DCIT 16(3), MUMBAI V. ARSHIT GEMS, MUMBAI

ITA 4831/MUM/2011

• Counselvise Citation: 483119914 RSA 2011
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: B V JHAVERI
• Keywords: Unexplained expenditure
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI S.S. GODARA (JM) I.T.A. NO. 4831 /MUM/2011 (A.Y. : 2007-08) DY. COMMR. OF INCOME-TAX-16()3), MATRU MANDIR, 2 ND FLOOR,R.NO.206, TARDEO ROAD, MUMBAI-400 007. VS. M/S. ARSHIT GEMS, 1415, PRASAD CHAMBERS, OPERA HOUSE, MUMBAI-400 015. PAN: AAEFA 8037 B APPELLANT RESPONDENT APPELLANT BY SHRI V.V. SHASTRI. RESPONDENT BY SHRI B. V. JHAVERI. DATE OF HEARING 25-04-2012 DATE OF PRONOUNCEMENT 30-04-2012 O R D E R PER R.S. SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 18-02-2011 IN RELATION TO ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED THROUGH THE GROUNDS IS AGA INST THE DELETION OF ADDITION OF RS.36,19,300/- AS UNEXPLAINED EXPENDITU RE U/S.69C OF THE ACT. ITA NO.4831/MUMN/2011 ARSHIT GERMS 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE AO RECEIVED INFORMATION FROM DDIT (INV)-1, SURAT, ABOUT HUGE CASH WITHDRAWA LS RECEIVED UNDER THE BANKING CASH TRANSACTION TAX BY THE ASSESSEE FROM S URAT BRANCH OF THE BANK. THERE WERE TWO TRANSACTIONS OF CASH WITHDRAWAL, FIR ST RS.50,00,000/- WITHDRAWN ON 06-02-2007 AND SECOND RS.90,00,000/- WITHDRAWN O N 17-02-2007 FROM MAIN BRANCH, SURAT. THERE IS NO DISPUTE REGARDING THE CA SH WITHDRAWAL OF RS.90,00,000/- WHICH THE AO HAS ACCEPTED. REGARDING THE FIRST ENTRY OF RS.50,00,000/-, THE ASSESSEE STATED THAT CASH WAS W ITHDRAWN AND UTILIZED FOR THE PURPOSE OF MAKING PAYMENT TO JOB WORKERS. THE AO NO TICED THAT THE ASSESSEE MADE CASH PAYMENTS TO LABOURERS FROM 01-02-2007 TO 05-02-2007 AMOUNTING TO RS.37 LAKHS WHEN IT DID NOT HAVE SUFFICIENT CASH BA LANCE TO MAKE SUCH CASH PAYMENTS. THE ASSESSEES CONTENTION THAT THE CASH W ITHDRAWAL OF RS.50 LAKHS WAS UTILIZED FOR MAKING THESE PAYMENTS WAS NOT ACCE PTED ON THE GROUND THAT ALL THE PAYMENT VOUCHERS WERE DATED 05-02-2007. AFTER C ONSIDERING THE ASSESSEES OBJECTION, THE AO OBSERVED THAT THE ACTUAL AMOUNT P AID AS PER THE RECORD WAS RS.36,19,300/-. IT WAS, THEREFORE, HELD THAT THE SA ID PAYMENT WAS MADE OUTSIDE THE BOOKS OF ACCOUNT BECAUSE THERE WAS NO CASH BALA NCE TO THAT EXTENT AS PER THE CASH BOOK TO JUSTIFY SUCH PAYMENTS ON 05-02-2007. R ESULTANTLY, ADDITION U/S.69C WAS MADE FOR RS.36.19 LACS. THE LD. CIT(A) DELETED THE ADDITION BY ENTERTAINING AFFIDAVIT OF SH. VALLABHBHAI M PATEL, PARTNER OF TH E ASSESSEE FIRM AND ALSO THE ASSESSEES EXPLANATION THAT UNAUDITED CASH BOOK WAS PRODUCED BEFORE THE AUTHORITIES, WHEREAS THE AUDITORS IN THE CORRECTED CASH BOOK HAD OBSERVED THAT THE ITA NO.4831/MUMN/2011 ARSHIT GERMS 3 PAYMENT WAS IN FACT MADE ON 06.02.2007, THOUGH WRON GLY RECORDED IN THE CASH BOOK ON 05.02.2007. THE REVENUE IS AGGRIEVED AGAINS T THE DELETION OF ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE CASE OF THE ASSESSEE IS THAT IT MADE PA YMENT OF RS.36,19,300/- ON 06-02-2007 AS AGAINST THE PAYMENT VOUCHERS DATED 05 -02-2007. ON THE OTHER HAND, THE REVENUE HAS MADE OUT A CASE THAT SINCE TH E CASH WAS WITHDRAWN ON 06- 02-2007, THE SAME COULD NOT HAVE BEEN UTILIZED FOR MAKING PAYMENT TO JOB WORKERS ON 05-02-2007. WE HAVE GONE THROUGH THE DET AILS OF SUCH PAYMENTS MADE BY THE ASSESSEE. THE LD. AR ADMITTED THAT THER E ARE 415 VOUCHERS THROUGH WHICH THE SAID PAYMENT WAS MADE. SAMPLE OF THE VOU CHERS WAS SHOWN BY THE AR FROM WHICH IT CAN BE SEEN THAT ALL THESE VOUCHER S ARE DATED 05-02-2007. THE JOBBERS HAVE PUT THEIR SIGNATURE ON THE REVENUE STA MPS IN ACKNOWLEDGEMENT OF THE RECEIPT OF AMOUNT. THERE IS NO MENTION OF ANY D ATE OF RECEIPT OF AMOUNT BY THEM AS 06-02-2007. THUS, WHEN WE CONSIDER THE VOUC HERS HAVING DATE OF 05-02- 2007 DULY SIGNED BY THE JOBBERS ON REVENUE STAMPS W ITHOUT ANY MENTION OF THE ACTUAL DATE OF RECEIPT AS 06-02-2007, THE ONLY CONC LUSION WHICH CAN BE DRAWN IS THAT THE PAYMENTS WERE IN FACT MADE ON 05-02-2007 A ND NOT ON 06-02-2007. THE AFFIDAVITS FILED BY PARTNER OF THE ASSESSEE FIRM IN SUPPORT OF THE CONTENTION THAT THE PAYMENTS WERE IN FACT MADE ON 06-02-2007 ARE N OTHING BUT SELF-SERVING DOCUMENTS. FURTHER THE LD. CIT(A) WAS NEEDLESSLY S WAYED BY THE CONTENTION THAT THE AUDITORS OF THE COMPANY HAD GIVEN A NOTE ON THE AUDITED CASH BOOK, WHEREAS ITA NO.4831/MUMN/2011 ARSHIT GERMS 4 BY MISTAKE, UNAUDITED CASH BOOK WAS PRODUCED BEFORE THE AUTHORITIES. WE ARE UNABLE TO UNDERSTAND AS TO HOW THE AUDITOR CAN AUTH ENTICATE THE ACTUAL DATE OF PAYMENT AS 06.02.2007 WHEN THE VOUCHERS ALONG WITH ALL THE RECEIPTS ARE SIMPLY DATED 05.02.2007. THE AUDITOR CAN EXPRESS HIS OPIN ION ONLY ON THE BASIS DOCUMENTS PRODUCED BEFORE HIM. WHEN THE DOCUMENT S IN THE SHAPE OF VOLUMINOUS VOUCHERS INDICATE THE DATE OF PAYMENT AS 05.02.2007, HOW THE AUDITOR CAN VERIFY THE DATE OF PAYMENT AS 06.02.200 7 IS BEYOUND OUR COMPREHENSION. ON A PERTINENT QUERY, THE LD. AR C OULD NOT PLACE ANY EVIDENCE TO SHOW THAT THESE JOBBERS HAD ACKNOWLEDGED TO HAVE RECEIVED THE MONEY ON 06- 02-2007 AS AGAINST THE DATE GIVEN ON THE VOUCHERS A S 05-02-2007. IN THIS VIEW OF THE OVERWHELMING EVIDENCE PROVING THE ACTUAL DATE O F PAYMENT AS 05.02.2007, WE ARE UNABLE TO UPHOLD THE CONTENTION OF THE ASSES SEE THAT IT MADE PAYMENTS TO JOBBERS ON 06-02-2007. 5. THERE IS NO DISPUTE ON THE FACT THAT THE SU M OF RS.50 LAKHS WAS IN FACT WITHDRAWN FROM THE BANK ON 06-02-2007. THAT BEING T HE POSITION, THE MONEY AVAILABLE WITH THE ASSESSEE ON 06-02-2007 COULD NOT HAVE BEEN POSSIBLY UTILIZED FOR MAKING A PAYMENT ON A ANTERIOR DATE. THIS LEADS TO THE IRRESISTIBLE CONCLUSION THAT THE PAYMENT MADE TO JOBBERS AMOUNTING TO RS.36 ,19,300/- WAS AN UNEXPLAINED EXPENDITURE CAUGHT WITHIN THE MISCHIEF OF SECTION 69C BECAUSE OF NON-AVAILABILITY OF CASH ON THAT DATE. WE, THEREFOR E, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ASSESSMENT ORDER ON THIS POINT. ITA NO.4831/MUMN/2011 ARSHIT GERMS 5 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THE 30TH DAY OF APRIL , 2012. SD/- SD/- (S.S. GODARA) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 30TH APRIL , 2012. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-27,UMBAI. 4 CIT,CITY-16,MUMBAI. 5.DR,A BENCH, MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI. ITA NO.4831/MUMN/2011 ARSHIT GERMS 6 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 25-04-12 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 25-04-12 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/A M 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/A M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *