Sh. Vikram Kukreja, Chandigarh V. ACIT, Chandigarh

ITA 443/CHANDI/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51450 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 29-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: CHANDIGARH BENCH A BEFORE HONBLE MS SUSHMA CHOWLA, JM AND HONBLE SHRI MEHAR SINGH, AM ITA NO. 443/CHANDI/2011 ASSESSMENT YEAR: 2006-07 VIKRAM KUKREJA V. A.C.I .T. CIRCLE 2(1), CHANDIGARH # 1627, SEC 18-D CHANDIGARH PAN: AFFPK 3242 Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KUMAR RESPONDET BY: SHRI N.K. SAINI DATE OF HEARING: 29.8.2011 DATE OF PRONOUNCEMENT: 30.8.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE, FOR ASSE SSMENT YEAR 2006-07, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), CHANDIGARH DATED 15.3.2011, U/S 250(6) OF THE INCOM E-TAX ACT (FOR SHORT IN ACT). 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1 THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDITI ON OF RS. 1,67,881/- OUT OF THE EXPENSES CLAIMED AGAINST CONT RACT INCOME. THE ADDITION BE DELETED. 2. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDIT ION OF RS. 6,76,000/- BEING EXPOSED TO TAX TWICE, FIRST ON CON TRACT RECEIPT ITA NO. 443/CHANDI/2011 VIKARAM KUKREJA V. ACIT 2 ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT AND SE CONDLY A S UNACCOUNTED CASH BY WRONGLY INVOKING SECTION 69A OF THE INCOME-TAX ACT, 1961. THE ADDITION BE DELETED. 3. BRIEF FACTS OF THE CASE ARE THAT AS PER PROFIT A ND LOSS ACCOUNT, THE ASSESSEE HAS SHOWN INCOME UNDER THE HEAD BUSIN ESS OR PROFESSION FROM TWO SOURCES:- COMMISSION INCOME AND CONTRACT INCOME. THE AO ASKED THE ASSESSEE TO PROVIDE RELE VANT DETAILS AND DOCUMENTS W.R.T BOTH OF THEM. THE ASSESSEE WAS PROVIDED WITH A NUMBER OF OPPORTUNITIES TO PRODUCE BOOKS OF ACCOU NT W.R.T. THE INCOME FROM BUSINESS OF PROFESSION. HOWEVER, IN THE COURSE OF PROCEEDINGS, THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT OR ANY OTHER EVIDENCE TO SUPPORT HIS CLAIM OF EXPENSES . THE AO MADE ADDITION OF PROPORTIONATE EXPENSES AMOUNTING TO RS. 1,67,881/-. THE LD. CIT(A) UPHELD THAT SAID ADDITION. 4. WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE, RIVAL SUBMISSIONS AND FACTUAL MATRIX OF THE CASE. THE AO DISALLOWED PROPORTIONATE EXPENSES OF RS. 167,881/-, CLAIMED BY THE ASSESSEE, IN THE PROFIT AND LOSS ACCOUNT. THE IMPUGNED EXPEN SES WERE DISALLOWED, ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND RELEVANT BILLS, AS CALLED FOR BY THE ASSESSEE DESPITE AFFORDING REPEATED OPPORTUNITIES. THE LD. CIT(A), CONFIRMED THE SAID DISALLOWANCES AFTER APPRECIATION OF THE SU BMISSIONS FILED BY THE ASSESSEE. IT WOULD BE IN THE FITNESS OF THE CA SE TO PRODUCE PART OF ORDER OF LD. CIT(A). THE SAME ARE REPRODUCED HE REUNDER:- 5 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL SUBMITTED THAT HE WAS INTO THE BUSINESS OF LIASIONING ITA NO. 443/CHANDI/2011 VIKARAM KUKREJA V. ACIT 3 AND AGAINST THE GROSS RECEIPT OF RS. 10,13,441/- HA D REPORTED AN INCOME OF RS. 7,41,220/- WHICH WAS 73.1% OF THE TOTAL TURNOVER. A FURTHER DISALLOWANCES OF RS. 1,67,881/ - WOULD INCREASE THE TAXABLE INCOME TO 89.7% OF THE TURNOVE R. THE AO DID NOT DENY THE FACTS THAT THE APPELLANT HAD NOT O NLY PRODUCED THE TELEPHONE BILLS, TRAVELING EXPENSES, BUT HAD AL SO TENDERED THE CASH FLOW STATEMENT AND ALSO NO DEFECT , AS SUCH, WAS POINTED OUT. 6. THE REPLY OF THE APPELLANT WAS SENT TO AO FOR CO MMENTS, AND HE SUBMITTED AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT W AS SEEN THAT THE ASSESSEE HAD SHOWN UNDER THE HEAD BUSINESS AND PROFESSION FROM TWO SOURCES I.E. COMMISSION INCOME AND CONTRACT INCOME. THE ASSESSEE WAS PROVIDED A NUMBE R OF OPPORTUNITIES TO PRODUCE THE BOOKS OF ACCOUNTS AND TO PRODUCE RELEVANT DETAILS IN RESPECT OF THE INCOME. THE ASS ESSEE WAS FURTHER ASKED TO DETAILS OF PARTIES TO WHOM THE CON TRACTS WERE EARNED AND DETAILS OF EXPENSES AND BILLS AND VOUCHE RS RELATING TO CONTRACT INCOME. THE ASSESSEE HOWEVER DID NOT F URNISH THE REQUISITE DETAILS. ACCORDINGLY, PROPORTIONATE EXPE NSES WERE NOT ALLOWED AGAINST THE CONTRACT INCOME. AS THE AS SESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE WITH REG ARD TO THE EXPENSE INCURRED IN RELATION TO THE CONTRACT INCOME AND ALSO FAILED TO GIVE DETAILS TO THE PARTIES FROM WHOM THI S INCOME WAS EARNED. THE EXPENSES WERE RIGHTLY DISALLOWED. 7. AFTER CONSIDERING THE RIVAL CONTENTIONS, I FIND THAT ALTHOUGH THE APPELLANT HAD SHOWN INCOME AT 73.1% BU T IT DID NOT ABSOLVE HIM FROM SHOWING THE BOOKS OF ACCOUNT A ND OTHER RELEVANT DETAILS. IN THE ABSENCE OF THESE, NO DISA LLOWANCE OF BENEFIT OF THESE PROPORTIONATE EXPENSES AGAINST THE CONTRACT INCOME IS JUSTIFIED SINCE LOOKING TO THE NATURE OF BUSINESS OF THE APPELLANT I.E. COMMISSION INCOME, WHERE THE EXP ENSES ARE NORMALLY MINIMAL, VERIFICATION OF THE SAME WAS NECE SSARY. ITA NO. 443/CHANDI/2011 VIKARAM KUKREJA V. ACIT 4 8. IN VIEW OF ABOVE, APPEAL ON THIS ISSUE IS DISMIS SED. 5. IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE US , THE ASSESSEE FAILED TO ADDUCE COGENT EVIDENCE, TO SUPPO RT HIS CONTENTION RAISED IN THIS GROUND OF APPEAL. CONSEQU ENTLY, IT IS NOT POSSIBLE TO DISLODGE THE FINDINGS OF THE LD. CIT(A) . THEREFORE, THE FINDINGS OF LD. CIT(A), IN THE MATTER ARE UPHELD AN D THE GROUND OF APPEAL FILED BY THE ASSESSEE IS DISMISSED. 6. IN THE NEXT GROUND OF APPEAL THE ASSESSEE CHALLE NGED THE ADDITION OF RS. 6,76,000/-, MADE BY THE AO U/S 69A OF THE ACT AND UPHELD BY THE LD. CIT(A). 7. IN THE COURSE OF APPELLATE PROCEEDINGS, THE AR FOR THE ASSESSEE CONTENDED THAT THE IMPUGNED ADDITION IS CO VERED BY THE AVAILABILITY OF CASH WITH THE ASSESSEE. HE SOUGHT TO EXPLAIN THE AVAILABILITY OF CASH BY WAY OF THE SO CALLED CASH F LOW STATEMENT. IN THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE W AS REQUIRED TO SUBMIT PROPER CASH FLOW STATEMENT. THE ASSESSEE SU BMITTED A STATEMENT WHICH CANNOT BE CONSIDERED REAL CASH FLOW STATEMENT. THE DR PLACED RELIANCE ON THE ORDER OF LD. CIT(A). HAVING REGARD TO THE FACT-SITUATION OF THE CASE, WE DEEM IT FIT TO R ESTORE THE ISSUE TO THE FILE OF AO, WITH A VIEW TO FURTHERING THE COURS E OF JUSTICE. CONSEQUENTLY, THE ISSUE RAISED IN GROUND NO. 2, PER TAINING TO THE ADDITION OF RS. 6,67,000/-, IS RESTORED TO THE FILE OF AO, FOR THE PURPOSE OF PROPER VERIFICATION AND TAKING ACTION, A S PER LAW, AFTER AFFORDING PROPER OPPORTUNITIES TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE A CASH FLOW STATEMENT, BEFORE THE AO OR ANY OTHER ITA NO. 443/CHANDI/2011 VIKARAM KUKREJA V. ACIT 5 MATERIAL AS CALLED FOR BY THE AO. ACCORDINGLY THIS GROUND OF APPEAL IS DISPOSED OFF, AS ALLOWED FOR STATISTICAL PURPOSE S. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS T REATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 .8.2011 SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNANT MEMBER CHANDIGARH, THE 30TH.8.2011 SURESH COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR