Krishan Kumar Bansal, New Delhi V. ITO, New Delhi

ITA 3834/DEL/2011

• Counselvise Citation: 383420114 RSA 2011
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 18-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Keywords: Unexplained cash credit; Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 3834/DEL/2011 ASSTT. YR: 2007-08 KRISHAN KUMAR BANSAL VS. INCOME-TAX OFFICER, 3856/4, SHAHGANJ, G.B. ROAD, WARD 28(1), NEW DEL HI. NEW DELHI-110006. PAN/GIR NO. AENPB2665M (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI VED JAIN FCA RESPONDENT BY : MS. ANUSHA KHURANA DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST CIT (A)S ORDER DATED 31-5-2011 RELATING TO A.Y. 2007-08. 2. FOLLOWING EFFECTIVE GROUNDS, AS REFRAMED BY US, ARE RAISED : 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING FOLLOWING ADDITIONS, AS UNEXPLAINED CASH CREDIT U/S 68: (I) RS. 2,91,875/- M/S SAKSHAM INTERNATIONAL (II) RS. 2,15,849/- M/S SUBHASH BEARING & MILL STORE RS. 5,07,724/- 2. THE ADDITION ON ACCOUNT OF CAR EXPENSES, DEPRECI ATION AND TELEPHONE EXPENSES = RS. 29,834/-. 3. LEARNED COUNSEL FOR THE ASSESSEE, APROPOS GROUND ABOUT CASH CREDITS, CONTENDS THAT THESE AMOUNTS REPRESENT TRADING LIAB ILITIES INCURRED DURING THE COURSE OF BUSINESS OF DEALING IN BALL BEARINGS. BOT H THE PARTIES ARE SUPPLIERS ITA 3834/DEL/11 KRISHAN KUMAR BANSAL 2 AND THESE BALANCES WERE SHOWN AS OUTSTANDING TO THE IR CREDIT. ACCORDING TO AO, BOTH THESE PARTIES WERE ASSESSED IN HIS WARD AN D THEIR CONFIRMATIONS REVEALED THAT THERE ARE NO DEBIT BALANCES AGAINST A SSESSEE. ACCORDING TO ASSESSEE, NEITHER COPIES OF ACCOUNTS OF THESE SUPPL IERS FROM THEIR BOOKS OF ACCOUNTS WERE GIVEN TO ASSESSEE NOR THEY WERE CALLE D TO INQUIRE AS TO WHY THERE WERE NO DEBIT BALANCES TALLYING WITH THE ASS ESSEES BOOKS OF ACCOUNTS. ASSESSEE FURNISHED COPIES OF ACCOUNTS AND EXPLAINED THAT THERE WERE OPENING BALANCES IN FAVOUR OF THESE SUPPLIERS AND IN ANY CA SE THE ADDITION CANNOT BE MADE IN THIS YEAR. AO WITHOUT GIVING PROPER DETAILS , MADE THESE ADDITIONS. 3.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WH ERE THESE ADDITIONS WERE CONFIRMED. 3.2. APROPOS LAST GROUND IT IS CONTENDED THAT THE D ISALLOWANCE IS EXCESSIVE. 4. LEARNED DR SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MAT ERIAL AVAILABLE ON RECORD. FROM THE ASSESSEES ACCOUNTS IT EMERGES THA T BOTH THE SUPPLIERS HAD OPENING BALANCES AND IN THE YEAR IN QUESTION THE AS SESSEES BALANCE-SHEET SHOWED ABOVE AMOUNTS OUTSTANDING IN THEIR FAVOUR. A O HAS INDICATED THAT FROM THE ACCOUNTS OF THE SUPPLIERS IT EMERGED THAT THERE WERE NO BALANCES RECOVERABLE FROM ASSESSEE. THUS THERE WAS A DIFFERE NCE IN THE ACCOUNTS OF THE ASSESSEE AND THE SUPPLIERS. ASSESSEE CONTENDS T HAT ITS BOOKS OF ACCOUNTS ARE CORRECTLY MAINTAINED AND THE DIFFERENCE IS TO B E EXPLAINED BY SUPPLIERS. IN THIS SITUATION, IT IS DESIRABLE TO EXAMINE IS AS TO WHY IN THE BOOKS OF SUPPLIERS THERE IS NO BALANCES RECOVERABLE FROM ASS ESSEE. IT MAY BE CAUSED BY SUPPLIERS HAVING CREDITED SOME AMOUNTS IN THEIR BOOKS AS CASH PAID BY THE ASSESSEE, GOODS RETURN CLAIM, CESSATION OF LIAB ILITY ETC. IN OUR VIEW WHEN ASSESSEES BOOKS INDICATE A LIABILITY AND NO EXPLAN ATION IS ASKED FROM THE SUPPLIERS WHO CLAIM EXTINGUISHMENTS OF LIABILITY, I T WILL BE DESIRABLE THAT THE ITA 3834/DEL/11 KRISHAN KUMAR BANSAL 3 RELEVANT FACTS ARE PROPERLY EXAMINED BY CALLING T HE SUPPLIERS AND THEIR BOOKS. IN OUR VIEW, WITHOUT CONSIDERING THESE ASPEC TS IT CANNOT BE HELD THAT THERE IS CESSATION OF LIABILITY U/S 41(1). THE ISSU E ABOUT ADDITION BEING MAINTAINABLE IN THIS YEAR ALSO NEEDS TO BE EXAMINED BY AO. CONSEQUENTLY, WE ARE INCLINED TO SET ASIDE THE ISSUE BACK TO THE FILE OF AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW. 5.1. APROPOS SECOND GROUND, THE TOTAL EXPENDITURE I NCURRED BY THE ASSESSEE IN RESPECT OF THESE EXPENSES IS AS UNDER: TELEPHONE RS. 27,228/- CAR MAINTENANCE RS. 70,975/- DEPRECIATION: RS. 50,959/- TOTAL: RS. 1,49,162/- 5.2. IN OUR VIEW, WHEN ASSESSEE HAS NOT MAINTAINED PROPER VOUCHERS AND THE PERSONAL USER IS NOT DISPUTED, THE 20% DISALLO WANCE THEREOF IS JUSTIFIED. WE SEE NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF CIT(A) ON THIS ISSUE. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 17-02-2012. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17-02-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 3834/DEL/11 KRISHAN KUMAR BANSAL 4