Shri. Subhash Gokuldas Mohota, Buldhana V. Income Tax Officer,Khamgaon, Khamgaon

ITA 59/NAG/2010

• Counselvise Citation: 5923914 RSA 2010
• Duration Of Justice: 3 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 23-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

- -- - IN THE INCOME TAX APPELLATE TRIBUNAL-E-BENCH, NAGPU R ( ! '#$ $ % '$ / THROUGH VIDEO CONFERENCE AT MUMBAI) '& ' '& ' '& ' '& ' ( (( (. .. . . .. . , ,, ,%+ %+ %+ %+ ' '' ' ,$-. ,$-. ,$-. ,$-., ,, ,$ $$ $. .. .' '' '. . . . BEFORE S/SH.H.L.KARWA,PRESIDENT AND RAJENDRA,ACCOUNTANT MEMBER ' ./ ITA NO.59/NAG/2010 & & & & /& /& /& /& / ASSESSMENT YEAR 2004-05 SUBHASH GOKULDAS MOHOTA NEAR DYANPEETH HIGH SCHOOL, NANDURA, DISTRICT-BULDHANA. PAN: ABPPM1633H VS. ITO KHAMGAON ( 01 / // / APPELLANT ) ( 3401 / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : NARENDRA KANE ' 56 / DATE OF HEARING : 20 - 01 -201 4 7!/ 56 /DATE OF PRONOUNCEMENT : 24- 01 -201 4 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) )$ $$ $ -5&5 -5&5 -5&5 -5&5 ?$@ ?$@ ?$@ ?$@ ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM - -- -$ '?A $ '?A $ '?A $ '?A, ,, ,,$-. $ ' ,$-. $ ' ,$-. $ ' ,$-. $ ' : CHALLENGING THE ORDER DATED 10.02.2010 OF THE CIT(A )-I,NAGPUR,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. LEARNED CIT(A)ERRED IN CONFIRMING THE ADDITION OF RS.1,03,260/-( OUT OF RS.1,58,860/-)AS UNEXPLAINED CREDIT. 2. LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 12,000 /-.OUT OF MOTOR CYCLE EXPENSES AS FOR PERSONAL USE NOT RELATING TO BUSINESS. 3. ASSESSEE CRAVES LEAVE TO URGE ADDITIONAL GROUNDS AT THE TIME OF HEARING AS MAY BE NECESSARY. 2. ASSESSEE AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 01.11.2004 DECLARING TOTAL INCOME AT RS. 17,89,206/-.ASSESSING OFFICER(AO) FINALISED THE ASS ESSMENT ON 28.12.2006 U/S. 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 20,09,390/-.ORIGINALLY THE APPEAL WAS FIXED FOR HEARING ON 28.04.2011 BUT ASSESSEE DID NOT APPEAR.T HEREFORE, SAME WAS DISMISSED BY THE TRIBUNAL (ITA NO.59/NAG/2011) DATED 28.04.2011.ASSESSEE FILE D AN APPLICATION FOR RECALLING THE ORDER PASSED BY THE ITAT AND MATTER WAS RESTORED BACK BY ORDER DATED 20.03.2013.DURING THE COURSE OF HEARING BEFORE US,NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR WAS ANY APPLICATION FOR ADJOURNING THE MATTER WAS FILED.WE ARE DECIDING THE APPEAL ON THE BASIS OF THE AVAILABLE MATERIAL. 3. FIRST GROUND OF APPEAL IS ABOUT ADDITION OF RS.1,58 ,180/- MADE BY THE AO ON ACCOUNT OR NON PRODUCTION OF TRADE CREDITORS AND TREATING THE SAME AS INGENUINE LIABILITY AND SUPPRESSION OF PROFIT. FROM VERIFICATION OF THE BOOKS OF ACCOUNT OF THE AS SESSEE, O NOTICED THAT THE ASSESSEE HAD SHOWN SUNDRY CREDITORS OF RS.1,18,44,654/- WHICH RELATED TO PURCHASE OF GOODS AND EXPENSES.HE MADE INQUIRY THROUGH AN INSPECTOR IN THAT REGARD.HE DIRE CTED THE ASSESSEE TO PRODUCE 11 CREDITORS FOR VERIFICATION,BUT THE ASSESSEE PRODUCED ONLY TWO OF THE CREDITORS FOR VERIFICATION.BEFORE THE AO THE ASSESSEE STATED THAT THE PERSONS HAD LEFT THE VILLA GE AFTER GETTING THE AMOUNT,THAT THE CREDITORS WERE STANDING AT THE END OF THE YEAR DUE TO REASON THAT THE CHEQUES RECEIVED AMOUNTING TO RS. 1,48,80,960/- WERE IN HAND,THAT THE ASSESSEE HAD RA ISED SUNDRY CREDITORS TO THE TUNE OF RS. 1,48, 2 ITA NO. 59/NAG/2010 SUBHASH GOKULDAS MOHOTA 44,654/- AT THE END OF THE FINANCIAL YEAR 2003-04,T HAT OUT OF SAID CREDITORS SUNDRY CREDITORS AGAINST GOODS AMOUNTED TO RS.42,87,578/-WHEREAS CREDITORS O F RS.75,57,076/- PERTAINED TO EXPENSES,THAT SUNDRY CREDITORS WERE MOSTLY REPAID IN THE MONTH OF APRIL AND MAY, 2004 WHEN THE CHEQUES IN HAND TO THE TUNE OF RS.1,48,80,958/- WERE CLEARED I N THE BANK ACCOUNT.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE,AO OBSERVED THAT THE FO LLOWING NINE CREDITORS WERE NOT PRODUCED BY THE ASSESSEE: 1. ABDUL MAJID. RS. 19,700/- 2. BABURAO BHAURAO RS. 19,100/- 3, DEVIDAS NAMDEO SATO RS. 16,800/- 4. GAJANAN HAN WAGH. RS. 19,390/- 5. NAMDEO NARE RS, 15,850/- 6. NITIN DHONDU KUYATE. RS. 16,680/- 7.TOTARAM DANGE RS. 17,880/- 8.SAHEBRAO NIMAJI BHALERAO RS. 18,690/- 9.VIJAY SAMPAT JADHAO RS. 14,770/- RS. 1,58,860/- AO TREATED THE AFORESAID AMOUNTS OF NINE CREDITORS AS NON-GENUINE LIABILITY AND HELD THAT IT WAS NOTHING BUT THE SUPPRESSION OF PROFITS OF THE ASSES SEE WHICH HAD BEEN SHOWN IN GUISE OF OUTSTANDING CREDITORS.AS A RESULT,HE ADDED THE AFOR ESAID AMOUNT OF RS. 1,58,860/- TO THE TOTAL INCOME OF THE ASSESSEE. 3.1. AGGRIEVED BY THE ADDITION,THE ASSESSEE PREFERRED A N APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE,FAA CALLED FOR A REPORT FROM THE AO.AO SUBMITTED THE REMAND REPORT,DATED 02.12.2 009,IN WHICH HE REITERATED THE FACTS AND FINDINGS RECORDED BY HIM IN THE ASSESSMENT ORDER.FA A HELD THAT THE ASSESSEE WAS ENJOYING CREDIT FACILITY FROM SUNDRY CREDITORS AND IT WAS A REGULAR TRADE PRACTICE OF THE ASSESSEE. IN THE ASSESSMENT YEAR 2003-04,SIMILAR ADDITION OF RS.1,31,000/- WAS MADE IN THE ASSESSMENT ORDER BY THE AO TREATING 7 CREDITORS AS NON GENUINE BECAUSE THEY WE RE NOT PRODUCED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS,THAT THE ADDITION MADE BY THE AO WAS CONFIRMED BY THE FAA.BEFORE HIM A CHART OF THE PAYMENT TO THE SUNDRY CREDITORS IN THE SUBSEQUENT FINANCIAL YEAR WAS PRODUCED BY THE ASSESSEE.HE VERIFIED THE CHART AND HELD THAT OUT OF THE 9 CREDITORS ONLY THREE PERSONS HAD BEEN PAID OFF DURING THE NEXT FINANCIAL YEAR.FINALLY,HE HELD THAT TRANSACTION AMOUNTING TO RS. 55,600/- WERE GENUINE,THAT THE REM AINING AMOUNT OF RS. 1,03,260/- RELATED TO 6 PERSONS WAS NOT GENUINE. 4. AS STATED EARLIER,NO ONE APPEARED BEFORE US,DURING THE COURSE OF HEARING,ON BEHALF OF THE ASSESSEE.DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA.WE FIND THAT FAA HAD CALLED FOR A REMAND REPORT FROM THE AO AFTER CO NSIDERING THE SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE,THAT IN THE ASS ESSMENT YEAR 2003-04 ADDITION OF RS. 1.31 LACS WAS MADE BY THE AO AS ASSESSEE COULD NOT PRODUCE 7 CREDITORS DURING THE ASSESSMENT PROCEED - INGS, THAT FAA HAD CONFIRMED THE SAID ORDER OF THE AO VIDE HER ORDER DATED 16.10.2007.WE FIND THAT FAA HAS ELABORATELY DISCUSSED THE ISSUE AND AS SUSTAINED THE ADDITION OF RS. 1.03 LACS ONLY OUT OF THE ADDITION OF RS. 1.58 LACS. AS THE ORDER OF THE FAA IS BASED ON THE FACTS AVAILABLE ON THE RECORD,THEREFORE, WE DO NOT WANT TO DISTURB THE FIN DINGS GIVEN BY HIM. GROUND NO.1 IS DECIDED AGAINST THE ASSESSEE. 5. GROUND NO.2 IS ABOUT ADDITION OF RS. 12,000/- ON AC COUNT OF MOTORCYCLE AND VEHICLE EXPENSES. DURING THE ASSESSMENT PROCEEDINGS AO HELD THAT THE ASSESSEE HAD HERO HONDA MOTOR CYCLE,JEEP, SCOOTER AND CAR,THAT EXPENSES OF FUELS WERE DEBITED TO THE FUELS EXPENSES AS WELL AS EXPENDITURE ON MAINTENANCE,THAT THE PERSONAL USE OF THESE VEHIC LES COULD NOT BE RULED OUT.IN THE APPELLATE PROCEEDINGS FAA HELD THAT THE DISALLOWANCE OF RS. 1 2,000/- MADE BY THE AO ON ACCOUNT OF 3 ITA NO. 59/NAG/2010 SUBHASH GOKULDAS MOHOTA PERSONAL USERS OF THE VEHICLES WAS REASONABLE AND D ID NOT CALL FOR ANY INTERFERENCE. 5.1. WE FIND THAT FAA HAD GIVEN A CATEGORICAL FINDING ON FACTS THAT THE ASSESSEE WAS USING HERO HONDA MOTORCYCLE, JEEP, SCOOTER AND CAR DURING THE YEAR UNDER APPEAL,THAT THE EXPENSES OF FUEL WERE DEBITED IN THE BOOKS OF ACCOUNTS.PERSONAL USE OF THE VEHICLES CANNOT BE RULED OUT. THEREFORE,WE ARE OF THE OPINION THAT DISALLOWANCE C ONFIRMED BY THE FAA WAS NOT UNJUST OR UNREA - SONABLE.CONFIRMING HIS ORDER,WE DECIDE GROUND NO.2 AGAINST THE ASSESSEE. AS A RESULT,APPEAL FILE D BY THE ASSESSEE STANDS DISMISSED. B 5C &B5 D ?E ,F ,5 G . ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2014. ?$@ 7!/ $ - 24 , 6 , 2014 ! . SD/- SD/- (H.L.KARWA/ ( (( (. .. . . .. . ) ( ,$-. ,$-. ,$-. ,$-. / RAJENDRA) PRESIDENT/ %+ $ $ $ $ '?A '?A '?A '?A /ACCOUNTANT MEMBER / MUMBAI, ? / DATE:24 .01.2014 SK ?$@ ?$@ ?$@ ?$@ 35 35 35 35 H$/5 H$/5 H$/5 H$/5 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 01 2. RESPONDENT / 3401 3. THE CONCERNED CIT(A)/ 'I J , 4. THE CONCERNED CIT / 'I J 5. DR ITAT,NAGPUR BENCH/ K 35 , . . - . - . 6. GUARD FILE/ & L . '45 35 //TRUE COPY// ?$@ ' / BY ORDER, M / ' , DY./ASST. REGISTRAR , /ITAT, MUMBAI.