Shri Ramesh Chandra Gupta, Biora District Rajgarh V. Assistant Commissioner of Income Tax 2 (1) Ujjain, Ujjain

ITA 595/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4585 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SB
• Assessment Year: 2014-2015
• Appeal Filed On: 31-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Assessee Lawyers: S N AGRAWAL
• Keywords: Unexplained investment; Business income
• Section: 44AD; 143(3); 133A

Judgement Text

[ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.594/IND/2017 ASSESSMENT YEAR: 2014-15 SHRI ASHUTOSH GUPTA PROP.M/S. MAA GAYATRI STONES 01, ANJALI LAL MANDIR ROAD BIAORA / VS. ACIT - 2(1) UJJAIN(MP) ( APPELLANT ) ( REVENUE ) P.A. NO. AFGPG8732A ITA NO.595/IND/2017 ASSESSMENT YEAR: 2014-15 SHRI RAMESH CHANDRA GUPTA WARD NO.13, JUNA BIORA DIST. RAJGARH / VS. ACIT - 2(1) UJJAIN(MP) (APPELLANT) (REVENUE ) P.A. NO. AKMPG5573E APPELLANT BY SHRI S.N. AGRAWAL, A.R. RESPONDENT BY SHRI V.J. BORICHA, SR. D.R. DATE OF HEARING: 22.01.2019 DATE OF PRONOUNCEMENT: 11.02.2019 [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 2 / O R D E R PER KUL BHARAT, J.M: THESE APPEALS BY TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST ORDERS OF THE CIT(A), UJJAIN DATED 5.5.2017 FOR THE ASSESSMENT YEAR 2014-15. WE HAVE HEARD THE APPEALS TOGETHER AND DISPOSE OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. FIRST WE TAKE UP APP EAL FILED INI ITA NO.594/IND/2017 FOR THE A.Y. 2014-15. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN MAINTAINING THE ADDITION OF RS.21,2 45/- AS MADE BY THE ASSESSING OFFICER OUT OF LABOUR EXPENSES WITHOU T PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION M ADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN MAINTAINING THE ADDITION OF RS.1,14,540/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOW HOUSEHOLD WITHD RAWAL WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUB MISSION MADE BEFORE HIM. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN NOT REDUCING THE TOTAL INCOME OF THE ASSES SEE BY THE AMOUNT OF EXCESS STOCK AS FOUND AND DECLARED DURING THE CO URSE OF SURVEY OF RS.15,00,580/- WITHOUT PROPERLY APPRECIATING THE FA CTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. 4. THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER OR D ELETE ANY GROUND OF APPEAL ON OR BEFORE THE DATE OF HEARING. [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 3 2. BRIEF FACTS GIVING RISE TO THE PRESENT APPEAL ARE TH AT A SURVEY ACTION WAS CARRIED OUT ON 18.2.2016. THE CASE W AS SELECTED FOR SCRUTINY AND THE ASSESSMENT U/S 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 20.12.2016. WHILE FRAMING THE ASSESSMENT, THE A.O. MADE ADDITION ON ACCOUNT OF DISPROPORTIONATE CLAIM OF EXPENSES OF RS.21,245/- AND ADDITIONS MADE ON ACCOUNT OF LOW HOUSEHOLD EXPENSES O F RS.1,14,540/-. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. 3. GROUND NO.1 IS AGAINST SUSTAINING ADDITION OF RS.21,245/-. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKI NG THE ADDITION AND SUSTAINING THE SAME. IT WAS STATED BEFORE L D. CIT(A) THAT THE ASSESSEE HAD FILED RETURN OF INCOME AS PER SECTION 44AD OF THE ACT ON THE BASIS OF PERCENTAGE OF NET [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 4 PROFIT. THEREFORE, THE A.O. OUGHT NOT TO HAVE MADE DISALLOWANCE OF THE EXPENSES. 4. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED ORDER OF THE A.O. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE A.O. HAS M ADE ADDITION BY ESTIMATING THE EXPENSES. THE A.O. HAS NOT GIVEN ANY REASON TO DISALLOW THE CLAIM OF THE ASSESSEE MERELY STATING THAT THESE ARE EXCESSIVE, IN OUR VIEW I S NOT SUFFICIENT. THERE HAS TO BE SOME REASON FOR TREATING THE EXPENSES AS DISPROPORTIONATE OR EXCESSIVE AS WAGES ARE NEVER REMAINED CONSTANT. THEREFORE, WE DIRECT THE A. O. TO DELETE THIS ADDITION. GROUND NO.1 OF THE ASSESSEE IS ALLOWED. [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 5 6. GROUND NO.2 IS AGAINST ADDITION MADE ON ACCOUNT OF LOW HOUSE WITHDRAWAL. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS DULY EXPLAINED THE EXPENSES. IT IS STATED THAT TOTAL LO HOUSE WITHDRAWAL IS RS.1,88,679/- BUT NOT RS.1,25,461/- AS STATED BY THE A.O. HE THEREFORE, SUBMITTED THAT THE ORDER OF THE A.O. I S ERRONEOUS AS HE HAS NOT APPRECIATED THE FACTS CORRECTLY. 7. ON THE CONTRARY, LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND SUBMITTED THAT THE WITHDRAWALS ARE NOT COMMENSURATE WITH THE EXPENSES INCURRED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE REVENUE H AS NOT CONTROVERTED THE FACT THAT THE A.O. HAS NOT TAKEN A LOWE R WITHDRAWAL AND HAS BEEN MADE ADDITION PURELY ON ESTIMATION BASIS. NO REASONING IS GIVEN AS TO WHY THI S [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 6 AMOUNT IS EXCESSIVE. WE THEREFORE, DIRECT THE A.O. TO DELETE THIS ADDITION. 9. GROUND NO.3 IS AGAINST NOT REDUCING THE TOTAL INCOM E OF THE ASSESSEE BY THE AMOUNT OF EXCESSIVE STOCK AS FO UND AND DECLARED DURING THE COURSE OF SURVEY. LD. COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. CIT(A). LD. CIT(A) HAS DECIDED THE ISSUE BY OBS ERVING AS UNDER: 4.4 GROUND NO.6:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE DECLARATION MADE AMOUN TING TO RS.15,00,580/- ON ACCOUNT OF EXCESS STOCK. A SURVE Y U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE APPELLA NT ON 18.2.2014. DURING THE COURSE OF SURVEY AN ADDITIONAL INCOME OF RS.15,00,580/- WAS DECLARED BY THE APPELLANT ON ACCOUNT OF EXCESS STOCK AND THE SAME HAS BEEN REFLECTED IN THE RETURN OF INCOME FIL ED BY THE APPELLANT ON 31.3.2015. THE A.O. HAS NOT MADE ANY ADDITION IN THIS REGARD. THEREFORE, THE APPEAL ON THIS GROUND IS DI SMISSED. 10. UNDISPUTEDLY, THE ASSESSEE HAS DECLARED AMOUNT IN H IS RETURN OF INCOME. THE ASSESSEE HIMSELF HAS DECLARED I TS AMOUNT AND HAS NOT EVEN REVISED HIS RETURN OF INCOME. THE ASSESSEE HAS ALSO NOT STATED AS TO HOW HE IS AGGRIEV ED [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 7 BY THE ORDER OF THE A.O. AS HE HAS NOT MADE ANY ADDITION IN THE ASSESSMENT ORDER. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. 12. NOW WE TAKE UP APPEAL NO.595/IND/2017 FOR THE A.Y . 2014-15. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN MAINTAINING THE ADDITION OF RS.2,16 ,121/- AS MADE BY THE ASSESSING OFFICER OUT OF SHOP EXPENSES WITHO UT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION M ADE BEFORE HIM. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) ERRED IN NOT REDUCING THE TOTAL INCOME OF THE ASSES SEE BY THE AMOUNT OF EXCESS STOCK AS FOUND AND DECLARED DURING THE CO URSE OF SURVEY OF RS.15,00,300/- WITHOUT PROPERLY APPRECIATING THE FA CTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. 3. THE APPELLANT RESERVE ITS RIGHT TO ADD, ALTER OR DE LETE ANY GROUND OF APPEAL ON OR BEFORE THE DATE OF FINAL HEARING. 13. BRIEF FACTS GIVING RISE TO THE PRESENT APPEAL ARE T HAT A SURVEY ACTION WAS CARRIED OUT ON 18.2.2016. THE CASE W AS SELECTED FOR SCRUTINY AND THE ASSESSMENT U/S 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT ) WAS [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 8 FRAMED VIDE ORDER DATED 20.12.2016. WHILE FRAMING THE ASSESSMENT, THE A.O. MADE ADDITION ON ACCOUNT OF DISPROPORTIONATE CLAIM OF EXPENSES OF RS.2,16,121/- O N ACCOUNT OF DISALLOWANCE OF SHOP EXPENSES AND ALSO MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT OF RS.6,86,000/-. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL. THEREBY, THE LD . CIT(A) DELETED THE ADDITION OF RS.6,86,000/- AND REST OF ALL THE ADDITIONS WERE CONFIRMED. AGAINST THIS, THE ASSES SEE IS IN APPEAL BEFORE THIS TRIBUNAL. 14. GROUND NO.1 IS AGAINST SUSTAINING THE ADDITION OF RS.2,16,121/-. LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. 15. LD. D.R. OPPOSED THE SUBMISSIONS AND SUPPORTED T HE ORDER OF THE A.O. [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 9 16. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTION OF THE ASSE SSEE IS THAT IT HAD DECLARED BUSINESS INCOME AS PER THE PROVIS IONS OF SECTION 44AD OF THE ACT. THE A.O. WAS NOT JUSTIF IED IN MAKING FURTHER DISALLOWANCE. ON THE CONTRARY, LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. WE F IND THAT LD. CIT(A) HAS DECIDED THIS ISSUE BY OBSERVING AS UND ER: GROUND NOS.2&3: THROUGH THESE GROUNDS OF APPEAL TH E APPELLANT HAS CHALLENGED THE ADDITION OF RS.2,16,12 1/- OUT OF EXPENSES. A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES INCURRED BEFORE AND AFTER SURVEY. IT IS F OUND THAT THE APPELLANT HAS INFLATED THE EXPENSES DURING POST SUR VEY PERIOD IN ORDER TO REDUCE THE PROFIT. THE A.O. IS JUSTIFIED IN RESTRICTING THE EXCESS EXPENSES CLAIMED DURING THE POST SURVEY PERI OD. THEREFORE, THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.2,16, 121/- IS CONFIRMED. THEREFORE, THE APPEAL ON THESE GROUNDS IS DISMISS ED. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIND ING OF THE AUTHORITIES BELOW. THE A.O. HAS MADE DISALLOW ANCE PURELY ON THE BASIS OF ESTIMATION. NO REASON IS GIVEN AS TO WHY THE PRE-SURVEY AND POST-SURVEY ARE EXCESSIVE. [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 10 THEREFORE, WE CANNOT SUSTAIN THESE ADDITIONS AND THE A. O. IS DIRECTED TO DELETE THE SAME. 18. GROUND NO.2 IS AGAINST THE FAILURE OF THE LD. CIT( A) TO REDUCE TOTAL INCOME OF RS.15,00,300/-. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WR ITTEN SYNOPSIS. 19. LD. D.R. OPPOSED THE SUBMISSIONS AND RELIED ON T HE ORDERS OF THE LOWER AUTHORITIES. 20. UNDISPUTEDLY, THE ASSESSEE HAS DECLARED AMOUNT IN HIS RETURN OF INCOME. THE ASSESSEE HIMSELF HAS DECLAR ED ITS AMOUNT AND HAS NOT EVEN REVISED HIS RETURN OF INCOME. THE ASSESSEE HAS ALSO NOT STATED AS TO HOW HE IS AGGRIEV ED BY THE ORDER OF THE A.O. AS HE HAS NOT MADE ANY ADDITION IN THE ASSESSMENT ORDER. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. APPEAL OF THE ASSESSEE IS DISMISSED. [ITA NOS.594 & 595/IND/2017] [SHRI ASHUTOSH GUPTA & SHRI RAMESH CHANDRA GUPTA, BIAORA] 11 21. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEES ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11. 02.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 11/02/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE