Shri Dilip Kumar Basantilal Dangarh, Ujjain V. The ITO, Mandsaur

ITA 376/IND/2013

• Counselvise Citation: 37622714 RSA 2013
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S C GOYAL
• Section: 133A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AJPPD1818F I.T.A.NO. 376 /IND/201 3 A.Y. : 2007-08 SHRI DILIP KUMAR BASANTILAL DANGAD, CINEMA ROAD, SHAMGARH. VS. I TO, MANDSAUR APPELLANT RESPONDENT APPELLANT BY : SHRI S.C.GOYAL, ADV. RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 27. 0 8 .201 3 DATE OF PRONOUNCEMENT : 28 . 0 8 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 11.2.2013 FOR THE ASSE SSMENT YEAR 2007-08 IN THE MATTER OF ORDER PASSED U/S 148/ 144 OF THE INCOME-TAX ACT, 1961. 2. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE WAS C ARRYING ON -: 2: - 2 SMALL KIRANA BUSINESS AT SHAMGARH. SURVEY U/S 133A WAS CARRIED OUT IN THE BUSINESS PREMISES ON 8.6.2007. A DDITION WAS MADE ON ACCOUNT OF EXCESS STOCK OF RS. 25,500/- AND CASH OF RS. 3,95,755/-. A DIARY WAS ALSO FOUND, WHEREIN THE ASSESSING OFFICER ASKED THE ASSESSEE TO ENTER TRANS ACTION OF LOAN AND ON THE BASIS OF THIS DIARY, AN ADDITION OF RS. 16,72,000/- WAS MADE ON THE PLEA THAT THE ASSESSEE HAS ADVANCED LOANS TO VARIOUS PERSONS MENTIONED IN THE DIARY. ADDITION WAS ALSO MADE BY ASSUMING INTEREST INCOME ON SUCH ADVANCES. BY THE IMPUGNED ORDER, THE LD. CIT(A) DEL ETED THE ADDITION MADE ON ACCOUNT OF STOCK. IN RESPECT OF CA SH FOUND AFTER RECORDING THE FINDING THAT FATHER OF THE ASSE SSEE WAS RETIRED AND HE HAS WITHDRAWN HIS RETIREMENT BENEFIT FROM THE BANK WHICH WAS KEPT IN THE HOUSE, ADDITION OF RS. 2 LAKHS WAS DELETED AND BALANCE OF RS. 1,95,755/- WAS CONFIRMED . THE DEPARTMENT IS NOT IN APPEAL BEFORE US AGAINST THE A DDITION DELETED BY THE LD.CIT(A). HOWEVER, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND -: 3: - 3 FROM RECORD THAT OUT OF CASH OF RS. 3,95,755/-, THE ASSESSEE HAS DULY EXPLAINED CASH OF RS. 2 LAKHS BELONGING TO HIS FATHER. BY ACCEPTING ASSESSEES CONTENTION, CIT(A) HAS DELE TED THE SAME. HOWEVER, IN RESPECT OF BALANCE CASH OF RS. 1,95,755/- NOTHING WAS PRODUCED EITHER BEFORE THE CIT(A) OR BE FORE THE TRIBUNAL AS NOT BELONGING TO HIM. ACCORDINGLY, WE C ONFIRM THE ADDITION OF RS. 1,95,755/- MADE ON ACCOUNT OF CASH FOUND. 4. WITH RESPECT TO ADDITION MADE ON ACCOUNT OF ENTRY I N THE DIARY DESCRIBED AS MAYUR MOGRA AGARBATTI, IT WAS CONTENDED BY LD. AUTHORIZED REPRESENTATIVE THAT SU RVEY OFFICER INSISTED THE ASSESSEE TO WRITE CERTAIN NAMES AND WH ICH WAS TAKEN AS A LOAN CREDITOR OF THE ASSESSEE. OUR ATTEN TION WAS ALSO DRAWN TO THE PETITION FILED BEFORE CIT, WHEREI N ALLEGATIONS WERE LEVIED AGAINST THE SURVEY OFFICERS. DURING ASS ESSMENT PROCEEDINGS, THE ASSESSEE HAS CONTENDED THAT NAMES GIVEN IN THE DIARY ARE BOGUS AND SURRENDER WAS TAKEN FROM HI M UNDER PRESSURE AND THAT HE DID NOT DEAL IN MONEYLENDING B USINESS. FROM THE RECORD, WE FOUND THAT DEPARTMENT HAS ISSUE D NOTICES TO THE CERTAIN PARTIES TO WHOM ASSESSEE WAS ALLEGED TO HAVE GIVEN LOANS, WHEREIN THEY HAVE DENIED ANY TRANSACTI ON WITH -: 4: - 4 THE ASSESSEE. NEITHER THE ASSESSING OFFICER HAS REC ORDED ANY FINDING WITH RESPECT TO THE LOAN GIVEN BY THE ASSES SEE TO ANY OF THESE PERSONS, NOR THE ASSESSING OFFICER HAS TRIED TO GET THE TRANSACTION CONFIRMED WITH ANY OF THESE PERSONS. TH E LD. CIT(A) HAS ALSO CONFIRMED THE ADDITION MERELY ON TH E BASIS OF ADMISSION BY THE ASSESSEE. WHEN THE NAMES GIVEN IN THE DIARY WERE FOUND TO BE BOGUS, MERELY BY OBSERVING THAT E VEN IF THE NAMES GIVEN IN THE DIARY WAS NOT GENUINE AND IT IS PRESUMED THAT THE APPELLANT HAS GIVEN LOANS TO VARIOUS PERSO NS IN FICTITIOUS NAMES, THE LD. CIT(A) HAS CONFIRMED THE ADDITION. WE DO NOT FIND ANY JUSTIFICATION IN THE ADDITION SO MA DE IN RESPECT OF FICTITIOUS NAMES ENTERED IN THE DIARY. FINANCIAL POSITION, LIVING STANDARD OF ASSESSEE DO NOT SUPPORT THE ALL EGATION MADE BY REVENUE TO THE EFFECT THAT HE HAD ADVANCED HUGE LOAN OF RS. 16,72,000/-. MERELY ADMISSION BEFORE THE SURVEY PA RTY IS NOT SUFFICIENT TO MAKE ADDITION UNLESS SOME COGENT AND CORROBORATIVE MATERIAL IS BROUGHT ON RECORD TO SUBS TANTIATE THE SAME. IN THE INSTANT CASE, THE ASSESSING OFFICER WA S UNABLE TO CONFIRM FROM EVEN A SINGLE PARTY REGARDING LOAN GIV EN BY THE ASSESSEE TO THEM. EVEN IN RESPONSE TO THE NOTICES G IVEN BY THE -: 5: - 5 DEPARTMENT, THE PERSONS HAVE DENIED ANY TRANSACTION WITH THE ASSESSEE. TOTALITY OF FACTS EMERGING FROM THE ORDER OF THE LOWER AUTHORITIES AND MATERIAL PRODUCED BEFORE US DO NOT SUPPORT THE ADDITION SO MADE ON ACCOUNT OF ALLEGED LOAN GIV EN BY THE ASSESSEE. ASSESSEE PERSONALLY APPEARED BEFORE THE B ENCH AND HE WAS EXAMINED TO FIND OUT HIS WORTH. HOWEVER, NOT HING SUPPORTED THE CONCLUSION DRAWN BY DEPARTMENT REGARD ING HIS FINANCIAL POSITION AND CAPACITY TO ADVANCE LOANS . IN THE LAST SIX YEARS, DEPARTMENT WAS NOT ABLE TO RECOVER A SIN GLE PENNY FROM ASSESSEE, SINCE NOTHING WAS FOUND BY THE DEPAR TMENT, WHICH ITSELF PROVE THE FINANCIAL POSITION OF ASSESS EE. IF THE DEPARTMENT FINDS THAT ASSESSEE HAD ACTUALLY ADVANCE D LOANS TO VARIOUS PARTIES, THERE ARE SUFFICIENT POWERS WIT H THE ASSESSING OFFICER TO RECOVER AMOUNT FROM SUCH LOAN CREDITORS. 5. IN VIEW OF THE ABOVE DISCUSSION, THERE IS NO JUSTIFICATION FOR THE ADDITION MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF ALLEGED LOAN AND INTEREST THEREON. ACCOR DINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE ON ACCOUNT OF LOAN ALLEGED TO BE GIVEN BY HIM AND INTE REST THEREON. -: 6: - 6 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH AUGUST, 2013. CPU* 2728