Honrao Nitin Bhimashankar, Barshi V. ITO, Ward 2(3), Solapur, Solapur

ITA 51/PUN/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62755 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MISHRA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Unexplained investment
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO. 51/PN/2010 (ASSTT. YEAR : 2005-06) HONRAO NITIN BHIMASHANKAR , ... APPELLANT PROP. SANJIVANI WINE CENTRE, TEL GIRANAI CHOWK, BARSHI 413 401 PAN : ABDPH4193F V. ITO WARD 2(3), SOLAPUR RESPONDENT APPELLANT BY : SHRI SUNIL PATHAK RESPONDENT BY : SHRI. ALOK MISHRA DATE OF HEARING : 16/7/12 DATE OF PRONOUNCEMENT : 19 -7-12 ORDER PER R.S. PADVEKAR, JM IN THIS APPEAL, THE ASSESSEEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD CIT(A) - III, PUNE, DATED 17.9.2009 FOR THE A.Y. 2005-06 . GROUND NO. 1 READS AS UNDER : 1) THE LEARNED INCOME TAX OFFICER & HON. CIT (APPEAL )III, PUNE HAS EARED IN MAKING ADDITION OF RS. 21,54,611.00 U/S 40A(3) OF THE INCOME TAX ACT. 2. THE ASSESSEE IS A LIQUOR DEALER AND RUNNING A WINE SH OP. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY FOR A.Y. 2005-06 AND ASS ESSMENT IS COMPLETED U/S. 143(3). THE A.O HAS OBSERVED THAT THE ASSESSEE HA S MADE THE PAYMENT IN CASH IN EXCESS OF RS. 20,000/- OTHERWISE THAN BY ACCOUNT PAYEE CHEQUES AND HENCE, PROVISIONS OF SEC. 40A(3) OF THE I.T. ACT ARE ATTRA CTED. AS OBSERVED BY THE A.O, THE PAYMENTS IN VIOLATION OF SEC. 40A(3) MADE BY THE ASSESSEE WERE TO THE EXTENT OF RS. 1,07,73,059/- AND THE A.O MADE THE DISA LLOWANCE AT 20% OF THE SAID AMOUNT WHICH WAS WORKED AT RS. 21,54,611/- AND MADE ADDITION TO THE INCOME OF THE ASSESSEE. THE LD CIT(A) CONFIRMED THE ADDITION. ITA . NO. 51//PN/2010 HONRAO NITIN BHIMASHANKAR A.Y. 2005-06 PAGE OF 4 2 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD COUNSEL WAS FAIR ENOUGH TO SUBMIT THAT RULES 6 DD OF I.T. RULES 1962 H AS UNDERGONE THE AMENDMENT AND NO DEFENCE OF THE BUSINESS EXPEDIENCY C AN BE CLAIMED, BUT, AT THE SAME TIME, SOME OF THE PAYMENTS ARE MADE ON THE BA NK HOLIDAYS AND HENCE, IN VIEW OF CLAUSE (J) TO RULE 6DD, THE SAID PAYMENTS ARE OU T OF THE APPLICABILITY OF SEC. 40A(3). THE LD. COUNSEL FILED THE CHART SHOWING THE HO LIDAYS IN THE F.Y. 2004-05 AND THE PAYMENTS MADE IN CASH BY THE ASSESSE E. HE PLEADED FOR RESTORING THE MATTER FOR THE FILE OF THE A.O FOR ALLOWING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF PAYMENTS MADE IN CASH IN EXCESS OF RS. 20,000/- ON THE BANK HOLIDAYS. WE ALSO HEARD THE LD. D.R.. 4. WE FIND THAT THERE IS A SUBSTANCE IN THE ARGUMENT OF THE LD. COUNSEL. WE FURTHER FIND THAT THERE WERE BANK HOLIDAYS IN THE F.Y. 200 4-05 AND ON THOSE HOLIDAYS ALSO, THE ASSESSEE HAS MADE THE PAYMENTS FOR TH E PURCHASE OF THE WINE AND LIQUOR. IN VIEW OF CLAUSE (J) TO RULE 6DD, IF THE PAYMEN TS ARE MADE ON THE BANKING HOLIDAYS, THEN THOSE ARE TO BE EXCLUDED. WE ACCO RDINGLY, SET ASIDE THE ORDER OF THE LD CIT(A) ON THIS ISSUE AND RESTORE THE SAM E TO THE FILE OF THE A.O FOR FRESH ADJUDICATION IN THE LIGHT OF THE ABOVE DISCUSSION. AC CORDINGLY, GROUND NO. 1 IS ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO. 2 READS AS UNDER : THE LEARNED INCOME TAX OFFICER & HON. CIT (APPEAL) III, PUNE HAS EARED IN MAKING ADDITION OF RS. 1,04,628.00 U/S 69B OF THE INCOME TAX ACT. 6. IT WAS NOTICED BY THE A.O THAT THE ASSESSEE HAS INT RODUCED A SUM OF RS.8,72,742/- AND THE SOURCE OF THE SAME IS SHOWN AS LOA N FROM ONE SHRI ARVIND MAHINDRAKUMAR. THE ASSESSEE UTILIZED THE SAID AMOUNT FOR PURCHASE OF THE FACTORY UNIT AT KADAPPA IN GULBARGA. IT WAS SEEN THAT THE ASSESSEE HAS PURCHASED THE SAID UNIT FOR RS.11,81,000/- ON WHICH STAM P DUTY OF RS.1,05,818/- AND REGISTRATION FEE OF RS. 11,810/- WAS PAID. AS OBSERVED BY THE A.O, TOTAL INVESTMENT IN THE MACHINERY AND BUILDING MADE BY THE ASSESSEE WAS TO THE EXTENT OF RS.12,98,628/- AND IN THE CAPITAL ACCOU NT, THE AMOUNT DEBITED ITA . NO. 51//PN/2010 HONRAO NITIN BHIMASHANKAR A.Y. 2005-06 PAGE OF 4 3 WAS RS. 11,94,000/-. THE A.O., THEREFORE, MADE AN ADDITION OF RS.1,04,628/- AS UNEXPLAINED INVESTMENT U/S. 69B. THE LD CIT(A) CONFIRMED THE SAME. 7. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS TH AT THE A.O. HAS ACCEPTED THE GENUINENESS OF THE LOAN OF RS. 8,72,742/- WHIC H WAS TAKEN FROM SHRI ARVIND MAHINDRAKUMAR, BUT THE ADDITIONAL AMOUNT OF RS . 1,45,000/- TAKEN FROM THE SAID PERSON WAS NOT ACCEPTED. HE SUBMITS THAT THE ASSESSEE HAS REQUESTED THE LD CIT(A) TO ACCEPT THE SIGNED ACCOUNT S TATEMENT OF SHRI MAHINDRAKUMAR AND HIS AFFIDAVIT, BUT THE SAME WAS NOT CONS IDERED. HE PLEADED FOR ALLOWING THE ASSESSEE TO PROVE THE ADDITIONAL EXPENDITU RE. WE HAVE ALSO HEARD THE LD. D.R. 8. WE FIND THAT IN THE SUBMISSION MADE TO THE LD CIT(A), THE ASSESSEE HAS REQUESTED THAT HE MAY BE ALLOWED TO SUBMIT SIGNED ACC OUNT STATEMENT OF SHRI ARVIND MAHINDRAKUMAR AND HIS AFFIDAVIT, IF REQUIRED, BUT THERE IS NO DISCUSSION IN THE ORDER OF THE LD CIT(A). THE LD. D.R. HAS NO OBJECTION FOR R ESTORING THE ISSUE TO THE FILE OF THE A.O. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD CIT(A) ON THIS ISSUE AND RESTORE THE SECOND GROUND ALSO TO TH E FILE OF THE A.O. THE ASSESSEE SHOULD PRODUCE THE EVIDENCE TO PROVE THAT T HE EXPENDITURE ON THE STAMP DUTY & REGISTRATION FEE WAS OUT OF THE AMOUNT PAID BY SHRI ARVIND MAHINDRAKUMAR. ACCORDINGLY, GROUND NO. 2 IS ALLOWED FOR STATISTICAL PUR POSES. 9. IN RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 19TH JU LY, 2012 SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S. PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 19TH JULY, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT ITA . NO. 51//PN/2010 HONRAO NITIN BHIMASHANKAR A.Y. 2005-06 PAGE OF 4 4 3. THE CIT. IV, PUNE 4. THE CIT(A)- III, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE /-TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE