ITO, Jaipur V. SMT KANTA BAIRATHI, Jaipur

ITA 648/JPR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48008 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: S L PODDAR

Judgement Text

1 ITA 648-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 648/JP/2010 ASSTT. YEAR : 2007-08. THE INCOME-TAX OFFICER, VS. SMT.KANTA BAIRATHI, WARD 2(2), PROP. M/S. JEWELS & ART EMPORIUM, JAIPUR. 3, MAYA MANSION, M.I. ROAD, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. ROSHANTA MEENA RESPONDENT BY : SHRI S.L. PODDAR ORDER DATE OF ORDER : 22/07/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN REDUCING THE TRAD ING ADDITION FROM RS. 1,81,309/- TO RS. 50,000/- AND REDUCING THE ADDITION MADE BY A O UNDER SECTION 41(1) ON ACCOUNT OF UNMOVED SUNDRY CREDITORS. 3. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF AO. 4. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE P LACED RELIANCE ON THE ORDER OF LD. CIT (A). 5. REGARDING REDUCING THE TRADING ADDITION, IT IS S EEN THAT THE PURCHASES OF RS.7,25,236/- REMAINED UNVERIFIABLE. THEREFORE, AO DISALLOWED 25% OF UNVERIFIABLE PURCHASES. THE LD. CIT (A) AFTER TAKING INTO CONSI DERATION VARIOUS DECISIONS OF THE TRIBUNAL FOUND THAT THE AO WAS NOT JUSTIFIED IN MAK ING DISALLOWANCE OF 25% OF 2 UNVERIFIABLE PURCHASES. HOWEVER, CERTAIN PURCHASES WERE REMAINED UNVERIFIABLE, THEREFORE, HE SUSTAINED AN ADDITION OF RS.50,000/- TO COVER UP THE LEAKAGE. WHILE HOLDING SO, THE VARIOUS DECISIONS RELIED UPON BY AO WERE TA KEN INTO CONSIDERATION AND WERE FOUND DISTINGUISHABLE BY THE JAIPUR BENCH OF THE TR IBUNAL. THEREAFTER, THE LD. CIT (A) HAS HELD THE ADDITION CAN BE MADE AFTER TAKING INTO CON SIDERATION THE PAST HISTORY OF THE CASE. THEREFORE, HE CONFIRMED THE ABOVE STATED ADDITION. 6. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE JAIPUR BENCHES OF THE TRIBUNAL ARE TAKING A CONSISTENT VIEW THAT WHERE CERTAIN PURCHASES REMAIN UNVERIFIAB LE, REJECTION OF BOOKS OF ACCOUNT IS CORRECT. HOWEVER, IF ANY ADDITION CAN BE MADE THAT CAN BE MADE ON THE BASIS OF PAST HISTORY AND TAKING INTO CONSIDERATION THE CURRENT E VENTS OF THE CASE. CURRENT EVENTS OF THE CASE ARE THAT CERTAIN PURCHASES REMAINED UNVERIFIAB LE AND ON THE ACCOUNT THE LD. CIT (A) HAS CONFIRMED AN ADDITION OF RS. 50,000/- WHICH IS JUSTIFIABLE. THEREFORE, WE CONFIRM THE ORDER OF LD. CIT (A) IN RESPECT TO FIRST ISSUE. 7. REGARDING DISALLOWANCE UNDER SECTION 41(1), THE AO NOTICED THAT CERTAIN OPENING BALANCES WERE APPEARING AS CLOSING BALANCE. THESE BALANCES WERE COMING FROM ASSESSMENT YEAR 1994-95. THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATION OF THESE CREDIT BALANCES AND SPECIFY THE NATURE OF LIABILITY ALONG WITH EVIDENCE. IT WAS SUBMITTED THAT ALL THESE LIABILITIES RELATE TO PURCHASE MADE IN EARLIE R YEAR. COPY OF PURCHASE BILLS AND LEDGER ACCOUNT AND ADDRESSES OF THE PARTIES OF ALL PURCHAS ES RELATED TO PERIOD 1996-97 ONWARDS WERE FILED. AS PER ORDER OF AO, NO DETAILS WERE FI LED IN RESPECT OF CREDITS BEFORE 6.1.1994 AS WELL AS RELATING TO FINANCIAL YEAR 1995 -96. SUMMONS WERE ISSUED ON THE PARTIES TO VERIFY THE PURCHASES MADE FROM ASSESSMEN T YEAR 96-97 ONWARDS. HOWEVER, NO SUMMONS COULD BE ISSUED FOR PURCHASES MADE BEFORE 6 .1.1994 AS PROPER DETAILS COULD NOT 3 BE FILED. THEREFORE, AO MADE A DISALLOWANCE OF RS. 9,20,328/- BELONG TO PERIOD 6.1.94 AND FINANCIAL YEAR 1995-96. IT WAS CONTENDED BEFOR E LD. CIT (A) THAT THE CREDIT ENTRIES ARE BALANCES BROUGHT FORWARDED SINCE 7.1.1994. THE AO H AS NOT MENTIONED ANY SECTION WHILE ADDING THE SAID AMOUNT AS AN INCOME OF THE ASSESSEE . HE HAS NOT CONSIDERED THE PROVISIONS OF SECTION 41(1) AND VARIOUS JUDGMENTS R ELIED UPON BEFORE HIM. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD, LD. CIT (A) FOUND THAT THESE ARE SUNDRY CREDITORS AND ASSESSEE HAS SHOWN Y EAR AFTER YEAR, LIABILITY HAS NOT BEEN CEASED. THEREFORE, HE DELETED THE ADDITION. 8. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). WE NOTED THAT THE LIAB ILITY WAS ON ACCOUNT OF PURCHASES MADE PRIOR TO 6.1.1994. YEAR AFTER YEAR THE LIABILITY W AS SHOWN. THEREAFTER, THE HUSBAND OF THE ASSESSEE WHO WAS EARLIER PROPRIETOR OF THE BUSINESS FIRM DIED AND THEREAFTER THE ASSESSEE TOOK OVER AND COULD NOT GET THE CONFIRMATION FROM T HE RESPECTIVE PARTIES. IT WAS SUBMITTED DURING APPELLATE PROCEEDINGS THAT EVEN ON LATER STA GE THE AMOUNT DUE TO THE PARTY HAVE BEEN PAID BY THE ASSESSEE. THEREFORE, PROVISIONS OF SECTION 41(1) ARE NOT APPLICABLE. THE FINDING OF LD. CIT (A) REMAINED UNCONTROVERTED, THE REFORE, IN OUR CONSIDERED VIEW THE ORDER OF LD. CIT (A) DOES NOT SUFFER FROM ANY INFI RMITY. ACCORDINGLY, WE CONFIRM THE ORDER OF LD. CIT (A) IN THIS RESPECT ALSO. 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22 .7.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- 4 COPY FORWARDED TO :- THE ITO WARD 2(2), JAIPUR. SMT. KANTA BAIRATHI, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 648/JP/2010) BY ORDER, AR ITAT JAIPUR.