Shri Kishore Kumar Agrawal, V. Income Tax Officer,

ITA 53/JAB/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2249 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 07-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: L L SHARMA
• Keywords: Corroborative evidences
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 53/JAB/2015 / ASSESSMENT YEAR : 2005-06 SHRI KISHORE KUMAR AGRAWAL, C/O. M/S. AGRAWAL STORES, MAIN ROAD, BABAI, HOSHANGABAD PAN: AVFPA 4523 K VS INCOME TAX OFFICER, ITARSI / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI L.L. SHARMA, ADV. REVENUE BY : SHRI PD CHOUGULE, DR / DATE OF HEARING : 14/03/2018 / DATE OF PRONOUNCEMENT: 16/03/2018 / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-I, BHOPAL (MP) DATED 14.01.2015 PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 01. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD. CIT(APPEAL) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 1,01,000/ - OUT OF THE TOTAL CASH DEPOSIT OF RS. 1,70,000/- MADE IN THE BANK ACCOUNT ON 29.03.2005, WHICH WAS MADE OUT OF THE FUNDS REFLECTED IN THE ACCOUNTS WITH THE RETURNS ON RECORD AVAILABLE BEFORE THE ASSESSING OFFICER. 02. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD. CIT(APPEAL) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 65,000/- TOWARDS THE CLOSING STOCK OF THE CONCERN OF THE APPELLANT M/S. AGA RWAL TRADERS. 03. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD. CIT(APPEAL) WAS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS. 10 ,000/- AGAINST THE JUSTIFIABLE EXPENSES CLAIMED BY THE APPELLANT IN HIS BUSIN ESS CONCERN M/S. AGRAWAL TRADERS. ITA NO. 53/JAB/2015 SHRI KISHORE AGRAWAL VS. ITO AY : 2005-06 2 04. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD. CIT(APPEAL) WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 2,60,500/ - INTRODUCED AS CAPITAL BY THE APPELLANT IN HIS BUSINESS CONCERN M/S. AGR AWAL TRADERS OUT OF THE FUNDS AVAILABLE WITH HIM AND EXPLAINED BY THE APPELLANT. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT CASE OF THE AS SESSEE WAS RE- OPENED AND THE ASSESSMENT UNDER SECTION 147 R.W.S 144 OF TH E INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED V IDE ORDER DATED 20.09.2010, ASSESSING TOTAL INCOME OF THE ASSESSEE AT RS.8,04,680/-. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE VARI OUS ADDITIONS IN THE INCOME DECLARED BY THE ASSESSEE, INCLUDING ADDITION OF RS.1,01,000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN ASSESSEES BANK AC COUNT, ADDITION OF RS.1,23,989/- ON ACCOUNT OF CLOSING STOCK, DISALLOWANCE OF R S.23,435/- OUT OF VARIOUS EXPENSES, ADDITION OF RS.2,60,500/- ON ACCOUNT OF U NEXPLAINED CAPITAL INTRODUCED IN THE BUSINESS ALONG WITH OTHER ADD ITIONS. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, ASSESSEE PREF ERRED APPEAL BEFORE THE LEARNED CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. FURTHER AGGR IEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT HE IS NOT PRESSING GROUND NO.3; HENCE, THE SAME IS DISMISSE D AS BEING NOT PRESSED. 5. GROUND NO.1 IS AGAINST UPHOLDING THE ADDITION OF RS.1, 01,000/- OUT OF THE TOTAL CASH DEPOSIT OF RS.1,70,000/- MADE IN THE BANK ACCOU NT ON 29.03.2005. 6. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS AS WERE MADE IN THE WRITTEN SUBMISSIONS. HE SUBMITTED THAT T HE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT THE AMOUNT WAS OUT OF M ATURITY OF NATIONAL ITA NO. 53/JAB/2015 SHRI KISHORE AGRAWAL VS. ITO AY : 2005-06 3 SAVINGS CERTIFICATE (NCC) WHICH WAS PURCHASED IN THE ASS ESSMENT YEAR 1999-2000. IT IS ALSO SUBMITTED THAT THE AUTHORITIES BELOW CO NFIRMED THE ADDITION ON THE GROUND THAT NO SUPPORTING EVIDENCE WAS PRODUCED. LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE AMO UNT IS DULY REFLECTED IN THE CASH BOOK. ON THE CONTRARY, LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE SUBMISSIONS OF THE ASSESSE E. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MAT ERIAL PLACED BEFORE US. WE FIND THAT LD. CIT(A) CONFIRMED THE ADDI TION OF RS.1,01,000/- OUT OF RS.1,70,000/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF UNEXPLAINED CASH DEPOSIT IN THE ASSESSEES BANK ACCOUNT . HOWEVER, IT IS THE CONTENTION OF THE ASSESSEE THAT THIS AMOUNT IS DULY RE CORDED IN THE CASH BOOK. THE REVENUE HAS NOT CONTROVERTED THIS FACT. M OREOVER, THE ASSESSING OFFICER HAS NOT MADE ANY INQUIRY IN THE POST OFFICE ABO UT THE VERACITY OF THE CLAIM OF THE ASSESSEE THAT THE AMOUNT WAS RECEIVED AS MATU RITY VALUE OF NATIONAL SAVINGS CERTIFICATE. THEREFORE, THERE WAS NO JU STIFICATION FOR MAKING THIS ADDITION AND THE ASSESSING OFFICER IS DIRE CTED TO DELETE THE SAME. GROUND NO.1 OF THE ASSESSEES APPEAL IS ACCORDINGL Y ALLOWED. 8. GROUND NO.2 OF ASSESSEES APPEAL IS IN RESPECT OF CON FIRMING ADDITION OF RS.65,000/- MADE ON ACCOUNT OF DIFFERENCE IN CLOSING ST OCK. CLOSING STOCK SHOWN BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSIN G OFFICER ON THE GROUND THAT BOOKS OF ACCOUNTS HAVE NOT BEEN PRODUCED. THEREFORE, THE ASSESSING OFFICER INCREASED THE VALUE OF CLOSING STOC K BY 20% AND MADE AN ADDITION OF RS.1,23,989/-. HOWEVER, LEARNED CIT(A) RESTRICT ED THE ADDITION TO 10% OF THE CLOSING STICK TO THE EXTENT OF RS.65,000/-. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO. 53/JAB/2015 SHRI KISHORE AGRAWAL VS. ITO AY : 2005-06 4 9. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOOK S OF ACCOUNTS WERE PRODUCED BEFORE THE SALES TAX AUTHORITIES WHO ACC EPTED THE OPENING STOCK, PURCHASE AND SALES OF THE ASSESSEE. HE ALSO SUBM ITTED THAT ASSESSEE DEALS IN PURCHASE AND SALE OF MEDICINES AND LOOKING TO T HE NATURE OF BUSINESS, IT IS IMPOSSIBLE TO MAINTAIN THE QUANTITATIVE AND QUALITATIVE CLOSING STOCK. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESE NTATIVE OPPOSED THE SUBMISSIONS SO MADE BY THE LEARNED COUNSEL FOR THE ASS ESSEE. 10. HAVING HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT LEARNED CIT(A) WAS NOT JUSTIFI ED IN CONFIRMING THE ADDITION OF RS.65,000/- MADE ON ACCOUNT OF DIFFERENCE IN CL OSING STOCK. IT IS PERTINENT TO NOTE FROM THE PROFIT AND LOSS ACCOUNT O F THE ASSESSEE THAT THE ASSESSEE HAD SHOWN RS.1,49,910/- BEFORE THE LIABILITY OF VA T, WHEREAS THE AMOUNT OF RS.13,790/- IS THE VAT LIABILITY AS PER THE ORDER PASSED BY THE SALES TAX AUTHORITY WHICH IS PLACED ON RECORD. MOREOV ER, THE SALES TAX AUTHORITY HAS ACCEPTED THE OPENING STOCK, PURCHASE AND SALES OF THE ASSESSEE. IN VIEW OF ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO JUSTIFICATION FOR CONFIRMING THE ADDITION OF RS. 65,000/- ON ACCOUNT OF CLOSING BALANCE DIFFERENCE WHICH IS HEREBY DELETED. GROUND NO. 2 RAISED BY THE ASSESSEE IS ALSO ALLOWED. 11. GROUND NO.3 IS AGAINST UPHOLDING THE ADDITION OF RS.2, 60,500/-, WHICH IS INTRODUCED AS CAPITAL BY THE ASSESSEE IN HIS BUSINESS CONCERN M/S. AGARWAL TRADERS OUT OF FUNDS AVAILABLE WITH THE ASSESSEE. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. WE FIND THAT ASSESSEE CARRIES ON THE RETAIL BUSINESS OF MEDICINES AND FOR THE YEAR UNDER CONSIDERATION ASSESSEE HAS ALSO EARNED INCOME FROM SHARE TRADING WHICH IS ALSO EVIDENT FROM T HE COMPUTATION OF ITA NO. 53/JAB/2015 SHRI KISHORE AGRAWAL VS. ITO AY : 2005-06 5 INCOME FILED WITH THE RETURN OF INCOME. WE FIND TH AT THE ASSESSEE HAD RECEIVED A SUM OF RS.1,23,375.33 FROM EXCLUSIVE SECURITIES LTD WHICH WAS DEPOSITED IN ASSESSEES ACCOUNT. ASSESSEE HAD WITHDRAW N A SUM OF RS.1,28,000/- FROM THIS ACCOUNT AND UTILIZED FOR THE BUSINES S. SIMILAR TYPES OF WITHDRAWALS WERE MADE FROM THE ACCOUNT OF THE ASSESSE E OUT OF THE AMOUNT RECEIVED FROM EXCLUSIVE SECURITIES LTD. ASS ESSEE SUBMITTED THAT AN AGGREGATE AMOUNT OF RS.5,43,000/- WAS WITHDRAWN FROM ASSESSEES BANK ACCOUNT. IT IS ALSO PLACED ON RECORD THAT THE ASSESSEE HAS AGRICULTURAL INCOME OF RS.89,000/- WHICH IS ALSO TAKEN FOR INVESTMENT IN HIS M EDICINE BUSINESS. KEEPING IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF TH E CASE, WE FIND NO JUSTIFICATION FOR MAKING ADDITION OF RS.2,60,500/- ON ACCOUN T OF UNEXPLAINED CAPITAL INTRODUCED BY THE ASSESSEE. WE, THEREFORE, DELE TE THIS ADDITION AND ALLOW THIS GROUND OF APPEAL RAISED BY THE ASSESSEE. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE COURT ON 16 TH MARCH, 2018 AT JABALPUR. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER JABALPUR; DATED 16/03/2018 *BIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, JABALPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, JABALPUR