Sh. Jawahar Lal, Jalandhar Cantt V. The Income tax Officer, Jalandhar

ITA 434/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5728 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 10-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: RAVISH SOOD
• Keywords: Depreciation
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO. 434 & 435(ASR)/2010 ASSESSMENT YEAR:2004-05 & 2005-06 PAN :ABGPL1326B SH. JAWAHAR LAL PROP. VS. THE INCOME-TAX OFFICER, M/S. NEW KRISHNA SWEET SHOP, JALANDHAR. JALANDHAR CANTT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAVISH SOOD, ADV. RESPONDENT BY: SH. AMRIK CHAND, DR ORDER PER MEHAR SINGH, AM, THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE ORDER OF THE CIT(A), JALANDHAR, EACH DATED 31.08.20 10, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO IN SHORT THE ACT) FOR THE ASSESSMENT YEARS 2004-05. & 2005-06 R ESPECTIVELY. 2. IN ITA NO.434(ASR)/2010, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LD. CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AND FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS.3 LACS IN THE HANDS OF THE ASSESSEE BY TREATING THE SAME AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 2.1 THAT THE CIT(A), WHILE SUSTAINING THE ADDITION OF RS.2,50,000/- (OUT OF RS. 3 LACS) IN THE HANDS OF T HE ASSESSEE, IN 2 THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CAS E AS STOOD SUBSTANTIATED ON THE BASIS OF MATERIAL MADE AVAILAB LE ON RECORD, HAD THEREIN GRAVELY ERRED AND FAILED TO APPRECIATE THAT THE A.O. WAS UNDER A STATUTORY OBLIGATION TO SUMMON SH. SUKH WINDER SINGH I.E. THE PROSPECTIVE PURCHASER U/S 131 OF THE ACT IN LIGHT OF THE PERSISTENT REQUESTS BY THE ASSESSEE. 2.2. THAT THE LD. CIT(A) ERRED IN LAW IN BRUSHING ASIDE THE REQUIREMENT ON THE PART OF THE A.O. TO SUMMON SH.SU KHWINDER SINGH AND HENCEFORTH ERRED IN SUSTAINING THE ADDITI ON OF RS.2,50,000/- IN THE HANDS OF THE ASSESSEE. 3. THE CIT(A) FAILING TO APPRECIATE THE FACTS OF TH E CASE AND MERELY GOING BY THE FINDINGS OF THE AO AND WITHOUT CARRYING OUT ANY INDEPENDENT EXAMINATION OF THE FACTUAL POSI TION, THEREIN ERRED IN SUSTAINING THE DISALLOWANCE OF RS.35,375/- IN THE HANDS OF THE ASSESSEE UNDER THE HEAD WORKERS WELFARE EXP ENSES A/C. 4. THE CIT(A) FAILING TO APPRECIATE THE FACTS OF TH E CASE IN THE RIGHT PERSPECTIVE AND THEREIN ERRED IN SUSTAINING T HE DISALLOWANCE OF RS.10,000/- OUT OF REPAIR AND MAIN TENANCE EXPENDITURE A/C 5. THE CIT(A WITHOUT BRINGING ANY MATERIAL ON RECOR D HAD THEREIN MOST ARBITRARILY SUSTAINED THE DISALLOWANCE OF 1/10 TH OF TELEPHONE EXPENSES A/C AND 1/6 TH OF PETROL EXPENSES, CAR REPAIR AND CAR DEPRECIATION OUT OF THE RESPECTIV E DISALLOWANCES CARRIED OUT BY THE A.O. 6. ANY OTHER GROUND OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 3. GROUND NO.1 IS GENERAL IN NATURE. HENCE, NEED NO ADJUDICATION, BEING PURELY GENERAL IN NATURE. 4. AS REGARDS GROUND NOS. 3 TO 6, THE LD. COUNSEL F OR THE ASSESSEE DID NOT PRESS THESE GROUNDS AT THE TIME OF HEARING. HEN CE, THE SAME ARE DISMISSED BEING NOT PRESSED. 3 5. AS REGARDS GROUND NO.2, 2.1 & 2.2, THE LD. COUNS EL FOR THE ASSESSEE, IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS CONT ENDED AND UNDERTOOK THAT THE ASSESSEE IS READY TO PRODUCE SH. SUKHWINDER SIN GH FOR DEPOSITION AND PRAYED FOR GRANT OF OPPORTUNITY. 6. THE LD. DR, ON THE OTHER HAND, DID NOT OPPOSE THE REQUEST OF THE ASSESSEES COUNSEL. 7. HAVING HEARD THE PARTIES AND IN VIEW OF THE REQU EST MADE BY ASSESSEES COUNSEL TO PRODUCE SH. SUKHWINDER SINGH, THE PROSPECTIVE PURCHASER, THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR THE PURPOSE OF SUCH DEPOSITION, IN TERMS OF THE RELEVAN T PROVISIONS OF THE ACT. THE AO IS DIRECTED TO DECIDE THE ISSUE AFRESH, IN A CCORDANCE WITH LAW, AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. NOW, WE TURN TO DEAL WITH ITA NO.435(ASR)/2010, WHERE THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LD. CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAD GRAVELY ERRED IN LAW AN D FACTS OF THE CASE IN DOUBTING THE EXPLANATION OF THE ASSESSE E AS REGARDS THE SOURCE OF CASH DEPOSIT OF RS.1,91,000/- SO MADE BY HIM IN HIS S.V. A/C 13069 WITH PUNJAB & SIND BANK, JALANDH AR, AND THEREIN ACTED MOST ARBITRARILY AND ENDORSED THE FIN DINGS OF THE A.O. 3. THAT THE LD. CIT(A) ERRED IN LAW AND FACTS OF TH E CASE AND SUSTAINED AN ADDITION OF RS.1,31,834/- ( OUT OF ADDITION OF RS.1,71,834/- AS INGENUINE EXPENDITURE. 4. THE CIT(A) WITHOUT BRINGING ANY MATERIAL ON RECO RD HAD THEREIN MOST ARBITRARILY SUSTAINED THE DISALLOWANCE OF 1/10 TH OF TELEPHONE EXPENSES A/C AND 1/6 TH OF PETROL EXPENSES, CAR REPAIR AND CAR DEPRECIATION OUT OF THE RESPECTIV E DISALLOWANCES CARRIED OUT BY THE A.O. 4 5. THAT IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE AFORESAID, IT IS SUBMITTED THAT THE LD. CIT(A) THOU GH DULY APPRECIATED THE AVAILABILITY OF FUNDS AMOUNTING TO RS.1,31,834/- IN THE HANDS OF THE ASSESSEE, PURSUANT TO DISALLOWA NCE OF THE SAID AMOUNT AS INGENUINE/BOGUS EXPENDITURE BY THE A.O. HE HOWEVER FAILED TO APPRECIATE THE FACTS OF THE CASE IN THE RIGHT PERSPECTIVE AND THEREIN ERRED IN RESTRICTING THE AL LOWING OF THE CREDIT AS REGARDS AVAILABILITY OF THE SAID AMOUNT O NLY TO THE EXTENT OF RS.36,834/- TOWARDS THE ALLEGED UNEXPLAI NED CASH DEPOSITS OF RS.1,91,000/- IN THE HANDS OF THE ASSE SSEE. 6. ANY OTHER GROUND OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 9. GROUND NOS.1 & 6 ARE GENERAL IN NATURE, HENCE, W E DO NOT CONSIDER IT ESSENTIAL TO ADJUDICATE THE SAME. 10. GROUND NOS. 4 & 5 ARE NOT PRESSED. HENCE, THE S AME ARE DISMISSED BEING NOT PRESSED. 11. AS REGARDS GROUND NO.2 IS CONCERNED, THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DEPOSIT STANDS EXPLAINED, AS RS. 1 LAC WAS WITHDRAWN ON 25.12.2003 AND DEPOSITED ON 1.6.2004. THE LD. DR, COULD NOT REBUT THIS ASSERTION OF THE ASSESSEE. 12. HAVING REGARD TO THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ASSERTION MADE BY THE ASSESSEE THAT THE D EPOSIT STANDS EXPLAINED, WHICH WAS NOT REBUTTED BY THE LD. DR, THIS GROUND OF APPEAL IS ALLOWED. 13. AS REGARDS GROUND NO.3 RELATING TO SUSTAINING T HE ADDITION OF RS.1,31,834/- OUT OF ADDITION OF RS.1,71,834/-, TH E LD. COUNSEL FOR THE ASSESSEE PLEADED THAT THE LD. CIT(A) WAS NOT JUSTIF IED IN SUSTAINING THE ADDITION AS INGENUINE EXPENDITURE. HE FURTHER SUBMI TTED THAT THE ADDITION HAS 5 BEEN MADE PURELY ON ASSUMPTIONS AND PRESUMPTIONS WI THOUT BRING ANY COGENT AND CORROBORATIVE MATERIAL ON RECORD AND THE SAME MAY BE ALLOWED. 13.1. THE LD. DR, ON THE OTHER HAND, RELIED ON TH E ORDERS OF THE AUTHORITIES BELOW. 14. HAVING HEARD BOTH THE PARTIES AND CONSIDERING T HE RIVAL SUBMISSIONS, FACTS OF THE CASE AND OTHER RELEVANT MATERIAL PLACE D ON RECORD, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION SUSTAINED BY THE LD. CIT(A), IS WITHOUT BRINGING ANY CONCRETE MATERIAL ON RECORD WHICH COUL D GO TO JUSTIFY SUCH DISALLOWANCE. THE ADDITION MADE AND SUSTAINED ON SU RMISES AND CONJECTURES DOES NOT SURVIVE IN THE EYES OF LAW. THE ASSSESSEE HAS EXPLAINED THAT SUCH EXPENDITURE HAS BEEN INCURRED FOR BUSINESS PROMOTIO N PURPOSES. HOWEVER, IN THE INTEREST OF JUSTICE, WE RESTRICT THE DISALLO WANCE TO 50% AS AGAINST RS.1,31,834/- SUSTAINED BY THE CIT(A). THUS, THE AS SESSEE WILL GET RELIEF OF RS.65,917/-. THIS GROUND OF APPEAL IS PARTLY ALLOWE D. 15. IN THE RESULT, THE APPEAL IN ITA NO.434(ASR)/20 10 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, WHEREAS APPEAL NO.435(ASR)/20 10 IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 20TH JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 20TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: SH. JAWAHAR LAL, PROP. M/S. NEW KRISH NA SWEET SHOP, JALANDHAR. 2. THE ITO, WARD II(1), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR. 5. THE SR DR, ASR 6 TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.