SANJAY KUMAR JAISWAL, Jaipur V. ITO, BEHROR

ITA 504/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5390 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA
• Keywords: Gift; Deemed to accrue or arise in india
• Section: 43B; 143(3); 68

Judgement Text

1 ITA NO.504/JP/2014 IN THE INCOME TAX APPELLATE TRIBUNAL: JAIPUR BENCH [SMC] : JAIPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER I.T.A. NO. 504/JP/2014 ASSESSMENT YEAR: 2009-10 SHRI SANJAY KUMAR JAISWAL, N.H.8, DELHI ROAD, BEHROR DIST. ALWAR, PAN: ADUPJ3796K VS THE INCOME TAX OFFICER, BEHROR, RAJASTHAN (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SATISH GUPTA, AR RESPONDENT BY SHRI RAJ MEHRA, JCIT DATE OF HEARING: 03-03-2016 DATE OF PRONOUNCEMENT: 9-03-2016 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF THE LEARNED CIT (A), ALWAR DATED 29-05-2014 FOR ASSESSM ENT YEAR 2009-10. THE GROUNDS RAISED ARE REPRODUCED BELOW:- 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN L AW ALSO LD. LOWER AUTHORITIES GROSSLY ERRED IN REJECTING THE BOOKS OF ACCOUNTS & MAKING AN ADDITION OF RS.15,000/-. 2. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN LA W ALSO LD. LOWER AUTHORITIES GROSSLY ERRED IN CONFIRMING THE ADDITIO N OF RS.5,00,000/- U/S 68 OF THE ACT. 3. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN LA W ALSO LD. A. O. GROSSLY ERRED IN MAKING LUMPSUM DISALLOWANCE OF RS. 7,339/- ON A/C OF GENERAL EXP. 2. AT THE OUTSET, THE LEARNED AR, MR. SATISH GUPTA HAS EXPRESSED NOT TO PRESS GROUND NO.3, HENCE, THE SAME IS DISMISSED BEING NOT PRESSED. 2 ITA NO.504/JP/2014 3. IN RESPECT OF GROUND NO.1, THE OBSERVATION OF TH E AO AS PER THE ORDER PASSED U/S 143(3) OF THE IT ACT DATED 13-12-2011 WE RE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS RUNNING A GIFT SHOP. ON THE SALES OF RS.25,05,242/- A GROSS PROFIT DECLARED WAS AT RS.10,10,004/-, DISCLO SING THE GROSS PROFIT RATE AT 40.3%. ACCORDING TO THE AO THE BOOK RESULT WAS NOT VERIFIABLE, HENCE, AD HOC ADDITION OF RS.50,000/- WAS MADE. WHEN THE MATTER W AS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE LEARNED CIT (A) HAS RESTRI CTED THE ADDITION TO RS.15,000/-. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES AND PERUSING THE ORDERS OF THE AUTHORITIES BELOW, IT IS APPARENT THA T THERE WAS NO INSTANCE OF INCORRECT DECLARATION OF INCOME. UNDISPUTEDLY, BOTH THE REVENUE AUTHORITIES HAVE MERELY ESTIMATED THE ADDITION WHICH IS NOT PER MISSIBLE IN THE EYES OF LAW. I, THEREFORE, HOLD THAT THE IMPUGNED ESTIMATED ADDI TION WAS NOT SUSTAINABLE IN THE EYES OF LAW. GROUND NO.1 IS ACCORDINGLY ALLOWED . 4. IN RESPECT OF GROUND NO.2, THE AO HAS MENTIONED THAT THERE WERE SUNDRY CREDITORS OF RS.6,94,389/- AND OUT OF THOSE CREDITO RS THE ASSESSEE HAD RAISED UNSECURED LOANS OF RS.5,00,000/- FROM 27 PERSONS BE TWEEN THE DATES OF 20 TH MARCH TO 23 RD MARCH, 2009. THE LOAN WAS RECEIVED IN CASH BELOW R S.20,000/-. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF TH E ASSESSEE, THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT TH E SAID AMOUNT OF RS.5,00,.000/- TAXED IN THE HANDS OF THE ASSESSEE. 5. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE ACTION OF THE AO WAS CONFIRMED AND THE EVIDENCES SU CH AS AFFIDAVITS OF THE CREDITORS, ID CARDS AND THE PLEA OF THE ASSESSEE TH AT THE AMOUNT HAD ACTUALLY BEEN REPAID WAS REJECTED AND THE ACTION OF THE AO W AS CONFIRMED. 6. FROM THE SIDE OF THE APPELLANT, LEARNED AR, MR. SATISH GUPTA VEHEMENTLY PLEADED THAT ALL THE 27 PERSONS WHO ARE AGRICULTURI STS AND THEIR VOTER ID CARD OR THE ADHAR CARD WAS FURNISHED BEFORE THE AO DURING T HE REMAND PROCEEDINGS. 3 ITA NO.504/JP/2014 THE LEARNED AR HAS ALSO PLEADED THAT ALTHOUGH THE N OTICES HAVE BEEN ISSUED BUT THE ADDRESSES WERE INCORRECT. ONCE, THE ASSESSEE HA S FURNISHED VOTER ID AND THE PROOF OF AGRICULTURAL LAND HOLDINGS THEN IT WAS WRO NG ON THE PART OF THE AO TO HOLD THAT THOSE PERSONS WERE BOGUS AND THE INGREDIE NTS OF SECTION 68 HAVE NOT BEEN COMPLIED WITH. HE HAS ALSO VEHEMENTLY PLEADED THAT THE FACT OF REPAYMENT OF LOAN HAS ALSO BEEN IGNORED BY THE REVENUE AUTHOR ITIES. 7. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE DEPARTMENT, LEARNED DR, MR. RAJ MEHRA APPEARED AND SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. 8. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES I AM OF THE CONSIDERED OPINION THAT ONE OF THE IMPORTANT FACT THAT THE AMO UNTS IN QUESTION WERE REPAID BY THE ASSESSEE HAVE NOT BEEN TAKEN INTO ACCOUNT BY THE REVENUE AUTHORITIES, RATHER IT WAS NOT ADJUDICATED UPON. THE ARGUMENTS APPEAR TO BE LOGICAL THAT IF THE ASSESSEE HAD TAKEN LOANS FROM AGRICULTURISTS, T HEN, NATURALLY HE WAS UNDER OBLIGATION TO REPAY THE LOAN. ACCORDING TO HIS SUBM ISSION A TEMPORARY LOAN WAS ARRANGED BUT THE SAME WAS REPAID. IF, WE EXAMINE TH IS FACT ON THE ANALOGY OF THE PROVISIONS OF SECTION 41 (1) OF THE ACT, IF AN EXPE NDITURE HAS BEEN CLAIMED IN THE PAST OR A LIABILITY WAS TAKEN INTO ACCOUNT BUT, LATER ON IT WAS FOUND THAT SUCH TRADING LIABILITY OR EXPENDITURE CEASE TO EXIST, TH E BENEFIT OF WHICH HAD ALREADY BEEN TAKEN, SHOULD BE HELD AS INCOME OF THE YEAR IN WHICH THE AMOUNT FOUND TO BE NO MORE IN EXISTENCE AS LIABILITY. IN MY HUMBLE OPINION IF, THE SAME ANALOGY IS APPLIED IN THIS REGARD THAT A LOAN WAS TAXED U/S 68 OF THE ACT BY HOLDING THAT THE LOAN WAS THE DEEMED INCOME THEN, IN THE YEAR IN WHICH THE LOAN WAS REPAID THE CORRESPONDING BENEFIT SHOULD BE GRANTED TO THE ASSESSEE. IN ONE MORE SECTION THE STATUTE HAS ADOPTED THE SAME ANALOGY I.E. SECTI ON 43B OF THE IT ACT WHICH PRESCRIBES THAT CERTAIN DEDUCTIONS ARE TO BE ALLOWE D ONLY ON ACTUAL PAYMENT. THEREFORE, IF INN A PARTICULAR YEAR BECUASE OF NON- PRODUCTION OF CHALLANS OR NON- PAYMENT, DISALLOWANCE HAS BEEN MADE, THEN THAT CLA IM SHOULD BE ALLOWED IN THE PREVIOUS YEAR IN WHICH THE LIABILITY IS DISCHARGED. BECAUSE OF THIS REASON, I DEEM 4 ITA NO.504/JP/2014 IT PROPER TO RESTORE THIS ISSUE BACK TO THE FILE OF THE LEARNED CIT (A) WHO IS ALREADY IN POSSESSION OF THE ENTIRE RECORD OF THE A SSESSEE AS WELL AS THE DETAILS COLLECTED BY THE AO WHILE SUBMITTING THE REMAND REP ORT. I ALSO CONSIDER IT NECESSARY TO DIRECT THE ASSESSEE TO CO-OPERATE WITH THE PROCEEDINGS BEFORE THE LEARNED CIT (A) BY DISCHARGING THE PRIMARY ONUS AS PRESCRIBED U/S 68 OF THE ACT. WITH THESE DIRECTIONS, THIS GROUND OF APPEAL O F THE ASSESSEE IS RESTORED BACK TO THE LEARNED CIT (A) FOR DE NOVO CONSIDERATION, H ENCE, MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE ONLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH OF MARCH, 2016. SD/- (MUKUL K. SHRAWAT) JUDICIAL MEMBER JAIPUR, DATED: 9 TH OF MARCH, 2016 LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT (APPEALS), JAIPUR. 5. D.R., ITAT, JAIPUR. 6. GUARD FILE TRUE C OPY BY ORDER ASSISTANT REGISTRA R, INCOME TAX APPELLATE TRIBUNA L, JAIPUR BENCH, JAIPUR.