New Patiala Bus Service, Sirhind V. ITO, Mandi Gobindgarh

ITA 592/CHANDI/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8455 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Income from undisclosed sources; Additional evidence; Assessment record
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI H.L.KARWA, HONBLE VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 592/CHD/2013 ASSESSMENT YEAR: 2009-10 M/S NEW PATIALA BUS SERVICE, VS THE ITO, RAILWAY ROAD, SIRHIND, SIRHIND. HQ-MANDI GOBINDGARH. PAN: AADFN1541Q & ITA NO. 620/CHD/2013 ASSESSMENT YEAR: 2009-10 THE ITO, VS M/S NEW PATIALA BUS SERVICE, SIRHIND RAILWAY ROAD, HQ-MANDI GOBINDGARH. SIRHIND. PAN: AADFN1541Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TEJ MOHAN SINGH DEPARTMENT BY : SHRI S.K.MITTAL DATE OF HEARING : 09.02.2016 DATE OF PRONOUNCEMENT : 18.02.2016 O R D E R PER H.L.KARWA,V.P. THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PATIALA DATED 22.03.2013 RELATING TO ASSESSMENT YEAR 2009-1 0. 2. THE GROUND NO. 1 OF THE APPEAL RAISED BY THE ASSESSEE IN ITA NO. 592/CHD/2013 READS AS UNDER : 1. THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) HAS ERRED ON LAW AND ON THE FACTS OF 2 THE CASE AND IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 22,00,000/- ON ACCOUNT OF UNSECURED LOAN RAISED BY THE APPELLATE FIRM. 3. THE GROUND NOS. 1 TO 3 RAISED BY THE REVENUE IN ITA NO. 620/CHD/2013 READ AS UNDER : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15 LAC (OUT OF ADDITION OF RS. 37 LACS ) ON ACCOUNT OF LOAN RAISED FROM THE SH. VARINDER SINGH WITHOUT CONSIDERING THE FACT THAT SH. VARINDER SINGH HAD FILED A FALSE AFFIDAVIT DURING THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE THAT HE WAS NOT ASSESSED TO TAX AND THAT THE SOURCE OF PAYMENTS WAS FARMING WHEREAS, SH. VARINDER SINGH WAS ASSESSED TO TAX AND HAS SHOWN INCOME FROM HIS PROFESSION AS ADVOCATE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN ADMITTING FRESH EVIDENCE U/R 46 A(L) ON THE BASIS OF THE FACT THAT THE BANK ACCOUNTS NUMBER OF SH. VARINDER SINGH WAS MENTIONED IN THE AFFIDAVIT, EVEN THOUGH NO EVIDENCE TO PROVE THE CREDIT WORTHINESS OF SH. VARINDER SINGH OR THE GENUINENESS OF THE TRANSACTION WAS LED DURING THE ASSESSMENT PROCEEDINGS. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 15 LACS WITHOUT VERIFYING THE GENUINENESS OF THE TRANSACTION, ESPECIALLY WHEN SH. VARINDER SINGH HAD CLAIMED BEFORE HIS AO THAT THE CASH DEPOSITS IN HIS BANK ACCOUNT ON 18.10.2008 WAS IN RESPECT OF SALE OF PROPERTY OF HIS FATHER ON 07.11.2008 3 WITHOUT SUPPLYING ANY EVIDENCE TO SUPPORT HIS CONTENTION FROM THE BUYER OR HIS FATHER. 4. THE ASSESSEE IS IN APPEAL AGAINST THE ADDITION O F RS. 22 LACS CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF UNSECURED LOANS AND THE REVENUE IS IN APPEAL AGA INST THE RELIEF OF RS. 15 LACS ALLOWED TO THE ASSESSEE B Y THE LD. CIT(APPEALS). IN THE ASSESSMENT ORDER, ASSESSING O FFICER MADE THE ADDITION OF RS. 37 LACS ON ACCOUNT OF UNSE CURED LOANS RAISED BY THE ASSESSEE FROM TWO PERSONS. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN TH E BUSINESS OF PLYING OF MOTOR BUSES. FOR THE ASSESSM ENT YEAR 2009-10, THE ASSESSEE SUBMITTED HIS RETURN OF INCOME ON 26.09.2009 DECLARING TOTAL INCOME OF RS. 9,80,590/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 ( IN SHORT THE ACT ), WHEREI N CERTAIN ADDITIONS/DISALLOWANCES WERE MADE. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD RAISED UNSECURED LOANS AMOUNTING TO RS. 22 LACS AND RS. 15 LACS FROM SHRI JAGDEV SINGH, MANDI GOBIND GARH AND SHRI VARINDER SINGH, MANDI GOBIND GARH RESPECTIVELY . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AB OVE PERSONS SUBMITTED THEIR AFFIDAVITS. IN THEIR AFFID AVITS, BOTH THE PERSONS STATED THAT THEY ARE NOT ASSESSED TO INCOME TAX BEING AGRICULTURISTS AND NO COPY OF RETU RN AND COPY OF THEIR BANK STATEMENTS WERE FURNISHED. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HA D SUBMITTED FALSE/FAKE AFFIDAVITS AS SHRI VARINDER SI NGH IS 4 REGULAR INCOME TAX ASSESSEE AND IS AN ADVOCATE BY PROFESSION AND FILES INCOME TAX RETURN VIDE PAN NO. BPZPS1147F. THE ASSESSING OFFICER, THEREFORE, OBSE RVED THAT THOUGH THE BANK ENTRIES ROUTED THROUGH BANK BU T BEING NOT GENUINE, HE TREATED THE AMOUNT OF RS. 37 LACS AS ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES. 5. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE ADDITION OF RS. 22 LACS BEING A LOAN TAKEN FROM ONE SHRI JAGDEV SINGH. HOWEVER, THE LD. CIT(APPEALS) DELET ED THE ADDITION OF RS. 15 LACS TAKEN AS A LOAN FROM ONE SH RI VARINDER SINGH, OBSERVING AS UNDER : DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THAT THE LOAN RAISED FROM SH. BARINDER SINGH HAS ALREADY BEEN 'REPAID AND AN AFFIDAVIT TO THESE EFFECT WAS SUBMITTED. REGARDING, SH. JAGDEV SINGH, IT WAS SUBMITTED THAT THE FIRM IS IN THE PROCESS OF THE ARRANGING THE FUNDS TO REPAY THE LOANS. DURING THE COURSE OF PERUSAL OF ASSESSMENT RECORDS IN PRESENCE OF THE A.O., IT WAS SEEN THAT THE BANK ACCOUNT FROM WHICH THE LOAN WAS GIVEN BY SH. BARINDER SINGH WAS DULY MENTIONED IN THE RECORDS AND THAT THE A.O. HAS NOT SPECIFICALLY ASKED ABOUT THE DETAILS OF THIS BANK ACCOUNT. SUBSEQUENTLY, THE APPELLANT MOVED A APPLICATION U/S 46A TO OTHERWISE ADMIT THE BANK STATEMENT OF SH. BARINDER SINGH WHICH WAS NEVER ASKED BY THE A.O TO BE PRODUCED WHILE THE SAME WAS DULY MENTIONED DURING THE .COURSE OF ASSESSMENT PROCEEDINGS, AS CONTENDED BY THE APPELLANT IN HIS SUBMISSIONS. IN VIEW OF THIS, AS T HE FACTS ARE CORROBORATED FROM THE ASSESSMENT RECORDS, THE ADDITIONAL EVIDENCE WAS ACCEPTABLE UNDER RULE 5 46A(1)(D) OF THE IT RULE 1962 AND THE A.O. WAS ASKED TO SUBMIT HIS COMMENTS IN THIS REGARD. IN RESPONSE, THE A.O. VIDE LETTER NO. 1548 DATED 15.03.2013 SUBMITTED THAT 'IN THIS REGARD, IT IS SUBMITTED THAT AS PER DIRECTION OF YOUR GOODSELF, T HE ADDITIONAL EVIDENCE IN RESPECT OF SH. VARINDER SING H FROM WHOM LOAN OF RS.15 LACS HAS BEEN RAISED BY THE ASSESSEE IN THE A.Y.2009-10, HAS BEEN EXAMINED. DURING THE COURSE OF EXAMINATION, SH. VARINDER SINGH HAS INFORMED VIDE HIS LETTER DATED 15.03.2013 (COPY ENCLOSED) THAT HIS CASE FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2009-10 HAS ALSO BEEN FINALIZED UNDER SCRUTINY BY THE THEN INCOME TAX OFFICER, WARD SIRHIND, HQ. MANDIGARH VIDE ORDER U/S 143(3) DATED 27.12.2011. I HAVE PERUSED THE ASSESSMENT RECORDS OF SH. VARINDER SINGH FOR A.Y, 2009-10 AND IT HAS BEEN FOUND THAT THE SOURCE OF DEPOSITS INTO BANK ACCOUNT OF SH. VARINDER SINGH FROM WHICH LOAN HAS BEEN GIVEN BY HIM TO M/S NEW PATIALA BUS SERVICE, SIRHIND HAS ALSO BEEN EXAMINED BY THE THEN A.O. AND NO ADVERSE INFERENCE HAS BEEN DRAWN. IN VIEW OF THESE FACTS, THE CASE MAYBE DECIDED ACCORDINGLY.' IN VIEW OF THE CATEGORICAL SUBMISSION OF THE A.O., THERE IS NO DISPUTE REGARDING THE LOAN GIVEN FROM SH. VARINDER SINGH AND, THEREFORE, THE ADDITION TO THIS EFFECT IS HEREBY DELETED. HOWEVER, AS REGARDS THE LOAN RAISED FROM SH. JAGDEV SINGH, NO DETAILS WHATSOEVER WAS SUBMITTED EVEN DURING THE APPELLATE PROCEEDINGS. THEREFORE, THIS ADDITION IS HEREBY CONFIRMED. IN THE RESULT, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 6 6. WE HAVE HEARD SHRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE AND SHRI S.K.MITTAL AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. SH RI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THAT ADDITION OF RS. 22 LACS CONFIRMED BY THE LD. CIT(APPEALS) IS AGAINST THE FACTS OF THE CASE A ND SETTLED LEGAL POSITION. HE, THEREFORE, SUBMITTED T HAT THERE WAS NO JUSTIFICATION IN CONFIRMING THE ADDITI ON OF RS. 22 LACS. ON THE OTHER HAND, SHRI S.K.MITTAL, L D. DR RELIED ON THE ORDER OF THE LD. CIT(APPEALS) AND SUB MITTED THAT THE LD. CIT(APPEALS) WAS FULLY JUSTIFIED IN CO NFIRMING THE ADDITION OF RS. 22 LACS MADE ON ACCOUNT OF UNSE CURED LOANS RAISED BY THE ASSESSEE FIRM FROM SHRI JAGDEV SINGH, MANDI GOBIND GARH BECAUSE THE ASSESSEE HAS FAILED T O PROVE THE CAPACITY OF THE CREDITOR TO ADVANCE THE M ONEY AND ALSO THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE DID NOT FILE ANY EVIDENCE WHAT-SO-EVER DUR ING THE ASSESSMENT PROCEEDINGS AND ALSO DURING THE APPE LLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS). AS REGARD S THE DELETION OF ADDITION OF RS. 15 LACS ON ACCOUNT OF L OAN RAISED FROM SHRI VARINDER SINGH, IT WAS CONTENDED B Y THE LD. DR THAT NO EVIDENCE TO PROVE THE CAPACITY OF SH RI VARINDER SINGH TO ADVANCE THE MONEY AND THE GENUINENESS OF THE TRANSACTION WAS PRODUCED DURING THE ASSESSMENT PROCEEDINGS. HE, THEREFORE, SUBMITTED T HAT LD. CIT(APPEALS) HAS ERRED IN ADMITTING FRESH EVIDE NCE UNDER RULE 46A OF THE IT RULES, 1962. 7 7. ON A PERUSAL OF THE ORDER OF THE LD. CIT(APPEALS ), WE ARE OF THE VIEW THAT THE LD. CIT(APPEALS) WAS FU LLY JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCE WHIC H IS IN ACCORDANCE WITH RULE 46A OF THE IT RULES. IN OUR OPINION, IT IS NOT THE CASE OF THE REVENUE THAT LD. CIT(APPEALS) HAS ADMITTED THE ADDITIONAL EVIDENCE I N VIOLATION OF THE PROVISIONS OF RULE 46A. FURTHER M ORE, THE ASSESSING OFFICER HAS SUBMITTED A REMAND REPORT DATED 15.03.2013, WHEREIN HE HAS CATEGORICALLY STAT ED THAT THE SOURCE OF DEPOSITS INTO THE BANK ACCOUNT O F SHRI VARINDER SINGH FROM WHICH LOAN WAS GIVEN TO ASSESSE E WAS ALSO EXAMINED BY THE THEN ASSESSING OFFICER AND NO ADVERSE INFERENCE HAS BEEN GIVEN. IN VIEW OF THE R EMAND REPORT SUBMITTED BY THE ASSESSING OFFICER, WE ARE O F THE CONSIDERED OPINION THAT THE LD. CIT(APPEALS) HAS CO RRECTLY DELETED THE ADDITION OF RS. 15 LACS. THE FINDINGS OF THE LD. CIT(APPEALS) ARE BASED ON CORRECT APPRECIATION OF THE FACTS AND THE EVIDENCE BROUGHT ON RECORD BY THE ASS ESSEE. 7(I) AS REGARDS LOAN OF RS. 22 LACS RAISED FROM SHR I JAGDEV SINGH, WE OBSERVE HERE THAT NO EVIDENCE IS BROUGHT ON RECORD BY THE ASSESSEE TO PROVE THE IDEN TITY OF THE CREDITOR, CAPACITY OF THE CREDITOR TO ADVANCE T HE MONEY AND THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON IT UNDER SECTION 68 OF THE ACT. ACCORDINGLY, WE DISMI SS GROUND NO. 1 OF THE ASSESSEE'S APPEAL AND GROUND NO S. 1 TO 3 OF THE REVENUES APPEAL. 8 8. THE GROUND NO. 2 OF THE ASSESSEE'S APPEAL IS AS UNDER : THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) HAS ERRED ON LAW AND ON THE FACTS OF THE CASE AND IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS. 2,00,000/- ON ACCOUNT OF ADHOC DISALLOWANCE OF EXPENSES. 9. THE GROUND NO. 4 OF THE REVENUES APPEAL READS A S UNDER : IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(APPEALS) HAS ERRED IN ALLOWING THE RELIEF OF RS. 30,89,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES AS THE ASSESSEE FAILED TO PRODUCE THE SUPPORTING VOUCHER OF EXPENSES AND THE DETAILS OF TICKETS ISSUED DAILY TO THE BUS CONDUCTOR AND THE EXPENSES CLAIMED BY THE ASSESSEE WERE ON THE HIGHER SIDE. 10. WHILE FRAMING THE ASSESSMENT, ASSESSING OFFICER MADE THE ADDITION OF RS. 32,89,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES. ON APPEAL, THE LD. CIT(APPEALS) ALLOWED A RELIEF OF RS. 30,89,000/- AN D CONFIRMED THE DISALLOWANCE OF RS. 2 LACS. NOW, THE REVENUE IS IN APPEAL AGAINST THE ORDER OF LD. CIT(A PPEALS) IN ALLOWING THE RELIEF OF RS. 30,89,000/- AND THE A SSESSEE IS IN APPEAL AGAINST THE ORDER OF LD. CIT(APPEALS) IN CONFIRMING THE DISALLOWANCE OF RS. 2 LACS. 11. THE FACTS RELATING TO ABOVE ISSUE ARE THAT THE ASSESSEE WAS RUNNING 14 BUSES DURING ASSESSMENT YEA R 9 2009-10. THE ASSESSEE COULD NOT PRODUCE THE DETAIL S OF TICKETS BEFORE THE ASSESSING OFFICER. THE ASSESSIN G OFFICER FURTHER NOTED THAT MOST OF THE EXPENSES WER E MADE IN CASH, PARTICULARLY THAT OF DIESEL EXPENSES. IN THAT VIEW OF THE MATTER, THE ASSESSING OFFICER ALLO WED ONLY 70% OF EXPENSES AND MADE THE ADDITION OF RS. 32,89,000/-. ON APPEAL, THE LD. CIT(APPEALS) RESTR ICTED THE DISALLOWANCE TO RS. 2 LACS FOR THE REASONS STAT ED IN PARA 6.2 OF THE IMPUGNED ORDER. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT I S EVIDENT FROM THE RECORDS THAT THE TOTAL RECEIPTS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION FROM PLYI NG OF BUSES IS RS. 2,74,09,548/-. THE ASSESSING OFFICER CALCULATED THE PERCENTAGE OF TOTAL EXPENSES TO THE TOTAL RECEIPTS AT 82%. ACCORDING TO THE ASSESSING OFFICE R, THE EXPENSES CLAIMED BY THE ASSESSEE WERE ON HIGHER SID E. HE, THEREFORE, REDUCED THE EXPENSES TO 70%. IT IS ALSO APPARENT FROM THE RECORDS THAT FOR ASSESSMENT YEAR 2005-06, THE ASSESSING OFFICER HIMSELF HAS DISALLOW ED RS. 1 LAC OUT OF EXPENSES OF RS. 1,52,20,609/- CLAI MED BY THE ASSESSEE. IN THIS CASE, THE ASSESSING OFFICER MADE ADDITION MERELY ON THE GROUND THAT IN HIS OPINION T HE EXPENSES CLAIMED BY THE ASSESSEE ARE ON HIGHER SIDE . IT IS RELEVANT TO OBSERVE HERE THAT THE DISALLOWANCE W AS MADE BY THE ASSESSING OFFICER PURELY ON ADHOC BASIS WITHOUT POINTING OUT ANY DISCREPANCY IN THE BOOKS O F ACCOUNT OF THE ASSESSEE. 10 13. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE THINK IT PROPER TO DISMISS GRO UND NO. 2 OF THE ASSESSEE'S APPEAL AND GROUND NO. 4 OF THE REVENUES APPEAL, BECAUSE THESE GROUNDS OF APPEAL A RE DEVOID OF ANY MERITS. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WE LL AS THAT OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEBRUARY, 2016. SD/- SD/- (RANO JAIN) (H. L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 18 TH FEBRUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD