Wintrobe Associates (p) Ltd, Guwahati V. Income Tax Officer, Ward-2(2), Guwahati

ITA 54/GTY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8501 (ITAT-GUWAHATI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 14-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Reasonable cause
• Section: 68; 273B; 143(3)

Judgement Text

] \ ' \ ' , ' , IN THEINCOMETAXAPPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRIS.S.GODARA,JUDICIALMEMBER AND DR. A.L. SAINI, ACCOUNTANTMEMBER ITA NO. 54 / GAU / 2019 ASSESSMENT YEAR :2015-16 WINTROBE ASSOCIATES PVT. LTD., GNB ROAD, AMBARI, GUWAHATI-781001 [ PAN NO.AAACW 4955 D ] V/S . INCOME TAX OFFICER, WARD-2(2), AAYKAR BHAVAN, CHRISTIAN BASTI, GUWAHATI-781005 \ ' /APPELLANT .. / RESPONDENT J /BYAPPELLANT SHRI SOMESH BOSE, FCA J /BYRESPONDENT SHRI M. HAOKIP,JCIT-DR ' _ /DATEOFHEARING 01-07-2019 /DATEOFPRONOUNCEMENT 03-07-2019 / ORDE R PERBENCH:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2015-16 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-GUWAHATI-1S ORDER DATED 19.12.2018 PASSED IN CASE NO.378239841290118, INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOMETAXACT,1961;INSHORTTHEACT. HEARDBOTHTHEPARTIES.CASEFILEPERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE PLEADED IN THE INSTANT APPEAL SEEKS TO REVERSE BOTH THE LOWER AUTHORITIES IDENTICAL ACTION TREATING THE AMOUNT IN ISSUE OF RS.49,73,944/- AS UNEXPLAINED CASH CREDITS. MR. HACKIP SUBMITSTHATCIT(A)S FINDINGSUNDERCHALLENGEREADAS UNDER:- ITA NO. 54/GAU/2019 A.Y.2015-16 WINTROBE ASSOCIATES P. LTD. VS. ITO WD-2(2), GUA PAGE2 III. I HAVE GONE THROUGH THE OBSERVATIONS OF THE LD AO AS ALSO THE SUBMISSION OF THE APPELLANT AND THE FACTS AND CIRCUMSTANCES OF THIS CASE. I FIND IN THIS CASE, THE APPELLANT HAS FILED TWO AUDIT REPORTS. THE LD AO HAVING FOUND THE DISCREPANCIES IN THESE AUDIT REPORTS, I.E. THE ORIGINAL AUDIT REPORT AS WELL AS THE REVISED AUDIT REPORT, HAS ADDED THE DIFFERENTIAL CASH IN HAND OF RS.49,73,944/- AS INCOME OF THE APPELLANT UNDER SECTION 68OFTHEACT. PER CONTRA, THE APPELLANT HAS CHALLENGED THE ADDITION MADE UNDER SECTION 68 OF THE ACT. I FIND FROM A CONSPECTUS OF THE FACTS GATHERED THAT THE APPELLANT HAS FILED TWO AUDIT REPORTS IN THIS CASE. THE APPELLANT HAS CONTENDED THAT THERE WAS A DISPUTE BETWEEN THE MANAGEMENT GROUPS. HOWEVER, NO EVIDENCE IN THIS REGARD SUCH AS CONFIRMATION FROM THE OTHER PARTY, COPIES OF MINUTE BOOKS, COPIES OF FIR, TESTIMONY OF STAFF/EMPLOYEE, ETC HAVE BEEN FURNISHED. THUS, THE STATEMENT OF THE APPELLANT THAT THERE WAS A MANAGEMENT DISPUTE APPEARS TO BE A CONCOCTED STORY WITHOUT ANY FACTUAL LEGS OR MATERIAL TO PROVE. I FURTHER FIND THAT THE APPELLANT HAS STATEDLY FILED A TAX AUDIT REPORT ORIGINALLY AS WELL AS REVISED. HOWEVER, EVEN PRESUMING THE STAND OF THE APPELLANT AS REGARDS MANAGEMENT DEADLOCK WAS CORRECT; THERE ARE CATENA OF JUDGMENTS WHICH PROVIDE THAT NON FURNISHING OF TAX AUDIT REPORT, ATTRIBUTABLE TO MANAGEMENT DEADLOCK IS A REASONABLE CAUSE UNDER SECTION 273B OF THE ACT AS WOULD HAVEABSOLVEDTHEAPPELLANT FORMRIGORS OFSECTION 271BOFTHEACT. I FURTHER NOTE THAT WHILE NO EVIDENCE / MATERIAL OF ANY PURPORTED DISPUTE IN THE MANAGEMENT HAS BEEN FURNISHED, THE APPELLANT HAS NOT PROVEN AS TO HOW THE OPERATIONS OF THE PURPORTED HOSPITAL WERE RUNNING AND AS TO HOW THE EXPENSES WERE MET OUT. THE MANAGEMENT DEADLOCKS ARE KNOWN FOR CAUSING AND JEOPARDIZING THE STATE OF OPERATIONS. HOWEVER, NO SUCH EVIDENCE HAS BEEN FURNISHED BEFORE THE LD AO. IN THIS CASE, I FURTHER NOTE THAT THE LD AO HAD TWO AUDIT REPORTS BEFORE HIM FOR THE ABOVE ASSESSMENT YEAR. WHILST THE LD AO OUGHT TO HAVE EXAMINED THE STATUTORY AS WELL AS TAX AUDITOR AND OUGHT TO HAVE PROCEEDED AGAINST THE ONE WHOSE AUDITED ANNUAL ACCOUNTS WERE INCORRECT, IT IS STILL INCOMPERHENSIBLE AS TO HOW THE LD AO HAD GOTTEN SATISFACTION AS TO THE TRUE AND CORRECT NATURE OF BOOKS OF ACCOUNTS. NOTWITHSTANDING THAT THERE ARE NO SUCH OBSERVATIONS, EXCEPT TO THE EXTENT OF ADDITION. IMPUGNED HEREIN, I FIND THAT THE CHALLENGE BY THE APPELLANT TO THE PURPORTED ADDITION UNDER SECTION 68 OF THE ACT IS BASELESS, SINCE THE APPELLANT HAS FAILED TO PROVE COMPREHENSIVELY AS TO THE NATURE AND SOURCE OF EXCESS CASH IN HAND IN ITS HANDS AS PER THE REVISED ANNUAL ACCOUNTS OF THE APPELLANT. ANY OTHER INTERPRETATION OF RESTRICTING THE MEANING OF CASH CREDIT TO ONLY BANK CREDITS WOULD LEAD TO NULLIFYING THE PROVISIONS OFSECTION 68OFTHE ACT. IN FACT, THERE IS NO EVIDENCE AS TO THE AMOUNT OF CASH RECEIVED FROM PATIENTS, CASH DEPOSITED IN THE BANK ACCOUNTS, CASH EXPENSES, ETC. THERE IS NO PHYSICAL VERIFICATION OF CASH IN HAND BY ANY AUDITORS. THERE IS NO EVIDENCE OR CONFIRMATION FROM ANYONE IN THE NEW MANAGEMENT AS TO THE PHYSICAL CASH AVAILABLE, LEAVE APART THE LOCATIONS, DENOMINATION,BUILD-UP OF SUCHCASHIN HAND. ON ACCOUNT OF ABOVE REASONS, I FIND NO REASON TO INTERFERE WITH THE FINDING OF FACT RECORDED BY THE LD AO AND AS SUCH THE IMPUGNED ADDITION OF RS.49,73,944/- IS HEREBY SUSTAINED.GROUND NOS.1 &2 ARE ACCORDINGLY DISMISSED. LEARNED COUNSEL MADE STRENUOUS EFFORTS TO TAKE US TO ASSESSEES DETAILED PAPER BOOK RUNNING INTO PAGES 1 TO 180 COMPRISING OF ITS WRITTEN SUBMISSIONS BEFORE THE CIT(A) AUDITED REVISED ACCOUNTS FOR THE RELEVANT FINANCIAL YEAR 2014-15, MCA RECEIPT COPY, RETURN FORM FOR THE FINANCIAL YEAR 2014-15, FORM ITA NO. 54/GAU/2019 A.Y.2015-16 WINTROBE ASSOCIATES P. LTD. VS. ITO WD-2(2), GUA PAGE3 AOC-4 FOR THE VERY FINANCIAL YEAR 2014-15, RETURN FROM FOR IMPUGNED FINANCIAL YEAR 2016-17 AND OTHER RELEVANT DOCUMENTS. HIS CASE IS THAT ASSESSING OFFICER AS WELL AS CIT(A) HAVE GRAVELY ERRED IN TREATING ASSESSEES CASH-IN- HAND FORMING PART OF BOOKS AS WELL IN RETURN TO BE UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. MR. BOSE VEHEMENTLYCONTENDS DURING THE COURSE OF HEARING THAT THE IMPUGNED STATUTORY PROVISION DOES NOT COME INTO PLAY IN CASE OF CASH-IN- HADALREADYAVAILABLEINBOOKS. 3. THE REVENUES CASE ON THE OTHER HAND IS THAT CIT(A) HAS ADMITTEDLY NOT ADJUDICATED THIS INSTANT FACTUAL ISSUE IN HIS ABOVE EXTRACTED FINDINGS SO AS TO CULMINATE INTO THE INSTANT LEGAL. WE THEREFORE DEEM IT APPROPRIATE TO RESTORE THE ASSESSEES INSTANT APPEAL BACK TO THE CIT(A) FOR AFRESH ADJUDICATION OF THE ABOVECLINCHINGASPECT WITHIN THREE EFFECTIVE OPPORTUNITIESOF HEARING. 4. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDERPRONOUNCEDINTHEOPENCOURT 03/07/2019 SD/- SD/- ( ' ) ( ' ) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP ' ' - 03/07 /201 9 ' \ / COPY OF ORDER FORWARDED TO:- 1. \ ' /APPELLANT-WOMTROBE ASSOCIATES PVT.LTD.GBRD,AMBARI,GUWAHATI-781001 2. /RESPONDENT-ITOWD-2(2), AAYKAR BHAVAN, CHRISTIAN BASTI,GUWAHATI-781005 3. - ' ] ] ' /CONCERNEDCIT GUWAHATI 4. ] ] - / CIT (A) GUWAHATI 5. ' ' ' , ] \ ' \ ' , ' ' / DR,ITAT,GUWAHATI 6. ' [ /GUARDFILE. BYORDER/ , /TRUECOPY/ SR. PRIVATE SECRETARY(ONTOUR) ] \ ' \ ' ,