M/s Anup Kumar, Lalitpur V. I.T.O.-6(4), Agra

ITA 491/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0558 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 7 month(s) 4 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 12-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: VITHAL DAS
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.491/AGR/2012 ASSESSMENT YEAR: 2007-08 M/S. ANUP KUMAR, VS. INCOME TAX OFFICER 6(4), 26, SUBASHPURA, LALITPUR. LALITPUR. (PAN: AAJFA 5654 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VITHAL DAS, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R . DATE OF HEARING : 23.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.01.2013 ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 08.12.2011 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2007-08. 2. THE FIRST EFFECTIVE GROUND RAISED IN THIS APPEAL IS IN RESPECT OF ADDITION OF RS.3,00,000/- MADE BY THE A.O. UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) AND THE SECOND EFFECTIVE GR OUND IS IN RESPECT OF DISALLOWANCE OF RS.50,000/- MADE BY THE A.O. OUT OF EXPENSES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM IS A LICENSEE OF COUNTRY LIQUOR WHICH WAS CONSTITUTED BY AN INSTRUMENT OF PA RTNERSHIP DEED EXECUTED ON ITA NO.491/AGR/2012 A.Y. 2007-08 2 01.09.2002 W.E.F. 01.04.2003. DURING THE ASSESSMEN T PROCEEDINGS, THE A.O. NOTICED THAT THERE IS A LIABILITY OF RS.3,00,000/- AS UNSECURED LOANS TAKEN FROM SHRI PRAMOD CHAUBEY AND SHRI DHARMENDRA PARMAR OF RS.1,5 0,000/- EACH. THE A.O. ASKED THE ASSESSEE TO EXPLAIN THESE CREDITORS OF RS .3,00,000/-. THE ASSESSEE IN SUPPORT OF THE CLAIM FURNISHED AFFIDAVITS OF SHRI P RAMOD CHAUBEY AND SHRI DHARMENDRA PARMAR WHEREIN THEY ADMITTED TO HAVE GIV EN RS.1,50,000/- EACH TO THE ASSESSEE THROUGH DRAFTS. BOTH THE PERSONS ARE ASSE SSED TO TAX AND PHOTOCOPY OF ACKNOWLEDGEMENT SLIP FOR FILING OF RETURN FOR A.Y. 2007-08 WAS FILED. BOTH THE PERSONS WERE NOT MAINTAINING BOOKS OF ACCOUNT. THE Y ARE FILING RETURN BY SHOWING THEIR INCOME ON ESTIMATION BASIS. THE A.O. ASKED T HE ASSESSEE TO FURNISH COPY OF BANK ACCOUNT BUT THE SAME WAS NOT FURNISHED. HOWEV ER, THE A.O. MADE THE ENQUIRY FROM BANK THROUGH INSPECTOR. IT WAS NOTICE D IN THE ENQUIRY REPORT THAT THESE DRAFTS WERE PURCHASED IN THE NAMES OF SHRI SR IDHAR PANDEY & SHRI KAMLESH KUMAR RAI. THE ASSESSEE FIRM FAILED TO FURNISH SAT ISFACTORY EXPLANATION OF THESE DEPOSITS, THEREFORE, THE A.O. MADE ADDITION OF RS.3 ,00,000/-. THE ADDITION MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A). 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE BURDEN IN RESPECT OF SECTION 68 BY F ILING AFFIDAVITS AND PHOTOCOPY OF ACKNOWLEDGE OF RETURNS FILED. HE FURTHER SUBMITTED THAT IN THE AFFIDAVITS THE CREDITORS HAVE ACCEPTED THAT THEY HAVE GIVEN RS.1,5 0,000/- EACH TO THE ASSESSEE. ITA NO.491/AGR/2012 A.Y. 2007-08 3 THESE TWO DRAFTS WERE MADE THROUGH BUSINESS ASSOCIA TES OF THE ASSESSEE. THE ASSESSEE HAS SHOWN THE SOURCE OF THE CREDITORS. LD . AUTHORISED REPRESENTATIVE SUBMITTED THAT THE A.O. CANNOT INSIST TO PROVE THE SOURCE OF THE SOURCE. 5. LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HA ND, RELIED UPON THE ORDER OF CIT(A). 6. I HAVE HEARD THE LD. REPRESENTATIVES OF THE PART IES AND RECORDS PERUSED. SECTION 68 CASTS BURDEN ON THE ASSESSEE TO PROVE ID ENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN THE CASE UNDER CONSIDERATION, THE ASSESSEE HAS FURNISHED AFFIDAVITS AND ACKNOWLEDGEMENTS OF RETURN S OF THE DEPOSITORS. THEREFORE, THE ASSESSEE IS ABLE TO ESTABLISH THE IDENTITY OF T HE DEPOSITORS. IN RESPECT OF OTHER TWO CONDITIONS, CREDITWORTHINESS & GENUINENESS OF T HE TRANSACTIONS, I NOTICE THAT THE ASSESSEE FURNISHED THE AFFIDAVITS OF THE DEPOSI TORS AND THE A.O. DID NOT CROSS EXAMINED THE DEPOSITORS. HOWEVER, A CONTRARY FACT HAS BEEN NOTICED BY THE A.O. ON ENQUIRY FROM BANK THAT THE DRAFTS WERE PURCHASED IN THE NAMES OF SHRI SRIDHAR PANDEY AND SHRI KAMLESH KUMAR RAI. THE ASSESSEE HA S FAILED TO EXPLAIN THE REASON FOR ACCEPTING THE DRAFTS IN THE NAMES OF SHR I SRIDHAR PANDEY AND SHRI KAMLESH KUMAR RAI EXCEPT SAYING THAT BOTH WERE BUSI NESS ASSOCIATES OF THE ASSESSEE. THUS, COMPLETE FACTS ARE NOT ON RECORD W HICH BOTH THE ASSESSEE AND A.O. HAVE FAILED TO PUT ON RECORD. THE ASSESSEE SIMPLY SUBMITTED THAT BOTH THE ITA NO.491/AGR/2012 A.Y. 2007-08 4 DEPOSITORS WERE ASSESSED TO TAX AND WERE FILING RET URNS OF INCOME WHICH IS NOT SUFFICIENT TO ESTABLISH THE CREDITWORTHINESS OF THE DEPOSITORS. IT IS RELEVANT TO STATE THAT EVEN THE BOOKS OF ACCOUNTS ARE NOT MAINTAINED BY DEPOSITORS AND SUBMISSION OF THE ASSESSEE THAT WITHOUT WHICH PREPARING BALANCE S HEET IS NOT POSSIBLE. BUT IN SUCH CASES A STATEMENT OF AFFAIRS CAN BE FURNISHED IN SUPPORT OF THE FACT THAT THE DEPOSITORS WERE HAVING SUFFICIENT FUND FOR GIVING A DVANCE TO THE ASSESSEE. THE ASSESSEE HAS FAILED TO FURNISH SUCH TYPE OF STATEME NT OF AFFAIRS OF THE DEPOSITORS. I DO NOT AGREE WITH THE SUBMISSIONS OF THE LD. AUTHOR ISED REPRESENTATIVE THAT THE A.O. ASKED ABOUT THE SOURCE OF THE SOURCE BECAUSE S UCH EXAMINATION DOES NOT AMOUNT TO ASKING SOURCE OF THE SOURCE BUT THAT IS R ELEVANT IN RESPECT OF EXPLAINING CREDITWORTHINESS OF THE DEPOSITORS. IN THE ABSENCE OF COMPLETE FACTS, THE ISSUE CANNOT BE DECIDED AT THIS STAGE. UNDER THE FACTS A ND CIRCUMSTANCES, I THINK IT PROPER TO SEND THE MATTER BACK TO THE FILE OF CIT(A ) WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO BOTH THE SIDES. 7. THE SECOND ISSUE IS IN RESPECT OF ADDITION OF RS .50,000/- MADE BY THE A.O. OUT OF EXPENSES. THE A.O. MADE ADHOC ADDITION AS S OME OF THE EXPENSES REMAINED UNSUPPORTED AND UN-VOUCHED. THE ADDITION MADE BY T HE A.O. HAS BEEN CONFIRMED BY THE CIT(A) ITA NO.491/AGR/2012 A.Y. 2007-08 5 8. I HAVE HEARD THE LD. REPRESENTATIVES OF THE PART IES AND RECORDS PERUSED. I NOTICE THAT A COMPARATIVE POSITION HAS BEEN FILED B Y THE LD. AUTHORISED REPRESENTATIVE THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN BETTER G.P. & N.P. THE DETAILS FILED BY THE LD. AUTHORISE D REPRESENTATIVE IS REPRODUCED AS UNDER :- A.Y. SALES G.P. % N.P. % 2007-08 1,58,26,859/- 23,29,610.46 14.72 3,94,434.3 8 2.49 2006-07 1,38,71,531/- 13,12,176.64 9.46 3,38,004.64 2.44 2005-06 1,17,40,221/- 12,34,584.45 10.51 2,75,289.5 5 2.34 9. THE A.O. MADE THE ADHOC ADDITION. THE SUBMISSIO N OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT IN THE LIGHT OF JUDGEMENT O F HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BANWARI LAL BANSHIDHAR, 229 ITR 229 (ALL.), THE A.O. CANNOT MAKE ADHOC ADDITION. AFTER GOING THROUGH TH E COMPARATIVE POSITION, I FIND FORCE IN THE SUBMISSION OF THE LD. AUTHORISED REPRE SENTATIVE THAT WHEN THE ASSESSEE HAS SHOWN COMPARATIVELY BETTER RESULT, ADHOC ADDITI ON CANNOT BE MADE. EVEN OTHERWISE ALSO, THE A.O. HAS FAILED TO POINT OUT SP ECIFIC DEFECT ON DETAILS OF SUCH EXPENSES. IN THE LIGHT OF FACT, I AM OF THE VIEW T HAT NO ADHOC ADDITION IS WARRANTED, THEREFORE, THE ADDITION OF RS.50,000/- IS DELETED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER ITA NO.491/AGR/2012 A.Y. 2007-08 6 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY