Avtar Singh Darshan Singh, Aligarh V. A.C.I.T., Circle-1, Aligarh

ITA 455/AGR/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0429 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 5 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-07-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 07-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MAURYA
• Keywords: Depreciation
• Section: 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.455/AGRA/2011 ASSESSMENT YEAR: 2003-04 SHRI AVTAR SINGH DARSHAN SINGH, VS. ASST. COMMISSIO NER OF INCOME TAX, C/O. SHRI SANJEEV GUPTA, C.A., CIRCLE -1, ALIGARH . 2/327A, NIRANJAN PURI, RAMGHAT ROAD, ALIGARH. (PAN: AALFA 8911 H). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI S.L. MAURYA, SR. D.R. DATE OF HEARING : 22.07.2013 DATE OF PRONOUNCEMENT : 26.07.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30.08.2011 PASSED BY THE LD. CIT(A), GHAZIABAD FOR THE ASSESSM ENT YEAR 2003-04. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD. A.O. COMPLETING THE ASSESSMENT UNDER SECTION 14 4 WHILE THERE WAS NO MATERIAL ON RECORD TO WARRANT FOR COMPLETION OF ASSESSMENT UNDER SECTION 144. ITA NO.455/AGRA/2011 A.Y. 2003-04 2 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD., A.O. IN NOT ALLOWING THE DEPRECIATION ON FIXED ASSETS PUT TO USE DURING THE YEAR. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN PARTLY CONFIRMING THE ACTION OF LD. A.O. OF MAKING AN ADDITION OF RS.9,70 ,842/- OUT OF TOTAL ADDITION OF RS.12,70,842/- AS INCOME FROM UNDISCLOS ED SOURCES UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE LD. AUTHORISED REPRESENTATIVE HAS NOT PRESSE D GROUNDS NO.1, 2 & 4, THEREFORE, THE SAME ARE DISMISSED AS NOT PRESSED. 4. THE EFFECTIVE GROUND REMAINED FOR ADJUDICATION I S GROUND NO.3 WHICH PERTAINS TO ADDITION OF RS.12,70,842/-. 5. THE BRIEF FACTS OF THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDING THE A.O. NOTICED THAT PARTNERS HAVE INTRODUCED FRESH CA PITAL OF RS.12,70,842/-. THE A.O. ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CA PITAL INTRODUCED BY THE PARTNER. IN THE ABSENCE OF COMPLIANCE, THE A.O. MADE ADDITIO N OF RS.12,70,842/- UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER). THE CIT(A) HAS ITA NO.455/AGRA/2011 A.Y. 2003-04 3 CONFIRMED THE ADDITION TO THE EXTENT OF RS.9,70,842 /- AFTER CONSIDERING THE CASH FLOW AND SUBMISSION OF THE ASSESSEE AND REMAND REPO RT ON THE GROUND THAT THE A.O. HAS GIVEN A LEVERAGE ON ACCOUNT OF NORMAL HUMAN PRO BABILITY OF RS.20,000/- AS CASH-IN-HAND FOR ALL THE PARTNERS. HOWEVER, THE CI T(A) HAS GIVEN SOME MORE LEVERAGE OF RS.50,000/- EACH TO ALL THE PARTNERS AN D ACCORDINGLY ALLOWED RELIEF OF RS.3,00,000/- AND BALANCE ADDITION OF RS.9,70,842 H AS BEEN CONFIRMED. 6. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS EXPLAINED WITH EVIDENCE AND MATERIAL THAT ALL THE PARTNERS WE RE HAVING SUFFICIENT CASH BALANCE TO INTRODUCE THE FRESH CAPITAL. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IT IS ADMITTED FACT THAT THE CAPITAL HAS BEEN INTRODUC ED BY THE PARTNERS. THE A.O. HIMSELF HAS ACCEPTED THE CASH AVAILABILITY OF THE P ARTNERS TO THE EXTENT OF RS.20,000/- AND THE CIT(A) HAS ACCEPTED IT AT RS.50 ,000/-, WHICH MEANS THE AMOUNT HAS BEEN GIVEN BY THE PARTNERS AS THEIR CAPI TAL CONTRIBUTION. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT WHEN THE A SSESSEE FIRM HAS PRIMA FACIE ESTABLISHED THE AMOUNT AS INTRODUCED BY PARTNER AS CAPITAL, THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. LD. AUTHORISED REPRESENTATIVE IN SUPPORT OF HIS CONTENTION RELIED UPON THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF ITO VS. M/S. PRESTRESSED CONCRETE INDUSTRIES IN ITA NO.167/ AGRA/2011, ORDER DATED 11.05.2012. THE RELEVANT FINDING IS REPRODUCED AS UNDER :- ITA NO.455/AGRA/2011 A.Y. 2003-04 4 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD AND FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF JURISDICTIONAL M.P. HIGH COURT IN THE CASE OF METAC HEM INDUSTRIES (SUPRA) AND THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF JAISWAL MOTOR FINANCE (SUPRA) AND SUNDER LAL JAI N (SUPRA). IN THIS CASE, ONE OF THE PARTNERS INTRODUCED CAPITAL IN THE ASSESSEE FIRM IN A SUM OF RS.45,45,000/- WHICH WAS ACCEPTED BY THE AO EXCEPT THE CAPITAL INTRODUCED IN CASH. THE PARTNER AFFIRMED TH E INTRODUCTION OF THE CAPITAL IN THE ASSESSEE FIRM IN STATEMENT RECOR DED U/S. 131 OF THE IT ACT AND IS ALSO ASSESSED TO TAX. HE HAS ALSO FIL ED AFFIDAVIT IN SUPPORT OF THE SAME CONTENTION BEFORE THE LD. CIT(A ), WHICH HAS NOT BEEN DISPUTED BY THE REVENUE IN THE GROUNDS OF APPE AL. THEREFORE, THE ASSESSEE IS ABLE TO EXPLAIN THAT THE CAPITAL HAS BE EN INTRODUCED BY THE PARTNER THROUGH HIS OWN SOURCES. THEREFORE THE INIT IAL BURDEN ON THE ASSESSEE FIRM EXPLAINING THE CAPITAL CONTRIBUTION B Y ONE OF THE PARTNERS IS DISCHARGED. THE LD. CIT(A) RIGHTLY DIRE CTED THE AO TO TAKE ACTION AGAINST THE PARTNER IN HIS INDIVIDUAL CASE I F HE WAS NOT SATISFIED ABOUT HIS CREDITWORTHINESS. THE DECISION CITED BY T HE LD. DR IS WITH REGARD TO THE CASH CREDIT INTRODUCED BY THE PARTNER U/S. 68 OF THE IT ACT WHICH IS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE, IN WHICH THE ASSESSEE FIRM RECEIVED CAPITAL CONTRIBUTI ON FROM THE PARTNER, WHICH IS NECESSARY FOR RUNNING OF THE BUSI NESS OF THE ASSESSEE FIRM. CONSIDERING THE FACTS OF THE CASE IN THE LIGH T OF ABOVE DECISION, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL . THE SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDER OF CIT(A). HE ALSO RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. YOUTH CONSTRUCTION PVT. LTD. IN ITA NO.497/2010, JUDGEMENT DATED 08.11.2012. ITA NO.455/AGRA/2011 A.Y. 2003-04 5 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE UNDER CONSIDERATION ARE THAT THE PARTNERS HAVE INTRODUCED CAPITAL. THIS FACT HAS BEEN ACCEPTED BY BOTH THE A.O. AND CIT(A). THE I.T.A.T., AGRA BENCH IN THE CASE OF ITO VS. M/S. PR ESTRESSED CONCRETE INDUSTRIES IN ITA NO.167/AGRA/2011, ORDER DATED 11.05.2012, AFTER CONSIDERING ALL THE RELEVANT FACT AND JUDGEMENT INCLUDING THE JUDGEMENT OF HONB LE ALLAHABAD HIGH COURT IN THE CASE OF SUNDAR LAL JAIN VS. CIT, 117 ITR 316 AN D THE JUDGEMENT OF HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. SHIV SHAKTI TIMBERS, 229 ITR 505 ON WHICH THE REVENUE HAS RELIED UPON HAVE BEEN CONSIDE RED. AFTER CONSIDERING ALL THESE FACTS, THE I.T.A.T., AGRA BENCH HELD THAT THE ASSESSEE IS ABLE TO EXPLAIN THAT THE CAPITAL HAS BEEN INTRODUCED BY THE PARTNERS THR OUGH THEIR OWN SOURCES. THEREFORE, THE INITIAL BURDEN ON THE ASSESSEE OF EX PLAINING CAPITAL CONTRIBUTION BY THE PARTNER IS DISCHARGED. ON IDENTICAL SET OF FAC TS, WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF ITO VS. M/S. PRESTRESSED CONCRETE INDUSTRIES IN ITA NO. 167/AGRA/2011, ORDER DATED 11.05.2012. THE JUDGMENT OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. YOUTH CONSTRUCTION PVT. LTD. CITED BY THE LD. DEPAR TMENTAL REPRESENTATIVE IS DISTINGUISHABLE ON FACTS. TO MAINTAIN CONSISTENCY, WE FOLLOW THE ORDER OF I.T.A.T. AGRA BENCH IN THE CASE OF ITO VS. M/S. PRESTRESSED CONCRETE INDUSTRIES IN ITA ITA NO.455/AGRA/2011 A.Y. 2003-04 6 NO.167/AGRA/2011, ORDER DATED 11.05.2012 AND IN THE LIGHT OF THE FACT, ADDITION OF RS.9,70,842/- SUSTAINED BY THE CIT(A) IS DELETED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT M EMBER PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY