GOPAL AGARWAL, MUMBAI V. ACIT CC38, MUMBAI

ITA 7076/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1778 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 01-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEBASHISH CHANDA
• Keywords: Reassessment proceedings
• Section: 143(3); 153A; 234B; 147; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.7076 & 7077/M/2012 ASSESSMENT YEARS: 2009-10 & 2010-11 SHRI GOPAL AGARWAL, A-304, NIRANJAN APTS, HIRA NAGAR, LINK ROAD, MULUND (W), MUMBAI 400 080 PAN: AAJPA1324L VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -38, AAYAKAR BHAVAN, GR. FLOOR, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, A.R. & SHRI ANUJ KISNADWALA, A.R. REVENUE BY : SHRI DEBASHISH CHANDA, D.R. DATE OF HEARING : 01.10.2015 DATE OF PRONOUNCEMENT : 31.12.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS RELEVANT TO A.Y. 2009-10 & A.Y. 2010-11 HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS BOTH DATED 17.10.2012 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) [HEREINAFTER REFERRED TO AS THE CIT(A)]. SINCE THE APPEALS ARE RELATING TO THE SAME ASSESSEE AND THE FACTS AND ISSUES INVOLVED THEREIN ARE IDENTICAL IN NATURE, HENCE THE SAME ARE TAKEN TOGETHER FOR DISPOSAL BY THIS COMMON ORDER. FIRST WE TAKE UP THE ASSESSEES APPEAL FOR A.Y. 2009-10 BEARING ITA NO.7 076/M/2012. ITA NO.7076/M/2012 (FOR A.Y. 2009-10) 2. THE ASSESSEE IN THIS APPEAL HAS RAISED THREE EFF ECTIVE ISSUES. VIDE GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF T HE ASSESSMENT ORDER PASSED UNDER SECTION 153C OF THE ACT. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS ITA NOS.7076 & 7077/M/2012 SHRI GOPAL AGARWAL 2 STATED THAT AS PER INSTRUCTIONS OF HIS CLIENT, HE D OES NOT PRESS GROUND NO.1. THE GROUND NO.1 OF THE APPEAL IS THEREFORE DISMISSED BE ING NOT PRESSED. 3. VIDE GROUND NOS.2 & 3, THE ASSESSEE HAS AGITATED THE CONFIRMATION OF ADDITION OF RS.1,82,324/- BEING 1% OF THE TOTAL WAG ES AND SALARY. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) IN THE ASSESSMENT ORDER HAD MADE THE DISALLOWANCE AT THE RATE OF 2% OF THE TOTAL PAYMENT OF WAGES TO THE LABOURERS AT RS.3,64,347/- ON THE GROUND THAT A LL THE PAYMENTS WERE MADE IN CASH ONLY; IN THE SALARY REGISTER, IN MANY PLACE S NO SIGNATURES OF THE PERSONS WERE THERE TO WHOM THE PAYMENTS WERE MADE; IN SOME PLACES, THE SIGNATURE WAS NOT TAKEN ON REVENUE STAMP AND FURTHER IN MANY PLACES ONE PERSON HAS SIGNED IN MORE THAN ONE PLACE. 4. THE LD. CIT(A), HOWEVER CONSIDERING THE FACT AND CIRCUMSTANCES OF THE CASE AND RELYING UPON HIS OWN DECISION ON IDENTICAL ISSUE FOR A.Y. 2007-08 OBSERVED THAT CONSIDERING THE TOTALITY OF THE FACT AND CIRCUMSTANCES IT WOULD BE REASONABLE TO DISALLOW 1% OF THE EXPENDITURE INCURR ED IN THIS RESPECT. HE, THEREFORE, RESTRICTED THE DISALLOWANCE AT RS.1,82,3 24/-. 5. THE LD. A.R. OF THE ASSESSEE HAS BROUGHT OUR ATT ENTION TO PARA 9.3 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS REPRODUCED THE STATEMENT OF THE ASSESSEE UNDER SECTION 131 OF THE ACT VIDE WHICH THE ASSESSE E HIMSELF HAD OFFERED A SUM OF RS.1,67,047/- AS ADDITIONAL INCOME ON ACCOUNT OF DISCREPANCY IN RECORD RELATING TO WAGES AND LABOUR CHARGES. THE LD. A.R. OF THE ASSESSEE HAS STATED THAT THE TELESCOPIC BENEFIT OF THE DISCLOSER MADE B Y THE ASSESSEE OF RS.5,67,047/- IS REQUIRED TO BE GIVEN TO THE ASSESS EE. 6. WE HAVE GONE THROUGH THE RECORDS. WE FIND THAT THE ASSESSEE HAD OFFERED THE ADDITIONAL INCOME ON ACCOUNT OF DISCREP ANCY IN RECORD IN RESPECT OF CERTAIN PAYMENTS MADE TO CERTAIN PARTIES ON ACCOUNT OF WAGES AND LABOUR CHARGES. THE AO HAS ALSO MADE THE DISALLOWANCE FIN DING DISCREPANCIES IN THE SALARY REGISTER. HENCE, IN OUR VIEW, TELESCOPIC BE NEFIT IS REQUIRED TO BE GIVEN TO THE ASSESSEE IN RESPECT OF THE INCOME OFFERED ON TH IS ACCOUNT. SINCE THE ITA NOS.7076 & 7077/M/2012 SHRI GOPAL AGARWAL 3 ASSESSEE HAS ALREADY DECLARED ADDITIONAL INCOME OF RS.5,67,047/- IN THIS RESPECT, HENCE, IN OUR VIEW, NO FURTHER DISALLOWANC E OF RS.1,79,732/- WAS WARRANTED IN THIS CASE. IN VIEW OF THE ABOVE, ADDI TION MADE ON THIS ISSUE IS HEREBY ORDERED TO BE DELETED. THESE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE THEREFORE ALLOWED. 7. VIDE GROUND NO.4, THE ASSESSEE HAS CLAIMED THAT THE INTEREST UNDER SECTION 234B OF THE ACT IS TO BE CALCULATED/COMPUTE D FROM THE DATE OF ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 143(1) OF THE ACT AND THAT THE ASSESSEE IS NOT LIABLE TO PAY THE INTEREST ON ACCOUNT OF ADD ITIONS MADE IN CONSEQUENCE OF ASSESSMENT MADE UNDER SECTION 153C OF THE ACT FOR T HE PERIOD PRIOR TO THE FINALIZATION OF ORIGINAL ASSESSMENT UNDER SECTION 1 43(1) OF THE ACT. THE ASSESSEE, IN THIS RESPECT, HAS RELIED UPON THE DECI SION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF VIJAY KUMAR SABOO, HUF & OTHERS. VS. ACIT 340 ITR 382. 8. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSU E. WE FIND THAT AS PER SUB SECTION (3) OF SECTION 234 OF THE ACT AS IT STO OD AND APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE I S LIABLE TO PAY THE INTEREST, FOR THE PERIOD COMMENCING ON THE DAY FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB SECTION (1) OF SECTION 143 O R UNDER SECTION 143(3) AS THE CASE MAY BE AND ENDING ON THE DATE OF REASSESSMENT OR RE-COMPUTATION UNDER SECTION 147 OR SECTION 153A. ON THE AMOUNT BY WHIC H THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF THE REASSESSMENT OR RE-COMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB SE CTION (1) OF SECTION 143 OR ON THE BASIS OF REGULAR ASSESSMENT UNDER SECTION 14 3(3) OF THE ACT. THE HONBLE KARNATAKA BOMBAY HIGH COURT IN VIJAY KUMAR SABOO, HUF & OTHERS. VS. ACIT (SUPRA) HAS ALSO ANALYZED THE ABO VE PROVISION AND HAS HELD THAT WHERE IN A CASE, THE INCOME IS DETERMINED CONS EQUENCE TO THE FILING OF THE RETURN UNDER SECTION 143(1) OR 143(3) AND THE INCOM E IS INCREASED IN CONSEQUENCE OF THE REASSESSMENT PROCEEDINGS, EITHER UNDER SECTION 147 OR ITA NOS.7076 & 7077/M/2012 SHRI GOPAL AGARWAL 4 UNDER SECTION 153A OF THE ACT, THE INTEREST WILL BE LEVIABLE AS PER THE PROVISIONS OF SUB SECTION (3) OF SECTION 234B OF T HE ACT. IN VIEW OF THE ABOVE, THE AO IS DIRECTED TO CALCULATE AND COMPUTE THE INT EREST ACCORDINGLY. 9. THIS APPEAL OF THE ASSESSEE IS, THUS, TREATED AS PARTLY ALLOWED. 10. NOW COMING TO THE APPEAL OF THE ASSESSEE FOR A. Y. 2010-11 BEARING ITA NO.7077/M/2012. ITA NO.7077/M/2012 11. THE ASSESSEE IN THIS APPEAL HAS TAKEN THREE GRO UNDS OF APPEAL. VIDE GROUND NO.1, THE ASSESSEE HAS AGITATED THE CONFIRMA TION OF ADDITION OF RS.18,200/- UNDER SECTION 68 OF THE ACT BEING UNEXP LAINED BANK DEPOSITS. THE AO, DURING THE ASSESSMENT PROCEEDINGS, MADE AN ADDI TION OF RS.7,41,484/- ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT UNDER SECTI ON 68 OF THE ACT. HOWEVER, DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A), THE ASSESSEE EXPLAINED THE SOURCE OF ALL THE DEPOSITS UPON WHICH THE LD. C IT(A) CALLED FOR A REMAND REPORT FROM THE AO. THE AO IN THE REMAND REPORT DA TED 29.08.12 STATED THAT ALL THE CREDITS AND DEPOSITS IN QUESTION WERE VERIF IED EXCEPT THE FOLLOWING TWO DEPOSITS: 1. RS.7,000/- DATED 11.08.09 2. RS.11,200/- DATED 08.02.10 TOTAL= RS.18,200/-. THE LD. CIT(A) ACCORDINGLY RESTRICTED THE ADDITION S MADE ON THIS ACCOUNT TO RS.18,200/-. 12. THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED BEFO RE US THAT IN FACT THE ASSESSEE HAS EXPLAINED THE SOURCE OF ENTIRE DEPOSIT S. HE HAS FURTHER STATED THAT THE AMOUNT OF RS.7000/- REPRESENTED THE DEPOSIT OF CASH WHICH WAS WITHDRAWN FROM M/S. SHREE SUDHA ENTERPRISES. WHILE THE SOURC E OF RS.11,200/- WAS REFUND RECEIVED FROM SALES TAX DEPARTMENT AGAINST T HE DEPOSIT OF RADHAKRISHNA DISTRIBUTORS. THE LD. A.R. OF THE ASS ESSEE, IN THIS RESPECT, HAS ITA NOS.7076 & 7077/M/2012 SHRI GOPAL AGARWAL 5 RELIED UPON THE CASH ACCOUNT FOR THE YEAR UNDER CON SIDERATION AND THE CAPITAL ACCOUNT OF M/S. SHREE SUDHA ENTERPRISES FOR THE YEA R SHOWING DRAWINGS. HE HAS FURTHER RELIED UPON THE BALANCE SHEET OF THE AS SESSEE AS ON 31.03.09 SHOWING DEPOSIT OF SALES TAX OF RS.5000/- FOR RADHA KRISHNA DISTRIBUTORS. 13. CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESS EE AND IN VIEW OF THE FACT THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF ENTIRE DEPOSITS OF MORE THAN RS.7 LAKHS, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES IN DISBELIEVING THE SOURCE OF ABOVE DEPOSITS OF MEA GER AMOUNT OF RS.18,200/-. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED AND TH E ADDITION OF RS.18,200/- CONFIRMED BY THE LD. CIT(A) IS HEREBY ORDERED TO BE DELETED. 14. VIDE GROUND NOS.2 & 3, THE ASSESSEE HAS AGITATE D THE ADDITION OF RS.1,87,676/- BEING 1% OF THE TOTAL WAGES AND SALAR Y CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE DURING THE YEAR. THE ADDITION ON THIS ISSUE HAS BEEN MADE ON IDENTICAL GROUNDS AS DISCUSSED ABOVE IN GROUND N O.2 OF THE APPEAL OF THE ASSESSEE FOR A.Y. 2009-10. HOWEVER, THE LD. A.R. O F THE ASSESSEE HAS FAIRLY SUBMITTED THAT NO ADDITIONAL INCOME HAS BEEN OFFERE D BY THE ASSESSEE IN THIS RESPECT FOR THE YEAR UNDER CONSIDERATION. UNDER TH E CIRCUMSTANCES, THE DISALLOWANCE AT THE RATE OF 1% OF TOTAL WAGES AND S ALARY ON ACCOUNT OF DISCREPANCY IN RECORD CONFIRMED BY THE LD. CIT(A) S EEMS TO BE JUSTIFIED. THESE GROUNDS ARE ACCORDINGLY DISMISSED. ACCORDING LY, THIS APPEAL OF THE ASSESSEE IS ALSO TREATED AS PARTLY ALLOWED. 15. IN VIEW OF THE ABOVE, BOTH THE APPEALS OF THE A SSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.12.2015. SD/- SD/- (N.K. BILLAIYA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.12.2015. * KISHORE, SR. P.S. ITA NOS.7076 & 7077/M/2012 SHRI GOPAL AGARWAL 6 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.