Mange Ram Tyagi, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 4592/DEL/2011

• Counselvise Citation: 459220114 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Assessee Lawyers: K L ANEJA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 4592/DEL/2011 4592/DEL/2011 4592/DEL/2011 4592/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, V.P.O. NIYAMU V.P.O. NIYAMU V.P.O. NIYAMU V.P.O. NIYAMU, ,, , MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. PAN : AFUPT5827P. PAN : AFUPT5827P. PAN : AFUPT5827P. PAN : AFUPT5827P. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2(1), 2(1), 2(1), 2(1), MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.L. ANEJA, ADVOCATE. RESPONDENT BY : SHRI P. DAM KANUNJHA, SR.DR. DATE OF HEARING : 1 11 11.03.2015 1.03.2015 1.03.2015 1.03.2015 DATE OF PRONOUNCEMENT : 18.03.2015 18.03.2015 18.03.2015 18.03.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2008-09 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), MUZAF FARNAGAR DATED 20 TH JULY, 2011. 2. THE REVISED GROUNDS OF APPEAL OF THE ASSESSEE AR E AS UNDER:- 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.6,85,000 /- MADE BY THE A.O. BY INVOKING SECTION 43A(3) OF INCO ME TAX ACT, BY NOT CONSIDERING EXCEPTIONAL CIRCUMSTANC E LAID IN RULE 6DD(G) OF THE INCOME TAX ACT. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.2,45,000 /- BY ITA-4592/DEL/2011 2 INVOKING PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT. 3. THAT THE AUTHORITY BELOW HAVE ERRED IN LAW AND O N FACTS IN MAKING THIS ALLOWANCE OF RS.73,000/- PAID TO SH. RAHUL KUMAR ON ACCOUNT OF COMMISSION BUT DENIED BY SAID RAHUL KUMAR TO BE RECEIPT OF THE IMPUNE SUM AS LOAN FROM THE APPELLANT INSTEAD OF COMMISSION. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS A VILLAGER RESIDING IN A REMOTE VILLAGE NAMED NIYAMA IN THE DISTRICT OF MUZAFFARNAGAR, UTTAR PRADESH AND THERE WAS NOT A SINGLE BANK IN THE VILLAGE DURING THE RELEVANT PERIOD. HE SUBMITTED THAT THE ASSESSEE HAS FILED A DULY SWORN-IN AFFIDAVIT TO THI S EFFECT, COPY OF WHICH HAS BEEN FILED IN THE COMPILATION BEFORE US. HE SU BMITTED THAT THE ASSESSING OFFICER IN HIS REMAND REPORT DATED 25.05. 2012 HAS ADMITTED ADMITTEDLY, THERE IS NO BANK FACILITY IN THE NATIVE VILLAGE (NIYAMU), WHERE THE ASSESSEE RESIDES AND THE BANK IS SITUATED IN A TOWN (PURKAZI) WHICH IS NEARLY 10-11 KMS FAR AWAY FROM HIS VILLAGE . HE SUBMITTED THAT IN VIEW OF NO BANKING FACILITY IN THE VILLAGE OF THE ASSESSEE, NO ADDITION COULD BE MADE UNDER SECTION 40A(3) OF THE INCOME-TAX ACT, 1961. HE SUBMITTED THAT THE TWO DEPONENTS HAVE APP EARED BEFORE THE ASSESSING OFFICER IN REMAND PROCEEDINGS AND HAVE CO NFIRMED THE PAYMENTS IN QUESTION. WITH REGARD TO THIRD PERSON, HE HAS APPEARED BEFORE THE ASSESSING OFFICER BUT TOLD THAT IT WAS A LOAN TRANSACTION. HE RELIED ON THE DECISION OF DELHI TRIBUNAL IN THE CAS E OF SARASWATI HOUSING & DEVELOPERS VS. ADDITIONAL CIT IN ITA NO.5 795/DEL/2011 IN SUPPORT OF THE CASE OF THE ASSESSEE. 4. LEARNED DR, ON THE OTHER HAND, HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). HE REFERRED TO T HE RELEVANT PORTION OF THE ORDER OF THE ASSESSING OFFICER AND CIT(A) IN SU PPORT OF THE CASE OF ITA-4592/DEL/2011 3 THE REVENUE. HE SUBMITTED THAT IT IS HIGHLY IMPROB ABLE THAT IN THESE TIMES, THERE WAS NO BANKING FACILITY IN THE VILLAGE OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A) AND A LSO THE CONTENTS OF THE AFFIDAVIT OF THE ASSESSEE IN THE COMPILATION FI LED BEFORE US. WE FIND THAT IN THE REMAND REPORT DATED 25.05.2012, THE ASS ESSING OFFICER HAS ADMITTED THAT THERE WAS NO BANKING FACILITY IN THE NATIVE VILLAGE NIYAMU WHERE THE ASSESSEE RESIDES AND THE BANK WAS SITUATED IN A TOWN PURKAZI WHICH IS ABOUT 10-11 KMS. FAR FROM THE VILLAGE. THE TWO PERSONS HAVE APPEARED BEFORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS AND HAVE CONFIRMED THE TRANSACTIONS IN QUESTION. THE THIRD PERSON HAS CONFIRMED THE TRANSACTION WITH THE DIFFERENCE THAT, ACCORDING TO HIM, THE NATURE OF THE TRANSACTION WAS THAT OF LOAN TRANSACTION. IN THESE FACTS OF THE CASE, IN VIEW O F THE ADMISSION OF THE ASSESSING OFFICER THAT THERE WAS NO BANKING FACILIT Y IN THE VILLAGE OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE CASE OF THE A SSESSEE FALLS IN THE EXCEPTIONS TO RULE 6DD OF THE INCOME-TAX RULES, 196 2 AND NO DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT COULD BE MADE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, THE ADDITIONS M ADE UNDER SECTION 40A(3) OF THE ACT ARE DELETED AND THE REVISED GROUN DS OF APPEAL NO.1 TO 3 OF THE ASSESSEES APPEAL ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 2015. SD/- SD/- ( (( ( T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-4592/DEL/2011 4 COPY FORWARDED TO: - 1. APPELLANT : SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, SHRI MANGE RAM TYAGI, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, S/O SHRI GHAYAN CHAND, V.P.O. NIYAMU, MUZAFFARNAGAR. V.P.O. NIYAMU, MUZAFFARNAGAR. V.P.O. NIYAMU, MUZAFFARNAGAR. V.P.O. NIYAMU, MUZAFFARNAGAR. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2(1), MUZAFFARNAGAR. 2(1), MUZAFFARNAGAR. 2(1), MUZAFFARNAGAR. 2(1), MUZAFFARNAGAR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR