Hotel Crystal Palace, Nashik V. Dy.CIT, Cen. Cir.1, Nashik, Nashik

ITA 369/PUN/2011

• Counselvise Citation: 36924514 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 05-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK MISHRA
• Assessee Lawyers: M K KULKARI
• Keywords: Loose papers
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 369/PN/2011 TO ITA NO.375/PN/2011 (ASSTT.YEAR : 2001-02 TO 2007-08 HOTEL CRYSTAL PALACE, 60 FEET ROAD, GANJMAL, NASHIK. .. APPELLANT PAN NO.AABFH 4658Q VS. DY.CIT, CENTRAL CIRCLE-1 NASHIK. .. RESPONDENT APPELLANT BY : SRI M.K. KULKARI RESPONDENT BY : SRI ALOK MISHRA DATE OF HEARING : 16-05-2012 DATE OF PRONOUNCEMENT : 17-05-2012 ORDER PER BENCH THE ABOVE 7 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE COMMON ORDER DATED 19-01-2011 OF THE CIT(A)-I, NASH IK RELATING TO ASSESSMENT YEAR 2001-02 TO 2007-08 RESPECTIVELY. S INCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ALL THESE APPEAL S, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT A SEARCH A ND SEIZURE ACTION U/S.132(1) OF THE IT ACT WAS CONDUCTED BY THE INCOME-TAX DEPAR TMENT ON 28-09-2006 IN LUTHRA GROUP OF CASES OF NASHIK INCLUDING THE RESID ENTIAL AND BUSINESS PREMISES 2 OF THE PERSONS BELONGING TO LUTHRA GROUP. DURING T HE SEARCH, CERTAIN LOOSE PAPERS RELATING TO PURCHASE DEED IN RESPECT OF A PL OT WHERE THE HOTEL CRYSTAL PALACE IS PRESENTLY SITUATED WERE ALSO FOUND. SUB SEQUENTLY THE AO ISSUED NOTICE U/S. 153C OF THE IT ACT TO THE ASSESSEE FOR DIFFERENT YEARS. THE DETAILS OF ORIGINAL RETURNS OF INCOME AND RETURNS FILED U/S. 1 53C OF THE IT ACT ARE AS UNDER: SR. NO. ASST.YEAR DATE OF ORIGINAL RETURN FILED INCOME RETURNED IN ORIGINAL RETURN DATE OF RETURN FILED U/S.153C INCOME RETURNED U/S. 153C INCOME ASSESSED U/S.153C DATE OF ORDER 1 2001-2002 31-07-2001 19,840 26-12-2008 19,840 55,164 30-12-2008 2 2002-2003 06-08-2002 11,850 26-12-2008 11,650 26,954 30-12-2008 3 2003-2004 30-09-2003 9,660 26-12-2008 9,660 25,526 30-12-2008 4 2004-2005 NOT FILED NIL 26-12-2008 5,080 15,450 30-12-2008 5 2005-2006 NOT FILED NIL 26-12-2008 8,810 28,879 30-12-2008 6 2006-2007 NOT FILED NIL 26-12-2008 6,750 26,327 30-12-2008 7 2007-2008 NOT FILED NIL 26-12-2008 4,000 23,528 30-12-2008 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT ESIC PAYMENT OF RS. 31,238/- FOR ASSESSMENT YEAR 2001-02 DOES NOT APPEAR TO HAVE BEEN DEPOSITED IN GOVERNMENT ACCOUNT SINCE NO PROOF WAS FURNISHED BY THE ASSESSEE. SIMILARLY RIKSHAW-PULLER COMMISSION OF R S.20,430/- IS ALSO NOT VERIFIABLE AS AUTHENTIC VOUCHERS FROM THE RECIPIENT S ARE NOT AVAILABLE. ACCORDING TO THE AO EVEN THOUGH SUCH EXPENDITURE AR E INEVITABLE IN LODGING 3 BUSINESS CONSIDERING THE SITE OF THE LOCATION OF TH E LODGE IN A SLUM AREA, ITS CORRECTNESS AND ACCURACY IS NOT ASCERTAINABLE. HE, THEREFORE, DISALLOWED AN AMOUNT OF RS. 4,086/- BEING 20% OF SUCH COMMISSION ON ADHOC BASIS. 3.1 IN APPEAL, THE ASSESSEE DID NOT CHALLENGE THE G ROUND IN RESPECT OF ACTION OF THE AO U/S. 153A/153C OF THE IT ACT. HOWEVER, IN A BSENCE OF FURNISHING OF ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE ESIC P AYMENT AND FURNISHING OF DETAILS OF COMMISSION PAID TO RIKSHAW-PULLERS THE L EARNED CIT(A) UPHELD THE ADDITION/DISALLOWANCE MADE BY THE AO. AGGRIEVED WI TH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS FOR ASSESSMENT YEAR 2001-02 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ESTIMATED ADDITION EQUAL TO 20% OF TOTAL COMMISSION PAID TO RIKSHAW-PU LLERS IN THE ASSESSMENT U/S. 153C OF THE ACT. THE ESTIMATION IS IMPERMISSIBLE AND CONSIDER THE NATURE OF BUSINESS THE SAME BE ALLOWED IN FULL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOW ANCE OF ESIC PAYMENTS INTO GOVERNMENT A/C IN THE ASSESSMENT U/S. 153C OF THE ACT. THE ESIC PAYMENT BE ALLOWED IN FULL. 4 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ASSESSEE DENIES ITS LIABILITY TO PAY INTEREST U/S.2 34A, 234B AND 234C OF THE ACT AND THE SAME BE DELETED. 4. THE APPELLANT CRAVES TO ADD/AMEND OR ALTER ANY O F THE ABOVE GROUNDS OF APPEAL. SIMILAR GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE FOR OTHER YEARS ALSO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET SUBMITTED THAT IN ABSENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH NOTICE U/S.153C IS VOID AB-INITIO. THEREFORE, NO ASSESSME NT COULD HAVE BEEN MADE U/S. 143(3)/153C. FOR THIS PROPOSITION, HE RELIED ON TH E DECISION OF KOLKATA BENCH OF TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL LTD. V S. DY. CIT REPORTED IN 119 TTJ 214 AND THE DECISION REPORTED IN (2010) 6 ITR ( TRIBUNAL) 376 (AHMEDABAD). 5. AS REGARDS THE MERITS OF THE CASE IS CONCERNED, HE SUBMITTED THAT THE SAME IS ON ESTIMATE BASIS, THEREFORE, THE SAME SHOU LD BE DELETED. 6. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE HAS NOT PRESSED THE LEGAL GROUND AND HAS NEVER CHALLENGED T HE JURISDICTION POINT EITHER 5 BEFORE THE AO OR BEFORE THE CIT(A). EVEN THERE IS NO SPECIFIC GROUND BEFORE THIS TRIBUNAL ON THIS ISSUE. THEREFORE, THE ARGUME NTS OF THE LEARNED COUNSEL FOR THE ASSESSEE CHALLENGING THE VALIDITY OF THE ORDER PASSED U/S.143(3)/153C IS DEVOID OF ANY MERITS. 7. SO FAR AS DISALLOWANCE OF COMMISSION DISALLOWED ON ESTIMATE BASIS HE SUBMITTED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE SAME IS JUSTIFIED. SO FAR AS THE DISALLOWANCE OF ESIC PAYM ENT HE SUBMITTED THAT IN ABSENCE OF ANY PROOF THE ADDITION MADE BY THE AO AN D UPHELD BY THE CIT(A) BE UPHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER B OOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS CITED BEFORE US. FROM THE ORDER OF THE LEARNED CIT(A) WE FIND AT PARA 5 H E HAS MENTIONED THAT DURING THE APPELLATE PROCEEDINGS THE APPELLANT DID NOT PRE SS HIS GROUND IN RESPECT OF ACTION OF THE AO U/S. 153A/153C OF THE IT ACT . EVEN THE GROUND RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL ALSO DOES NOT CONTAIN ANY GROUND CHALLENGING THE VALIDITY OF THE ORDER PASSED UNDER SECTION 143(3)/1 53C. NO ADDITIONAL GROUND HAS BEEN FILED CHALLENGING THE VALIDITY OF THE ASSE SSMENT MADE U/S.143(3)/153C. WE, THEREFORE, UPHOLD THE ORDER PASSED U/S.143(3)/1 53C. 6 9. SO FAR AS ADHOC DISALLOWANCE OF COMMISSION IS CO NCERNED, ADMITTEDLY THE SAME HAS BEEN PAID TO RICKSHAW-PULLERS AND THE HOTE L OF THE ASSESSEE IS SITUATED IN A SLUM AREA. IT IS ALWAYS NOT POSSIBLE EITHER T O GIVE THE NAMES AND ADDRESSES OF THE RIKSHAW-PULLRS OR TO OBTAIN VOUCHERS FROM TH EM. FURTHER, THE AMOUNT CLAIMED IN THE PROFIT AND LOSS ACCOUNT ALSO IS VERY NEGLIGIBLE. UNDER THESE CIRCUMSTANCES, NO DISALLOWANCE OUT OF THE COMMISSIO N EXPENSES CAN BE MADE ESPECIALLY IN AN ORDER PASSED U/S.143(3)/153C. CON SIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT NO DISALLOWANCE OUT OF COMMISSION PAID TO RICKSHAW-PUL LERS IS CALLED FOR. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS SET-ASIDE AND THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. 10. SO FAR AS THE DISALLOWANCE OF ESIC PAYMENT IS C ONCERNED, WE FIND THE AO MADE THE DISALLOWANCE FOR WANT OF PROOF OF PAYMENT TO GOVERNMENT ACCOUNT. LEARNED CIT(A) ALSO UPHELD THE ORDER OF THE AO FOR NON-FURNISHING OF ANY DOCUMENTARY EVIDENCE. HOWEVER, CONSIDERING THE TOT ALITY OF THE FACTS OF THE CASE AND SMALLNESS OF THE ASSESSEE, WE, IN THE INTE REST OF JUSTICE, DEEM IT PROPER TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUB STANTIATE WITH EVIDENCE REGARDING THE ALLOWABILITY OF ESIC PAYMENT. WE ACC ORDINGLY RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE PROOF EVIDENCING PAYMENT OF ESI C BEFORE THE SPECIFIED 7 DATE. WE HOLD AND DIRECT ACCORDINGLY. THIS GROUND BY THE ASSESSEE ON THIS ISSUE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11. SO FAR AS THE GROUND RELATING TO LEVY OF INTERE ST U/S. 234A, 234B AND 234C IS CONCERNED, THE SAME IN OUR OPINION, IS MANDATORY AND CONSEQUENTIAL IN NATURE. ACCORDINGLY, THE GROUND ON THIS ISSUE IS DISMISSED. 12. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE PARTLY-ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY 2012. (I.C. SUDHIR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED THE 17 TH MAY 2012 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE DY.CIT, CENTRAL CIRCLE-1, NASHIK. 2. THE CIT (A),-II, NASHIK 3. THE CIT(A)II, PUNE 4. THE CIT CONCERNED 5. D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE