Dr. Ishtiyaq Ahmad , Ambedkar Nagar V. Income Tax Officer-III, Faizabad

ITA 378/LKW/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9108 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C MEENA
• Keywords: Business income; Opportunity of being heard; Additional evidence

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.378/LKW/2013 ASSESSMENT YEAR:2006 - 07 INCOME TAX OFFICER - III, FAIZABAD. VS DR. ISHTIYAQ AHMAD, BASKHARI AMBEDKAR NAGAR. PAN:AGAPA1973G (RESPONDENT) (APPELLANT) SHRI K. N. SINGH, ADVOCATE APPELLANT BY SHRI K. C. MEENA, D. R. RESPONDENT BY 10/12/2014 DATE OF HEARING 23 /01/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, LUCKNOW DATED 11/02/2013 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE ORDER OF THE LEARNED AUTHORITIES BELOW IS BAD IN LAW AND WITHOUT PROPER APPRECIATION OF FACTS OF THE CASE. 2. BECAUSE THE APPELLANT IS A BEMS. THE APPELLANT PURCHASES MEDICINE AND AFTER ADDING HIS PROFESSIONAL FEE HE ISSUES IT TO THE PATIENTS. THE TRADING RESULT IS GIVEN AS UNDER: OPENING STOCK 66,190.00 SALE 11,07,840.00 PURCHASE 987,879.00 CLOSING STOCK 8,38,275.00 ------------- --------------- 10,54,069.00 11,91,115.00 G.P. 1,37,046.00 -------- ------ ---------------- 11,91,115.00 G.P. SHOWN BY 1,37,046.00 G.P. RATE 12.37% ASSESSEE 2 ADDED BY A.O. 9,87,879.00 G.P. AFTER ADDITION 11,24,925.00 G.P. RATE 101.54% MADE BY A.O. N.P. SHOWN BY 92,650.00 N.P. RATE 8.36% ASSESSEE N.P. AFTER ADDITION 9,87,879.00 BY THE A.O. 10,80,529.00 N.P. RATE 89.17% 3. BECAUSE THE SALE/RECEIPT HAS BEEN ACCEPTED BY THE AUTHORITIES BELOW. 4. BECAUSE THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.9,87,879/ - ADDED BY THE LEARNED ASSESSING OFFICER WHICH IS BAD IN LAW AND WITHOUT PROPER APPRECIATION OF FACTS OF THE CASE. THE ADDITION MADE/CONFIRMED IS LIABLE TO BE DELETED. 5. BECAUSE THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE UNEXPLAINED DEPOSIT AT RS.41,850/ - (134500 - 92450) IN BANK ACCOUNT NO.006810002110 WHICH IS BAD IN LAW AND WITHOUT PROPER APPRECIATION OF FACTS OF THE CASE. THERE WAS OPENING BALANCE IN THIS ACCOUNT RS.22,814/ - AND DEPOSIT R S.1,35,677/ - AND AFTER DEDUCTING WITHDRAWALS THE CLOSING BALANCE IS RS.10,774/ - . THE DEPOSIT IS VERIFIABLE FROM BOOKS OF ACCOUNT KEPT AND COVERED OUT OF PROFESSIONAL RECEIPT AND THE AMOUNT SUSTAINED BY LEARNED CIT(A) IS LIABLE TO BE DELETED. 6. BECAUSE T HE ADDITION MADE FOR HOUSE HOLD EXPENSES IS HIGHLY EXCESSIVE AND LIABLE TO BE DELETED. 3. GROUND NO. 1 IS GENERAL AND HENCE, NO SPECIFIC ADJUDICATION IS CALLED FOR. ACCORDINGLY, THIS GROUND IS REJECTED. 4. REGARDING GROUND NO. 2 TO 4, WHICH ARE INTER - C ONNECTED, LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS WHICH WERE RAISED BEFORE THE CIT(A). 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER GR OUNDS OF APPEAL REPRODUCED ABOVE, IT IS SEEN THAT THE TOTAL OF SALE OF RS.11,07,840/ - AND CLOSING STOCK OF RS.8,38,275/ - HAS BEEN SHOWN AT RS.11,91,115/ - , WHICH IS NOT CORRECT. THE MAJOR ADDITION IS DISALLOWANCE OF RS.9,87,887/ - OUT OF PURCHASE EXPENSES. IN PARA 6 OF THE ORDER OF CIT(A), IT IS NOTED THAT THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE EVEN A SINGLE VOUCHER. HE FURTHER NOTED THAT DURING THE APPELLATE PROCEEDINGS ALSO, THE ASSESSEE NEITHER PRODUCED THESE VOUCHERS NOR MADE ANY PRAYER UNDER RULE 46A OF THE I.T. RULES TO ACCEPT THE SAME AS ADDITIONAL EVIDENCE. BEFORE US, THE ASSESSEE HAS FURNISHED LIST OF PURCHASES AND PHOTOCOPY OF PURCHASE VOUCHERS FOR THE PERIOD 01/04/2005 TO 07/04/2 005. THE ASSESSEE HAS ALSO UNDERTAKEN THAT THE COMPLETE VOUCHERS CAN BE PRODUCED, IF REQUIRED. CONSIDERING THESE FACTS, WE FEEL IT FIT AND PROPER THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO TO CIT(A) FOR FRESH DECISION AFTER EXAMINING THE ADDIT IONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE US . GROUND NO. 2 TO 4 ARE ALLOWED FOR STATISTICAL PURPOSES AND MATTER IS RESTORED TO THE FILE OF CIT(A) FOR FRESH DECISION ON THIS ISSUE. THE ASSESSEE SHOULD PRODUCE THE ADDITIONAL EVIDENCE BEFORE CIT( A) AND CIT(A) SHOULD CONSIDER THE SAME AND HE MAY OBTAIN REMAND REPORT FROM THE ASSESSING OFFICER, IF HE FEELS NECESSARY AND PASS NECESSARY ORDER AS PER LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. GROUND NO. 2 TO 4 ARE ALL OWED FOR STATISTICAL PURPOSES. 7. REGARDING GROUND NO. 5 ALSO, LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS, WHICH WERE RAISED BEFORE CIT(A) WHEREAS LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CONS IDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS ISSUE WAS DECIDED BY CIT(A) AS PER PARA 5.1 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 5.1 REGARDING DEPOSITS IN THE ACCOUNT OF THE APPELLANT AMOUNTING TO RS.1,34,500/ - , THE APPELLANT SUBMITTED THAT THE DEPOSITS IN CASH HAVE BEEN MADE OUT OF PROFESSIONAL RECEIPTS OF RS.11,07,840/ - WHICH IS DULY RECORDED IN THE BOOKS OF ACCOUNT OF 4 THE ASSESSEE. I HAVE CONSIDERED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE ASSESSEE. THERE ARE NO CASH WITHDRAWALS EXCEPT FOR HOUSEHOLD PURPOSES WHICH COULD EXPLAIN THESE DEPOSITS. SINCE THE PROFIT FROM THE BUSINESS HAS BEEN DECLARED AT RS.92,650/ - , I HOLD THAT THE CAS H DEPOSITS TO THE EXTENT OF RS.92,650/ - AS EXPLAINED AND ADDITION OF BALANCE AMOUNT I.E. RS.41,850/ - (RS.1,34,500 - RS.92,650) IS CONFIRMED. 8.1 FROM THE ABOVE PARA FROM THE ORDER OF CIT(A), WE FIND THAT CIT(A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE TO T HE EXTENT OF PROFIT DECLARED BY THE ASSESSEE FROM BUSINESS AT RS.92,650/ - AS AGAINST TOTAL PROFESSIONAL RECEIPT OF RS.11 , 0 7 , 840 / - . IN OUR CONSIDERED OPINION, TOTAL RECEIPTS AND PAYMENTS SHOULD BE EXAMINED INCLUDING CASH FLOW FOR DECIDING THIS ISSUE BECAUS E IN ADDITION TO BUSINESS INCOME DECLARED BY THE ASSESSEE AT RS.92,650/ - , THERE MAY BE EXTRA CASH AVAILABLE IF THE ASSESSEE CAN ESTABLISH THAT THERE WERE SOME EXPENSES FOR WHICH PAYMENT WAS NOT MADE DURING THIS YEAR AND IN THAT SITUATION , IT HAS TO BE ACCE PTED THAT THE EXTRA CASH WAS AVAILABLE TO THE ASSESSEE. HENCE, WE SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE ALSO AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 /01/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR