M/s. Mahesh Enterprises (R.F.), Ghaziabad V. ITO, Ghaziabad

ITA 5780/DEL/2012

• Counselvise Citation: 578020114 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: SHINKA NAGPAL S
• Keywords: Unexplained cash credit; Business income; Question of law
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 5780/DEL/2012 5780/DEL/2012 5780/DEL/2012 5780/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009 - -- - 10 1010 10 M/S MAHESH ENTERPRISES M/S MAHESH ENTERPRISES M/S MAHESH ENTERPRISES M/S MAHESH ENTERPRISES (R.F.), (R.F.), (R.F.), (R.F.), 39, NAYA GANJ, 39, NAYA GANJ, 39, NAYA GANJ, 39, NAYA GANJ, GHAZI GHAZI GHAZI GHAZIABAD. ABAD. ABAD. ABAD. PAN : AABFM4051E. PAN : AABFM4051E. PAN : AABFM4051E. PAN : AABFM4051E. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(4), 1(4), 1(4), 1(4), GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S. ANAND AND MS. SHINKA NAGPAL, ADVOCATES. RESPONDENT BY : SHRI P. DAM KANUNJNA, SR.DR. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A), GHAZIABAD DATED 7 TH AUGUST, 2012 FOR THE AY 2009-10. 2. SINCE THE GROUNDS OF APPEAL RAISED BY THE ASSESS EE WERE NOT CLEAR, THE ASSESSEE FILED THE REVISED GROUNDS OF AP PEAL. GROUND NOS.1 TO 4 OF REVISED GROUNDS OF APPEALS ARE ALL AGAINST THE ESTIMATION OF BUSINESS INCOME OF THE ASSESSEE AT `6,35,800/- BY T HE LEARNED CIT(A) AS AGAINST `4,47,895/- DECLARED BY THE ASSESSEE. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THE REJECTION OF BOOKS OF ACCOUNT AS W ELL AS THE ESTIMATE OF PROFIT BY THE ASSESSING OFFICER WAS NOT JUSTIFIE D AND THE CIT(A) WAS ALSO NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUN T AND ESTIMATING THE PROFIT, OF COURSE, ON A LESSER AMOUNT THAN THE ASSE SSING OFFICER. ITA-5780/DEL/2012 2 HOWEVER, DUE TO SMALLNESS OF THE DISPUTED ADDITIONS WHICH REMAIN AFTER THE ORDER OF LEARNED CIT(A), THE ASSESSEE DOE S NOT WANT TO PURSUE THESE GROUNDS OF APPEAL ANY FURTHER. SINCE THE LEA RNED COUNSEL FOR THE ASSESSEE HAS NOT PURSUED THE GROUNDS AGAINST THE ES TIMATION OF PROFIT BY THE CIT(A), THE ORDER OF LEARNED CIT(A) IN THIS REGARD IS UPHELD AND GROUND NOS.1 TO 4 OF THE ASSESSEES REVISED GROUNDS OF APPEAL ARE REJECTED. 4. GROUND NOS.5 TO 9 OF THE REVISED GROUNDS OF APPE AL ARE AGAINST THE ADDITION OF `17,50,000/- MADE BY THE ASSESSING OFFICER FOR UNEXPLAINED CREDIT. 5. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT DURING THE YEAR UNDER CONSIDERATION, T HE ASSESSEE WHICH IS A PARTNERSHIP FIRM HAD RECEIVED THE SUM OF `17,5 0,000/- FROM ITS TWO PARTNERS SHRI ASHISH GARG AND SHRI MANISH GARG. TH AT SHRI ASHISH GARG AND SHRI MANISH GARG BOTH ARE ASSESSED TO INCOME TA X SEPARATELY AND THEY ARE CARRYING ON THE BUSINESS IN THEIR INDIVIDU AL CAPACITY. THAT THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) DOUBTED THE CARRYING ON OF THE BUSINESS BY THE PARTNERS ON THE GROUND THAT THE PARTNERS FILED THE RETURN IN FORM NO.3 WHICH IS NOT FOR BUSINESS INCOM E. HE STATED THAT IF THE PARTNERS HAVE FILED THE RETURN IN A WRONG FORM, THE ASSESSEE, WHICH IS A PARTNERSHIP FIRM, CANNOT BE HELD RESPONSIBLE F OR THE SAME. HE STATED THAT THE PARTNERS ARE ASSESSED TO INCOME TAX AND THEREFORE, THE SOURCE OF THE MONEY GIVEN BY THEM TO THE FIRM CAN B E EXAMINED IN THEIR CASE. IN SUPPORT OF THIS CONTENTION, HE RELI ED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT, ORISSA VS. O RISSA CORPORATION P.LTD. [1986] 159 ITR 78. ITA-5780/DEL/2012 3 6. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF AUTHORITIES BELOW. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. IN THE CASE OF ORISSA CORPORATION P.LTD. (SUPRA), THEIR LORDSHIPS HELD AS UNDER:- THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NA MES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WE RE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUI NG NOTICES UNDER SECTION 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO EFFORT MADE TO PURSUE T HE SO- CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE P REMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE RES PONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT C OULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSIO N WAS BASED ON SOME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH AROSE. THE HIGH COURT WAS RIGHT IN REFUSING TO STATE A CASE. 8. THE FACTS OF THE ASSESSEES CASE ARE MUCH BETTER THAN THE FACTS OF THE CASE BEFORE THE HONBLE APEX COURT. IN THE SAID CASE, THE ASSESSEE HAD GIVEN THE INCOME TAX NUMBER OF THE CRE DITORS UPON WHOM THE NOTICE COULD NOT BE SERVED BY THE ASSESSIN G OFFICER. DESPITE THESE FACTS, IT WAS HELD BY THE HONBLE APEX COURT THAT THE ASSESSEE HAS DULY DISCHARGED THE ONUS. IN THE CASE UNDER AP PEAL BEFORE US, THE CREDITORS ARE THE PARTNERS OF THE FIRM AND ARE ASSE SSED TO INCOME TAX IN THEIR INDIVIDUAL CAPACITY. MERELY BECAUSE THEY HAV E FILED THEIR RETURN OF INCOME IN A WRONG FORM OR THE BUSINESS TRANSACTION IN THEIR HANDS WAS IN CASH WOULD BE NO GROUND FOR MAKING THE ADDITION UNDER SECTION 68 IN ITA-5780/DEL/2012 4 THE CASE OF THE ASSESSEE. UNDISPUTEDLY, THE PARTNE RS ARE ASSESSED TO INCOME TAX AND THEREFORE, THE ABOVE DECISION OF HON BLE APEX COURT IN THE CASE OF ORISSA CORPORATION P.LTD. WOULD BE SQUA RELY APPLICABLE SO FAR AS THE ADDITION UNDER SECTION 68 OF THE ACT IN THE CASE OF THE ASSESSEE FIRM IS CONCERNED. ACCORDINGLY, WE DELETE THE ADDITION OF `17,50,000/-. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY, 2015. SD/- SD/- ( (( ( CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.01.2015 VK. COPY FORWARDED TO: - 1. APPELLANT : M/ M/M/ M/S MAHESH ENTERPRISES (R.F.), S MAHESH ENTERPRISES (R.F.), S MAHESH ENTERPRISES (R.F.), S MAHESH ENTERPRISES (R.F.), 39, NAYA GANJ, GHAZIABAD. 39, NAYA GANJ, GHAZIABAD. 39, NAYA GANJ, GHAZIABAD. 39, NAYA GANJ, GHAZIABAD. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(4), GHAZIABAD. 1(4), GHAZIABAD. 1(4), GHAZIABAD. 1(4), GHAZIABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR