DCIT, Berhampur Circle, Berhampur, Berhampur V. Bhaskar Dash, Berhampur

ITA 92/CTK/2014

• Counselvise Citation: 9222114 RSA 2014
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Assessment record
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH ES , CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 59 / CTK / 201 4 : (ASST. YEAR : 200 8 - 09 ) BHASKAR DASH , C/O KUTHARI SALES AGENCY, RAILWAY GOODS SHED ROAD, B ERHAMPUR , GANJAM 7 60008 . PAN : A BJPD2532L . (APPELLANT) VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, B ERHAMPUR RANGE . (RESPONDENT) AND ITA NO. 92/ CTK/ 2014 : (ASST.YEAR:2008 - 09) : (ASST.YEAR:2008 - 09) DY. COMMISSIONER OF INCOME TAX, VS. BHASKAR DASH, BERHAMPUR CIRCLE, C/O KUTHARI SALES AGENCY, (APPELLANT) RAILWAY GOODS SHED ROAD, BERHAMPUR , GANJAM 760008. PAN : A BJPD2532L . (RESPONDENT) THE ADDITIONAL COMMISSIONER OF INCOME TAX, BERHAMPUR RANGE. (RESPONDENT) A SSESSEE BY : SHRI D.K. SHETH , A.R. RE VENEUE BY : SHRI RABIN CHOUDHURI , LD. D.R. DATE OF HEARING : 0 5 / 0 2 /201 5 DATE OF PRONOUNCEMENT : 05/03 /201 5 O R D E R PER P.K. BANSAL BOTH THE APPEAL S ARE FILED BY THE ASSESSEE AND REVENUE AGAINST THE RESPECTIVE ORDER S OF CIT(A) , B ERHAMPUR , ODISHA DT D . 0 3 . 1 2 .201 3 BY TAKING THE RESPECTIVE GROUNDS OF APPEAL FOR THE ASSESSMENT YEAR 200 8 - 0 9 ARE AS UNDER : - ITA NO.57/CTK/2014 : - 1. FOR THAT THE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION OF RS.56,30,717/ - UNDER HEAD UNEXPLAINED SOURCES AS MADE BY THE 2 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) LEARNED BY THE A.O. AND AS SUSTAINED BY THE LEARNED COMMISSIONER IS ARBITRARY UNLAWFUL AND U NJUSTIFIED. 2. FOR THAT THE AFORESAID ADDITION IS BASED ON MERE SURMISES AND NOT ON THE CORRECT STATUS AFFAIRS AS AVAILABLE WITH THE L EARNED A.O AND ALSO AS EXPLAINED TO THE LEARNED COMMISSIONER. 3. FOR THAT THE ADDITION OF RS.4,11,785/ - AS MADE UNDER HEAD UNEXPLAINED CASH IS WHOLLY UNCALLED FOR AND UNJUSTIFIED AND THE LEARNED COMMISSIONER IS NOT JUSTIFIED TO CONFIRM THE SAME. 4. FOR THAT THE LEARNED A.O AS - WELL - AS THE LEARNED C OMMISSIONER SHOULD HAVE APPRECIATED THE EXPLANATION AND S UBMISSIONS. ITA NO. 92 /CTK/2014 : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS FACTS IN RESTRICTING THE ADDITION TO RS.56,30,717/ - IN PLACE OF RS.66,30,717/ - MADE BY THE AO INSPITE OF THE FACT THAT THE ASSESSEE FAILED TO PROVE ITS CONTENTION. 2. SINCE THE ISSUE INVOLVED IN BOTH THESE APPEALS ARE COMMON ARE THEREFORE BEING DISPOSED OF BY THIS COMMON ORDER . THE BRIEF FACTS OF THE CASE FOR THE ASSESSMENT YEAR 200 8 - 0 9 ARE THAT THE ASSESSEE DERIVES INCOME FROM HOUSE PROPERTY AND REMUNERATION AND INTEREST FROM PARTNERSHIP FIRM. THE RETURN OF INCOME WAS FILED ON 27.11.2008 DISCLOSING THE TOTAL INCOME OF RS.4,84,930/ - . THE ASSESSMENT WAS COMPLETED ON AN INCOME OF RS.75,27,430/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3. THE GROUND NO. 1 AND 2 IN ASSESSEES APPEAL AS WELL AS ONLY EFFECTIVE GROUNDS IN REVENUES APPEAL RELATES TO THE COMMON ISSUE REGARDING THE ADDITIO N MADE BY THE ASSESSING OFFICER IN RESPECT OF INVESTMENT FROM UNDISCLOSED SOURCES. THE FACTS RELATING TO THE SAID ADDITION ARE THAT THE ASSESSING OFFICER NOTED OUT OF THE EXPENDITURE OF RS.92,00,000/ - SUBSTANTIAL LUMP SUM PAYMENT IS TOWARDS LABOUR CHARGES AND PURCHASE OF MATERIAL MADE IN CASH. SINCE THE ASSESSEE COULD NOT SATISFY ABOUT THE SOURCE OF RS.66,30,717/ - TOWARDS THE CONSTRUCTION OF THE BUILDING THE ASSESSING OFFICER ISSUED SHOW CAUSE AND ULTIMATELY NOT BEING SATISFIED MADE THE ADDITION. THE MATTE R WENT BEFORE THE 3 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) CIT(A). THE CIT(A) REDUCED THE ADDITION TO THE EXTENT OF RS.56,30,717/ - BY OBSERVING AS UNDER : - 4.3 I HAVE CAREFULLY CONSIDERED THE MATTER, GONE THROUGH THE ASSESSMENT RECORDS AND PERUSED THE SUBMISSIONS FILED BY THE APPELLANT AND T HE REPORTS SUBMITTED BY THE A.O. THE AO ADDED RS.66,30,717/ - ON THE GROUND THAT AGAINST THE TOTAL INVESTMENT OF RS.92 LACS IN THE BUILDING, THE MAXIMUM EXPLAINED SOURCE OF INVESTMENT IS ONLY RS.25,69,283/ - AND ACCORDINGLY HE HELD THAT THE APPELLANT HAS SP ENT THE BALANCE AMOUNT OF RS.66,30,717/ - FROM HIS UNDISCLOSED SOURCES. THERE IS NO DISPUTE THAT THE CONSTRUCTION OF THE PROPERTY WAS COMPLETED BY SEPTEMBER, 2007. THE AO WAS OF THE VIEW THAT THE APPELLANT IS EXPECTED TO HAVE SPENT THE ENTIRE MONEY TOWARDS THE COST OF CONSTRUCTION BY SEPTEMBER, 2007 WHEREAS THE APPELLANT HAS ARGUED THAT WHILE THE CONSTRUCTION WAS COMPLETE HE DISCHARGED THE OUTSTANDING IN SUBSEQUENT MONTHS AFTER HE OBTAINED THE LOAN FROM SBI. NORMALLY IT IS EXPECTED THAT MORE THAN 95% OF TH E EXPENDITURE WILL BE INCURRED DURING THE CONSTRUCTION OF THE BUILDING AND HARDLY EXPENSES UPTO 5% MAY REMAIN AS OUTSTANDING. AGAINST THIS THE APPELLANT IS CONTENDING THAT MORE THAN 70% OF THE EXPENDITURE INCURRED IN THE CONSTRUCTION OF THE BUILDING REMAIN ED OUTSTANDING AND WAS PAID OVER A PERIOD OF 5 TO 6 MONTHS AFTER THE BUILDING WAS CONSTRUCTED. SUCH A STATE OF AFFAIRS TO SAY THE LEAST IS QUITE UNUSUAL AND THUS THE ONUS IS ON THE APPELLANT TO PROVE ITS CASE. IN THE INTEREST OF SUBSTANTIVE JUSTICE, I HAVE GIVEN THE APPELLANT SUFFICIENT OPPORTUNITIES TO EXPLAIN THE MATTER BEFORE THE AO AND BEFORE ME. BUT, THE APPELLANT FAILED TO PROVE CONVINCINGLY HIS ARGUMENT IN ITS ENTIRETY. WHAT IS MOST UNACCEPTABLE IN THE EXPLANATION OF THE APPELLANT IS THE FACT THAT THE DETAILS FILED BY THE APPELLANT DURING THE APPEAL PROCEEDING HAVE CHANGED FROM TIME TO TIME. FOR EXAMPLE, INITIALLY THE A PPELLANT STATED THAT AN AMOUNT OF RS.22,68,540/ - WAS PAYABLE TO MS/ RD CONSTRUCTION TOWARDS LABOUR CHARG ES WHICH WAS PAID IN CASH AFTER SEPTEMBER, 2007. SUBSEQUENTLY, WHEN THE AO POINTED OUT THAT AN AMOUNT OF RS.10LAC HAS BEEN PAID TO THIS CONCERN BY CHEQU E, THE APPELLANT ACCEPTED THE SAME BUT RE - CASTED THE CASH FLOW STATEMENT AND IN THE PROCESS CHANGED THE DATES AND THE AMOUNTS OF PAYMENTS TO VARIOUS PARTIES INCLUDING M/S RD CONSTRUCTION. IT ALSO SUBMITTED THAT THE ACTUAL OUTSTANDING BALANCE TO RD CONSTRU CTION WAS RS.18,18, 540/ - AND NOT RS.22,68,540/ - AS SUBMITTED EARLIER. FURTHER, WHILE AS PER THE EARLIER CASH FLOW STATEMENT, PAYMENTS OF RS.7,200/ - , RS.96,100/ - AND RS.30,600/ - WERE STATED TO HAVE BEEN PAID TO M/S SAPNA SUPPLIERS ON 08 - 10 - 2007, IN THE RE - CASTED CASH FLOW STATEMENT FILED SUBSEQUENTLY BY THE LD. A/R, THESE PAYMENTS HAVE BEEN SHOWN ON 15 - 10 - 2007. ALSO, AS PER THE COPY OF THE LEDGER ACCOUNT PURPORTEDLY SIGNED BY THE PROPRIETOR OF SAPNA SUPPLIER WHILE THERE IS AN OUTSTANDING OF RS.1,33,900/ - T HE ENTIRE AMOUNT WAS STATED TO HAVE BEEN PAID DURING THE YEAR ITSELF AS SUBMITTED BY THE LD. A/R DURING THE COURSE OF THE HEARING. SECONDLY , AS MENTIONED BY THE AO IN HIS REMAND REPORT AN AMOUNT OF RS.6,66,910/ - HAVE BEEN SHOWN AS BILLS RAISED IN FAVOUR O F M/S RD CONSTRUCTION BY M/S KUTHARI STEELS, KUTHARI CEMENT SYNDICATES AND KUTHARI SALES. IT MAY BE MENTIONED HERE THAT ALL THESE CONCERNS ARE SISTER CONCERNS OF THE APPELLANT AND THEREFORE, IT IS NOT UNDERSTOOD AS TO WHY THESE BILLS RELATING TO THE 4 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) APPELL ANT WILL BE RAISED AGAINST M/S RD CONSTRUCTION AND NOT IN THE NAME OF THE APPELLANT. I AM, THEREFORE, INCLINED TO BELIEVE THAT THESE BILLS REPRESENT INDEPENDENT TRANSACTION OF THESE CONCERNS WITH M/S RD CONSTRUCTION WHICH IS NOT CONNECTED WITH THE APPELL ANT AND HAVE NOW BEEN FURNISHED JUST IN SUPPORT OF THE APPELLANTS CONTENTION THAT PAYMEN TS HAVE BEEN MADE SUBSEQUENTLY. THIRDLY , IN CASE OF BHAWANI SUPPLY AGENCIES, AS PER THE LEDGER SUPPLIED BY THE APPELLANT WHICH WAS PURPORTEDLY SIGNED BY THE CONCERNED PARTY, AN AMOUNT OF RS.5,52,300/ - IS SHOWN AS OUTSTANDING AT THE END OF THE YEAR WHEREAS IN THE CASH FLOW STATEMENT FURNISHED BY THE LD.A/R, THE ENTIRE AMOUNT IS STATED TO HAVE BEEN PAID TO THIS PARTY. FOURTHLY, AS PER THE DETAILS SUBMITTED BY THE LD. A/R WHILE THE APPELLANT PURPORTEDLY MADE SUBSTANTIAL PAYMENTS TO ITS OWN SISTER CONCERNS LIKE M/S KUTHARI STEELS AND KUTHARI SALES AGENCY BEFORE SEPTEMBER, 2007, HE DID NOT MAKE ANY PAYMENT AT ALL TO M/S BHAWANI SUPPLY AGENCY (RS.6,13,800/ - ) FOR CEMENT, SAHU SUPPLIERS (RS.9,28,000/ - ) FOR CENTERING MATERIALS, M.T. HOUSE SUPPLY (RS.2,29,794/ - ) FOR SANITARY ITEMS, GEMINI GLASS HOUSE (RS.10,32,700/ - ) FOR GLASS AND LABOUR, NARAYAN ELECTRICALS (RS.3,78,800/ - ) FOR LIGHT FITTINGS, RAO AGENCY (RS.7,03,520/ - ) FOR PLY W OOD ETC., AND AMBICA HOUSEHOLDS (RS.3,90,885/ - ) FOR ELECTRICAL CHARGES TILL THE CONSTRUCTION WAS OVER. IN FACT THE APPELLANT ALSO INITIALLY CLAIMED THAT HE DID NOT MAKE ANY PAYMENT OF LABOUR CHARGES OF RS.22,68,540/ - TO RD CONSTRUCTION TILL SEPTEMBER, 200 7. IT IS QUITE UNUSUAL THAT THE APPELLANT SHALL MAKE PAYMENTS TO ITS OWN SISTER CONCERNS BUT WILL AVAIL CREDITS FOR SUCH LONG PERIOD FROM UNRELATED PARTIES. AND THE LAST BUT THE MOST IMPORTANT FACT WHICH GOES AGAINST THE APPELLANT IS THAT NONE OF THE PARTIES WHO WERE SPECIFICALLY SUMMONED BY THE AO APPEARED BEFORE THE AO TO CONFIRM THE CONTENTION OF THE APPELLANT. ALL OF THEM SIMPLY FILED SOME LETTERS IN THE OFFICE OF THE AO ON A SINGLE DATE WITHOUT ANY SUPPORTING EVIDENCE. IN OTHER WORDS THE APPELLANT HAS BEEN UNABLE TO SUBSTANTIATE ITS CONTENTION THAT AN AMOUNT IN EXCESS OF RS.66 LACS OUT OF AN INVESTMENT OF RS.92LACS WAS KEPT PENDING EVEN AFTER THE BUILDING WAS CONSTRUC TED. SUCH A CONTENTION FAILS THE TEST OF HUMAN PROBABILITY. THEREFORE, EXCEPT THE PAYMENT OF RS.10LAC BY CHEQUE WHICH AS CONFIRMED BY BANK TO THE AO DURING THE REMAND PROCEEDING HAS BEEN PAID TO M/S RD CONSTRUCTION BY THE APPELLANT AFTER SEPTEMBER, 2007, I AM UNABLE TO GIVE ANY FURTHER RELIEF TO THE APPELLANT REGARDING THE ADDITION OF INVESTMENT FROM UNDISCLOSED SOURCES. THE ADDITION IS ACCORDINGLY SUSTAINED AT RS.56,30,717/ - . 4. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WIT H THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED IN THIS CASE THE STATEMENT OF BHASKAR DASH PARTNER OF KOTHARI SALES AGENCY WAS RECORDED. HE FURNISHED THE COPY OF THE LEDGER ACCOUNT AND HE CONFIRMED THAT HE ADMIT TRANSACTION WITH THE ASSESSEE ABOUT THE S UPPLY OF MATERIAL. THE ASSESSING OFFICER HAS ALSO CALLED FOR THE OTHER PARTIES FROM THROUGH WHOM THE ASSESSEE GOT CONSTRUCTION MATERIAL AS WELL AS LABOUR CHARGES. THESE PARTIES DETAILED AS BELOW 5 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) R AISED THE BILLS TO THE ASSESSEE UPTO SEPTEMBER, 2007 BUT CO NFIRMED PAYMENT WERE RECEIVED BY THEM AFTER SEPTEMBER, 2007 AS DETAILED BELOW: - M/S RAO AGENCY RS.7.05 LAKHS M/S GEMINI GLASS RS.10.35 LAKH M/S BHAWANI SUPPLY AGENCIES RS.6,15,000/ - M/S SAPNA SUPPLIERS RS.8,20,000/ - M/S SAHU SUPPLY RS.9,30,000/ - . 5. THE ASSESSING OFFICER SUSTAINED THE ADDITION MERELY ON THE BASIS THAT THE BILL OF THESE PARTIES WOULD HAVE NOT KEPT PENDING . AS THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE THE ABOVE PARTIES ONCE HAS CLEARLY ACCEPTED THAT THE PAYMENT H AS BEEN RECEIVED BY THESE PARTIES FOR THE SUPPLY OF PLY WOOD, GLASS DOOR AND WINDOW, CEMENT, SAND, BRICK, STONE CHIPS AND SANITAR Y MATERIAL RESPECTIVELY. THE TOTAL OF THESE BILLS COMES TO RS.41,05,000/ - . THE ASSESSING OFFICER SIMPLY PRESUMED THAT THESE PAR TIES WOULD HAVE NOT KEPT THE PAYMENT PENDING. WE NOTED IN THEIR WRITTEN SUBMISSION AS IS APPEARING AT PAGE NO.7 OF THE ORDER OF THE CIT(A).THESE PARTIES HAS CONFIRMED THAT THEY HAVE RECEIVED F ULL PAYMENT UPTO OCTOBER, NOVEMBER AND DECEMBER, 2007. THEREFO RE IN RESPECT OF THESE PAYMENTS WITHOUT BRINGING ANY EVIDENCE TO THE CONTRARY THE ASSESSING OFFICER CANNOT REJECT THEIR SUBMISSIONS MADE IN RESPONSE TO SUMMONS U/S 131 MERELY ON PRESUMPTION AND ASSUMPTION. IT IS NOT THE CASE OF THE REVENUE THAT THESE PAYME NTS ARE NOT APPEARING IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE . IF THE PAYMENT WOULD NOT HAVE APPEARED, THE ASSESSING OFFICER WOULD HAVE BEEN RIGHT IN MAKING THE ADDITION AND CIT(A) WOULD HAVE BEEN RIGHT IN SUSTAINING THE SAME. WE THEREFORE, DELETE THE ADDITION OF RS.41,05,000/ - . OUT OF THE ADDITION OF RS.56,30,717/ - . IT IS NOT DENIED BY THE REVENUE THAT A PAYMENT OF RS.10,00,000/ - IS MADE TO M/S RD CONSTRUCTION THROUGH CHEQUE. THE ASSESSEE HAS SHOWN OUTSTANDING PAYMENT TO THE M/S RD CONSTRUCTION AM OUNTING TO RS. 18,18,540/ - AS PER HIS SUBMISSION BEFORE THE CIT(A) A T THE END OF SEPTEMBER, 2007 . I N THIS CASE ALSO THE ASSESSING OFFICER 6 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) INSTEAD OF RECORDING THE STATEMENT OF M/S RD CONSTRUCTION MADE THE ADDITION EVEN THOUGH THE PAYMENT WERE DULY SHOWN IN THE CASH FLOW STATEMENT AND IT IS NOT DENIED IN ADDITION TO A SUM OF RS.10,00,000/ - THE ASSESSEE HAS WITHDRAWN RS.69,74,000/ - FORM THE BANK. THERE IS NO EVIDENCE BEEN BROUGHT ON RECORD THAT THIS AMOUNT HAD BEEN SPENT OR INVESTED BY THE ASSESSEE SOMEWHERE ELSE. WHEN THE ASSESSEE HAS MADE THE WITHDRAWAL EVEN AFTER SEPTEMBER, 2007 IMPLIEDLY IF THE AMOUNT IS NOT SPENT ANY WHERE ELSE THE SOURC E OF INVESTMENT IN CONSTRUCTION STAND EXPLAINED. WE THEREFORE, IF THE OUTSTANDING BALANCE OF RS.18,18,540/ - OF M/S RD CONSTRUCTION IS CONSIDERED NO ADDITION IN OUR OPINION CAN BE SUSTAINED. WE THEREFORE, DELETE THE ADDITION OF RS.56,30,717/ - BY ALLOWI NG GROUND NO. 1 AND 2 OF THE ASSESSEE AND REJECTING THE ONLY GROUND OF REVENUE . 6. SO FAR THE GROUND NO. 3 AND 4 ARE CONCERNED, AFTER HEARING THE RIVAL SUBMISSIONS WE NOTED THAT IN THE BALANCE SHEET THE ASSESSEE HAS SHOWN OPENING CASH BALANCE OF RS. 31 , 7 2 2/ - WHILE IN THE CASH FLOW STATEMENT, IT WAS SHOWN AT RS. 3,43,507/ - THEREFORE THE ADDITION OF RS.3,11,785/ - HAS RIGHTY BEEN SUSTAINED BY THE CIT(A). SIMILARLY, THE ADDITION OF RS.1,00,000/ - WAS ALSO BEEN RIGHTLY BEEN SUSTAINED AS THIS AMOUNT WAS NOT SHOWN BY THE ASSESSEE IN THE CASH FLOW STATEMENT BUT SHOWN SUBSEQUENTLY. THE ONUS IS ON THE ASSESSEE TO ADDUCE THE EVIDENCE FOR THE SAME. WE THEREFORE, CONFIRM THE ORDER OF THE CIT(A). THUS, BOTH THESE GROUNDS STANDS DISMISSED. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED WHEREAS BY THE REVENUE STANDS DISMISSED. 8 . ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON TH E NOTICE BOARD OF THE BENCH AT CUTTACK ON 05.03.2015. SD/ - (D.T.GARASIA ) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI - GOA DATED : 05/03 /201 5 * A * 7 IT A . NOS. 59 & 92 / CTK /201 4 (ASST. YEAR : 200 8 - 0 9 ) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ASSISTANT REGISTRAR ITAT, CUTTACK BENCH, CUTTACK