SHABD PRAKASH LATH, BILASPUR(CG) V. ITO, WARD- 1(1), BILASPUR(CG)

ITA 89/BIL/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4791 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI
• Keywords: Business income; Salary income
• Section: 80C; 68

Judgement Text

1 ITA NO.89/RPR/2014 IN THE INCOME TAX APPELLA TE TRIBUNAL RAIPUR BENCH: RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 89/RPR/201 4 (A.Y 2009-10) SHABD PRAKASH LATH, NIRALA NAGAR, BUSTAND, BILASPUR (C.G). PAN ABWPL8707G (APPELLANT) VS ITO WARD 1(1), MAHIMA COMPLEX, VYAPAR VIHAR, BILASPUR, C.G (RESPONDENT) APPELLANT BY SHRI R.B DOSHI, CA RESPONDENT BY SHRI D.K. JAIN, DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 27/01/2014 PASSED BY CIT(A), BILASPUR (CG) FOR THE A.Y 2009-10 . 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT UNDER THE FACTS & THE LAW, THE LD. CIT(A) E RRED IN MAINTAINING DISALLOWANCE OF RS. 80,000/- OUT OF RS. 1,69,630/- CLAIMED TOWARDS EXPENSES WHICH IS UNJUSTIFIED. PRAYED THAT EXPENSES ARE VOUCHED & VERIFIABLE, MOR EOVER, THE INCOME OFFERED IS MORE THAN AS REQUIRED U/S 44AE. 2. THAT THE LD. CIT(A) FURTHER ERRED IN MAINTAINING ADDITION U/S 68 AMOUNTING TO RS. 2,50,000/- RECEIVED RS. 50,000/- FROM PAYAL LATH AND RS. 2,00,000/- RECEIVED FROM VANDANA AGARWAL, WHICH IS UNJUSTIFIED. PRAYED THAT THE APPELLANT DISCHARGED THE BURDEN OF PROVING CREDIT WORTHINESS, IDENTITY & GENUINENESS OF TRANSACTIONS & THEREFORE, THE ADDITION OF RS. 2,50,000/-. DATE OF HEARING 07.08.2018 DATE OF PRONOUNCEMENT 16.10.2018 2 ITA NO.89/RPR/2014 3. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY FROM M/S SARWA MANGLA SALES AND SERVICES PVT. LTD., BILASPUR , AS WELL AS INCOME FROM HOUSE PROPERTY, INTEREST INCOME FROM BANK AND TWO S OURCES OF BUSINESS INCOME I.E. INCOME FROM PLYING BUS AND LETTING OUT TATA 40 7 ON HIRE CHARGE BASIS OWNED BY HIM. THE RETURN OF INCOME FOR A.Y 2009-10 WAS FILED ON 02.12.2009 DECLARING INCOME AT RS. 1,88,750/- AFTER CLAIMING D EDUCTION U/S 80C OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER ASSESS ED THE INCOME AT RS. 8,57,880/- AFTER MAKING AN ADDITIONS OF RS. 1,69,13 0/- RELATING TO EXPENSES AND RS. 5,00,000/-AS REGARDS ESTIMATED RECEIPTS FRO M BUS PLYING U/S 68 OF THE INCOME TAX ACT, 1961. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. AS REGARDS GROUND NO. 1, THE LD. AR SUBMITTED TH AT THE ASSESSEE HAD SUBMITTED PROFIT AND LOSS ACCOUNT ALONG WITH ACCOUN T RELATING TO THE BUSINESS OF BUS PLYING AT PAGE NOS. 7 AND 8 OF THE PAPER BOO K WHICH WERE DULY PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). THE LD. AR ALSO SUBMITTED THAT THE EXPENSES DISALLOWED BY THE ASSES SING OFFICER TOWARDS RS. 1,69,130/- WAS DULY EXPLAINED BEFORE THE ASSESSING OFFICER. THE LD. AR SUBMITTED THAT NONE OF THE EVIDENCES SHOWS THAT IT RELATES TO GOODS CARRIAGE VEHICLE EXCEPT RS. 2,475/- TOWARDS TAX OF VEHICLE. THE LD. AR FURTHER SUBMITTED BILLS AND VOUCHER EXPENSES PRODUCED BEFOR E THE ASSESSING OFFICER WHICH WAS NOT AT ALL DISPUTED BY THE ASSESSING OFFI CER. THE LD. AR FURTHER SUBMITTED THAT THERE WAS NO DISCREPANCY POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THUS, THE DISALLOWANCE WHI CH IS PARTLY SUSTAINED BY THE CIT(A) IS ONLY ON PRESUMPTION BASIS. THE NARRA TION IN BOOKS SHOWS THAT ALL THE EXPENSES CLAIMED WERE RELATING TO BUS OPERATION . THE LD. AR SUBMITTED THAT THE CIT(A) WITHOUT VERIFYING THE VOUCHERS HAS GIVEN DIFFERENT REASON FOR SUSTAINING OF PARTIAL DISALLOWANCE. THE LD. AR FU RTHER SUBMITTED THAT RUNNING 3 ITA NO.89/RPR/2014 AND MAINTAINING EXPENSES OF GOODS CARRIAGE BORN BY HIRER. THE LD. AR FURTHER SUBMITTED THAT THERE WAS NO DISCREPANCY IN TWO BALA NCE SHEETS WHICH IS FOR THE BUSINESS AND FOR THE OTHER BALANCE SHEET IS FOR THE CONSOLIDATED ACCOUNTS. 6. AS REGARDS GROUND NO. 2, THE LD. AR SUBMITTED TH AT LOAN WAS GIVEN BY ONE PAYAL LATH HAS BEEN EXPLAINED AND THE SOURCE OF LOAN OF RS. 50,000/- WAS DISBELIEVED BY THE CIT(A) IS NOT JUST AND PROPER. THE LOAN GIVEN BY ONE VANDANA AGARWAL WAS ALSO EXPLAINED BEFORE THE ASSES SING OFFICER AS WELL AS BEFORE THE CIT(A). THE DOCUMENTS SUCH AS LOAN CONF IRMATION COMPUTATION AND BANK ACCOUNT AS WELL AS BALANCE SHEETS OF PAYAL LAT H AS WELL AS VANDANA AGARWAL WAS SUBMITTED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). THUS, THE LD. AR SUBMITTED THAT BURDEN CAS T UPON ASSESSEE U/S 68 OF THE INCOME TAX ACT WAS DISCHARGED BY THE ASSESSEE A ND THE SAME SHIFTED TO THE ASSESSING OFFICER, BUT NO FRESH EVIDENCE WAS BROUGH T BY THE ASSESSING OFFICER IN SUPPORT OF THE ADDITIONS MADE U/S 68 OF THE ACT. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER INCORRECTLY MENTIONED THAT NO NE OF THE EVIDENCES WERE PROVED BY THE ASSESSEE. IN FACT, THIS IS NOT CORREC T AS THE ASSESSEE HAS FILED ALL THE RELEVANT EVIDENCES IN SUPPORT OF HIS CLAIM. THE ASSESSING OFFICER SHOULD HAVE EXPLAINED HOW THE DETAILS FILED BY THE ASSESSE E ARE CONTRARY TO HIS CLAIM. THE LD. AR SUBMITTED THAT NO ADVERSITY WAS DRAWN WI THOUT MAKING ANY ENQUIRY FROM CREDITORS ABOUT THE SOURCE OF THEIR FU NDS. THE LD. AR RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS GANGESHWARI METAL PVT. LTD., (2014) 361 ITR 10 (DEL). THE LD. AR SU BMITTED THAT THE LOAN WAS OUT OF THEIR OWN CAPITAL AND WAS ACCEPTED IN THE RETURN S, THEREFORE, DIFFERENT VIEW CANNOT BE TAKEN IN THE PRESENT CASE. THE LD. AR FU RTHER SUBMITTED THAT NO CONTRARY MATERIAL / ADVERSE MATERIAL WAS BROUGHT BY THE ASSESSING OFFICER FOR MAKING SUCH ADDITIONS. THE LD.AR RELIED UPON THE D ECISION OF THE HONBLE CHHATISHGARH HIGH COURT IN THE CASE OF CIT VS. ABDU L AZIZ (2012) 251 CTR 58 (C.G) AS WELL AS THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN CASE OF CIT VS. METACHEM INDUSTRIES (2000) 245 ITR 160. THE LD. AR FURTHER 4 ITA NO.89/RPR/2014 SUBMITTED THAT THE RELIANCE OF THE DECISION OF THE TRIBUNAL IN CASE OF KUSHAL PRASAD MANHAR VS. ITO ORDER DATED 30.07.2009 WHICH WAS CONFIRMED BY THE HONBLE HIGH COURT AS MENTIONED BY THE CIT(A) I N HIS ORDER, IS NOT AT ALL APPLICABLE AND HAS DISTINGUISHING FACTORS. THE LD. AR POINTED OUT FOLLOWING DISTINGUISHING FACTORS:- FACTS/ FINDINGS IN KUSHAL PRASAD MANHAR PRESENT ASSESSEE ADDITION MADE NOT ONLY ON ACCOUNT OF CASH DEPOSIT BUT ALSO BECAUSE GENUINENESS AND CREDIT WORTHINESS NOT ESTABLISHED. GENUINENESS AND CREDIT WORTHINESS PROVED BY CONFIRMATION, ENTRIES IN BANK ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET, WHICH HAVE ALL REMAINED UNDISPUTED AND ACCEPTED IN THE CASE OF THE CREDITORS. CAPACITY OF THE CREDITORS AND THEIR CREDITWORTHINESS NOT PROVED. CAPITAL ACCOUNT AND BALANCE SHEET DO NOT APPEAL TO HAVE BEEN SUBMITTED IN FAVOUR OF CREDITWORTHINESS. CAPITAL ACCOUNT AND BALANCE SHEET SUBSTANTIATING CREDIT WORTHINESS SUBMITTED, REMAINED UNCONTROVERTED. CASH DEPOSITS WERE MADE ON 18 DATES, IN SMALL AND ODD AMOUNTS. SINGLE CASH DEPOSIT MADE HUGE AMOUNT OF CASH (RS. 14,99,000/-) WAS NOT CONSIDERED TO BE PROBABLE OF BEING KEPT BY THE ASSESSEE. HUGE AMOUNT OF CASH IS NOT INVOLVED. LOANS WERE GIVEN ON DIFFERENT DATES, IN SMALL AND ODD AMOUNT WHICH RAISED DOUBT ITS GENUINENESS. LOAN GIVEN IN ONE GO. 6. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DER OF THE ASSESSING OFFICER AS WELL AS THE CIT(A). AS REGARDS TO GROUND NO. 2, THE LD. DR SUBMITTED THAT REGARDING THE FINDINGS OF THE ASSESSING OFFICE R THAT CASH WAS DEPOSITED IN THE RESPECTIVE BANK ACCOUNT OF THE CREDITORS BEFORE ISSUANCE OF CHEQUE OF EQUAL AMOUNT IN FAVOUR OF THE ASSESSEE. REGARDING THE SOU RCE OF CASH DEPOSIT OF RS.50,000/- ON 19.10.2008 THE LD. DR SUBMITTED THAT IMMEDIATELY AFTER DEPOSIT OF CASH, PAYAL LATH ISSUED CHEQUE OF RS.50, 000/- IN FAVOUR OF THE ASSESSEE. AS REGARDS, SOURCE OF CASH DEPOSIT OF RS. 2,00,000/- ON 06.06.2008 IN THE BANK ACCOUNT OF VANDANA AGARWAL WITH CENTRAL BA NK OF COMMERCE, 5 ITA NO.89/RPR/2014 BILASPUR, IMMEDIATELY AFTER DEPOSIT OF CASH, VANDAN A AGARWAL ISSUED CHEQUE OF RS.2,00,000/- IN FAVOUR OF THE ASSESSEE ON SAME DAT E, FOR WHICH THERE WAS NO EXPLANATION GIVEN BY THE ASSESSEE. THUS, THE LD. DR SUBMITTED THAT THE CIT(A) RIGHTLY MADE ADDITION. 7. WE HAVE HEARD THE BOTH THE PARTIES AND PERUSED A LL THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS GROUND NO. 1, WE F IND THAT THE BILLS AND VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS THE CIT(A) BY THE ASSESSEE. THE EXPENSES DISALLOWED BY THE ASSESS ING OFFICER TOWARDS RS. 1,69,130/- WAS DULY EXPLAINED BEFORE THE ASSESSING OFFICER. DESPITE ACCEPTING THE EVIDENCE PRODUCED BY THE ASSESSEE AND GIVING BE NEFIT OF RS. 79,000/- WITHOUT DOUBTING THE SAME, THE CIT(A) DISALLOWED RS . 80,000/- AS EXPENSES. THIS ITSELF SHOWS THAT THE CIT(A) HAS NOT GIVEN PRO PER REASONING WHILE DISALLOWING THE PARTIAL EXPENSES. THE CIT(A) WITHOU T VERIFYING THE VOUCHERS HAS GIVEN DIFFERENT REASON FOR SUSTAINING OF PARTIAL D ISALLOWANCE. THUS, THE DISALLOWANCE WHICH IS PARTLY SUSTAINED BY THE CIT(A ) IS ONLY ON PRESUMPTION BASIS. A PERUSAL OF THE BOOKS OF ACCOUNT SHOWS THA T ALL THE EXPENSES CLAIMED WERE RELATING TO BUS OPERATION. THUS, THE ASSESSEE DISCHARGED HIS BURDEN OF PROVING THE EXPENSES THROUGH THE EVIDENCES. THEREFO RE, ASSESSING OFFICER AS WELL AS THE CIT(A) ARE NOT CORRECT IN DISALLOWING T HE EXPENSES. THEREFORE GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 8. AS REGARDS GROUND NO. 2, IT IS PERTINENT TO NOTE THAT THE DOCUMENTS SUCH AS LOAN CONFIRMATION COMPUTATION AND BANK ACCOUNT A S WELL AS BALANCE SHEETS OF PAYAL LATH AS WELL AS VANDANA AGARWAL WERE SUBMI TTED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) BY THE ASSESSE E. THUS, INITIAL BURDEN OF PROVING THE EVIDENCE ON PART OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT WAS DISCHARGED BY THE ASSESSEE AND THE SAME SHIFTED TO THE ASSESSING OFFICER, BUT NO FRESH EVIDENCE WAS BROUGHT BY THE ASSESSING OFFI CER IN SUPPORT OF THE ADDITIONS MADE U/S 68 OF THE ACT. THE ASSESSING OF FICER INCORRECTLY MENTIONED THAT NONE OF THE EVIDENCES WERE PRODUCED BY THE ASS ESSEE WHICH IS NOT CORRECT 6 ITA NO.89/RPR/2014 AFTER GOING THROUGH THE RECORDS SUBMITTED BEFORE TH E ASSESSING OFFICER AND THE CIT(A). THE ASSESSEE FILED ALL THE RELEVANT EVIDENC ES IN SUPPORT OF HIS CLAIM. THERE IS NO EXPLANATION BY THE ASSESSING OFFICER AS TO HOW THE DETAILS FILED BY THE ASSESSEE ARE CONTRARY TO HIS CLAIM. THUS, NO C ONTRARY VIEW CAN BE TAKEN OR THE CLAIMS OF THE ASSESSEE BE DOUBTED WITHOUT MAKIN G ANY ENQUIRY FROM CREDITORS ABOUT THE SOURCE OF THEIR FUNDS. THE LD. AR RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS GANGE SHWARI METAL PVT. LTD., (2014) 361 ITR 10 (DEL) WHICH IS RELEVANT IN THE PR ESENT CASE. THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IS THAT IF THE COMPL ETE PARTICULARS OF CREDITORS ARE FURNISHED TO THE ASSESSING OFFICER AND ASSESSIN G OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATERIAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPO N, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE U/S 68 OF THE INC OME TAX ACT, 1961. THE LOANS WERE OUT OF THE CREDITORS OWN CAPITAL AND WA S ACCEPTED IN THE RETURNS, THEREFORE, DIFFERENT VIEW CANNOT BE TAKEN IN THE PR ESENT CASE. HERE ALSO, THE ASSESSING OFFICER HAS NOT BROUGHT ANY CONTRARY MATE RIAL / ADVERSE MATERIAL FOR MAKING SUCH ADDITIONS. THE LD.AR RELIED UPON THE D ECISION OF THE HONBLE CHHATISHGARH HIGH COURT IN THE CASE OF CIT VS. ABDU L AZIZ (2012) 251 CTR 58 (C.G). THE RELIANCE OF THE DECISION OF THE TRIBUNAL IN CASE OF KUSHAL PRASAD MANHAR VS. ITO ORDER DATED 30.07.2009 WHICH WAS CONFIRMED BY THE HONBLE HIGH COURT AS MENTIONED BY THE CIT(A) IN HI S ORDER IS NOT AT ALL APPLICABLE AND IS RIGHTLY DISTINGUISHED BY THE LD. AR. HENCE, IN THE PRESENT CASE THE CREDITWORTHINESS IN OUR OPINION HAS BEEN E XPLAINED AND THERE IS AN EXPLANATION AS WELL AS THE DETAILS SUBMITTED BEFORE THE ASSESSING OFFICER WHICH WAS CRUCIAL DIFFERENCE IN THE PRESENT CASE TO THAT OF THE DECISION IN THE CASE OF KUSHAL PRASAD MANHAR (SUPRA). THE RELIANCE OF THE LD. AR ON THE DECISI ON IN THE CASE OF ABDUL AZIZ (SUPRA) IS RELEVANT WHEREIN IT IS HELD THAT ONCE THE ASSESSEE PROVED CREDITWORTHINESS OF THE CREDITORS N O ADDITION CAN BE MADE UNDER SECTION 68 OF THE ACT. THEREFORE, THE ASSESSI NG OFFICER AS WELL AS THE CIT(A) ARE NOT CORRECT IN MAKING THIS ADDITION. HEN CE, GROUND NO. 2 IS ALLOWED. 7 ITA NO.89/RPR/2014 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 16/10/2018 KRK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT PRIVATE SECRETARY RAIPUR BENCH, RAIPUR