ITO, Sonepat V. Sh. Yashbir Malik Prop., Sonepat

ITA 4574/DEL/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1734 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 23-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARUN SEEM
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO . 4574 /DEL/201 1 ASSESSMENT YEAR: 2008 - 09 INCOME TAX OFFICER, VS. SH. YASHBIR MALIK, PROP. WARD - 2, SONEPAT M/S HINDUSTAN STEEL & CEMENT STORE, OPP. MALVA MOTORS, G.T. ROAD, KUNDLI (SONEPAT) (PAN: ANSPM3537D ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TARUN SEEM, SR. DR RESPONDENT BY: SH. K. SAMPATH, ADV. DATE OF HEARING: 23.06.2015 DATE OF PRONOUNCEMENT: 12.08.2015 ORDER PER INTURI RAMA RAO, A.M. : THIS APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2008 - 09 AGAINST THE ORDER OF CIT(A), ROHTAK, DATED 04.08.2011, RAISING THE FOLLOWING GROUNDS OF APPEAL: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITIONS OF RS.12,32,734/ - , RS.4,60,328/ - AND RS.4,880/ - , WHICH WERE MADE ON ACCOUNT OF CESSATION OF LIABILITY U/S 41 (1) OF THE INCOME - TAX ACT, 1961. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN / LAW BY ACCEPTING THE AFFIDAVITS FILED BY THE ASSESSEE IN RESPECT OF THE PERSONS, WHO WERE NOT IN EXISTENCE AT THE ADDRESSES GIVEN BY THE ASSESSEE. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN / LAW BY ACCEPTING THE AFFIDAVITS WI THOUT DOCUMENTARY EVIDENCE, AS THE AFFIDAVIT IS A SELF EXPLANATORY NOTE. 2 IV. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN LAW AND FACTS IN ACCEPTING THE AFFIDAVITS AS THE ID.CIT(A) NEITHER MADE ANY VERIFICATION NOR GOT CONDUC TED FROM THE ASSESSING OFFICER. V. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE ADDITION OF RS.30,000/ - ON ACCOUNT OF LOW HOUSEHOLD EXPENSES BY ACCEPTING THE FACT THAT THE ASSESSEE HAD AGRICULTU RAL INCOME ALSO WHEREAS IN THE RETURN OF INCOME THE ASSESSEE HAD NOT SHOWN EVEN A SINGLE PENNY OF AGRICULTURAL INCOME AND ALSO NOT FURNISHED ANY EVIDENCE REGARDING THE OWNERSHIP OF AGRICULTURAL LAND. VI. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DE LETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 WAS FILED ON 29.09.2008. SUBSEQUENTLY, THE C ASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1 961 VIDE ORDER DATED 10.12.2010 AT A TOTAL INCOME OF RS. 20,75,100/ - . WHILE DOING SO, THE ASSESSING OFFICER MADE SEVERAL ADDITIONS AGGREG ATING TO SUM O F RS. 20,75,097/ - . ONE OF THE DISALLOWANCES IS PERTAINING TO THE ADDITION OF AMOUNT PAYABLE TO M/S SUPREMO TRADING COMPANY OF RS. 12,32,734/ - BY HOLDING THAT THE RESPONDENT ASSESSEE HAD NOT PRODUCED SH. RANBIR SINGH, PROPRIETOR OF THE SAID F IRM FOR VERIFICATION. SIMILARLY, THE AMOUNT PAYABLE TO ONE M/S BALRAJ SALES CORPORATION TO THE TUNE OF RS. 4,60,328/ - ON SIMILAR REASON THE AMOUNT PAYABLE TO M/S SURAJ FABRICS I NDUSTRIES LTD. OF RS. 4,880/ - WERE DISALLOWED BY HOLDING THAT THE LIABILITY CEA SED TO EXISTS AND IN RESPECT OF THE EXPENSES PAYABLE FOR ACCOUNTING CHARGES OF RS. 2,500/ - , AUDIT FEES OF RS. 5,618/ - , ELECTRICITY EXPENSES OF RS. 723/ - AND WATER CHARGES OF RS. 1320/ - WERE DISALLOWED BY HOLDING THAT THE RESPONDENT ASSESSEE HAD NOT PRODUCE D EVIDENCES AND SUM OF RS. 9,399/ - WAS DISALLOWED 3 HOLDING TO BE U S E D FOR PERSONAL USE. SIMILARLY 1/5 TH OF THE TELEPHONE EXPENDITURE WERE DISALLOWED AND ADDITION FOR LOW WITHDRAWALS FOR HOUSEHOLD EXPENSES OF RS. 30,000/ - WERE ALSO DISALLOWED . AGGRIEVED BY THE ABOVE DISALLOWANCES, AN APPEAL WAS PREFERRED BEFORE THE CIT(A), ROHTAK , WHO VIDE ORDER DATED 4 TH AUGUST, 2011 ALLOWED THE APPEAL IN FULL. 3. I N RESPECT OF DELETION OF ADDITION S OF RS. 12,32,734/ - , RS. 4,60,328/ - AND RS. 4,880/ - MADE ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1) OF THE INCOME - TAX ACT, 1961 , THE LEARNED CIT(A) , AFTER CONSIDERING THE SUBMISSION OF THE PARTIES AND THE MATERIAL S AVAILABLE ON RECORD , GIVEN HIS FINDING S VIDE PARA 4 (PAGE 4) OF HIS ORDER, WHICH READ AS UNDER: 4. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE BY THE AR. IT IS NOT IN DISPUTE THAT THE APPELLANT HAS NOT WRITTEN OFF THE AMOUNTS IN HIS BOOKS OF ACCOUNTS. FROM THE AFFIDAVITS FILED, IT IS ALSO EVIDENT THAT THE SUNDRY CREDITORS HAVE NOT GIVEN ANY BEN EFIT TO THE APPELLANT BY WAY OF REMISSION OR CESSATION OF LIABILITY. THIS BEING THE CASE, THE ACTION OF THE AO IN ADDITION THE OUTSTANDING LIABILITY U/S 41(1) OF THE ACT IS CLEARLY NOT JUSTIFIED IN VIEW OF THE RATIO OF HON BLE APEX COURT IN THE CASE OF CHI EF CIT VS. KESARIA TEA CO. (SUPRA). THE ACTION OF THE AO IN DISBELIEVING THE AFFIDAVIT WITHOUT CAUSING NECESSARY ENQUIRIES/ RECORDING STATEMENT IS NOT TENABLE. IN VIEW OF THE ABOVE THE ADDITIONS MADE BY THE ARE DELETED AND THE GROUND OF APPEAL IS ALLOWED 4. SIMILARLY, IN RESPECT OF ADDITION OF RS. 10,161/ - ON ACCOUNT OF OUTSTANDING EXPENSES OF ACCOUNTING, AUDIT FEES, ELECTRICITY EXPENSES AND WATER HIS FINDINGS ARE RECORDED VIDE PARA 5.1 (PAGE 4) , WHICH READ AS UNDER: 5.1 I HAVE CONSIDERED THE ISSUES AND FIND THAT THE AO MADE THE DISALLOWANCE WITHOUT ANY VALID REASON. DISALLOWANCE OF PETTY OUTSTANDING EXPENSES WITHOUT HAVING ANY ADVERSE MATERIAL ON RECORD IS CLEARLY NOT TENABLE AND THEREFORE THE DISALLOWANCE IS DELETED AND T HE GROUND OF APPEAL IS ALLOW ED. 4 5. I N RESPECT OF TELEPHONE AND CAR EXPENSES HIS FIND INGS ARE RECORDED VIDE PARA 6.1 OF HIS ORDER , WHICH READ AS UNDER: 6.1 FROM THE AD - HOC DISALLOWANCE BY THE AO, IT IS SEEN THAT IT WAS MADE PURELY ON ESTIMATE BASIS WITHOUT POINTING ANY INSTANCES OF PERSONAL USE. THE DISALLOWANCE IS THEREFORE DELETED AND T HE GROUND OF APPEAL IS ALLOWED. 6. R EGARDING THE ADDITION TOWARDS LOW WITHDRAWALS FOR HOUSEHOLD EXPENDITURE HIS FIND INGS ARE RECORDED VIDE PARA 7.1, WHICH READ AS UNDER: 7.1 I HAVE CONSIDERE D THE ISSUE AND FIND THAT THE WITHDRAWAL OF 82,770/ - COUPLED WITH AGRICULTURE INCOME IS SUFFICIENT FOR THE FAMILY OF THE APPELLANT. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONCLUDE THAT THE APPELLANT WOULD HAVE SPENT HIGHER AMOUNT FOR HOUSE HOLD E XPENSES. THE ADDITION IS THEREFORE DELETED AND THE GROUND OF APPEAL IS ALLOWED. 7 . THE ABOVE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE EVIDENCE PRODUCED BEFORE HIM AND WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 8 . IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 1 2 T H A U G U S T , 2015. S D / - S D / - ( I.C. SUDHIR ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 T H A U G U S T , 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI