M/S Mohitraj DistributersPvt.Ltd., Jabalpur V. I.T.O Ward 2(1), Jabalpur

ITA 38/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1049 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 20-03-2013
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA
• Keywords: Business income; Additional evidence; Set aside

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 38/JAB/2013 A.Y. 2003-04 M/S MOHITRAJ DISTRIBUTORS PVT. LTD JABALPUR PAN AACCM 5839L ::: APPELLANT VS INCOME TAX OFFICER WARD 2(1) JABALPUR ::: RESPONDENT ` APPELLANT BY SHRI SUMIT NEMA RESPONDENT BY SHRI D.R. LATHORIYA DATE OF HEARING 20 . 5 .2015 DATE OF PRONOUNCEMENT 2 8 . 7 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A), JABALPUR, DATED 1.3.2012. 2 2. THE ASSESSEE IS TRADING IN KIRANA GOODS ON WHOLESALE BASIS. THE ASSESSEE IS DEALING IN SUGAR, SOYABEAN OIL, MUSTERED OIL, VEGETABLE OIL, GROUND OIL, ETC.THE ASS ESSING OFFICER MADE CERTAIN ADDITIONS WHICH HAVE BEEN SUSTAINED BY THE LEARNED CIT(A). THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE BEFORE US ARE AS UNDER :- (I) THAT THERE IS NO JUSTIFICATION EITHER IN LAW OR ON FACTS FOR THE LEARNED CIT(A) TO SUSTAIN THE ENTIRE ADDITION OF RS.118862/- ON ACCOUNT OF UNEXPLAINED PURCHASES. (II) THAT THERE IS NO JUSTIFICATION EITHER IN LAW O R ON FACTS IN SUSTAINING THE ENTIRE ADDITION OFRS. 431570/- AS UNACCOUNTED PURCHASES. (III) THAT THERE IS NO JUSTIFICATION EITHER IN LAW OR ON FACTS IN SUSTAINING THE ENTIRE ADDITION OF RS.30362/- AS UNACCOUNTED PURCHASES. 3 (IV) THAT THERE IS NO JUSTIFICATION EITHER IN LAW O R ON FACTS IN SUSTAINING THE ADDITION OF RS.141893/- AS UNEXPLAINED, UNSECURED LOAN. 3. IN GROUND NO. 1 THE ISSUE INVOLVED IS SUSTAINING THE ADDITION OF RS. 1,18,862/-. FROM THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE, WE NOTE THAT INITIALL Y THE ASSESSING OFFICER MADE THE ADDITION OF RS.3,42,970/- ON ACCOUNT OF UNACCOUNTED SALES AS THE ASSESSEE WAS SHOWING TOTAL SALES OF GOODS TO M/S RAJ TRADERS AMOUNTING TO R S. 8,84,480/- WHEREIN THE BOOKS OF ACCOUNTS OF RAJ TRADE RS WERE SHOWING THE GOODS PURCHASED FROM THE ASSESSEE AT RS.1,22,74,450/- AND THE ADDITION OF RS. 3,42,970/- W AS MADE ON ACCOUNT OF SUPPRESSED SALES OUT OF BOOKS. DURI NG THE APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THERE SHOULD BE ADJUSTMENT FROM THE ALLEGED UNACCOUNTE D PURCHASES OF RS.4,31,570/- AND RS. 30,362/- FOR WHIC H 4 THE ADDITION WAS MADE. THUS, THE ASSESSEE CLAIMED THAT DIFFERENCE OF UNRECORDED PURCHASES AND UNRECORDED SALE S SHOULD HAVE BEEN MADE TO THE INCOME OF THE ASSESSEE AND THIS COMES TO RS. 1,18,862/-. 4. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE ASSE SSEE HIMSELF HAS OFFERED THIS AMOUNT BEFORE THE LEARNED CI T(A) ON ACCOUNT OF SUPPRESSED SALES. KEEPING THESE FACTS I N VIEW, WE FIND NO MERIT IN THIS GROUND OF THE ASSESSE E AND DISMISS THE SAME. 5. GROUND NOS. 2 AND 3 ARE REGARDING SUSTAINING THE ADDITION OF RS. 4,31,570/- AND RS. 30,362/- ON ACCOUNT OF UNACCOUNTED PURCHASES FROM M/S K.S. OILS AND M/S J.R. BHANDAR RESPECTIVELY.` 6. THE ASSESSING OFFICER MADE THE ADDITION OF RS.4,31,570/- ON ACCOUNT OF UNACCOUNTED PURCHASES FROM M/S K.S. OILS. THE ASSESSEE MADE PURCHASES OF 5 RS.1,13,08,107/- FROM M/S K.S. OILS. THE ACCOUNTS O F M/S K.S. OILS SHOW PURCHASES OF RS. 1,08,76,537/-. THE ASSESSEE EXPLAINED THAT THE BILLS FOR THE AMOUNT OF RS.4,31,570/- WERE NOT INCORPORATED IN THE PURCHASES , HENCE THE DIFFERENCE. SIMILARLY, IN THE CASE OF M/S J .R. BHANDARI, THE ASSESSEE HAS MADE PURCHASES OF RS. 72,630/- AS PER THE BOOKS OF ACCOUNTS WHEREAS M/S J.R. BHANDARI HAS SHOWN THE AMOUNT OF RS. 1,02,892/-. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EN TIRE PURCHASE AMOUNT SHOULD NOT BE ADDED BUT ONLY THE DIFFERENCE. THE LEARNED CIT(A) IN THE REMAND REPORT F OUND THAT THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS OFFERED THE PROFIT ON THE SUPPRESSED SALES. THE ASSES SEES CLAIM THAT DIFFERENCE ON ACCOUNT OF UNRECORDED SALES AND PURCHASES SHOULD BE ADDED TO THE INCOME OF THE ASSESSE E WHICH COMES TO RS. 1,18,862/- APPEARS TO BE CORRECT. 6 7. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE ASSE SSEE DESERVE TO BE ALLOWED THE BENEFIT OF TELESCOPING BET WEEN THE UNACCOUNTED SALES AND ACCOUNTED PURCHASES. THE ASSESSING OFFICER HAS AGREED TO THE CONTENTION OF THE ASSESSEE. WE HAVE ALREADY SUSTAINED THE ADDITION OF RS.1,18,862/- ON ACCOUNT OF UNEXPLAINED PURCHASES, THEREFORE, WE FIND MERIT IN THE CONTENTION OF THE AS SESSEE AND SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND AL LOW THESE GROUNDS OF THE ASSESSEE. 8. THE ISSUE INVOLVED IN GROUND NO. 4 IS ABOUT SUSTAI NING THE ADDITION OF RS.1,41,893/- ON ACCOUNT OF UNEXPLAINE D AND UNSECURED LOAN. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 2,50,000/- AND THE UNEXPLAINED CASH WER E RECEIVED FROM MRS. MEETA KHATRI AND RS. 2,97,000/- FRO M SMT. SNEHA KHATRI. 9. THE ASSESSEE RECEIVED UNSECURED LOAN OF RS.9,13,95 0/- FROM SMT. MEETA KHATRI DURING THE RELEVANT PERIOD. THE 7 ASSESSING OFFICER MADE THE ADDITION OF RS. 2,50,000/- . AS PER THE ASSESSING OFFICER, NO CAPITAL ACCOUNT OR BALAN CE SHEET WAS FILED. THE ASSESSEE FILED BALANCE SHEET AS ON 31 ST MARCH, 2002 AND 31 ST MARCH, 2003 AS ADDITIONAL EVIDENCE BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) ADMITTE D THE ADDITIONAL EVIDENCE. WITH REGARD CASH CREDIT FROM SMT. SNEHA KHASTRI, THE ASSESSEE FILED ADDITIONAL EVIDENCE WH ICH HAS BEEN CONSIDERED BY THE LEARNED CIT(A). THE LEAR NED CIT(A) HAS GRANTED PART RELIEF BY HOLDING AS UNDER :- 1. SIMILARLY, IN REGARD TO CASH CREDIT AT RS.2,97,000/- IN THE CASE OF SMT. SNEHA KHATRI, BALANCE SHEET AS ON 31.03.02002 AND 31.3.02003 WERE FILED AS ADDITIONAL EVIDENCE. ON PERUSAL OF THE BALANCE SHEET IT WAS NOTICED THAT THERE WAS CASH BALANCE AT RS.1,55,107/-. BUT CASH DEPOSITED IN THE BANK WERE AT RS. 72,000/- AND RS. 75,000/- ON 19.04.2002 AND RS. 1,50,000/- 8 ON 30.05.2002. THUS, THERE WAS NO AVAILABILITY OF CASH WITH THE LOANER TO THE EXTENT OF RS.1,44,893/- WHICH DESERVES TO BE SUSTAINED. II. IN THE CASH BOOK ON 30.05.2002 BECAUSE OF SALE OF PLOT AT AWADHPUR, SMT. SNEHA KHATRI RECEIVED RS. 1,50,000/- WHICH WAS DEPOSITED IN THE BANK OF THAT EVERY DATE AND OUT OF THE BANK LOAN WAS GIVEN TO M/S MOHITRAJ DISTRIBUTORS BY CHEQUE. THUS, THE SAID ASSESSEE SMT. SNEHA KHATRI HAD BALNCE CASH TO DEPOSIT RS. 1,50,000/- ON 30.05.2002. III. ON PERUSAL OF THE COPY OF THE REGISTRY DEED DATED 28.07.2003, THE PLOT WAS SOLD FOR A CONSIDERATION OF RS. 9,25,000/- TO SHRI RAGHUBIR SINGH VIJ AND SHRI ANUBHAV VIJ, GOUR NADI, MANDLA ROAD, JABALPUR. ON PAGE 2 OF THE SALE DEED, IT WAS MENTIONED THAT RS.1,75,000/- PAID 9 AS ADVANCE IN CASH AND BALANCE OFRS. 7,50,000/- WAS MADE THROUGH CHEQUE NO. NEMO/5954590 DATED 25.076.2003 OF UNION BANK OF INDIA, CANTT., JABALPUR TO THE SELLER. BUT, THE DATE OF ADVANCE OF RS.1,50,000/- PAID TO THE SELLER SMT. SNEHA KHATRI AGAINST THE SALE OF AWADHPURI PLOT HOUSE HAD NOT BEEN MENTIONED IN THE SALE DEED. IV. SINCE THE TRANSACTION OF LOAN WERE MADE DURING THE FINANCIAL YEAR 2002-03 AND THE SALE OF AWADHURI PLOT WAS ON 28.07.2003 AS PER THE SALE DEED I.E. EXECUTED DURING THE FINANCIAL YEAR 2003- 04. THE AMOUNT OF RS.1,50,000/- RECEIVED AND ADVANCED AS LOAN TO M/S MOHITRAJ DISTRIBUTORS BY CHEQUE IS NOT CONVINCING IN ABSENCE OF ANY AGREEMENT IN THAT YEAR AS CLAIMED OR AUTHENTIC EVIDENCE TO THE EFFECT. IN VIEW OF ABOVE, ADDITION TO THE EXTENT OF RS.1,41,893/- (RS.2,97,000/- - 10 RS.1,55,107/-) AS UNSECURED LOAN HEREBY STANDS CONFIRMED. THESE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 10. AFTER HEARING WE FIND THAT BOTH THE SIDES ARE NOT ABLE TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A), WE , THEREFORE, SUSTAIN THE ORDER OF THE LEARNED CIT(A) AN D DISMISS THIS GROUND. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS P ARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 28 TH JULY, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 28 TH JULY, 2015 DN/-