The Income-tax Officer, Bathinda V. Smt. Usha Garg, Bathinda

ITA 386/ASR/2010

• Counselvise Citation: 38620914 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LAXMAN SINGH
• Assessee Lawyers: P C GOEL
• Keywords: Unexplained investment; Source of fund
• Section: 44AD; 133(6); 68; 69; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P.JAIN, ACCOUNTANT MEMBER. I.T.A. NO.386 (ASR)/2010. (ASSESSMENT YEAR: 2007-08) THE INCOME TAX OFFICER, SMT. USHA GARG, WARD 1(1),BHATINDA. H.NO.138, MODEL TOWN, BHATINDA . (APPELLANT) VS. (RESPONDENT) AND I.T.A. NO.387 (ASR)/2010. (ASSESSMENT YEAR: 2007-08) THE INCOME TAX OFFICER, SH. KEWAL KRISHAN GARG, HUF, WARD 1(1),BHATINDA. H.NO.138, MODEL TOWN, BHATINDA . (APPELLANT) VS. (RESPONDENT) AND I.T.A. NO.388 (ASR)/2010. (ASSESSMENT YEAR: 2007-08) THE INCOME TAX OFFICER, SH. KEWAL KRISHAN GARG, WARD 1(1),BHATINDA. PROP. M/S.GRG ENTERPRISES, H.NO.138, MODEL TOWN, BHATINDA. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI LAXMAN SINGH, D.R. RESPONDENTS BY: SHRI P.C. GOEL , C.A. DATE OF HEARING: 18 TH APRIL, 2012. DATE OF HEARING: 18 TH APRIL, 2012. ORDER 2 PER BENCH. THE DEPARTMENT HAS FILED THE PRESENT APPEALS AGAIN ST THE DIFFERENT ORDERS ALL DATED 8-7-2010 PASSED BY THE LEARNED CIT(A), B HATINDA FOR THE ASSESSMENT YEAR 2007-08. THE REVENUE HAS RAISED IDENTICAL GRO UNDS OF APPEALS IN ALL THE APPEALS. FOR THE SAKE OF CONVENIENCE, GROUNDS OF AP PEAL INVOLVED IN I.T.A. NO.386(ASR)/2010, ASSESSMENT YEAR 2007-08, ARE REPR ODUCED AS UNDER:- (1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A), BATHINDA WAS NOT RIGHT IN IGNORING THE FACT THAT PR OVISIONS OF SECTION 44AD AND PROVISIONS OF SECTION 68 AND 69 AR E INDEPENDENT TO EACH OTHER AND SECTION 44 DO NO OVERRIDE THE PRO VISIONS OF SECTION 68 AND 69 OF THE INCOME TAX ACT. (2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) WAS NOT RIGHT IN HOLDING THAT ONCE THE NET PROFIT HAS B EEN DECLARED BY THE ASSESSEE @ 8% UNDER THE PROVISO OF SECTION 44AD , NO FURTHER ADDITION IS CALLED FOR DESPITE THE FACT PROVISIONS OF SECTION 44AD HAVE LIMITED OVERRIDING EFFECT OVER SECTION 28 TO 4 3C OF THE ACT. (3) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) WAS NOT RIGHT IN GIVING THE DIRECTION THAT INCOME OF TH E ASSESSEE IS ASSESSABLE UNDER THE HEAD BUSINESS AND PROFESSION A S AGAINST INCOME FROM OTHER SOURCES ASSESSED BY THE A.O. DESP ITE THE FACT THE ASSESSEE IN THE STATEMENT RECORDED COULD NOT EVEN E XPLAIN THE DETAILS OF WORK CLAIMED TO HAVE BEEN EXECUTED IN TH E RETURN OF INCOME FILED AND TRANSACTIONS DONE FOR THE SAID BUS INESS. (4) THAT IT IS PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. (5) THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. THE LEARNED D.R. STATED THAT THE PROVISIONS OF S ECTION 44AD DO NOT OVERRIDE THE PROVISIONS OF SECTIONS 68 AND 69 OF TH E INCOME TAX ACT, 1961 BUT 3 THE LEARNED FIRST APPELLATE AUTHORITY HAS NOT APPRE CIATED CORRECTLY THE PROVISIONS OF LAW AND WRONGLY DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE. HE FURTHER STATED THAT IT IS WELL SETTLED LAW AND COMM ON KNOWLEDGE THAT THE ONUS LIES UPON THE ASSESSEE TO PROVE THE SOURCES OF FUND S, WHICH WERE APPLIED AS RECEIVABLES (AS CLAIMED BY THE ASSESSEE) AND AS UNE XPLAINED INVESTMENT (AS RIGHTLY TREATED BY THE A.O., WHILE FRAMING THE ASSE SSMENT ORDER IN DISPUTE). THE ASSESSEE IS REQUIRED TO FURNISH THE DETAILS OF SOUR CES OF THE FUNDS I.E. CORRESPONDING ASSETS WHOSE SOURCE OF ACQUISITION WA S TO BE PROVED BY THE ASSESSEE BUT THE ASSESSEE HAS FAILED TO PROVE THE S OURCE OF FUNDS NOT DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT ALSO IN THE AP PELLATE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY BUT EVEN BEFORE THIS BENCH. THE LEARNED D.R. FINALLY STATED THAT THE A.O. HAS SENT LETTERS TO ALL THE CR EDITORS UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 BY REGISTERED POST POST/SP EED POST AT THE ADDRESSES GIVEN BY THE ASSESSEE BUT THE ASSESSEE RECEIVED BAC K UNDELIVERED WITH THE POSTAL REMARKS NO SUCH COMPANY/NO SUCH FIRM ON THE ADDRESS WRITTE N/INCOMPLETE ADDRESS ETC., RETURN TO THE SENDER. THESE UNDELIVERED LETTERS WERE SHOWN TO THE ASSESSEE AND THE ASSESSEE WAS ASKED TO PROVIDE CONFIRMED COPIES OF THE ACCOUNTS OF THE SUNDRY CREDITORS, CORRECT ADDRESSE S OF THE SUNDRY CREDITORS IN ORDER TO EXAMINE THE GENUINENESS BUT THE ASSESSEE F AILED TO DO THE NEEDFUL AFTER AFFORDING SUFFICIENT OPPORTUNITY TO PROVE THESE TRA NSACTIONS, THE LEARNED D.R. DREW OUR ATTENTION TOWARDS THE ORDER OF THE A.O., S PECIALLY PARAS 3.2 TO 3.9 AND HE FINALLY REQUESTED THAT THE GENUINENESS OF THE CR EDITORS ION DISPUTE REQUIRES TO BE EXAMINED AT THE LEVEL OF THE A.O., WHICH HAS NOT BEEN APPRECIATED BY THE LEARNED FIRST APPELLATE AUTHORITY AND WRONGLY DELET ED THE ADDITION IN DISPUTE. HE REQUESTED THAT THE APPEALS FILED BY THE REVENUE MAY BE ACCEPTED AND ORDERS O THE LEARNED FIRST APPELLATE AUTHORITY MAY BE CANCEL LED BY RESTORING THE ASSESSMENT ORDER IN DISPUTE. 4. ON THE CONTRARY, THE LEARNED FOR THE ASSESSEE R ELIED UPON THE ORDERS OF THE LEARNED CIT(A) AND STATED THAT THE LEARNED FIRST AP PELLATE AUTHORITY HAS PASSED A 4 WELL REASONED ORDER ON THE ISSUE IN DISPUTE AND HAS RIGHTLY DELETED THE ADDITION IN DISPUTE BY RESPECTFULLY FOLLOWING THE ORDER OF T HE HONBLE JURISDICTIONAL HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF C.I.T. VS. AGGARWAL ENGG. CO. (2008) 302 ITR 246. HE FURTHER STATED THAT THE ASS ESSEE IS IN CIVIL CONSTRUCTION AND HAS ALSO DECLARED A NET PROFIT @ 8% IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 44AD OF THE ACT, NO SEPARATE ADDITION ON AC COUNT OF EXPLAINED INVESTMENT DISPUTED BY THE REVENUE IS REQUIRED TO B E MADE IN THE CASE OF THE ASSESSEE AND THE LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE ADDITION IN DISPUTE BY CANCELING THE ASSESSMENT ORDERS IN DI SPUTE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. WE ARE OF THE CONSIDERED OPINION THAT IT IS AN ADMITTED FACT THAT THE A.O. HAD SENT NOTICES BY REGISTERED POST/SPEED POST TO THE SUNDRY CREDITORS FOR GETTING CONFIRMATION UNDER THE PROVISIONS OF SECTIO N 133(6) OF THE ACT WHICH REMAINED UNDELIVERED WITH THE POSTAL REMARKS NO SUCH COMPANY/NO SUCH FIRM ON THE ADDRESS WRITTEN/INCOMPLETE ADDRESS ETC. , RETURN TO THE SENDER. IT IS ALSO NOT DENIED BY THE ASSESSEE THAT THESE UN DELIVERED LETTERS WERE ALSO SHOWN BY THE A.O. TO THE ASSESSEE AND THE ASSESSEE WAS ALSO REQUESTED TO PROVIDE THE CONFIRMED COPIES OF ACCOUNT OF THE SUND RY CREDITORS IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTION, DESPITE A NUMBER OF OPPORTUNITIES PROVIDED TO THE ASSESSEE, THE ASSESSEE FAILED TO FU RNISH THE DETAILS RAISED AS WELL AS CONFIRMED COPIES OF ACCOUNT, SUNDRY CREDITORS/CO PIES OF ACCOUNT OF SUNDRY CREDITORS OF THE PRECEDING YEARS. THE ASSESSEE HAS ALSO NOT FURNISHED ANY DOCUMENTARY EVIDENCE SUPPORTING HER CLAIM ON THE IS SUE IN DISPUTE. THE ASSESSEE HAS ALSO FAILED TO GIVE ANY DETAIL OF WORK EXECUTED AND WAS NOT ABLE TO EXPLAIN ABOUT THE TRANSACTION DONE. THE ASSESSEE A LSO ONLY REPLIED THAT THE ASSESSEE IS NOT REQUIRED TO MAINTAIN THE BOOKS OF A CCOUNT, AS PER LAW, SINCE THE RETURN IS FILED U/S 44AD OF THE ACT. 6. AFTER GOING THROUGH THE ORDERS PASSED BY THE REV ENUE AUTHORITIES, WE ARE OF THE VIEW THAT THE ONUS LIES UPON THE ASSESSEE TO PROVE THE SOURCE OF FUNDS, 5 WHICH WAS APPLIED AS RECEIVABLE (AS CLAIMED BY THE ASSESSEE) AND AS UNEXPLAINED INVESTMENT (AS TREATED BY THE A.O. WHILE FRAMING TH E ASSESSMENT ORDER), WE ARE ALSO OF THE VIEW THAT THE ASSESSEE IS ALSO REQUIRED TO FURN ISH THE DETAILS OF FUNDS I.E. CORRESPONDING ASSETS WHOSE SOURCES OF ACQUISITION W AS TO BE PROVED BY THE ASSESSEE. IN ORDER TO SUBSTANTIATE THE AMOUNT OF SUNDRY DEBTORS OUTSTANDING BUT THE ASSESSEE FAILED TO PROVE THE SOURCES OF FUNDS NOT ONLY DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AND THE FIRST APPELLATE PROCEEDINGS BUT EVEN BEFORE THIS BE NCH. 7. KEEPING IN VIEW THE FACTS AND THE CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE PROVISIONS OF LAW APPLICABLE ON THE ISS UE IN DISPUTE IN THE CASE OF THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT IN ORDER TO VERIFY THE OPENING BALANCE, TRANSACTIONS MADE BY THE ASSESSEE DURING T HE YEAR FOR PURCHASE OF MATERIAL AND PAYMENT MADE, BALANCE OUTSTANDING AT T HE END OF THE YEAR, THE A.O. HAS SENT LETTERS TO ALL THE CREDITORS UNDER SECTION 133(6) OF THE INCOME TAX ACT, WHICH WERE SENT BY REGISTERED POST/SPEED POST AT TH E ADDRESSES GIVEN BY THE ASSESSEE BUT THE SAME REMAINED UNDELIVERED WITH THE POSTAL REMARKS MENTIONED ABOVE. IN OUR VIEW THAT IT WOULD BE IN THE INTERES T OF JUSTICE, IF WE GIVE SOME MORE OPPORTUNITY TO THE ASSESSEE TO PROVIDE FRESH A ND CORRECT ADDRESSES OF THE CREDITORS IN DISPUTE IN THESE APPEALS TO THE A.O. T O VERIFY THE OPENING BALANCE, TRANSACTIONS MADE BY THE ASSESSEE DURING THE YEAR F OR THE PURCHASE OF MATERIAL AND PAYMENTS MADE, BALANCE OUTSTANDING AT THE END O F THE YEAR AND PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR SUBSTANT IATING THE CLAIM IN DISPUTE. THE A.O. IS DIRECTED TO DECIDE THE ISSUE AS MENTIONED H EREINABOVE. 8. IN THE RESULT, THE ISSUE IN DISPUTE IS SET-ASIDE TO THE A.O. AS INDICATED AND THE PRESENT APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18 TH APRIL, 2012. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DATED: 18 TH APRIL, 2012. /LALIT/