Lalchand Parasaram Chhabriya, Kolhapur V. Deputy Commissioner of Income-tax,

ITA 493/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7732 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-06-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVRAJ MORE
• Keywords: Business expenditure; Search and seizure; Revised return
• Section: 234B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.493/PUN/2016 / ASSESSMENT YEAR : 2008-09 SHRI LALCHAND PARASARAM CHHABRIYA, OM SAI, 235/4B, TARABAI PARK, DIST. KOLHAPUR PAN : AALPC1122C . /APPELLANT VS. DCIT, CENTRAL CIRCLE, KOLHAPUR . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI SHIVRAJ MORE / DATE OF HEARING : 26.06.2018 / DATE OF PRONOUNCEMENT: 27.06.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R OF CIT(A)-11, PUNE, DATED 25-01-2016 FOR THE ASSESSMENT YEAR 2008-09. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. ON FACTS AND IN CIRCUMSTANCE OF THE CASE THE LD .CIT(A) ERRED IN LAW AND ON MERIT IN CONFIRMING THE ADDITION OF RS.93,528/-. 2. ON FACTS AND IN CIRCUMSTANCE OF THE CASE THE LD. CIT(A) ERRED IN LAW AND ON MERIT IN CONFIRMING ADDITION ON ACCOUNT OF WHEN NO ERRORS AND OMISSION WAS POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER. 3. ON FACTS AND IN CIRCUMSTANCE OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST U/S.234B & C. 4. THE APPELLANT CRAVES FOR LEAVE TO ADD, ALTER, AM END ANY OF THE GROUNDS OF APPEAL. ITA NO.493/PUN/2016 LALCHAND P. CHHABRIYA 2 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF WHOLESALE WINE ME RCHANT. THERE WAS SEARCH AND SEIZURE ACTION ON THE ASSESSEE O N 18-04-2007 U/S.132 OF THE ACT IN THE CHHABRIYA GROUP OF CASES OF KOLHAPUR. ASSESSEE WAS ALSO COVERED IN THE SAID SEARCH & SEIZURE ACTION. SEARCH RES ULTED IN DISCLOSURE OF ADDITIONAL INCOME OF RS.12,89,333/- TO COVER UP ERRORS AND OMISSIONS AND THE ASSESSEE OFFERED THE SAME FOR TAXATION. ASSESSEE FILED THE REVISED RETURN REDUCING THE AMOUNT OF ADDITIONAL INCOME UNDER THE HEAD ERRORS & OMISSIONS. DURING THE YEAR UNDER CONSIDERATION, THE ASSE SSEE PURCHASED A RESIDENTIAL HOUSE AT RS NO.449, STATION ROAD, KOLHAPUR ALON G WITH HIS BROTHER FOR A SUM OF RS.53 LAKHS. THE PAYMENT FOR THE SA ID PURCHASE IS MADE THROUGH ASSESSEES PERSONAL SAVINGS ACCOUNT MAINT AINED WITH VEERSHAIV BANK. HOWEVER, THE AMOUNT WAS TRANSFERRED UND ISPUTEDLY FROM THE CASH CREDIT ACCOUNT OF M/S. VISHAL TRADERS, PROPRIETAR Y CONCERN OF THE ASSESSEE. THUS, THE AO OPINED THAT THE SAID INVESTMENT IS INDIRE CTLY SOURCED FROM THE CASH CREDIT ACCOUNT, WHICH IS AN INTEREST BEARIN G ACCOUNT. AO REASONED THAT THE PROPERTY IS NEVER USED FOR THE ACTIV ITIES OF THE BUSINESS. THEREFORE, THE AO DISALLOWED THE INTEREST AMOUNT OF RS.93,52 8/- ON THIS ACCOUNT. EVENTUALLY, THE AO DETERMINED THE INCOME OF THE ASSESSEE AT RS.74,23,969/-. THE COMPUTATION MADE BY THE AO IS AS UNDER : INCOME FROM HOUSE PROPERTY RS.168000 INCOME FROM BUSINESS OR PROFESSION RS.4470713 INCOME FROM OTHER SOURCES RS.2993329 ADD : NON BUSINESS EXPENSES RS.93528 TOTAL 7725570 LESS : DECLARATION UNDER ERRORS & OMISSION (AS DISCUSSED IN PARA 8 ABOVE) RS.176454 GROSS TOTAL INCOME RS.7549116 LESS : DEDUCTION UNDER CHP. VIA RS.125147 TOTAL INCOME ASSESSED RS.7423969 SHORT TERM CAPITAL GAINS RS.115719 ITA NO.493/PUN/2016 LALCHAND P. CHHABRIYA 3 4. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(A) UPHELD THE ADDITION MADE BY THE AO ON ACCOUNT OF INTEREST. 5. REGARDING THE INTEREST U/S.234B & 234C OF THE ACT, ASS ESSEE SUBMITTED THAT THE ITAT, PUNE GAVE RELIEF TO THE ASSESSE E WHILE DECIDING THE ASSESSEES APPEALS FOR THE A.YRS. 2002-03 TO 2005-06. I N THE APPELLATE PROCEEDINGS, THE CIT(A) DIRECTED THE AO TO VERIFY THE FAC TS AND MODIFY THE LEVY OF INTEREST US.234A AND 234B ACCORDINGLY. 6. AGGRIEVED WITH THE ORDER OF CIT(A), THE ASSESSEE FILED THE PRESENT APPEAL WITH THE GROUNDS EXTRACTED ABOVE WHEREIN THERE ARE COUPLE OF ISSUES FOR ADJUDICATION. 7. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT M/S. VISHAL TRADERS IS THE PROPRIETARY CONCERN AND THE ASSESSEE HAS SUFFICIENT BALANCE IN THE CAPITAL ACCOUNT. THEREFORE, THE USE OF THE FUNDS FRO M THE CASH CREDIT ACCOUNT OF THE FIRM SHOULD NOT AMOUNT TO WITHDRAWAL OF MON EY FROM THE INTEREST BEARING CASH CREDIT ACCOUNT. LD. COUNSEL PRAYED FOR REVERSING THE ORDER OF CIT(A). 8. WE HEARD BOTH THE SIDES ON THE ISSUE RELATING TO THE DISALLOWANCE OF INTEREST AT RS.93,528/- MADE BY THE AO. WE HAVE PERUS ED THE ORDERS OF THE REVENUE. ON PERUSAL OF THE ORDER OF CIT(A), WE FIND IT RELEV ANT TO EXTRACT THE FINDING GIVEN BY THE CIT(A) ON THIS ISSUE AND THE SAME READS AS UNDER : 5. THE APPELLANTS CONTENTION IS PRIMA-FACIE UNACC EPTABLE. THE ASSESSING OFFICER HAS VERY CLEARLY MENTIONED THAT THE AMOUNT SHOULD BE DEPOSITED IN THE SAVINGS BANK A/C OUT OF WITHDRAWAL FROM THE CC A/C WHICH WAS AN INTEREST BEARING A/C. THE INTEREST DISALLOWANCE IS THEREFOR E IN ORDER. GROUND NO.1 OF THE APPEAL IS DISMISSED. FROM THE ABOVE, IT IS EVIDENT THAT ASSESSEE HAS NOT DIS PUTED THE FACT THAT FUNDS ARE WITHDRAWN FROM CASH CREDIT ACCOUNT AND THE SA ME ARE APPROPRIATED FOR BUYING THE PERSONAL ASSET. IT IS ALSO A FACT THAT ASSESSEE ITA NO.493/PUN/2016 LALCHAND P. CHHABRIYA 4 PAID SUM OF RS.93,528/- ON ACCOUNT OF INTEREST PAID TO THE BANK. FURTHER, THERE IS NO ARGUMENT THAT THE BALANCES IN THE CAPITAL A CCOUNT DO NOT ATTRACT INTEREST OR OTHERWISE. THEREFORE, WE ARE OF THE OPINION TH AT THE FINDING OF THE CIT(A) GIVEN IN PARA NO.5 ABOVE WITH FACTS NARRATED IN PARA NOS. 3 AND 4 CONSTITUTES A PLAUSIBLE CONCLUSION. WE AGREE WITH THE SAME . THEREFORE, WE HOLD THAT THE ORDER OF CIT(A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE ARE DISMISSED. 9. REGARDING GROUND NO.3 RAISED BY THE ASSESSEE RELATING TO LEVY OF INTEREST U/S.234A AND 234C OF THE ACT, WE FIND THE SAME IS CONSEQUENTIAL. THE DEPARTMENTAL OFFICERS HAVE TO FOLLOW THE STATUTE IN LE VYING THE SAID PENALTIES AS PER THE RULES. THEREFORE, THIS GROUND IS DISMIS SED AS CONSEQUENTIAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JUNE, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 27 TH JUNE, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-11, PUNE 4. THE PR.CIT, CENTRAL, PUNE 5. , , B BENCH PUNE; 6. / GUARD FILE. // TRUE COPY//