Shri Rajesh Jain, Indore V. THE ITO, Indore

ITA 678/IND/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2372 (ITAT-INDORE)
• Duration Of Justice: 4 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 142(1); 68

Judgement Text

ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.678/IND/2013 ASSESSMENT YEAR: 2009-10 ORDER PER MANISH BORAD, AM. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, INDORE [IN SHORT REFERRED TO AS THE CIT (A)] DATED 16.09.2013 ARISING OUT OF THE ORDER U/S 250/143(3) OF THE INCOME TAX ACT DATED 28.12.2011 F RAMED BY THE INCOME TAX OFFICER, WARD 2(2), INDORE PERTAINING TO ASSESSMENT YEAR 2009-10. SHRI RAJESH JAIN PROP. M/S. RAJAT SALES CORPORATION, 89/1, LODHIPURA, INDORE VS. INCOME TAX OFFICER, 2(2) , INDORE (APPELLANT) (RE SPONDENT ) PAN NO.AAZPJ7931Q RESPONDENT BY SHRI RAJEEV JAIN , SR. DR APPELLANT BY SHRI A SHISH GOYAL & SHRI N.D. PATWA,ADVOCATES (AR) DATE OF HEARING: 02.01.2018 DATE OF PRONOUNCEMENT: 16.01.2018 ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL. 1(A) THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING ADDITION OF RS.27,00,000/- MADE BY THE A SSESSING OFFICER IN THE APPELLANTS INCOME ON ACCOUNT OF ALLEGED UNDISC LOSED CONTRACTUAL RECEIPT FROM IDA, WITHOUT ACCEPTING AND APPRECIATIN G THE EXPLANATION OF THE APPELLANT. (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARN ED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE ENTIRE ADDITION OF RS.27,00,000/- ON ACCOUNT OF ALLEGED SUPPRESSED CON TRACT RECEIPTS, WITHOUT APPRECIATING THE MATERIAL FACT THAT THE APP ELLANT HAD NOT CLAIMED ANY EXPENDITURE IN RESPECT OF THE ALLEGED CONTRACT RECEIPTS AND THEREFORE, AT THE MOST THE ADDITIONS COULD HAVE BEEN RESTRICTED T O THE AMOUNT OF NET PROFIT EARNED ON THE SUPPRESSED CONTRACT RECEIPTS. 2. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT ADMITTING THE ADDITIONAL EVIDENCES FURNISHED BY THE APPELLANT UNDER RULE 46A OF THE INCOME TAX RULES, 1962 ON THE EXTRANEOUS AND NON-EXISTING GROUNDS. 3. THAT, WITHOUT PREJUDICE TO THE ABOVE, ON THE FAC TS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED, IN CONF IRMING ADDITION OF RS.15,52,617/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF UNSECURED LOANS TAKEN BY THE APPELLANT FROM VARIOUS PERSONS, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961, WITHOUT ACCEPTING THE APPELLANTS SUBMISSION AND WITHOUT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT HAD DULY ESTABLISHED THE IDENTITY OF THE CREDITORS, THE GENUINENESS OF THE LOAN TRANSACTIONS AND AS ALSO TH E CREDITWORTHINESS OF THE LOAN CREDITORS BEYOND ALL DOUBTS. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL RUNNING BUSINESS OF SUPPL Y TO GOVERNMENT DEPARTMENTS UNDER PROPRIETARY SHIP CONCERN M/S. RAJ AT SALES CORPORATION. RETURN OF INCOME FILED ON 30.09.2009 DECLARING TOTAL INCOME OF RS.8,83,030/-. CASE SELECTED FOR SCRUTIN Y THROUGH CASS. NECESSARY NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. THE LD.A.O OBSERVED DIFFERENCE IN THE TOTAL CONTRA CT RECEIPTS AS APPEARING IN THE INFORMATION RECEIVED THROUGH AIR A ND THE CONTRACT RECEIPT SHOWN IN THE BOOKS OF ACCOUNTS. THE UNACCOU NTED RECEIPTS WERE CALCULATED AT RS.27,00,000/-. THE LD.A.O ALSO OBSERVED THAT ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 3 THERE ARE VARIOUS CREDITORS WHICH THE ASSESSEE COUL D NOT JUSTIFY TO BE GENUINE AND CREDITWORTHY. LD. AO TREATED SUCH C REDITORS TOTALED AT RS.15,52,517/- AS BOGUS. ASSESSMENT COMPLETED AT INCOME OF RS.51,35,647/- AFTER MAKING ADDITIONS OF RS.42,52,6 17/-. 4. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ADD ITIONS MADE BY LD.A.O BEFORE LD.CIT(A) BROUGHT NO RELIEF AND BOTH THE ADDITIONS WERE CONFIRMED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 6. AT THE OUTSET THE LD. COUNSEL OF THE ASSESSEE SU BMITTED WITH REGARD TO THE ADDITION OF UN ACCOUNTED RECEIPTS OF RS.27,00,000/-, BOTH THE LOWER AUTHORITIES FAILED TO APPRECIATE TH AT THE ASSESSEE HAS NOT CLAIMED ANY EXPENSES AGAINST THESE BUSINESS RE CEIPTS AND FURTHER THE ALLEGED UNACCOUNTED RECEIPTS WERE ON AC COUNT OF SUPPLIES MADE BY THE ASSESSEES BROTHER IN LAW AND PAYMENT ALSO RECEIVED BY HIM. CONFIRMATION LETTER OF SHRI MANIS H JAIN (BROTHER IN LAW OF THE ASSESSEE) STANDS FILED. FURTHER ASSE SSEE HAS ALSO NOT CLAIMED THE TAX DEDUCTED AT SOURCE AT RS.54,384/- A ND NOR THE IMPUGNED AMOUNT OF RS.27,00,000/- WAS EVER CREDITED TO THE BANK ACCOUNT OF THE ASSESSEE. THE LD. COUNSEL PRAYED FO R PROVIDING ONE MORE OPPORTUNITY TO GO BEFORE THE ASSESSING OFFICER TO PRODUCE NECESSARY DETAILS IN SUPPORT OF THE CONTENTIONS MAD E HEREIN ABOVE. 7. SIMILARLY WITH REGARD TO THE ADDITION OF RS.15,5 2,617/-, IT WAS PLEADED THAT THE ASSESSEE POSSESSES ALL NECESSARY D OCUMENTS INCLUDING THE CONFIRMATION, BANK STATEMENT, IDENTIT Y DETAILS OF THE ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 4 SUNDRY CREDITORS BUT THESE WERE NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. REQUEST WAS MA DE FOR ADMITTING ADDITIONAL EVIDENCES UNDER RULE 46A OF TH E I.T RULES. 8. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENT ATIVE RAISED NO OBJECTION TO THE REQUEST OF THE LEARNED COUNSEL FO R SETTING ASIDE ALL THE ISSUES RAISED IN THIS APPEAL TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. IN THE INSTANT APPEAL TWO ISSUES ARE RA ISED BY THE ASSESSEE. FIRSTLY RELATING TO UN ACCOUNTED CONTRAC T RECEIPT OF RS.27,00,000/- AND SECONDLY FOR UN EXPLAINED SUNDRY CREDITORS AT RS.15,52,617/-. 10. FROM PERUSAL OF THE SUBMISSIONS BY THE ASSESS EE BEFORE THE LOWER AUTHORITIES AND US AS WELL AS THE PAPER BOOK FILED, WE FIND THAT THE ASSESSEE HAS STRONGLY CHALLENGED THE UNACC OUNTED RECEIPT OF RS.27,00,000/- BY WAY OF DEMONSTRATING THAT THE AMOUNT HAS NEVER REACHED TO ITS BANK ACCOUNT AND NOR THE TAX D EDUCTED AT SOURCE AND RS. 54,384/- HAS BEEN CLAIMED. SIMILARL Y FOR THE UN EXPLAINED CREDITORS OF RS.15,52,167/- THE ASSESSEE HAS PLEADED FOR PROVIDING ONE MORE OPPORTUNITY TO APPEAR BEFORE THE ASSESSING OFFICER IN ORDER TO SATISFY HIM WITH NECESSARY DETA ILS SUFFICIENT ENOUGH TO PROVE THE IDENTITY, GENUINENESS AND CREDI TWORTHINESS OF THE ALLEGED BOGUS CREDITORS. THE REVENUE HAS NO OB JECTION IF THE ASSESSEE IS PROVIDED ONE MORE OPPORTUNITY TO GO BEF ORE THE ASSESSING AUTHORITY FOR NECESSARY VERIFICATION. ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 5 11. WE THEREFORE IN THE GIVEN CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE SET ASIDE ALL THE ISSUES RAISED IN THIS APPEAL TO THE FILE OF LD. A.O WITH A DIRECTION TO ADMIT THE ADDIT IONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A OF THE I.T RUL ES AND ALSO TO VERIFY AFRESH AS TO WHETHER THE ASSESSEE ACTUALLY R ECEIVED THE ALLEGED UNACCOUNTED SALES IN HIS BANK ACCOUNT AND A LSO TO VERIFY THE ALLEGED CREDITORS AS TO WHETHER THEY ARE BOGUS IN THE NATURE OR NOT. WE ALSO DIRECT THE ASSESSEE TO FURNISH ALL TH E NECESSARY DETAILS IN SUPPORT OF ITS CLAIM AS MENTIONED IN GROUND NO.1 AND 3 OF THIS APPEAL. NEEDLESS TO MENTION THAT THE ASSESSEE WILL BE PROVIDED A PROPER OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE ALLOWED FOR STASTICAL PURPOSE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.01.201 8. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 16TH JANUARY, 2018 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE ITA NO.678/IND/2013, A.Y. 2009-10 RAJESH JAIN 6 1. DATE OF DICTATION : 11/01/2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 12/01/2018 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S./P .S: 12.1.2018 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT: 15.1.2018 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.: 16.1.2018 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK:17.1 .18 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISSTANT R EGISTRAR FOR SIGNATURE OF THE ORDER. 9. DATE OF DESPATCH OF THE ORDER: