Appeal Details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 4201 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 8 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-07-2013
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
A
Next Hearing Date
01-07-2013
Assessment Year
2006-2007
Appeal Filed On
03-11-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO.7539/MUM/2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER WARD 19(3)(1) ROOM NO.307, 3 RD FLOOR PIRAMAL CHAMBERS, LALBAUG PAREL MUMBAI-400 012. VS. M/S. ATUL SHIRODKAR & ASSOCIATES 16/815, KHERNAGAR VRINDAVAN MHB COLONY KHERNAGAR, BANDRA (E) MUMBAI-51 PAN NO.AAHFA 4794 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATISH R. MODY REVENUE BY : SHRI KALIK SINGH DATE OF HEARING : 01.07.2013 DATE OF PRONOUNCEMENT : 05.07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS A REVENUE APPEAL AGAINST THE ORDER OF CIT(A )-30, MUMBAI DATED 10.8.2010. THE REVENUE HAS RAISED THE FOLLOWI NG THREE GROUNDS:- (1)WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDIT ION MADE U/S. 68 OF THE I T ACT IN RESPECT OF UNEXPLAINED CASH CREDIT O F RS.23.70 LACS WITHOUT APPRECIATING THE FACT THAT THERE WAS INHERE NT INCONSISTENCIES AND CONTRADICTION IN THE SUBMISSION MADE N RESPECT OF LABOUR CHARGES RECEIVED AND THE ASSESSEE FAILED TO PROVE HIS BUSIN ESS FOR GETTING HIM ELIGIBLE FOR THE PRESUMPTIVE RATE OF TAX U/S. 44AD. ITA NO.7539/MUM/10 A.Y.06-07 ATUL SHIRODKAR 2 (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDIT ION MADE U/S. 68 OF THE I T ACT TOWARDS UNEXPLAINED CASH CREDIT OF RS.8 .1O LACS ON ACCOUNT OF LOAN WITHOUT APPRECIATING THE FACT THAT IDENTITY OF THE LOAN CREDITOR ITSELF HAD NOT BEEN ESTABLISHED. (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDIT ION MADE U/S. 68 OF THE I T ACT TOWARDS UNEXPLAINED CASH CREDIT OF RS.5 2.97 LACS BY TREATING THE LOAN AS ADVANCE WITHOUT APPRECIATING T HE FACT THAT THE IDENTITY OF THE LENDER OR THE IDENTITY OF THE PERSO N MAKING THE ADVANCE, HAD NOT BEEN ESTABLISHED AND ALSO THE SAID LIABILITY WAS NOT APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. 2. BRIEFLY STATED, THE ASSESSEE HAS RETURNED HIS IN COME OF RS.7,27,030 FROM CIVIL CONSTRUCTION BUSINESS UNDER SECTION 44AD OF THE ACT. THE ASSESSEE HAS CASH DEPOSITS IN THE BANK ACCOUNT. AO ASKED THE EXPLANATION OF THE SAME. IT WAS SUBMITTED THAT AN A MOUNT OF RS.23.70 LACS WAS ASSESSEES RECEIPTS FROM THE LABOUR CONTRA CT PAYMENTS WHICH WERE DEPOSITED IN THE BANK ACCOUNT AND HAS BEEN SHO WN IN THE PROFIT & LOSS A/C ACCOUNT. ON THE REASON THAT, THE ASSESSEE DID NOT GIVE PROPER EXPLANATION, THE AO MADE AN ADDITION OF RS.23.70 L ACS AS UNEXPLAINED CASH CREDIT. THE LEARNED. CIT(A) DELETED THE SAME A S SAID AMOUNT WAS OFFERED AS RECEIPT IN THE PROFIT & LOSS A/C ,THER EFORE, TREATING THE SAME AS UNEXPLAINED CASH CREDIT DOES NOT ARISE. THE REVE NUE HAS RAISED THIS IN GROUND NO1. 3. AFTER CONSIDERING THE RIVAL CONTENTIONS WE DO NO T SEE ANY REASON TO DEVIATE FROM THE FINDINGS OF THE LD. CIT(A) ON GROU ND NO.1 WHICH ARE AS UNDER :- I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , AND THE SUBMISSIONS MADE BY THE LEARNED AR AND THE FACTS OF THE CASE. THE APPELLANT HAS RECEIVED A SUM OF RS.23.70 LACS, FROM ITS BUSINESS OF CIVIL CONSTRUCTION, WHICH IT HAS DULY OFFERED TO TA X AT A MUCH HIGHER NET PROFIT OF 21.65%, AS AGAINST 8% SPECIFIED BY SE CTION 44AD. DUE TO THE SUDDEN DEMISE OF THE CONSULTANT WHO HAD PREPARE D ITS ACCOUNTS ITA NO.7539/MUM/10 A.Y.06-07 ATUL SHIRODKAR 3 AND AGGRAVATED BY THE FACT THAT THE APPELLANTS REL ATIONSHIP WITH ITS LABOUR CONTRACTORS HAS BEEN ADHOC AND TEMPORARY, TH ERE WERE INCONSISTENCIES IN THE APPELLANTS REPLIES, BUT THE SE ARE NOT FATAL TO THE APPELLANTS CASE, FOR THE FOLLOWING TWO REASONS , AS HAVE BEEN RIGHTLY SUBMITTED BY THE APPELLANT: A. AN ASSESSEE WHO RETURNS HIS INCOME UNDER SECTION 44AD OF THE ACT, IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT. IT IS THEREFORE NOT CORRECT TO ASK IT TO EXPLAIN INDIVIDUAL ENTRIES OF CASH DEP OSITS. ONCE INCOME HAS BEEN RETURNED UNDER THE SPECIAL PROVISIONS OF S ECTION 44AD, EXEMPTION FROM MAINTAINING BOOKS OF ACCOUNT HAS BEE N PROVIDED AND PRESUMPTIVE INCOME AT 8% OF THE GROSS RECEIPT ITSEL F IS THE BASIS FOR DETERMINING THE TAXABLE INCOME. THE APPELLANT THUS WAS UNDER NO OBLIGATION TO EXPLAIN INDIVIDUAL ENTRY OF CASH DEPO SIT, PARTICULARLY WHERE THE A.O. HAS NOT DOUBTED THE EXPENDITURE INCU RRED THEREON AND THEIR NEXUS WITH SUCH RECEIPTS. B. MOREOVER, THE APPELLANT HAS CREDITED SUCH RECEIP TS OF RS.23.70 LACS TO ITS PROFIT & LOSS ACCOUNT AND RETURNED SUCH INCO ME TO TAX. IT IS NOT SHOWN AS A CAPITAL RECEIPT IN THE SHAPE OF A LOAN O R OTHER CREDIT, WHICH IS NOT A PART OF PROFIT. I FIND FORCE IN THE CONTENTION OF THE A.R. THAT ONLY THOSE ITEMS THAT APPEAR ON THE LIABILITY SIDE OF THE BALANCE SHEET CAN BE TREATED AS INCOME UNDER THE PROVISIONS OF SECTION 68 OF THE ACT AND NOT THOSE WHICH HAVE BEEN ALREADY OFFER ED TO TAX THROUGH THE P&L ACCOUNT AS IS THE CASE OF THE APPELLANT. IT WOULD AMOUNT TO DOUBLE TAXATION OF THE SAME INCOME, WHICH IS NOT PE RMITTED BY THE ACT. C. IN VIEW OF THE ABOVE, THE ADDITION OF RS.23,70,0 00I- U/S.68 IS DIRECTED TO BE DELETED. THE GROUNDS OF APPEAL ARE ALLOWED. 3.1 SINCE THE AMOUNT WAS ALREADY CREDITED TO THE PR OFIT & LOSS A/C AND THE ASSESSEE OFFERED INCOME THEREON, WE DO NOT SEE ANY REASON TO ACCEPT THE REVENUES CONTENTIONS. ACCORDINGLY GRO UND NO.1 IS DISMISSED. 4. THE ISSUE IN GROUND NO.2 AND 3 IS WITH REFERENCE TO ADDITION OF RS.8.10 LACS ON ACCOUNT OF LOAN RECEIVED FROM M/S. MANISH KUKREJA AND AN AMOUNT OF RS .52.97 LACS FROM MR. OMPRAKASH U/S. 68 OF THE INCOM E TAX ACT. EVENTHOUGH THE ASSESSEE SUBMITTED THE NEC ESSARY CONFIRMATIONS AND REASONS FOR RECEIVING AMOUNTS, AO DID NOT ACCEPT THE ITA NO.7539/MUM/10 A.Y.06-07 ATUL SHIRODKAR 4 SAME. THE LD. CIT(A) ACCEPTED ASSESSEES CONTENTION S AND DELETED THE SAME. 5. THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS NOT ASKED AO TO EXAMINE AND PARTICULARLY REFERRED TO HIS PARA-4.4 O F THE ORDER OF CIT(A) THAT NO FURTHER ENQUIRIES WERE CONDUCTED BY AO AND SO IF GENUINENESS OF TRANSACTIONS WERE DOUBTED BY HIM HE SHOULD HAVE MAD E ENQUIRIES. THE LD. COUNSEL HOWEVER, HAS NO OBJECTION IF THE VERIFI CATION OF THESE TWO AMOUNTS IS RESTORED TO THE FILE OF AO. 6. WITHOUT GOING INTO MERITS OF AOS ORDER AND CIT( A)S ORDERS, SINCE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE IN IT S CORRECT PERSPECTIVE WE SET ASIDE THE ORDERS OF ASSESSING OFFICER AND CI T(A) WITH THE DIRECTION TO ASSESSING OFFICER TO EXAMINE THE CREDITS AFRESH , KEEPING IN MIND THE CONFIRMATIONS FILED AND EXPLANATION FURNISHED BY AS SESSEE. IN CASE OF ANY FURTHER REQUIREMENT, AO IS FREE TO MAKE NECESSARY E NQUIRIES AND ASSESSEE TO FURNISH REQUIRED DETAILS IN SUPPORT OF THE CREDITS. THE ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY. WITH THES E DIRECTIONS, THE ISSUE IN GROUND NO.2 AND 3 ARE RESTORED TO THE FILE OF ASSESSING OFFICER FOR FRESH EXAMINATION ON FACTS AND LAW. GROUND NO.2 AND 3 ARE CONSIDERED AS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2013. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 05.07.2013. JV. ITA NO.7539/MUM/10 A.Y.06-07 ATUL SHIRODKAR 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.7539/MUM/10 A.Y.06-07 ATUL SHIRODKAR 6 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 01.07.13 JM/AM 2 DRAFT PLACED BEFORE AUTHOR 01.07.13 JM/AM 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM /AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 05.07.13 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 05.07.13 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER 10. DRAFT DICTATION ENCLOSED IN FILE YES
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