ITO, New Delhi V. M/s. Indo Scottish, New Delhi

ITA 4872/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0005 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO: 4872/DEL/2012 ASSESSMENT YEAR : - 2008-09 ITO, WARD 33(2) VS. INDO SCOTTISH ROOM NO. 206B, 974/1, DHAKA PLAZA, C.R. BUILDING, I.P. ESTATE ARYA SAMAJ ROAD, NEW DELHI. KAROL BAGH, NEW DELHI. (PAN AABF15836P) (APPELLANT) (R ESPONDENT) APPELLANT BY : SMT. PARMINDER KAUR, SR. DR RESPONDENT BY :SHRI SANJIV SAPRA, CA DATE OF HEARING :15.4.2015 DATE OF PRONOUNCEMENT :6.5 .2015 O R D E R PER G.C. GUPTA,VICE PRESIDENT THIS APPEAL BY THE REVENUE FOR THE ASSESS MENT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). THE GROUND OF APPE AL NO. 1 IS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 16,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CASH PA ID TO SHRI SUKHDEV SINGH. 2. LD. DR SUBMITTED THE AMOUNT OF RS. 16.5 LACS WAS PAID BY THE ASSESSEE FIRM TO ITS PARTNER SHRI SUKHDEV SINGH IN CASH AND SHRI SUKHDEV SINGH IN TURN HAS GIVEN THIS AMOUNT TO M/S. PUSHAN PROPERTIES AND DEVELOPE RS (P) LTD. AS UNSECURED LOAN. SHE SUBMITTED THAT THERE WAS NO DOCUMENTARY EVIDENC ES OF THE PAYMENT OF RS. 16.5 ITA NO. 4872/DEL/2012 ITO VS. INDO SCOTTISH 2 LACS BY THE ASSESEE TO SHRI SUKHDEV SINGH. SHE RELI ED ON THE ORDER OF THE AO. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASH PA YMENT MADE BY THE ASSESSEE TO ITS PARTNER HAS BEEN ASSESSED AS INCOME IN THE HAND S OF THE ASSESSEE. HE SUBMITTED THAT THERE IS NO LAW TO ASSESS THE CASH WITHDRAWAL OF A PARTNER AS INCOME IN THE HANDS OF THE ASSESEE FIRM. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDER OF THE LD. CIT(A). WE FIND THAT THE BASIC FACTS IN THIS CA SE ARE NOT IN DISPUTE. THE ASSESSEE FIRM HAS PAID RS. 16.5 LACS TO ITS PARTNER SHRI SUK HDEV SINGH AND THE NECESSARY ENTRIES WERE PASSED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE FIRM. THE CASH ENTRY OF RS. 16.5 LAC WAS REFLECTED IN THE LEDGER A CCOUNT OF SHRI SUKHDEV SINGH IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FIRM, COPY OF WHIC H HAS BEEN FILED BY THE ASSESSEE BEFORE THE CIT(A). THE CIT(A) IN THESE FACTS HELD T HAT AO DID NOT PROPERLY APPRECIATE THE FACTS OF THE CASE AND THAT THE ENTRIES WERE EXP LAINED AND ADDITION WAS DELETED. THE CASH PAYMENT MADE BY THE ASSESEE FIRM TO ITS PA RTNER WAS GENUINE AND DULY REFLECTED IN THE ACCOUNTS BOOK OF ASSESSEE FIRM AND WAS FULLY EXPLAINED AND THEREFORE NO CASE OF ADDITION OF THIS AMOUNT AS INC OME IN THE HANDS OF THE ASSESSEE FIRM IS MADE OUT BY THE REVENUE AND THERE BEING NO MERIT IN THE GROUND NO. 1 OF THE REVENUE, THE SAME IS DISMISSED. 4. THE GROUND OF APPEAL NO. 2 OF THE REVENUE IS AS UNDER :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 14,69,061/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PURCHAS E MADE FOR NON BUSINESS PURPOSE. ITA NO. 4872/DEL/2012 ITO VS. INDO SCOTTISH 3 5. LD. DR REFERRED TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. SHE REFERRED TO THE PORTIO N OF THE ASSESSMENT ORDER WHEREIN THE AO HAS RECORDED THAT NOTICES ISSUED U/S 133 (6) OF THE ACT TO SOME OF THE PARTIES FROM WHOM PURCHASES WERE MADE WERE RETU RNED AS UNSERVED BY THE POSTAL AUTHORITIES. SHE SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES OF BUILDING MATERIAL A ND THE ASSESSEE HAS FAILED IN THIS CASE TO DO SO AND THEREFORE THE ADDITION MADE WAS J USTIFIED. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SALES FIGURE OF BUILDIN G MATERIAL AS WELL AS THE CLOSING STOCK FIGURES THEREOF HAVE BEEN ACCEPTED BY THE AO AND THEREFORE TO DISALLOW PART OF THE PURCHASES OF BUILDING MATERIAL WAS NOT JUSTIFIE D. HE SUBMITTED THAT IN CASE THERE WAS ANY DISCREPANCY IN THE ACCOUNTS, THE AO SHOULD HAVE RESTORE TO THE PROVISION OF SECTION 145 OF THE ACT AND NOT TO DISALLOW THE PART OF PURCHASES OF BUILDING MATERIAL, WHICH WERE DULY REFLECTED IN THE REGULAR BOOKS OF A CCOUNT OF THE ASSESEE MAINTAINED IN THE NORMAL COURSE OF BUSINESS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND HAVE PERUSED THE ORDER OF THE AO AND CIT(A). WE FIND THAT THE CIT(A) HAS PASSED A WELL REASONED SPEAKING ORDER ON THIS ISSUE. THE CIT(A) HAS GIVEN A FINDING THAT THERE IS NO BASIS FOR HOLDING BY THE AO THAT THESE TRANSACTIONS OF PURCHASES WERE NOT FO R BUSINESS PURPOSES OF THE ASSESSEE. THE PURCHASES WERE SUPPORTED BY THE PURCH ASE BILLS PRODUCED BY THE ASSESSEE. THE COMPLETE POSTAL ADDRESS OF THE SELLER PARTIES WERE FURNISHED TO THE AO. THE CIT(A) HAS RECORDED THAT DURING THE RELEVA NT YEAR THE ASSESSEE HAS DIVERSIFIED AND STARTED THE BUSINESS OF SUPPLYING CONSTRUCTION MATERIAL AND ENTERED INTO THE MOU WITH M/S. PUSHAN PROPERTIES AND DEVEL OPERS PVT. LTD. AND THEREFORE THE FINDING OF THE AO THAT THE PURCHASE TRANSACTION S WERE FOR THE PURPOSE OF NON ITA NO. 4872/DEL/2012 ITO VS. INDO SCOTTISH 4 BUSINESS WAS NOT CORRECT. THERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE SAME IS CONFIRMED AND THE GROUND NO. 2 O F THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- (N.K. SAINI) (G.C. GUPTA) ACCOUNTANT MEMBER VICE PRESIDE NT DATED: THE 6 TH MAY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR ITA NO. 4872/DEL/2012 ITO VS. INDO SCOTTISH 5 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 15.4.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 15.4.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER