Ramesh Kumar Kakkar, Panipat V. ACIT, Panipat

ITA 412/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9684 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 01-09-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 03-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: K C ANEJA ITP
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI D.R.SINGH, JM AND SHRI R.C.SHARMA, AM ITA NO.412/DEL/2009 ASSESSMENT YEAR : 2006-07 SHRI RAMESH KUMAR KAKKAR, PROP. NEW JANTA JEWELLERS, COURT BAZAR, PANIPAT. PAN NO.ADEPK6271G. VS. ASSTT.COMMISSIONER OF INCOME TAX, PANIPAT CIRCLE, PANIPAT. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C.ANEJA, ITP. RESPONDENT BY : SHRI H.K.LAL, DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 18.12.2008 FOR THE AY 2006-07. 2. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN T HE MANUFACTURING AND TRADING OF GOLD AND SILVER ORNAMENTS. THERE WAS SURVEY U/S 133A ON 8.12.2005 DURING WHICH STOCK OF GOLD AND SILVER WAS FOUND IN EXCESS WHEREAS CASH WAS FOUND IN SHORT. GOLD AND SILVER FOUND IN EXCESS WAS AMOUNTI NG TO RS.21,98,252/-, WHEREAS SHORT CASH FOUND WAS RS.3,05,765/-. AS PER BOOKS O F ACCOUNT, THE ASSESSEE WAS HAVING CASH BALANCE OF RS.3,84,465/-, HOWEVER DURIN G SURVEY PHYSICAL CASH FOUND WAS RS.78,700/-. IN RESPECT OF THE EXCESS STOCK OF GOLD AND SILVER OF RS.21.98 LAKHS, THE ASSESSEE SURRENDERED A SUM OF RS.22 LAKH S WHICH WAS ACCEPTED BY THE DEPARTMENT. IN THE RETURN OF INCOME FILED, THE ASS ESSEE HAD SHOWN SHORTAGE OF CASH OF RS.3.84 LAKHS AS HAVING BEEN UTILIZED FOR GOLD A ND SILVER ORNAMENTS. WHILE FRAMING THE ASSESSMENT, THE AO MADE AN ADDITION OF RS.3,05,765/- ON ACCOUNT OF SHORTAGE IN CASH WHICH WAS STATED TO BE UTILIZED FO R ACQUISITION OF GOLD AND SILVER ITA-412/D/2009 2 ORNAMENTS. BY THE IMPUGNED ORDER, THE CIT(A) CONFI RMED THE ACTION OF THE AO, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT DURING SURVEY, PHYSICAL STOCK OF GOLD AND SILVER JEWELLERY WAS TAKEN AND CA SH WAS COUNTED. GOLD AND SILVER JEWELLERY WAS FOUND IN EXCESS AS COMPARED TO THE STOCK SHOWN IN THE BOOKS OF ACCOUNT BY RS.21.98 LAKHS, WHEREAS PHYSICAL CASH WAS FOUND SHORT BY RS.3.05 LAKHS. AS THE ASSESSEE WAS NOT HAVING ANY BILL ETC . FOR THE EXCESS STOCK OF GOLD AND SILVER FOUND, HE SURRENDERED THE SAME AS ITS INCOME . SINCE THE ASSESSEE WAS NOT OBTAINING BILL ETC. FOR THE STOCK OF GOLD AND SILVE R SO ACQUIRED, THERE WAS NO REASON FOR PRESSING ANY BILL FOR THE SHORTAGE IN CASH FOUN D WHICH WAS STATED TO BE UTILIZED FOR GOLD AND SILVER. IT IS NOT THE CASE OF THE DEP ARTMENT THAT CASH FOUND IN SHORT COULD BE TREATED AS INCOME. IT IS ALSO NOT THE CAS E OF THE DEPARTMENT THAT THE SHORTAGE IN CASH SO FOUND WAS UTILIZED BY THE ASSES SEE SOMEWHERE ELSE. SINCE THE ASSESSEE HAS ACCEPTED THE VERSION OF EXCESS STOCK O F GOLD AND SILVER FOUND WHICH IS NOT SUPPORTED BY ANY BILLS AND VOUCHERS, THERE WAS NO REASON WITH THE DEPARTMENT TO ASK FOR PRODUCTION OF BILLS IN RESPECT OF UTILIZ ATION OF SHORTAGE IN CASH UTILIZED FOR GOLD AND SILVER. WE, THEREFORE, DO NOT FIND AN Y MERIT FOR MAKING ANY ADDITION ON ACCOUNT OF SHORTAGE IN CASH WHICH WAS ALLEGED TO BE UTILIZED FOR GOLD AND SILVER ORNAMENTS. 4. THE AO HAS ALSO DISALLOWED INTEREST PAID TO THRE E RELATIVES AT THE RATE OF 15% ON THE PLEA THAT INTEREST TO OTHER CREDITORS WA S PAID AT 12% BY INVOKING THE PROVISIONS OF SECTION 40A(2) OF THE IT ACT. THE DI SALLOWANCE OF INTEREST OF RS.68,003/- WAS CONFIRMED BY THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM THE RECORD THAT TO THE SAME RELATIVES, THE ASSESSEE HAD PAID INTEREST AT THE RATE OF 18% IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND WHICH HAS BEEN ACCEPTED BY THE ITA-412/D/2009 3 DEPARTMENT WHILE COMPLETING SCRUTINY ASSESSMENT U/S 143(3). DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS EVEN PAID REL ATIVELY LOWER RATE OF INTEREST AT 15% AS AGAINST INTEREST RATE OF 18% PAID DURING THE IMMEDIATELY PRECEDING ASSESSMENT YEAR AND WHICH WAS ACCEPTED BY THE DEPAR TMENT, THERE IS NO REASON FOR REDUCING THE INTEREST RATE FURTHER BY 3%, MERELY ON THE PLEA THAT SOME OF THE OTHER CREDITORS FROM WHOM LOAN HAS BEEN TAKEN WERE PAID I NTEREST AT THE RATE OF 12%. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION FOR DI SALLOWANCE OF PART OF INTEREST BY REDUCING THE SAME FROM 15% TO 12%. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2009. SD/- SD/- (D.R.SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 04.09.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR