Shri Dhirajbhai Ishwarlal Gogia, RAJKOT-GUJARAT V. The Deputy Commissioner of Income Tax, Central Circle-2, RAJKOT-GUJARAT

ITA 54/RJT/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85409 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-10-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RD LALCHANDANI
• Keywords: Corroborative evidences
• Section: 68; 132

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NOS. 381/RJT/2013 & 54/RJT/2014 / ASSESSMENT YEAR(S) : 2008-09 & 2009-10 SHRI DHIRAJ ISHWARLAL GOGIA, C/O. M/S. NARENDRA GLASS WORKS, RAMNIK HOUSE, SHOP NO.3 & 4, JUBELEE CHOWK, RAJKOT PAN : AERPG 0249 J / VS. THE D.C.I.T., CENTRAL CIRCLE-2, RAJKOT ( / APPELLANT ) .. ( / RESPONDENT ) ! '# / ASSESSEE BY SHRI R.D. LALCHANDANI, ADVOCATE $ ! '# / REVENUE BY SHRI YOGESH PANDE, DR ' % & ' / DATE OF HEARING 09.10.2014 ( ' / DATE OF PRONOUNCEMENT 10.10.2014 )#* / O R D E R PER SHRI G.C. GUPTA, VICE PRESIDENT : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF THE CIT(A)-IV, AHMEDABAD DATED 30.08.201 3 AND 12.12.2013 FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 RESPECTIVELY. BOTH THESE APPEALS WERE HEARD ON THE SAME DATE, ARGUED BY COMMON REPRESENTA TIVE; THEREFORE THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. ITA NO. 381/RJT/2013 : AY 2008-09 2. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UND ER:- GROUND NO1. THE LEARNED CIT ERRED IN UPHOLDING THE ADDITION OF RS.1960000/- IN THE INCOME OF THE APPELLANT AS UNDER STATE UNACCOUNTED DEVELOPMENT CHARGES. ITA NOS. 381-RJT-2013 & 54-RJT-2014 AYS 2008-09 & 2009-10 SHRI DHIRAJBHAI ISHWARLAL GOGIA - 2 - THE APPELLANT HAD ACCOUNTED FOR THE DEVELOPMENT CHA RGES ACTUALLY RECEIVED BY THE APPELLANT. DURING THE ACCOUNTING PE RIOD RECEIVED DEVELOPMENT CHARGES BY THE APPELLANT AMOUNTED TO RS .160000/- FOR GLOBAL GREEN CITY AND RS.180000/- FOR GLOBAL CITY. THE LEARNED CIT DID NOT APPRECIATE THAT THE LANDS D ID NOT BELONG TO THE APPELLANT BUT TWO OTHER PARTIES. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT D UE TO DISPUTE WITH OWNERS OF THE LAND THE APPELLANT HAD GIVEN UP THE P ROJECTS. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE AP PELLANT HAD TO INCUR EXPENSE FOR DEVELOPMENT FOR LANDS. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE RE CEIPT OF DEVELOPMENT CHARGES WERE SHOWN AS INCOME DUE TO GIVING UP THE P ROJECT ON ACCOUNT OF DISPUTE WITH OWNER OF LAND AND VOLUNTARILY DECLARED THE ACTUAL RECEIPT OF DEVELOPMENT CHARGES AS INCOME. THE APPELLANT SUBMITS THAT THERE IS ABSOLUTELY NO E VIDENCE TO SHOW THAT ALL THE PLOTS WERE SOLD WITHIN A VERY SHORT PERIOD OR T HAT THE APPELLANT HAD RECEIVED ANY AMOUNT IN EXCESS OF THE AMOUNT DECLARE D BY HIM IN THE RETURN OF INCOME. 2. GROUND NO.2. WITHOUT PREJUDICE TO GROUND NO.1, THE LEARNED CIT(A ) ERRED IN NOT TAKING IN TO CONSIDER THAT FACTS THAT THE APPELLANT HAD DECLA RED RECEIPT OF RS.360000/- AGAINST ESTIMATE OF RS.2060000/- MADE B Y THE APPELLANT AND THAT THEREFORE THE ADDITION COULD BE ONLY RS.172000 0/- AND NOT RS.1960000/-. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH OPERATION U/S 132 OF THE ACT IN THIS CASE ON 24.06. 2010 AND THE ASSESSEE MADE A DISCLOSURE OF RS. 1 CRORE AS A RESULT THEREOF, A ND HAS HONOURED HIS COMMITMENTS AND HAS PAID THE TAX THEREON. HOWEVER, THE DEPARTMENT HAS MADE A FURTHER ADDITION OF RS.19,60,000/- IN THIS C ASE ON ACCOUNT OF UNACCOUNTED MAINTENANCE CHARGES OF TWO BUILDING PRO JECTS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS NO EVIDENCE W ITH THE DEPARTMENT FOR MAKING THE ADDITION, EXCEPT SOME RECEIPTS OF RS.10, 000/- EACH FOR MAINTENANCE CHARGES WHICH WERE MOSTLY UNSIGNED AND EVEN THE AMO UNT WAS NOT FILLED-IN IN SOME OF THEM; AND SOME OTHER RECEIPTS WERE BLANK. T HE ONLY SIGNED RECEIPT IS RECEIPT NO.37, WHICH WAS OF RS.10,000/- ONLY. HE SU BMITTED THAT OUT OF 74 RECEIPTS OF MAINTENANCE CHARGES WITH REGARD TO THE FIRST BUILDING PROJECT, ONLY 23 ITA NOS. 381-RJT-2013 & 54-RJT-2014 AYS 2008-09 & 2009-10 SHRI DHIRAJBHAI ISHWARLAL GOGIA - 3 - RECEIPTS WERE SIGNED WITH INITIAL ONLY. WITH REGARD TO THE SECOND PROJECT, THE SIGNED RECEIPTS WERE ONLY 16 OUT OF 74 TOTAL RECEIP TS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS EARNED ONLY RS.1,00,000/- AS INCOM E, AFTER DEDUCTING THE EXPENSES INCURRED FOR MAINTENANCE OF TWO BUILDING P ROJECTS AND THE SAME HAS BEEN DISCLOSED IN THE DISCLOSURE MADE FOR RS. 1 CRO RE BY THE ASSESSEE AT THE TIME OF SEARCH. 4. THE LD. DR HAS OPPOSED THE SUBMISSIONS OF THE LD . COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE DATE OF RECEIPT AND THE NAMES OF PAYER OF THE MAINTENANCE CHARGES HAVE BEEN MENTIONED IN ALL THE RECEIPTS SEIZED BY THE DEPARTMENT AT THE TIME OF SEARCH. HE SUBMITTED THAT THE ABSENCE OF RECEIVERS SIGNATURE IS NOT OF IMPORTANCE. HE SUBMITTED THAT THE BLANK RECEIPTS WERE DUE TO CONSOLIDATED RECEIPT OF GROUP OF PERSONS ISSUED BY THE ASSESSEE FOR RECEIPT OF MAINTENANCE CHARGES AND THE REVENUE HAS RECONCILED THE FIGURES OF AMOUNT RECEIVED AS MAINTENANCE CHARGES WITH THE BLANK RECE IPTS. HE RELIED ON THE ORDER OF THE LD. A.O. AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE ORDER OF THE LOWER AUTHORITIES AND ALSO PERUSED THE COPIES OF RECEIPTS OF MAINTENANCE CHARGES FILED IN THE COMPILATION BOOK. WE FIND THAT MERELY BECAUSE THE RECEIVER HAS NOT SIGNED THE RECEIPTS, IT IS NOT DECISIVE OF THE MATT ER. THE RECEIPTS SEIZED BY THE DEPARTMENT ARE DULY NUMBERED AND THE DATE OF RECEIP T OF AMOUNT WITH NAME OF THE PAYER AND ALSO THE AMOUNT HAS BEEN DULY FILLED- IN IN THE SAID RECEIPTS - COPY OF WHICH ARE FILED IN THE COMPILATION BOOK BEFORE U S. THE DEPARTMENT HAS RECONCILED THE BLANK RECEIPTS WITH THE CONSOLIDATED RECEIPT OF MAINTENANCE CHARGES FROM GROUP OF PERSONS AND EXACTLY THE REQUI RED NUMBER OF RECEIPTS, COVERED BY CONSOLIDATED RECEIPT OF MAINTENANCE CHAR GES, HAS BEEN FOLLOWED WITH THE BLANK RECEIPTS THEREOF. IN THE FACTS OF THE CA SE, WE ARE OF THE VIEW THAT THE ASSESSEE COULD BE TAXED ON THE ESTIMATED PROFIT ON THE RECEIPT OF THE MAINTENANCE CHARGES TOTALING TO RS.20,60,000/- BY W AY OF ESTIMATE. THE ASSESSEE MUST HAVE SPENT ON THE MAINTENANCE OF THE TWO BUILDING PROJECTS AND THEREFORE, THE WHOLE AMOUNT OF RECEIPT OF MAINTENAN CE CHARGES COULD NOT BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE AND A SUITABLE DEDUCTION HAS TO BE ALLOWED ON ACCOUNT OF EXPENDITURE INVOLVED THERE IN. THEREFORE, WE HOLD THAT ITA NOS. 381-RJT-2013 & 54-RJT-2014 AYS 2008-09 & 2009-10 SHRI DHIRAJBHAI ISHWARLAL GOGIA - 4 - ENDS OF JUSTICE SHALL BE MET IF THE PROFIT OF THESE RECEIPTS OF RS.20,60,000/- IS ESTIMATED AT 25% THEREOF, WHICH COMES TO RS.5,15,00 0/-. AFTER ALLOWING THE CREDIT OF RS.1,00,000/- DISCLOSED IN THE DISCLOSURE MADE AT THE TIME OF SEARCH, WE HOLD THAT THE ADDITION HAS TO BE RESTRICTED TO R S.4,15,000/- AS AGAINST RS.19,60,000/- CONFIRMED BY THE CIT(A) AND THE GROU NDS OF APPEAL OF THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. ITA NO. 54/RJT/2014 : AY 2009-10 6. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THE COMMISSIONER OF INCOME TAX ERRED IN CONFIRMI NG THE ADDITION OF RS.455370/- MADE UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. THE ADDITION IS NOT JUSTIFIED. 2. WITHOUT PREJUDICE TO GROUND NO.1, THE ADDITION I S COVERED BY THE DISCLOSURE MADE IN THE CASE OF DHIRAJ GOGIA. THE AD DITION IS THEREFORE A DOUBLE ADDITION. 3. WITHOUT PREJUDICE TO GROUND NO.1 AND 2 THE ADDIT ION DOES NOT ARISE ON ACCOUNT OF PROCEEDINGS UNDER SECTION 132 OF THE ACT . 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE CASH CREDITS WERE LESS THAN RS.20,000/- EACH AND COMPLETE NAME AND AD DRESS OF THE DEPOSITORS WERE FURNISHED TO THE ASSESSING OFFICER WITH CONFIR MATION OF THE CREDITORS AND THEREFORE, THE ASSESSEE HAS DISCHARGED HIS ONUS OF PROVING THE GENUINENESS OF THE CREDITORS. HE SUBMITTED THAT THE ASSESSEE HAS S UPPORTING EVIDENCE IN THE FORM OF ELECTION CARD/DRIVING LICENSE/IDENTITY CARD OF THE BAR ASSOCIATION ETC. OF ALL THE CREDITORS. IN ONE OF THE CREDITORS CASE, N AMELY, SHRI DUBAL RAJA; HE IS WORKING IN LIC AS AN OFFICER AND HIS PAN NUMBER WAS GIVEN. ONE MS BHUT PANNABEN, SHE WAS PRACTICING AS AN ADVOCATE AND HER IDENTITY CARD OF BAR ASSOCIATION WAS FURNISHED. FURTHER HE SUBMITTED THA T THE DISCLOSURE OF RS.1 CRORE AT THE TIME OF SEARCH ALSO COVERS THE ADDITIO N MADE. 8. THE LD. DR HAS OPPOSED THE SUBMISSIONS OF THE LD . COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT THE CAPACITY OF THE CRE DITORS AND GENUINENESS OF THE TRANSACTIONS COULD NOT BE PROVED BY THE ASSESSE E. MERELY FILING THE ITA NOS. 381-RJT-2013 & 54-RJT-2014 AYS 2008-09 & 2009-10 SHRI DHIRAJBHAI ISHWARLAL GOGIA - 5 - COMPLETE ADDRESS DOES NOT ABSOLVE THE ASSESSEE FROM HIS ONUS OF PROVING THE GENUINENESS OF THE CREDITORS. HE RELIED UPON THE O RDER OF THE A.O. AND CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE ORDER OF THE LOWER AUTHORITIES AND COPIES OF VARIOUS DOCUMENTS PLACED BEFORE US. WE FIND THAT THE ASSESSEE HAS PROVED THE IDENTITY OF ALL THE CREDITO RS BEYOND DOUBT. THEIR COMPLETE ADDRESS WITH SUPPORTING EVIDENCE VIZ. ELEC TION CARD/DRIVING LICENSE/IDENTITY CARD OF BAR ASSOCIATION ETC., WAS FURNISHED BY THE ASSESSEE. ONE OF THE CREDITORS IS A LIC OFFICER AND HIS PAN N UMBER WAS PROVIDED. ONE CREDITOR WAS PRACTICING AS AN ADVOCATE AND HER IDEN TITY CARD OF BAR ASSOCIATION WAS FURNISHED. ALL THE CREDITORS HAVE CONFIRMED TH E TRANSACTIONS OF LOAN ADVANCED TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT PLACED ANY EVIDENCE ON RECORD TO CONTROVERT THE PRIMA-FACIE EVIDENCE FU RNISHED BY THE ASSESSEE. MERELY BECAUSE THE AMOUNTS OF LOAN WERE RECEIVED IN CASH, IS NOT DECISIVE OF THE ISSUE. THE ASSESSING OFFICER COULD HAVE MADE FURTH ER INQUIRY IN THIS MATTER BEFORE MAKING THE IMPUGNED ADDITION IN THIS CASE. I N THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED HI S ONUS U/S 68 OF THE ACT, WHICH THE DEPARTMENT COULD NOT CONTROVERT; AND THER EFORE, IT IS NOT A FIT CASE FOR ADDITION U/S 68 OF THE ACT, WHICH IS ACCORDINGLY DE LETED AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.381/RJT/2013 FOR AY 2008-09 IS PARTLY ALLOWED AND THE APPEAL OF THE ASS ESSEE IN ITA NO.54/RJT/2014 FOR AY 2009-10 IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (ANIL CHATURVEDI) (G.C. GUPTA) ACCOUNTANT MEMBER V ICE PRESIDENT )#* +),/ ORDER DATE 10.10.2014 /RAJKOT *BIJU T. ITA NOS. 381-RJT-2013 & 54-RJT-2014 AYS 2008-09 & 2009-10 SHRI DHIRAJBHAI ISHWARLAL GOGIA - 6 - / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI DHIRAJ ISHWARLAL GOGIA, C/O. M/S . NARENDRA GLASS WORKS, RAMNIK HOUSE, SHOP NO.3 & 4, JUBELEE CHOWK, RAJKOT 2. / RESPONDENT- THE D.C.I.T., CENTRAL CIRCLE-2,RAJKO T 3. ',1, % 2 / CONCERNED CIT/DIT 4. % 2- / CIT (A)-IV, RAJKOT 5. 678 , , / DR, ITAT, RAJKOT 6. 8; <= / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !'# / ITAT, RAJKOT