Sh. Munshi Ram Sharma, New Delhi V. ACIT, New Delhi

ITA 619/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91212 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 04-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Assessee Lawyers: A K JAIN
• Keywords: Retrospective amendment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.619/DEL/2014 ASSESSMENT YEAR : 2002-03 MUNSHI RAM SHARMA, PROP., RASHTRIYA TRANSPORT CORP., 5810, GALI NO.8, BLOCK NO.4, DEV NAGAR, KAROL BAGH, NEW DELHI. PAN : AATPS4846D VS. ACIT, CIRCLE-33(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. JAIN, CA RESPONDENT BY: SHRI NEEHAR RANJAN PANDEY, ADDL.CIT DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 18.06.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 26.12.2013 IN RELATION TO THE ASSESSMENT YEAR 2002-03. 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF ADDITION OF RS.8,74,439/- MADE BY THE AO. ITA NO.619/DEL/2014 2 3. BRIEFLY STATED, THE FACTS ARE THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDER 143(3) ON 24.3.2005 IN WHICH TO TAL INCOME WAS DETERMINED AT RS.10,60,920/-. THE MAJOR ADDITION T O THE TOTAL INCOME WAS OF RS.8,74,439/- TOWARDS DIFFERENCE OF THE BALANCE IN THE BOOKS OF THE ASSESSEE AND M/S METRO TYRES LTD., FROM WHOM THE AS SESSEE WAS EARNING FREIGHT CHARGES. THE ASSESSEE WENT IN APPEAL AGAIN ST THE ORIGINAL ASSESSMENT ORDER AND THE TRIBUNAL RESTORED THE MATT ER TO THE CIT(A) FOR RECONSIDERATION. THE CIT(A) VIDE HIS ORDER DATED 1 5.11.2007 DELETED THIS ADDITION, AGAINST WHICH THE REVENUE APPROACHED THE TRIBUNAL. THE TRIBUNAL, VIDE ITS ORDER DATED 17.7.2009, IN SECOND ROUND, RESTORED THE MATTER TO THE FILE OF AO FOR DECIDING THIS ISSUE AF RESH AND DIRECTING THE ASSESSEE TO FILE RECONCILIATION STATEMENT DULY SUPP ORTED BY RELEVANT VOUCHERS, BANK STATEMENT AND DOCUMENTARY EVIDENCE E XPLAINING THE REASONS FOR THE DIFFERENCE. IN THE INSTANT THIRD ROUND OF PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE ACCOUNTING ENTRIES FOR ALL THE TRANSACTIONS WERE DULY REFLECTED IN THE BOOKS OF THE ASSESSEE FO R ASSESSMENT YEAR 2001- 02 AND 2002-03. THE DIFFERENCE OF RS.8,74,429/- WA S STATED TO BE NOT ON ACCOUNT OF ANY WRONG ACCOUNTING ENTRIES MADE IN THE SE YEARS, BUT, OF EARLIER PERIOD. IT WAS FURTHER STATED THAT THE ORIGINAL DI FFERENCE STOOD AT ITA NO.619/DEL/2014 3 RS.9,29,250/- AS ON 31.3.2000 WHICH STOOD REDUCED T O RS.8,74,429/- AS ON 31.3.2002. THE AO NOTICED FROM THE COPY OF ACCOUNT RECEIVED FROM M/S METRO TYRES THAT THEY PAID RS.35,37,337/-, WHEREAS THE ASSESSEE HAD SHOWN TO HAVE RECEIVED ONLY A SUM OF RS.26,62,908/-. IN THE ABSENCE OF THE ASSESSEE FURNISHING ANY SATISFACTORY EXPLANATION, T HE AO MADE AN ADDITION TO THE TUNE OF RS.8.74 LAC. THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT HIS ACCOUNTANT MADE A WRONG ENTRY AND THE AMOU NT OF RS.8,74,439/- WAS ACTUALLY INTRODUCED AS CAPITAL IN CASH WHICH WA S RECEIVED BY HIM ON FAMILY SETTLEMENT IN THE PERIOD RELEVANT TO ASSESSM ENT YEAR 2000-01, BUT, THE ACCOUNTANT WRONGLY CREDITED THE ACCOUNT OF M/S METRO TYRES INSTEAD OF THE CAPITAL ACCOUNT OF THE ASSESSEE. THE ASSESSEE DID NOT DISPUTE ABOUT THE CLOSING BALANCE OF RS.35.37 LAC WHICH WAS RECEIVABL E FROM THIS PARTY. THE LD. CIT(A) UPHELD THE VIEW TAKEN BY THE AO. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND HAVING PE RUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT IT IS THE THIRD ROUND OF THE PROCEEDINGS BEFORE THE TRIBUNAL. ADMITTEDLY, THERE IS A DIFFERENCE OF RS.8.74 LAC. WHEREAS THE ASSESSEE HAD SHOWN TO HAV E RECEIVED A SUM OF RS.26.62 LAC FROM M/S METRO TYRES LTD., ON THE OTHE R HAND, THIS COMPANY IS ITA NO.619/DEL/2014 4 CONFIRMING TO HAVE PAID RS.37.37 LAC TO THE ASSESSE E TOWARDS FREIGHT. DESPITE THE TRIBUNAL ALLOWING SUFFICIENT OPPORTUNIT Y, THE ASSESSEE MISERABLY FAILED TO PROVE HIS CASE BEFORE THE AUTHO RITIES. IT WAS CONTENDED THAT THE SAID SUM OF RS.8.74 LAC WAS ACTUALLY HIS C APITAL CONTRIBUTION WHICH WAS INADVERTENTLY TAKEN TO THE ACCOUNT OF M/S METRO TYRES BY THE ACCOUNTANT INSTEAD OF THE CAPITAL ACCOUNT. ON BEIN G CALLED UPON BY ME TO DEMONSTRATE THIS MISTAKE WITH REFERENCE TO THE COPY OF ACCOUNT OF M/S METRO TYRES, THE LD. AR FAILED TO POINT OUT ANY SUC H WRONG POSTING OF ENTRY TO THE ACCOUNT OF M/S METRO TYRES INSTEAD OF THE CA PITAL ACCOUNT. IN MY CONSIDERED OPINION, THE ASSESSEE HAS NOT GIVEN ANY TENABLE EXPLANATION IN SUPPORT OF THE DIFFERENCE IN THE AMOUNT RECEIVED BY THE ASSESSEE FROM M/S METRO TYRES TOWARDS THE FREIGHT CHARGES. IT IS FUR THER AN ADMITTED FACT THAT THE AMOUNT OUTSTANDING AT RS.37.37 LAC AT THE END O F THE YEAR IN THE CASE OF METRO TYRES LTD., WAS RECEIVED BY THE ASSESSEE IN T HE SUBSEQUENT YEAR. AS SUCH, I AM OF THE CONSIDERED OPINION THAT THE LD. C IT(A) WAS JUSTIFIED IN SUSTAINING THE ADDITION. THIS GROUND IS NOT ALLOWE D. 5. THE ONLY OTHER GROUND IS AGAINST THE CHARGING OF INTEREST OF RS.29,024/- U/S 234D OF THE ACT. THE LD. AR CONTEN DED THAT INTEREST U/S 234D OUGHT NOT TO HAVE BEEN CHARGED. ITA NO.619/DEL/2014 5 6. I DO NOT FIND ANY REASON TO DISTURB THE VIEW TAKEN BY THE LD. CIT(A). EXPLANATION 2 INSERTED TO SECTION 234D BY THE FINAN CE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 1.6.2003 PROVIDES THAT TH E PROVISIONS OF THIS SECTION WAS ALSO APPLY TO AN ASSESSMENT YEAR COMMEN CING BEFORE THE FIRST DAY OF JUNE, 2003 IF THE PROCEEDINGS IN RESPECT OF SUCH ASSESSMENT YEAR IS COMPLETED AFTER THE SAID DATE. SINCE THE ASSESSMEN T PROCEEDINGS IN THIS CASE WERE COMPLETED AFTER THE 1 ST JUNE, 2003, I HOLD THAT THE INTEREST IS RIGHTLY CHARGEABLE. 7. IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 8 TH JUNE, 2015. SD/- (R.S. SYAL) ACCOUNTANT MEMBER DATED: 18 TH JUNE, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI