Smt. Laltesh Rani, Karnal V. ITO, Karnal

ITA 6812/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6336 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 11-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: PERMIL GOEL
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-6812/DE L/2015 (ASSESSMENT YEAR-2011-12) LALTESH RANI, PROP. NAVEEN TRADERS, C/O-DHARAMPAL GUPTA, ADV., 7, RAILWAY ROAD, KARNAL. PAN: AESPR2616K (APPELLANT) VS ITO, WARD-2, AAYAKAR BHAWAN, SECTOR-12, KARNAL (RESPONDENT) ASSESSEE BY SH. PERMIL GOEL, ADV. REVENUE BY SH. MANOJ KUMAR CHOPRA, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 07.10.2015 OF CIT(A) , KARNAL PERTAINING TO 2011- 12 AY ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED BY THE A.O IS WRONG ON FACT S IN LAW. 2. THAT THE ADDITIONS OF RS.21,684/- BY ENHANCING THE VALUE OF THE CLOSING STOCK OF GUR SHAKKAR A/C @ 174 PER QUANTAL IS PURELY ESTIMATE BASIS WITHOUT APPRECIATION OF FACTS AND LA W IN NEXT YEAR THERE IS PROFIT IN THIS A/C HENCE THIS ADDITION IS DOUBLY TAXED. 3. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADD ITIONS, RS.1,00,000/- CREDITOR MR. YASHU AGGARWAL, CREDITOR EXISTING ASSESSEE, SHOWING CASH INCOME DECLARING TAXABLE INC OME, IS WITHOUT APPRECIATION OF FACTS & LAW. THE ADDITION IS ILLEGAL WRONG. 4. THAT AN ADDITION OF RS.25,000/- OF CREDITOR PARUL A GGARWAL DULY SUPPORTED BY CONFIRMATION AND SOURCE IS ILLEGAL WRO NG ON FACT & LAW. 5. THAT THE ADDITION OF RS.20677/- AS DISALLOWANCE OF 20% FROM CAR EXPENSES, PETROL, TELEPHONE EXPENSES, DEPRECATION O F CAR & SCOOTER, INTEREST PAID ON CAR LOAN, TOTAL EXPENSES 103387/- IS EXCESSIVE, THE ASSESSEE IS WIDOW, ILLITERATE NOT ATTENDING ANY BUS INESS WORK, HER SON LOOKING AFTER THE WORK THUS EXCESSIVE WRONG. DATE OF HEARING 11.02.2016 DATE OF PRONOUNCEMENT 28.03.2016 I.T.A .NO.-6812/DEL/2015 PAGE 2 OF 6 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE RETURNED AN INCOME OF RS.1,67,360/-. THE SAID RETURN WAS SELECTED FOR SC RUTINY THROUGH CASS. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3), VA RIOUS ADDITIONS WERE MADE. 3. THE ADDITIONS WERE CONFIRMED IN APPEAL BY THE CI T(A) LEADING TO THE FILING OF THE PRESENT APPEAL. ADDRESSING THE GROUNDS RAIS ED, THE LD.AR SUBMITTED THAT GROUND NO.-1 IS GENERAL AND REQUIRES NO ADJUDICATIO N; GROUND NO.2 IT WAS SUBMITTED THE ASSESSEE DID NOT WISH TO PRESS AS THE ISSUE WAS RESTORED BY THE CIT(A) TO THE AO. 4. ADDRESSING GROUND NO.3 & 4, THE IMPUGNED ORDER W AS ASSAILED. THE RECORD SHOWS THAT THE AO FOUND THAT THERE WERE CONS ISTENT CASH DEPOSITS OF EQUAL AMOUNTS IN THE BANK ACCOUNTS OF BOTH THE CRED ITORS I.E MR. YASHU AGGARWAL & SMT. PARUL AGGARWAL WHO AS PER THE ASSES SEES CLAIM HAD ADVANCED LOANS OF RS.1,00,000/- AND RS.25,000/- RESPECTIVELY . ACCORDINGLY THE ASSESSEE WAS REQUIRED TO JUSTIFY THE CLAIM OF RECEIPT OF LOA NS BY THE AO. THE ASSESSEE WAS CONFRONTED BY THE FACT THAT THE BANK ACCOUNTS O F THE CREDITORS DID NOT SHOW SUFFICIENT BALANCE EVEN TO MEET THEIR DAY-TO-DAY EX PENSES; AND COUPLED BY THE FACT THAT THE ADVANCING OF LOAN BY CHEQUE WAS ALWA YS PRECEDED BY A DEPOSIT IN CASH OF EQUIVALENT AMOUNTS THE AO REQUIRED THE ASSE SSEE TO PRODUCE THE CREDITORS FOR EXAMINATION. THE ASSESSEE WAS ACCORD INGLY HELD TO HAVE FAILED TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION AND THE AMOUNTS WERE ADDED AS ITS INCOME. THE EXPENSES BOOKED IN T HE P&L A/C PERTAINING TO CAR, PETROL, TELEPHONE, DEPRECIATION OF CAR & SCOOT ER ETC. TOTALING RS.1,00,000/- WERE DISALLOWED TO THE EXTENT OF 20% FOR WANT OF D OCUMENTARY EVIDENCE IN SUPPORT OF THE SAME. THESE ADDITIONS MADE BY WAY O F DISALLOWANCE WERE UPHELD IN APPEAL BY THE CIT(A). I.T.A .NO.-6812/DEL/2015 PAGE 3 OF 6 5. AGGRIEVED THE ASSESSEE IS IN APPEAL. THE LD.AR ADDRESSING GROUND NO.3 SUBMITTED THAT MR. YASHU AGGARWAL HAD ADVANCED TWO LOANS OF RS.30,000/- AND RS.70,000/- TOTALING TO RS.1,00,000/- ON 03.04.201 0 AND 18.11.2010 RESPECTIVELY. RELYING ON CIT VS VIR BHAN & SONS [2 005] 273 ITR 206 (P&H) IT WAS HIS SUBMISSION THAT THE ADDITION CAN NOT BE SUS TAINED AS NECESSARY VERIFICATION SHOULD HAVE BEEN DONE BY THE AO WHICH IT WAS SUBMITTED THE AO FAILED TO DO SO. SH. YASHU AGGARWAL IT WAS SUBMITT ED WAS AN INCOME TAX ASSESSEE. 6. ADDRESSING THE ADDITION OF RS.25,00,000/- AS LOA N ADVANCED BY SMT. PARUL AGGARWAL IT WAS HIS SUBMISSION THAT THOUGH SH E WAS A HOUSE-WIFE AND WAS NOT AN INCOME TAX ASSESSEE BUT SHE HAD FILED AN AFFIDAVIT BEFORE THE AO & THE CIT(A) STATING THAT SHE HAD SAVINGS FROM MONEYS RECEIVED ON VARIOUS CEREMONIES AND SHE ALSO DID SOME PETTY JOB WORK WH ICH SHOULD HAVE BEEN ACCEPTED BY THE TAX AUTHORITIES AS SUFFICIENT FOR A DVANCING THE LOAN. 7. ADDRESSING THE REMAINING GROUND OF DISALLOWANCE OF 20% FROM CAR EXPENSES; PETROL EXPENSES; TELEPHONE EXPENSES, DEPR ECIATION OF CAR AND SCOOTER ETC. IT WAS HIS SUBMISSION THAT THE LADY WAS A WIDO W AND DOES NOT DRIVE A CAR ETC. THUS THE EXPENSES ARE PURELY FOR BUSINESS PURP OSES. IN THE ALTERNATE, THE DISALLOWANCE IT WAS SUBMITTED IS EXCESSIVE. ON QUE RY HE SUBMITTED THAT HE WOULD BE SATISFIED IF 10% OF THE DISALLOWANCE IS SU STAINED AND PART RELIEF IS GRANTED. 8. THE LD. SR.DR ON THE OTHER HAND HEAVILY RELYING UPON THE FINDINGS ARRIVED AT BY THE AO AND THE CIT(A) SUBMITTED THAT NECESSAR Y VERIFICATION HAS BEEN DONE BY THE AO TO THE EXTENT THAT HE HAS MADE OUT THAT B EFORE ISSUANCE OF EVERY CHEQUE BOTH BY MR. YASHU AGGARWAL & SMT. PARUL AGGA RWAL THAT THEY HAVE DEPOSITED EQUAL AMOUNTS OF MONEY IN CASH IN THEIR R ESPECTIVE BANK ACCOUNTS. I.T.A .NO.-6812/DEL/2015 PAGE 4 OF 6 THE GENERAL ARGUMENTS THAT THE CASH WAS DEPOSITED I N THE PREVIOUS YEAR IT WAS SUBMITTED IS OF NO RELEVANCE IN THE FACE OF THE CON SISTENT PATTERN WHERE EVERY TIME SO CALLED CREDITORS DEPOSIT CASH OF THE EXACT AMOUNT OF ADVANCING LOANS. THE ASSESSEE IT WAS SUBMITTED AS PER THE STATUTE AN D JURISPRUDENCE IS REQUIRED TO ADDRESS THE IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE CLAIMED TRANSACTIONS. IN THE FACTS OF THE PRESENT CASE NEIT HER GENUINENESS NOR CREDITWORTHINESS HAS BEEN ESTABLISHED. THESE CONCL USIONS HAVE BEEN UPHELD BY THE CIT(A) AND FURTHER DESPITE AN OPPORTUNITY THE C REDITORS COULD NOT BE PRODUCED BEFORE THE AO TO DEMONSTRATE GENUINENESS A ND NO SUCH EFFORT HAS BEEN MADE BY THE ASSESSEE TO PRODUCE THEM BEFORE TH E CIT(A OR MAKE ANY SUCH PRAYER. 9. THE LD. SR.DR SUBMITTED THAT THE ARGUMENTS OF TH E ASSESSEE HAVE NO CREDENCE THAT THE AMOUNTS ARE SMALL AND SOME SAVING S CAN BE MADE BY SMT. PARUL AGGARWAL ARE OF NO RELEVANCE AS EVEN IN THE E ARLIER YEARS QUA SMT. PARUL AGGARWAL THE ASSESSEE HAS CLAIMED THAT THE SAID LA DY HAD ADVANCED A LOAN OF SIMILAR AMOUNT AGAIN BY MAKING PRIOR DEPOSIT IN CA SH. THE ARGUMENTS THAT IT IS THE OPENING BALANCE FOR THE YEAR UNDER CONSIDERATIO N IN THE FACE OF THE SYSTEMATIC DEPOSITS IN CASH EVERY TIME BEFORE ADVAN CING THE LOAN IT WAS SUBMITTED DEMONSTRATES THAT THE ASSESSEE IS CONSIST ENTLY RELYING UPON BASELESS FACTS AND CASE LAWS WHICH HAVE NO APPLICABILITY ON FACTS ON RECORD. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ADDITIONS MADE WERE CORRECT AND JUSTIFIED. 10. THE LD.AR IN REPLY SUBMITTED THAT MR. YASHU AGG ARWAL IN HIS RETURNED INCOME HAS SHOWN A LOAN OF RS.1,00,000/- AND ALTHOU GH IT IS NOT COMING OUT FROM THE RECORD IN THE PRESENT PROCEEDINGS, AN OPP ORTUNITY TO PLACE IT ON RECORD WAS REQUESTED AND FOR SMT. PARUL AGGARWAL IT WAS RE QUESTED ATLEAST PART RELIEF MAY BE GIVEN AND THE ENTIRE EXPLANATION MAY NOT BE REJECTED. I.T.A .NO.-6812/DEL/2015 PAGE 5 OF 6 11. HAVING HEARD THE SUBMISSIONS OF THE PARTIES BEF ORE THE BENCH AND THE MATERIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT IN THE FACE OF THE CONSISTENT FINDING ON RECORD QUA THE RECEIPT OF ADVANCES FROM MR. YASHU AGGARWAL THE ASSESSEE HAS FAILED MISERABLY. THE FACT ON RECORD THAT THERE WERE CASH DEPOSITS IN THE BANK ACCOUNTS JUST BEFORE THE LOAN IS MADE H AS NOT BEEN REBUTTED. THIS PRACTICE IS FOUND TO BE A CONSISTENT PATTERN IN THE LOANS RECEIVED IN BOTH THE INSTANCES OF MR. YASHU AGGARWAL & ALSO IN THE CASE OF SMT. PARUL AGGARWAL AND STATED TO BE A PRACTICE BY THE LD.SR.DR IN THE EARL IER ALSO. HOWEVER, THE LD.AR HAS RAISED THE ARGUMENTS THAT MR. YASHU AGGARWAL IN HIS RETURNED INCOME HAS SHOWN THE ADVANCE OF LOAN OF RS.1,00,000/- AND HAS REQUESTED FOR AN OPPORTUNITY FOR VERIFICATION OF THIS FACT. THE LD. SR.DR HAS INITIALLY OPPOSED. CONSIDERING THE PLEADINGS OF THE PARTIES THE ISSUE IS RESTORED BACK TO THE FILE OF THE AO IN REGARD TO THE LOAN OF RS. ONE LAKH STATED TO BE ADVANCE BY SH.YASHU AGGARWAL. THE AO IS DIRECTED TO EXAMINE THE CLAIM. ACCORDINGLY FOR THIS LIMITED PURPOSE THE ISSUE IS RESTORED BACK TO THE FILE OF T HE AO. ACCORDINGLY GROUND NO.3 IS RESTORED BACK. 12. ADDRESSING GROUND NO.4 CONSIDERING THE ADMISSIO N OF THE PARTIES THE PRAYER OF PARTIAL RELIEF OF THE LD.AR IS ACCEPTED. ACCORDINGLY THE ASSESSEE IS GIVEN THE BENEFIT OF HAVING RECEIVED LOAN OF RS.10, 000/- FROM SMT. PARUL AGGARWAL AS HAVING BEEN ADVANCED FROM HER SAVINGS. FOR THE REMAINING AMOUNT OF RS.15,000/- THE ADDITION FOR LACK OF EVIDENCE IS SUSTAINED. THE FINDING IN REGARD TO THE PART RELIEF HAS BEEN ARRIVED AT ON TH E BASIS OF CONCESSION OF THE PARTIES BEFORE THE BENCH AND SHALL NOT BE A PRECEDE NT TO BE FOLLOWED IN ANY OTHER YEAR IN THE CASE OF SMT. PARUL AGGARWAL AS THE EVID ENCE OF JOB WORK; THE NATURE OF JOB WORK ETC. HAS NOT BEEN CONSIDERED OR EXAMIN ED. I.T.A .NO.-6812/DEL/2015 PAGE 6 OF 6 13. QUA THE ISSUE RAISED IN GROUND NO.5 THE LD. AR HAS PRAYED THAT THE DISALLOWANCE IS EXCESSIVE AND THE WIDOWED LADY DOES NOT DRIVE AND HAS USED THE VEHICLE, PHONE ETC. FOR BUSINESS PURPOSES ONLY. AF TER HEARING BOTH THE SIDES AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD THE DI SALLOWANCE IS SUSTAINED FOR WANT OF NECESSARY EVIDENCES TO THE EXTENT OF 10%. THE ESTIMATE WAS ARRIVED AT IN THE OPEN COURT AFTER HEARING BOTH THE SIDES. 14. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH OF MARCH, 2016. SD/- (DIVA SINGH) JU DICIAL MEMBER DATED:28/03/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTA NT REGISTRAR ITAT NEW DELHI