Appeal details
Counselvise Citation
[2016] 121 COUNSELVISE.COM (IT) 4430 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-10-2016
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB
Assessment Year
2005-2006
Appeal Filed On
13-02-2015
Judgement Text
JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO.93/IND/2015 ASSESSMENT YEAR: 2005-06 JAGDISH KUMAR NARANG UJJAIN PAN ADWPN 9757G :: APPELLANT VS ACIT RANGE 2(1) UJJAIN :: RESPONDENT REVENUE BY SHRI ADITYA NAMJOSHI ASSESSEE BY SHRI MOHD. JAVED ! ' #$ DATE OF HEARING 3..10.2016 %&'( #$ DATE OF PRONOUNCEMENT 3.10.2016 * O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A),UJJAIN,DATED 14.11.2014. JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 2 2. GROUND NO. 1 RELATING TO ADDITION MADE ON ACCOUNT OF PAYMENT MADE TO LABOURS OF RS.1,08,593/- IS NOT PRESS ED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING, THEREFORE, THE SAME IS DISMISSED. 3. GROUND NO. 2 IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION ON ACCOUNT OF C APITAL INTRODUCTION TO THE EXTENT OFRS.8,00,000/-BY THE ASS ESSEE WHICH WAS ADDED BY THE ASSESSING OFFICER. 4. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE FIL ED THE RETURN OF INCOME ON 30.10.2005. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION OF ROAD. TH E ASSESSEE HAS FILED COPIES OF FINAL AUDIT AND PROFIT AND L OSS ACCOUNT. DURING THE YEAR UNDER CONSIDERATION IT WAS NOTICED THAT THE ASSESSEE HAS INTRODUCED CAPITAL OF RS. 8 LAKHS IN THE CAPITAL ACCOUNT OF PROPRIETARY CONCERN, THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 3 CAPITAL INTRODUCED IN THE BUSINESS. THE ASSESSEE HAS SUBMITTED THAT THE CAPITAL WAS INTRODUCED OUT OF ROUTIN E CAPITAL IN THE CONSTRUCTION BUSINESS FOR WHICH SEPARATE BOOKS OF ACCOUNTS ARE MAINTAINED. THE ASSESSEE DID NOT F ILE ANY EVIDENCE, THEREFORE, THE ADDITION WAS MADE BY THE LEARNED ASSESSING OFFICER. ON APPEAL, THE ADDITION WAS CONFIRMED BY THE LEARNED CIT(A). NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER :- AS REGARDS ADDITION OF RS.8,00,000.00 IT WAS EXPLAINED TO THE ASSESSING OFFICER TDHAT THE ASSESSEE WAS HAVING TWO SOURCES OF INCOME FIRST ONE IS RENTAL INCOME AND SECOND IS CONTRACTORSHIP BUSINESS. THE ASSESSEE WAS HAVING RENTAL INCOME AND INCOME FROM OTHER SOURCES SINCE LONG BACK AND WAS PAYING TAXES I.E. INCOME TAX ASWELL AS WEALTH JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 4 TAX. THE ASSESSEE HAS ALSO PREPARED THE CAPITAL ACCOUNTS IN VARIOUS YEARS AND THE SAME ARE FILED WITH THE INCOME TAX DEPARTMENT. THE DEPARTMENT HAS ACCEPTED THE INCOME WHICH WAS FILED BY THE ASSESSEE. SIR, THE ASSESSEE HAS TAKEN ONE CONTRACT DURING THE FINANCIAL YEAR 2003-04 ONLY AND WHICH WAS COMPLETED IN THE YEAR 2005-06. THE ASSESSEE HAS PREPARED SEPARATE BOOKS OF ACCOUNTS FOR CONTRACTORSHIP BUSINESS ONLY AND HAS SHOWN OTHER INCOME OF RENT, BANK INTEREST AGRICULTURAL INCOME DIRECTLY IN HIS RETURN OF INCOME. HE WAS NOT PREPARED THE SEPARATE BOOKS OF ACCOUNTS FOR THESE HEADS OF INOME BUT CONTINUED WITH PREPARATION OF CAPITAL ACCOUNT FOR THIS INCOME. COPIES OF INCOME TAX RETURNS AND COPIES OF CAPITAL ACCOUNT ARE ENCLOSED. THE ASSESSEE HAS ALSO TRANSFERRED THE JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 5 CAPITAL FROM OTHER SOURCES TO THE CAPITAL FOR CONTRACTORSHIP BUSINESS IN THE YEAR 2004. COPY OF AUDIT REPORT IS ENCLOSED. SIR, AS THE ASSESSEE WAS HAVING PROVEN SOURCE OF INCOME AND FILING RETURN OF INCOME SINCE THE YEAR 1968, HE WAS ALSO A WEALTH TAX PAYEE PERSON. THEREFORE, HE IS HAVING HUGE AMOUNT OF CAPITAL BUIL T UP OVER THE YEARS AND HE CONTINUOUSLY FILING COPY O F CAPITAL ACCOUNT WITH THE RETURN OF INCOME. HE HAD INVESTED RS.8,00,000.00 FROM PREVIOUS SAVINGS, RENTAL INCOME AND INTEREST INCOME IN THE CONTRACTORSHIP BUSINESS. TWO SETS OF CAPITAL ACCOUNTS WERE FILED AT THE TIME OF FILING OF INCOME TAX RETURN AS WELL AS DURING THE ASSESSMENT PROCEEDINGS REFLECTING THE CAPITAL TRANSFERRED FROM ONE SOURCE OF INCOME FOR OTHER SOURCE OF INCOME. JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 6 THE LEARNED ASSESSING OFFICER HAS NOT DENIED THE OTHER SOURCES AND INCOME GENERATED THEREFROM. HON'BLE SIR, IT WAS HELD IN THE CASE OF CIT VS. RAMWSHWAR SIKAR (1994) 74 TAXMAN(CAL THAT :- THAT WHERE AFTER GOING THROUGH ASSESSMENT RECORDS AND OTHER MATERIALS PRODUCED, IT WAS FOUND THAT THE AMOUNT HAD INFACT BEEN TRANSFERRED TO CAPITAL ACCOUNT FROM ASSESSEES PERSONAL ACCOUNT, DELETION OF ADDITION UNDER SECTION 68 WAS JUSTIFIED . COPY OF CASE LAW IS ENCLOSED. AS THE ASSESSEE WAS HAVING HUGE AMOUNT OF CAPITAL FROM OTHER SOURCES OF INCOME AND HE WAS FILING THE RETURN OF INCOME LONG BACK, WE REQUEST YOU TO KINDLY GRANT THE RELIEF TO THE ASSESSEE BY DELETING THE ADDITION MADE TO THE EXTENT OFRS.8,00,000.00 JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 7 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SI DES. WE FIND THAT IT IS THE CASE OF THE ASSESSEE THAT HE WAS FILING RETURN OF INCOME AND HE HAS INVESTED RS. 8 LAKHS FROM PREVIOUS YEARS SAVINGS, RENTAL INCOME AND INTEREST INC OME IN CONTRACTORSHIP BUSINESS AND TWO SETS OF CAPITAL ACCO UNT SHOW THAT THE CAPITAL IS TRANSFERRED FROM ONE SOURCE T O ANOTHER SOURCE OF INCOME. THEREFORE, WE ARE OF THE VI EW THAT THIS REQUIRES VERIFICATION AT THE LEVEL OF THE ASS ESSING OFFICER. THEREFORE, WE REVERSE THE FINDING OF THE L EARNED CIT(A) AND RESTORE THIS ISSUE TO THE ASSESSING OFFIC ER WITH THE DIRECTION TO THE ASSESSEE TO GIVE EVIDENCE BEFOR E THE ASSESSING OFFICER INCLUDING THE RETURN OF INCOME, C ASH FLOW INCOME AND SET OF BOOKS AND THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE SAME AND DECIDE THE MATTER AFRE SH AFTER PROVIDING THE ASSESSEE OPPORTUNITY OF BEING HEAR D. JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 8 8. GROUND NO. IS IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION ON ACCOUNT OF DEPRECIATION OF RS.41,583/- WHICH WAS ADDED BY THE ASSESSING OFFICER. 9. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEPRECIATION OF RS.41,583/- ON MOTOR CAR. OUT OF THE ABOVE THE ASSESSING OFFICER HAS DISALLOWED RS.41,5 83/- BEING NOT USED FOR BUSINESS PURPOSES. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANCE. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 10. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTE D THAT THE CAR WAS EXCLUSIVELY USED FOR BUSINESS PURPOSE S. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE S IDES. WE FIND THAT THE ASSESSEE HAS UTTERLY FAILED TO PRODUCE ANY EVIDENCE SUCH AS REGISTRATION OF THE CAR, ETC. TO PROV E THAT JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 9 THE CAR HAS BEEN ACTUALLY USED FOR BUSINESS PURPOSES. W E, THEREFORE, FIND OURSELVES IN AGREEMENT WITH THE FIND INGS OF THE LEARNED CIT(A) AND DISMISS THIS GROUND. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 3 RD OCTOBER, 2016. SD/- SD/- ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 3 OCTOBER, 2016. DN/ JAGDISH KUMAR NARANG ITA NO. 93/IND/2015 10
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