Sh. Darshan Kumar Singhal, Bathinda V. The Income-tax Officer, Bathinda

ITA 445/ASR/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2231 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 29-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.445(ASR)/2009 ASSESSMENT YEAR:2001-02 PAN :ABOPS2921B SH.DARSHAN KUMAR SINGHAL, VS. INCOME TAX OFFICER, PROP. LUXMI ENTERPRISES, WARD-1(1), BATHINDA. G.T.ROAD, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.ASHWANI KALIA, CA RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING: 27/05/2013 DATE OF PRONOUNCEMENT:30/05/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA DATED10.08.2009 FOR THE ASSESSMENT YEAR 20 01-02. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING T HE ADDITION OF RS.2,25,000/- MADE BY A.O. U/S 68,. ITA NO.445(ASR)/2009 2 2. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT DEPOSIT OF RS.2,25,000/- REMAINED UNPROVED. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF INTEREST OF RS.44405 PAID TO LOAN CREDITORS. 4. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF RS.17,830/- OUT OF VEHICLE EXPENSES. 5. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF RS.15000/- OUT OF TELEPHONE EXPENSES. 6. THAT THE ORDER PASSED BY THE CIT(A) IS ABSOLUTELY N ON SPEAKING ORDER WITH TOTAL DISREGARD TO THE FACTS AND CIRCUMS TANCES OF THE CASE AND WITHOUT AFFORDING PROPER OPPORTUNITY TO TH E ASSESSEE. 7. THAT THE ORDER IS BAD IN LAW AND ON FACTS. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 2. THE BRIEF FACTS IN GROUNDS NO. 1, 2 & 3 ARE THAT THE ASSESSEE HAS RAISED DIFFERENT LOANS FROM DIFFERENT PERSONS AS UNDER: MEENU RANDER 50000 MOHAN RAJ BHANDARI 20000 SARASWATI TIMBER SUPPLY 100000 SHARDA DEVI 30000 DEVENDRA KUMAR MADAD C/O KAMAL TIMES 25000 225000 2.1. THE ASSESSEE WAS REQUIRED TO PROVE THE IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF THE SAID TRANSACTIONS. IT WAS SUBMIT TED BEFORE THE AO THAT ITA NO.445(ASR)/2009 3 ASSESSEES BUSINESS HAS BEEN CLOSED DOWN AND THE AS SESSEE HAS ALREADY PRODUCED BEST POSSIBLE EVIDENCE AVAILABLE WITH HIM AND HE REQUESTED THE CREDITORS MAY BE CALLED FOR EXAMINATION SINCE THE BUSINESS HAS BEEN FORCED TO CLOSE DOWN. THE ADDRESS OF THE SAID CREDITORS WE RE ASKED FOR FROM THE ASSESSEE WHICH WERE SUBMITTED AND REPRODUCED BY TH E AO AT PAGE 3 OF HIS ORDER. ASSESSEE SUBMITTED AN EXPLANATION WHICH WAS NOT FOUND SATISFACTORY AND ACCORDINGLY THE AO MADE THE ADDITION OF RS.2,25 ,000/- ALONGWITH INTEREST AMOUNTING TO RS.44,405/- THEREON. 3. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 4. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSE E SH. ASHWANI KALIA, CA THAT THE BUSINESS OF THE ASSESSEE HAD BEEN CLOSE D DOWN AND THE LOANS WERE TAKEN THROUGH BROKER. HE SUBMITTED WITH REGAR D TO THE CREDITOR MEENU RANDER THAT DEPOSIT OF RS.50,000 WAS RECEIVED BY W AY OF PAYEE A/C CHEQUE ON 1.6.2000 AND ADVANCE INTEREST OF RS.1500 PAID FO R TWO MONTHS BY PAYEE A/C CHEQUE. SIMILARLY INTEREST FOR EVERY TWO MONTHS PAID IN ADVANCE BY PAYEE A/C CHEQUE. COMPLETE ADDRESS OF THE ABOVE CRE DITOR FILED WITH THE A.O. 4.1. AS REGARDS THE CREDITOR MR. MOHAN RAJ BHANDARI , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN ADVANCE OF RS.20000 RECEIVED BY WAY OF PAYEE A/C CHEQUE ON 13.4.2000. AND ADVANCE INTEREST OF RS.640/- FOR TWO ITA NO.445(ASR)/2009 4 MONTHS WAS PAID BY WAY OF PAYEE A/C CHEQUE. SUBSEQU ENTLY ALSO INTEREST PAID IN ADVANCE BY PAYEE A/C CHEQUE. HE FURTHER STA TED THAT ADVANCE OF RS.20000 REPAID BY PAYEE A/C CHEQUE. THEREAFTER AGA IN ADVANCE OF RS.30000 WAS RECEIVED ON 2.2.2001 BY PAYEE A/C CHEQ UE AND ADVANCE INTEREST OF RS.900 PAID BY PAYEE A/C CHEQUE ON SAME DATE. THE AO ACCEPTED THE SECOND ADVANCE OF RS.30000 AS GENUINE BUT ADDED BACK THE ADVANCE OF RS.20000 AS NOT GENUINE WHICH HAD ALREADY BEEN REP AID BY PAYEE A/C CHEQUE. COMPLETE ADDRESS OF THE CREDITOR WAS FILED. 4.2. AS REGARDS THE CREDITOR M/S. SARSWATI TRADERS , CREDIT OF RS.1,00,000/- WAS RECEIVED ON 1.9.2000 BY PAYEE A/C CHEQUE. BUT A T THE TIME OF RECEIPT OF ABOVE AMOUNT ADVANCE INTEREST OF RS.4500 PAID BY PA YEE A/C CHEQUE ON 1.9.2010. SUBSEQUENTLY ALSO ADVANCE INTEREST PAID B I-MONTHLY BY PAYEE A/C CHEQUE. COMPLETE ADDRESS OF THE CREDITOR WAS GIVEN. 4.3. AS REGARDS THE CREDITOR, SMT. SHARDA DEVI, A C REDIT OF RS.30000 RECEIVED ON 29.04.2000 BY PAYEE A/C CHEQUE AND INTE REST REGULARLY PAID BY WAY OF PAYEE A/C CHEQUE ON BI-MONTHLY BASIS. 4.4. AS REGARDS THE CREDITOR MR. DEVENDRA KUMAR MAK AD C/O KAMAL TIMES, A CREDIT OF RS.125000 RECEIVED ON 14.3.2001 BY PAYEE A/C CHEQUE. OUT OF SAID LOAN RS.100000/- WAS REPAID BY PAYEE A/ C CHEQUE ON 4.8.2001 ITA NO.445(ASR)/2009 5 AND THE AO MADE AN ADDITION OF RS.25,000 WHICH REMA INED UNPAID BY TREATING THE SAME AS INGENUINE. 5. AS REGARDS THE DISALLOWANCE OF INTEREST OF RS.44 ,405/-, HE SUBMITTED THAT TOTAL INTEREST ON THE ABOVE CREDITS COMES TO R S.25,180/- AS PER DETAILS BELOW: A) MEENU RANDER 7500 B) MOHAN RAJ BHANDARI 1280 C) SARASWATI TIMBER SUPPLY 10500 D) SHARDA DEVI 5900 E) DEVENDRA KUMAR MADAD C/O KAMAL TIMES - ------------------- 25180 THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. COUNSEL FOR THE ASSESSEE, MR. ASHWANI KALIA, CA ARGUED THAT THE ADD ITIONS CONFIRMED BY THE LD. CIT(A) BE DIRECTED TO BE DELETED. 6. ON THE OTHER HAND, THE LD. DR, SH.R.L.CHHANALIA, RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS PLACED ON RECORD COPY OF ACCOUNTS FROM THE BOOKS OF ACCOUNT AT PB 2 TO 9. IN THE CASE OF MEENU RANDER , THE ASSESSEE HAS ITA NO.445(ASR)/2009 6 DECLARED TO HAVE RECEIVED RS.50,000/- THROUGH CHEQ UE ON 1.6.2000 WHICH HAS NOT BEEN DISPUTED BY THE OTHER SIDE. IT WAS CLA IMED THAT THE ASSESSEE HAS BEEN CREDITING INTEREST FOR WHICH THE INTEREST HAS ALSO BEEN PAID THROUGH CHEQUE IS ALSO PART OF THE COPY OF ACCOUNT. THE SAI D INTEREST HAS BEEN PAID IN ADVANCE AND THE CLOSING BALANCE SHOWN AT RS.50,000/ -. 7.1. IN THE CASE OF MR. MOHAN RAJ BHANDARI AT PB-5 , THE ASSESSEE HAS RAISED RS.20,000/- ON 13.4.2000, WHICH HAS BEEN REP AID ON 9.8.2000, WHICH IS SUBJECT MATTER OF ADDITION BY THE AO. AS A MATTE R OF FACT, INTEREST HAS BEEN CREDITED IN THIS CASE AS WELL AND HAS BEEN PAID THR OUGH CHEQUE HAS NOT BEEN DISPUTED. THE DIFFERENT FACT IN THIS CASE IS THE AM OUNT WHICH HAS BEEN RECEIVED AND HAS ALREADY BEEN REPAID DURING THE YE AR. THE ASSESSEE HAS RECEIVED RS.30,000/- THROUGH BANKING CHANNEL ON 2.2 .2001 WHICH IS OUTSTANDING AT THE CLOSE OF THE YEAR HAS BEEN ACCEP TED AS GENUINE BY THE LOWER AUTHORITIES. 7.2. AS REGARDS THE LOAN FROM M/S. SARASWATI TIMBER SUPPLY, THE LOAN OF RS. 1 LAC HAS BEEN RAISED ON 1.9.2000 AND INTEREST HAS BEEN CREDITED AND PAID THROUGH BANKING CHANNEL AND OUTSTANDING BALANCE OF RS. 1 LAC IS THERE AT THE CLOSE OF THE YEAR, ON PERUSAL OF THE COPY OF ACCOUN T PLACED AT PB 7. ITA NO.445(ASR)/2009 7 7.3. SIMILAR IS THE FACT IN THE CASE OF SMT. SARDA DEVI IN THE BOOKS OF LAXMI ENTERPRISES, JAIPUR WITH REGARD TO RS.30,000/ - WHICH HAS BEEN RAISED THROUGH ACCOUNT PAYEE CHEQUE AND INTEREST HAVING BE EN PAID THROUGH BANKING CHANNEL AND THE SAID AMOUNT IS OUTSTANDING AT THE END OF THE YEAR. 7.4. AS REGARDS DEVENDRA KUMAR MAKAD PROP. OF KOMAL TIMES, JAIPUR, THE AMOUNT OF LOAN HAS BEEN RAISED AT RS.1,25,000/- ON 14.03.2001. THE ASSESSEE HAS SUBMITTED AN AFFIDAVIT OF THE CASH CRE DITOR DULY ATTESTED BY THE NOTARY PUBLIC. IN THIS CASE, THE AO HAS ACCEPTED TH E REPAYMENT OF RS. 1,00,000/- IN THE FOLLOWING YEAR BY THE ASSESSEE AN D HAS ADDED RS.25,000/-. THEREFORE, ON THE PERUSAL OF THE INDIVIDUAL CASH CR EDIT, THE ASSESSEE HAS SUBMITTED THE CONFIRMATION ONLY IN THE CASE OF DEV ENDRA KUMAR MAKAD PROP. OF KOMAL TIMES AND NOT ANY OTHER CASE. ALSO A T THE SAME TIME, THE AO HAS NOT MADE AN ATTEMPT TO FIND OUT THE ADDRESS FRO M THE BANK AND TO CONFIRM THE TRANSACTION WHETHER THE SAME HAS BEEN CLAIMED A S A GENUINE TRANSACTION OR NOT. THEREFORE, IN THE FACTS AND CIRCUMSTANCES O F THE CASE, IT IS PRE-MATURE TO DECIDE THE ISSUE AT THIS APPELLATE LEVEL. ACCORD INGLY, THE MATTER IS SET ASIDE TO THE FILE OF THE AO WHO WILL VERIFY FROM THE BANK THE IDENTITY AND GENUINENESS OF TRANSACTION AND ALSO THE ASSESSEE SH ALL CO-OPERATE IN THE ASSESSMENT PROCEEDINGS WITH REGARD TO CONFIRMATION OF THE ABOVE AMOUNT PAYABLE WHICH HAS ITA NO.445(ASR)/2009 8 BEEN ADDED TO THE INCOME OF THE ASSESSEE U/S 68 O F THE ACT. WE ORDER ACCORDINGLY. 8. THE AO IS ALSO DIRECTED TO VERIFY THE INTEREST A MOUNT CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE AO IS DIRECTED TO DECIDE THE ISSUE IN GROUNDS NO. 1 TO 3 DENOVO BUT BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, GROUNDS NO. 1 TO 3 ARE ALLOWED FOR STATISTICAL PURPOSES. 9. AS REGARDS GROUNDS NO. 4 & 5, THE AO MADE A DISA LLOWANCE OF RS.17830/- ON ACCOUNT OF PERSONAL USE OF VEHICLE A S NO LOG BOOK WAS MAINTAINED BEING THE PERSONAL EXPENSES AND ALSO RS. 15,000/- ON ACCOUNT OF TELEPHONE EXPENSES BEING PERSONAL ELEMENT. 9.1. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASS ESSING OFFICER. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN THE ABSENCE OF ANY LOG BOOK MAINTAINED BY THE AS SESSEE WITH REGARD TO USE OF THE VEHICLE OR ANY REGISTER FOR CALLS MADE FROM TELEPHONE, THERE IS NOTHING ON RECORD THAT WHOLE EXPENDITURE HAS BEEN USED FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. IN SUCH CASES, PERSONAL ELEMENT CA NNOT BE RULED OUT AND ACCORDINGLY THE AO HAS MADE THE ADDITION AND THE LD . CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE A.O. WE FIND NO INFIRMI TY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY, GROUNDS NO.4 & 5 OF THE ASSESS EE ARE DISMISSED. ITA NO.445(ASR)/2009 9 11. GROUNDS NO. 6 & 7 OF THE ASSESSEE ARE GENERAL I N NATURE AND THEREFORE, NO ADJUDICATION IS REQUIRED. 12 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO445(ASR)/2009 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH MAY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30TH MAY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.DARSHAN KUMAR SINGHAL, BATHINDA. 2. THE ITO WARD-1(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.