M/s Walia & Co., Amritsar. V. The Addl. Commissioner of Income Tax, Amritsar.

ITA 485/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7830 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: GAURAV AGGARWAL LD
• Keywords: Unexplained cash credit; Rejection of books of accounts; Depreciation; Income from undisclosed sources; Opportunity of being heard; Corroborative evidences
• Section: 145; 144

Judgement Text

IN THE INCOME TAX APPELLAT E TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.485(ASR)/2015 ASSESSMENT YEAR:2011-12 M/S. WALIA & CO., 63, KENNEDY AVENUE, AMRITSAR. PAN: AABFW-0898H VS. ADDL. CIT, RANGE-IV, AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A. NO.501(ASR)/2015 ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER, WARD-4(4), AMRITSAR. VS. M/S. WALIA & CO., 63, KENNEDY AVENUE, AMRITSAR. PAN: AABFW-0898H (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.33(ASR)/2015 (ARISING OUT OF ITA NO.501(ASR)/2015) ASSESSMENT YEAR:2011-12 M/S. WALIA & CO., 63, KENNEDY AVENUE, AMRITSAR. PAN: AABFW-0898H VS. INCOME TAX OFFICER, WARD-4(4), AMRITSAR. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SH. GAURAV AGGARWAL (LD. CA.) RESPONDENT BY: SH. RAHUL DHAWAN (LD. D R) DATE OF HEARING: 08.08.2017 DATE OF PRONO UNCEMENT:31.08.2017 ORDER PER N. K. CHOUDHRY: BOTH THE APPEALS AND CROSS OBJECTIONS PREFERRED BY THE A SSESSEE AS WELL AS REVENUE DEPARTMENT CHALLENGING THE SINGLE ORDER DATED ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 2 25.06.2015 PASSED IN APPEAL NO.332/2013-14 FOR ASST. YE AR:2011-12 BY THE LD. CIT(A) NO.2, AMRITSAR. 2. THE GROUNDS OF APPEAL IN ITA NO.485(ASR)/2015 FOR A.Y.2011-12 RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDE R: 1. THE LEARNED ASSESSING OFFICER HAS ERRED BOTH ON FAC TS AND IN LAWS IN MAKING AN ADDITION IN AHATA INCOME OF RS.10 ,36,000 BY TAKING AN UNREALISTIC ASSUMPTION THAT EACH AHATA EARNED AN INCOME OF RS.15000/- PER MONTH. THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS FURTHE R ERRED BOTH ON FACTS AND IN LAWS IN UPHOLDING THE ACTION O F THE LEARNED ASSESSING OFFICER. 2. THE LEARNED ASSESSING OFFICER HAS ERRED BOTH ON FACTS AND IN LAWS IN MAKING AN ADDITION OF RS.900000/- TOWARDS C APITAL INTRODUCED BY THE PARTNERS. SINCE THE ASSESSING OFF ICER HAS NOT GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD, TH E ADDITION TO CAPITAL OF PARTNER SH. SARBJIT SINGH WALIA OF RS . 150000/-, SH. VIJAY KUMAR CHAWLA OF RS. 300000/- AND SH. HARV INDER SINGH OF RS. 550000/- UNJUSTIFIED AND ILLEGAL AS P ER LAW. 2.1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HAS GIVEN THE ASSESSEE THE R OPPORTUNITY TO PRODUCE THE PARTNERS BANK STATEMENTS. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAWS IN REJECTING THE BANK STATEMENTS OF SH. HARVINDER SINGH AND BALANCE SHEETS OF SH. SARBJ IT SINGH AND THEREBY UPHOLDING THE ACTION OF LEARNED ASSESSING OFFICER. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 3 3) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D THE GROUNDS OF APPEAL AT LATER STAGE. AND GROUNDS OF APPEAL OF ITA NO.501(ASR)/2015 FOR A.Y.2011-12 RAISED BY THE REVENUE DEPARTMENT ARE REP RODUCED AS UNDER: (I) WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE LD . CIT(A) HAS ERRED IN LAW 8S FACTS BY HOLDING THAT THE A.O WAS N OT JUSTIFIED IN HOLDING THE ASSESSMENT U/S 144 OF THE I.T. ACT. (II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ERRED IN LAW & FACTS BY DELET ING THE ADDITION OF RS. 21,32, 720 /- MADE BY THE A.O. ON DIFFERENCE IN G.P. RATE. (III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ERRED IN LAW & FACTS BY DELETING THE ADDITI ON OF RS. 14,38,151/- MADE BY THE A.O. ON THE ACCOUNT OF EXPE NSES AS PER P & L ACCOUNT. (IV) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ERRED IN LAW & FACTS BY DELETING THE ADDITI ON OF RS.2,00,000/- MADE BY THE A.O. ON THE ACCOUNT OF UN EXPLAINED CREDIT. (V) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), ERRED IN LAW & FACTS BY DELETING THE ADDITI ON OF RS.6,85,935/- MADE BY THE A.O. ON THE ACCOUNT OF IN VESTMENT IN FURNITURE. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 4 (VI) THE APPELLANT CRAVES LEAVE TO AMEND OR TO TAKE AN A DDITIONAL GROUND AT THE TIME OF HEARING OR BEFORE THE APPEAL IS DISPOSED OFF. AND GROUNDS OF CROSS OBJECTION NO.33(ASR)/2015 ARE REPRODUCED AS UNDER: 1) THE LEARNED ASSESSING OFFICER (AO) HAS PRO POSED THE GROUND OF APPEAL WHEREIN THE AO CLAIMED THAT THE WORTHY CIT (APPEALS ) IS NOT JUSTIFIED IN HOLDING THE ASSESSMENT U/SL44 OF THE INCOME TAX ACT, 1961. THE LEARNED CIT (APPEALS ) -2, AMRITSAR HAS CLEARLY STATED IN HIS ORDER SHEET PAGE NO.7 AND 8 THAT THE ASSESSEE H AS PRODUCED ALL THE RELEVANT PURCHASE BILLS, SALARY REGISTER, RENT DEEDS ETC BEFORE THE AO. ONLY AGAINST THE SALES BILL , THE ASSESSEE WERE MAINTAINING PARCHAS AS PER THE PRACTICE OF TRADE WHICH FULLY EX HIBITS AND EVIDENCES THE SALES. THE EXPLANATION OF THE ASSESSEE ACCEPTED BY THE LEA RNED CIT (APPEALS) AND HE IS COMPLETELY JUSTIFIED IN HOLDING THE ASSESSMENT U/S. 144 OF THE I.T. ACT ON THE BASIS OF THE FACTS AND LAWS. THE ASSESSEE IS ALSO RELYING ON THE JUDGEMENT OF HO NOURABLE ITAT AMRITSAR BENCH IN ASHOK KUMAR & CO. VS. INCOME TAX OFFICER [2004]2SOT518(ASR). IN THE SAID JUDGEMENT THE THE L EARNED MEMBERS HAVE REJECTED THE REVENUES CONTENTION OF REJECTION OF BOOKS OF ACCOUNTS OF THE ASSESSEE. THE FACTS OF THE CASE ARE ALMOST S IMILAR TO THE PRESENT CASE. 2) THE LEARNED ASSESSING OFFICER (AO) HAS PROPOS ED THE GROUND OF APPEAL THE AO CLAIMED THAT THE WORTHY CIT (APPEALS) IS NOT JUSTIFIED IN ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 5 DELETING THE ADDITION OF RS.21,32,720/- MADE BY THE AO ON DIFFERENCE IN G.P. RATE. THE LEARNED CIT(APPEALS) CLEARLY MENTIONED IN HIS O RDER SHEET NO. 10, THE COMPARISON OF THE CASE OF THE APPELLANT WITH SOME M/S. PUNJAB TRADING CO WAS NOT JUSTIFIED AS THE TWO CASE S WERE NOT COMPARABLE. THE AO USED COMPLETE ESTIMATION WITHOUT GOING INTO THE MATERIAL FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE IS ALSO RELYING ON THE JUDGEMENT OF HO NOURABLE HIGH COURT OF ALLAHABAD IN CIT, SULTANPUR VS. KAMLE SH KUMAR JAISWAL ET CO. [2014] 42TAXMANN.COM 197 (ALLAHABAD) THUS THE LEARNED CIT (APPEALS ) IS JUSTIFIED IN DEL ETING THE SAID ADDITION. 3) THE LEARNED ASSESSING OFFICER (AO) HAS PROPOSED THE GROUND OF APPEAL WHEREIN THE AO CLAIMED THAT THE WORTHY CIT (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.14,38,151/- MADE BY THE AO ON ACCOUNT OF EXPENSES AS PER P&L ACCOUNT. THE AO COMPLETELY ERRED IN MAKING THE SAID ADDITION SINCE THE AO EVEN MADE THE ADDITION IN BANK CHARGES DEBITED A ND SUBSTANTIATED BY BANK STATEMENTS. THE LEARNED CIT(APPEALS) CLEARLY MENTIONED THE RELE VANT FACTS IN THE SUPPORT OF THE ASSESSEE AS PER ORDER SHEET P AGE NO. 14,15 AND 16 WHICH CLEARLY EXPLAINS THE POSITION OF THE ASSES SEE. THUS THE LEARNED CIT (APPEALS ) IS JUSTIFIED IN DEL ETING THE SAID ADDITION. 4) THE LEARNED ASSESSING OFFICER (AO) HAS PROPOSED THE GROUND OF APPEAL WHEREIN THE AO CLAIMED THAT THE WORTHY CIT (APPEALS ) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2,00,000/- MADE BY T HE AO ON ACCOUNT OF UNEXPLAINED CREDIT. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 6 WORTHY CIT (APPEALS) IN HIS ORDER CLEARLY DELETED T HE ADDITION OF CAPITAL OF RS.200000/- FROM MR. JAGJIT SINGH SIN CE HIS BANK ACCOUNT CLEARLY MENTIONS THE SAID ENTRY AND HIS CRE DIBILITY FOR THAT AMOUNT. THUS THE LEARNED CIT (APPEALS ) IS JUSTIFIED IN DEL ETING THE SAID ADDITION. THE ASSESSEE RELIED ON THE JUDGMENT OF HONOURABLE H IGH COURT OF GUJARAT IN CIT, RAJKOT VS. ODEDARA CONSTRUCTIONS [2014]45TAXMANN.COM65 (GUJARAT), THE AO, UNLESS BRINGS MATERIAL TO SHOW THAT AMOUNT BROUGHT IN FIRM BY PARTNERS REPRES ENTS UNACCOUNTED INCOME OF THE FIRM AND THAT PARTNERS HA D NO CAPACITY TO MAKE SUCH INVESTMENT, CAPITAL BROUGHT IN FIRM COULD NOT BE ASSESSED IN HANDS OF FIRM. 5). THE LEARNED ASSESSING OFFICER (AO) HAS PROP OSED THE GROUND OF APPEAL THE AO CLAIMED THAT THE WORTHY CIT (APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.6,85,935/- MADE BY THE AO ON ACCOUNT OF INVESTMENT IN FURNITURE. THE LEARNED AO MADE THE SAID ADDITION ON PURELY EST IMATION BASIS WITHOUT ANY MATERIAL FACTS OR EVIDENCE ON RECORD. THE ASSESSEE RELIED ON THE JUDGEMENT OF HONOURABLE HIGH COURT OF PUNJAB & HARYANA HIGH COURT IN CIT, PATIALA VS. DULLA RAM, L ABOUR CONTRACTOR, KOTKAPURA [2014] 42 TAXMANN.COM 349 (P& H) WORTHY CIT(APPEALS) CLEARLY GIVES HIS OPINION ON PA GE 19 AND 20 OF THE ORDER. THUS THE LEARNED CIT (APPEALS ) IS JUSTIFIED IN DEL ETING THE SAID ADDITION. 6) THE ASSESSEE CRAVES LEAVE TO AMEND OR TO TAK E AN ADDITIONAL GROUND AT THE TIME OF HEARING OR BEFORE THE APPEAL IS DISP OSED OFF. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 7 5. THE BRIEF FACTS OF THE CASE ARE AS UNDER : THAT THE ASSESSEE DEALS IN TRADING OF LIQUOR AND RETUR N DECLARING AN INCOME OF RS.8,19,250/- WAS E-FILED BY THE ASSESSEE ON 30.09.2011 AND THE CASE WAS SELECTED FOR SCRUTINY ON THE BASIS OF MANUA L SELECTION AND THEREAFTER, STATUTORY NOTICES HAVE BEEN ISSUED AND T HE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS WITH COMPLETE VO UCHER OF PURCHASES, SALES AND EXPENSES, BUT IN SPITE OF GIVING NUMBE R OF OPPORTUNITIES, THE ASSESSEE PRODUCED COMPUTERIZED CASH BOOK LEDGER ONLY. NO SALE BILL OR BILLS OF EXPENSES WERE PRODUCED AND IT WAS ADMITTED BY THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 25 .02.2014 BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS NO SALE BIL LS AND THE SALE IS AS PER CASH BOOK. SIMILARLY, HE ALSO ADMITTED THA T WITH REGARD TO EXPENSES DEBITED TO THE P&L ACCOUNT, NO SUPPORTING VO UCHERS ARE AVAILABLE. IN THE ABSENCE OF THE SALE BILL AND THE EXP ENSES VOUCHERS, THE AO WAS NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETE NESS OF THE ACCOUNTS OF THE ASSESSEE, THEREFORE, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND MADE THE ASSESSMENT ORDER IN THE MANNER PROVIDED IN SEC.144 OF THE I.T. ACT AN D FINALLY THE ASSESSING OFFICER DETERMINED THE LIABILITY AS UNDER: THE ASSESSEE GROSS PROFIT WAS ESTIMATED AT THE RAT E OF 5.6 % WHICH COMES TO RS.91,01,536/- AS AGAINST RS.69,68,8 06 AS SHOWN BY THE ASSESSEE, THEREFORE, THE DIFFERENCE OF RS.21 ,32,730/- WAS ADDED TO THE RETURN OF INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE HAS SHOWN INCOME OF RS.5,04, 000/- IN THE P&L ACCOUNT, HOWEVER, THE ASSESSING OFFICER WOR KED OUT THE ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 8 TOTAL INCOME OF AHATA TO TUNE OF RS.12,60,000/- AND DIFFERENCE OF RS.10,36,000/- WAS ADDED TO THE RETURN OF INCOME OF THE ASSESSEE. DISALLOWED RS.6,37,000/- BEING INTEREST AND SALARY PAID TO THE PARTNERS. DISALLOWED THE RS.14,38,151/- BEING 25% OF THE EXPE NSES CLAIMED, FOR WANT OF SUPPORTING EVIDENCE. ADDED RS.12 LAKHS ON ACCOUNT OF UNEXPLAINED CREDITS . FURTHER THE ASSESSING OFFICER RS,6,85,953/- DISALLO WED BEING AN EXPLAINED INVESTMENT IN THE FURNITURE AND FITTIN GS. 6. FEELING AGGRIEVED AGAINST THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL, B EFORE THE LD. CIT(A) AND THE LD. CIT(A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE BY DELETING THE FOLLOWING ADDITIONS/DISALLOWANCE S. (I) SET ASIDE THE REJECTION OF BOOKS OF ACCOUNTS BY THE ASSESSING OFFICER. (II) DELETED THE ADDITION OF RS.21,32,720/-. MADE BY THE AO ON DIFFERENCE IN G.P. RATE (III) DELETED THE ADDITION OF RS.14,38,151/- ON ACCOU NT OF EXPENSES AS PER P&L ACCOUNTS, (IV) DELETED THE ADDITION OF RS.2,00,000/- MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED CREDIT (V) DELETED THE ADDITION OF RS.6,85,935/- MADE BY T HE A.O ON ACCOUNT OF THE INVESTMENT IN FURNITURE. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 9 HOWEVER, UPHELD THE ADDITION TO THE TUNE OF RS.10,36, 000/- IN RESPECT OF AHATA INCOME. ADDITION TO THE CAPITAL OF TRADING BY SH. SARABJIT S INGH WALIA TO THE TUNE OF RS.1,50,000/- AND SH. VIJAY KUMAR CHAWAL TO THE TUNE OF RS.3,00,000/- AND SH. HARWINDER SINGH TO THE TUNE OF RS.5,50,000/- BY R EJECTING THE BANK STATEMENTS OF SH. HARWINDER SINGH AND BALANCE SHEET OF SH. SARABJIT SINGH. 7. LET US TO FIRST CONSIDER THE APPEAL OF THE ASSESSEE, WHO I N SUPPORT OF ITS CASE, SUBMITTED THAT THE LD. AO HAD MADE AN ADDITION OF RS.10,36,000/- ON ACCOUNT OF AHATA INCOME BY DEDUCTING SH OWN BY THE ASSESSEE. IT IS RESPECTFULLY SUBMITTED THAT THE ASSESSEE WA S HAVING LICENSE OF SEVEN AHATAS AND SHOWN A GROSS RECEIPT OF RS.50, 4000/- FROM THESE AHATAS ON THE BASIS OF RECEIPTS AS FOLLOWED. NO. OF AHATAS INCOME PER MONTH GROSS INCOME (IN RS .) 2 15000 360000 1 8000 96000 4 1000 48000 GROSS INCOME 504000 IT WAS SUBMITTED BEFORE THE LD. LD CIT(A) THAT AGREEM ENT RELATING TO FIRST THREE AHATAS WERE PRODUCED BEFORE T HE LD. AO DURING THE ASSESSMENT PROCEEDINGS AND THERE WERE NO WRITTEN AGRE EMENTS IN RESPECT OF REMAINING FOUR AHATAS SINCE THESE WERE THE EGG /CHIKEN REHRIS WHICH WERE ALLOWED TO OPERATE OUTSIDE THE WINE SHOP. IT WAS ALSO EXPLAINED TO THE A.O. THAT THE ASSESSEE WAS HAVING NINE LIQUORS ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 10 SHOP SPREADED IN AN AREA OF 0.5 TO 1 K.M , THEREFORE, THERE WAS NOT MUCH SCOPE FOR OPERATING SEVEN FULL FLEDGED AHATA. HOWEV ER, THE LD. AO MADE ADDITION ON THE BASIS OF TAKING HIGHEST CONTRA CT OF RS.15,000 PER MONTH AND MULTIPLIED IT WITH ALL THE 7 AHATAS WH ICH IS ARBITRARY AND ILLOGICAL AND THE AO AS WELL AS LD. CIT(A) DID NOT TAK E INTO ACCOUNT THE WRITTEN CONTRACT OF RS.8,000/- PER MONTH AND OTHER SUBM ISSIONS AND EVEN OTHERWISE, THE ASSESSEE ALTHOUGH HAS PAID LICENSE FEES FOR 7 AHATAS STILL THERE IS NO SUCH COMPULSION THAT IT SHOULD RUN ALL 7 AHATAS AND THE LD. CIT(A), AMRITSAR ALSO CONFIRMED THE ADDITI ON ON THE BASIS OF THAT AGREEMENTS WERE NOT PRODUCED BEFORE HIM. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT AGREEMENT OF 4 AHATAS HAVING LOWER RECEIPTS BASED ON THE ORAL CONTRACTS, THEREFORE, THERE WERE NO WRITTEN CONTRACTS AND HENCE, COULD NOT BE PRODUCED BEFORE THE AUTHORITIES BELOW. REGARDING GROUND NO.2 OF ASSESSEES APPEAL, IT WAS SUBMITTED BY THE LD. AR THAT THE LD. AO HAS MADE ADDI TION ON THE FOLLOWING CAPITAL WHICH WAS INTRODUCED BY THE PARTNER D URING THE ASSESSMENT YEARS UNDER REFERENCE AND THE SAME WAS ALSO CONFIR MED BY THE LD. CIT(A). (A) SH. SARABJIT SINGH WALIA RS.150,000/- (B) SH. HARWINDER SINGH RS.550,000/- (C) SH. VIJAY KUMAR CHAWLA RS.300,000/- IN RESPECT OF SH. SARABJIT SINGH WALIA , IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE FIRM HAS PRODUCED ITS BALANCE SHEET AND ITR FILED WITH THE INCOME TAX DEPARTMENT FOR THE ASSES SMENT YEAR 2009-10 AND 2010-11 WHICH WERE PREPARED ON THE BASIS OF BOOKS OF ACCOUNTS MAINTAINED BY IT FOR HIS PERSONAL BOOKS AND SH. WALIA IS A ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 11 REGULAR ASSESSEE AND TRANSFERRED THE CASH TO THE ASSESSEE FIR M OUT OF HIS PERSONAL BOOKS AND THERE IS NO BAR TO TRANSFER CASH T O THE PARTNERSHIP FIRM, THEREFORE, THE ADDITION MADE ON TH IS ACCOUNT IS LEGALLY WRONG. IN RESPECT OF SH. HARWINDER SINGH , IT WAS SUBMITTED BY LD. AR HE HAS INTRODUCED RS.5,50,000/- AS CAPITAL IN THE FIR M. ALTHOUGH THE LD. CIT(A) HAS TAKEN ON RECORD THE BANK STATEMENT REFLECTING THE TRANSFER OF CAPITAL BY HIM IN THE ASSESSEE FIRM, HOWEVER , NOT GIVEN ANY CREDENCE TO THE BANK STATEMENT JUST BECAUSE THE STATEMEN T WAS NOT SIGNED BY THE BANK MANAGER IN THE COMPUTER AGE, WHERE ALL THE ACCOUNTS ARE AVAILABLE ON A CLICK OF MOUSE, THEREFORE, T HE ASSESSEE HAD RELIED UPON BANK STATEMENT GIVEN BY THE BANK AND STA TEMENTS IS HALF YEARLY AS NORMALLY ISSUED BY THE BANK . WITH REGARD TO THE SH. VIJAY KUMAR CHAWALA . THE ASSESSEE HAS RELIED UPON THE JUDGMENT OF CIT, RAJKOT VS. ODEDARA CONSTRUCTION (2014) 45 TAXMAN. COM 65 (GUJ). 8. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW WITH REGARD TO THE CHALLENGED BY T HE ASSESSEE AND SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) WITH RESPECT TO THE GROUNDS RAISED BY THE ASSESSEE DOES NOT REQUIRES TO BE INTE RFERED WITH AS THE SAME IS BASED UPON LOGIC, REASONS AND PROPER APPRECI ATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTA NCES OF THE CASE AND DOCUMENTS AVAILABLE ON RECORD AS IN THE INSTANT CA SE THE ASSESSEE HAD GIVEN 7 AHATAS ON LICENSE BASIS TO DIFFERENT PE RSONS, HOWEVER, ACCORDING TO ASSESSMENT ORDER, NO EVIDENCE WHATSO EVER, ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 12 PRODUCED , HOWEVER, INCOME OF RS.5,04,000/- HAS BEEN CAL CULATED FROM AHATAS BUSINESS . IN THE ABSENCE OF DOCUMENTARY EVID ENCE, THE ASSESSING OFFICER ESTIMATED THE AHATAS INCOME AT THE RATE O F 15,000/- PER MONTH (RS.1,80,000/- PER AHATA) AND THE SAID AMOU NT WAS CONFIRMED BY THE LD. CIT(A), HOWEVER, IF WE CONSIDER T HE STATEMENTS OF THE ASSESSEE AS WELL AS AGREEMENT AVAILABLE ON RECORD IT GOES TO SHOW THAT THE ASSESSEE HAD GIVEN TWO AHATAS @ 15,000/- PE R MONTH AND ONE AHATA @ 8,000/- PER MONTH, AND FURTHER SUBMI TTED THAT FOUR AHATAS WERE GIVEN AT THE RATE OF 1,000/- PER MONTH O N THE ORAL CONTRACTS, THEREFORE, THE ASSESSEE WAS NOT IN POSITION TO BR ING RELEVANT AGREEMENTS QUA REMAINING 4 AHATAS. WE HAVE FAILED TO UNDERSTAND THAT HOW THE AUTHORITIES BELOW CALCULATED THE AHATAS INCOME @ 15,000/- PER MONTH AND WORKED OUT ALL THE AHATAS IN COME TO THE TUNE OF RS.12,60,000/- BY CONSIDERING THE EVERY AHATAS AT RS.15,000/- PER MONTH WHEREAS IN REAL FACT ONE OF THE AHATA UNDISPUTE DLY WAS GIVEN ONLY AT RS.8,000/- PER MONTH. WE FIND LOGIC IN THE SUB MISSIONS OF THE ASSESSEE THAT ALTHOUGH THE ASSESSEE HAS PAID LICENSE FEE OF 7 AHATAS BUT THERE CANNOT BE ANY SUCH COMPULSION THAT IT SHOULD RU N ALL THE 7 AHATAS AND WE ALSO IN AGREEMENT WITH THE SUBMISSIONS OF THE LD. AR THAT ONCE THERE WERE ORAL AGREEMENTS CONSIDERING THE FA CT OF LOWEST AMOUNT @ 1,000/- PER MONTH AND IN FACT THEY WERE EGG /CHICKEN REHRIS WHICH WERE ALLOWED TO OPERATE OUTSIDE THE WINE SHOPS T HAT IS WHY THE ASSESSEE COULD NOT PRODUCE THE AGREEMENTS QUA 04 REMAINING AHATAS ALTHOUGH ORAL AGREEMENTS ARE ALSO VALID IN LAW . WE ARE OF THE CONSIDERED OPINION, AS WE FAILED TO UND ERSTAND ON WHAT LOGIC AND REASONING, THE AUTHORITIES BELOW, CALCULA TED THE AHATA INCOME BY TAKING INTO CONSIDERATION @ 15,000/- PER MON TH, THEREFORE , IN THE ABSENCE OF CONTRARY MATERIAL, THE ADDITION CANNO T BE MADE, HENCE, WE DO NOT HAVE ANY HESITATION TO DELETE THE SAID ADDITION IN RESPECT OF AHATA INCOME. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 13 NOW, GROUND NO.2 , WE HAVE SEEN THE BALANCE SHEET OF SH. SARABJIT SINGH WALIA AND OF M/S WALIA & COMPANY, WH ERE IT IS CLEARLY SHOWN TO HAVE BEEN INTRODUCED A CAPITAL OF RS.1,50,000 /- BY SH. SARABJIT SINGH WALIA AND THE INVESTMENT IN THE M/S WA LIA & COMPANY HAS ALSO BEEN REFLECTED IN THE BALANCE SHEET OF SH. SARA BJIT SINGH WALIA AND IT IS NOT IN CONTROVERSY THAT SH. SARABJIT S INGH WALIA IS NOT A REGULAR ASSESSEE AND NOT TRANSFERRED THE AMOUNT TO THE A SSESSEE FIRM. ALTHOUGH, FROM THE ORDER PASSED BY HE CIT(A), IT APPE ARS THAT HE HAS CONSIDERED THE SOURCE OF CAPITAL OF RS.3 LAKHS AS UNEXPLAIN ED AND CONFIRMED THE ADDITION TO THE TUNE OF RS.3 LAKHS, HOWE VER, FROM THE ASSESSMENT ORDER, IT REFLECTS THAT ONLY RS. 1,50,000/- WA S ADDED IN THE NAME OF SH. SARABJIT SINGH WALIA BY TREATING AS UNEXPLAINED CREDIT IN THE ABSENCE OF EVIDENCE, HOWEVER, WE HAVE CONSIDERED THE QUANTUM OF RS.1,50,000/- AS DETERMINED BY THE ASSESSING O FFICER. HENCE IN OUR CONSIDERED OPINION, CAPITAL OF RS.1500 00/- LAKHS INTRODUCED IN THE FIRM SH. SARABJIT SINGH WAL IA WAS DULY EXPLAINED AND HENCE, THE SAME IS DELETED. NOW COMING TO CAPITAL OF RS. 550000/- INTRODUCED BY SH. HARWINDER SINGH . FROM THE BANK STATEMENT IT REFLECTS, IT IS NOT SIGNED BY THE BANK MANAGER BUT IN OUR CONSIDERED OPINI ON THE LD. CIT(A) ALTHOUGH TAKEN INTO CONSIDERATION THE CONTENTS O F THE STATEMENT, HOWEVER, REJECTED THE SAME BECAUSE OF NON-SIGN ING BY THE BANK. IN OUR CONSIDERED OPINION, THE AUTHORITIES BELOW FAILED TO UNDERSTAND THAT IN THE COMPUTER ERA, ON ONE SIDE, THE INDIA IS HEADING TOWARDS DIGITAL INDIA AND ON THE OTHER SIDE, THE RESPONSIBLE OFFICERS ARE NOT TAKING INTO CONSIDERATION, THE COMPUTE R GENERATING ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 14 STATEMENT. AS IT CLEARLY REFLECTS FROM THE BANK STATEME NT OF SH. HARWINDER SINGH (FROM 1 ST APRIL, 2010 TO 30 TH SEP. 2010) THAT THERE IS DEBIT ENTRIES IN FAVOUR OF M/S WALIA & COMPANY ON TW O OCCASIONS I.E. 8 TH MAY, 2010 AND 22 ND JUNE, 2010 OF AMOUNT RS.300025.00 AND 250025.00 RESPECTIVELY WHICH GOES TO SHOW THAT THE SAID AMOUNT WAS TRANSFERRED BY SAID PERSON AND FROM THE BANK STATEMENT IT IS EVIDENT THAT SH. HARWINDER SINGH HAD SUFFICIENT FUNDS AVAILAB LE IN HIS ACCOUNT, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT CAPI TAL INTRODUCED WAS DULY EXPLAINED. IT IS SETTLED LAW THAT SOURCE OF SOURCE CA NNOT BE ALLOWED TO BE ASKED BY THE REVENUE AUTHORITIES AND ON CE IT IS CLEAR THAT THE AMOUNT UNDER CONSIDERATION HAS BEEN EN-ROUTED THROUGH BANKING CHANNEL THEN THE SAME CANNOT BE DOUBTED, HENCE , THE ADDITION OF RS.5,50,000/- STANDS DELETED . WITH REGARD TO THE INVESTMENT MADE BY SH. VIJAY KUMAR CHAWALA TO THE TUNE OF RS.3 LAKH , WE PERUSED THE ASSESSMENT ORDER PASSED BY THE LD. CIT(A), AS WE REALIZE T HAT THE LD. CIT(A) MAY BE INADVERTENTLY, DID NOT ADJUDICATE THE ISSUE RELATES TO THE ADDITION OF RS.3 LAKHS AS UNEXPLAINED CAPITAL, ALLE GED TO BE INTRODUCED BY SH. VIJAY KUMAR CHAWLA, THEREFORE, WE FEEL IT APPROPRIATE TO REMAND THE ISSUE UNDER CONSIDERATION TO THE FILE OF LD CIT(A) , AMRITSAR , TO DECIDE THE SAME, BY GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE PARTIES . IN THE AFORESAID OBSERVATION AND CONCLUSION THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. NOW COMING TO THE APPEAL OF THE REVENUE DEPARTMENT. IN SUPPORT OF ITS CASE, THE LD. DR RELIED UPON THE ORD ER ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 15 PASSED BY THE ASSESSING OFFICER AND SUBMITTED THAT THE LD. CIT(A) HAS ERRED BY HOLDING THAT THE A.O WAS NOT JUSTIFIED IN H OLDING THE ASSESSMENT U/S 144 OF THE I.T. ACT. FURTHER THE LD. CIT(A ) WAS ALSO ERRED IN LAW AND FACTS BY DELETING THE ADDITION OF R S.21,32,720/- MADE BY THE A.O ON DIFFERENCE IN G.P RATE. FURTHER THE LD . CIT(A) ALSO ERRED BY DELETING THE ADDITION OF RS.14,38,151/- DETERMINE D BY THE A.O ON THE ACCOUNT OF EXPENSES AS PER P&L ACCOUNT. FURTHER THE L D. CIT(A) ERRED IN DELETING THE ADDITION OF RS.2 LAKHS DETERMIN ED BY THE A.O ON ACCOUNT OF EXPLAINED CREDIT AND FURTHER ERRED BY DELET ING THE ADDITION OF RS.6,85,935/- DETERMINED BY THE A.O ON ACCOUNT OF I NVESTMENT OF FURNITURE. 11. ON THE CONTRARY, THE LD. AR RELIED UPON THE ORDER PASSED BY THE LD. CIT(A) AND SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) IS A SPEAKING , LOGICAL AS WELL AS REASONED ORDER WITH REGARD TO THE CHALLENGE BY THE DEPARTMENT AND THE SAME DOES NOT DESERVES TO BE INTERFERED WITH EXCEPT AS CHALLENGED BY THE ASSESSEE IN SEPARATE APPEAL. 12. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDERS PASSED BY THE AUTHORITIES BELOW AND DOCUMEN TS RELIED UPON BY THE PARTIES. LATE US TO DEAL WITH THE GROUND NO. (I) :- THE LD. CIT(A) WHILE CONSIDERING THE SAID REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT HAD GIVEN REASONS FOR SETTING ASIDE THE REJECTION OF THE BOOKS OF ACCOUNTS BY RELYING UPON THE DECISION OF CO-ORDINATI ON BENCH AT AMRITSAR IN THE CASE OF ASHOK KUMAR AND CO. VS. ITO (20 04) 2 SOT ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 16 518 (ASR) WHEREBY IN WHICH THE HONBLE BENCH CONSIDERED T HE IDENTICAL AND SIMILAR ISSUE AS THE ASSESSEE INVOLVED IN THE LIQUOR B USINESS. THE LD. CIT(A) OBSERVED THAT THE BOOKS OF ACCOUNTS WERE REJE CTED BY THE A.O ONLY BECAUSE, NO SALE BILLS AND VOUCHERS OF EXPENSES WE RE PRODUCED BY THE APPELLANT. IN THIS REGARD THE APPELL ANT HAD EXPLAINED THAT SALE BILLS WERE NOT MAINTAINED SINCE IT IS NOT DON E AS PER THE NATURE OF TRADE. IT WAS STATED THAT A PARCHA IS MAINTAI NED FOR ALL THE SHOPS WHEREIN DAILY STOCK DETAILS ARE RECORDED AND SALE IS AS PER CASH BOOK. THE EXPLANATION OF THE APPELLANT IS ACCEPTED CONSI DERING THE LINE OF BUSINESS OF THE APPELLANT OF LIQUOR TRADING. THE AP PELLANT HAD STATED THAT VOUCHERS OF ALL THE EXPENSES DEBITED IN TRADING AN D P&L ACCOUNT WERE MAINTAINED AND WERE ALSO PRODUCED BEFORE THE UND ERSIGNED IN THE APPELLATE PROCEEDINGS. ACCORDINGLY, IT IS HELD THAT REJECTION OF BOOKS OF ACCOUNTS OF THE APPELLANT U/S 145(3) OF THE ACT WAS NOT JUSTIFIED AND IS DISMISSED. FINALLY THE LD. CIT(A) WAS P LEASED TO HELD THAT AO WAS NOT JUSTIFIED IN COMPLETING THE ASSESSMENT U/ S 145 OF THE ACT. WE HAVE REALIZED THAT THE CO-ORDINATION BENCH OF ITAT AMRITSAR IN THE CASE OF ASHOK KUMAR AND CO. VS. ITO (SUPRA) HAD DEA LT WITH THE SAME SITUATION AND CAME TO THE RESCUE OF THE ASSESSEE BY SETT ING ASIDE THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT AND WHILE PASSING THE ORDER, THE LD. CIT(A) HAD TAKEN DUE CONSIDERATION OF THE SAME, THEREFORE, WE DO NO FIND ANY CONTRARY DECISION AND /OR ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 17 REASON TO INTERFERE WITH THE ORDER PASSED BY THE L D. CIT(A) AND THEREFORE THE SAME IS UPHELD AGAINST GROUND NO. (I). NOW GROUND NO.(II) OF THE REVENUE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS.21,32,720/- MADE BY THE A O ON DIFFERENCES IN G.P RATE. THE A.O IN THE INSTANT CASE COMPARED THE CASE OF THE ASSESSEE WITH M/S PUNJAB TRADING COMPANY, E-421 RANJIT AVENUE, AMRITSAR AND APPLIED THE G.P RATE @ 5.6% OF THE GROSS SALES INSTEAD OF 4.28% AS DECLARED BY THE ASSESSEE AND THEREFORE, WORKED OUT THE GROSS PROFIT TO THE TUNE OF RS.91,01,536/- INSTEAD OF 6 9,68,806/- AS CLAIMED BY THE ASSESSEE AND FINALLY THE A.O MADE THE ADD ITION OF RS.25,32,730/-. THE LD. CIT(A) CONSIDERED THE FACTUAL POSITION AND CAME TO THE CONCLUSION THAT THE ASSESSING OFFICER WRONGLY CO MPARED THE CASE OF THE APPELLANT WITH THE PUNJAB TRADING & C O. WHICH WAS NOT JUSTIFIED AS THE TWO CASES WERE NOT COMPARABLE BECAUSE TURN OVER OF THE APPELLANT IN THE YEAR UNDER CONSIDERATION WAS RS.16 ,25,27,441/- ONLY , WHILE THAT OF M/S PUNJAB TRADING CO. WAS NEA RLY RS.120 CRORE AND WHICH WAS DOING BUSINESS OF MUCH LARGER SCALE ON A MUCH WIDER AREA THEN THE ASSESSEE, THEREFORE, MONOPOLY OVER THE AR EA OF THE SAID COMPANY CANNOT BE DENIED AND IT IS NOT IN DISPUTE THAT MRP FIXED ON THE LIQUOR BOTTLE BY THE STATE GOVT. OF PUNJAB AS M INIMUM RETAILER PRICE AND THEREFORE, THE PARTIES COULD SET ANY PRICE BY THE LIQUOR ABOVE THE MRP AND THE AO HAS NOT DENIED THE SAID STAT EMENT OF THE ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 18 APPELLANT IN THE ASSESSMENT PROCEEDINGS AND EVEN OTHERWI SE BOOKS OF ACCOUNTS OF THE APPELLANT HAD ALSO BEEN AUDITED BY THE CHARTERED ACCOUNTANT VIDE AUDIT REPORT IN THE FORM OF 3CB AND 3 CD DATED 28.09.2011 ,WHEREIN THE AUDITORS DID NOT GIVEN ANY A DVERSE COMMENT IN THE REPORT. THE ASSESSEE WAS IN LIQUOR BUSINESS CONTROLL ED BY THE EXCISE DEPARTMENT OF THE PUNJAB GOVT. AND WAS DEALING IN EXCISABLE ITEMS AND THE A.O HAD NOT POINTED OUT THAT THE ASSESSEE HAD NOT MAINTAINED STATUTORY REGISTER PRESCRIBED BY THE EXCISE A UTHORITY AND EVEN OTHERWISE THE A.O HAD NOT POINTED OUT IF ANY DE FECT OBSERVED BY THE EXCISE AUTHORITY IN THE EXCISE RECORD AND ALSO NOT P OINTED OUT ANY MATERIAL AND SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNTS AND N O SALES AND PURCHASES OUTSIDE THE BOOKS OF ACCOUNTS WERE DETECTED BY THE A.O ALTHOUGH THE APPELLANT HAD CLAIMED TO PRODUCE PURCHASE BILLS, SALARY REGISTER RENT DEEDS AND OTHER VOUCHERS BEFORE THE A.O O N 06.02.2014 BUT THE A.O. DID NOT EVEN MENTION ABOUT THE SAME IN THE ASSESSMENT ORDER. ON THE AFORESAID ANALYZATION, THE LD. CIT(A) DELETE D THE ADDITION AS ADDED BY THE ASSESSING OFFICER BY APPLYING TH E G.P RATE AT THE 5.6%. WE DO NOT HAVE ANY HESITATION TO HOLD THAT THE LD. CIT(A) WHILE ADJUDICATING THE ISSUE IN HAND APPLIED HIS MIND PROPERLY AND RIGHTLY PASSED WELL-REASONED ORDER , T HEREFORE, WE UPHELD THE SAME. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 19 GROUND NO.(III) REGARDING DELETION OF ADDITION OF RS.14,38,151/- MADE BY THE A.O ON ACCOUNT OF EXPENSES AS P&L ACCOUNT. IN THE INSTANT CASE, THIS IS NOT IN DOUBT THE ASSE SSEE HAD TAKEN SHOPS ON RENT AND HAD PRODUCED RENT DEEDS OF THE SHOPS AND SALARY REGISTER AND OTHER VOUCHERS WHICH WERE DULY ACKNO WLEDGED BY THE ASSESSING OFFICER BUT STILL DISALLOWED TO THE TUNE OF RS.25% OF THE SHOP RENT CLAIMED ON ADHOC BASIS WITHOUT POINTING ANY DE FECT IN THE RENT DEED AND/OR ANY EXCESS CLAIM OF RENT, THEREFORE, T HE LD. CIT(A) RIGHTLY DELETED THE ADDITION QUA RENT OF RS.13,50,80 0/- AND FURTHER IT WAS ALSO OBSERVED BY THE LD. CIT(A) THAT AO WAS FAILED TO NOTICE THAT THE ASSESSEE HAS NINE RETAILER LIQUOR SHOPS AND ONE OFFIC E FOR WHICH EMPLOYEES WERE REQUIRED TO RUN THE BUSINESS AND BY NOT SIMPLY MENTIONING ADDRESSES OF EMPLOYEE, THE ATTENDANCE REGIS TER CANNOT BE DOUBTED BECAUSE IN THE ATTENDANCE REGISTER THE NAME OF THE EMPLOYEE WERE APPEARING REGULARLY IN EACH MONTH AND THE RECEIP T OF SALARY WAS SIGNED ON JUDICIAL STAMP WHICH APPEARS TO BE GENUINE, THEREFORE, THE LD. CIT(A) DELETED THE ADHOC DISALLOWANCE TO THE TUNE OF RS.4,68,749/- WHICH WAS DISALLOWED @ 25% QUA STAFF SALARY , HENCE WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) RIGHTLY DEL ETED THE AFORESAID ADDITION . FURTHER, IN RESPECT OF DISALLOWANCE OUT OF BANK CHARGES OF RS.62,244/- AND AUDIT FEES OF RS.25,000/-. IT WAS OBSERV ED BY THE LD. CIT(A) THAT THE CASE OF THE ASSESSEE WAS COVERED U/S 44AB A ND THE BOOKS OF ACCOUNTS WERE AUDITED BY CHARTERED ACCOUNTANT A ND THEREFORE, THE DISALLOWANCES OF AUDIT FEES OF RS.25,000/ - WAS DELETED. WE FURTHER FIND THAT THE BANK CHARGES ARE VERIFIABLE FROM THE BANK STATEMENT OF THE APPELLANT, THEREFORE, IN OUR CONSIDERED OPINION THE LD. CIT(A) RIGHTLY DELETED THE SAID ADDITION QU A AUDIT FEES OF RS. 25000/- AND BANK CHARGES OF RS. 62,224/-. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 20 WITH REGARD TO THE OTHER DISALLOWANCES IN RESPECT OF CAN DY, TELEVISION, FURNITURE, JEEP, COMPUTER, INVERTORS AND MOTORCYCLE. THE BOOKS OF THE ACCOUNTS OF THE APPELLANT HAD BEEN AUDITED BY THE CHARTERED ACCOUNTANT AND THE AUDITORS HAVE NOT GIVEN A NY ADVERSE COMMENTS IN THEIR REPORT QUA CLAIMED DEPRECIATION AND EVEN OTHERWISE THE ASSESSING OFFICER HAD ALLOWED THE DEPRECIATION @ 10%, THEREFORE, WE FEEL IT APPROPRIATE THAT LD. CIT(A) WAS RIGHT IN DELETING THE DISALLOWANCES OF RS.57,032/- ON ACCOUNT OF DEPRECAT ION. WITH REGARD TO THE DISALLOWANCES @ 25% OF THE BALANCE EXPENDITURE CLAIMED IN P&L ACCOUNT TO THE TUNE OF RS.55 2,858/- AS THE ASSESSING OFFICER FAILED TO GIVE ANY REASON FOR THE ADHOC DISALLOWANCE OF THE SAID AMOUNT, THEREFORE, WE FEEL IT APPROPRIATE THAT THE LD. CIT(A) WAS RIGHT IN DELETING THE SAME. GROUND NO.(IV) REGARDING DELETION OF ADDITION OF RS.2,00,000/- ON ACCOUNT OF UNEXPLAINED CREDIT, WHILE CONSIDERING THE ADDITION OF RS.2,00,000/- IN RESPECT OF SH. JAGJIT SINGH, THE LD. CIT(A) OBSERVED AS UNDER: ACCOUNT 90942010007898 IS SYNDICATE BANK, DELHI, THE COPY OF THE SAID BANK STATEMENT WAS FOR THE PERIOD FROM 1 ST APRIL, 2010 TO 31 ST MARCH,20911 WHICH REVEALS CREDIT ENTRIES BY CLEARING TH ROUGH OUT THE YEAR NOT A SINGLE ENTRY DEPOSITED BY CASH WAS APPEARING IN THE SAID BANK STATEMENT OF SH. JAGJIT SINGH HAD CREDITED BALA NCE OF RS.610,375.85 ON 03.03.2011 IMMEDIATELY BEFORE HE ISSU ED A CHEQUE NO.330714 IN FAVOUR OF WALIA (THE APPELLANT) FOR RS. 2,00,00/-, THEREFORE, THE SOURCE OF CAPITAL OF RS.2,00,000/- INTR ODUCED BY SH. JAGJIT SINGH IN THE APPELLANT FIRM WAS ESTABLISHED AN D THE ADDITION OF RS.2,00,000/- ON THIS ACCOUNT IS DELETED. WE CONSIDERED THE SAID ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 21 OBSERVATION AND DO NOT FIND ANY MATERIAL AND REASON TO INTERFERE WITH BECAUSE THE LD. CIT(A) HAS TAKEN INT O CONSIDERATION THE SAID BANK STATEMENT FOR THE PERIO D FROM 1 ST APRIL, 2010 TO 31 ST MARCH, 2011 AND RIGHTLY CONCLUDED THAT THE SOURCE OF CAPITAL RS.2,00,000/- WAS CLEARLY ESTABLI SHED. GROUND NO.(V) RELATES TO THE DELETION OF THE ADDITION OF RS.6,85,935/- MADE BY THE A.O ON ACCOUNT OF INVESTMENT IN FURNITURE. IN THE INSTANT CASE THAT THE ASSESSEE HAD SHOWN FURNITURE O F RS.1,87,850/-, HOWEVER, IT WAS FELT BY THE AO THAT TH E SAME WAS NOT SUFFICIENT TO START NINE RETAIL LIQUOR VENDS AND ONE O FFICE, THEREFORE, THE ASSESSING OFFICER ESTIMATED THE EXPENSES ON ACCOUNT OF FURNIT URE AND FIXTURE AT RS.100,000/- PER VEND AND RS.50,000/- FOR THE OFFICE AND THE TOTAL INVESTMENT IN FURNITURE WAS ESTIMATED AT RS.9,50, 000/- AND AFTER REDUCING THE FURNITURE SHOWN BY THE ASSESSEE AT RS.1,87,85 0/- THE DIFFERENCE OF RS.762,150/- WAS TREATED AS UNEXPLAINED I NVESTMENT. HOWEVER, WHILE GIVING DEPRECIATION OF RS.76,215/- @ 10 % ON THE ESTIMATED INVESTMENT IN FURNITURE, THE BALANCE OF RS.6, 85,935/- WAS ADDED TO THE RETURNED INCOME OF THE ASSESSEE. THE LD. CIT(A) OBSERVED THAT IN WRITTEN SUBMISSION THE APPELLANT SUBMITTED THAT THE FURNITURE WAS OLD AND PURCHASED FROM PREVIOUS RUNNING LIQUOR VENDS AND THE APPELLANT QUESTIONED THA T HOW THE AO ESTIMATED THE FURNITURE VALUE OF THE SHOPS CONSISTING OF AN AREA OF AROUND 150 TO 200 SQ. FT.. THE LD. CIT(A) WAS IN AGRE EMENT WITH THE ASSESSEE THAT THE A.O ON HIS OWN PRESUMPTION, ESTIMATED TH E TOTAL INVESTMENT IN FURNITURE AS THE SAID ESTIMATION WAS NOT B ASED ON ANY ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 22 EVIDENCE WHATSOEVER, BUT IT WAS JUST AN IMAGINATION OF THE A.O AND TREATED THE SAME AS BASELESS. WE REALIZE THAT THE LD. C IT(A) GIVEN THE LOGICAL REASONING WHILE COMING TO THE CONCLUSION FOR DELE TION THE SAID DISALLOWANCE WHICH WAS WRONGLY ESTIMATED BY THE ASSESSING OF FICER JUST ON THE BASIS OF SURMISES AND CONJECTURE WITHOUT ANY EV IDENCE AND BASE. HENCE, WE CONFIRM THE SAID ISSUE ADJUDICATED BY THE L D. CIT(A). 13. NOW COMING TO THE C.O. NO.33(ASR)/2015 FILED BY T HE ASSESSEE. WE HAVE GONE THROUGH WITH THE GROUNDS OF CROSS OBJECTION AS THE SAME ARE IN SUPPORT OF THE CIT(A)S ORDER AND AG AINST THE GROUNDS RAISED BY THE REVENUE DEPARTMENT AND THEREFOR E, WE ARE OF THE CONSIDERED OPINION THAT THE SAME DOES NOT REQUIRE A NY INDEPENDENT ADJUDICATION. 14. IN THE RESULT, THE APPEAL FIELD BY THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND APPEAL FILED BY THE REVENUE DEPARTMENT STANDS DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSE E DOES NOT REQUIRE DISPOSED OFF IN VIEW OF THE AFORESAID ORDE R PASSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.0 8.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED:31.08.2017. /PK/ PS. ITA NOS.485 & 501 (ASR)/2015 C.O. NO.33 (ASR)/2015 ASST. YEARS: 2011-12 23 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER