GIRDHARI SINGH SHEKHAWAT, JAIPUR V. ACIT, CIRCLE-2, JAIPUR

ITA 365/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2040 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R MEENA CIT DHK
• Assessee Lawyers: S R SHARMA; R K BHATRA
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 365/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. SHRI GIRDHARI SINGH SHEKHAWAT, JAIPUR. CUKE VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGMPS 6648 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.R. SHARMA & R.K. BHATRA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.R. MEENA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15.06.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/06/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, JAIPUR, DATED 02.02.2015 PERTAINING TO A.Y. 2011-12 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING ADDITION OF RS. 22,50,284/- MADE TO THE INCOME OF THE APPELLANT BY THE LD. ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOU NT OF ALLEGED UNEXPLAINED CREDIT AMOUNT FROM SHRI ISHWAR SINGH (R . 11,17,646) AND SHRI IZRAIL KHAN (11,32,638). 2. THAT THE APPELLANT CRAVES THE PERMISSION TO ADD TO OR AMEND TO ANY OF THE ABOVE GROUNDS OF APPEAL OR TO WITHDRAWN ANY OF THEM. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT WAS FRAMED U NDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) VIDE ORDER DATED 30.03.2014. WHILE FRAMING THE ASSESSMENT, THE AO O BSERVED THAT THE ASSESSEE HAD 2 ITA NO. 365/JP/2015 SHRI GIRDHARI SINGH SHEKHAWAT, JAIPUR. SHOWN EXPENSE OF EXCESS SALES TAX PAID OVER COLLECT IONS OF RS. 34,27,681/-. THE ASSESSEE HAD COLLECTED RS. 2,24,52,072/-, BUT HAD A CTUALLY PAID RS. 2,58,79,753 TO THE GOVERNMENT ACCOUNT. THE AO NOTICED THAT THIS WA S IN THE FORM OF PENALTY AND HENCE DISALLOWED THIS EXPENDITURE. FURTHER, HE OBS ERVED THAT THE ASSESSEE HAD PAID RS. 1,03,341/- AS INTEREST ON SALES TAX INSTALLMEN T. THIS WAS ALSO TREATED AS PENALTY OF DISALLOWANCE AS EXPENDITURE. FURTHER, THE AO DI SALLOWED THE INTEREST EXPENSES CLAIM OF RS. 5,82,410/- AND BANK CHARGES OF RS. 5, 322/-, THE AO ALSO DISALLOWED THE INTEREST PAID ON EXCESS BANK GUARANTEE COMMISSION. THE AO OBSEREVED THAT THE ASSESSEE HAD STATUTORY AND OTHER LIABILITIES FROM S HRI ISHWAR SINGH OF RS. 11,17,646/- AND FROM IZRAIL KHAN OF RS. 11,32,638/-. HOWEVER, T HE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND MADE ADDITION ON THE SE LIABILITIES U/S 68 OF THE ACT. FURTHER, THE AO MADE ADDITION ON ACCOUNT OF EXCESS COMMISSION NOT DISCLOSED BY THE ASSESSEE OF RS. 42,89,466/-. 3. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED TH E APPEAL. WHILE DISPOSING OF THE APPEAL THE LD. CIT(A) DELETED THE ADDITION MADE ON ACCOUNT OF EXCESS COMMISSION AND ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF EXCESS COMMISSION PAID AND INTEREST PAID IN RESPECT OF LATE PAYMENT OF THE COM MISSION. FURTHER, THE LD. CIT(A) ALSO DELETED THE EXPENSES ON INTEREST OF RS. 5,82,4 10/- AND BANK CHARGES OF RS. 5,322/-.HOWEVER, HE SUSTAINED THE ADDITION MADE U/S 68 IN RESPECT OF LIABILITY TOWARD SHRI ISHWAR SINGH AND SHRI IZRAIL KHAN. 4. AGGRIEVED, BY THIS ORDER, THE ASSESSEE IS IN APP EAL. 5. THE ONLY EFFECTIVE GROUND IS AGAINST SUSTAINING THE ADDITION OF RS. 22,50,284/- MADE U/S 68 OF THE ACT. THE LD. COUNSEL FOR THE AS SESSEE REITERATED THE SUBMISSIONS 3 ITA NO. 365/JP/2015 SHRI GIRDHARI SINGH SHEKHAWAT, JAIPUR. AS MADE IN THE WRITTEN SUBMISSION. IT IS CONTENDED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT ON 10/11/2009 FOR COLLECTION OF T AX WITH GOVERNMENT OF RAJASTHAN, COMMERCIAL TAX DEPARTMENT. IN PURSUANCE OF THE EXECUTION OF THE TERM OF THE AGREEMENT THE ASSESSEE HAD PROVIDED SECURITY TO THE STATE GOVERNMENT IN THE FORM OF BANK GUARANTEES, FROM BANK OF BARODA FOR RS . 1,19,84,000/-, AND PLEDGE OF FDR BELONGING TO SHRI IHWAR SINGH OF PUNJAB NATIONA L BANK AMOUNTING TO RS. 11 LAKHS AND PLEDGE OF FDR BELONGING TO SHIR IZRAIL KH AN OF ORIENTAL BANK OF COMMERCE AMOUNTING TO RS. 11 LAKHS. HE CONTENDED THAT THE A O MADE ADDITION ON THE BASIS AND THE ASSESSEE FAILED TO FURNISH THE SUPPORTING E VIDENCES AND PRODUCE PERSONS NAMELY SHRI ISHWAR SINGH AND SHRI IZRAIL KHAN. HE SUBMITTED THAT THOSE PERSONS HAVE NOT GIVEN CONFIRMATION BUT IN THAT TRANSACTION IS THROUGH BANK CHALLENGE, THE BANK HAS GIVEN A CERTIFICATE IT IS ENCLOSED AT PAGE NO. 38 OF THE PAPER BOOK. HE SUBMITTED THAT ASSESSEE HAD SOME DISPUTE WITH THOSE PERSONS THEREFORE THEY DID NOT GIVE CONFIRMATION. FURTHER, HE SUBMITTED THAT THE ADDITION IS MADE U/S 68 OF THE ACT. ADMITTEDLY, THE FDR WAS MADE IN THE YEAR, EARLIER T O THE YEAR UNDER CONSIDERATION AND SAME OUGHT TO HAVE NOT BEEN TAX IN THE YEAR UND ER APPEAL. FURTHER, HE SUBMITTED THAT IN THE LIGHT OF THE EVIDENCES PLACED ON RECORD, MATTER MAY BE RESTORED TO THE FILE OF THE AO FOR VERIFICATION. H E SUBMITTED THAT, IN RESPECT OF THESE LIABILITIES THE ASSESSEE CANNOT BE MADE LIABLE FOR TAX, AS THE ASSESSEE DISCHARGED PRIMARY ONUS. 6. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE OPPOSED THE SUBMISSION AND SUPPORTED THE ORDERS OF THE AUTHORIT IES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. WE FIND THAT THE 4 ITA NO. 365/JP/2015 SHRI GIRDHARI SINGH SHEKHAWAT, JAIPUR. ASSESSEE HAS PLACED ON RECORD EVIDENCES WHICH DEMON STRATE THAT THE FDR BELONGING TO SHRI ISHWAR SINGH AND IZRAIL KHAN WAS PLEDGED AS SECURITY AND WHEN THE ASSESSEE FAILED TO FULFILL THE CONTRACTUAL OBLIGATION, GOVER NMENT OF RAJASTHAN INVOKED THE BANK GUARANTEED AND ALSO THE SECURITY IN THE FORM OF FDR . THERE IS NO EVIDENCE SUGGESTING THAT THESE FDR WERE MADE OUT OF THE FUND S OF THE ASSESSEE. UNDER THESE FACTS, WE ACCEPT THE PRAYER OF THE ASSESSEE T HAT MATTER TO BE RESTORED TO THE FILE OF THE AO TO BE DECIDED IN THE LIGHT OF THE EV IDENCES PLACED ON RECORD. 8. THEREFORE, WE SET ASIDE THE ORDERS OF THE LD. CI T(A) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR DECISION AFRES H. NEEDLESS TO SAY, THAT AO WOULD PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 16TH DAY OF JUNE 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16 /06/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI GIRDHARI SINGH SHEKHAWAT, J AIPUR. 2. THE RESPONDENT THE ASSTT. COMMISSIONER OF INC OME TAX, CIRCLE-2, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 365/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 365/JP/2015 SHRI GIRDHARI SINGH SHEKHAWAT, JAIPUR.