Pradeep Singh Grewal, Mayurbhanj V. JCIT, Balasore

ITA 93/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81444 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 133A; 68; 6; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO. 93/CTK/2013 ASSESSMENT YEAR: 2009-2010 PRADEEP SINGHGREWAL, PROP: M/S. J.B.ROADWAYS, AT: JASHIPUR, DIST: MAYURBHANJ, ODISHA-757034 PA NO.AJSPG 0282 H VS JCIT, BALASORE RANGE, BALASORE. APPELLANT RESPONDENT FOR THE APPELLANT: NONE FOR THE RESPONDENT: SHRI ANIL SHARMA DATE OF HEARING: 14/10/.2014 DATE OF PRONOUNCEMENT: /10/2014 ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 15.11.2012 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEAR 2009-2010 O N THE FOLLOWING GROUNDS: 1. THAT THE ORDER DATED 15.11.2012 PASSED BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(APPEALS)] SO FAR AS PARTLY ALLOW ING THE APPEAL BEFORE HIM IS AGAINST PRINCIPLES OF NATURAL JUSTICE, CONTRARY TO FACTS, ARBITRARY AND ERRONEOUS AND BAD IN LAW. 2. THAT THE LEARNED CIT (APPEALS) HAS MISCONSTRUED/MIS -APPRECIATED/ IGNORED THE FACTS AND HIS THE ORDER DATED 15.11.2012 SUSTAINING THE R EJECTION OF BOOKS OF ACCOUNTS AND THE ESTIMATION OF INCOME @7.5% OF GROSS RECEIPT S OF RS.3,76,22,982//- IS CONTRARY TO FACTS, ARBITRARY, EXCESSIVE, ERRONEOUS AND BAD IN LAW. 3. THAT THE ESTIMATION OF INCOME @7.5% OF COMMISSION R ECEIVED OF RS.2,19,219/- BY THE LEARNED CIT (APPEALS) IS CONTRARY TO FACTS, ARB ITRARY, EXCESSIVE, ERRONEOUS AND BAD IN LAW. 4. ADDITION UNDER 'UNEXPLAINED SUNDRY CREDITORS' U/S 6 8 OF THE I.T ACT - RS. 17,31,364/- A. THAT THE LEARNED CIT(APPEALS) HAS MISCONSTRUED/ MIS-APPRECIATED THE FACTS AND HIS ORDER DATED 15.11.2012 IN SUSTAINING THE AD DITION OF RS. 17,31,364/- UNDER 'UNEXPLAINED SUNDRY CREDITORS' U/S 68 OF THE INCOME TAX ACT (IT ACT/ACT) 2 I.T.A. NO. 93/CTK/2013 ASSESSMENT YEAR: 2009-2010 MADE BY THE LEARNED ASSESSING OFFICER IS CONTRARY T O FACTS, ARBITRARY, EXCESSIVE, ERRONEOUS AND BAD IN LAW. B. THAT THE SUNDRY CREDITORS OF RS. 17,31,364/- BEI NG TRADE CREDITORS AS ON 31.03.2009, THE ADDITION OF THE SAME MADE U/S 68 OF THE IT ACT BY THE LEARNED ASSESSING OFFICER AND SUSTAINING THE SAME BY THE LEARNED CIT(APPEALS) IS ARBITRARY, ERRONEOUS, BAD IN THE LAW AND LEGALLY UNTENABLE. C. THAT, WITHOUT PREJUDICE TO THE GROUNDS (A) AND ( B) ABOVE, THE SUNDRY CREDITORS AS ON 31.03.2009 BEING RS. 17,31,364/- AND THE SUNDRY CRE DITORS AS ON 31.03.2008 BEING RS.6,60,580/-, THE ADDITION OF RS. 17,31,364/- MADE BY THE LEARNED ASSESSING OFFICER AND THE SUSTAINING OF THE SAME BY THE LEARNED CIT(A PPEALS) IS CONTRARY TO FACTS, ARBITRARY, EXCESSIVE, ERRONEOUS AND BAD IN LAW. D. THAT, WITHOUT PREJUDICE TO THE GROUNDS 2 & 3 AND 4(A) TO (C) ABOVE, THE LEARNED CIT(APPEALS) HAVING SUSTAINED THE REJECTION OF BOOK S OF ACCOUNTS AND THE ESTIMATION OF INCOME (ALTHOUGH AT A LOWER RATE), THE SUSTAINING OF THE ADDITION OF RS. 17,31,364/- UNDER 'UNEXPLAINED SUNDRY CREDITORS' U/S 68 OF THE IT ACT BY THE LEARNED CIT(APPEALS) IS ARBITRARY, ERRONEOUS, BAD IN LAW AN D LEGALLY UNTENABLE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT HAVE HEL D THAT THE RETURNED INCOME BE ACCEPTED. 2. BRIEF FACTS OF THE CASE ARE THAT, IN THE RELEVAN T ASSESSMENT YEAR, THE ASSESSEE DERIVED INCOME FROM TRANSPORT CONTRACT WORK. THE ASSESSING OFFICER HAS OBSERVED THAT VARIOUS NOTICES ISSUED TO THE ASSESSEE REMAINED UN-COMPLIED AND, TH EREFORE, HE PASSED ORDER UNDER SECTION 144 OF THE ACT, INTER ALIA, OBSERVING THAT A SURVEY UNDER SECTION 133A IN THE BUSINESS PREMISES OF THE ASSESSEE WAS CONDUCTED ON 17.10.2011, ON WHI CH THE ASSESSEE WAS NOT PRESENT AND, THEREFORE, THE STATEMENT OF SRI JAGDISH SIONGH GRE WAL, ELDER BROTHER OF THE ASSESSEE AND SHRI MANJEET SINGH GREWAL, FATHER OF THE ASSESSEE, WHO W ERE PRESENT DURING THE COURSE OF SURVEY IN HIS BUSINESS PREMISES WERE RECORDED BY THE ITO, WAR D-1, BARIPADA. IN THEIR STATEMENT, THEY HAD STATED THAT ASSESSEE HAD NOT MAINTAINED BOOKS O F ACCOUNT IN RESPECT OF TRANSPORTATION BUSINESS DONE BY HIM. EVEN THE BILLS RAISED/RECEIP T REGISTER WAS NOT FOUND FROM HIS BUSINESS PREMISES. ACCORDINGLY, THE AO ESTIMATED THE NET PR OFIT @ 8% OF GROSS RECEIPTS SHOWN AT RS.3,76,22,982/-, WHICH CAME TO RS.30,09,838/-. HE , HOWEVER, MADE ADDITION AS UNDER: 3 I.T.A. NO. 93/CTK/2013 ASSESSMENT YEAR: 2009-2010 1. INCOME FROM COMMISSION SHOWN IN RETURN OF INCO ME : RS.2,19,219/- 2. UNEXPLAINED CREDIT TOWARDS UNSECURED LOAN U/S.6 8 OF THE ACT.: RS.2,79,479/- 3. UNEXPLAINED SUNDRY CREDITORS U/S.68 OF THE ACT. : RS.17,31,364/- 3. BEFORE LD CIT(A), IT WAS POINTED OUT THAT THE AS SESSEE, THE PROPRIETOR OF M/S. J.B.,ROADWAYS WAS THE OWNER OF 9 TRUCKS. IN ADDITI ON TO IT, ASSESSEE HAD TO DEPEND ON OTHER TRUCK OWNERS FOR PROVIDING TRANSPORT SERVICE TO DIF FERENT CUSTOMERS WHEN OWN VEHICLES WERE OTHERWISE ENGAGED. FOR RENDERING SUCH TRANSPORT SE RVICES AND ARRANGING VEHICLES/TRUCKS FOR AND ON BEHALF OF CUSTOMERS, CERTAIN PARTIES PAID CO MMISSION IN CONSIDERATION OF SUCH SERVICES RENDERED, WHICH WAS REFLECTED AS COMMISSION RECEIVE D IN THE PROFIT AND LOSS ACCOUNT AS WELL AS IN THE INCOME TAX RETURN FURNISHED DURING THE RELEV ANT ASSESSMENT YEAR. IT WAS FURTHER POINTED OUT THAT ALMOST ALL THE VEHICLES/TRUCKS WERE TAKEN ON FINANCE FROM ICICI BANK AND OTHER FINANCE COMPANY. IN ADDITION TO OWNING OF VEHICLES, ASSESS EE HAD ONE TATA SAFARI NO.JH-05-T-0019 FOR MANAGING DAY TO DAY BUSINESS WHICH WAS ALSO TAKEN O N FINANCE FROM TML FINANCE LTD DURING THE FINANCIAL YEAR 2007-08 AND SAME WAS EXCLUSIVELY USED FOR BUSINESS PURPOSES. ASSESSEE HAD FILED DETAILED SUBMISSIONS BEFORE LD CIT(A), WHICH ARE ON RECORD. LD CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSION, PARTLY ALLOWED THE APPEA L, INTER ALIA, ESTIMATING THE NET PROFIT @ 7.5% OF THE GROSS RECEIPTS. HE FURTHER SUSTAINED T HE ADDITION OF RS.2,79,479/- MADE BY THE AO AS UNEXPLAINED CREDIT TOWARDS UNSECURED LOANS U/S.6 8 OF THE ACT AND FURTHER SUSTAINED THE ADDITION OF RS.17,31,364/- AS UNEXPLAINED SUNDRY CR EDITORS U/S.68 OF THE ACT. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, AN ADJOURNMENT APPLICATION DATED 13.10.2014 IS ON RECORD. WE REJECT THE ADJOURNMENT APPLICATION AND PROCEED TO DECIDE THE APPEAL ON MERITS AFTER HEARING LD D.R. AND ON THE B ASIS OF MATERIAL AVAILABLE ON RECORD. 5. GROUND NOS.1 AND 5 ARE GENERAL IN NATURE, HENCE REQUIRES NO ADJUDICATION. 6. AS FAR AS GROUND NO.2 IS CONCERNED, CONSIDERING THE NATURE OF ASSESSEES BUSINESS THAT OF TRANSPORTER AND NOT AS CONTRACTOR, WE ARE OF THE CO NSIDERED VIEW THAT IT WOULD MEET ENDS OF 4 I.T.A. NO. 93/CTK/2013 ASSESSMENT YEAR: 2009-2010 JUSTICE, IF THE INCOME FROM TRANSPORTATION CHARGES IS ESTIMATED AT 5% INSTEAD OF 7.5% AS DIRECTED BY LD CIT(A). WE DIRECT ACCORDINGLY. GR OUND NO.2 IS PARTLY ALLOWED. 7. AS FAR AS GROUND NO.3 IS CONCERNED, WE FIND THAT BEFORE LD CIT(A), IT WAS SUBMITTED THAT THE COMMISSION RECEIVED OF RS.2,19,219/- AS SHOWN I N THE RETURN WAS SEPARATELY ADDED IN ITS ENTIRETY WITHOUT APPRECIATING THE BASIC FACT THAT N O INCOME COULD BE EARNED WITHOUT INCURRING ANY REVENUE EXPENSES TO EARN SUCH INCOME. LD CITA) HAS DIRECTED TO ESTIMATE THE PROFIT @ 7.5% ON COMMISSION RECEIVED OF RS.2,19,219/-. AFTER CONSIDERING THE SUBMISSION OF LD D.R, WE ARE OF THE OPINION THAT SINCE THE ASSESSEE IS ENGA GED IN TRANSPORT BUSINESS, IT WOULD MEET THE ENDS OF JUSTICE, IF THE COMMISSION INCOME IS ESTIMA TED @ 5% OF RS.2,19,219/-. WE ORDER ACCORDINGLY. 8. AS FAR AS GROUND NO.4 REGARDING ADDITION MADE UN DER UNEXPLAINED SUNDRY CREDITORS UNDER SECTION 68 OF THE ACT OF RS.17,31,364/- IS CO NCERNED, WE ARE OF THE OPINION THAT SINCE THE ADDITION HAS BEEN MADE ON ESTIMATE BASIS AND ASSESS EE HAS NO OTHER SOURCE OF INCOME, THEREFORE, SEPARATE ADDITION U/S.68 REGARDING SUNDR Y CREDITORS IS NOT CALLED FOR. THIS WOULD RESULT IN DOUBLE TAXATION. THEREFORE, WE DIRECT THE AO TO DELETE THE SAME. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK /10/2014 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: PRADEEP SINGHGREWAL,PROP: M/S. J. B.ROADWAYS, AT: JASHIPUR, DIST: MAYURBHANJ, ODISHA-757034 2. THE RESPONDENT: JCIT, BALASORE RANGE,BALASORE. 3. THE CIT, CUTTACK 4. THE CIT(A),CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK 5 I.T.A. NO. 93/CTK/2013 ASSESSMENT YEAR: 2009-2010 1. DATE OF DICTATION 14/10/.2014. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 14.10. 2014OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .............. .. 9. DATE OF DISPATCH OF THE ORDER ..