Sri Vishnu Kumar Jalan, Ranchi V. ACIT,Cir-3, Ranchi

ITA 93/RAN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0034 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAN
• Assessee Lawyers: DEVESHPODDER; S K PODDER

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL RANCHI BENCH, RANCHI BEFORE N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO.93/RAN/ 2015 (ASSESSMENT YEAR :2008-09 SHRI VISHNU KUMAR JALAN PROP: M/S JALAN FOOD PRODUCTS BHUIYA TOLI, UPPER BAZAR RANCHI-874 001, JHARKHAND [ PAN NO.AAWPJ 3994 J APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-3, RANCHI RESPONDE NT REVENUE BY : SHRI CHOUDHARY ORAN, DR ASSESSEE BY : SHRI S.K.PODDER, AR & SHRI DEVESHPODDER, AR DATE OF HEARING : 05-09-2016 DATE OF PRONOUNCEMENT : 0 9-09-2016 O R D E R PER SHRI N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 20.02.2015 OF COMMISSIONER OF INCOME TAX (APPEALS) RANCHI (JHA RKHAND) RELATING TO ASSESSMENT YEAR 2008-09. ITA NO.93(RAN)2015 A.Y: 08-09 2 2. FIRST ISSUE THAT ARISES FOR CONSIDERATION IN THI S APPEAL BY THE ASSESSEE IS AS TO WHETHER THE REVENUE AUTHORITIES W ERE JUSTIFIED IN SUSTAINING THE ADDITION ON ACCOUNT OF AD HOC DISALL OWANCE UNDER THE HEAD FUEL CONSUMED, MACHINERY EXPENSES (REPAIR, MAINTENA NCE & PLANT AND MACHINERY) GENERATOR EXPENSES. THE ASSESSEE IS AN I NDIVIDUAL, HE CARRIES ON BUSINESS OF WHOLESALE TRADING AND MILLING AND PR OCESSING OF FOOD GRAINS UNDER THE NAME AND STYLE OF M/S JALAN FOOD PRODUCTS . IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISAL LOWED 10% OF EXPENSES UNDER THE HEAD FUEL CONSUMED OF RS.5,28,520/- AND 1 0% EXPENSES UNDER THE HEAD MACHINERY EXPENSES OF RS.2,53,998/- 25% OF GENERATOR EXPENSES UNDER HEAD GENERATOR OF RS.20,450/- ON THE GROUND T HAT NO BILLS AND VOUCHERS WERE FOUND IN SUPPORT OF THE EXPENSES. LD. CIT(A) CONFIRMED THE ORDER OF AO. 3. BEFORE US LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE EXPENSES IN QUESTION WERE FULLY VERIFIABLE FROM THE DETAILS MAI NTAINED AND THAT PAST HISTORY OF EXPENSES COMPARED TO THE TURNOVER OF THE ASSESSEE WILL SHOW THAT EXPENSE IS CLAIMED IN THE PRESENT YEAR JUSTIFIED A ND COULD NOT HAVE BEEN DISALLOWED. THE LD. DR RELIED ON THE ORDER OF LD. C IT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE DETAILS OF SIMILAR EXPENSE CLAIMED AND ALLOWED BY THE REVENUE IN THE P AST ARE AS FOLLOWS:- ITA NO.93(RAN)2015 A.Y: 08-09 3 AY 2007-08: 08-09 EXPENSES UNDER THE HEAD FUEL CONSUMED RS.5,83,095 RS.5,28,520 MACHINERY EXPENSES (REPAIRS & MAINTENANCE) RS.1,92,415 RS.2,53,998 GENERATOR EXPENSES RS.1,51,883 RS.1,20,450 TURNOVER RS.2,85,05,066 RS.3,72,09,686 FROM THE READING OF THE ABOVE, DETAILS IT IS CLEAR THAT THE EXPENSE IN QUESTION IN THE PRESENT ASSESSMENT YEAR CAN BE JUST IFIED AS PROPORTIONATE AND COMMENSURATE TO THE VOLUME OF BUSINESS CARRIED OUT BY THE ASSESSEE. THE AO HAS MADE THE IMPUGNED DISALLOWANCE PURELY ON SURMISES. KEEPING IN MIND THE PAST HISTORY OF THE EXPENSE WE ARE OF THE VIEW THAT THE DISALLOWANCE OF EXPENSE CANNOT BE SUSTAINED. THE DI SALLOWANCE IS DIRECTED TO BE DELETED. 5. THE NEXT ISSUE THAT ARISES FOR CONSIDERATION IS THE ADDITION OF 6 CRORES TO THE TOTAL INCOME OF ASSESSEE BY THE AO ON PROTECTIVE BASIS. THE FACTS AND CIRCUMSTANCES UNDER WHICH THE AFORESAID A DDITION MADE BY THE AO ARE AS FOLLOWS:- ON 30.06.2006 RAHUL BALDOTA HAD GIVEN CASH OF RS.6 CRORES TO THE ASSESSEE THROUGH INTERMEDIARIES. THIS SUM OF RS.6 CRORES WAS HOWEVER RETURNED BY ASSESSEE TO RAHUL BALDOTA THROU GH MR. SHRENIK NARENDRA BALDOTA SON OF RAHUL BALDOTA. THIS SUM OF RS.6 CRORES WAS OFFERED AS INCOME FROM UNDISCLOSED SOURCE BY RAHUL BALDOTA IN HIS ASSESSMENT. THE ASSESSEE HAD NOTHING TO DO WITH THE SUM OF RS.6 CRORES AND THIS FACT IS ACCEPTED BY AO ALSO. HOWEVE R, AO MADE THE ADDITION OF RS.6 CRORES ON A PROTECTIVE BASIS IN TH E HANDS OF THE ASSESSEE FOR THE FOLLOWING REASONS:- ITA NO.93(RAN)2015 A.Y: 08-09 4 ENQUIRIES WERE MADE WITH AO OF BALDOTA GROUP AND I T HAS BEEN LEARNT THAT SRI SSHRENIK NARENDRA BALDOTA, SON OF S RI RAHUL BALDOTA, HAS OFFERED RS.6 CRORES AS INCOME FROM UND ISCLOSED SOURCES. AO (ACIT CENTRAL CIRCLE 2(1), BANGALORE) I N HIS ASSESSMENT ORDER DATED 31/12/10 HAS ALSO ADDED THE SAID INCOME IN THE HANDS OF SRI SHRENIK NARENDRA BALDOTA AND HAS NOTED THAT THE ASSESSEE HAS AGREED THAT THE SAID CASH OF RS.6 CRORE DID BELONG TO HIM ONLY BUT HE WAS NOT ABLE TO EXPLA IN THE SOURCES FOR THIS CASH IN VIEW OF THE SAME, SINCE THE SAID CASH OF RS.6 CR ORE HAS ALREADY BEEN ASSESSED IN THE HANDS OF SRI SHRENIK N ARENDRA BALDOTA, THE SAME IS ADDED IN THE HANDS OF SRI BISH NU KUMAR JALAN ON A PROTECTIVE BASIS SO THAT THE REVENUES I NTEREST IS PROTECTED, IN CASE THE ADDITION IN THE HANDS OF SRI SHRENIK NARENDRA BALDOTA GETS REVERSED. 6. ON APPEAL BY THE ASSESSEE TO LD. CIT(A) AND CON FIRMED THE ORDER OF AO. 7. BEFORE US LD. COUNSEL FOR THE ASSESSEE FIELD A C OPY OF THE LETTER DATED 22.03.2012 BY THE ACIT, CENTRAL CIRCLE-2(1), BANGAL ORE ADDRESSED TO THE ACIT, CIRCLE-III (AO) RANCHI WHEREIN IT HAS BEEN SP ECIALLY MENTIONED THAT THE ASSESSMENT OF RS.6 CRORES AS UNDISCLOSED INCOME IN THE HANDS OF SHRI SHRENIK NARENDRA BALDOTA HAS BECOME FINAL AND NO AP PEAL HAS BEEN FILED AGAINST THE ORDER OF ASSESSMENT BEFORE LD. CIT(A) B Y THE ASSESSEE. IN VIEW OF THE AFORESAID LETTER, WE ARE OF THE VIEW THAT TH E PROTECTIVE ASSESSMENT OF THE SUM OF RS.6 CRORES IN THE HANDS OF ASSESSEE CAN NOT BE SUSTAINED, SINCE THE ASSESSMENT OF RS.6 CRORES IN THE HANDS OF SHRI SHRENIK NARENDRA BALDOTA HAS BECOME FINAL. WE HOWEVER MAKE IT CLEAR THAT IN THE EVENT OF ANY CHANGE IN THE FACTS AND CIRCUMSTANCES, THE REVE NUE WILL BE AT LIBERTY ITA NO.93(RAN)2015 A.Y: 08-09 5 TO INITIATE PROPER PROCEEDINGS TO ASSESS THE SUM OF RS.6 CRORES IN THE HANDS OF RIGHT PERSON. WITH THESE OBSERVATIONS, THE GROUN D OF ASSESSEES APPEAL IS ALLOWED. 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALLOWE D . ORDER PRONOUNCED IN THE OPEN COURT ON THE 09/09/20 16. SD/- SD/- (M.BALAGANESH) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIALMEMBER PLACE: RANCHI DATED: -09-2016 DKP* COPY TO : 1 APPELLANT-SHRI VISHNU KR. JALAN PROP: M/S JALAN FOOD PRODUCT, BHUIYA TOLI, UPPAR BAZAR, RANCHI-834001, 2 RESPONDENT-ACIT, CIR-3, RANCHI 3 CIT(A), RANCHI 4 CIT 5 DR, ITAT, RANCHI. 6 GUARD FILE BY ORDER SR/P.S. ITAT, RANCHI ITA NO.93(RAN)2015 A.Y: 08-09 6 1. DATE OF DICTATION- ..05/09...... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/09 OTHER MEMBER06/09 ......... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - ..06/09& 09/09 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR 07/09 & 09/09 PRONOUNCEMENT 09/09.. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK09/09 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DISPATCH OF THE ORDER