Dakshin Dinajpur Zilla Regulated Market Committee, Dakshin Dinajpur V. ACIT, Circle - Malda, Malda

ITA 905/KOL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3058 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 16-06-2011
• Court: TRIBUNAL
• Department Lawyers: K N JANA
• Assessee Lawyers: SUBASH AGARWAL ADOV CATE
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE . . . . . . . . , ! /AND ' #!' , ) [BEFORE SHRI N. S. SAINI, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 905/KOL/2011 #% &' #% &' #% &' #% &'/ // / ASSESSMENT YEAR: 200 5- 0 6 DAKSHIN DINAJPUR ZILLA REGULATED VS. ASSISTANT CO MMISSIONER OF INCOME-TAX, MARKET COMMITTEE (PAN: ACXPD9403D MALDA CIRCLE, MA LDA. ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 22.04.2013 DATE OF PRONOUNCEMENT: 26.04.2013 FOR THE APPELLANT: SHRI SUBASH AGARWAL, ADOV CATE FOR THE RESPONDENT: SHRI K. N. JANA, JCIT - / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), JALPAIGURI IN APPEAL NO. 254/MLD/CIT(A)/JAL/07-08 DATED 04.02.2011. ASSESSME NT WAS FRAMED BY ACIT, MALDA CIRCLE, MALDA U/S. 143(3) OF THE INCOME-TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 21.12. 2007. 2. THE FIRST FOUR GROUNDS, THE ONLY ISSUE ARISES I S AGAINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO MAKING ADDITION OF PROVISION FOR C ONSTRUCTION OF BUILDING CLAIMED BY THE ASSESSEE AS APPLICATION OF FUNDS. THE FOLLOWING AR E THE FOUR GROUNDS: 1. THAT THE LD. ASSESSING OFFICER HAS ERRE IN ASSE SSING THE TOTAL INCOME AT RS.43,63,313/- INSTEAD OF RS. NIL INCOME RETURNED B Y THE ASSESSEE. 2. THAT THE LD. CIT(A) AND TH LD. ASSESSING OFFICER ERRED IN HOLDING THAT A SUM OF RS.35,00,000/- PROVISION FOR CONSTRUCTION OF BUILDI NG IS NOT AN APPLICATION OF FUND AND THEREFORE NOT DEDUCTIBLE FROM THE RECEIPTS. 3.THAT THE LD. CIT(A) ERRED IN HOLDING THAT PURPOSE OF SETTING APART OF THE FUND OF RS.35,00,000/- HAS NOT BEEN MENTIONED IN AUDIT REPO RT, THEREFORE PROVISION CREATED IS NOT AN APPLICATION OF FUND. 4. THAT THE LD. ASSESSING OFFICER ERRED IN HOLDING THAT A SUM OF RS.35,00,000/- IS THE UNDISCLOSED INCOME OF THE ASSESSEE. 3. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDIN GS NOTICED THAT THE ASSESSEE HAS ONLY CREATED PROVISION AND FOR THIS HE RECORDED FOLLOWIN G FINDINGS: UPON VERIFICATION OF THE INCOME AND EXPENDITURE AC COUNT SUBMITTED ALONG WITH THE RETURN, IT IS SEEN THAT A SUM OF RS.35 LAKHS HAS BE EN DEBITED UNDER THE HEAD CORPUS FUND (BUILDING). WHEN THE A/R WAS ASKED TO EXPLAI N THE NATURE OF THIS DEBIT ENTRY, HE 2 ITA NO.905/K/2011 DAKSHI DINAJPUR ZILLA REGULATED MARKET COMMITTEE AY: 2005-06 STATED THAT THIS AMOUNT CONSTITUTED PROVISION FOR C ONSTRUCTION OF BUILDING. AS PER THE PROVISIONS OF THE INCOME TAX ACT, THE SUM OF RS.35 LAKHS STATED TO BE PROVISION FOR CONSTRUCTION OF BUILDING IS NOT A DEDUCTIBLE EXPENS ES. ACCORDINGLY, THE SUM OF RS.35 LAKHS IS TREATED AS THE UNDISCLOSED INCOME OF THE A SSESSEE AND ADDED BACK TO THE INCOME DISCLOSED IN THE INCOME AND EXPENDITURE ACCO UNT. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE HAS NOT SERIOUSLY CONTESTED THE ISSUE. HE ADMITTED THAT THIS IS MERELY A PROVISION AND ONCE THIS IS A PROVISION THE RE IS NO QUESTION OF APPLICATUION OF FUNDS QUA THIS AMOUNT OF RS.35 LAKHS AND ONCE THE FUNDS ARE N OT APPLIED AND ONLY PROVISION IS CREATED I.E. NOT AT ALL ALLOWABLE EXPENDITURE AND THE AO HAS RIG HTLY MADE THE ADDITION AND CIT(A) HAS RIGHTLY CONFIRMED THE SAME. IN SUCH CIRCUMSTANCES, WE ALSO CONFIRM THE ACTION OF LOWER AUTHORITIES. THESE GROUNDS OF APPEAL OF ASSESSEE AR E DISMISSED. 5. COMING TO SECOND ISSUE OF THE ASSESEES APPEAL R EGARDING APPLICATION OF FUNDS SPENT ON PURCHASE OF LAND, BUILDING, FURNITURE AND FIXTURE T O THE TUNE OF RS.20,36,939/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.5: 5. THAT THE LD. CIT(A) AND THE LD. AO DID NOT CON SIDER THE AMOUNT SPENT FOR PURCHASE OF LAND, BUILDING, FURNITURE & FIXTURE OF RS.20,36,939/- TOWARD APPLICATION OF FUND AS PRESCRIBED U/S. 11(1)(A) OF THE ACT. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THOUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THERE IS NO CLAIM MADE BY THE ASSESSEE BEFORE AO AND THERE IS NO WHISPER ABOUT THE SAME AND EVEN THIS ISSUE WAS NOT BEFORE CIT(A). THE LD. COUNSEL FOR THE ASSESSEE ADMITTED THAT THIS ISSUE IS FIRST TIME TAKEN UP BEFORE TRIBU NAL. WE FIND THAT THIS IS NOT A LEGAL ISSUE, THIS IS A FACTUAL ISSUE. LD. COUNSEL FOR THE ASSESEE DREW OUR ATTENTION TO THE SCHEDULE C TO THE ACCOUNTS, WHEREIN SCHEDULE OF FIXED ASSET AS ON 31. 03.2005 IS ENCLOSED. THE CLAIM OF ASSESSEE IS UNSUSTAINABLE BECAUSE ON BUILDING AND FURNITURE AND FIXTURE ASSESSEE HAS CLAIMED DEPRECIATION AND IN NO WAY IT CAN BE ALLOWED BECAUS E THIS ISSUE WAS NEVER RAISED BEFORE THE AO OR CIT(A). THE FRESH ISSUE CANNOT BE RAISED BEFORE TRIBUNAL FOR THE FIRST TIME IN CASE THE FACTS ARE NOT AVAILABLE ON RECORD. IN SUCH CIRCUMSTANCES , WE DISMISS THE GROUND OF APPEAL OF ASSESSEE. 7. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 26.04.2013 SD/- SD/- . . . . . . . . , ' ' ' ' #!' #!' #!' #!' , (N. S. SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 26TH APRIL, 2013 /0 #12 #3 JD.(SR.P.S.) 3 ITA NO.905/K/2011 DAKSHI DINAJPUR ZILLA REGULATED MARKET COMMITTEE AY: 2005-06 - 4 +##5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DAKSHIN DINAJPUR, ZILLA REGULATED MARKE T COMMITTEE, P.O. BALURGHAT, DIST DAKSHIN DINAJPUR . 2 +,)* / RESPONDENT ACIT, MALDA CIRCLE, MALDA 3 . #- ( )/ THE CIT(A), JALPAIGURI 4. 5. #- / CIT JALPAIGURI 5 <#= +# / DR, KOLKATA BENCHES, KOLKATA ,5 +#/ TRUE COPY, ->/ BY ORDER, ' !2 /ASSTT. REGISTRAR .