ACIT, Kota V. JAI KISHAN MASSAND, Kota

ITA 684/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5090 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 24-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: SAURAB HARSHS LQUOKB
• Keywords: Unexplained cash credit; Depreciation; Additional evidence
• Section: 143(3); 133A; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 684/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA. CUKE VS. SHRI JAI KISHAN MASSAND, H.NO. 480, SHASTRI NAGAR, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ADGPM 6782 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ C.O. NO. 50/JP/2015 ARISING OUT OF ITA NO. 684/JP/2015. FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. SHRI JAI KISHAN MASSAND, H.NO. 480, SHASTRI NAGAR, KOTA. CUKE VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ADGPM 6782 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA ( CIT ) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDDHARTH RANKA & SHRI SAURAB HARSH(ADVOCATES) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05.09.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/09/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJEC TION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) , KOTA DATED 25.06.2015 PERTAINING TO ASSESSMENT YEAR 2011-12. BOTH THE APPEAL AND THE CROSS OBJECTION ARE TAKEN UP TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF A CON SOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. 2 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND 2. WE FIRST TAKE UP REVENUES APPEAL IN ITA NO. 684 /JP/2015. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN :- I) DELETING THE ADDITION OF RS. 10,06,92,000/- MADE BY THE AO U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF UNEXPL AINED CASH CREDIT BY RELYING ON THE ADDITIONAL EVIDENCES & ADM ITTING IT, WHEREAS THE ASSESSEE FAILED TO DISCHARGE PRIMA-FACI E BURDEN U/S 68; II) DELETING ADDITION OF RS. 1,01,55,994/- MADE BY AO O N ACCOUNT OF INTEREST INCOME NOT DISCLOSED BY THE ASSESSEE BY RELYING ON THE ADDITIONAL EVIDENCES & ADMITTING IT, WHEREAS TH E ASSESSEE FAILED TO DISCHARGE PRIMA-FACIE BURDEN U/S 68. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 06.10.2010 IN WHICH THE ASSESSEE OFFERED FOR TAXATION RS. 86,96,078/-. SUBSEQUENTLY THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 74,77,950/-. THE CASE WAS PICKED UP FOR SCRUTINY AND ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS FRAMED VIDE ORD ER DATED 31.03.2014 THEREBY AO MADE ADHOC DISALLOWANCE IN RESPECT OF MAINTENANCE O F CAR OF RS. 2,65,172/-, ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF R S. 10,06,62,000/- AND ALSO MADE ADDITION ON ACCOUNT OF UNDISCLOSED INTEREST INCOME EARNED OF RS. 1,01,55,994/- FROM OTHER SOURCES. THE ASSESSEE AGGRIEVED BY THIS ORDE R, PREFERRED APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS AND RELEVANT RECORD CONFIRMED THE 3 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND ADDITION OF RS. 2,65,172/- AND DELETED OTHER ADDITI ONS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT AND INTEREST EARNED THEREON . 4. NOW THE REVENUE AND ASSESSEE ARE IN APPEAL AND C ROSS OBJECTION BEFORE US. 5. GROUND NO. 1 IN REVENUES APPEAL IS AGAINST DELE TION OF ADDITION OF RS. 10,06,62,000/- MADE BY THE AO UNDER SECTION 68. 5.1. THE LD. D/R SUBMITTED THAT THE ASSESSEE HAD FA ILED TO DISCHARGE THE PRIMARY ONUS AND LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 5.2. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SHRI SIDDHARTH RANKA TOOK US THROUGH THE ORDER OF LD. CIT (A) AND COPIES OF CONF IRMATION OF ACCOUNTS SUBMITTED TO THE AO. LD. COUNSEL SUBMITTED THAT THE ORDER OF TH E AO IS EX FACIE PERVERSE. THE AO HAS ADDED ALL CREDIT ENTRIES AND HAS NOT SUBTRAC TED THE DEBIT ENTRIES. THE ASSESSEE IS IN THE BUSINESS OF FINANCE BROKER AND H E IS ONLY EARNING COMMISSION FROM ARRANGING PARTIES. THE LD. COUNSEL SUBMITTED THAT A LL THE EVIDENCES IN SUPPORT OF THE CONTENTION WERE SUBMITTED BUT THE AO WITHOUT TAKING INTO ACCOUNT PROCEEDED TO MAKE ADDITION. THE LD. COUNSEL FOR THE ASSESSEE FUR THER REITERATED THE SUBMISSIONS AS WERE MADE BEFORE LD. CIT (A). 5.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE LD. CIT (A) HAS GIVEN FINDING OF FACT ON THIS ISSUE BY OBSERVING AS UNDER :- I HAVE GONE THROUGH THE AOS FINDING, ASSESSEES SUBMISSION, AOS REMAND REPORT AND ASSESSEES REJOINDER. IN MOST OF THE CASES, THE LENDER AS WELL AS THE BOR ROWER HAS CONFIRMED THE TRANSACTION. IN SOME OF THE CASES, NO REPLY WAS FURNISHED U/S 133(6), HOWEVER, MOST OF THEIR CONFIRMATIONS WERE S UBMITTED BY THE ASSESSEE. REGARDING THE DIFFERENCE IN DATES, THE S AME HAS NO BEARING 4 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND ON THE ASSESSMENT OF INCOME OF ASSESSEE (AS THE ASS ESSEE WAS APPARENTLY ACTING AS A BROKER). ONLY IN ONE CASE I .E. IN THE CASE OF SHRI OM PRAKASH, THE LENDER DENIED THE TRANSACTION. FROM THE PERUSAL OF SEIZED DIARY, IT WAS SEEN THAT THE NAME OF LENDER AS WELL AS BORROWER WERE RECORDED AGAINST EACH OTHE R ON THE SAME PAGE. FROM THE ABOVE, I HAVE REACHED TO THE FOLLOWING C ONCLUSION :- I) THE ASSESSEE NEITHER GAVE LOAN OR RECEIVED ANY LOAN . II) THE LOANS WERE NOT ROUTED THROUGH THE ASSESSEE. III) THE ASSESSEE ACTED AS BROKER IN THESE TRANSACTIONS. IV) ALL THE TRANSACTIONS WERE THROUGH BANKING CHANNEL. CONSIDERING THE ABOVE, IT IS HELD THAT NO ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE ON THE BASIS OF THESE ENTRIES. AD DITION, IF ANY, COULD HAVE BEEN MADE EITHER IN THE HANDS OF LENDER OR BOR ROWER. THE AO IS THEREFORE DIRECTED TO DELETE ADDITION OF RS. 10,06,62,000/-. THE ABOVE FINDING OF FACT IS NOT CONTROVERTED BY TH E REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. THERE IS NO DISPUTE WITH REGAR D TO THE FACT THAT THE ASSESSEE HAS ACTED AS A BROKER. THE AO HAS NOT BROUGHT ANY MATE RIAL ON RECORD SUGGESTING THAT THE CREDITS AS REFLECTED IN THE DIARY PERTAINED TO THE ASSESSEE. IN THE ABSENCE OF SUCH DETAILS, IN OUR CONSIDERED VIEW, THE AO WAS NO T JUSTIFIED IN MAKING THE ADDITION WITHOUT CONSIDERING THE DEBIT ENTRIES. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT (A), SAME IS HERE BY UPHELD. THIS GROUND OF THE REVENUES APPEAL IS REJECTED. 6. GROUND NO. 2 IS RESPECT OF DELETION OF ADDITION ON ACCOUNT OF INTEREST INCOME OF RS. 1,01,55,994/-. 5 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND 6.1. THE LD. D/R SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE ASSESSEE MIGHT HAVE EARNED INCOME IN THE NATURE OF INTEREST ON THE AMOUNT OF ADDITION MADE BY THE AO. 6.2. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTED THE ORDER OF LD. CIT (A) AND SUBMITTED THAT NO MATERIAL IS PLACED ON RECORD SUGGESTING THAT THE ASSESSEE HAS EARNED INCOME ON THE IMPUGNED ADDITION . HE SUBMITTED THAT THE AO HAS MIS-DIRECTED HIMSELF BY MAKING THE ADDITION. 6.3. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF LD. CIT (A). WE ARE IN AGREEMENT WITH THE LD. COUNSEL FOR THE ASSESSEE THAT THIS GROUND IS CONSEQ UENTIAL OF GROUND NO. 1. SINCE WE HAVE AFFIRMED THE VIEW OF THE LD. CIT (A) ON THE IS SUE OF DELETION OF ADDITION OF ALLEGED CASH CREDITS, THEREFORE, THE INTEREST ALLEG ED TO BE ACCRUED ON SUCH ADDITION IS ALSO DELETED. THE ORDER OF LD. CIT (A) IS HEREBY U PHELD. C.O. NO. 50/JP/2015 : 7. NOW WE TAKE UP CROSS OBJECTION OF THE ASSESSEE. TH E ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. LOWER AUTHORITIES GROSSLY ERRED IN DISALLOWING @ 25% OF THE AMOUNT INCURRED TOWARDS [DEPRECIATION OF CAR, INTEREST ON CAR LOAN, VEHICLE EXPENSES AND VEHICLE INSURANCE EXPENSES] AMOUNTING TO RS. 2, 65,172/-. 7.1. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITION. HE SUBMITTED THAT THE ADDITION IS MADE ON ADHOC BASIS. SUCH ADDITION CANNOT BE SUSTAINED. 7.2. ON THE CONTRARY, THE LD. D/R SUPPORTED THE ORD ER OF THE AUTHORITIES BELOW. 6 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND 7.3. WE FIND THAT BOTH THE AUTHORITIES BELOW HAVE M ADE THE DISALLOWANCE ON THE BASIS THAT PERSONAL USE OF VEHICLE CANNOT BE RULED OUT. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE ASSESSEE HAS FAIRLY CONCEDED TH AT PERSONAL ELEMENT CANNOT BE RULED OUT. HOWEVER, HE SUBMITTED THAT THE DISALLOWA NCE OF 25% IS EXCESSIVE. AFTER CONSIDERING THE TOTALITY OF FACTS, WE ARE OF THE CO NSIDERED VIEW THAT THE DISALLOWANCE @ 25% IS EXCESSIVE. IT WOULD BE FAIR AND REASONABLE IF THE DISALLOWANCE IS RESTRICTED TO THE EXTENT OF 10% ON ACCOUNT OF PERSONAL USAGE. THE GROUND OF THE CROSS OBJECTION IS PARTLY ALLOWED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23/09 /2016. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23/09/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. THE RESPONDENT SHRI JAI KISHAN MASSAND, KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 684(2)/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 7 ITA NO. 684(2)/JP/2015 SHRI JAI KISHAN MASSAND