESSING OFFICER INCLUDED THE FOLLOWING: - 1) RS. 7 LAC DEPOSITED IN ASSESSEES ACCOUNT BY SHRI MORESHWAR B. DHOBLE. 2) RS. 1 LAC UNSECURED LOAN RECEIVED FROM SHRI MORESHWAR B. DHOBLE. 3) RS. 71,395/ - @ 8% PROFIT ON ADDITIONAL RECEIPT AS COMPUTED BY THE ASSESSING OFFICER. 3. UPON ASSESSEES APPEAL , LD. CIT(A) DELETED THE ADDITION OF RS. 7 LAC, HOWEVER, HE HELD THAT SINCE THE AMOUNT WAS DEPOSITED IN ASSESSEES ACCOUNT , 8% THEREIN SHOULD BE ADDED TO THE INCOME AS THE ASSESSEE HAD USED THE SAID AMOUNT IN HIS BUSINESS. THEREAFTER, LD. CIT(A) ALSO HELD THAT BALANCE ADDITION MADE BY THE ASSESSING OFFICER ON UNDECLARED TURNOVER OF ASSESSEE I.E. RS. 15,393/ - (RS. 71,395 RS. 56,000) @8% IS ALSO UPHE LD . HENCE, LD. CIT(A) CONCLUDED THAT ADDITION OF RS. 7 LAC IS DELETED, BUT THE ADDITION OF RS. 71,395/ - ON ACCOUNT OF PROFIT FROM 3 SHRIKANT CHANDRAKANT GHATE I.T.A.NO. 324/NAG/2012 UNDECLARED TURNOVER IS UPH E LD . LD. CIT(A) HA S ALSO OBSERVED THAT ASSESSEE HAD NOT PRESSED GROUND NO.4 WHICH RELATED TO THE ADD ITION OF RS. 1.6 LAC TOWARDS UNSECURED LOAN . H ENCE, LD. CIT(A) UPH E LD THE ADDITIONS IN THIS REGARD ALSO. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD L EARNED D.R. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL CONSIDERATION , IN OUR CONSIDERED OPINION , THE ISSUES RAISED CAN BE ADJUDICATED BY HEARING LEARNED D.R. AND PERUSING THE RECORD . 5. WE FIND THAT IN THIS CASE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 7 LAC CLAIMED TO HAVE BEEN RECEIVED FROM SHRI MORESHWAR B. DHOBLE , HOWEVER, LD. CIT(A) HAS ADDED 8% ON SUCH RECEIPT AS ASSESSEES INCOME. WE NOTE THAT ASSESSEE HAS EARNED 8% INCOME ON THE SAID RECEIPT OF RS. 7 LAC. WAS NOT EVEN THE CASE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT MADE AN Y ADDITION OF 8% INCOME ON RS. 7 LAC RECEIVED IN THIS REGARD . THE ADDITION OF 8 % INCOME WAS MADE BY THE ASSESSING OFFICER ON UNDISCLOSED TURNOVER OF WHICH RS. 7 LAC RECEIVED WAS NOT CONSIDERED AS PART OF ASSESSEES TURNOVER . HENCE, IN OUR CONSIDERED OPINION THIS ADDITION IS NOT SUSTAINABLE . T HOUGH WE AGREE THAT LD. CIT(A) HAS POWER OF ENHANCE MENT . BUT, WE NOTE THAT FACTS OF THE CASE DO NOT POINT OUT 4 SHRIKANT CHANDRAKANT GHATE I.T.A.NO. 324/NAG/2012 THAT THE ASSESSEE HAS EARNED 8% INCOME ON RS. 7 LAC DEPOSITED IN HIS ACCOUNT WHICH WAS WITHDRAWN ALSO. FURTHER, THE FACTS ON RECORD ALSO , DO NOT INDICATE THAT PROCEDURES RELATING TO ISSUE OF NOTICE ETC. WHEN THE LD. CIT(A) PROPOSES ENHANCEMENT HAS BEEN FOLLOWED OR NOT. IN THIS VIEW OF THE MATTER, IN OUR CONSIDERED OPINION, ADDITION OF RS. 56,000/ - OUT OF RS. 71,395/ - IS NOT SUSTAINABLE. 6 . AS REGARDS, REST OF THE ADDITION OF RS. 15,393/ - WE FIND THAT THE SAME IS SUSTAINABLE , TO BE ADDED IN THE HANDS OF THE ASSESSEE AS THE SAME RELAT ES TO 8% INCOME EARNED BY THE ASSESSEE ON THE UNDISCLOSED TURNOVER. 7 . AS REGARDS ADDITION OF RS. 1 LAC ON ACCOUNT OF BOGUS LIABILITY, WE FIND THAT THIS ISSUE WAS NOT PRESSED BEFORE LD. CIT(A) . ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THIS ADDITION. 8 . IN THE RESULT, THIS APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL , 201 5 ) . SD/ - SD/ - ( MUKUL K. SHRAWAT ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH APRIL , 201 5 . 5 SHRIKANT CHANDRAKANT GHATE I.T.A.NO. 324/NAG/2012 VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE . ASSISTANT REGISTRAR , ITAT, NAGPUR . 6 SHRIKANT CHANDRAKANT GHATE I.T.A.NO. 324/NAG/2012 DATE INITIAL ORIGINAL DICTATION PAID IS ENCLOSED AT THE END OF FILE 1. DRAFT DICTATED ON 9 .4.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 9 .4.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. DATE OF PRONOUNCEMENT SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER