ACIT, JODHPUR V. Smt. Kiran Kanwar, JODHPUR

ITA 358/JODH/2013

• Counselvise Citation: 35823314 RSA 2013
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: NK JAIN; N M RANKA RAJESH SURANA
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.358/JODH/2013 ASSESSMENT YEAR: 2008-09 ASSTT. COMMISSIONER OF INCOME TAX, VS. SMT. K IRAN KANWAR, CIRCLE-2, JODHPUR. L/H SHRI RAJENDRA SINGH KHETASAR, VILLAGE TALIYA KHETASAR, TEHSIL OSIAN, JODHPUR. (PAN: EBQPS 4060 D). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.A. JOSHI, D.R. RESPONDENT BY : S/SHRI N.M. RANKA, RAJESH SURANA & N.K. JAIN DATE OF HEARING : 22.11.2013 DATE OF PRONOUNCEMENT : 25.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2008 -09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 14.03.2013. 2. THE FACTS OF THE SOLE ISSUE INVOLVED IN THIS APP EAL ARE THAT THE ASSESSEE, AS INDIVIDUAL, CARRIED ON BUSINESS OF REAL ESTATE, PUR CHASE AGENT AND BROKER. FOR THE A.Y. 2008-09 HIS RETURN WAS FILED THROUGH HIS WIDOW SMT. KIRAN KANWAR AS HIS LEGAL HEIR IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961, 2 ITA NO.358/JODH/2013 A.Y. 2008-09 THE ACT FOR SHORT. IN THIS RETURN, INCOME WAS SH OWN AT RS.6,21,29,650/- ON THE GROSS RECEIPTS OF RS.7,51,26,358/- WHICH INCLUDED I NTEREST FROM BANK OF RS.1,26,358/-. THE ASSESSEE ACTED AS BROKER FOR TH E COMPANY PACL INDIA LIMITED BASED AT JAIPUR WITH ITS CORPORATE OFFICE IN NEW DE LHI. FROM THE RECORDS OBTAINED BY THE DEPARTMENT INCLUDING A COPY OF COURT CASE FI LED AGAINST THE ASSESSEE BY THE COMPANY IT WAS NOTICED THAT THE ASSESSEE HAD RECEIV ED SUBSTANTIAL AMOUNTS WITH AN UNDERSTANDING THAT IN LIEU OF COMMISSION THE ASSESS EE WOULD ARRANGE PURCHASE OF LAND FOR PACL OR THE CUSTOMERS IDENTIFIED BY THE PA CL. FOR A.Y. 2007-08 THE ASSESSEE HAD ALSO BEEN ASSESSED ON SUCH COMMISSION INCOME. THE ASSESSEE ALSO FURNISHED COMPUTATION OF COMMISSION ACCOUNTED FOR I N THE BOOKS OF ACCOUNTS WHICH ARE DULY AUDITED. HOWEVER, THE VOUCHERS TOWA RDS EXPENDITURE WERE FOUND TO BE MAINLY SELF-MADE. THE ASSESSEE, HOWEVER, DENIED HIS RELATIONSHIP WITH PACL AS ITS BROKER. IN ORDER TO DEFEND A CIVIL SUIT FIL ED BY PACL AGAINST HIM IN LOWER COURT. PACL HAS ALSO DENIED THE RELATIONSHIP BETWE EN THEM OF A CONTRACTOR AND CONTRACTEE. HOWEVER, THE ASSESSEE HAS VOLUNTARILY RETURNED GROSS RECEIPT OF AROUND RS.7,50,00,000/- AS COMMISSION AND AFTER CLAIMING E XPENSES AND AFTER ADJUSTING DISALLOWANCE HAS RETURNED INCOME OF RS.6,21,29,650/ - INCLUDING BANK INTEREST AS DISCUSSED ABOVE BECAUSE SOME OF THE EXPENSES CLAIME D WERE FOUND TO BE PROVED THROUGH SELF-MADE VOUCHER. THE A.O. THOUGHT IT PRO PER TO DISALLOW A PORTION OF THE EXPENDITURE. THEREFORE, HE HAS DISALLOWED A LUMP S UM AMOUNT OF RS.20,00,000/- 3 ITA NO.358/JODH/2013 A.Y. 2008-09 FROM THE EXPENDITURE SHOWN IN THE P&L ACCOUNT AND H AS ADDED THE SAME TOWARDS ASSESSEES INCOME. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THIS ADDITION. NOW THE REVENUE IS AGGRIEVED AND HA S CHALLENGED THIS ADDITION 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ENTIRE RECORDS. THE LD. DEPARTMENTAL REPRESENTATIVE HAS J USTIFIED LUMP SUM DISALLOWANCE OF RS.20,00,000/- BASED ON LAST YEARS ASSESSMENT W HERE THE ASSESSEE HAD HIMSELF OFFERED DISALLOWANCE OF RS.50,00,000/- OUT OF VARIO US EXPENDITURE CLAIMED IN THE P&L ACCOUNT. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A) AND HAS SUBMITTED THAT BOTH THE ASSESSMENT YEARS ARE SEPARATE AND CANNOT BE FOLLOWED FOR DISALLOWANCE PU RPOSE PARTICULARLY WHEN THE RATIO OF EXPENSES QUA THE COMMISSION EARNED IS ALMO ST SAME IN A.Y. 2007-08 AND 2008-09. HE HAS SUBMITTED THAT THIS RATIO COMES EV EN AFTER SURRENDERING AMOUNT OF RS.50,00,000/- AS HAS BEEN CLAIMED BY THE REVENUE. 5. BEFORE US, BOTH THE PARTIES HAVE REITERATED THEI R EARLIER STAND. WE HAVE FOUND IT FOR A FACT THAT THE BOOKS OF ACCOUNT OF THE ASSE SSEE ARE DULY AUDITED. THE FAILURE TO SUPPLY SOME OF THE DOCUMENTS AND CLARIFICATION O F THE QUERIES RAISED REGARDING EXPENDITURE, THE FACTUM THAT THE ASSESSEE HAD SUDDE NLY DIED AND HIS WIFE WAS NOT AWARE ABOUT THE BUSINESS ACTIVITIES SEEMS TO BE A G OOD GROUND. THE ASSESSEE VOLUNTARILY RETURNED GROSS RECEIPTS AFTER CLAIMING AN EXPENDITURE OF 4 ITA NO.358/JODH/2013 A.Y. 2008-09 RS.1,07,65,624/- WHICH IS 11.69%. IN THE LAST YEAR IT WAS 16.80%. IN OUR OPINION, THE EXPENSES CLAIMED ARE NOT EXCESSIVE RATHER THE E XPENSES CLAIMED ARE ON LOWER SIDE IN THIS YEAR. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE FOR CHALLENGING THE DELETION OF LUMP SU M ADDITION OF RS.20,00,000/- OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 25.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH NOVEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR