Hemant Ambalal Patel, Ahmedabad V. ACIT, Circle-3(2), Ahmedabad

ITA 551/AHD/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9761 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 08-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K GOYAL
• Assessee Lawyers: VARISH ISANI
• Keywords: Depreciation; TDS
• Section: 143(3); 201; 143(2); 43; 13; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER HEMANT AMBALAL PATEL, 135, SHIVSHAKTI ESTATE, OPP. KASHIRAM T EXTILE MILL, NAROL, AHMEDABAD PAN: ABCPP2230Q (APPELLANT) VS THE ACIT , CIRCLE - 3(2) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI N.K. GOYAL , SR. D . R. ASSESSEE BY: SHRI VARISH ISANI , A.R. DATE OF HEARING : 10 - 12 - 2 019 DATE OF PRONOUNCEMENT : 17 - 12 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A) - 7, AHMEDABAD DATED 17 - 01 - 2 018 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS MAINLY CONTESTED THREE GROUNDS OF APPEAL I. E. CONFIRMING THE ADDITION ON SALE OF COMMISSION EXPENSES AMOUNTING TO RS. 12 , 66 , 43 1 / - , CONFIRMING THE ADDITION OF RS. 2 LACS U/S. 68 OF THE ACT AND I T A NO . 551 / A HD/20 18 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 551 /AHD/20 18 A.Y. 2012 - 13 PAGE NO SHRI HEMANT AMBALAL PATEL VS. ACIT 2 CONFIRMING THE ADDITION ON DEPRECIATION OF RS. 8 , 985/ - ON TV PURCHASE DURING THE YEAR. 3. THE FACT IN BRIE F IS THAT THE RETURN OF INCOME DECLARING INCOME OF RS. 17 , 54 , 516/ - WAS FILED ON 23 RD JAN, 2014. THE CASE WAS SELECTED FOR SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 3 RD SEP, 2014. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS FINALIZED AT RS. 4 5 , 76 , 550/ - AFTER MAKING THE VARIOU S DISALLOWANCES. THE DISALLOWANCE S CONTESTED IN THE APPEAL FILED BY THE ASSESSEE ARE ADJUDICATED AS FOLLOWS: - GROUND NO.1 ( DISALLOWANCE OF CLAIM OF COMMISSION AM OUNTING TO R S. 12 , 66 , 431/ - ) 4. DURING THE COURSE OF ASSESSM ENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED THE AFORESAID COMMISSION IN THE P & L A/C. O N QUERY, THE ASSESSEE HAS SUBMITTED THE LEDGER ACCOUNT OF SALE COMMISSION, C OPY OF TDS RETURN , COPY OF FORM 16A AND OTHE R RELATED DETAILS. T HE ASSESS ING OFFICER HAS DISALLOWED THE CLAIM OF COMMISSION EXPENSES ON THE GROUND THAT ASSESSEE HAS FAILED TO SUBSTANTIATED ITS CLAIM FOR COMMISSION EXPENSES . 5. DISSATISFIED WITH T H E DECISION OF ASSESSING OFFICER, THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE L D. CIT(A). T HE LD. CIT(A) HAS SUSTAINED THE ADDITION STATING THAT NO SUBMISSION S HAVE BEEN MADE BY THE ASSESSEE IN RESPECT OF THE SERVICES RENDERED EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS. 6. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD CAREFULLY. DURING THE CO URS E OF ASSESSMENT PROCEEDINGS I.T.A NO. 551 /AHD/20 18 A.Y. 2012 - 13 PAGE NO SHRI HEMANT AMBALAL PATEL VS. ACIT 3 AND APPELLATE PROCEEDINGS AS PER PAPER BOOK SUBMITTED BY THE ASSESSEE, THE ASSESSEE HAS SUBMITTED LEDGER ACCOUNT OF SALE COMMISSION EXPE NSES, THE COMMISSION AGENT WISE DETAIL OF AM OUNT OF SALE BILL NO . ALONG WITH PARTICULARS OF THE PU RCHASE PARTIES TO WHOM THE SALES WAS MADE THROUGH THE COMMISSION AGENTS . THE ASSE SSEE HAS ALSO FURNISHED THE COPIES OF LEDGER ACCOUNT S OF ALL THE PE RSONS TO WHOM THE COMMISSION PAID AND THE COPIES OF THE L EDGER ACCOUNT OF BUYERS TO WHOM THE SALES MADE THROUGH COMMISSION AGENTS. DURING THE YEAR THE ASSESSEE HAS MATERIALIZED SALE OF R S. 10,64,77,632 AS AGAINST SALE OF RS. 8,94 , 66,143/ - SHOWN IN THE PRECEDING YEAR. IN THE PRECEDING YEAR, THE A SSESSEE HAS PAID COMMISSION OF RS. 12,58,296/ - AND DURING THE YEAR UNDER CON SIDERATION THE ASSESSEE HAS PAID COMMISSION OF RS. 12,60,000/ - . THE ASSESSEE HAS ALSO GIVEN YEAR WISE BREAK UP OF PAYMENTS OF COMMISSION ALONG WITH AMOUNT OF SALE FROM F.Y. 20 10 - 1 1 TO 2011 - 2016. THE LD. COUNSEL HAS ALSO REPORTED THAT ASSESSEE HAS SUBMITTED THE ADDRESS, PAN CARD COPY, COPY OF IT RETURN OF AGENT, DETAIL OF WORK DONE BY THEM, DETAIL OF SALES INVOICES OF THE ORDER OBTAINED FROM ALL AGENTS AND PRO O F OF PAYMENT GIVEN TO THEM. CONSIDERING THE AFORESAID FACTS AN D CIRCUMSTANCES, WE OBSERVE THAT ASSESSEE HAS PROVIDED THE RELEVANT DETAIL AND INFORMATION ABOUT THE KINDS OF SERVICES RENDERED BY PERSONS/ AGENTS AND THE PARTIES FOR WHOM THEY HAVE RENDERED THE SERVICES. HOWEVER, THE ASSESSING OFFICER HAS NOT MADE ANY VERIFICATION TO CONTRADICT THE MATERIAL FACTS REPORTED BY THE ASSESSEE. IN VIEW OF THE ABOVE, WE CONSIDER THAT THE LD. CIT(A) IS NOT JUSTIFI ED IN SUSTAINING THE ADDITION ON REITERATING THE FACTS REPORTED BY THE ASSES SING OFFIC ER. THEREFORE , WE CONSIDER THAT THIS ADDITION IS NOT SUSTAINABLE. ACCORDINGLY, THIS APPEAL OF THE ASSESSEEE ON THIS ISSUE IS ALLOWED. I.T.A NO. 551 /AHD/20 18 A.Y. 2012 - 13 PAGE NO SHRI HEMANT AMBALAL PATEL VS. ACIT 4 GROUND NO. 2 ( ADDITION FOR R S. 2 LACS U/S. 68 OF THE ACT ) 7. DURING ASSESSMENT, THE ASSESSING OFFICER HAS N OTICED THAT ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 2 LACS OBTAINED FROM MANGUBEN RAMANLAL PATEL. DURING ASSESSMENT THE ASSESSEE HAS FAILED TO FURNISH PROPER CONFIRMATION WITH COMPLETE PARTICULAR AND THE ASSESSEE HAS FILED A CONFIRMATION ON PLAIN PAPER WI THOUT MENTIONING THE PAN NO. AND OTHER RELEVANT DETAIL. THE ASSESSING OFFICER HAS T REATED THE AMOUNT OF RS. 2 LACS AS UNEXPLAINED DEPOSIT STATING THAT ASSESSEE HAS NOT GIVEN BASIC INFORMATION SUCH AS PAN, SOURCE OF INCOME, COPY OF IT RETURN AND IDENTIFICA TION OF THE PERSON S WHO HAVE EXTENDED THE LOAN TO THE ASSESSEE. 8. THE ASSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION HOLDING THA T NO PROOF OF IDENTITY BY PAN NO. OR IT RETURN HAS BEEN FURNISHED TO PROVE T HE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTION. 9. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. IT IS NOTICED THAT ASSESSEE HAS MERELY FILED COPY OF BANK A/C OF NUTAN NAGRIK SAH A KARI BANK LTD. WHICH REFLECTS THAT THERE WAS CREDIT ENTRIES OF RS. 2 LACS IMMEDIATELY BEFORE ISSUING THE CHEQUE TO THE ASSESSEE AND TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESEE HAS FAILED TO FILE OTHER PRIMARY DOCUMENT LIKE INCOME TAX RETURN OF THE LEN DER AND THE BUSINESS AND OTHER ACTIVITY CARRIED OUT BY THE LENDER IN ORDER TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN VIEW OF THE ABOVE FACTS, WE OBSERVE THAT M E RE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON - GENUINE A GENUINE TRANSACTION AND IT IS FOR THE ASSESSEE TO PROVE I.T.A NO. 551 /AHD/20 18 A.Y. 2012 - 13 PAGE NO SHRI HEMANT AMBALAL PATEL VS. ACIT 5 THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IN THE LIGHT OF THE ABOVE FACTS AND PERUSAL OF THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE HAS NOT FURNISHED THE PRIMARY EVIDENCES TO PROVE THE IDENTITY, CREDITWORTHINESS AND THE GENUINENESS OF THIS TRANSACTION, THEREFORE, WE DO NOT FIND ANY INTERFERENCE IN THE DECISION OF LD. CIT(A). ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. GROUND NO. 3 (D ISALLOWANCE OF DEPRECIATION OF R S. 8985 ON TV ) 10. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE BILL AND VOUCHER, THE ASSESSING OFFICER HAS NOTICED THAT ONE LCD AMOUNTING TO RS. 5 9, 900 AS PER BILL WAS DELIVERED AT THE RESIDENCE OF THE ASSESSEE, THEREFORE, CONSIDERING THE PERSONAL EXPENDITURE THE CLAIM OF DEPRECIATION WAS DISALLOWED. THE ASSESSEE COULD NOT GET ANY RELIEF AT THE LEVEL OF CIT(A). 11. WE HAVE HEARD THE RIVAL CONTENTION ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD AND IT IS NOTICED THAT AS PER BILL DATED 9 TH AUGUST, 2012 ONE LCD TV WAS PURCHASED AND IT WAS DELIVERED AT THE RESIDENCE OF THE ASSESSEE. THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCES OF SHIFTING OF THE TV TO THE OFFICE AND ITS INSTALLATION AND FUNCTIONING AT OFFICE . THEREFORE, WE DO NOT FIND ANY ERROR IN THE DECISION OF LD. CIT(A). ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 12 - 201 9 SD/ - SD/ - ( MAH AVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 17 /12 /2019 I.T.A NO. 551 /AHD/20 18 A.Y. 2012 - 13 PAGE NO SHRI HEMANT AMBALAL PATEL VS. ACIT 6 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVEN UE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,