Appeal details
Counselvise Citation
[2019] 111 COUNSELVISE.COM (IT) 9799 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 6 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-12-2019
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
18-12-2019
Assessment Year
2004-2005
Appeal Filed On
07-06-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND SH. O.P.MEENA, ACCOUNTANT MEMBER ITA NOS. 366 TO 372/AS R/2017 ASSESSMENT YEARS: 2002-03 TO 2008-09 M/S. CHET RAM NARESH KUMAR, SCO-92, NEW GRAIN MARKET, SRI MUKTSAR SAHIB VS. DY. CIT, CENTRAL CIRCLE-III, LUDHIANA. [PAN:AABFC 6297Q] (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SH. CHARAN DA SS (LD. DR) DATE OF HEARING : 19.12.2019 DATE OF PRONOUNCEMENT : 19.12.2019 ORDER PER N.K.CHOUDHRY, JM: THESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS DATED 23.02.2017 & 02.02. 2017 PASSED BY THE LD. CIT(A), BATHINDA U/S 250(6) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) FOR ASST. YEARS: 2002-03 TO 2008-09 RESPECTIVELY. 2. AS THE ISSUE AND FACTS IN ALL THE APPEALS UNDER CONSID ERATION ARE ALMOST SIMILAR AND IDENTICAL, THEREFORE, FOR THE S AKE OF BREVITY ALL THE APPEALS HAVE BEEN TAKEN SIMULTANEOUSLY FOR ADJUDICATION BY THIS COMPOSITE ORDER AND FOR BREVITY T HE FACTS OF ITA NO.366/ASR/2017 SHALL BE TAKEN INTO CONSIDERATION. ITA NOS.366 TO 372/ASR/ 2017 CHET RAM NARESH KUMAR VS. DCIT 2 3. THESE APPEALS HAVE BEEN FILED ON DATED 19.07.2017 BY THE ASSESSEE, THEREAFTER ON 11 TH OCCASIONS, CAME UP FOR HEARING, HOWEVER, NO ONE APPEARS ON BEHALF OF THE ASSESSEE NOR AN Y ADJOURNMENT APPLICATION HAS BEEN FILED ON EITHER OCCASI ONS, THEREFORE, WE ARE CONSTRAINED TO DECIDE THESE APPEALS IN THE ABSENCE OF THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZUR E OPERATION WAS CARRIED OUT ON DATED 24.10.2007 BY THE INVESTIGATION WING OF THE REVENUE DEPARTMENT AND DUR ING WHICH, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEI ZED. CONSEQUENTLY, NOTICE U/S 153A OF THE ACT WAS ISSUED. IN R EPLY TO WHICH, THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR ASST. YEAR 2002-03 ON DATED 14.10.2008 DECLARING THE SAME INCOME AS PER ORIGINAL RETURN. THEREAFTER, VARIOUS STATUTORY NOTICES HAVE BEEN ISSUED. THE ASSESSING OFFICER MADE THE ADDITION OF RS.2,04, 330/- ON THE BASIS OF SEIZED MATERIAL FROM THE RESIDENCE OF SH . SAT PAL BANSAL WHICH CONTAINED DETAILS ABOUT THE TRANSACTIONS OF ASSESSEE FIRM WITH ONE SH. SHIV RAJ SINGH AND ON THE BA SIS OF STATEMENT OF SH. VINAY BANSAL. THE ASSESSING OFFICER ALSO MADE AN ADDITION OF RS.48,495 /- ON ACCOUNT OF DISALLOWANCE OF INTEREST QUA UNSECURED LOAN S PROVIDED TO SH. SAT PAL BANSAL, SH. VINAY BANSAL (HUF) AND SMT. PREM LATA. 5. THE ASSESSEE CHALLENGED THE ADDITIONS BEFORE THE LD. CIT(A) WHICH VIDE IMPUGNED ORDER CONFIRMED BOTH THE A DDITIONS, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. ITA NOS.366 TO 372/ASR/ 2017 CHET RAM NARESH KUMAR VS. DCIT 3 6. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD A ND THE ORDERS PASSED BY THE AUTHORITIES BELOW. GROUND NO-1 , RELATES TO THE AFFIRMATION OF THE ADDITION OF RS.2,04,330/- ON ACCOUNT OF ALLEGED ADVANCES MADE TO ONE SH. SHIVRAJ SINGH. THIS ADDITION WAS MADE BY THE ASSESSING O FFICER ON THE BASIS OF SEIZED MATERIAL AS PER ANNEXURE-A-1 DU RING THE SEARCH PROCEEDINGS FROM THE RESIDENCE OF SH. SAT PAL BAN SAL WHICH CONTAINED THE DETAILS ABOUT THE TRANSACTIONS OF ASSE SSEE WITH SH. SHIVRAJ SINGH. THE ASSESSING OFFICER HAD ALSO RE CORDED THE STATEMENT OF SH. VINAY BANSAL, TO WHOM CERTAIN QUE STIONS HAVE BEEN ASKED. QUESTION NO.11 IS RELEVANT BECAUSE THE AO MADE RELIANCE UPON THE SAME FOR MAKING THE ADDITION U NDER CONSIDERATION. Q NO.11 PLEASE GO THROUGH PAGE NO.113 TO 118 OF ANNEXURE- A1 WHICH IS ACCOUNT OF SH. SHIV RAJ SINGH. PLEASE STATE WHETHER IT IS AS PER REGULAR BOOKS OF ACCOUNT OR NOT? THIS QUESTION WAS ANSWERED BY SH. VINAY BANSAL BY SAYING THAT IT IS PARTIALLY AS PER ACCOUNTS AND PARTIALLY UNACCOUNTED. I WILL SUBMIT THE RECONCILIATION . HOWEVER THEREAFTER NO RECONCILIATION WAS FILED BY SH. VINAY BANSAL. CONSEQUENTLY, THE ASSESSING OF FICER ADDED THE AMOUNT OF RS.204,330/- IN THE INCOME OF THE ASSESSEE. IN OUR CONSIDERED VIEW THIS ISSUE REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER FOR JUST AND PROPER DE CISION OF THE CASE WHILE TAKING INTO CONSIDERATION THE RECONCILIATI ON STATEMENT OF THE SH. VINAY KUMAR. WE CLARIFY THAT THE ASSESSEE SHALL BE AT LIBERTY TO DEMONSTRATE ITS CASE BEFORE THE ASSESSING OFFICER TO COME OUT FROM THE ADDITION UNDER HAND AND THERE WILL ITA NOS.366 TO 372/ASR/ 2017 CHET RAM NARESH KUMAR VS. DCIT 4 NOT BE ANY IMPEDIMENT ON THE RIGHT AND CONTENTION OF THE ASSESSEE. HENCE, IN THE INTEREST OF JUSTICE, WE ARE INCLINED TO SET REMIT THE ISSUE CONSIDERATION TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. 6.1 GROUND NO.2- THAT ASSESSE HAS RAISED THIS GROUND TO THE EFFECTS THAT THE CIT(A) FURTHER WAS NOT JUSTIFIED T O ARBITRARY HOLD THE DISALLOWANCE OF A SUM OF RS.94,898/- OUT OF IN TEREST ACCOUNT BY RESORTING TO THE PROVISIONS OF SECTION 36(1)(I II). THIS GROUND PERTAINS TO DISALLOWANCE OF INTEREST AMOUNTI NG TO RS.94,896/- UNDER THE PROVISIONS OF SECTION 36(1)(II I) ON THE GROUND THAT THE ASSESSE HAD FAILED TO SHOW AVAILABILIT Y OF INTEREST FREE FUNDS. AS PER THE ASSESSING OFFICER, ALL THE PARTNER S OF THE APPELLANT/ASSESSEE FIRM HAD DEBIT BALANCE IN THEIR CAPIT AL ACCOUNT ON WHICH NO INTEREST WAS CHARGED FROM THEM BESIDES THE ASSESSEE FIRM HAD ADVANCED INTEREST FREE LOANS TO SISTER CONCE RN NAMELY SH. SAT PAL SINGH (HUF) AND M/S SADHU RAM SATP AL, THOUGH INTEREST WAS PAID BY THE ASSESSEE QUA SECURED AND UNSECURED LOANS AGAINST THE SAID ADDITION. ON APPEAL AGAINST THIS ADDITION, IN THE APPEAL PROCEED INGS IT WAS CLAIMED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT NO BORROWED FUNDS WERE UTILIZED TO ADVANCE THE MONEY TO THE SAID PARTIES. FURTHER, IT WAS SUBMITTED BEFORE THE LD. CIT( A) THAT AMOUNT OF INTEREST FREE FUNDS AVAILABLE WITH THE APPE LLANT WERE RS.37,71,453/-, THEREFORE, THE INTEREST FREE ADVANCES O F RS.7,78,321/- STANDS COVERED. THE ASSESSE HAS ALSO FILED A L IST TO DEMONSTRATE THE DETAILS OF CAPITAL/CREDITORS TO WHOM NO ITA NOS.366 TO 372/ASR/ 2017 CHET RAM NARESH KUMAR VS. DCIT 5 INTEREST WAS PAID. THE LD. CIT(A) DULY CONSIDERED THE SUBMISSIONS AND DETAILS OF THE ASSESSEE AND ALSO PERUSED THE DETAILS PROVIDED FOR HAVING INTEREST BEARING FUND FRO M WHICH IT WAS TRANSPIRED THAT CAPITAL AMOUNT OF THE PARTNERS WAS O NLY UP TO THE EXTENT OF RS.3,66,650/- WHEREAS THE AMOUNT OF RS.34,04,813/- WAS OF THE SUNDRY CREDITORS OF THE TRADE, THEREFORE, IT WAS HELD BY THE LD.CIT(A) THAT IT CANNO T BE SAID THAT THE AVAILABILITY OF NON-INTEREST BEARING FUNDS WERE E NOUGH TO COVER THE NON-INTEREST BEARING ADVANCES. THE LD. CIT(A ) FURTHER HELD THAT BESIDES NO COMMERCIAL EXPEDIENCY COULD BE DEMONSTRATED BY THE APPELLANT FIRM IN MAKING INTEREST FREE ADVANCES TO THE SISTER CONCERN. CONSEQUENTLY, THE LD. CIT( A) DID NOT INTERFERE WITH THE DISALLOWANCE. WE REALIZE FROM THE ORDER PASSED BY THE AUTHORITIES BE LOW THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE THE AVAILABIL ITY OF THE INTEREST FREE FUNDS WHICH COULD HAVE GIVEN AS INTER EST FREE ADVANCES TO ITS SISTER CONCERN OR OTHERWISE TO OTHER PERSON S AND EVEN OTHERWISE THE ASSESSEE ALSO FAILED TO SHOW ANY COMMERCI AL EXPEDIENCY AND IT IS A FACT THAT PARTNERS CAPITAL WAS ON LY TO THE TUNE OF RS.3,66,640/- WHEREAS THE BALANCE AMOUNT OF RS.34,04,813/- PERTAINS TO THE SUNDRY CREDITORS OF TRADE , HENCE, IN OUR CONSIDERED VIEW THIS ADDITION DOES NOT REQUIRE ANY INTERFERENCE, BECAUSE CONCLUSION OF THE LD. CIT(A) IS LOG ICAL AND WELL-REASONED AND DOES NOT SUFFER FROM ANY ILLEGALITY AND/OR IMPROPRIETY. RESULTANTLY, THE APPEAL UNDER CONSIDERATI ON IS LIABLE TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NOS.366 TO 372/ASR/ 2017 CHET RAM NARESH KUMAR VS. DCIT 6 7. IN THE RESULT, APPEALS I.E. ITA NOS. 366 TO 367/ASR/2017 STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND ITA NO S. 368 TO 372/ASR/2017 STANDS DISMISSED AS THE SAME CONTAINED ONLY ONE DISALLOWANCE OF INTEREST MADE UNDER THE PROVI SIONS OF SECTION 36(1)(III) OF THE ACT, WHICH HAS BEEN CONFIRMED BY US IN THE LEAD CASE I.E. ITA NO. 366/ASR/2017 . ORDER PRONOUNCED IN THE OPEN COURT ON 19/12/2 019 SD/- SD/- (O.P.MEENA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/12/2019. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER
