ITO, BIKANER V. Sh. Shree Bhagwan Suthar, SRIDUNGARGARH

ITA 367/JODH/2013

• Counselvise Citation: 36723314 RSA 2013
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Business income; Additional evidence

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. 367/JODH/2013 (A.Y. 2008-09) THE I.T.O VS. SHRI SHREE BHAGWAN SUTHAR WARD - 1(4) PROP M/S GOBIND HANDICRAFTS BIKANER VILLAGE THUKARIYASAR SRIDUNGARGARH PAN NO. AXEPS 7940 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SURESH OJHA DEPARTMENT BY : SHRI N.A. JOSHI, DR. DATE OF HEARING : 28.04.2014 DATE OF PRONOUNCEMENT : 13.05.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE FOR A.Y 2008-09 AGAINST THE ORDER OF THE CIT(A), BIKANER, D ATED 22.03.2013. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS THE PROPRIETOR OF M/S GOVIND HANDICRAFTS AND DERIVE S HIS INCOME FROM THE PURCHASE AND SALE OF HANDICRAFT ITEMS. FO R A.Y. 2008-09, HE FIELD HIS RETURN OF INCOME [ROI] ON 30.09.2008, DECLARING OF TOTAL INCOME OF RS. 1,46,340/-. ON TOTAL SALES OF THE YE AR AT RS. 41,02,525/- HE HAS DISCLOSED GROSS PROFIT OF RS. 4 ,09,977/- WHICH GIVES GROSS PROFIT RATE OF 9.99%, AS AGAINST SHOWN AT RS. 8.06% IN EARLIER YEAR ON TOTAL SALES OF RS. 36,75,015/- AND GROSS PROFIT OF RS. 3,16,268/-. THE A.O. HAS COMPUTED TOTAL INCOME OF THE ASSESSEE VIDE ORDER DATED 18.11.2010 AT RS. 11,70,888/- AFTE R MAKING THE FOLLOWING ADDITIONS: (1) DISALLOWANCE OUT OF EXPENSES CLAIMED RS. 1,73 ,464/- (2) ADDITION U/S 68 OF THE ACT RS. 8,16,584/- (3) ON ACCOUNT OF HOUSE HOLD EXPENSES RS. 34,50 0/- 2.1 AGGRIEVED AGAINST THE ABOVE ADDITION, THE ASSES SEE WENT IN FIRST APPEAL BEFORE THE LD. CIT(A), WHO, IN TURN, H AS GIVEN PART RELIEF, AGAINST WHICH THE REVENUE HAS RAISED THE FO LLOWING GROUNDS: 3 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CITA) HAS ERRED IN :- I) DELETING ADDITION OF RS 8,16,584/- MADE A/S 6 8 OF THE I.T. ACT,1961. II) DELETING ADDITION OF RS. I,73,463/- MADE ON A CCOUNT OF DISALLOWANCE OUT OF EXPENSES. III) DELETING ADDITION OF RS. 34,500/- MADE ON AC COUNT OF LOW WITHDRAWALS FOR HOUSEHOLD EXPENSES.' 2.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CA REFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. 2.3 GROUND NO. (I) OF THIS APPEAL PERTAINS TO DELET ION OF AN ADDITION OF RS. 8,16,584/- ADDED U/S 68 OF THE ACT. THE FACTS APROPOS THIS GROUND ARE THAT DURING THE YEAR THE FO LLOWING CREDITS ARE REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE: 1. SITA RAM SUTHAR 63222 2. BHAGIRATH SUTHAR 202200 3. SMT. GITA DEVI BHUWAL 105333 4. SMT. GANGA DEVI SUTHAR 52283 5. SMT. VIDYA DEVI SAINI 271296 4 6. NAND KUMAR SUTHAR 15000 7. KHINWA RAM SUTHAR 14500 8. SMT. AMRATI DEVI SUTHAR 12500 TOTAL RS. 8,16,584/- 2.4 WHEN CALLED UPON TO ESTABLISH THE GENUINITY OF THESE 8 CREDITS, THE ASSESSEE PRODUCED DULY SWORN IN AFFIDAVITS OF 6 CREDITORS. FOR THE REMAINING, THE ASSESSEE PRODUCED CONFIRMATION T HROUGH AFFIDAVITS ETC. BEFORE THE LD. CIT(A). AFTER CONS IDERING THE OBJECTION OF THE A.O., GIVEN IN HIS REMAND REPORT W HICH WAS CALLED IN RELATION TO THE ADDITIONAL EVIDENCE, THE LD. CIT (A) HAS ADMITTED THE SAME BUT THE DEPARTMENT HAS NOT CHALLENGED THIS ASPECT BEFORE US. WE HAVE FOUND THAT THE CREDITORS, IN QUESTION, HAVE ADMITTED THEIR RESPECTIVE CREDITS AND HAVE ALSO EXPLAINED TH EIR SOURCE(S). THE A.O. HAS NOT FURTHER EXAMINED THEM. THEREFORE, AS PER THE SETTLED POSITION OF LAW IN THIS REGARD THAT UNLESS THE A.O. CONTROVERTS THE AVERMENTS OF THESE AFFIDAVITS, THE VERSION GIVEN THEREIN CANNOT BE REJECTED. ON THAT REASONING ONLY THE LD. CIT(A) HAS DELETED THE IMPUGNED ADDITION. TO FURTHER BOLS TER THE ABOVE, WE MAY INCORPORATE THE EVIDENCE PRODUCED BY THE ASS ESSEE IN RESPECT OF THE CREDITORS AS UNDER: 5 S. NAME OF THE CREDITORS EVIDENCE FILED EVIDENCE FILE RS. NO. BEFORE THE CIT (A) 1. SH. SITARAM SUTHAR AFFIDAVIT (ACCEPTED BY AO LETTER DATED 18.7.2011 AND WS TO ITO COPY OF AFFIDAVIT 63222 / - BY I.S. SHEKHAWAT) BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT) ACKNOWLEDGEME NT OF ITR BALANCE SHEET BALANCE SHEET (WS TO ITO BY IS SHEKHAWAT) CONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26. 7. 20 10) 2 SMT. MANJU DEVI SUTHAR AFFIDAVIT (ACCEPTED BY AO LETTER DATED 18.7.2011 AND WS TO ITO COPY OF AFFIDAVIT 52250 / - BY I.S. SHEKHAWAT) BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT) ACKNOWLEDGEME NT OF ITR ITR ACKNOWLEDGEMENT (WS TO ITO BY I S SHEKHAWAT) BALANCE SHEET (WS TO ITO BY I S SHEKHAWAT AND AO ACCEPTED IN HIS ORDER AT PAGE NO. 2) BALANCE SHEET CONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26. 7. 20 10) 3 SMT VIDYA DEVI SAINI AFFIDAVIT (ACCEPTED BY AO LETTER DATED 18.7.2011 AND WS TO ITO COPY OF AFFIDAVIT 271296 / - BY I.S. SHEKHA WAT) I BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT AO ACCEPTED IN HIS ORDER AT PAGE NO. 2) ITR ACKNOWLEDGEMENT (WS TO ITO BY I S SHEKHAWAT) ACKNOWLEDGEME NT OF ITR BALANCE SHEET (WS TO ITO BY IS BALANCE SHEET 6 SHEKHAWAT) CONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26.7.2010) 4 SMT. GEETA DEVI BHUWAL AFFIDAVIT (ACCEPTED BY AO LETTER DATED 18.7.2011 AND WS TO ITO COPY OF AFFIDAVIT 105333 / - BY I.S. SHEKHAWAT) BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT AND AO ACCEPTED IN HIS ORDER AT PAGE NO. 2) ITR ACKNOWLEDGEMENT (WS TO ACKNOWLEDGEME NT ITO BY I S SHEKHAWAT) OF ITR , BALANCE SHEET (WS TO ITO BY IS BALANCE SHEET SHEKHAWAT) CONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26.7 .20 10) 5 SMT. GANGA DEVI SUTHAR AFFIDAVIT (ACCEPTED BY AO LETTER COPY OF AFFIDAVIT 52283 / - DATED 18.7,2011 AND WS TO ITO BY I.S. SHEKHAWAT) BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT) ITR ACKNOWLEDGEMENT (WS TO ACKNOWLEDGEME NT ITO BY I S SHEKHAWAT) OF ITR BALANCE SHEET (WS TO ITO BY IS BALANCE SHEET SHEKHAWAT) CONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26 .7 .20 1 0) 7 6 SH. BHAGIRATH SUTHAR AFFIDAVIT (ACCEPTED BY AO LETTER COPY OF AFFIDAVIT 202200/ - DATED 18.7.2011 WS TO ITO BY I.S. SHEKHAWAT AND AO ACCEPTED IN HIS ORDER AT PAGE NO. 2) BANK PASS BOOK (WS TO ITO BY I.S. SHEKHAWAT AND AO ACCEPTED IN HIS ORDER AT PAGE NO. 2) ITR ACKNOWLEDGEMENT (WS TO ACKNOWLEDGEME NT ITO BY I S SHEKHAWAT) OF ITR BALANCE SHEET (WS TO ITO BY IS BALANCE SHEET SHEKHAWAT) C ONFIRMATION OF ACCOUNTS (WS TO ITO DATED 26.7. 20 10) 7 SMT. GEETADEVI CONFIRMATION OF ACCOUNTS (WS AFFIDAVIT 14500/ - TO ITO DATED 26. 7 .20 10) 8 SH. NANDRAM SUTHAR CONFIRMATION OF ACCOUNTS (WS AFFIDAVIT 15000/ - T O ITO DATED 26.7 .2010) 9 SH. KHINWA RAM SUTHAR CONFIRMATION OF ACCOUNTS (WS AFFIDAVIT 14500/ - TO ITO DATED 26.7 .2010) 10 SMT. IMRATI DEVI SUTHAR CONFIRMATION OF ACCOUNTS (WS AFFIDAVIT 12500/ - TO ITO DATED 26.7 .20 10) 11 SH. OM PRAKASH SUTHAR CONFIRMATION OF ACCOUNTS (WS AFFIDAVIT 13500/ - TO ITO DATED 26.7.2010) 8 2.5 THE ABOVE, IS THE PICTOGRAPH OF EVIDENCE PRODUC ED IN RESPECT OF ALL THE CREDITORS, INCLUDING THE ONE WE ARE CONC ERNED WITH IN THIS APPEAL. RESULTANTLY, WE CONFIRM THE IMPUGNED DELET ION OF RS. 8,16,584/- MADE U/S 68 OF THE ACT AND CANNOT ALLOW GROUND NO. (I) OF REVENUES APPEAL. 3. THE GROUND NO. (II) IS REGARDING DELETION OF ADD ITION OF RS. 1,73,463/- MADE ON ACCOUNT OF DISALLOWANCE OUT OF E XPENSES. ALL THESE EXPENSES ARE IN RELATION TO THE TRADING ACTIV ITIES OF THE ASSESSEE. THE A.O. HAS NOT REJECTED THE BOOKS OF A CCOUNT. SO HE CANNOT DISTURB THE EXPENSES CLAIMED UNLESS ANY PART ICULAR EXPENSES IS FOUND TO HAVE BEEN WRONGLY CLAIMED. IN THIS CAS E, THE A.O. HAS NOT DOUBTED THE RECEIPTS ETC AND HAVE ACCEPTED THE SAME, SO THE A.O. CANNOT REJECT SOME OF THE EXPENSES. IN THIS R EGARD, THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. MAHARAJA SHREE UMMAID MILLS LTD. [1991] 192 ITR 565 [RAJ] IS RELEVANT. ACCORDINGLY, WE UPHOLD THIS DELETION AND DISMISS GROUND NO. (II) OF REVENUES APPEAL. 9 4. THE GROUND NO. (III) IS REGARDING DELETION OF AN ADDITION OF RS. 34,500/- MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWA LS. THIS ADDITION IS BASED ON NO MATERIAL BUT ON WILD GUESS AND PURE ESTIMATION WITH REFERENCE TO THE SIZE OF THE FAMILY AND THE STANDARD OF LIVING. THE A.O. HAS NOT BROUGHT ANY EVIDENCE O N RECORD, IN THIS REGARD. THEREFORE, WE APPROVE THIS DELETION AS WEL L AND DISMISS GROUND NO. (III) OF REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13 TH MAY, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MAY, 2014 VL/- 10 COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR