Sh. Sanjay Gupta, Guna V. I.T.O., Guna

ITA 401/AGR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2110 (ITAT-AGRA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 17-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: MANUJ SHARMA S
• Keywords: Business expenditure; Salary income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.401/AGRA/2012 ASSESSMENT YEAR: 2006-07 SHRI SANJAY GUPTA, VS. INCOME TAX OFFICER, C/O. M/S. MAHAKAL BOREWELL, GUNA. A.B. ROAD, GUNA (M.P.) (PAN : AGZPG 0972 E). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, & SHRI MANUJ SHARMA, ADVOCATES RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 23.04.2013 DATE OF PRONOUNCEMENT : 10.05.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 12.06.2012 PASSED BY THE LD. CIT(A), GWALIOR FOR THE ASSESSMEN T YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL :- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED A.O. ERRED IN DISALLOWING THE STAMP PAPER EXPENDITURE OF RS.10119/- 2 ITA NO.401/AGRA/2012 A.Y. 2006-07 WITHOUT ANY BASIS AND THE LEARNED CIT(A) ALSO FAILE D IN CONFIRMING THE SAME. 2. THAT THE LEARNED A.O. ERRED IN ADDING RS.2,00,00 0/- U/S. 68 IN THE NAME OF NIDHI AGRAWAL ALTHOUGH THE AFFIDAVIT CO PY OF BANK STATEMENT, COPY OF IT RETURN WERE SUBMITTED BEFORE THE LEARNED A.O. THE LEARNED CIT(A) ALSO ERRED IN CONFIRMING THE SAM E. 3. THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY LEARNED A.O. OF RS.5,09,000/- ON A/C OF CREDITS OF THE SAID PARTY ALTHOUGH THE COPY OF IT RETURN FILED, AFFIDAVIT, BA NK SEGMENT ETC. WERE SUBMITTED TO PROVE THE GENUINENESS OF THE SAID CRED ITORS. THE CONFIRMATION OF ADDITION IS ENTIRELY WRONG. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVED INCOME FROM SALARY AND INTEREST FROM FIRM AND INTEREST ON SAVING ACCOU NT. 4. THE BRIEF FACTS OF FIRST GROUND WHICH IS PERTAIN ING TO ADDITION OF RS.10,119/- IS THAT DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED THAT THE SUM OF RS.10,119/- DEBITED IN INTEREST ACCOUNT. THE DETAI LS WERE NOT FURNISHED ABOUT THE SAID STAMP DUTY EXPENDITURE OF RS.10,119/-. THE A. O. WAS OF THE VIEW THAT EARNING INTEREST INCOME ON SUCH EXPENDITURES IS NOT NEEDED. THE A.O. MADE THE ADDITION OF RS.10,119/-. THE CIT(A) CONFIRMED THE ADDITION. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ASSESSEE HAS FAILED TO FURNISH ANY EXPLANATION SATISFACTORILY THAT WHY THE STAMP PAPER EXPENDITURE OF RS.10,119/- HAS BEEN DEBITED I N INTEREST ACCOUNT. BEFORE THE 3 ITA NO.401/AGRA/2012 A.Y. 2006-07 CIT(A), IT WAS CLAIMED THAT THESE EXPENSES MAY BE A LLOWED AS BUSINESS EXPENSES BUT THE CIT(A) NOTED THAT THE ASSESSEE HAS DECLARED INCOME FROM HOUSE PROPERTY AND INTEREST INCOME AGAINST WHICH SUCH EXPENSES ARE NOT ALLOWABLE. SINCE THE ASSESSEE HAS FAILED TO FURNISH NECESSARY EXPLANATIO N, IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) ON TH E ISSUE. 6. THE BRIEF FACTS OF THE SECOND GROUND ARE THAT DU RING THE ASSESSMENT PROCEEDINGS, THE A.O. WHILE EXAMINING THE BALANCE S HEET AND CONFIRMATION FILED IN RESPECT OF CREDITORS NOTICED THAT IN RESPECT OF SMT . NIDHI AGRAWAL, IN CONFIRMATION, OPENING BALANCE OF RS.1,00,000/- HAS BEEN SHOWN WH EREAS IN THE BALANCE SHEET FOR A.Y. 2005-06 FILED BY THE ASSESSEE SUCH ENTRY W AS NOT FOUND. THE A.O. MADE ADDITION OF RS.2,00,000/- AS UNDER :- (PAGE NOS.3 & 4) THE EXPLANATION OF THE ASSESSEE IS VAGUE IN THE LI GHT OF THE FACT THAT THE AMOUNT OF RS.2 LAKH TO HAVE BEEN GIVEN TO SHRI SANJAY GUPTA AS MENTIONED IN THE PASS BOOK OF THE LADY WAS DEBIT ED IN HER PASS BOOK ON 2 ND DEC., 2005. IT MEANS, THE LOAN WAS GIVEN DURING T HE ASSESSMENT YEAR 2006-07, NOT IN ASSESSMENT YEAR 200 5-06 AS MENTIONED IN THE REPLY. FURTHER, NO REPAYMENT DURI NG THE YEAR HAS BEEN SHOWN BY THE ASSESSEE. HENCE, THERE SHOULD BE CLOSING BALANCE OF RS.2 LAKH IN THE BALANCE SHEET PREPARED AS ON 31 .03.2006 WHEREAS IN THE BALANCE SHEET CREDIT IN THE NAME OF SMT. NID HI AGRAWAL HAS BEEN SHOWN ONLY AT RS.1 LAKH. THUS, IT IS CLEAR TH AT THE LOAN APPEARING IN BALANCE SHEET AS ON 31.03.2006 AS RS.1 LAKH IS DIFFERENCE AMOUNT. THE AMOUNT OF RS.2 LAKH RECEIVED BY THE AS SESSEE THROUGH CHEQUE FROM SMT. NIDHI AGRAWAL IS DIFFERENT AMOUNT WHICH HAS NOT BEEN MENTIONED IN THE REGULAR BOOKS OF ACCOUNT OF T HE ASSESSEE. THIS AMOUNT GIVEN TO SMT. NIDHI AGRAWAL BY THE ASSESSEE HAS NOT BEEN INCORPORATED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS FAILED 4 ITA NO.401/AGRA/2012 A.Y. 2006-07 TO GIVE HIS EXPLANATION ON THIS LINE AND HE ALSO FA ILED TO FURNISH ANY DOCUMENTARY EVIDENCE THAT THE AMOUNT OF RS.2 LAKH H AS BEEN DULY INCORPORATED IN THE BOOKS OF ACCOUNT. THEREFORE, I TREAT THIS AMOUNT OF RS.2 LAKH AS INCOME FROM UNDISCLOSED SOURCE OF T HE ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. THUS, THER E WOULD BE AN ADDITION OF RS.200000/- TO THE TOTAL INCOME OF THE ASSESSEE. 7. THE CIT(A) CONFIRMED THE ORDER OF A.O. OBSERVING THAT THE ASSESSEE WAS GIVING VARYING EXPLANATION REGARDING LOAN TRANSACTI ON OF RS.2,00,000/- FROM SMT. NIDHI AGRAWAL. DESPITE BEING ASKED FOR, HE HAS ALS O NOT PRODUCED HER FOR VERIFICATION DURING THE COURSE OF ASSESSMENT PROCEE DINGS. THE ASSESSEE HAS FAILED TO PROVE SATISFACTORILY THE CREDITWORTHINESS OF THE LENDER ALONG WITH GENUINENESS OF THE TRANSACTION. 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE A.O. MADE THE ADDITION ON THE BASIS OF THE FACT NOTICED THAT THERE WAS DIFFERENCE IN AMOUNT IN CONFIRMATION FILED AND BOOK S OF ACCOUNT. THE ASSESSEE EXPLAINED THAT THERE IS CLERICAL MISTAKE WHEREAS TH E FACT IS THAT THE LOAN WAS GIVEN ON 02.12.2005 THROUGH BANKING CHANNEL. THIS FACT I S SUPPORTED BY AN AFFIDAVIT OF DEPOSITOR AND HER BANK ACCOUNT OF WHICH COPIES HAVE BEEN PLACED AT PAGE NO.30 TO 35 OF PAPER BOOK. ON PERUSAL OF BANK ACCOUNT, WE N OTICED THAT THE ASSESSEE HAS PROVED THE CREDITWORTHINESS OF DEPOSITOR AS THERE W AS SUFFICIENT BANK BALANCE OUT OF WHICH THE LOAN WAS GIVEN. THE IDENTITY AND GENU INENESS OF THE TRANSACTIONS ARE 5 ITA NO.401/AGRA/2012 A.Y. 2006-07 ALSO PROVED. THUS, THE ASSESSEE DISCHARGED THE BUR DEN IN THIS REGARD. UNDER THE CIRCUMSTANCES, ADDITION OF RS.2,00,000/- IS NOT WAR RANTED. THEREFORE, THE SAME IS DELETED. 