OM PRAKASH GUPTA, Jaipur V. ITO, BEHROR

ITA 341/JPR/2011

• Counselvise Citation: 34123114 RSA 2011
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Section: 131; 68

Judgement Text

1 ITA 341-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER ITA NO. 341/JP/2011 ASSTT. YEAR : 2005-06. SHRI OM PRAKASH GUPTA S/O VS. THE INCOME-TAX OFF ICER, SHRI GYARSI LAL GUPTA, WARD BEHROR, C/O PARKASH KIRANA STORE, BEHROR. NEAR BUCHAHERA SCHOOL, KOTPUTLI. (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT : 09.01.2012. ORDER DATE OF ORDER : 09.01.2012. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. FIRST ISSUE IS AGAINST RESTRICTING TRADING ADDIT ION TO RS. 25,000/- OUT OF TOTAL ADDITION MADE BY AO AT RS. 56,245/-. 3. THE ASSESSEE IS A RETAILER AND HAS SHOWN INCOME IN VIEW OF PROVISIONS OF SECTION 44AF @ 5% OF THE TOTAL TURNOVER. THE AO NOTICED TH AT PETTY SALES HAVE NOT BEEN VOUCHED. THEREFORE, THE DECLARED SALE IS NOT ACCEP TABLE. ACCORDINGLY, HE ENHANCED THE SALES TO RS. 25.00 LACS AGAINST RS. 21.00 LACS OR O DD SHOWN BY ASSESSEE AND BY NOTING THAT GP RATE IS NOT PROPER AS BOOKS OF ACCOUNT WERE NOT PROPERLY MAINTAINED. 2 ACCORDINGLY, HE APPLIED 11% GP RATE AGAINST 10.38% DECLARED BY ASSESSEE. CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED THAT ASSESSEE IS A RETAILER AND PROVISIONS OF SECTION 44AF IS APPLICABLE. THE LD. CIT (A) ALSO RESTRICTED THE TRADING ADDITION TO RS. 25,000/- AGAINST RS. 56,245/- MADE BY THE AO. 4. AFTER CONSIDERING THE WRITTEN SUBMISSIONS AND PE RUSING THE ORDERS OF THE AUTHORITIES BELOW, I FIND THAT ASSESSEE DESERVES TO SUCCEED PARTLY IN HIS APPEAL. IT IS SEEN THAT VARIOUS PETTY SALES WERE NOT RECORDED IN THE B OOKS OF ACCOUNT, THEREFORE, THE AO WAS RIGHT IN REJECTING BOOKS OF ACCOUNT. ESTIMATION OF SALES BY AO IS ALSO NOT UNREASONABLE. HOWEVER, I FEEL THAT IF A TRADING ADDITION OF RS. 1 5,000/- IS SUSTAINED AGAINST RS. 25,000/- SUSTAINED BY LD. CIT (A) THAT WILL MEET THE ENDS OF JUSTICE. I ORDER ACCORDINGLY. 5. NEXT ISSUE IS AGAINST CONFIRMING THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL AT RS. 18,672/- AGAINST RS. 37,772/- MAD E BY THE AO. 6. AO ESTIMATED THE HOUSEHOLD WITHDRAWAL AT RS. 90, 000/-. RS. 54,000/- WAS ESTIMATED ON ACCOUNT OF HOUSEHOLD EXPENSES AND RS. 36,000/- WAS ESTIMATED ON ACCOUNT OF CAR EXPENSES. ASSESSEE HAS SHOWN TOTAL WITHDRAW AL AT RS. 52,278/-. THEREFORE, THE REMAINING AMOUNT I.E. RS. 37,772/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT (A) ALLOWED THE GROUND IN PART AS HE HAS GIVEN A BENEFIT OF RS. 19,100/- WITHDRAWAL SHOWN BY WIFE OF THE ASSESSEE. THE REMAINING AMOUN T OF RS. 18,000/- OR ODD WAS CONFIRMED BY LD. CIT (A). 7. AFTER CONSIDERING THE SUBMISSIONS, I FIND THAT A SSESSEE DESERVES TO SUCCEED ON THIS GROUND. I HAVE ALREADY SUSTAINED A TRADING ADDITIO N OF RS. 15,000/- WHICH WILL TAKE CARE OF IF THERE IS ANY SHORTAGE ON ACCOUNT OF HOUSEHOLD WITHDRAWALS. THE ASSESSEE IS A RETAILER AND CAR IS USED FOR BUSINESS PURPOSES ONLY . THEREFORE, ESTIMATING CAR EXPENSES 3 SEPARATELY, IN MY VIEW WAS ALSO NOT JUSTIFIED. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I DELETE THE ENTIRE ADDITION ON ACCOUNT OF HOUSEHOLD WITHDRAWAL. 8. NEXT GROUND IS AGAINST SUSTAINING THE ADDITION O F RS. 1.00 LAC UNDER SECTION 68. 9. A LOAN OF RS. 1.00 LAC WAS TAKEN FROM ONE SMT. K IRAN BANSAL THROUGH DEMAND DRAFT ISSUED FROM ICICI BANK, MUMBAI. CONFIRMATION OF CASH CREDITOR, BANK STATEMENT, COPY OF INCOME-TAX RETURN WAS FILED BEFORE THE AO. HOWEVER, ASSESSEE COULD NOT PRODUCE THE PARTY, THEREFORE, HE MADE THE ADDITION BY NOT A CCEPTING THE CREDITWORTHINESS AND IDENTITY OF THE PERSON. THE LD. CIT (A) ALSO CONFI RMED THE ACTION OF THE AO. 10. AFTER CONSIDERING THE WRITTEN SUBMISSIONS AND O RDERS OF THE AUTHORITIES BELOW, I FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROU ND. UNDISPUTED FACT IS THAT ASSESSEE HAS REPAID THE AMOUNT OF LOAN IN SUBSEQUENT YEAR. SMT. KIRAN BANSAL HAS SHIFTED FROM KOTPUTLI TO MUMBAI, THEREFORE, IT IS BEYOND THE APP ROACH OF THE ASSESSEE TO PRODUCE SMT. KIRAN BANSAL. A REQUEST WAS MADE BY ASSESSEE THAT SHE MAY BE CALLED BY ISSUING NOTICE UNDER SECTION 131. I HAVE ALSO SEEN BANK STATEMENT AND IT IS SEEN THAT THERE IS NO CASH DEPOSIT IN THE BANK ACCOUNT OF SMT. KIRAN BANSAL. I T IS ALSO A MATTER OF FACT THAT FROM THE BANK ACCOUNT OF CREDITOR THE BANK DRAFT WAS ISSUED FROM MUMBAI. THEREFORE, IT WAS ALSO IMPOSSIBLE THAT ASSESSEE WENT TO MUMBAI AND DEPOSIT ED CASH IN THE BANK ACCOUNT OF SMT. KIRAN BANSAL AND THEN OBTAINED THE DEMAND DRAFT. A SSESSEE HAS DISCHARGED HIS ONUS LAY UPON HIM BY FILING DETAILS, COPY OF INCOME-TAX RETU RN. AO COULD HAVE EASILY VERIFIED EVEN FROM THE INCOME-TAX DEPARTMENT OF MUMBAI WHERE SHE IS ASSESSED TO TAX. IT IS ALSO WRONG ON THE PART OF THE LD. CIT (A) WHO MENTIONED ASSESSEE CANNOT DICTATE THE AO TO ISSUE SUMMON UNDER SECTION 131. THE ISSUANCE OF NO TICE UNDER SECTION 131 IS PROVIDED UNDER THE LAW AND IF THE AO WAS NOT SATISFIED WITH THE EXPLANATION FILED ON BEHALF OF THE 4 ASSESSEE, THEN HE COULD HAVE ISSUED NOTICE UNDER SE CTION 131 TO ASCERTAIN THE FACTUAL ASPECTS. THE ASSESSEE HAS DISCHARGED ITS BURDEN AN D IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. ORISSA CREDIT CORP ORATION LTD., 159 ITR 78, I HOLD THAT ADDITION MADE AND SUSTAINED UNDER SECTION 68 IS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 11. REMAINING GROUND IS AGAINST CONFIRMING THE DISA LLOWANCE OF RS. 1000/- AGAINST THE ADDITION OF RS. 3,000/- AND OF RS. 2437/- ON AC COUNT OF SUNDRY EXPENSES AND TELEPHONE EXPENSES. 12. THE LD. CIT (A) HAS MADE A SMALL SUSTENANCE OF ADDITION OF RS. 1,000/-, THEREFORE, I DO NOT FIND ANY UNREASONABLENESS ON THE PART OF T HE LD. CIT (A). ACCORDINGLY, THIS ADDITION IS SUSTAINED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 14. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 .01.2012. SD/- ( R.K. GUPTA ) JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHRI OM PRAKASH GUPTA, KOTPUTLI. THE ITO WARD BEHROR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 341/JP/2011) BY ORDER, AR ITAT JAIPUR. 5