ITO 18(1)(3), MUMBAI V. SHARNAPPA H ALUR, MUMBAI

ITA 3999/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101082 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UDAYA B JAKLE
• Keywords: Unexplained investment

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 3999/MUM/2012 ( / ASSESSMENT YEAR : 2008 - 09 THE ITO 18(1)(3), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400 012 / VS. SHRI SHARNAPPA H. ALUR, BLDG. NO. 38, R. NO. 958 ADARSH NAGAR, DR. A.B. ROAD, WORLI, MUMBAI - 400 030 ./ ./ PAN/GIR NO. : ACWPA 0685K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI UDAYA B JAKLE / RESPONDENT BY: SHRI PRAMOD KUMAR PARIDA / DATE OF HEARING : 1 6 .0 9 .2015 / DATE OF PRONOUNCEMENT : 1 6 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 29 , MUMBAI D ATED 1 2 . 3 .2012 PERTAINING TO ASSESSMENT YEAR 2008 - 09. 2. THE FIRST GRIEVANCE OF THE REVENUE IS AGAINST THE DELETION OF THE DISALLOWANCE OF EXPENSES OF RS. 79,06,473/ - MADE BY THE AO U/S. 40A(IA) OF THE ACT AND THE SECOND GRIEVANCE RELATES TO THE DELETION OF THE A DDITION OF RS. 10,00,000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT. ITA. NO. 3999/M/2012 2 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS ON ACCOUNT OF HIRING CHARGES TO THE EXTENT OF RS. 79 ,06,473 / - . THE AO WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS RELATING TO TDS AND THEREFORE THE EXPENSES ARE NOT ALLOWABLE U/S. 40A(IA) OF THE ACT AND ACCORDINGLY MADE THE DISALLOWANCE OF RS. 79,06,473/ - . 3.1. THE INCOME FROM THE BUSINE SS WAS COMPUTED @ 8.5% OF THE GROSS RECEIPTS. THE ADDITION WAS STRONGLY CONTESTED BEFORE THE LD. CIT(A) , FIRSTLY ON THE GROUND THAT SINCE THE PROFIT IS ESTIMATED ALL THE EXPENSES ARE DEEMED TO BE ALLOWED AND THEREFORE THERE SHOULD NOT BE ANY FURTHER DISAL LOWANCE OF EXPENSES. SECONDLY, THERE WAS NO WRITTEN OR ORAL CONTRACT BETWEEN THE ASSESSEE AND THE TRUCK OWNERS AND THE TRUCK OWNERS HAVE HIRED TEMPORARILY FOR A DAY OR SO. ON BOTH COUNTS, THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETE D THE IMPUGNED ADDITION OF RS. 79,06,473/ - . 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE AO. 5. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE TRIBUNAL IN THE CASE OF TEJA CONSTRUC TIONS VS ACIT 129 TTJ (HYD) 57 AND POINTED OUT THAT ON IDENTICAL SET OF FACTS THE TRIBUNAL HAS HELD THAT WHEN THE BOOKS ARE NOT ACCEPTED BY THE AO, THE ESTIMATION OF INCOME TAKES CARE OF OTHER IRREGULARITIES COMMITTED BY THE ASSESSEE THEREFORE ANY FURTHER ADDITION BY INVOKING PROVISIONS OF SEC. 40(A)(IA) AMOUNTS TO PUNISHING THE ASSESSEE FOR A SAME OFFENCE ON A DOUBLE. A SIMILAR VIEW HAS TAKEN BY THE HONBLE HIGH ITA. NO. 3999/M/2012 3 COURT OF ANDHRA PRADESH IN THE CASE OF INDWELL CONSTRUCTIONS VS CIT 232 ITR 776. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT THE BUSINESS PROFIT OF THE ASSESSEE HAS BEEN ESTIMATED BY THE AO AND CONFIRMED BY THE LD. CIT(A). THUS, WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL THAT ONCE THE PROFIT IS ESTIMATED, ALL THE EXPENSES ARE DEEMED TO BE ALLOWED. OUR VIEW IS ALSO FORTIFIED BY THE DECISION OF THE TRIBUNAL, HYDERABAD BENCH IN THE CASE OF TEJA CONSTRUCTIONS (SUPRA). WE, THEREFORE, DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). GROUND NO. 1 IS DISMISSED. 7. ON FURTHER SCRUTINY, THE AO FOUND THAT THE ASSESSEE HAS PURCHASED A PROPERTY WORTH RS. 71 LAKHS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTMENT. THE A SSESSEE EXPLAINED THAT A LOAN OF RS. 52 LAKHS WAS TAKEN FROM KOTAK MAHINDRA BANK AND THE BALANCE AMOUNT OF RS. 19,00,000/ - HAS BEEN PAID THROUGH THE BANK ACCOUNT OF THE WIFE OF THE ASSESSEE. RELEVANT DOCUMENTS/DETAILS WERE FURNISHED. HOWEVER, NO CONFIRM ATION WAS FILED FROM THE WIFE, THEREFORE THE AO MADE THE ADDITION OF RS. 19,00,000/ - . 8. BEFORE THE LD. CIT(A), THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES AND ONCE AGAIN FURNISHED THE RELEVANT DOCUMENTS/DETAILS. AFTER CONS IDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) FOUND THAT THE WIFE OF THE ASSESSEE IS A JOINT OWNER OF THE IMPUGNED PROPERTY AND SHE HAS PAID THROUGH HER BANK ACCOUNT. EVEN THE LOAN SANCTIONED BY KOTAK MAHINDRA BANK WAS IN THE NAME OF THE ASSESSEE, HIS WIFE AND HIS SON. THE LD. CIT(A) FURTHER FOUND THAT ALL THE THREE PERSONS ARE ASSESSED TO TAX WITH THE ITA. NO. 3999/M/2012 4 RESPECTIVE PAN. THE LD. CIT(A) WAS OF THE BELIEF THAT ANY ADVERSE INFERENCE AGAINST THE INVESTMENT CAN ONLY BE DRAWN WITH REFERENCE TO THE WIFE AN D NOT THE ASSESSEE AND ACCORDINGLY HE DELETED THE ADDITION. 9. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. 10. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE FINDINGS OF THE AO. 11. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 12. THE UNDISPUTED FACT IS THAT THE PROPERTY WAS PURCHASED IN JOINT NAME. IT IS ALSO AN UNDISPUTED FACT THAT THE BANK HAD SANCTIONED THE LOAN IN THE NAMES OF THE ASSESSEE, HIS WIFE AND THE UNDENIABLE FACT IS THAT RS. 19,00,000/ - HAVE BEEN DRAWN FROM THE BANK ACCOUNT OF THE WIFE OF THE ASSESSEE. THE LD. CIT(A) WAS RIGHT IN HOLDING THAT ANY ADVERSE INFERENCE, IF NECESSARY CAN BE TAKEN IN THE CASE OF THE WIFE OF THE ASSESSEE. THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. WE, DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). GROUND NO. 2 IS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 16 TH SEPTEMBER , 2015 SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 6 TH SEPTEMBER , 2015 . . ./ RJ , SR. PS ITA. NO. 3999/M/2012 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI