OM PRAKASH AGARWAL, Jaipur V. ITO, BHARATPUR

ITA 530/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99381 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PA A VIHYKFKHZ IZRFKHZ
• Assessee Lawyers: P C PARWAL CA SHRI
• Keywords: Rejection of books of accounts; Opportunity of being heard
• Section: 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 530/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SHRI OM PRAKASH AGARWAL, PROP. M/S. SHIVA OIL INDUSTRIES, MANGROLE ROAD, MANIA, DHOLPUR. CUKE VS. THE INCOME TAX OFFICER, WARD-3, BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABYPA 8015 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. CIT (A), ALWAR DATED 30.05.2014 FOR THE ASSESSMENT YEAR 2009-10, C HALLENGING THE LD. CIT (A)S ACTION ON THE FOLLOWING GROUNDS :- (I) CONFIRMING THE REJECTION OF BOOKS OF ACCOUNTS U/S 1 45(3). (II) CONFIRMING TRADING ADDITION OF RS. 6,53,263/- BY AP PLYING G.P. RATE OF 5% ON THE DECLARED TURNOVER AS AGAINST GROSS LOS S OF RS. 2,68,795/- DECLARED BY THE ASSESSEE. 2 ITA NO. 530/JP/2014 A.Y. 2009-10. SHRI OM PRAKASH AGARWAL VS. ITO (III) CONFIRMING DISALLOWANCE OF RS. 11,378/- BEING 10% O UT OF VARIOUS EXPENSES OF RS. 1,13,781/- CLAIMED BY THE ASSESSEE. (IV) CONFIRMING ADDITION OF RS. 43,800/- U/S 68 OUT OF T OTAL ADDITION OF RS. 3,05,000/- MADE BY THE AO. HE HAS FURTHER ERRED IN NOT ALLOWING THE SET OFF OF ADDITION CONFIRMED BY HIM U /S 68 AGAINST THE TRADING ADDITION CONFIRMED BY HIM. 2. BRIEF FACTS ARE- ASSESSEE IS PROPRIETOR OF M/S. SHIVA OIL INDUSTRIES, WHICH AS PER ASSESSEES COUNSEL DEALS IN TRADING OF MUSTARD SEED S, MUSTARD OIL ETC. IT COULD NOT BE EXPLAINED WHETHER SEPARATE ACCOUNT OF EACH ITEM DEA LT IN WERE MAINTAINED OR NOT AND IT WAS AGREED BY THE ASSESSEE THAT CONSOLIDATED ACCOUN T FOR ASCERTAINING GP IS PREPARED. VARIOUS DEFECTS IN THE BOOKS OF ACCOUNTS WERE FOUND BY AO AND THEY WERE REJECTED U/S 145(3) AND GP WAS ESTIMATE RESULTING IN ADDITIONS. IN 1 ST APPEAL LD. CIT(A) UPHELD THE REJECTION OF BOOKS, HOWEVER PART RELIEF IN GP WAS A WARDED. AGGRIEVED ASSESSEE IS IN 2 ND APPEAL. 3. AFTER HEARING BOTH THE PARTIES, I AM OF THE VIEW THAT BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN RIGHTLY REJECTED IN AS MUCH AS T HE STOCK REGISTER ETC. ARE NOT MAINTAINED AND ALL THE ACTIVITIES TRADED IN BY ASSE SSEE HAVE BEEN MIXED IN ONE ACCOUNT DUE TO WHICH THE SEPARATE ITEM WISE G.P. COULD NOT BE ASCERTAINED. CONSEQUENTLY, THE ORDER OF LD. CIT (A) CONFIRMING REJECTION OF BOOKS IS UPHELD. 4. AS REGARDS GROUND NO. 2, THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE G.P. ADDITION IS EXCESSIVE AND SUITABLE RELIEF MAY BE GI VEN. 5. AFTER HEARING BOTH THE PARTIES, TAKING A LENIENT VIEW, THE GP ADDITION CONFIRMED BY LD. CIT (A) AT 5% IS REDUCED TO 3%. THE ADDITION IS REDUCED ACCORDINGLY. 3 ITA NO. 530/JP/2014 A.Y. 2009-10. SHRI OM PRAKASH AGARWAL VS. ITO 6. APROPOS GROUND NO. 3, THE DISALLOWANCE OF RS. 11 ,378/- BEING 10% DISALLOWANCE OUT OF MISCELLENEOUS EXPENSES IS UPHELD. THIS GROUN D OF THE ASSESSEE IS DISMISSED. 7. APROPOS LAST GROUND RELATING TO ADDITION U/S 68, THE LD. CIT (A) CONFIRMED THIS ADDITION BY OBSERVING AS UNDER :- 7.5. I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 3 ,05,000/- WAS MADE BY THE AO ON ACCOUNT OF CAPITAL INTRODUCTION MADE BY T HE PROPRIETOR DURING THE PERIOD UNDER CONSIDERATION. THE ADDITION WAS MA DE BY THE AO AS THE APPELLANT COULD NOT FURNISH SUFFICIENT EVIDENCE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAD FILED ADDITIONAL EVI DENCE IN THE COURSE OF APPELLATE PROCEEDINGS TO SUBSTANTIATE THE SOURCES O F FUNDS RAISED BY THE PROPRIETOR BEFORE INTRODUCING SUCH MONEY IN THE BUS INESS. THE EVIDENCE FILED BY THE APPELLANT WAS FORWARDED TO THE AO FOR EXAMINATION AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 7.6. AO HAS IN HIS REMAND REPORT STATED THAT THE AP PELLANT COULD FURNISH SATISFACTORY EVIDENCE WITH REGARD TO THE AMOUNT INT RODUCED OF RS. 2,61,200/- WHICH HAS BEEN RECEIVED FROM 16 PERSONS. HOWEVER, THE APPELLANT FAILED TO PRODUCE THREE PERSONS BEFORE TH E AO OR FURNISH OTHER SATISFACTORY EVIDENCE IN THE COURSE OF REMAND PROCE EDINGS, FROM WHOM AN AMOUNT OF RS. 43,800/- WAS TAKEN AND INTRODUCED IN THE BUSINESS. THE APPELLANT HAS STATED THAT THE EVIDENCE FURNISHED MA Y BE TREATED AS SUFFICIENT AND ACCORDINGLY NO ADDITION MAY BE MADE AS CONFIRMATION, ADDRESS AND IDENTITY PROOF HAS BEEN FURNISHED BY TH E APPELLANT. 7.7. CONSIDERING THE EVIDENCE AVAILABLE ON RECORD, I FIND THAT THE APPELLANT HAS NOT BEEN ABLE TO PRODUCE THREE PERSON S FROM WHOM IT WAS STATED THAT AN AMOUNT OF RS. 43,800/- HAS BEEN RAIS ED BY THE APPELLANT IN CASH BEFORE INTRODUCING THE SAME IN THE BUSINESS AS CAPITAL. THE ONUS LIES UPON THE APPELLANT U/S 68 OF THE IT ACT TO PRODUCE THE SAID CREDITORS, AS 4 ITA NO. 530/JP/2014 A.Y. 2009-10. SHRI OM PRAKASH AGARWAL VS. ITO AND WHEN REQUIRED BY THE AO. THUS, THE PRIMARY REQU IREMENT HAS NOT BEEN SATISFIED AND IN THE ABSENCE OF ANY OTHER EVID ENCE, AN ADDITION OF RS. 43,800/- IS CONFIRMED ON ACCOUNT OF CAPITAL INT RODUCTION OUT OF THE TOTAL ADDITION OF RS. 3,05,000/- MADE BY THE AO ON THIS ACCOUNT. 8. AFTER HEARING BOTH THE PARTIES, I FIND NO INFIRM ITY WITH THE ORDER OF LD. CIT (A) CONFIRMING THE ADDITION OF RS. 43,800/- IN AS MUCH AS THE ASSESSEE COULD NOT EFFECTIVELY CONTROVERT THE FINDING THAT IN RESPECT OF THIS AMOU NT SATISFACTORY EVIDENCE COULD NOT BE FURNISHED. THE CONFIRMATION ALONE CANNOT BE CONSID ERED AS PROOF OF CREDITWORTHINESS OF THE CREDITOR WHICH IS AN ESSENTIAL INGREDIENT FOR E XPLAINING THE CASH CREDIT, THUS THE ASSESSEE FAILED TO DISCHARGE ONUS CAST ON HIM IN TH IS REGARD U/S 68. THE ALTERNATE CLAIM OF SET OFF OF THE AMOUNT AGAINST STANDING ADDITION ALSO CANNOT BE ENTERTAINED AS THE CASH CREDITS ARE RECEIVED ON DISTINCT DATE WHEREAS THE TRADING ADDITIONS ARE AS A RESULT OF DAY TO DAY BUSINESS OPERATIONS OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE COULD NOT DEMONSTRATE ANY NEXUS TO JUSTIFY THE CLAIM OF S ET OFF. CONSEQUENTLY THIS GROUND OF THE ASSESSEE IS DISMISSED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/10/201 5. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/10/ 2015 DAS/ 5 ITA NO. 530/JP/2014 A.Y. 2009-10. SHRI OM PRAKASH AGARWAL VS. ITO VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH AGARWAL, DHOLPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD -3, BHARTPUR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.530/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 530/JP/2014 A.Y. 2009-10. SHRI OM PRAKASH AGARWAL VS. ITO