J.C.I.T., Gwalior V. Sh. Laxmi Narayan Shivhare, Gwalior

ITA 345/AGR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60180 (ITAT-AGRA)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 345/AGRA/2011 ASSTT. YEAR : 2006-07 J.C.I.T., RANGE-3, VS. SHRI LAXMI NARAIN SHIVHAR E, GWALIOR. B-7, ASHOK VIHAR COLONY, GWALIOR. (PAN :AHIPS 2394E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI RAJENDRA SHARMA, ADVOCATE. DATE OF HEARING : 31.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 08.06.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 20.06.2011 FOR THE ASSESSMENT YEAR 20 06-07 ON THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE LAW THE CIT(A) HAS ERRED IN HOLDING THE ASSESSMENT ORDER DATED 21.12.2 009 FOR ASSESSMENT YEAR 2006-07 AS INFRUCTUOUS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.66,13,271/- MADE ON ACCOUNT OF NET PROFIT RATE @ 5% OF TOTAL SALES. ITA NO. 345/AGRA/2011 2 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.2,28,82,072/- MADE ON ACCOUNT OF SUPPRESSED SALE . 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.15,00,000/- MADE ON ACCOUNT OF UNEXPLAINED INVES TMENT U/S. 69. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.6,42,500/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN FDRS U /S. 69. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.5,02,000/- MADE ON ACCOUNT OF INCOME FROM OTHER SOURCES OUT OF AGRICULTURAL INCOME. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.1,00,000/- MADE U/S. 68 OF THE INCOME-TAX ACT. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITIONS OF RS.1,17,695/- MADE ON ACCOUNT OF DISALLOWANCE OF SETTING OFF INTE REST U/S. 24(B) OF THE INCOME TAX ACT. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GROUNDS OF APPEALS RAISED BY THE REVENUE DO NOT ARISE OUT O F THE ORDER OF THE LD. CIT(A) AND HAVE NOT BEEN AUTHORIZED BY THE LD. CIT, GWALIOR FOR FILING THE APPEAL ON THESE GROUNDS AS PER THE AUTHORIZATION AV AILABLE ON RECORD. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE AO AND ALSO SUBMITTED THAT HE WOULD INTIMATE AS TO HOW THE ABOVE MISTAKE HAS C REPT IN FILING THE APPEAL ITA NO. 345/AGRA/2011 3 ON SUCH GROUNDS OF APPEAL WHICH HAVE NOT BEEN AUTHO RIZED AND APPROVED BY THE LD. CIT, BY NEXT DAY. HOWEVER, NOTHING IS EXPLA INED IN THIS REGARD. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND GONE THROUGH THE MATERIAL ON RECORD. THE AO PASSED THE A SSESSMENT ORDER U/S. 143(3) DATED 30.12.2008, WHICH WAS SUBJECT MATTER I N APPEAL BEFORE THE LD. CIT(A). THE AO APPLIED NET PROFIT RATE OF 5% AS AGA INST NET PROFIT SHOWN BY THE ASSESSEE AT THE RATE OF 1.11% FOR THE PURPOSE O F COMPUTING THE NET PROFIT AT RS.77,57,375/-. THE AO ALSO COMPUTED AGRICULTURAL I NCOME AND BALANCE WAS ADDED AS INCOME FROM OTHER SOURCES IN A SUM OF RS.5 ,02,000/-. THE AO MADE FURTHER ADDITION OF RS.1,00,000/- BEING CASH CREDIT IN THE NAME OF M/S RADHEY BISCUITS BECAUSE THE ASSESSEE COULD NOT PRODUCE COP Y OF BANK ACCOUNT. THE AO DID NOT GIVE BENEFIT OF INTEREST PAYMENT CLAIMED U/S. 24(B) IN A SUM OF RS.1,17,695/- BECAUSE NO EVIDENCE WAS PRODUCED BEFO RE THE AO FOR PAYMENT OF INTEREST. THE LD. CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF THE SAME ASS ESSEE DIRECTED TO APPLY NET PROFIT RATE OF 1.3%. SEPARATE ADDITION OF RS.5,02,0 00/- WAS TELESCOPED OUT OF THE NET PROFIT ADDITION AND IT WAS DIRECTED THAT NO SEPARATE ADDITION IS CALLED FOR. THE ADDITION OF CASH CREDIT U/S. 68 WAS DELETE D BECAUSE CONFIRMATION WAS FILED BEFORE THE AO AND IN THE SUCCEEDING YEAR THE AO ACCEPTED THE CLAIM OF ITA NO. 345/AGRA/2011 4 THE ASSESSEE IN THE PROCEEDINGS U/S. 143(3) OF THE IT ACT. THE ASSESSEE WAS ALLOWED DEDUCTION OF PAYMENT OF INTEREST U/S. 24(B) OF THE IT ACT BECAUSE SAID AMOUNT WAS DEBITED THROUGH BANK ACCOUNT OF THE ASSE SSEE. THE LD. COUNSEL FOR THE ASSESSEE IS, THEREFORE, JUSTIFIED IN CONTENDING THAT THE GROUNDS OF APPEAL RAISED IN THE DEPARTMENTAL APPEAL DO NOT ARISE FROM THE ORDER OF THE LD. CIT(A). IN THE FIRST GROUND OF APPEAL, THE REVENUE CHALLENG ED THE ORDER OF THE LD. CIT(A) IN HOLDING THAT THE ASSESSMENT ORDER DATED 2 1.12.2009 AS INFRUCTUOUS. THIS GROUND IS NOT DECIDED BY THE LD. CIT(A) IN THE IMPUGNED ORDER AND FURTHER THE ASSESSMENT ORDER IN APPEAL BEFORE THE L D. CIT(A) WAS DATED 30.12.2008 AND NOT 21.12.2009. FURTHER ON GROUND NO . 2, THE REVENUE CHALLENGED THE DELETION OF ADDITION OF RS.66,13,271 /- WHICH ALSO DOES NOT ARISE OUT OF THE ORDER OF THE LD. CIT(A). GROUND NO . 3, 4 & 5 ARE ALSO NOT ARISING OUT OF THE ORDER OF THE LD. CIT(A). ACCORDI NG TO SECTION 253(2) OF THE IT ACT, THE COMMISSIONER MAY, IF OBJECTS TO ANY ORD ER PASSED BY COMMISSIONER (APPEALS), DIRECT THE ASSESSING OFFICE R TO FILE APPEAL BEFORE THE APPELLATE TRIBUNAL AGAINST SUCH ORDER. THEREFORE, B EFORE FILING OF THE APPEAL BY THE ASSESSING OFFICER, THE DIRECTIONS/AUTHORIZAT ION OF THE COMMISSIONER IS REQUIRED. THE AUTHORIZATION OF THE COMMISSIONER IS AVAILABLE ON RECORD DATED 05.09.2011 IN WHICH GROUND NO. 1 TO 5 HAVE NOT BEEN AUTHORIZED BY THE LD. COMMISSIONER FOR FILING THE APPEAL BEFORE THE TRIBU NAL. THEREFORE, THESE ITA NO. 345/AGRA/2011 5 GROUNDS HAVE NOT BEEN AUTHORIZED BY THE LD. COMMISS IONER FOR THE PURPOSE OF FILING THE APPEALS BEFORE THE TRIBUNAL AND FURTHER THESE ARE NOT ARISING OUT OF THE IMPUGNED ORDER OF LD. CIT(A). THE APPEAL OF THE REVENUE ON GROUND NO. 1 TO 5 IS, THEREFORE, INFRUCTUOUS AND ALSO NOT MAINTA INABLE. 3.1 ON GROUND NO. 6, THE LD. CIT(A) HAS GIVEN TELES COPING BENEFIT OUT OF THE PART ADDITION MAINTAINED ON ACCOUNT OF NET PROF IT ADDITION AND NO SEPARATE ADDITION WAS MADE. THE LD. CIT WHILE GIVING AUTHORI ZATION HAS CHALLENGED THE ORDER OF LD. CIT(A) IN GIVING TELESCOPING BENEFIT T O THE ASSESSEE. THE GROUND OF APPEAL APPROVED BY THE LD. CIT HAS NOT BEEN INCO RPORATED IN GROUND NO. 6 OF THE DEPARTMENTAL APPEAL. THEREFORE, THE SAME IS ALSO DIFFERENT GROUND. AS SUCH, THE AO WAS NOT COMPETENT TO RAISE DIFFERENT G ROUND IN APPEAL, WHICH WAS NOT AUTHORIZED BY THE LD. CIT. GROUND NO. 6 OF THE DEPARTMENTAL APPEAL IS ALSO, THEREFORE, LIABLE TO BE REJECTED. 3.2 ON GROUND NO. 7 FOR DELETING THE ADDITION OF RS .1,00,000/- OF CASH CREDITS, THE AO MADE ADDITION BECAUSE THE ASSESSEE DID NOT PRODUCE COPY OF BANK ACCOUNT AND ACKNOWLEDGEMENT OF INCOME-TAX RETU RN IN THE CASE OF M/S. RADHEY BISCUITS. HOWEVER, THE LD. CITA) ON EXAMINAT ION OF THE CONFIRMATION FOUND THAT THE SAME AMOUNT IS APPEARING IN THE BALA NCE SHEET OF THE ITA NO. 345/AGRA/2011 6 SUCCEEDING YEAR AND THE AO ACCEPTED THE GENUINENESS OF THE SAME IN THE PROCEEDINGS U/S. 143(3) OF THE IT ACT BECAUSE NO AD VERSE INFERENCE HAS BEEN DRAWN AGAINST THE ASSESSEE. THE LD. CIT IN THE AUTH ORIZATION APPROVED THE GROUND OF APPEAL CHALLENGING THE DELETION OF ADDITI ON OF RS.1,00,000/- BECAUSE THE LD. CIT(A) CONSIDERED THE FRESH EVIDENCES WITHO UT AFFORDING ANY OPPORTUNITY TO THE AO. SUCH GROUND IS NOT RAISED BY THE AO IN GROUND NO. 7 AS ABOVE. THEREFORE, WHATEVER GROUND WAS APPROVED B Y THE LD. CIT FOR THE PURPOSE OF FILING THE APPEAL BEFORE THE TRIBUNAL HA S NOT BEEN TAKEN CARE BY THE AO. THEREFORE, GROUND NO. 7 IS ALSO INFRUCTUOUS AND IS NOT APPROVED BY THE LD. CIT FOR THE PURPOSE OF FILING THE APPEAL. 3.3 ON GROUND NO.8, THE REVENUE CHALLENGED THE DELE TION OF RS.1,17,695/- BEING INTEREST U/S. 24(B) OF THE IT ACT. THE LD. CI T(A) FOUND THAT INTEREST WAS PAID THROUGH BANK BECAUSE THE SAID AMOUNT WAS DEBIT ED IN THE BANK ACCOUNT. THEREFORE, SET OFF OF THE SAME WAS GIVEN TO THE ASS ESSEE BEING THE INTEREST PAID ON THE HOUSE LOAN. NO CONTRARY MATERIAL HAS BEEN PR ODUCED BEFORE US TO CONTRADICT THE FINDINGS OF THE LD. CIT(A). THIS GRO UND IS MORE OR LESS SAME AS WAS APPROVED BY THE LD. CIT FOR THE PURPOSE OF FILI NG THE APPEAL BEFORE THE TRIBUNAL. ITA NO. 345/AGRA/2011 7 3.4 IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR TH AT THE GROUND NO. 1 TO 5 OF THE DEPARTMENTAL APPEAL DO NOT ARISE OUT OF THE IMP UGNED ORDER AND HAVE ALSO NOT BEEN APPROVED AND AUTHORIZED BY THE LD. CIT FOR THE PURPOSE OF FILING THE APPEAL BEFORE THE TRIBUNAL. GROUND NO. 6 & 7 THOUGH ARISE FROM THE ORDER OF THE LD. CIT(A), BUT WHAT WAS AUTHORIZED BY THE LD. CIT FOR THE PURPOSE OF FILING THE APPEAL HAS NOT BEEN TAKEN CARE OF BY THE AO. THEREFORE, THE AO IS NOT COMPETENT TO FILE THE APPEAL ON THE GROUNDS OTH ER THAN THE GROUNDS APPROVED BY THE LD. CIT. THEREFORE, IN OUR VIEW, TH E DEPARTMENTAL APPEAL ON GROUNDS NOS. 1 TO 7 ARE INFRUCTUOUS AND NOT MAINTAI NABLE AND AS SUCH THESE GROUNDS ARE LIABLE TO BE REJECTED. WE, ACCORDINGLY, REJECT THE GROUNDS NOS. 1 TO 7 OF THE DEPARTMENTAL APPEAL AND DISMISS THE DEPART MENTAL APPEAL ON THESE GROUNDS. 3.5 GROUND NO. 8 ARISES OUT OF THE ORDER OF THE LD. CIT(A) AND IS ALSO APPROVED BY THE LD. CIT FOR THE PURPOSE OF FILING T HE APPEAL. THE LD. CIT(A) FOUND THAT THE INTEREST ON HOUSING LOAN HAS BEEN PA ID THROUGH BANK. IT HAS BEEN SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY ALLOWED S ET OFF. IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD, WE DO NOT JUSTIFY ANY INTERFERENCE IN THE ORDER OF THE LD. CIT(A). GROUND NO. 8 OF THE REVENUES APPEA L IS, ACCORDINGLY DISMISSED. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT GROUND NO. 1 TO 5 ARE ITA NO. 345/AGRA/2011 8 NOT ARISING OUT OF THE IMPUGNED ORDER AND HAVE NOT BEEN APPROVED BY THE LD. CIT. WE FURTHER HOLD THAT GROUND NO. 6 & 7 HAVE NOT BEEN AUTHORIZED AND RAISED AS PER DIRECTION OF THE LD. CIT. THEREFORE, THE APPEAL OF THE REVENUE ON THESE GROUNDS IS NOT MAINTAINABLE AND IS INFRUCTUOU S. THERE IS NO MERIT IN GROUND NO. 8 OF THE DEPARTMENTAL APPEAL. ACCORDINGL Y, THE DEPARTMENTAL APPEAL IS LIABLE TO BE DISMISSED. 4. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. 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