J.c.I.T.-Range-3, Gwalior V. M/s K.P.Singh Bhadariya, Contractor, Gwalior

ITA 376/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7045 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 10-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: RAJENDRA SHARMA ADOVCATE
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.376/AGR/2009 ASST. YEAR: 2005-06 JOINT COMMISSIONER OF INCOME TAX, VS. M/S K.P. SIN GH BHADORIYA, RANGE-III, GWALIOR. CONTRACTOR, E-46, BALWANT NAGAR, GWALIOR. (PAN : AAFFK 6124 L). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HOMI RAJVANSH, CIT D.R. RESPONDENT BY : SHRI RAJENDRA SHARMA, ADOVCATE ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 14.05.2009 PASSED BY THE LD. CIT(A), GWALIOR ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 6,74,000/- ON ACCOUNT OF UNDER SECTION 68. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 6,88,584/- ON ACCOUNT OF SUPPRESSED CLOSING STOCK. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF ` 1,35,885/- ON ACCOUNT OF SUPPRESSED CLOSING STOCK. (DIESEL) 2. THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 3 1 ST OCTOBER, 2005 ALONG WITH BALANCE SHEET, PROFIT & LOSS ACCOUNT AND AUDIT REPO RT. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2) ON 10.04.2006. IN RESPONSE TO THE SAME, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED REQUIRED INFORMATION. WHILE EXAMINING THE BOOKS OF ACCOUNTS, THE ASSESSIN G OFFICER NOTICED THAT THE ASSESSEE HAS NOT DEPOSITED THE TAX DEDUCTED AT SOUR CE IN THE GOVERNMENT ACCOUNT, THEREFORE, AN AMOUNT OF ` 3,20,91,738/- WAS DISALLOWED UNDER SECTION 40(A)(IA ) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). SECONDLY, THE ASSESSING OFFICER REQUESTED THE ASSESSEE TO FURNISH CONFIRMATIONS OF ALL THE LOANS TAKEN BY IT. THE ASSESSEE HAD FURNISHED ONLY ONE CONFIRMATION IN RES PECT OF LOAN OF ` 3,00,000/- FROM SHRI JUNG BAHADUR SINGH BHADORIA, BUT THE PAN OF THE PARTY HAS NOT BEEN MENTIONED ON THE CONFIRMATION. THEREFORE, THE ASSE SSING OFFICER DISALLOWED THE AMOUNT OF ` 3,00,000/- AND ADDED THE SAME UNDER SECTION 68 OF THE ACT TO THE INCOME OF THE ASSESSEE. 3. AS REGARDS TO AMOUNT OF ` 3,74,000/-, AS REQUIRED BY THE ASSESSING OFFICER, THE ASSESSEE HAS ALSO NOT FURNISHED CONFIRMATION O F THE LENDERS AND FAILED TO PROVE 3 THE GENUINENESS OF THE LOAN AND HE ADDED THE SAME T O THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. 4. THE ASSESSING OFFICER ALSO ADDED ` 6,88,584/- ON ACCOUNT OF 75% OF THE MATERIAL LYING AT SITE AS ON 31.03.2005 AGAINST WHI CH THE SECURED ADVANCE OF ` 5,16,438/- WAS GIVEN TO THE ASSESSEE. THIS CLOSING STOCK OF ` 6,88,584/- HAS NOT BEEN SHOWN BY THE ASSESSEE IN ITS ACCOUNTS. THEREF ORE, THE ASSESSING OFFICER ADDED THE SAME TO THE INCOME OF THE ASSESSEE AS VAL UE OF SUPPRESSED CLOSING STOCK AND LASTLY ` 1,35,885/- HAS BEEN ADDED ON ACCOUNT OF PURCHASE PR ICE OF THE DIESEL AS ON 31.03.2005 VIDE BILL NO.72 FROM RAHUL AGGARWAL F UEL. THIS DIESEL WAS NEITHER SHOWN AS CLOSING STOCK NOR AS WORK IN PROGRESS. TH E ASSESSEE HAS SHOWN STOCK OF DIESEL FOR ` 94,097/- IN THE CLOSING STOCK, BUT IT WAS LYING AT 3 DIFFERENT SITES AS PER INFORMATION SUBMITTED BY THE ASSESSEE. THE ASSESSI NG OFFICER ADDED ` 1,35,885/- TO IN THE INCOME OF THE ASSESSEE AS VALUE OF SUPPRE SSED CLOSING STOCK AND COMPLETED THE ASSESSMENT IN DISPUTE ON 31.12.2007 U NDER SECTION 143(3) OF THE ACT. AGGRIEVED BY THE SAME, THE ASSESSEE FILED APP EAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO, VIDE ORDER DATED 14.05.200 9, DELETED THE ADDITION IN DISPUTE. NOW THE REVENUE BEING AGGRIEVED, FILED TH E PRESENT APPEAL AGAINST THE IMPUGNED ORDER. 4 5. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REP RESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND, ON THE C ONTRARY, THE LD. COUNSEL FOR THE ASSESS RELIED UPON THE ORDER PASSED BY THE LD. FIRS T APPELLATE AUTHORITY. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AVAILABLE WITH US. AS REGARDS TO THE ADDITION OF ` 6,74,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT, ON PERUSAL OF THE IMPUGNED O RDER, WE FIND THAT THE LD. FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION OF ` 3,00,000/- IN RESPECT OF LOAN FROM SHRI JUNG BAHADUR SINGH BHADORIA, BUT THE DEPA RTMENT HAS WRONGLY MENTIONED IN THE GROUND OF APPEAL AS ` 6,74,000/- HAS BEEN DELETED BY THE LD. FIRST APPELLATE AUTHORITY. IT IS ONLY ` 3,74,000/- WHICH SHOULD BE CHALLENGED BY THE DEPARTMENT IN THE PRESENT APPEAL. 7. AS REGARD THE DELETION OF ADDITION ` 3,74,000/-, THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY HELD THAT THE ASSESSING OFFIC ER HAS NOT COLLECTED ANY MATERIAL TO ESTABLISH THAT THE DEPOSIT IN BANK ACCOUNT OF M/ S SHANTI BUILDERS WAS MADE BY THE ASSESSEE FIRM. M/S SHANTI BUILDERS IS ASSESSED TO TAX BY THE SAME ASSESSING OFFICER AND THE AMOUNT HAS BEEN GIVEN BY CHEQUE TO THE ASSESSEE FIRM. THEREFORE, THE ADDITION IN DISPUTE HAS RIGHTLY BEEN DELETED BY THE LD. FIRST APPELLATE AUTHORITY. THE ASSESSEE HAS ALSO PRODUCED THE AFFIDAVIT OF THE SMALL CREDITORS BUT THE 5 ASSESSING OFFICER HAS NOT EXERCISED HIS POWER UNDER SECTION 131 OF THE ACT. THEREFORE, THE LD. FIRST APPELLATE AUTHORITY HAS RI GHTLY ADDED THE ADDITION OF ` 74,000/- IN RESPECT OF 4 SMALL LOANS. WE FIND NOTH ING WRONG IN THE IMPUGNED ORDER ON THE DELETION OF ADDITION OF ` 3,74,000/-. THEREFORE, WE CONFIRM THE IMPUGNED ORDER ON THIS ISSUE. 8. AS REGARDS TO THE DELETION OF ADDITION OF ` 6,88,584/- BY THE LD. FIRST APPELLATE AUTHORITY WHICH IS ON ACCOUNT OF SUPPRESS ED CLOSING STOCK, THE LD. FIRST APPELLATE AUTHORITY HAS THOROUGHLY CONSIDERED THE W RITTEN SUBMISSION FILED BY THE ASSESSEE AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH HER. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY ON THE ISSUE IN DI SPUTE AND HAS ALSO NOT CONFRONTED ANY ADVERSE MATERIAL AGAINST THE ASSESSE E. THEREFORE, ADDITION IN DISPUTE HAS RIGHTLY BEEN DELETED BY THE LD. FIRST A PPELLATE AUTHORITY. WE FIND NO INFIRMITY IN THE IMPUGNED ORDER ON THE ISSUE IN DIS PUTE. WE CONFIRM THE IMPUGNED ORDER ON THE ISSUE CHALLENGED BY THE REVENUE IN GRO UND NO.2. 9. AS REGARDS TO THE ADDITION OF ` 1,35,885/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSED CLOSING STOCK, AFTER GOING TH ROUGH THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS GIVEN DETAILS OF CLOSING STOCK AS ON 31.03.2005 WITH FULL DOCUMENTARY EVIDENCE ON THE 6 DIESEL IN DISPUTE WHICH HAS PROPERLY BEEN APPRECIAT ED BY THE LD. FIRST APPELLATE AUTHORITY BY DELETING THE ADDITION IN DISPUTE. THE REFORE, NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. FI RST APPELLATE AUTHORITY. WE CONFIRM THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE AS WELL AS ON THE ISSUES MENTIONED ABOVE BY DISMISSING THE APPEAL FILED BY T HE REVENUE. 10. IN THE RESULT, APPEAL FIELD BY THE REVENUE IS D ISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 06.05.2011 ). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 6 TH MAY, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY