The Income Tax Officer, Jammu V. Sh. Suresh Kumar, Jammu

ITA 605/ASR/2013

• Counselvise Citation: 60520914 RSA 2013
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.605(ASR)/2013 ASSESSMENT YEAR:2009-10 PAN :ANZPK5641F INCOME TAX OFFICER, VS. SH. SURESH KUMAR WARD 2(3), JAMMU. C/O M/S. GREENLAND PALACE, EWS COLONY, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. MAHAVIR SINGH, DR RESPONDENT BY:SH.JOGINDER SINGH, CA DATE OF HEARING: 26/02/2014 DATE OF PRONOUNCEMENT:28/02/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU DATED 12.07.2013 RELATING TO ASSESSMENT YEAR 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.26,30,000/- ON ACCOUNT OF INCOME FROM THE BANQUET HALL. 2. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. ITA NO.605(ASR)/2013 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS OWNER OF A BANQUET HALL NAMELY GREEN LAND PALACE IN ROOP NAGAR, JAMMU AND ALSO ASSESSEE IS DERIVING INCOME FROM OPERATION OF A JCB MACHINE . THE AO MADE AN ADDITION OF RS.26,30,000/- ON ACCOUNT OF LESS GROSS RECEIPTS DECLARED IN RESPECT OF BANQUET HALL AND THE RELEVANT FINDINGS A T PAGES 2-3 OF AOS ORDER ARE REPRODUCED AS UNDER: IN RESPECT OF INCOME FROM BANQUET HALL, NAMES AND ADDRESSES OF THE PERSONS WHO HAD BOOKED THE HALL AND DETAILS OF PAYM ENTS WERE CALLED IN THE MEANTIME LOCAL ENQUIRIES WERE CONDUCTED BY T HE INSPECTOR OF THIS OFFICE IN RESPECT OF THE BANQUET HALL. IT WAS GATHERED THAT THE BOOKING AMOUNT BEING CHARGED BY THE ASSESSEE FOR TH E BANQUET HALL WAS HIGHER THAN WHAT WAS SHOWN. IN THE RETURN OF IN COME IN ORDER TO VERIFY THIS THE INSPECTOR WAS SENT AS A DECOY CUST OMER. ON HIS FIRST VISIT ON 09.08.2011, THE INSPECTOR ENQUIRED ABOUT T HE RATE OF BOOKING OF THE HALL WHICH WAS STATED TO HIM TO BE RS.90,000 /-. ON THIS DAY THE INSPECTOR HAD ONLY RS.400/- IN HIS POCKET WHICH HE PAID AND BOOKED THE HALL FOR 11.11.2011. HE WAS HOWEVER TOLD BY THE MANAGER OF THE HALL THAT A CONFIRMED BOOKING RECEIPT CAN BE ISSUED ONLY IF AN AMOUNT OF RS.20,000/- IS PAID. ACCORDINGLY, AFTER FEW DAYS ON 19.08.2011, THE INSPECTOR BOOKED THE HALL IN HIS OWN NAME FOR 11.11 .2011 AFTER GIVING A CHEQUE OF RS.20,000. A RECEIPT NO.37 DATED 19.08. 2011 WAS ISSUED TO HIM. THERE WAS NO MENTION OF THE TOTAL BOOKING A MOUNT ON THIS RECEIPT. THE INSPECTOR HOWEVER INSISTED THAT BALAN CE AMOUNT TO BE PAID SHOULD BE MENTIONED ON THE RECEIPT. ON HIS INS ISTENCE THE MANAGER MADE AN ENTRY IN A DIARY ON THE DATE OF 11. 11.2011 TO THIS EFFECT. IT WAS MENTIONED HERE THAT TOTAL AMOUNT WAS RS.90000/, ADVANCE GIVEN RS.20,000/- AND BALANCE AMOUNT RS.70, 000/-. DURING THE COURSE OF SUBSEQUENT ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ASKED TO PRODUCE THE RECEIPT BOOK AND THE BOOKING DIARY. THESE WERE PRODUCED BY THE ASSESSEE ON 15.11.2011. THE B OOKING DIARY AND THE RECEIPT BOOK PRODUCED BY THE ASSESSEE WERE IMPO UNDED UNDER THE PROVISIONS OF SEC. 131(3) OF THE ACT ON 15.11.2011. THE ASSESSEE WAS CONFRONTED WITH THE FACT THAT BOOKING AMOUNT IN THE YEAR 2011-02 WAS RS.90,000/- AND IN THIS CONTEXT HE WAS REQUESTED TO EXPLAIN THE ITA NO.605(ASR)/2013 3 AMOUNT OF BOOKING CHARGED DURING THE YEAR 2008-09 I .E. THE YEAR UNDER CONSIDERATION. HE WAS ALSO ASKED TO EXPLAIN W HY THE BOOKING AMOUNT SHOWS WAS UNDER STATED FOR THE YEAR UNDER CO NSIDERATION AS IS APPARENT FROM THE FACT THAT BOOKING AMOUNT SHOWN WA S RS.20,000/- IN MOST OF THE CASES AND EVEN LESS IN FEW CASES. VIDE LETTER DATED 25.11.2011 THE ASSESEE STATED AS UNDER: REGARDING BOOKING FOR 11.11.2011 MADE AGAINST CHE QUE OF RS.20,000/- THE BOOKING WAS NEITHER CONFIRMED NOR A NY FUNCTION SOLEMNIZED. THE CHEQUE RECEIVED WAS NOT PRESENTED WITH THE BANK DUE TO NON CONFIRMATION. CONSIDERING OF ABOVE FACTS TH ERE WAS NO CONCEALMENT OF ANY FACTS. 2.1. THE ABOVE DISCUSSION SHOWS THAT A VERY STRONG PIECE OF EVIDENCE WAS COLLECTED IN RESPECT OF THE UNDERSTATE MENT OF BOOKING AMOUNT BY THE ASSESSEE. THE HALL WAS BOOKED AFTER I SSUING A CHEQUE AS DEMANDED BY THE MANAGER OF THE PALACE. IT WAS AL SO MENTIONED IN THE BOOKING DIARY THAT THE BALANCE AMOUNT WAS RS.7 0,000/-. THIS CLEARLY SHOWS THE PREVALENT RATE OF THE HALL IN TH E YEAR 2011-12 WAS RS.90,000/- AND COULD BE LESSER IN THE EARLIER YEAR S AS PER THE TREND OF THE MARKET. BUT IN NO CASE IT CAN BE RS.20,000/- AS DECLARED BY THE ASSESSEE IN THE LEDGER ACCOUNT OF BOOKING FURNISHED BY HIM. THE ASSESSEES CONTENTION THAT THE BOOKING WAS NEITHER CONFIRMED NOR ANY FUNCTION WAS SOLEMNIZED IS NOT RELEVANT AS FAR AS T HE BOOKING IS CONCERNED. IT WAS NEVER THE INTENTION TO BOOK THE H ALL FOR SOLEMNIZING A FUNCTION, RATHER IT WAS ONLY TO VERIFY THE RATE C HARGED IN THE CURRENT YEAR. IF THE FUNCTION WERE TO BE HELD ON THE DATE F IXED, THE ASSESSEE WOULD HAVE ASKED FOR THE BALANCE AMOUNT AS WELL. TH IS CLEARLY ESTABLISHES THAT THE ASSESSEE HAS UNDERSTATED THE B OOKING AMOUNT IN THE YEAR 2011-12 WAS RS.90,000/-, THE BOOKING AMOUN T FOR THE YEAR 2008-09 IS ESTIMATED AT RS.60000/- FOR EACH FUNCTIO N. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN TO HAVE BOOKED 63 FUNCTIONS. BY APPLYING THE RATE OF RS.60,000/- FOR EACH FUNCTION THE BOOKING AMOUNT WORKS OUT TO RS.37,80,000/- AGAINST RS.11,50,000/- SHOWN BY THE ASSESSEE. THE ASSESSEE MAKES AN ADDIT ION OF RS.26,30,000/- TO THE GROSS RECEIPTS DECLARED IN RE SPECT OF THE BANQUET HALL. AS THE EXPENSES ON DAY TO DAY RUNNING AND MAI NTENANCE OF THE HALL HAVE ALREADY BEEN DEBITED IN THE P & L ACCOUNT , NO FURTHER EXPENDITURE IS ALLOWED. ITA NO.605(ASR)/2013 4 3. THE LD. CIT(A) DELETED THE ADDITION BY ACCEPTING THE EXPLANATION OF THE ASSESSEE. 4. THE LD. DR, MR. MAHAVIR SINGH, ARGUED THAT THE I NSPECTOR SENT BY THE ITO HAD BEEN THE AUTHORITY OF THE ITO SINCE THE IT O HAS PASSED HIS ORDER ON THE BASIS OF ENQUIRY MADE BY THE INSPECTOR, WHO ACT ED AS A DECOY CUSTOMER. NOTHING HAS BEEN BROUGHT ON RECORD BEFORE THE A.O. AS WELL AS BEFORE THE LD. CIT(A) TO REBUT THE FINDING OF THE AO EITHER BY THE ASSESSEE OR BY THE LD. CIT(A). THEREFORE, HE PRAYED TO REVERSE THE ORDER O F THE LD. CIT(A) AND CONFIRM THE ORDER OF THE A.O. 5. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, AT THE OUTSET RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMISSIONS M ADE BEFORE HIM. THE LD. COUNSEL FURTHER ARGUED THAT IT IS WRONG TO MENT ION BY THE AO THAT THE BOOKS OF ACCOUNT AND RECEIPTS BOOKS WERE NOT PRODUC ED BEFORE THE AO. THEY WERE VERY MUCH PRODUCED BEFORE THE AO AND THAT IS WHY THE AO HAS COMPLETED HIS ORDER ON THE BASIS OF BOOKS OF ACCOUN T. THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT AND IN THE FACTS AND CIRCUMSTANCES, NO ESTIMATION CAN BE MADE. NO COMPARABLE CASE HAS BEEN BROUGHT ON RECORD. WITH REGARD TO ESTIMATION OF INCOME @ RS.60,000/- PER OCCASION, HE RELIED UPON VARIOUS DECISIONS MENTIONED IN THE SUBMISSIONS BEFORE THE LD. CIT(A) AND PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A). ITA NO.605(ASR)/2013 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE INSPECTOR HAD CONDUCTED ENQUIRY AND WHO ACTED AS DECOY CUSTOMER. IT IS ALSO NOT IN DISP UTE THAT THE AO HAS MADE THE ORDER ON THE BASIS OF THE ENQUIRY MADE BY THE I NSPECTOR. AS REGARDS THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE THAT BOOKS OF ACCOUNT HAS NOT BEEN REJECTED, IN THIS REGARD THE BOOKS OF ACC OUNT ARE NOT REQUIRED TO BE REJECTED WHEN SPECIFIC FINDINGS ARE THERE AND THE I NSPECTOR HAD MADE SPECIFIC QUERY. IT IS ALSO TRUE THAT NOTHING HAS BEEN BROUGH T ON RECORD AS A COMPARABLE CASE BY THE AO WITH REGARD TO THE BOOKING OF BANQUE T HALL AT RS.60,000/- PER OCCASION. THEREFORE, ONE OCCASION I.E. BOOKING BY THE INSPECTOR AS A DECOY CUSTOMER CANNOT BE APPLIED TO THE WHOLE YEAR. NO CIRCUMSTANCES OF WHATSOEVER KIND HAS BEEN BROUGHT ON RECORD BY THE A.O. AND REVENUE IN THIS REGARD. THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKI NG APPLICATION OF BOOKING ON THE BASIS OF ENQUIRY BY THE INSPECTOR TO EACH AN D EVERY FUNCTION CONDUCTED BY THE ASSESSEE, UNLESS ANY DEFECT IN THE SAME HAS BEEN POINTED OUT. WHEN SPECIFIC ADDITIONS ARE MADE THEN SPECIFIC DEFECTS HAVE TO BE POINTED OUT, WHICH HAS NOT BEEN DONE IN THE PRESENT CASE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO IS NOT JUSTIFIED IN MAKING ANY ADDITION OF WHATSOEVER KIND AND WE FIND NO INFIRMITY IN THE ORD ER OF THE LD. CIT(A), WHO ITA NO.605(ASR)/2013 6 HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. T HUS, THE SOLE GROUND OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.605(ASR)/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SURESH KUMAR JAMMU 2. THE ITO WARD 2(3), JAMMU 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR