M/S SHRI BAGH CHAND CHOUDHARY, Jaipur V. ACIT, Jaipur

ITA 506/JPR/2012

• Counselvise Citation: 50623114 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH
• Keywords: Gift; Business income; Depreciation; Opportunity of being heard; Additional evidence; Corroborative evidences; Procedural lapse
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 506/JP/2012 ASSTT. YEAR- 2009-10 PAN NO. ADXPC 3227 F SHRI BAGH CHAND CHOUDHARY, THE A.C.I.T., PLOT NO. 540, SUMER NAGAR, VRS. RANGE-7, JAIPUR. NEW SANGANER ROAD, JAIPUR. (APPELLANT) (RESPONDENT) I.T.A. NO. 584/JP/2012 ASSTT. YEAR- 2009-10 PAN NO. ADXPC 3227 F THE A.C.I.T., SHRI BAGH CHAND CHOUDHARY, CIRCLE-7, JAIPUR. VRS. PLOT NO. 540, SUMER NAGAR NEW SANGANER ROAD, JAIPUR. ASSESSEE BY :- SHRI S.L. JAIN. DEPARTMENT BY :- MRS. NEENA JEPH. DATE OF HEARING : 27/10/2014 DATE OF PRONOUNCEMENT : 28/11/2014 O R D E R PER: T.R. MEENA, A.M. THE ITA NO. 506/JP/2012 FILED BY THE ASSESSEE AS WEL L AS CROSS APPEAL NO. 584/JP/2012 BY THE REVENUE ARE AGAINST T HE ORDER DATED ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 2 23/03/2012 OF THE LEARNED C.I.T.(A)-III, JAIPUR FOR THE A.Y. 2009-10. THE GROUNDS OF ASSESSEES APPEAL AS WELL AS THE REVENUE ARE AS UNDER:- GROUNDS OF ITA NO. 506/JP/2012 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE. AUTHORITIES BELOW HAVE GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING REJECTION THE BOOKS OF ACCOUNTS MAINTAINED IN REGULAR COURSE OF BUSINESS WITHOUT INVOKING OF SECTION 145(3) WHICH IS REQUIRED UNDER L AW AND THUS ADDITIONS/DISALLOWANCES ARE MADE WITHOUT JURISDICTION. BOOKS OF ACCOUNTS ARE DULLY AUDITED B Y CHARTERED ACCOUNTANT AND EXPENSES ARE VOUCHED AND VERIFIABLE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN APPLYING THE N.P. RATE OF 6.79% IN PLACE OF 6.36% FOLLOWING THE PAST HISTORY OF THE CASE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AUTHORITIES BELOW HAVE FURTHER GROSSLY ERRED IN LAW I N MAKING/CONFIRMING ADDITION OF RS. 25019/- (RS. 5,38 2 & 19,637) ON ACCOUNTS OF NONPAYMENT OF TDS AMOUNT WITHIN DUE DATE. THE TDS AMOUNTS HAVE BEEN DEPOSITED BEFORE FILLING OF ITR. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AUTHORITIES BELOW HAVE GROSSLY ERRED IN LAW IN NOT CONSIDERING AGRICULTURAL INCOME OF RS. 2,75,000/- A ND TREATING THE SAME AS INCOME FROM OTHER SOURCES. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 3 5. THAT THE APPELLANT RESERVES HIS RIGHT TO ADD, AME ND OR ALTER THE GROUND OF APPEAL ON OR BEFORE THE DATE OF APPEAL HEARING. GROUNDS OF ITA NO. 584/JP/2012 I. THE ORDER OF THE CIT(A) IS PERVERSE AS RELEVANT A ND SPECIFIC FACTS IN THE PRESENT YEAR, IN RESPECT OF D EBITED EXPENSES, HAVE BEEN OVERLOOKED, IN FAVOUR OF IRRELEVANT AND NON-SPECIFIC FACTS/DETAILS OF THE EA RLIER YEAR. II. THE ORDER OF THE CIT(A) IS PERVERSE IN ASSUMING T HAT THE A.O. HAD ACTUALLY INVOKED THE PROVISIONS OF SEC TION 145(3) DESPITE THE FACT THAT THE A.O. HAD SPECIFICA LLY DISALLOWED UNVERIFIABLE EXPENSES BUT HAD ACCEPTED TH E RECEIPTS DISCLOSED AND OTHER DETAILS. III. THE ORDER OF THE CIT(A) IS PERVERSE IN MAKING COMPARISON OF THE DISCLOSED G.P./N.P. WITH THE G.P./N.P. DISCLOSED IN THE EARLIER YEAR, EVEN WHILE ACCEPTING THAT THE FACTS/DETAILS IN THE PRESENT YEA R DIFFERENT MATERIALLY. IV. THE ORDER OF THE CIT(A) IS PERVERSE IN IGNORING THE FACT THAT THE NORMAL AND ACCEPTABLE NET PROFIT RATE IN C ASE OF THIS CONTRACTORS WAS 8% AND SHOULD HAVE BEEN APPLIED SINCE IT WAS CONSIDERED BY HIM TO BE A CASE OF NO ACCOUNTS, CONSEQUENT TO THE INVOKING THE PROVISI ONS OF SECTION 145(3). V. THUS THE CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANCE OF RS. 58,14,131/- TO RS. 2,82,697/-. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 4 VI. THE CIT(A)S ORDER IS PERVERSE IN DELETING THE A DDITION OF RS. 1,20,000/- FOR HOUSEHOLD EXPENSES EVEN WHEN THE ASSESSEE HAD NOT RESPONDED WITH SPECIFIC DETAILS , SOUGHT BY THE A.O. VIDE QUESTIONNAIRE DATED 29/11/2011. VII. THE CIT(A)S ORDER IS PERVERSE IN DELETING THIS ADDITION FOR HOUSEHOLD EVEN WHEN THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE ITS ASSERTION THAT THE SON OF THE ASSE SSEE WAS EMPLOYED WITH M/S GYAN VASISHTHA AND HAD WITHDRAWALS. VIII. THE CIT(A)S ORDER IS PERVERSE IN HOLDING THAT THE BURDEN OF PROVING THAT THE ASSESSEES SON HAD NO INCOME, WAS ON THE A.O. IX. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, WITHDRAW OR INSERT ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. GROUNDS NO. 1 AND 2 OF THE ASSESSEES APPEAL AND GROUNDS NO. I TO V OF THE REVENUES APPEAL ARE REVOLVING AROUND REJE CTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED AS THE ACT) AND NET PROFIT ASSESSED. THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INC OME OF RS. 39,71,000/- ON 25/09/2009. THIS CASE WAS SCRUTINIZED U/S 143(3) O F THE ACT. THE ASSESSEE CARRIED OUT CONSTRUCTION WORK OF RAJASTHAN HOUSING BOARD AND AVAS VIKAS LTD. IN THE PROPRIETARY CONCERN NAMELY M /S GIRIRAJ CONSTRUCTION ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 5 COMPANY. THE ASSESSEE HAD SHOWN PROFIT BEFORE DEPRECI ATION AT RS. 41,73,632/- ON CONTRACT RECEIPTS OF RS. 6,56,30,771 /-, WHICH GIVES A N.P. RATE OF 6.36%. ON TOTAL TURNOVER OF RS. 2,49,20,855 /- IN IMMEDIATE PRECEDING YEAR N.P. 6.79%. IT IS OBSERVED BY THE AS SESSING OFFICER THAT THE ASSESSEE HAS NOT MAINTAINED STOCK REGISTER AND DETAILS OF PURCHASES MADE AND CONSUMED AS PER PARA 28(B) A AND B OF PART B OF FORM NO. 3CD, THE AUDITOR HAD COMMENTED THAT DUE TO NATURE OF TRADE, IT IS NOT POSSIBLE TO COMPILE THE QUANTITY DETAILS OF MATERIA LS PURCHASED AND CONSUMED AND CLOSING STOCK OF INVENTORY HAS BEEN TA KEN AS CERTIFIED BY THE PROPRIETOR. THE AUDITOR HAD FURTHER COMMENTED I N NOTES ON ACCOUNT ANNEXED WITH THE FORM NO. 3CD THAT THERE ARE SOME E XPENSES INCURRED THROUGH KACHHA BILLS. ASSESSEE EXPLAINED THAT DUE T O NATURE OF TRADE, IT IS NOT POSSIBLE TO COLLECT PACCA BILLS. THE ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS DISCREPANCY FOUN D BY HIM. ALL STOCK REGISTER, PURCHASE, SITE WISE DETAILS, MATERIAL CONS UMPTION REGISTER, LABOUR EXPENSES, FREIGHT AND CARTAGE EXPENSES, JCB EXPENSE S, WATER AND ELECTRICAL CHARGES SHUTTERING EXPENSES, SITE EXPENS ES, CONVEYANCE EXPENSES, DIESEL EXPENSES, TESTING CHARGES, VEHICLE RUNNING AND MAINTENANCE EXPENSES, WCT EXPENSES, SALARY EXPENSES, ADDITION IN FIXED ASSETS AND AGRICULTURAL INCOME. THE APPELLANT SUBMIT TED REPLY VIDE LETTER ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 6 DATED 21/12/2012 UNDER THE SAME HEAD. BY CONSIDERIN G THE REPLY OF THE ASSESSEE, THE LEARNED ASSESSING OFFICER HELD THAT T HE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUNT ON WHICH, THE CO RRECT INCOME CAN BE DEDUCED. THE PURCHASES MADE BY THE ASSESSEE IN CASH AND PAYMENTS WERE NOT MADE THROUGH BANKING CHANNEL. THE ASSESSEE WA S SUBMITTED CONFIRMATION OF ONE SUPPLIER I.E. M/S JAIPUR STEELT ECH PVT. LTD. FROM WHOM PURCHASES OF RS. 68,75,538/- HAD BEEN MADE AND THE PAYMENTS WERE THROUGH BANK ACCOUNT BUT HE HIMSELF ACCEPTED THAT M OST OF SUPPLIERS OF RODI, BAJRI, BRICKS, MARBLE, HARDWARE, WOODEN WORK ETC . WAS MADE IN CASH ON SELF MADE VOUCHERS, RUBBER STAMP PRINTED BILLS/ KACHHA BILLS. THE PURCHASES TO THE TUNE OF RS. 1,08,21,316/- HAD BEEN SHOWN AS SUNDRY CURRENT LIABILITIES. THUS, THE ASSESSEE WAS NOT ABLE TO COMPLETELY SUBSTANTIATE THE EXPENSES DEBITED IN THE P&L ACCOUN T UNDER THESE HEADS. HE DISALLOWED 10% OUT OF TOTAL PURCHASES OF RS. 3,48 ,54,667/- AT RS. 27,97,912/- FROM THE PURCHASES. HE MADE SIMILAR DIS ALLOWANCES IN FOLLOWING HEADS:- (I) LABOUR EXPENSES:- RS. 18,00,538/-. (II) FREIGHT & CARTAGE EXPENSES:- RS. 1,50,705/-. (III) JCB EXPENSES:- RS. 86,134/-. (IV) WATER & ELECTRICAL EXPENSES:- RS. 98,755/-. (V) SHUTTERING EXPENSES:- RS. 41,612/-. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 7 (VI) SITE EXPENSES:- RS. 41,648/-. (VII) CONVEYANCE CHARGES:- RS. 23,096/-. (VIII) DIESEL EXPENSES:- RS. 20,429/-. (IX) TESTING CHARGES:- RS. 17,091/-. (X) VEHICLE RUNNING AND MAINTENANCE EXPENSES:- RS. 9,544/-. (XI) VAT EXPENSES:- RS. 3,73,812/-. (XII) SALARY EXPENSES:- RS. 1,75,954/-. (XIII) OTHER DEDUCTION:- RS. 1,49,662/-. (XIV) TELEPHONE EXPENSES:- RS. 6,138/-. (XV) DISALLOWANCE OF DEPRECIATION CLAIMED:- RS. 21, 101/-. FURTHER AGRICULTURAL INCOME SHOWN BY THE ASSESSEE A T RS. 2.75 LACS. ON VERIFICATION OF RECORD OF LAND HOLDING, IT WAS REVEA LED THAT LAND WAS NOT BELONGED TO HIM. THE LAND WAS BELONGED TO HIS FATHER BUT CULTIVATED BY HIM. LATER ON, IT HAS BEEN TRANSFERRED THROUGH GIFT DEED ON 06/7/2011. NO EXPENDITURE HAD BEEN CLAIMED ON AGRICULTURAL AC TIVITIES, ACCORDINGLY SHE TREATED AGRICULTURAL INCOME AT RS. 2.75 LACS AS INCOME FROM OTHER SOURCES. SHE FURTHER MADE ADDITION UNDER THE HEAD L OW HOUSEHOLD WITHDRAWALS AT RS. 1.20 LACS, INTEREST IN SAVINGS BAN K ACCOUNT AND TDS DEDUCTED BUT NOT PAID IN TIME AT RS. 25,019/-. THUS , TOTAL ADDITION OF RS. 62,37,210/- WAS MADE BY THE LEARNED ASSESSING OFFIC ER. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASS ESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT( A), WHO HAD DECIDED ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 8 THE APPEAL PARTLY IN FAVOUR OF THE ASSESSEE BY OBSE RVING THAT ON TECHNICAL GROUND THAT BOOKS WERE NOT REJECTED U/S 145(3) OF TH E ACT BUT THE LEARNED CIT(A) HELD THAT THE LEARNED ASSESSING OFFI CER HAD NOT SPECIFICALLY APPLIED SECTION 145(3) BUT ON THE BASI S OF DISCREPANCIES POINTED OUT BY HER IN HER ASSESSMENT ORDER SUGGEST THE IMPLIED OR DEEMED INVOCATION OF SECTION 145(3) OF THE ACT. HO WEVER, IT IS TREATED AS A PROCEDURAL LAPSE EVEN THE VALIDITY OF ADDITION CA NNOT BE AFFECTED. HE RELIED UPON THE DECISION IN THE CASE OF CIT VS. QUAL ITY 224 ITR 77 (PATNA) AND M.V. NAGRAJA 70 ITD 318 (BANG.). THE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUNT, STOCK REGISTER AND ALSO OT HER SERIOUS DEFECTS AND INCRIMINATING ASPECTS AS POINTED OUT BY THE ASS ESSING OFFICER TOWARDS MAJOR EXPENSES. ACCORDINGLY, HE CONFIRMED THE REJEC TION OF BOOKS OF ACCOUNT. 3.1 THE ASSESSING OFFICER MADE GROSS TRADING ADDITIO N OF RS. 58,14,040/- IN FORM OF PARTIAL DISALLOWANCES OF VARI OUS EXPENSES WHILE OBSERVING SPECIFIC DEFECTS IN THE MAINTENANCE OF BO OKS OF ACCOUNTS ETC.. IF ALL THE ADDITIONS WERE CONSIDERED, THE EFFECTIVE G.P. RATE WOULD BE 15.22%, WHICH IS PRIMA FACIE ABNORMALLY HIGHER AND I MPROBABLE IN THE CONTRACTUAL BUSINESS, AS SUCH. IT HAS BEEN HELD THA T NORMALLY ADDITION U/S 145(3) OF THE ACT SHOULD BE LIMITED TO THE ESTIMATI ON OF THE G.P. RATE ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 9 ONLY, BASED ON THE RELEVANT PAST HISTORY OF THE ASS ESSEE AND THERE IS NO FURTHER SCOPE FOR MAKING SEPARATE ADDITIONS ON DIFF ERENT RELATED GROUNDS, FOR WHICH, HE RELIED UPON THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF P. PRAVIN & CO. (274 ITR 534). HE FUR THER RELIED UPON THE DECISION OF HONBLE ITAT JAIPUR BENCH IN THE CASE OF M/S CHOUDHARY & BROTHERS IN ITA NO. 1177/JP/2010 DATED 31/05/2011 WH EREIN THE HONBLE TRIBUNAL HAD DISPROVED THE MULTIPLE ADDITIONS AND HA D VIEWED THAT A COMPOSITE ADDITION TO THE G.P./N.P. RATIO WOULD BE S UFFICIENT TO TAKE CARE OF ALL SUCH DISCREPANCIES. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION UNDER THE VARIOUS HEAD IN CASE OF THE ASSESSEE. IF IT IS PRESUMED THAT BOOKS OF ACCOUNT R EJECTED U/S 145(3) OF THE ACT EVEN THE ADDITIONS SHOULD HAVE BEEN MADE ON THE BASIS OF PAST HISTORY OF THE APPELLANT, WHICH IS MOST RELIABLE GUI DELINES IN THIS REGARD, FOR WHICH HE RELIED UPON THE DECISION IN THE CASE OF M/S INANI MARBLES 316 ITR 125 (RAJ. HIGH COURT) AND M/S ACTION ELECTRI CALS 258 ITR 188 (DEL. HIGH COURT). THE LEARNED CIT(A) FINALLY APPLIE D THE PREVIOUS YEARS G.P. FOR THE CURRENT YEAR I.E. 6.79% AND COMPUTED A DIFFERENT ADDITION OF RS. 2,82,697/- AND REMAINING ADDITION HAS BEEN DELE TED. 4. NOW THE ASSESSEE AS WELL AS THE REVENUE ARE IN APP EAL BEFORE US. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 10 5. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT KEEPING IN VIEW THE PREVIOUS YEAR TURNOVER, THE ASSESSEE HAS INCREA SED TURNOVER MORE THAN 250%. THE DECLINE OF G.P. IS BUT NATURAL TO AC HIEVE THE TURNOVER. THE NET INCOME HAS BEEN SHOWN MUCH MORE THAN PREVIOUS YEAR. THE ASSESSEE IS A CONTRACTOR OF RAJASTHAN HOUSING BOARD AND AVAS VIKAS LTD. ALL PAYMENTS HAVE BEEN RECEIVED FROM THE GOVERNMENT DEPARTMENT. FURTHER IT IS NOT POSSIBLE TO GET BILLS OF RODI, BA JRI, BRICKS, MARBLE, HARDWARE, WOODEN WORK, LABOUR AT VARIOUS SITES EVEN WAG ES ARE TO BE PAID ON DAILY BASIS, THUS COMPLETE BILLS/VOUCHERS I N THIS LINE OF BUSINESS ARE IMPOSSIBLE. THE ASSESSEE HAS MAINTAINED STOCK RE GISTER AT SITE, WHICH IS VALUED AT THE TIME OF CLOSING IN EVERY YEAR, THE REFORE, RETURNED INCOME SHOULD BE ACCEPTED AS SUCH. HE FURTHER RELIED ON TH E DECISION OF THE HONBLE ITAT, JAIPUR BENCH IN THE CASE OF M/S GUPTA K.N. CONSTRUCTION CO. VS. ACIT IN ITA NO. 524/JP/2012 FOR A.Y. 2009-10 WHEREIN THE ASSESSEES PAST HISTORY HAS BEEN ACCEPTED AND THE H ONBLE BENCH HAD CONFIRMED THE LUMP SUM ADDITION OF RS. 5 LACS ON TU RNOVER OF RS. 12.32 CRORES, IN WHICH IDENTICAL CIVIL CONTRACTOR WORK WAS C OMPLETED. 6. AT THE OUTSET, THE LEARNED DR VEHEMENTLY SUPPORT ED THE ORDER OF THE LEARNED ASSESSING OFFICER AND ARGUED THAT THE A SSESSEE IS NOT MAINTAINED PROPER BOOKS OF ACCOUNT AND SPECIFIC DEF ECT HAS BEEN POINTED ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 11 OUT BY THE LEARNED ASSESSING OFFICER UNDER THE VARI OUS HEADS, THEREFORE, ORDER OF THE LEARNED CIT(A) MAY BE REVERTED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSESSE ES TURNOVER INCREASED SUBSTANTIALLY COMPARED TO IMMEDIATE PRECE DING YEAR. THE G.P. HAS GONE DOWN SLIGHTLY WHATEVER DISCREPANCIES POINTE D OUT BY THE LEARNED ASSESSING OFFICER WITHOUT QUOTING SECTION 1 45(3) OF THE ACT ARE SUFFICIENT TO REJECT THE BOOK RESULT IN CASE OF CIV IL CONTRACTOR. THE VARIOUS COURTS HELD THAT PROCEDURAL LAPSE DOES NOT ALLOW TO ASSESSEE TO GET BENEFIT ON ACCOUNT OF DEFAULT OF ANY PROCEDURE. HOWE VER, THE ESTIMATION MADE BY THE LEARNED CIT(A) APPEARS TO HIGHER SIDE A S HE APPLIED THE PREVIOUS YEAR G.P. RATE IN CURRENT YEAR, THEREFORE, IN THE INTEREST OF JUSTICE, WE APPLY 6.5% G.P. RATE ON TOTAL SALES AS A GAINST CONFIRMED BY THE LEARNED CIT(A) @ 6.79%. ACCORDINGLY, THE ASSESS EE GETS RELIEF PARTLY. THE ASSESSING OFFICER IS DIRECTED TO CALCULA TE THE INCOME @ 6.5% G.P.. 8. IN THE RESULT, THE ASSESSEES GROUNDS NO. 1 AND 2 ARE PARTLY ALLOWED AND REVENUES GROUND NO. I TO V ARE DISMISSED. 9. GROUND NO. 3 OF THE ASSESSEES APPEAL IS AGAINST CONFIRMING THE ADDITION OF RS. 25,019/- ON ACCOUNT OF NON-PAYMENT OF TDS AMOUNT. THE ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 12 LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAD DEDUCTED AMOUNT OF RS. 5,382/- AND RS. 19,637/- U/S 194(C) O F THE ACT AND THE DUE DATE FOR REMITTANCE WAS ON 07/2/2009 BUT THE SAM E HAS BEEN DEPOSITED ON 15/6/2009. AS PER PROVISION OF SECTION 40(A)(IA) OF THE ACT, THE SAID AMOUNT WAS TO BE DEPOSITED ON OR BEFORE THE LAST DATE OF THE PREVIOUS YEAR I.E. BY 31/3/2009. THEREFORE, HE DISA LLOWED RS. 25,019/- U/S 40(A)(IA) OF THE ACT. 10. BEING AGGRIEVED BY THE ORDER OF THE LEARNED AS SESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A ), WHO HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 3.3 FROM THE RELEVANT INFORMATION, IT IS GATHERED THAT THOUGH THE ASSESSEE HAD DEDUCTED THE TDS OF RS. 25,0 19/- U/S 194(C) IN TIME, BUT THE SAME WAS DEPOSITED ON 15/06/2009 I.E. SUBSEQUENT TO THE LAST DAY OF RELEV ANT P.Y. I.E. 31/3/2009. ACCORDINGLY, IN VIEW OF THE PROVISIO N SEC. 40(A)(IA) OF THE ACT, I FIND THAT A.O. HAS RIGHTLY DISALLOWED THE SAME AS AN INADMISSIBLE EXPENSES. REGARDING THE ELI GIBILITY ASPECT OF SUCH EXPENSES IN SUBSEQUENT YEAR IS CONCE RNED, THE A.O. MAY DO THE NEEDFUL AFTER MAKING DUE VERIFICATI ON IN THIS REGARD. CONSEQUENTLY THIS SUB-GROUND OF APPEAL IS R EJECTED. 11. NOW THE ASSESSEE IS IN APPEAL BEFORE US. IT IS ARGUED BY THE LEARNED AR THAT THE ASSESSEE HAD PAID THIS AMOUNT B EFORE THE DUE DATE ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 13 OF RETURN FILED ON 15/6/2009. THE ASSESSEES CASE IS AUDITABLE AND THE RETURN IS TO BE FILED ON OR BEFORE 30/9/2009, ACCOR DINGLY THIS MAY BE DELETED. AT THE OUTSET, THE LEARNED DR SUPPORTED TH E ORDER OF THE LEARNED CIT(A). 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE HONBL E RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. UDAIPUR DUGDH UDPADAK S AHKARI SANGH LTD. 366 ITR 163 (RAJ.) HELD THAT TDS WAS DEDUCTED AND PAI D BEFORE THE DUE DATE OF RETURN IS ALLOWABLE U/S 40(A)(IA) OF THE ACT , THEREFORE, WE DELETE THE ADDITION CONFIRMED BY THE LEARNED CIT(A). 13. THE 4 TH GROUND OF THE ASSESSEES APPEAL AND GROUND NO. VII I OF THE REVENUES APPEAL ARE AGAINST NOT CONSIDERING THE AG RICULTURAL INCOME OF RS. 2,75,000/-, WHICH WAS TREATED INCOME FROM OTHER S OURCES. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SH OWN AGRICULTURAL INCOME OF RS. 2,75,000/-. HOWEVER, DOCUMENTS FURNISH ED REGARDING LAND HOLDING REVEALED THAT THE LAND DID NOT BELONG TO TH E ASSESSEE. THEREFORE, HE GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON TH IS ISSUE, WHICH WAS RESPONDED BY THE ASSESSEE THAT THIS LAND WAS IN THE NAME OF HIS FATHER. HE SUBMITTED TWO COPIES OF NAKALBANDI REGARDING AGRI CULTURAL LAND AND IN BOTH THE COPIES, FATHERS NAME OF THE ASSESSEE WAS A PPEARING. BASICALLY, ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 14 THIS PROPERTY WAS JOINT PROPERTY IN THE NAME OF FAMI LY MEMBERS. FATHER HAD GIVEN TO HIM THE READY CROPS OF AGRICULTURAL LA ND, WHICH HAS BEEN SOLD BY HIM. HE ALSO SUBMITTED ADDITIONAL EVIDENCE THAT THIS LAND HAS BEEN GIFTED TO THE ASSESSEE. THE ASSESSES ALSO SUBMI TTED THAT NECESSARY DOCUMENTS REGARDING CROPS SOLD DURING THE F.Y. 2008 -09. THE LEARNED ASSESSING OFFICER FURTHER OBSERVED THAT GIFT DEED WA S DATED 06/7/2011, THEREFORE, THE LAND DID NOT BELONG TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. IN FACT, THE GIFT DEED SIGNED WAS AFT ER THOUGHT TO JUSTIFY THE RECEIPT IN HIS HAND. THE ASSESSEE HAD NOT CLAIME D ANY EXPENDITURE ON DOING THE AGRICULTURE ACTIVITY BUT MET OUT FROM THE AGRICULTURAL CROP SOLD IN THE F.Y. 2007-08. IN A.Y. 2008-09, NO AGRICULTUR AL INCOME HAD BEEN SHOWN BY THE ASSESSEE, THEREFORE HE TREATED AGRICULT URAL INCOME OF RS. 2.75 LACS AS INCOME FROM OTHER SOURCES. 14. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A), WHO HA D CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 4.3 IN THIS REGARD, IT IS OBSERVED THAT THE A.O. H AS TREATED THAT AGRICULTURAL INCOME OF RS. 2,75,000/-, SHOWN BY THE APPELLANT, AS INCOME FROM THE OTHER SOURCES AS THE LAND DID NOT B ELONG TO THE ASSESSEE, DURING THE PERIOD UNDER CONSIDERATION. MO REOVER, THE APPELLANT WAS ALSO FOUND NOT HAVING PROPER DETAILS A ND DOCUMENTS, ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 15 IN SUPPORT OF RELEVANT EXPENDITURES AND RECEIPTS OF THE AGRICULTURE ACTIVITIES. IN THIS REGARD, THE SUBMISSION FURNISHE D BY THE LEARNED A.R. AT THE APPELLATE STAGE, IS ALSO FOUND GENERAL AND VAGUE AND NOT SUPPORTED WITH PROPER DOCUMENTARY EVIDENCES. ACC ORDINGLY, THE STAND TAKEN BY THE A.O. IN THIS REGARD IS HEREB Y UPHELD AND ADDITION OF RS. 2,75,000/- IS CONFIRMED. CONSEQUENT LY, THIS SUB- GROUND OF APPEAL IS REJECTED. 15. NOW THE ASSESSEE AS WELL AS THE REVENUE ARE IN A PPEALS BEFORE US. 16. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THA T DURING THE YEAR, THE ASSESSEE HAS SOLD AGRICULTURAL PRODUCE OF RS. 2 .75 LACS IN THE MONTH OF APRIL AND MAY, 2008 FROM THE STOCK IN HAND OF TH E YEAR 31/3/2008 AND IN F.Y. 2007-08, NO AGRICULTURAL INCOME HAS BEEN SH OWN BECAUSE AS AND WHEN THE AGRICULTURAL EXPENSES INCURRED, IT IS SET O FF FROM THE SALE PROCEEDS OF AGRICULTURAL CROPS AND NET INCOME DECLA RED IN THE RELEVANT F.Y. AND ASSESSEE HAS INCURRED AGRICULTURE EXPENSES IN F.Y. 2007-08 FOR THE CROP SOLD AND CROP IN HAND DURING THE YEAR 2007 -08. HENCE FOR THE SAID REASON, NO AGRICULTURE INCOME SHOWN IN THE PREV IOUS YEAR. THEN NO ADVERSE INFERENCE SHOULD BE DRAWN THAT THERE IS NO A GRICULTURE INCOME DURING THE YEAR. WHEN THE ASSESSEE FILED THE DETAIL S OF AGRICULTURE LAND HOLDING, WHICH ARE JOINT IN THE NAME OF FAMILY MEMBE RS AND LATER RECEIVED IN GIFT AND SALES BILLS, WHICH WERE IN THE N AME OF THE ASSESSEE. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 16 THE A.O. WAS NOT JUSTIFIED IN BRUSHING ASIDE THESE AS SUBMITTED BY THE ASSESSEE AND HE COULD NOT DISPROVE AND REBUTTED THE SE EVIDENCES. DESPITE THESE EVIDENCES THE A.O. ALTOGETHER IGNORED . ON THE OTHER HAND, WHEN THE ONUS SHIFTED TO THE A.O. SHE TOTALLY FAILED TO DISCHARGE THE SAME. THE LEARNED A.O. DESPITE HAVING ALL THE RELEVA NT INFORMATIONS COULD NOT REBUT THE MATERIAL AVAILABLE WITH HIM WITH THE HELP OF EVIDENCES. SHE PROCEEDED ONLY ON SUSPICION. AN ALLE GATION REMAINS A MERE ALLEGATION UNLESS PROVED. SUSPICION CANNOT TAK E THE PLACE OF REALITY, ARE THE SETTLED PRINCIPLES KINDLY REFER DHAKESHWARI COTTON MILLS 26 ITR 775 (SC) ALSO REFER R.B.H.J. NAIDU VS. CIT 29 ITR (NA G.), KANPUR STEEL CO. LTD. VS. CIT 32 ITR 56 (ALL.). ALL THE ADDITION D ESERVE DELETION ON THIS SUBMISSION ALONE. THE A.O. NEITHER SPEAK A SINGLE WO RK ON THE EVIDENCES FILED BY THE APPELLANT NOR REBUTTED THE SAME WITH TH E HELP OF ANY SUPPORTING EVIDENCE. ALSO REFER CIT VS. KULWANT RAI 2 91 ITR 36 (DEL.). THEREFORE, THE ADDITION SO MADE MAY KINDLY BE DELETE D IN FULL. 17. AT THE OUTSET, THE LEARNED D.R. SUPPORTED THE ORDER OF THE LEARNED CIT(A). 18. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS FUR NISHED THE RELEVANT AGRICULTURAL RECORD AS WELL AS CROP GROWN ON AGRICUL TURAL LAND. THE LAND ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 17 BELONGS TO THE FAMILY MEMBERS, WHICH WAS LATER ON GI FTED TO HIM BY HIS FATHER. IT IS IMMATERIAL WHETHER THE ASSESSEE HAS SH OWN ANY AGRICULTURAL INCOME OR NOT AS IT IS FACTS THAT AGRICULTURAL INCO ME MOSTLY DEPENDED ON NATURE. FURTHER THE LEARNED ASSESSING OFFICER HAS N OT DISCHARGED HIS ONUS TO DISPROVE THE EVIDENCES FILED BY THE ASSESSEE, TH EREFORE, WE DELETE THE ADDITION AND ASSESSING OFFICER IS DIRECTED TO TREAT THE AGRICULTURAL INCOME AS SUCH. ACCORDINGLY, WE ALLOW THIS GROUND IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 19. GROUNDS NO. VI AND VII OF THE REVENUES APPEAL ARE AGAINST DELETING THE ADDITION OF RS. 1,20,000/- FOR HOUSEHO LD EXPENSES. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSE E HAD SHOWN HOUSEHOLD WITHDRAWALS AT RS. 1.20 LACS. THE LEARNED A SSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS RESPONDED BY THE ASSESSEE. AFTER CONSIDERING THE AS SESSEES REPLY, IT WAS HELD THAT THE ASSESSEE HAS NOT ABLE TO PROVE THAT H IS SON WAS FILING INCOME TAX RETURN EVEN HAS NOT FILED ANY EVIDENCE T HAT HE WAS IN EMPLOYMENT WITH M/S GYAN BASISTHA, THEREFORE, THE SO URCE OF RS. 1.20 LACS WAS NOT FOUND ASCERTAINABLE TO THE ASSESSING OF FICER. THUS, HE ESTIMATED PER MONTH HOUSE HOLD WITHDRAWALS @ 20,000/- PER MONTH. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 18 AFTER CONSIDERING THE WITHDRAWALS OF RS. 1.20 LACS, T HE REMAINING AMOUNT OF RS. 1.20 LACS WAS ADDED IN THE INCOME OF THE ASSE SSEE. 20. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A), WHO H AD ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UN DER:- I HAVE CAREFULLY CONSIDERED THE RIVAL STANDS OF T HE A.O. AND THE LEARNED AR, TOWARDS ISSUE UNDER CONSIDERATION. FROM THE CONTENTS OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE A.O . HAS MADE THE ADDITION OF RS. 1,20,000/-, ON AD HOC BASIS, TOWARDS LOWER HOUSEHOLD EXPENSES SHOWN BY THE APPELLANT ON THE GRO UNDS THAT THE NECESSARY EVIDENCES I.R.O. INCOME OF THE ASSESS EES SON WERE NOT PROVIDED. HOWEVER, WHILE MAKING SUCH ADDITION, SH E HAS NOT BROUGHT ANY POSITIVE THINGS ON RECORD TO SUBSTANTIA TE HER INFERENCE THAT THE WITHDRAWAL MADE BY APPELLANT OF RS . 1,20,000/- ITSELF, AS SUCH. SINCE THE A.O. WAS SUSPE CTING THE SUPPRESSION OF HOUSEHOLD EXPENSES, THEREFORE, IT IS FELT THAT THE ONUS WAS LIES ON HER TO PROVE THE ADVERSE CONCLUSION MADE IN THIS REGARD WITH COGENT EVIDENCES AND RELEVANT INFORMATIO N. IN ABSENCE OF ANY SUCH EXERCISE ON HER PART, IT IS HEL D THAT THE ADDITION MADE BY THE A.O. TOWARDS THE HOUSEHOLD EXPE NSES IS BASED ON SIMPLY ASSUMPTION AND PRESUMPTION ONLY, WHI CH CANNOT BE RATIFIED UNDER THE GIVEN CIRCUMSTANCES. ACCORDIN GLY, THE ADDITION OF RS. 1,20,000/- MADE IN THIS REGARD IS H EREBY DELETED. CONSEQUENTLY, THIS GROUND OF APPEAL IS UPHELD. ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 19 21. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LEAR NED DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER. HOWEVER, THE LEA RNED A.R. FOR THE ASSESSEE CONTENDED THAT THE LEARNED ASSESSING OFFIC ER ESTIMATED THE HOUSEHOLD WITHDRAWALS WITHOUT ANY EVIDENCE COLLECTED THROUGH ANY INQUIRY. THERE WAS NO SPECIFIC INSTANCES OF SUPPRESSI ON OF EXPENDITURE ON HOUSEHOLD. THE ASSESSEES FAMILY CONSIST HIM, HIS WIF E AND THREE CHILDREN. THE ASSESSEES SON HAS SHOWN HOUSEHOLD EXPENSES AT RS . 2.25 LACS APART FROM HE HAS AGRICULTURAL INCOME. THERE WAS NO SOCIAL CEREMONY AND MARRIAGE DURING THE YEAR UNDER CONSIDERATION. HE RE LIED UPON THE DECISION IN THE CASE OF RAJ KUMAR JAIN VS. ACIT 50 I TD 1 (ALL) TM, ROHITASH YADAV VS. ITO 114 TTJ 973 (JP), MRS. CATHRIE NE THOMAS VS. DCIT 116 TTJ 797 (COCH) AND REQUESTED TO CONFIRM THE ORDER OF THE LEARNED CIT(A). 22. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LE ARNED D.R. HAD NOT CONTROVERTED THE FINDINGS GIVEN BY THE LEARNED CIT( A) AND THE ASSESSING OFFICER ALSO HAS NOT BROUGHT ON RECORD ANY ADVERSE MATERIAL THAT THE ASSESSEE INCURRED MORE THAN EXPENSES ON HOUSEHOLD WI THDRAWALS EXCEPT MADE ADDITION ON SURMISES AND CONJECTURES, WHICH IS NOT PERMITTED UNDER ITA 506 & 584/JP/2012 BAGHCHAND CHOUDHARY VS. ACIT 20 THE LAW. THEREFORE, WE CONFIRM THE ORDER OF THE LEARNE D CIT(A) ON THIS GROUND. 23. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED AND THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/11/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 28 TH NOVEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. SHRI BAGHCHAND CHOUDHARY, JAIPUR. 2. THE A.C.I.T., RANGE-7 & ACIT, CIRCLE-7, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 506 & 584/JP/2012) BY ORDER, AR ITAT JAIPUR.