Borole Education Pvt. Ltd., Jalgaon V. ITO, Ward 2(1), Jalgaon

ITA 752/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93872 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR P SINGH

Judgement Text

] IQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE ! ' BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.752/PN/2013 !# $ %$ / ASSESSMENT YEAR : 2007-08 BOROLE EDUCATION PVT. LTD., DESHMUKH PLAZA, NEAR KHWAJAMIYA, JALGAON 425001 PAN NO.AACCB5416G . / APPELLANT V/S ITO, WARD-2(1), JALGAON . / RESPONDENT / APPELLANT BY : NONE / DEPARTMENT BY : SHRI B.C. MALAKAR P. SINGH & / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 12-12-2011 OF THE CIT(A)-II, NASHIK RELATING TO ASSESSM ENT YEAR 2007-08. 2. THIS APPEAL WAS FIRST FIXED FOR HEARING ON 20-03-2015. HOWEVER, SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE ON THAT D ATE THE CASE WAS ADJOURNED TO 08-07-2015. ALTHOUGH THE NOTICE WAS DULY SERVED ON THE ASSESSEE THROUGH RPAD (ACKNOWLEDGEMENT PLACED O N RECORD) / DATE OF HEARING : 08.07.2015 / DATE OF PRONOUNCEMENT: 10.07.2015 2 ITA NO.752/PN/2013 NONE APPEARED ON BEHALF OF THE ASSESSEE. IT WAS FURTHER SEEN THAT EVEN BEFORE CIT(A) ALSO NO ONE HAS APPEARED FOR WHICH HE HAS PASSED AN EXPARTE ORDER. UNDER THESE CIRCUMSTANCES THIS APPE AL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND A FTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF IT ENABLED SER VICE, IT COMPUTER AND RESEARCH CENTRE. IT FILED ITS RETURN OF INCO ME ON 31- 10-2007 DECLARING TOTAL INCOME OF RS.1,34,780/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT A SURVEY ACTION U/S.133A WAS CONDUCTED IN THIS CASE ON 29-11-2007. DUR ING THE SAID SURVEY, THE STATEMENT OF MR. PARAG BOROLE, ONE OF THE DIRECTOR OF THE ASSESSEE COMPANY WAS RECORDED. IN REPLY TO A QU ESTION, HE HAD STATED THAT HE HAD VISITED CHINA FOR PURCHASE OF FURNITURE FOR WHICH A SUM OF RS.2,12,178/- WAS INCURRED AS EXPENDITURE WHICH IS IN THE NATURE OF CAPITAL. HE HAD THEREFORE AGREED TO DISCLOSE RS .2,12,178/- AS ADDITIONAL INCOME FOR A.Y. 2007-08. HOWEVER, THE ASSESSE E DID NOT REVISE THE RETURN BY DISCLOSING THE ABOVE AMOUNT. THE A O, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT SH OULD NOT BE ADDED. SINCE THE ASSESSEE DID NOT GIVE ANY REASON FOR T HE SAME AND AGREED FOR CAPITALISATION OF THE ABOVE AMOUNT OF RS.2,12,178/ -, THE AO MADE ADDITION OF THE SAME TO THE TOTAL INCOME OF THE A SSESSEE. THE AO FURTHER MADE A LUMPSUM OF RS.25,000/- TO THE TO TAL INCOME OF THE ASSESSEE. 4. BEFORE CIT(A) NONE APPEARED DESPITE SERVICE OF NOTICE. H OWEVER, A WRITTEN SUBMISSION WAS FILED VIDE LETTER DATED 30-06-2010 STATING THEREIN THAT THE PROVISIONS OF SECTION 10(23C)(III)(D) OF THE I.T. ACT IS 3 ITA NO.752/PN/2013 APPLICABLE. THE DECISION OF THE HONBLE DELHI HIGH COURT IN T HE CASE OF DIT VS. INDO SOVIET MEDICARE AND RESEARCH FOUNDATION REPORTED IN 196 CTR 183 (DELHI) WAS ALSO RELIED UPON. HOWEVER, THE LD.CI T(A) DID NOT AGREE WITH THE ABOVE SUBMISSIONS STATING THAT T HERE IS NO RELEVANCE OF THE ABOVE REFERRED DOCUMENTS. SINCE THE AS SESSEE COULD NOT CONTROVERT THE FINDINGS OF THE AO BY FURNISHING ANY D OCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM HE UPHELD THE ADDITION MADE BY THE AO. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. FROM THE FACTS AND IN THE CIRCUMSTANCES C.I.T. (A PPEALS) ERRED IN NOT ALLOWING THE EXPENSES OF CHINA TOUR FOR PURCHASES O F FURNITURE, TREATING IT OF CAPITAL NATURE (I.T.O. TREATED IT AS OF CAPITAL NATURE.) 2. FROM THE FACTS AND IN THE CIRCUMSTANCES C.I.T. (APP EALS) FAILED IN CONFIRMING THE LUMP SUM ADDITION OF RS. 25,000/-. I.T .O. DID NOT GIVE ANY REASON FOR THIS ADDITION. 3. THE SURVEY ACTION U/S 133 A OF IT. ACT WAS TAKEN U NDER WRONG IMPRESSION, CONSIDERING THE ASSESSEE UNIT IS OF DR. SURESH B OROLE OF CHOPDA. DIRECTOR OF ASSESSEE COMPANY IS PARAG BOROLE. NO THING OBJECTIONABLE WAS FOUND IN THE SURVEY ACTION. 4. I.T.O AND THE C.I.T. (APPEALS) BOTH ERRED IN MAK ING THE ADDITION AND CONFIRMING IT ONLY ON THE BASIS OF THE STATEMENT RECORDED OF THE DIRECTOR OF ASSESSEE COMPANY, AT THE TIME OF SURVEY OPER ATION U/S 133 A OF I.T. ACT. HENCE IT IS PRAYED THAT ADDITIONS CONFIRMED BY THE C. I.T. (APPEALS) BE DELETED FULLY. 5. ASSESSEE MAY ADD, AMEND, WITHDRAW ANY GROUNDS OF APPE AL AT THE TIME OF HEARING. 6. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD AND H EARD THE LD. DEPARTMENTAL REPRESENTATIVE. SO FAR AS THE ADDIT ION OF RS.25,000/- IS CONCERNED, ADMITTEDLY, THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER AND THE AO HAS SIMPLY MADE LUMPSUM A DDITION OF RS.25,000/- WHICH HAS BEEN UPHELD BY THE CIT(A). NO DEFECT S IN THE 4 ITA NO.752/PN/2013 BOOKS OF ACCOUNT HAS BEEN POINTED OUT BY THE AO. SINCE THERE IS NO BASIS FOR THE ADDITION AND THERE IS NOTHING ON RECORD ON WHAT BASIS THE AO HAS MADE THE ADDITION, THEREFORE, WE ARE OF THE OP INION THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE AMOUNT OF RS .25,000/-. ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED. 7. SO FAR AS THE ADDITION OF RS.2,12,178/- IS CONCERNED, WE FIND DURING THE COURSE OF SURVEY, THE ASSESSEE HAS AGREED FO R DISCLOSURE OF THE SAID AMOUNT BEING CAPITAL IN NATURE. EVEN BEFORE TH E AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS ALSO AGREED TO CAPITALIZE THE AMOUNT OF RS.2,12,178/- AS ADDITIONAL INCOME. S INCE THE AMOUNT WAS INCURRED FOR PURCHASE OF FURNITURE AND TH E ASSESSEE HAS AGREED DURING THE COURSE OF SURVEY AS WELL AS DURING ASSESSMENT PROCEEDINGS THAT IT IS CAPITAL IN NATURE, THEREFORE, THE AO IS JUSTIFIED IN MAKING THE ADDITION AND THE CIT(A) WAS JUSTIFIED IN SUSTA INING THE ADDITION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCOR DINGLY PARTLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10-07-2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) ! / JUDICIAL MEMBER / ACCOUNTANT MEMBER IQ.KS PUNE ; ! DATED : 10 TH JULY, 2015. LRH'K 5 ITA NO.752/PN/2013 &'(!)*+%) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # # $ ( ) , ' / THE CIT(A)-II, NASHIK 4. # # $ , ' / THE CIT-II, NASHIK 5. ()* ++,- , # ,- , IQ.KS / DR, ITAT, B PUNE; 6. */0 1 / GUARD FILE. &# , / BY ORDER , ( ( + //TRUE COPY// + //TRUE COPY// 234 +5 ,6 / SR. PRIVATE SECRETARY # ,-, IQ.KS / ITAT, PUNE