9. THE BRIEF FACTS OF THIRD GROUND WHICH IS PERTAIN ING TO ADDITION OF RS.5,09,000/- ARE THAT DURING THE ASSESSMENT PROCEE DINGS THE A.O. NOTICED THAT THE ASSESSEE HAS SHOWN UNSECURED LOAN. THE CIT(A) DELE TED THE PART AMOUNT OF ADDITION, HOWEVER, THE CIT(A) SUSTAINED FOLLOWING A DDITIONS:- I) SMT. SAROJ JAIN RS.1,18,000/- II) SHRI SACHIN JAIN RS.1,12,000/- III) SMT. VIJAY JAIN RS.1,12,000/- IV) SMT. SAVEETA JAIN RS.1,12,000/- V) SMT. URMILA SHARMA RS. 55,000/- ---------------- RS.5,09,000/- ---------------- 10. THE A.O. CALCULATED INTEREST AMOUNT ON THESE FR ESH LOANS ACCOUNT RS.1,37,096/-. THUS, THE TOTAL DISALLOWANCE WAS MA DE BY THE A.O. OF RS.6,87,096/- (RS.5,50,000 + 1,37,096). THE CIT(A) RESTRICTED TH E ADDITION TO THE EXTENT OF RS.5,09,000/- OUT OF RS.6,87,096/- MADE BY THE A.O. 11. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE DEMONSTRATED THAT THE ASS ESSEE HAS DISCHARGED THE BURDEN IN THIS REGARD, IDENTITY, CREDITWORTHINESS A ND GENUINENESS OF TRANSACTIONS BY REFERRING VARIOUS PAGES OF PAPER BOOK WHICH ARE AS UNDER :- 6 ITA NO.401/AGRA/2012 A.Y. 2006-07 S.NO. PARTICULARS PAGE NO. (A) SMT. SAROJ JAIN 1. AFFIDAVIT OF SMT. SAROJ JAIN 1-2 2. ACKNOWLEDGEMENT SLIPS FOR FILING OF THE RETURNS BY SAROJ JAIN FOR A/Y 2006-07 TO 2008-09 3-5 3. AFFIDAVIT OF SMT. SAROJ JAIN FILED BEFORE INCOME TAX OFFICER 6 4. PHOTOCOPY OF THE PAN NO. IN THE CASE OF SARAJ JA IN 7 5. PHOTOCOPY THE BANK A/C OF SAROJ JAIN 8-9 (B) SHRI SACHIN JAIN 1. AFFIDAVIT OF SH. SACHIN JAIN 10-11 2. PHOTOCOPY OF THE PAN NO. IN THE CASE OF SACHIN J AIN 12 3. ACKNOWLEDGEMENT SLIPS FOR FILING OF THE RETURNS BY SACHIN JAIN FOR A/Y 2006-07 13 4. PHOTOCOPY OF THE BANK PASSBOOK OF SACHIN JAIN 14 -15 (C) SHRI VIJAY JAIN 1. AFFIDAVIT OF SH. VIJAY JAIN 16 2. PHOTOCOPY OF THE PAN NO. IN THE CASE OF VIJAY JA IN 17 3. ACKNOWLEDGEMENT SLIPS FOR FILING OF THE RETURNS BY VIJAY JAIN FOR A/Y 2006-07 18 4. PHOTOCOPY OF THE BANK PASSBOOK OF VIJAY JAIN 19- 20 (D) SMT. SAVITA JAIN 1. AFFIDAVIT OF SMT. SAVITA JAIN 21 2. ACKNOWLEDGEMENT SLIPS FOR FILING OF THE RETURNS BY SAVITA JAIN 22-24 3. AFFIDAVIT OF SMT. SAVITA JAIN FILED BEFORE INCOM E TAX OFFICER 25 4. PHOTOCOPY OF THE PAN NO. IN THE CASE OF SAVITA J AIN 26 5. PHOTOCOPY OF THE BANK PASSBOOK OF SAVITA JAIN 27 -28 (E) SMT. URMILA SHARMA 1. CONFIRMATION LETTER FILED BY URMILA SHARMA 29 (F) SMT. NIDHI AGARWAL 1. AFFIDAVIT OF SMT. NIDHI AGARWAL 30-31 2. PHOTOCOPY OF THE BANK PASSBOOK OF NIDHI AGARWAL 32-36 7 ITA NO.401/AGRA/2012 A.Y. 2006-07 12. THE ABOVE FACTS WERE NOT CONTROVERTED BY THE LD . DEPARTMENTAL REPRESENTATIVE. WE FIND THAT THE ASSESSEE HAS FURN ISHED SUFFICIENT MATERIAL TO DISCHARGE BURDEN IN THIS REGARD, IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTIONS INCLUDING BANK BALANCES OUT OF WHICH L OANS WERE GIVEN. UNDER THE CIRCUMSTANCES, THE ADDITION OF RS.5,09,000/- SUSTAI NED BY THE CIT(A) IS NOT WARRANTED, THEREFORE, THE SAME IS DELETED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY