Vivek Agarwal, Jharsuguda V. ITO, Jharsuguda

ITA 85/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3845 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: M UDAYAPURIAB AGTARWAL
• Keywords: Unexplained cash credit
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER ITA NO.85 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 VIVEK AGARWAL, MARWARI PARA, JHARSUGUDA. VS. ITO, WARD - 1, JHARSUGUDA PAN/GIR NO. AGHPA 3341`D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI M.UDAYAPURIA/B.AGTARWAL, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 25 /04/ 2017 DATE OF PRONOUNCEMENT : 28 /04/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 28.11.2014 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. GROUND NO.1 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE DISALLOWANCE OF RS.14,44,064/ - FOR N ON - DEDUCTION OF TDS UNDER SECTION 194C OF THE ACT AND RS.78,668/ - FOR NON - DEDUCTION OF TDS U/S.194 A OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 40(A)(I A) OF THE ACT. 2 ITA NO.85 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD MADE PAYMENT OF RS.1,70,835/ - ON ACCOUNT OF SUB - CONTRACT EXPENSES TO ONE MUKUN SINGHANIA AND RS.12,73,229/ - ON ACCOUNT OF LOADING AND UNLOADING CHARGES WITHOUT DEDUC TING TDS U/S.194C AND RS.78,668/ - TO L&T FINANCE AND HDFC BANK WITHOUT DEDUCTING TDS U/S.194A OF THE ACT WITHOUT DEDUCTING TDS. THEREFORE, BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER DISALLOWED DEDUCTION FOR THE SAME A ND MADE ADDITION FOR THE SAME. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER . 5. BEFORE US, THE SUBMISSION OF THE LD A.R. OF THE ASSESSEE IS THAT NONE OF THESE AMOUNTS ARE OUTSTANDING FOR PAYMENT AS AT THE END OF THE FINANCIAL YEA R ON 31.3.2010. THEREFORE, NO DISALLOWANCE CAN BE MADE IN VIEW OF THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING & SERVICES PVT LTD., (2013) 357 ITR 642(ALL). HE FURTHER SUBMITTED THAT THE SLP FILED AGAINST THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE JUDGMENT DATED 2.7.2014 IN CC NO.(S) 8068/2014HE SUBMITTED THAT WHERE THERE ARE CONTRARY DECISIONS OF HONBLE HIGH COURTS ON AN ISSUE AND NONE OF WHICH IS HONBLE JURISDICTIONAL HIGH COURT, THEN THE DECISION IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED IN VIEW OF THE DECISION OF 3 ITA NO.85 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 HONBLE SUPREME COURT IN THE CASE OF CIT VS.VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). 6. ON THE OTHER HAND, LD D.R. COULD NOT CONTROVERT THE SUBMISSION OF LD A.R. OF THE ASSESSEE. 7 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THERE IS NO AMOUNTING OUTSTANDING AND PAYABLE AT TH E END OF THE YEAR. THEREFORE, WE SET ASIDE THE O RDERS OF LOWER AUTHORITIES AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. V ICTOR SHIPPING SERVICES (P) LTD(SUPRA) DELETE THE DISALLOWANCE OF RS.14,44,064 / - AND RS.78,668/ - MADE U/S.40(A)(IA) OF THE ACT AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 8. IN GROUND NO.2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,80,126/ - ALLEGING UNDISCLOSED GROSS RECEIPT FROM SEPCO. 9. THE ASSESSING OFFICER OBSERVED THAT THE CONTRACT RECEIPT OF RS.1,74,06,320/ - EXCLUDING SERVICE TAX & VAT COLLECTED AT SOURCE WAS TO BE CREDITED IN THE PROFIT AND LOSS ACCOUNT IN HEAD OF SEPCO ELECTRICAL CONSTRUCTION CORPN. BUT THE ASSESSEE HAD CREDITED RS.1,71,26,194/ - FROM THE SEPCO ELECTRICAL CONSTRUCTION CORPORATION. THUS, THERE WAS UNDISCLOSED RECEIPT OF RS.2,80,126/ - . THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF RS.2,80,126/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE ON THE GROUND THAT ALL THE EXPENSES PERTAINING TO 4 ITA NO.85 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 CONTRACT RECEIPT HAS BEEN CLAIMED IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. 10. ON APPEAL, TH E CIT(A) CONFIRMED THE ACTION BY THE ASSESSING OFFICER. 11. BEFORE US, LD A.R. OF THE ASSESSEE COULD NOT BRING ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LOWER AUTHORITIES THAT RS.2,80,126/ - WAS NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT ON ACCOUNT OF CONTRACT RECEIPTS FROM CEPCO . THEREFORE, WE DO NOT FIND ANY REAS ON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND, ACCORDINGLY CONFIRM THE SAME AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 12. IN GROUND NO.3 OF THE APPEAL, THE GRIEVANCE OF THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,42,000/ - BEING SMALL HA ND LOANS TAKEN FROM FRIENDS AND RELATIVES. 13. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED TO HAVE ACCEPTED HAND LOANS OF RS.3,42,000/ - FROM 18 PERSONS OF AN AMOUNT OF RS.19,000/ - EACH. THE ASSESSEE COULD NOT PROVE THE IDENTITY OF THE LOAN CR EDITORS , GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LOAN CREDITORS AND, THEREFORE, THE ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 14. ON APPEAL, THE CIT(A) CONFIRMED THE A CTION OF THE ASSESSING OFFICER. 5 ITA NO.85 /CTK/2015 ASSESSMENT YEAR :2010 - 2011 15. BEFORE US, NO MATERIAL WAS BROUGHT ON RECORD BY THE LD A.R. TO CONTROVERT THE FINDINGS OF LOWER AUTHORITIES THAT THE IDENTITY OF THE CREDITORS, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE LOAN CREDITORS WAS NOT PROVED BY THE ASSESSEE ON ACCOUNT OF HANDLOANS TAKEN FROM RELATIVES AND FRIENDS FROM 18 PERSONS OF RS.19,000/ - EACH. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND DISMISS THE GROUND OF APPEAL OF THE ASSESSEE 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 28 /04/2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (KULDIP SINGH) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER CUTTACK; DATED 28 /04/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : VIVEK AGARWAL, MARWARI PARA, JHARSUGUDA. 2. THE RESPONDENT: ITO, WARD - 1, JHARSUGUDA 3. THE CIT(A) CUTTACK 4. PR.CIT , SAMBALPUR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//