M/s Jannat Associates, Shahjahanpur V. Income Tax Officer-1(4), Shahjahanpur

ITA 782/LKW/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3908 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-06-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 30-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K VISHWAKARMA
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 782/LKW/2016 ASSESSMENT YEAR: 2012 - 13 M/S JANNAT ASSOCIATES VILL. RAWATPUR, P.O. KA NTH SHAHJAHANPUR V. INCOME TAX OFFICER WARD 1(4) SHAHJAHANPUR T AN /PAN : AAFFJ4242G (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI SANJAY SAXENA, C.A. RESPONDENT BY: SHRI R. K. VISHWAKARMA, D.R. DATE OF HEARING: 06 08 201 8 DATE OF PRONOUNCEMENT: 10 08 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A), BAREILLY DATED 3/11/2016 AS PER FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE ID. COMMISSIONER OF INCOME TAX (APPEALS), BARE ILLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 67,81,856 / - U/S 68 OF THE I.T. ACT, 1961 WHICH IS CONTRARY TO THE FACTS. 2. THAT THE ID. CIT (A), BAREILLY ERRED ON FACTS AND IN LAW IN CON FIRMING THE DISALLOWANCE OF RS. 15,25,386 / - BEING 10% OF LABOUR WAGES WHICH WAS ONLY ON SURMISES. 3. THAT THE ID. CIT (A), BAREILLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.1,13,222/ - BEING 10% OF ITA NO.782/LKW/2016 PAGE 2 OF 5 VEHICLE - IN - USE EXPENSES, MISC. EXPENSES & MISC. DEDUCTIONS WHICH WERE ONLY ON SURMISES. 4. THAT THE ID. CIT (A), BAREILLY ERRED ON FACTS AND IN LAW I N COMPUTING TOTAL INCOME OF RS. 88,56,163 / - (BEFORE INTEREST & SALARY TO PARTNERS I.E. 4,05,043 / - ) WHICH IS 87.11 % OF NET CONTRACT RECEIPTS. 5. THE APPELLANT FIRM RESERVES A RIGHT TO ADD/ALTER/ AMEND ANY GROUND OF APPEAL AT THE TIME OF ITS HEARING. 2 . WITH REGARD TO FIRST GROUND OF APPEAL, IT IS THE CASE OF THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ASSESSING OFFICER ADDED RS.67,81,856/ - TREATING IT AS UNEXPLAINED CASH CREDIT BEING AMOUNT OF SERVIC E TAX COLLECTED/ RECEIVED FROM KSFL , WHICH HAD BEEN SUBSEQUENTLY PAID AS SERVICE TAX AND THE SAME AMOUNT HAS BEEN SHOWN AS ADVANCE WITH EXCISE DEPARTMENT IN THE BALANCE SHEET. APART FROM THAT, A DETAILED SUBMISSION WAS MADE BEFORE THE LD. CIT(A). LD. CIT( A) AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSING OFFICER CATEGORICALLY STATED THAT ASSESSEE HAS SHOWN UNSECURED LOAN FROM KSFL IN ITS BALANCE SHEET AT RS.67,81,856/ - . THE ASSESSING OFFICER ALSO MENTIO NED THAT ASSESSEE DID NOT PRODUCE ANY UNSECURED LOAN ACCOUNT. REPORT FROM THE ASSESSING OFFICER WAS ALSO PROVIDED TO THE ASSESSEE , HOWEVER, THE ASSESSEE HAS NOT COMMENTED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. LD. A.R. OF THE ASSESSEE ONLY STATE D THAT THE AMOUNT WAS GIVEN TO THE ASSESSEE FOR PAYMENT OF SERVICE TAX WHICH THEY HAVE ALREADY PAID DURING FINANCIAL YEAR 2012 - 13 TO THE CENTRAL EXCISE DEPARTMENT. IN THIS REGARD A NOTICE UNDER SECTION 133(6) OF THE ACT WAS ISSUED TO KSFL REQUIRING FOR CO NFIRMATION OF CREDIT OF RS.67,81,856/ - , WHICH THE ASSESSEE HAS SHOWN AS UNSECURED LOAN DURING THE PERIOD UNDER CONSIDERATION. IN RESPONSE TO NOTICE, KSFL SUBMITTED THAT THEY HAVE NOT GIVEN ANY TYPE OF SECURED OR UNSECURED LOAN TO THE ASSESSEE DURING THE P ERIOD UNDER CONSIDERATION ITA NO.782/LKW/2016 PAGE 3 OF 5 I.E. FINANCIAL YEAR 2011 - 12 RELEVANT TO ASSESSMENT YEAR 2012 - 13. IN VIEW THIS , LD. CIT(A) UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER. 3 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS OF THE CASE AND WE OBSERVE THAT TH ERE ARE TWO THINGS WHICH COMES OUT FROM RECORD. (1) WITH REGARD TO THIS ISSUE, ASSESSEE HAS NEITHER PRODUCED ANY UNSECURED LOAN ACCOUNT BEFORE THE ASSESSING OFFICER NOR ANY DOCUMENTARY EVIDENCE HAS BEEN FILED BEFORE THE LD. CIT(A). (2) LD. CIT(A) HAS ISS UED NOTICE UNDER SECTION 133(6) OF THE ACT TO KSFL AND IN RESPONSE THERETO THEY HAVE CATEGORICALLY DENIED TO HAVE GIVEN ANY SECURED OR UNSECURED LOAN TO THE ASSESSEE. AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED THAT SERVICE TAX WAS ALREADY PAID TO THE CENTRAL EXCISE DEPARTMENT AND HAS DULY BEEN SHOWN IN THE BALANCE SHEET, COPY OF WHICH WAS FILED IN THE PAPER BOOK. IT IS A CASE WHERE THE ASSESSEE HAS NOT FILED RELEVANT EVIDENCE AND DOCUMENTS BEFORE THE SUBORDINATE AUTHORITIES. EVEN IN THE NOTICE ISSUED UNDER SECTION 133(6), KSFL HAS SUBMITTED THAT THEY HAVE NOT GIVEN ANY TYPE OF LOAN TO THE ASSESSEE WHEREAS AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSEE COMES OUT WITH BALANCE SHEET SHOWING THAT THE SAID AMOUNT HAS BEEN DULY REFLECT ED THEREIN AND IT IS NOTHING BUT PAYMENT OF SERVICE TAX WHICH THE ASSESSEE HAS ALREADY PAID TO THE CENTRAL EXCISE DEPARTMENT. WE ARE OF THE CONSIDERED VIEW THAT THE MATTER REQUIRES DETAILED FACTUAL VERIFICATION AND, THEREFORE, A FINAL OPPORTUNITY SHOULD B E GIVEN TO THE ASSESSEE TO PROVIDE DOCUMENTARY EVIDENCES INCLUDING UNSECURED LOAN ACCOUNT, BOOKS OF ACCOUNT OF THE ASSESSEE INCLUDING BALANCE SHEET AND AFTER ANALYZING THESE EVIDENCES, LD. CIT(A) SHALL PASS A SPEAKING ORDER. WE UNDERSTAND THAT THE POWER O F THE LD. CIT(A) BEING CO - TERMINUS WITH THAT OF THE ASSESSING OFFICER , THERE WILL BE SPECIFIC ENQUIRY WITH REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND ACCORDINGLY A DECISION WILL BE ARRIVED AT. WITH THESE OBSERVATIONS, WE ITA NO.782/LKW/2016 PAGE 4 OF 5 SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO HIS FILE TO ADJUDICATE THE ISSUE AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 4 . GROUNDS NO.2, 3 & 4 ARE TAKEN TOGETHER. WITH REGARD TO THESE GROUNDS, LD. CIT(A) HAS HELD THAT ASSESSING OFFICER HAS MENTIONED IN THE BODY OF THE ORDER THAT ASSESSEE WAS REQUIRED TO PRODUCE COPY OF ACCOUNTS OF LABOUR CHARGES ALONG WITH SALARY REGISTER AND SUPPORTING EVIDENCES. HE ALSO ASKED T HE ASSESSEE TO PROVIDE NAME AND POSTAL ADDRESS OF SOME OF LABOURERS AND CONFIRMATION LETTERS TO ASCERTAIN REAL EMPLOYMENT WITH THE ASSESSEE. IT IS NOTICED THAT THE ASSESSEE NEITHER PROVIDED THE NAME AND ADDRESS OF THE EMPLOYEES NOR THEIR ADDRESS FOR VERIFI CATION IN RESPECT OF LABOUR CHARGES CLAIMED. ON THE ISSUE OF OTHER EXPENSES, IT IS NOTED THAT COMPUTERIZED BOOKS WERE PRODUCED BUT NO COPY OF CHALLAN / VOUCHERS WERE FILED FOR VERIFICATION. IN THESE CIRCUMSTANCES , LD. CIT(A) UPHELD THE DISALLOWANCES @ 10% OUT OF THESE EXPENSES AS MADE BY THE ASSESSING OFFICER. 5 . LD. A.R. OF THE ASSESSEE AT THE TIME OF HEARING BEFORE US PRAYED FOR AN OPPORTUNITY TO PRESENT ISSUES RELATING TO THESE GROUNDS ON MERIT BEFORE THE LD. CIT(A) WITH ALL SUPPORTING DOCUMENTS, BILLS, VOU CHERS AND CONFIRMATION LETTERS. LD. A.R. OF THE ASSESSEE SUBMITTED THAT IF AN OPPORTUNITY IS GIVEN , ASSESSEE WOULD LIKE TO PRESENT THE CASE ON MERIT BEFORE THE LD. CIT(A) WITH SUPPORTING DOCUMENTS AND EVIDENCES , WHICH ARE WITH THEM . ALTERNATIVELY, LD. A. R. OF THE ASSESSEE PRAYED THAT THE DISALLOWANCE MADE @ 10% WAS EXCESSIVE AND ON HIGHER SIDE. 6 . THE LD. D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW ON THESE DISALLOWANCES. ITA NO.782/LKW/2016 PAGE 5 OF 5 7 . WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS. IN THE INTEREST OF JUSTICE, WE ALLOW THE ASSESSEE ONE OPPORTUNITY TO PRESENT THEIR CASE ON MERITS WITH RELEVANT DOCUMENTARY EVIDEDNCES BEFORE THE LD. CIT(A) AND ALLOWING THE PRAYER OF THE ASSESSEE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THESE GROUNDS AND RESTORE THEM BACK TO HIS FILE FOR FRESH ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . 8 . GROUND NO.5 IS GENERAL IN NATURE, HENCE NO ADJUDICATION IS REQUIRED. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORD ER PRONOUNCED IN THE OPEN COURT ON 10 / 0 8 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH AUGUST , 201 8 JJ: 0608 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR