SHRI AJAY KUMAR SHARMA, Jaipur V. ADD. CIT, BHARATPUR

ITA 860/JPR/2011

• Counselvise Citation: 86023114 RSA 2011
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 04-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI
• Keywords: Gift
• Section: 234B; 145

Judgement Text

1 ITA 860-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 860/JP/2011 ASSTT. YEAR : 2005-06. SHRI AJAY KUMAR SHARMA, VS. THE ADDL. COMMISSION ER OF PROP. M/S. ARUN MOTOR, INCOME-TAX, BHARATPUR R ANGE SOMNATH CIRCLE, DAUSA. BHARATPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHENDRA GARGIEYA RESPONDENT BY : SHRI VINOD JOHARI DATE OF HEARING : 12.01.2012. DATE OF PRONOUNCEMENT : 30.01.2012. ORDER DATED : 30/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. GROUND NO. 1 WAS NOT PRESSED, THEREFORE, THE SAM E IS DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 IS AGAINST SUSTAINING THE ADDITION OF RS. 15,000/- MADE BY INVOKING PROVISIONS OF SECTION 145(3). 4. THE LD. A/R SUBMITTED THAT THIS ISSUE MAY BE DIS POSED OFF ON MERIT AND AFTER TAKING INTO CONSIDERATION THE WRITTEN SUBMISSIONS. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDER OF LD. CIT (A). 2 6. THE AO MADE AN ADDITION OF RS. 88,740/- IN STP S PARE PARTS ACCOUNT AS AO NOTICED THAT GP RATE SHOWN BY ASSESSEE WAS REDUCED TO 6.93% FROM 9.65% AS COMPARED TO EARLIER YEAR. NO SATISFACTORY REPLY COULD BE GI VEN ON BEHALF OF THE ASSESSEE BEFORE THE AO, THEREFORE, THIS ADDITION WAS MADE BY THE AO. 7. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A) AND REASON FOR FALL IN GP RATE WAS ALSO EXPLAINED. 8. AFTER CONSIDERING THE ORDER OF AO AND SUBMISSION S, THE LD. CIT (A) FOUND THAT AO HAS NOT POINTED OUT ANY DEFECT IN THE SALES OF SPAR E PARTS IN ASSESSMENT ORDER AND HAS ALSO NOT REJECTED THE BOOKS OF ACCOUNT UNDER SECTION 145 (3) OF THE ACT. HOWEVER, HE FOUND THAT ADDITION MADE BY AO IS ON HIGHER SIDE. THEREFO RE, HE RESTRICTED THE ADDITION TO RS. 15,000/-. 9. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), WE FIND THAT LD. CIT (A) HAS GIVEN A REASONABLE FINDING BY RESTRICTING THE A DDITION TO RS. 15,000/- AGAINST ADDITION OF RS. 38,740/-. THE GP RATE WAS DECLINED SUBSTANT IALLY. THEREFORE, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF LD. CIT (A). ACCORDI NGLY WE CONFIRM THE ORDER OF LD. CIT (A) IN RESPECT TO TRADING ADDITION. 10. GROUND NO. 3 RELATES TO CONFIRMING THE ADDITION OF RS. 2,95,000/- UNDER SECTION 68. 11. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTIC ED THAT ASSESSEE HAS SHOWN GIFT FROM 7 (SEVEN) PERSONS AT RS. 4,95,000/-. THE GIFT RECEIVED FROM SHRI GOPAL LAL SHARMA AT RS. 2,00,000/- WAS FOUND GENUINE. HOWEVER, REMAI NING GIFT OF RS. 2,95,000/- WERE NOT FOUND GENUINE AND, THEREFORE, THE ADDITION WAS MADE . THE LD. CIT (A) HAS CONFIRMED THE ADDITION MADE BY AO. 3 12. NOW, ASSESSEE IS IN APPEAL. THE CONTENTIONS RA ISED BEFORE LD. CIT (A) WERE REITERATED HERE BEFORE THE TRIBUNAL. FURTHER, ATTE NTION OF THE BENCH WAS DRAWN ON COPY OF WRITTEN SUBMISSIONS PLACED ON RECORD. 13. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED ON THIS GROUND. IT IS NOTICED THAT ASSESSEE HAS RECEIVED GIFT FROM HIS IN-LAWS. GIFT DEEDS WERE FILED ALONG WITH AFFIDAVITS, STATEMENTS OF ALL THE DONORS WERE RECORDED BY THE AO AND THEY HAVE ADMITT ED HAVING GIVEN GIFTS TO THE ASSESSEE. ALL THE DONORS ARE ASSESSED TO TAX. COM PUTATION OF TOTAL OF TOTAL INCOME, BALANCE SHEET, CAPITAL ACCOUNTS, BANK STATEMENT, FO RM NO. 16 WERE FILED BEFORE THE LOWER AUTHORITIES, COPIES OF WHICH ARE PLACED ON RECORD H ERE ALSO. IT IS FURTHER SEEN THAT THERE ARE SIX DONORS WHO HAD MADE PETTY GIFTS TO THE ASSE SSEE. ALL THESE PERSONS ARE RELATED TO THE ASSESSEE AS THEY ARE FROM IN-LAWS SIDE. SOURCE OF GIFT HAS ALSO BEEN EXPLAINED IN THE AFFIDAVITS FILED BEFORE THE AO AS WELL AS BEFORE LD . CIT (A). THEY ARE ASSESSED TO TAX ALSO. THEREFORE, LOOKING TO THE QUANTUM OF GIFT AND THE STATUS OF THESE PERSONS, WE ARE OF THE VIEW THAT ADDITIONS MADE AND SUSTAINED BY LOWER AUTHORITIES WERE NOT JUSTIFIED. ACCORDINGLY, WE DELETE THIS ADDITION AS ASSESSEE HA S DISCHARGED HIS ONUS BY PRODUCING ALL THE DONORS, BY FILING INCOME-TAX DETAILS, SOURCE OF INCOME ETC. VARIOUS CASE LAWS RELIED UPON BY LD. COUNSEL OF THE ASSESSEE INCLUDING THE D ECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF P.D215 CTR 303 AND OTHERS WHICH A RE IN SUPPORT OF THE CASE OF THE ASSESSEE. 14. NEXT GROUND IS AGAINST SUSTAINING ADDITION OF R S. 18,000/- ON ACCOUNT OF VARIOUS EXPENSES I.E. DISCOUNT EXPENSES, ENTERTAINMENT EXPE NSES, MISCELLANEOUS EXPENSES ETC. 4 THE AO DISALLOWED 20% OF THESE EXPENSES BY MAKING A TOTAL DISALLOWANCE OF RS. 38,444/-. THE LD. CIT (A) HAS CONFIRMED RS. 18,000 /- OUT OF TOTAL ADDITION MADE. 15. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. WE HAVE ALREAD Y SUSTAINED TRADING ADDITION MADE BY LD. CIT (A) BY INVOKING PROVISIONS OF SECTION 145(3 ). THEREFORE, SEPARATE ADDITION ON ACCOUNT OF VARIOUS, IN OUR CONSIDERED VIEW WAS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THIS ADDITION. 16. REMAINING GROUND IS CONSEQUENTIAL GROUND WHICH IS AGAINST CHARGING OF INTEREST UNDER SECTION 234B AND 234C AND WITHDRAWING OF INTE REST UNDER SECTION 244A. 17. THE AO IS DIRECTED TO ALLOW CONSEQUENTIAL RELIE F TO THE ASSESSEE. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 19. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 .01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- SHRI AJAY KUMAR SHARMA, DAUSA. THE ADDL. COMMISSIONER OF INCOME-TAX, BHARATPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 860/JP/2011) BY ORDER, AR ITAT JAIPUR.