Amit Kumar Patwari, V. DCIT,

ITA 36/RAN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2182 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 30-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDIP RAJ
• Assessee Lawyers: B K ISHWAR
• Keywords: Unexplained cash credit; Source of fund; Bad and doubtful debts
• Section: 40A(3); 143(3); 194C

Judgement Text

1 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BEFORE SHRI SHAMIM YAHYA (AM) & SHRI PARTHA SARATHI CHAUDHURY (JM) I.T.A. NO.36/RAN/2014: ASSESSMENT YEAR :2010-2011 AMIT KUMAR PATWARI, PROP. M/S. B.K.ENTERPRISES, BHAGALPUR ROAD, DUMKA. V S DCIT, CIRCLE-III, DEOGHAR PAN/GIR NO. : AKHPP 3534 H (APPELLANT ) .. RESPONDENT I.T.A. NO.16/RAN/2014: ASSESSMENT YEAR :2010-2011 ) DCIT, CIRCLE-III, DEOGHAR V S AMIT KUMAR PATWARI, PROP. M/S. B.K.ENTERPRISES, BHAGALPUR ROAD, DUMKA. PAN/GIR NO. : AKHPP 3534 H (APPELLANT ) .. RESPONDENT ASSESSEE BY : SHRI B.K.ISHWAR REVENUE BY : SHRI SANDIP RAJ, ADDL. CIT DATE OF HEARING : 01-03-2016 DATE OF PRONOUNCEMENT : 04 - 3-2016 O R D E R PER PARTHASARATHI CHAUDHURY, JUDICIAL MEMBER: THE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER D ATED 31.10.2013 OF THE LD CIT(A), DHANBAD, IN THE MATTER OF ASSESSM ENT YEAR 143(3) OF THE I.T.ACT, 1961, FOR THE ASSESSMENT YEAR 2010-2011. 2 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T.ACT DATED 17.12.2012 WERE THAT THE ASSESSEE DERIVES INCOME FROM CONTRACT BUSINESS. HE FILED THE RETURN OF INCOME ON 5.10.2010 FOR ASSESSMENT YEAR 2010-2011 S HOWING TOTAL INCOME OF RS.12,93,317/-. THE CASE WAS SELECTED FO R SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT WITH ASSESSED INCOME BEING RS.1,24,33,771/-, INTER ALIA, DISALLOWING THE VARIOUS CLAIM OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE LD CIT(A), WHO PARTLY ALLOWED THE APPEAL . HENCE, BOTH THE SIDES ARE IN APPEAL BEFORE US. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1.THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4,50,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN THE NAME OF SMT. POOJA AGARWAL (WIFE OF THE ASSESSEE ) WITHO UT EXAMINING THE CREDITWORTHINESS OF THE ALLEGED LENDERS AS THE CASH WAS DEPOSITED IN THEIR BANK ON DIFFERENT DATES AS LOAN. MERE PROOF OF IDENTITY OF CREDITORS OR THAT TRANSACTION WAS BY CH EQUE/ DD IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF CREDIT T MAN GILAL JAIN VS 1T0 { MAD) 315ITR105 AND C1T VS DECISION FINANCE P.LTD. { CAL ) 208ITR 465. 2. THE LD. CIT(A) HAS ERRED IN DELETING DISALLOWAN CE OF RS.6,33,078 = RS.75,48,859 -RS.11,15.781) MADE U/S 40(A(IA) OF THE 1-T.ACT IN THE LIGHT OF JUDICIAL PRONOUNCEMENT IN THE CASE OF VALIBHAI KHANBHAI MANKIND VS DY, CIT BY IT AT AHMED ABAD 122 ITR 345. WITHOUT PREJUDICE TO ABOVE LEGAL POSITION THERE IS NO EVIDENCE SHOWING THAT THE ASSESSEE HAS FURNISHED THE STATUTO RY FORM TO THE PRESCRIBED INCOME TAX AUTHORITY. 3 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 3. THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING TH E ADDITION OF RS.1,23,624 ON ACCOUNT OF BAD DEBTS AS THE ASSESSEE FAILED TO PRODUCE EVIDENCE IN RESPECT OF THIS CLAIM. 4. THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING TH E ADDITION OF RS.4,25,026/- ON ACCOUNT OF ACCIDENT CLAIMS AS THE LD. CIT(A) OVERLOOKED THE DECISION IN THE CASE OF INDIAN MOLAS SES CO.P LTD VS CIT 1959 (37 ITR 66 (SUPREME COURT) CITED IN THE AS STT. ORDER. 5. THE LD. CLT(AJ WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4,21,510/-(RS.5,83 J 870-RS.1,62,510 ON ACCOUNT OF REPAIRS AND MAINTENANCE EXPENSES AS THE ASSESSEE FAILED TO DISCHARGE HIS ONUS. 6. THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.72,523/- ON ACCOUNT OF REPAYMENT OF LOAN AS THE PAYMENTS WERE NOT MADE THROUGH CASH BOOK. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. FOR THAT THE LD CIT(A) HAS ERRED IN NOT DETERMI NING THE INCOME ON ESTIMATE BASIS. 2. FOR THAT THE LD CIT(A) HAS ERRED IN CONFIRMING T HE UNSECURED LOAN RS.3,02,700/- INCLUDING INTEREST RS.2700.00. 3. THAT THE LD CIT(A) HAS ERRED IN UPHOLDING DISALL OWANCE OF RS.5,51,162/- AND RS.5,85,1809/- U/S.40A(3) OF THE I.T.ACT. 4. FOR THAT THE LD CIT(A) HAS ERRED IN UPHOLDING DI SALLOWANCE U/S./40(A)(IA) AMOUNTING TO RS.11,15,781/-. 5. FOR THAT THE LD CIT(A) HAS ERRED IN CONFIRMING A DDITION OF RS.32,484/- UNDER INSURANCE EXPENSES. 6. FOR THAT THE LD CIT(A) HAS ERRED IN CONFIRMING A DDITION OF RS.1,62,510/- & RS.4,09,825/- ON ACCOUNT OF BOGUS P URCHASES & TYRES RESOLE CHARGES. 5. GROUND NO.1 OF REVENUE APPEAL RELATES TO ADDITIO N OF RS.4,50,000/- IN RESPECT OF UNSECURED LOAN RECEIVED FROM SMT. POO JA AGARWAL. 4 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 6. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.4 ,50,000/- TOWARDS LOAN TAKEN FROM SMT. POOJA AGARWAL. 6.1 AS REGARDS THE LOAN FROM SMT. POOJA AGARWAL, T HE OBSERVATION OF THE ASSESSING OFFICER WAS THAT IN HER BANK ACCOUNTS , THERE ARE CASH DEPOSITS ON DIFFERENT DATES AND LOAN HAS BEEN GIVEN THROUGH THE BANK ACCOUNT. SINCE THE ASSESSEE FAILED TO JUSTIFY THE CREDITWORTHINESS OF THE LOAN AMOUNT OF RS.4,50,000/-, THE ASSESSING OFFICER TREATED THE SAME UN EXPLAINED CASH CREDIT AND ADDED THE SAME TO THE TOT AL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS SHOWN INTEREST PAID RS.40,000/- ON THIS UNSECURED LOAN BY BOOK ADJUSTMENT, THE SAID AMOUNT WAS ALSO ADDED TO THE INCOME OF THE ASS ESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER I N APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 7 BEFORE THE LD CIT(A), IT WAS SUBMITTED THAT SMT. POOJA AGARWAL WAS REGULARLY ASSESSED TO TAX SINCE A.Y. 2006-07 AND CO PY OF RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED. COP Y OF COMPUTATION OF INCOME AND BALANCE SHEET WAS ALSO FILED FROM WHICH, IT CAN BE SEEN THAT TOTAL LOAN INCLUDING LOAN GIVEN IN THE PRECEDING AS SESSMENT YEARS TO THE ASSESSEE WAS SHOWN AT RS.7,07,528/-. LD CIT(A) IN HIS ORDER OBSERVED THAT ABOVE PERSON IS REGULAR INCOME TAX ASSESSEE AN D SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT HAS BEEN EXPLAINED THR OUGH AVAILABILITY OF 5 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 CASH FROM INCOMES DISCLOSED IN THE RETURNS AND BALA NCE SHEETS FOR DIFFERENT YEARS. LD CIT(A) WHILE REFERRING TO THE JUDGMENT OF HON'BLE JHARKHAND HIGH COURT IN THE CASE OF CIT VS. M/S. GI RDHAR AGENCIES, RANCHI IN TAX CASE NO.02 OF 1999 IN ORDER DATED 9.7.2010, WHEREIN, IT IS HELD THAT THE LOAN CANNOT BE HELD AS NOT GENUINE MERELY ON THE GROUND OF DEPOSIT OF CASH IN THE BANK ACCOUNT PRIOR TO ISSUE OF CHEQUE FOR LOAN IF AVAILABILITY OF SUCH IS OTHERWISE DISCERNIBLE FROM THE RECORDS. CONSIDERING THE FACTS, LD CIT(A) DELETED THE ADDITION OF RS.4,5 0,000/- MADE BY THE ASSESSING OFFICER. HENCE, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFF ICER WHEREAS THE LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE AUT HORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE. THE LEGAL PRINCIPLES HAVE ALSO BEEN CONSIDER ED AND WE COME TO THE CONCLUSION THAT AS OBSERVED BY THE LD CIT(A) IN A D ETAILED MANNER THAT THE PERSON FROM WHOM, THE LOAN WAS TAKEN IS REGULARLY A SSESSED TO TAX. THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT HAS ALSO BEEN EXPLAINED. THEREFORE, AVAILABILITY OF CASH FROM INCOME DISCLOS ED IN THE RETURN AND BALANCE SHEET FOR DIFFERENT YEARS IS PROVED. LD CI T(A) HAS BROUGHT OUT THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF M/S. GIRDHAR AGENCIES,(SUPRA) AND IN VIEW OF ABOVE DECISION, THE SOURCE OF CASH DEPOSIT IS NOT DISPUTED BY THE DEPARTMENT. THE ONL Y DOUBT OF THE 6 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 ASSESSING OFFICER SIMPLY BECAUSE OF THE FACT THAT J UST BEFORE THE LOAN WAS GIVEN CASH WAS DEPOSITED IN THE BANK ACCOUNT. ON PE RUSAL OF THE IMPUGNED ORDER, WE OBSERVE THAT THE ENTIRE TRANSACT ION TOOK PLACE THROUGH BANKING CHANNEL, WHICH IS ALSO NOT DISPUTED BY THE DEPARTMENT, THEREFORE, WE CONFIRM THE ACTION OF THE LD CIT(A) I N DELETING THE ADDITION. THIS GROUND OF THE REVENUE IS REJECTED. 10. GROUND NO.2 OF ASSESSEE RELATES TO ADDITION OF RS.3,02,700/- IN RESPECT OF UNSECURED LOAN RECEIVED FROM HUF. 11. SO FAR AS LOAN FROM THE HUF, THE ASSESSEE FAI LED TO JUSTIFY THE SOURCES OF INCOME OF THE HUF. THE ASSESSING OFFICE R NOTICED THAT THERE WERE CASH DEPOSITS OF RS.3,00,000/- PRIOR TO GIVING OF THE LOAN BY CHEQUE AND THE ASSESSEE FAILED TO JUSTIFY THE AVAILABILITY OF THE CASH IN THE HANDS OF HUF. IN VIEW OF THIS, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE LOAN OF RS.3,00,000/- APPEARS TO BE NOT GENUINE AND, ACC ORDINGLY, ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED I NCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE LD CIT(A). 13. LD CIT(A) OBSERVED THAT THE HUF WAS FILING RETU RN OF INCOME FROM ASSESSMENT YEAR 2009-2010 AND THE CASH WAS DEPOSITE D OUT OF ACCUMULATION OF INCOME. REFERRING TO THE JUDGMENT OF HON'BLE KHUBCHAND 7 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 MOTILAL JAIN VS CIT, 100 ITR 206 (MP), LD CIT(A) HE LD THAT THE INCOME SHOWN IN THE HANDS OF HUF NOT BEING FROM ANY CORPUS OF THE HUF BUT IS ASSESSABLE IN THE HANDS OF THE INDIVIDUAL ONLY. TH EREFORE, HE CONFIRMED THE ADDITION OF RS.3,00,000/- AND INTEREST OF RS.27 00/-. HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 14. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD CIT(A). IT I S SETTLED POSITION OF LAW THAT THE INCOME SHOWN IN THE HANDS OF THE HUF NOT B EING FROM ANY CORPUS OF THE HUF, IS ASSESSABLE IN THE HANDS OF THE INDI VIDUAL. HENCE, GROUND NO.2 OF THE ASSESSEE IS DISMISSED. 15. AS REGARDS TO THE DISALLOWANCE UNDER SECTION 40 (A)(IA) OF THE ACT, FACTS ARE THAT THE ASSESSING OFFICER, ON PERUSAL OF BOOKS OF ACCOUNT OF THE ASSESSEE, NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.75,48,859/- UNDER THE HEAD TRANSPORTATION FARE PAYMENT. HE OBSERVED THAT THE ASSESSEE HAS TAKEN HYWAS FROM THE DIFFERENT PERSONS ON HIRE FROM OTHER TRANSPORTERS AND LIABILITY TO DE DUCT TAX AT SOURCE UNDER SECTION 194-I OF THE ACT @ 2% WAS NOT DONE. ACCORD INGLY, HE DISALLOWED THE SAME. BEING AGGRIEVED, THE ASSESSEE CARRIED TH E MATTER BEFORE THE FIRST APPELLATE AUTHORITY. 8 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 16. BEFORE THE LD CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT HAVING ANY AGREEMENT WITH SUCH TRANSPORTERS. THERE FORE, DEDUCTION OF TAX WAS NOT REQUIRED UNDER SECTION 194 C OF THE INC OME TAX ACT, 1961. IT WAS SUBMITTED THAT THERE WAS NO SUCH HIRING OF PLAN T AND MACHINERY REQUIRING DEDUCTION OF TAX UNDER SECTION 194-I OF T HE ACT. AS PER SUB- SECTION (6) OF SECTION 194C OF THE ACT, IF THE TRAN SPORTERS SUBMIT THEIR PANS, NO DEDUCTION OF TAX IS REQUIRED TO BE MADE. FURTHER, ALL SUCH SIX TRANSPORTERS HAD FILED THEIR RETURNS OF INCOME AND, THEREFORE, THE PURPOSE OF TAX DEDUCTION IS FULFILLED. IT WAS ALSO SUBMITT ED THAT THE ENTIRE AMOUNT HAS BEEN PAID BY CHEQUES AND ONLY AN AMOUNT OF RS.1 5,89,166/- IS OUTSTANDING AT THE END OF THE RELEVANT PREVIOUS YEA R. RELIANCE WAS PLACED ON THE DECISION OF ITAT VISAKHAPATNAM SPECIA L BENCH IN THE CASE OF MERLIYN SHIPPING AND TRANSPORT VS ACIT, 136 ITD 23 , THE ASSESSING OFFICER COULD HAVE AT THE MOST MADE ADDITION OF THE OUTSTANDING AMOUNT. ON BEING ASKED BY THE LD CIT(A) ABOUT THE NATURE OF BUSINESS OF TRANSPORTATION CHARGES PAID, IT WAS SUBMITTED BY TH E ASSESSEE THAT HE HAD TAKEN TRANSPORT CONTRACT FOR TRANSPORTATION OF COAL FROM M/S. PANEM COAL MINES LIMITED. THE ASSESSEE HAD ALSO SUBMITTED DET AILED LIST OF BILL AND AMOUNT PAID, DATE OF PAYMENT ALONGWITH ADDRESS AND PAN NO. BEFORE THE LD CIT(A). LD CIT(A) IN HIS ORDER OBSERVED THAT TH E ASSESSEE IS HAVING FIXED TRANSPORTERS AND HAS ASSIGNED THE TRANSPORTAT ION WORK TO THEM. RATE OF TRANSPORTATION PER METRIC TON IS ALSO FIXED AND THE TRANSPORTATION WORK HAS BEEN DONE OVER A PERIOD OF TIME. THEREFORE, WHE THER OR NOT ANY 9 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 WRITTEN AGREEMENT EXISTS BETWEEN THE ASSESSEE AND T HESE CONTRACTORS, THERE IS CLEAR EVIDENCE OF AN ORAL AGREEMENT FOR A PERIOD OF TIME BETWEEN THE ASSESSEE AND SUCH TRANSPORTERS. THEREFO RE, THESE PERSONS HAVE WORKED AS SUB-CONTRACTORS OF THE ASSESSEE AND THE ASSESSEE WAS REQUIRED TO DEDUCT TAX @ 1% UNDER SECTION 194C OF T HE INCOME TAX ACT, 1961. AS FAR AS OBSERVATION OF THE A.O. IN BRINGING THESE PAYMENTS UNDER SECTION 194-1 OF THE INCOME TAX ACT, 1961 IS CONCER NED, THE PROVISIONS OF THIS SECTION COULD BE INVOKED IF IT COULD BE SHOWN THAT THE ASSESSEE HAD TAKEN ON HIRE SUCH HYWAS ON FIXED RENT AND USING HIS OWN DRIVERS AND INCURRING EXPENSES LIKE FUEL, MAINTENANCE ETC. ON T HIS ISSUE, LD CIT(A) REFERRED TO THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF C1T VS. SHREE MAHALAXMI TRANSPORT COMPANY REPORTED IN IT AP PEAL NO. 1038 OF 2009 (GUJ.) OF 2009 DATED 11-1-2001. AS REGARDS THE ALTERNATE PLEA OF THE ASSESSEE THAT ONLY THE OUTSTANDING PAYMENT AT T HE END OF THE RELEVANT PREVIOUS YEAR SHOULD BE ADDED, THE ABOVE ISSUE WAS EXAMINED BY THE SPECIAL BENCH OF THE ITAT VISHAKHAPATANAM IN THE CA SE OF M/S MERILYRI SHIPPING AND TRANSPORT (SUPRA), WHEREIN, T WAS HELD THAT ONLY THE AMOUNT REMAINING PAYABLE AT THE END OF THE RELEVANT PREVIO US YEAR COULD BE DISALLOWED UNDER THIS SECTION. HOWEVER, OPERATION O F THIS DECISION WAS SUSPENDED BY THE HON'BLE HIGH COURT OF ANDHRA PRADE SH VIDE L.T.TA.M.P. NO. 908 OF 2012. SUBSEQUENTLY, THIS ISSUE CAME TO B E CONSIDERED BY THE KOLKATA HIGH COURT IN ITAT NO. 20 OF 2013 G.A. NO. 190 OF 2013 IN CIT VS. CRESCENT EXPORT SYNDICATE REPORTED IN 216 TAXMA N 258. IT WAS HELD 10 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 THAT THE LAW PRONOUNCED BY THE SPECIAL BENCH AS AB OVE WAS NOT A GOOD LAW. SIMILAR VIEW WAS EXPRESSED BY THE GUJARAT HIGH COURT IN CIT VS. SIKANDAR KHAN N TUNVAR IN ORDER DATED 02.05.2013. H OWEVER, THE HON'BLE ALLAHABAD H IN CIT VS. VECTOR SHIPPING SERVICES PRI VATE LIMITED [2013] 38 TAXMANN.COM 77 HAS UPHELD THE DECISION OF THE SPECIAL BENCH. THEREFORE, AS OF NOW, THE ISSUE IS UNSETTLED AND DE CISIONS: TWO HIGH COURTS ARE AGAINST THE PROPOSITION WHEREAS, DECISIO N OF ONE HIGH COURT SUPPORTS THIS PROPOSITION. IN VIEW OF ABOVE, LD CI T(A) CONSIDERED IT APPROPRIATE TO FOLLOW THE DECISION TAKEN BY THE MAJ ORITY OF THE HIGH- COURTS AND ACCORDINGLY, HE HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT LIMITED TO THE AMOUNT REMAINING PAYABLE AT THE END OF THE PREVIOUS YEAR ONLY AND THE ENTIRE AMOUNT PAID OR PA YABLE DURING THE PREVIOUS YEAR ON WHICH TAX WAS REQUIRED TO BE DEDUC TED AND HAS NOT BEEN SO DEDUCTED IS LIABLE TO BE DISALLOWED. FURTHER, A S REGARDS APPLICABILITY OF SUB-SECTION (6) OF SECTION 194C OF THE INCOME TAX A CT, 1961,IT IS SEEN THAT THIS SUB-SECTION HAS BEEN INTRODUCED W.E.F. 01 .10.2009. AS PER THIS SUB-SECTION, DEDUCTION OF TAX IS NOT REQUIRED IF TH E TRANSPORTERS FURNISH PAN TO THE ASSESSEE. AS PER SUB-SECTION (7) OF SECT ION 194C OF THE INCOME TAX ACT, 1961, INFORMATION OF SUCH NON-DEDUC TION OF TAX IS REQUIRED TO BE SUBMITTED TO THE PRESCRIBED AUTHORIT Y. IT WAS ASCERTAINED THAT IN SUCH CASES, IN THE TDS RETURN, SUCH PAYMENT S ARE REQUIRED TO BE MENTIONED AND RATE OF TAX DEDUCTION IS TO BE SHOWN AS ZERO PER CENT. THE ASSESSEE HAS FILED SUCH RETURN EVEN THOUGH BELATEDL Y AND BENEFIT; OF THIS 11 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 SUB-SECTION CAN BE GIVEN TO HIM BECAUSE EVEN THOUGH , THERE WAS DELAY IN COMPLIANCE OF PROVISIONS OF SUB-SECTION (7) OF SECT ION 194C OF THE INCOME TAX ACT, 1961, THERE COULD BE OTHER CONSEQUENCES BU T DISALLOWANCE UNDER SECTION 40(A)(IA) WOULD NOT BE WARRANTED AS THE SAM E TO BE MADE WHEN THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AND HAS NOT DONE SO. SINCE ALL THESE TRANSPORTERS ARE HAVING PANS AS ABOVE, AFTER 1.10.2009, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX ON THE SAME . IT WAS HELD IN THE CASE OF VALIBHAI KHANBHAI MANKAD VS. DCIT BY ITAT A HMEDABAD 'A' BENCH REPORTED IN 122 TP 346 THAT MERELY BECAUSE THERE WA S DELAY IN SUBMISSION OF FORM 15-I TO THE CIT, IT COULD NOT BE HELD THAT THERE WAS LIABILITY TO DEDUCT TAX UNDER SECTION 194C OF THE A CT AND DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT COULD NOT BE MAD E. THE ASSESSEE FURNISHED DETAILS OF PAYMENT FROM 1.4.2009 TO 30.9. 2009 BEFORE THE LD CIT(A). AFTER CONSIDERING VARIOUS CASE LAWS CITED I N THE IMPUGNED ORDER, THE LD CIT(A) DELETED RS.64,33,078/- AND CONFIRMED BALANCE AMOUNT OF RS.11,15,781/- . HENCE, BOTH THE SIDES ARE IN APPE AL BEFORE THE TRIBUNAL. THE REVENUE IS IN APPEAL IN GROUND NO.2 AND ASSESSE E IS IN APPEAL IN GROUND NO.4 IN THEIR RESPECTIVE APPEALS. 17. HAVING HEARD THE RIVAL CONTENTIONS, WE FIND THA T THE LD CIT(A) HAS ELABORATELY DEALT WITH THE LEGAL PRINCIPLES, RATION ALE OF LAW, APPLICABILITY OF SECTION 40(A)(IA) OF THE ACT. THE LD CIT(A) CONFIRM ED THE ADDITION OF RS.11,15,781/- IN RESPECT OF THREE TRANSPORTERS BEI NG PAYMENT MADE FROM 1.4.2009 TO 30.9.2009. HOWEVER, THE BALANCE AMOUNT OF RS. 64,33,078/- 12 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 ,THERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE, TH EREFORE, THE LD CIT(A) HAS RIGHTLY DELETED THE SAME. IN VIEW OF ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD CIT(A). GR OUND NO.2 OF REVENUE AND GROUND NO.4 OF ASSESSEE IS DISMISSED. 18. GROUND NO.3 OF THE REVENUE RELATES TO DELETION OF ADDITION OF RS.1,23,624/- ON ACCOUNT OF BAD DEBTS. 19. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.1,23,624/- UNDER THE HEAD BAD DEBTS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE EVIDENCE IN RESPECT OF THIS CLAIM. IN RESPONSE TO THE QUERY, THE ASSESSEE ONLY PRODUCED LEDGER COPY AND SUBMITTED THAT THE AMOUNT RECEIVABLE FROM NATI ONAL HIGHWAY AUTHORITY OF INDIA, DHANBAD AT RS.1,23,624/- WAS WR ITTEN OFF IN THE BOOKS OF ACCOUNT AS BAD DEBT BECAUSE OF PRESS RELEASE IN THIS REGARD. HOWEVER, THE EXPLANATION WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER AND ACCORDINGLY, HE DISALLOWED RS.1,23,624/- CLAIMED AS BAD DEBT BY THE ASSESSEE. AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. LD CIT(A) HELD THAT FRO M 1.4.1989, IT IS SUFFICIENT IF BAD DEBT IS WRITTEN OFF IN THE BOOKS OF ACCOUNT AND THE ASSESSEE IS NOT REQUIRED TO PROVE THAT THE DEBT HAS ACTUALLY BECOME BAD. SINCE, THE ASSESSEE HAS WRITTEN OFF THE AMOUNT AS B AD DEBT IN ITS BOOKS OF ACCOUNT, LD CIT(A) DELETED THE SAME. HENCE, THE DE PARTMENT IS IN APPEAL BEFORE US. 13 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 20. HAVING HEARD THE RIVAL CONTENTIONS, WE DO NOT F IND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A). LD CIT(A) HAS RIGHTLY HELD THAT FROM 1.4.1989, IT IS SUFFICIENT IF BAD DEBT IS WRITTEN OFF IN THE BOOKS OF ACCOUNT AND THE ASSESSEE IS NOT REQUIRED TO PROVE THAT THE DEBT HAS ACTUALLY BECOME BAD. IN THIS CASE, THE ASSESSEE HAS WRITTEN OFF THE DEBT IN ITS BOOKS OF ACCOUNT AND HENCE, WE UPHOLD THE SAME. GROUND NO.3 OF REVEN UE IS REJECTED. 21. GROUND NO.4 OF REVENUE RELATES TO DELETION OF ACCIDENT CLAIMS OF RS.4,25,026/-. 22. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE. IT IS AN ADMITTED POSITION THAT THE CLAIM OF RS.4,25,026/- HAS BEEN RECOVERED BY THE CONTRACTEE M/S. PANEL COAL MINES L IMITED FROM THE BILLS PAID TO THE ASSESSEE, WHICH HAS ALSO BEEN CONFIRMED BY THE ASSESSING OFFICER. IN VIEW OF THIS, LD CIT(A) HAS RIGHTLY DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER. THIS GROUND IS ACCORDING LY REJECTED. 23. GROUND NO.5 OF THE REVENUE AND GROUND NO.6 OF T HE ASSESSEE RELATES TO ADDITION OF RS.5,83,870/- MADE BY THE AS SESSING OFFICER ON ACCOUNT OF REPAIR AND MAINTENANCE EXPENSES SHOWN TO VARIOUS PARTIES. 14 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 24. FACTS ARE THAT THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE HAS DEBITED EXPENSES AMOUNTING TO RS.5,83,870/- UNDER T HE HEAD REPAIR AND MAINTENANCE PAID TO M/S. GAYATRI ENGINEERING WORKS , DUMKA. THE ASSESSING OFFICER DEPUTED THE INSPECTOR TO ENQUIRY AND VERIFY THE BILLS AND VOUCHERS FURNISHED BY M/S. GAYATRI ENGINEERING WORK S, DUMKA AND THE INSPECTOR REPORTED THAT THE BILLS ARE FAKE IN NATUR E. IN VIEW OF THIS, THE ASSESSING OFFICER DISALLOWED RS.5,83,870/-. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FI RST APPELLATE AUTHORITY. 25. BEFORE THE LD CIT(A), IT WAS SUBMITTED THAT OPP ORTUNITY OF CROSS EXAMINATION WAS NOT ALLOWED TO THE ASSESSEE BEFORE DISALLOWING THE CLAIM. IT WAS SUBMITTED THAT IN THE TRANSPORTATION BUSINES S, REPAIR AND MAINTENANCE IS ALWAYS REQUIRED. IT WAS SUBMITTED TH AT OUT OF TOTAL BILLS OF RS.5,83,270/-, AN AMOUNT OF RS.1,62,510/- RELATES T O M/S. GAYATRI ENGINEERING WORKS AND BALANCE AMOUNT FROM OTHER PAR TIES. 26. LD CIT(A) CONFIRMED THE AMOUNT OF RS.1,62,510/- RELATING TO M/S. GAYATRI ENGINEERING WORKS AND DELETED THE BALANCE A MOUNT OF RS.4,21,360/- WHICH RELATES TO OTHER PARTIES. HENC E, BOTH THE SIDES ARE IN APPEAL BEFORE THE TRIBUNAL. 27. HAVING HEARD BOTH THE SIDES, WE FIND THAT THE A SSESSING OFFICER HAS DEPUTED THE INSPECTOR TO M/S. GAYATRI ENGINEERING W ORKS FOR VERIFICATION 15 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 AS TO WHETHER THE BILLS AND VOUCHERS ARE ACTUALLY F URNISHED TO THE ASSESSEE GENUINE OR NOT. HOWEVER, IT WAS THE CONTE NTION OF THE ASSESSEE THAT AN AMOUNT OF RS.1,62,510/- PERTAINS TO M/S. GA YATRI ENGINEERING WORKS LTD. THE ONUS LIES ON THE ASSESSEE TO SUBSTA NTIATE ITS CLAIM OF DEDUCTION BY PRODUCING NECESSARY DETAILS. HOWEVER, THE ASSESSING OFFICER HAS MENTIONED WHETHER ALL THE BILLS PERTAIN TO M/S. GAYATRI ENGINEERING WORKS OR SOME RELATE TO OTHER PARTIES. IN VIEW OF THIS, LD CIT(A) HAS ONLY CONFIRMED THE ADDITION IN RESPECT OF BILLS ISSUED B Y M/S. GAYATRI ENGINEERING WORKS AND FOR REMAINING AMOUNT, HE HAS DELETED THE ADDITION, WHICH, IN OUR CONSIDERED OPINION, IS FULL Y JUSTIFIED. HENCE, GROUND NO.3 OF THE REVENUE AND GROUND NO.6 OF THE A SSESSEE IS REJECTED. 28. GROUND NO.6 OF REVENUE RELATES TO DELETION OF A DDITION ON ACCOUNT OF REPAYMENT OF LOAN OF RS.72,525/-. 29. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD OF THE CASE. THE ASSESSING OFFICER OBSERVED THAT THE ASSE SSEE HAD TAKEN LOANS FROM INDUS IND BANK LIMITED FOR PURCHASE OF HYWAS I N RESPECT OF TWO DEALS I.E. NO.DUOO2505H AND DUOO2504H AMOUNTING TO RS.34,825/- AND RS.37,700/-. HOWEVER, NO SUCH PAYMENT WAS REFLECTE D IN THE CASH BOOK. BEFORE THE LD CIT(A), IT WAS SUBMITTED THAT PAYMENT OF RS.1,71,085/- WAS MADE IN RESPECT OF FOUR DEALS INCLUDING ABOVE TWO D EALS. THIS FACT WAS NOT CONFRONTED TO THE ASSESSEE. THEREFORE, LD CIT( A) DELETED THE ADDITION 16 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 MADE ON THIS ACCOUNT. LOOKING TO THE FACTS OF THE CASE THAT THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT CONFRONTING T HE CASE WITH THE ASSESSEE, WE ARE OF THE VIEW THAT THE LD CIT(A) IS JUSTIFIED IN DELETING THE SAME. WE CONCUR WITH HIS VIEWS. THIS GROUND OF TH E REVENUE IS REJECTED. 30. GROUND NO.3 OF THE ASSESSEE RELATES TO ADDITION OF RS.5,51,162/- AND RS.5,85,180/- U/S.40A(3) OF THE I.T.ACT. 31. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED EXPENSES UNDER THE HEAD TYRES & TUBES AMOUNTING TO RS.6,70,237/-. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSE E HAS MADE CASH PAYMENT ABOVE RS.20,000/- IN CASH ON DIFFERENT DATE S AMOUNTING TO RS.5,51,162/-. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE REQUIREMENTS OF THE ASSESSEE AS TO WHY PAYMENT ABOVE RS.20,000/- IN CASH WAS PAID, THE ASSESSING OFFICER DISALLOWED RS.5,51,162/- U/S. 40A(3) OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 32. SIMILARLY, ON PERUSAL OF BOOKS OF ACCOUNT OF TH E ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEB ITED RS.12,08,775/- UNDER THE HEAD VEHICLE PARS & MAINTENANCE. THE A SSESSING OFFICER ALSO OBSERVED THAT SOME OF THE PAYMENT IN CASH TO A SING LE PARTY ABOVE RS.20,000/- WAS PAID ON DIFFERENT DATES AND, ACCORD INGLY REQUIRED THE ASSESSEE TO PRODUCE BILLS. HOWEVER, THE ASSESSEE O NLY PRODUCED LEDGER 17 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 COPY AND SOME OF THE INTERNAL VOUCHERS, WHICH WERE NOT VERIFIABLE. SINCE, THE ASSESSEE FAILED TO DISCHARGE HIS ONUS, LD ASSES SING OFFICER DISALLOWED RS.5,85,180/- U/S.40A(3) OF THE ACT AND ADDED THE S AME TO THE TOTAL INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSES SEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 33. BEFORE THE LD CIT(A), IT WAS SUBMITTED THAT TH E AMOUNT PAID SHOWN IN THE CASH BOOK WAS A CONSOLIDATED PAYMENT AND IN FACT, THE PAYMENT HAD BEEN MADE TO MULTIPLE PARTIES AND NO PAYMENT EX CEEDING AMOUNT OF RS.20,000/- WAS MADE. THE ASSESSEE FURNISHED PARTY WISE DETAILS I.E. BILL DATE, AMOUNT, DATE OF PAYMENT WITH AMOUNT, WHICH AR E REPRODUCED IN THE IMPUGNED ORDER. ON PERUSAL OF THE SAME, LD CIT(A) OPINED THAT THE BILL AMOUNT IS OF MORE THAN RS.20,000/- AND THE PAYMENT OF EXACTLY THE SAME WHICH HAS BEEN SHOWN IN THE CASH BOOK ON ONE DATE. LD CIT(A) ALSO VERIFIED THE CLAIM OF THE ASSESSEE THAT PAYMENTS WE RE MADE TO MULTIPLE PARTIES IN MORE THAN ONE INSTALMENT ON DIFFERENT DA TES AND FOUND THE SAME TO BE FABRICATED ONE IN RESPECT OF BOTH THE AD DITIONS MADE BY THE ASSESSING OFFICER. HENCE, HE CONFIRMED THE ADDITIO N. 34. HAVING HEARD BOTH THE SIDES, WE FIND NO INFIRMI TY IN THE ORDER OF THE LD CI(A) TO INTERFERE. BEFORE US, LD COUNSEL FOR T HE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM THAT PAYMENT IN CASH ABOVE R S.20,000/- WAS MADE. 18 I.T.A. NO.36/RAN/2014: I.T.A. NO.16/RAN/2014 ASSESSMENT YEAR :2010-2011 IN VIEW OF THIS, WE UPHOLD THE ORDER OF THE LD CIT( A). GROUND NO.3 OF THE ASSESSEE IS REJECTED. 35. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4/3/2016 . SD/- SD/- (SHAMIM YAHYA) (PA RTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI , DATED 04 / 03/2016 PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : AMIT KUMAR PATWARI, PROP. M/S. B.K.ENTERPRISES, BHAGALPUR ROAD, DUMKA 2. THE RESPONDENT: DCIT, CIRCLE-III, DEOGHAR 3. THE CIT(A)-DHANBAD 4. CIT , DHANBAD 5. DR, ITAT, RANCHI 6. GUARD FILE. BY ORDER, //TRUE COPY// SR.PRIVATE SECRETARY ITAT, RANCHI