M/s. Mukut Mahal Banquet (P) Ltd., Meerut V. ITO, Meerut

ITA 437/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97754 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 30-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: RAVINDRA AGGARWAL
• Section: 143(3); 133A

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 437/DEL/2015 A.Y. : 2009-10 M/S MUKUT MAHAL BANQUET VS. INCOME TAX OFFICER -1(4), (P) LTD., DELHI ROAD, INCOME TAX OFFICE, NEAR HAPUR RAILWAY CROSSING, BHAISALI GROUND, MEERUT MEERUT (UP) (PAN : AAECM0776A) (ASSESSEE ) (RESPONDENT) ASSESSEE BY : SH. RAVINDRA AGGARWAL, CA DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR DATE OF HEARING : 30-10-2015 DATE OF ORDER : 30-10-2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), MEERUT DATED 19 .12.2014 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S), MEERUT ('ID. CIT-(A)') HAS ERRED IN LAW AS WELL AS ON THE FA CTS OF THE CASE BY CONFIRMING THE ADDITIONS OF RS4,25,496/-,TO THE RETURNED INCOME OF THE ASSESSEE AND THE VARIOUS OBSERVATION S -AND FINDINGS MADE BYHIM ARE EITHER FACTUALLY INCORRECT OR ARE 2 UNTENABLE IN LAW AND THE FACTS OF THE CASE HAVE NOT BEEN CONSIDERED IN THE RIGHT PERSPECTIVE THEREOF. 2. THAT THE ID. CIT (A) HAS GROSSLY ERRED IN LAW AND IN THE FACTS OF THE CASE BY HOLDING THAT THE EXPLANATION OF THE AS SESSEE REGARDING CASH OF RS.2,00,000/- STATED TO BE BELONG ING TO THE DAUGHTERS OF THE DIRECTOR, APPEARS TO BE AN AFTER-T HOUGH, IGNORING THE FACT THAT THE SAID EXPLANATION WAS OFF ERED AND RECORDED IN THE STATEMENT ON OATH OF THE DIRECTOR O F THE ASSESSEE COMPANY AS RECORDED AT THE TIME OF THE SURVEY. 3. THAT THE ID. CIT (A) HAS GROSSLY ERRED IN LAW AND IN THE FACTS OF THE CASE BY HOLDING THAT THE EXPLANATION OF THE ASS ESSEE REGARDING CASH OF RS.63,120/- STATED TO HAVE BEEN L EFT BY AN ACQUAINTANCE OF THE DIRECTOR OF THE ASSESSEE COMPA NY, NAMELY SH. PAPIT KUMAR, IN THE MORNING OF THE DAY SURVEY WAS CONDUCTED UPON THE ASSESSEE , WAS NOT ACCEPTABLE IN VIEW THAT HE WAS AN UNRELATED, NON-ASSESSED AGRICULTURIST, IG NORING THE FACT THAT THE SAID EXPLANATION WAS DULY RECORDED IN THE STATEMENT ON OATH OF THE DIRECTOR OF THE ASSESSEE COMPANY AS RECORDED AT THE TIME OF THE SURVEY AND WAS DULY CON FIRMED BY SH. PAPIT KUMAR DURING THE ASSESSMENT PROCEEDINGS. 4. THAT THE ID. CIT(A) HAS GROSSLY ERRED IN LAW AS WEL L AS ON THE FACT OF THE CASE IN UPHOLDING THE ADDITION OF RS.1,62,376 /- AS MADE BY THE ID. A.O. IGNORING THE ASSESSEE 'S SUBMISSION AND STATEMENT ON OATH OF ALL THE CUSTOMERS AS RECORDED DURING 3 ASSESSMENT PROCEEDINGS AND IN THE REMAND PROCEEDING S, AND THE OBSERVATIONS MADE BY HIM ARE TOTALLY UNJUST, AN D ARE BASED ON INCOMPLETE AND INCORRECT APPRECIATION OF FACTS O F THE CASE. 5. THE ASSESSEE CRAVES LEAVE TO ADD, MODIFY ANDL OR DELETE ANY GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY CARRYING ON THE BUSINESS OF RUNNING OF HOTEL AND BA R/BANQUET HALL ETC. A SURVEY U/S. 133A OF THE I.T. ACT, 1961 WAS CONDUCTED UPONT TH E PREMISES OF THE ASSESSEE ON 17.2..2009. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT YEAR ON 25.9.2009, DECLARING AN INCOME OF RS. 4,75,770/-, W HICH WAS SELECTED FOR SCRUTINY ASSESSMENT. THE ASSESSMENT PROCEEDINGS WER E COMPLETED BY THE AO VIDE HIS ORDER DATED 31.11.2011 PASSED U/S. 143(3) OF THE I.T. ACT, ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS. 12,88,157/-, AFTER MA KING THE VARIOUS ADDITIONS. 4. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 31.12. 2011, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 19.12.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE AFORESAID ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 62 HAVING THE PHOTOCOPY OF THE REPLY DATED 20.12.2 011 FILED DURING ASSESSMEN PROCEEDINGS; PHOTOPCY OF THE SUBMISSION DATED 1.1.2014 AS FILED BEFORE THE LD. CIT(A); PHOTOCOPY OF THE REMAND REPROT DATED 10.10.2014 ; PHOTOCOPY OF REJOINDER DATED 13.11.2014 TO THE REMAND REPORT DATED 10.10.2014; PHOTOPCY OF STATEMENT ON OATH OF THE DIRECTOR OF THE COMPANY NAMELY MUKESH KUMAR GUPTA; PHOTOCOPY 4 COPY OF THE BANK STATEMENTS OF MS. BHAWNA KANSAL; P HOTOCOPY OF RETURN FILING PRROF, COMPUATION OF TOTAL INCOME AND PERSONAL STATEMENT O F AFFAIRS OF MS. BHAWNA KANSAL; PHOTOCPY OF THE CONRI; PHOTOCOPY OF CONFIRM ATION LETTER DATED 1.1.2014 OF MS. BHAWANA KANSAL; PHOTOCOPY OF THE BANK STATEMENT S OF MS. PRIYANKA KANSAL; PHOTOCOPY OF THE RETURN FILING PROOF OF AY 2009-10, COMPUATION OF TOTAL INCOME OF AND PERSONAL STATEMENT OF AFFAIRS OF MS. PRIYANKA K ANSAL; PHOTOCOPY OF THE CONFIRMATION LETTER DATED 1.1.20014 OF MS. PRIYANKA KA NSAL; PHOTOCOPY OF THE CONFIRMATION DATED 18.2.2009 OF SH PAPIT KUMAR; PHO TOCOPY OF THE STATEMENTS OF OATH RECORDED ON 26.2.2009 AND PHOTOCOPY OF CROSS E XAMINATION; PHOTOCOPY OF THE STATEMENT ON OATH RECORDED ON 28.4.2009; PHOTOC OPY OF THE STATEMENT ON OATH RECORDED ON 16.4.2009 AND PHOTOCOPY OF CROSS EXAMIN ATION STATEMENT OF CUSTOMER NAMELY SH. RAMESH CHAND; PHOTOCOPY OF THE STATEMENT ON OATH RECORDED ON 6.3.2009 AND PHOTOCOPY OF THE STATEMENT OF OATH REC ORDED ON 2.3.2009 U/S. 144(6) ALONGWITH BOOKING RECEIPT, INVOICE AND PHOTOC OPY OF CROSS EXAMINATION STATEMENT OF THE CUSTOMER NAMLEY SHRI NAUNIHAL SING H AS RECORDED ON 24.9.20014 DURING REMAND PROCEEDINGS AND STATED THAT ALL THE ADDITIONS HAVE BEEN FULLY EXPLAINED DURING THE ASSESSMENT AS WELL AS IN THE A PPELLATE PROCEEDINGS, HOWEVER, THE REVENUE HAVE WRONGLY MADE/CONFIRMED THE ADDITI ONS IN DISPUTE WHICH NEEDS TO BE DELETED IN THE INTERST OF JUSTICE. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AVAILABLE WITH ME, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AN D THE CITATIONS RELIED UPON THE BY THE LD. COUNSEL OF THE ASSESSEE. 5 8.1 GROUND NO. 1 IS A GENERAL IN NATURE IN WHICH THE ASSESSEE CHALLENGES THE ADDITIONS OF RS. 2,63,120/- AND RS. 1,62,376/- AS ARE CONFIRMED BY THE CIT(A) WHICH ARE SPECIFICALLY BEING RAISED IN GROUND NO. 2 TO 4. 8.2 IN SO FAR AS ADDITION IN DISPUTE RAISED IN G ROUND NO. 2 & 3 I.E. RS. 2,00,000/- AND RS. 63,120/- OUT OF CASH BALACNE ARE CONCERNED, A SUM OF RS.2,00,000/- WAS STATED TO BE BELONGING TO THE TWO DAUGHTERS OF THE DIRECTOR OF THE COMPANY. THE AO WHILE MAKING ADDITION OF THE SA ID AMOUNT HAS MADE FINDING AND THE MAIN REASON GIVEN BY THE AO WAS THAT BOTH THE GIRLS MADE WITHDRAWAL ON 14.02.2009 FROM THEIR BANK ACCOUNTS, WHILE THE CASH WAS FOUND ON 17.02.2009, THEN HOW COULD ITBE POSSIBLE FOR A CONCERN TO RETAI N THE CASH FOR 3 DAYS. THE FURTHER FINDING OF THE AO WAS THAT THE ASSESSEE COULD NOT PRODUCE AN SPECIFIC EVIDENCE, WHICH COULD PROVE THAT THIS IS THE AMOUNT OF THESE TWO GIRLS. ON THE OTHER HAND, THE ID. CIT(A) HAS CONFIRMED THE ADDITION UNDER APPEAL MAK ING DIFFERENT OBSERVATION TO THE EFFECT THAT AS TO HOW THE CASH OF THE DAUGHTER WAS LYING IN THE BUSINESS PREMISES OF THE ASSESSEE. AS PER THE ID. CIT(A), IT DOES NOT SE EM REASONABLE THAT THE CASH WITHDRAWN BY THE DAUGHTER OF THE DIRECTOR OF THE AS SESSEE COMPANY WOULD BE KEPT AT THE BUSINESS PREMISES RATHER THAN THE RESIDENCE OF THE DIRECTOR. THE ID. CIT(A) FURTHER OBSERVED THAT THE EXPLANATION GIVEN BY THE AR. SEEM TO BE AN AFTERTHOUGHT. A SUM OF RS.63,120/- OUT OF THE CASH FOUND WAS EXPL AINED TO HAVE BEEN LEFT BY AN ACQUAINTEE OF THE DIRECTOR OF THE COMPANY NAM ELY SHRI PAPIT KUMAR IN THE MORNING OF THE DAY OF SURVEY. THE AO HAS MADE ADDIT ION HOLDING THAT SHRI PAPIT KUMAR IS AN AGRICULTURIST HAVING NO RELATIONSHIP WI TH ANY OF THE DIRECTOR OF THE ~ COMPANY AND WAS NOT AN ASSESSEE AND MERELY ON THE B ASIS OF CONFIRMATION OF SHRI PAPIT KUMAR FILED THE EXPLANATION IS NOT ACCEPTED. THE ID. CIT(A) HAS CONFIRMED THE 6 ADDITION BY OBSERVING THAT THE AR. HAS NOT BEEN ABL E TO COUNTER ARGUMENT OF THE AO. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES SU BMISSIONS THAT THE ASSESSEE HAS EXPLAINED THE AVAILABILITY OF CASH OF RS.2,63,120/- SPONTANEOUSLY AT THE TIME OF SURVEY ITSELF WHEN QUESTION WAS FIRST RAISED TO HIM AND THEREFORE THE SAME CANNOT BE REGARDED AS AN AFTERTHOUGHT. IN MY VIEW THERE IS NO LEGAL BAR IN KEEPING CASH OF DAUGHTERS OF THE DIRECTOR AT BUSINESS PREMISES OF D IRECTOR AND ALSO THERE IS NOTHING ABNORMAL IN KEEPING THE CASH BALANCE FOR 3 DAYS AS STATED BY THE A.O. IT HAS ALSO BEEN BROUGHT ON RECORD AT PAGE NOS. 27 TO 40 OF THE PAPER BOOK, BEFORE THE AUTHORITIES BELOW THAT THE CASH BY THE DAUGHTERS OF DIRECTOR WAS WITHDRAWN FOR BEING DEPOSITED IN THEIR BANK ACCOUNT WITH PUNJAB N ATIONAL BANK ACCOUNT AND THE SAME WAS ACTUALLY DEPOSITED ON 21.02.2009 IN THEIR P UNJAB NATIONAL BANK ACCOUNT. AS FAR AS THE AMOUNT OF RS.63,120/- WHICH WAS LEFT AS A TRUST MONEY BY MR. PAPIT KUMAR ON HIS WAY WHILE GOING FROM MEERUT TO DELHI FOR SAFE CUSTODY. THE AUTHORITIES BELOW HAVE TREATED THE SAID AMOUNT AS A CASH CREDIT AND THEREFORE HAVE MADE AND CONFIRMED ADDITION ON THE GROUND THAT HE W AS NOT ASSESSED TO TAX. THEY HAVE NOT DOUBTED HIS IDENTITY AT ALL. FOR KEEPING M ONEY IN TRUST, IT WAS NOT NECESSARY TO PROVE THE CREDITWORTHINESS OF THE PERSON LEAVING THE MONEY. OTHERWISE ALSO ASSESSEE HAS SUBMITTED KISHAN BAHI AND KHASRA OF HI S LAND SHOWING HIS LAND HOLDING. TO BE A RELATIVE OF ANY DIRECTOR IS AISO NOT NECESSARY FOR KEEPING THE MONEY IN TRUST FOR A DAY OR TWO FOR SAFE CUSTODY. THE STAT EMENT OF THE DIRECTOR OF THE ASSESSEE AT THE TIME OF SURVEY OPERATION SPECIFYIN G THE EXACT MONEY TO THE EXTENT OF RS.63, 120/- ALSO SUPPORTS ASSESSEE'S CASE. IN VIEW OF THE ABOVE, I HEREBY DELETE THE ADDITIONS IN DISPUTE RAISED IN GROUND NO. 2 & 3 AND ALLOW THE GROUND NO. 2 & 3 IN FAVOUR OF THE ASSESSEE. 7 8.3 IN SO FAR AS ADDITION IN DISPUTE RAISED IN G ROUND NO. 4 I.E. RS. 1,62,376/- TOWARDS ALLEGED DIFFERENCE IS CONCERNED, THIS ADD ITION IS RELATING TO BOOKING AMOUNTS STATED TO HAVE BEEN PAID BY SIX (6) PARTIES AS AGAINST THE AMOUNT RECORDED TO HAVE BEEN RECEIVED BY THE ASSESSEE. THE AO DURI NG POST SURVEY PROCEEDINGS RECORDED STATEMENT ON OATH OF SIX (6) PARTIES BEHIN D THE BACK OF THE ASSESSEE. OUT OF THE SIX (6) PARTIES, ONE PARTY CONFIRMED TO HAVE BEEN PAID THE AMOUNT OF RS.20,OOO/-, WHICH WAS ALSO RECORDED IN THE BOOKS O F ACCOUNT AT THE SAME FIGURE. THE REMAINING FIVE (5) PARTIES IN THEIR RES PECTIVE STATEMENTS STATED THAT THEY HAVE PAID AMOUNTS MORE THAN THE AMOUNT DECLARED AND RECEIPTED BY THE ASSESSEE . HOWEVER, ALL THE FIVE (5) PARTIES HAD STATED IN THE IR STATEMENT THAT THE AMOUNT PAID BY THEM WAS TOWARDS HIRE CHARGES OF BANQUET, CHARGE S FOR WAITERS, CROCKERY, FLOWER DECORATION, DIESEL FOR GENERATOR AND OTHER F ACILITIES. THE AO HAS REFERRED TO THE IMPOUNDED SEIZED ATERIAL STATING THAT THIS FACT IS ALSO EVIDENT FROM THE PERUSAL THEREOF, BUT THE AO HAS NOT MENTIONED OR PIN-POINTE D ANY TRANSACTION OR PAGE NUMBER OF THE SEIZED MATERIAL, WHERE ANY TRANSACTIO N SHOWING, DIFFERENT AMOUNT MORE THAN THAT OF THE AMOUNT RECORDED IN THE REGULA R BOOKS OF ACCOUNT, WAS NOTED/ RECORDED. THE AO HAS MADE THE REFERENCE TO THE IMPO UNDED MATERIAL ONLY FOR THE SAKE OF STRENGTHENING HIS FINDING WITHOUT PIN-POINT ING ANY SPECIFIC TRANSACTION THEREIN. IN FACT, THERE IS NO TRANSACTION IN THE SEI ZED MATERIAL, WHICH WAS AT DIFFERENT AMOUNT THAN THE AMOUNT RECORDED IN THE REGULAR BOOK S OF ACCOUNT. DURING ASSESSMENT PROCEEDINGS, THE AO. WAS REQUESTED TO C ONFRONT THE FIVE (5) PARTIES TO THE ASSESSEE FOR CROSS EXAMINATION. THE REQUEST WAS NOT ACCEDED TO AND THE ADDITION WAS MADE. THE AO HAS MADE ADDITIONS BY M AKING FINDINGS AT PAGES 5 TO 10 OF THE ASSESSMENT ORDER. THE FINDINGS MADE BY THE ID. AO. ARE PERVERSE AS ALL RECEIPTS FOR ADVANCES RECEIVED AND DETAILS OF AMOUN T CREDITED IN THE BOOKS OF 8 ACCOUNTS WERE DULY FILED BEFORE THE AO IN ASSESSME NT PROCEEDINGS AND NO DEFICIENCY THEREIN ARE PIN-POINTED BY HIM. THE ID. C IT(A) REMANDED THE MATTER TO THE FILE OF THE AO TO CONFRONT THE SAID PARTIES TO THE ASSESSEE AND THEIR STATEMENTS ON CROSS EXAMINATION IN REMAND PROCEEDINGS WERE RECORD ED. IN MY CONSIDERED VIEW ALL THE FIVE (5) PARTIES HAVE CONFIRMED DURING CROS S EXAMINATION THAT THEY HAVE PAID THE VARIOUS AMOUNTS SEPARATELY TO THE DIFFERENT SER VICE PROVIDERS FOR CATERING, FLOWER DECORATION, WAITERS, DIESEL AND OTHER SERVICES AND ONLY THE AMOUNTS WHICH WERE RECEIPTED BY THE ASSESSEE WERE PAID TO IT. COPIES O F THE STATEMENTS OF ALL THE FIVE (5) PARTIES AS RECORDED BEHIND THE BACK OF THE ASSESSEE AS WELL AS RECORDED' IN REMAND PROCEEDINGS ARE PLACED AT PAGES 44-62 IN THE PAPER BOOK. IN FIND THAT THE ID. CIT(A) HAS CONFIRMED THE ADDITION VIDE PARA 7.3 O F THE APPEAL ORDER SIMPLY RELYING ON THE FINDING OF THE AO REGARDING IMPOUND ED BOOKS OF ACCOUNT AND THE STATEMENT OF THE FIVE (5) PARTIES CONCERNED, STATIN G THAT THERE WERE DIFFERENCE IN THE AMOUNTS PAID BY THEM AND AMOUNTS RECEIPTED BY THE A SSESSEE AND MAKING AN UNWARRANTED OBSERVATION THAT THE SAID PARTIES, EVEN IN REMAND 'PROCEEDINGS COULD NOT CLARIFY SATISFACTORILY THAT THEY HAVE PAID SOME AMOUNTS SEPARATELY TO SOME SERVICE PROVIDERS, PROBABLY FOR THE REASON THAT THE SAID PARTIES COULD NOT TELL THE NAMES OF OTHER SERVICE PROVIDERS TO THE AO. IN VI EW OF THE STATEMENTS OF THE FIVE PARTIES RECORDED DURING REMAND PROCEEDINGS AS ARE P LACED AT PAGE 46-48, 50- 52, 54-56, 58 AND 61-62, I AM OF THE CONSIDERED VIEW THAT THAT THE EXCESS AMOUNT DECLARED TO HAVE BEEN PAID BY THE SAID FIVE (5) PAR TIES DURING THEIR EARLIER STATEMENTS, WERE IN FACT PAID BY THEM TO THE DIFFER ENT SERVICE PROVIDERS AND NOT TO THE ASSESSEE . THE ASSESSEE DID NOT PROVIDE OTHER SE RVICES TO THE PARTIES SOLEMNIZING THEIR FUNCTIONS AT THE BANQUET OF THE ASSESSEE, WHI CH FACT ALSO FIND SUPPORT FROM THE BOOKS OF ACCOUNT, WHERE NO EXPENSES ON WAITERS, FLO WER DECORATION, GENERATOR 9 DIESEL, D.J. OR OTHER SERVICE ARE BOOKED. THE SUBMI SSIONS ALSO FIND SUPPORT FROM THE STATEMENT ON OATH AS RECORDED AT THE TIME OF SURVEY FROM INTERNAL PAGES 3 & 5 AS PLACED AT PAGES 21 & 23 OF THE PAPER BOOK. I FIND C ONSDIERABLE COGENCY IN THE CONTENTION OF THE ASSESSEES COUNSEL THAT IT IS N OT POSSIBLE FOR THE PARTIES SOLEMNIZING THEIR FUNCTION TO REMEMBER THE NAMES OF THE DIFFERENT SERVICE PROVIDERS, BEING ONE TIME DEALING ONLY. IN VIEW OF THE ABOVE, I HEREBY DELETE THE ADDITION IN DISPUTE RAISED IN GROUND NO. 4 AND ALLOW THE GROUN D NO. 4 IN FAVOUR OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/20 15. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 30/10/2015 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 10