JAGDAMBE STONE COMPANY, BHARATPUR V. DEPUTY COMMISSIONER OF INCOME TAX, BHARATPUR

ITA 959/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1972 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DHK
• Keywords: Business expenditure
• Section: 37(1); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 959/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2014-15 M/S JAGDAMBE STONE COMPANY, BIJASANA, PAHARI, BHARATPUR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE, BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAIFJ 7275 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.03.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/03/2018. VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, AM THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT(A)-22, ALWAR, DATED 09.10.2017 FOR THE A.Y. 2014-15 WHEREI N THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY CONFIRMING ADDI TION OF RS. 3,90,137/- IN TOTAL INCOME OF THE APPELLATE FIRM AS MADE BY LD. AO U/S 68 WITHOUT APPRECIATING THE FACTS OF THE CASE AND T HE MATERIAL BROUGHT ON RECORD BY THE APPELLANT. 2. IN DOING SO, THE LD. CIT(A) HAS ERRED IN LAW AN D ON FACTS BY CONFIRMING ADDITION U/S 68 IN REGARD OF CAPITAL CONTRIBUTION O F RS. 3,90,137/- IN THE INCOME OF THE FIRM AND NOT IN THE INCOME OF THE PAR TNERS INDIVIDUALLY. 3. THAT TELEPHONE AND TRAVELLING EXPENSE ARE PUREL Y BUSINESS EXPENSES AND THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AD-HOC ADDITIONS OF RS. 12,330/- U/S 37(1) MADE BY LD. AO. 2 ITA NO. 959/JP/2017. JAGDAMBE STONE COMPANY VS. DCIT 2. NO ONE APPEARED ON BEHALF OF THE ASSESSEE NOR AN Y ADJOURNMENT APPLICATION WAS FILED. THEREFORE, IT WAS DECIDED T O HEAR THE MATTER EX-PARTE QUA THE ASSESSEE BASED ON MATERIAL AVAILABLE ON REC ORD. 3. IN GROUND NO. 1 & 2, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 3,90,137/- WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) U/S 68 OF THE ACT. BRIEFLY THE FACTS OF THE CASE ARE THAT, DURING THE YEAR UNDER CONSIDERATION, FOUR PARTNERS OF THE ASSESSEE FIRM HAVE CONTRIBUTED RS. 12 LAKHS EACH AS PARTNERS CAPITAL IN THE FIRM. THE PARTNERS CLAIMED TO HAVE AGRICULTURAL LAND IN THEIR INDIVIDUAL NAMES AND HAVE CLAIMED THAT THE SOURCE O F PARTNERS CAPITAL IS FROM THE SALE OF AGRICULTURAL PRODUCE. THE AO, HOWEVER, REJECTED THE CLAIM OF THE ASSESSEE FOR THE REASONS THAT NO AGRICULTURAL INCOM E HAS BEEN DECLARED IN THEIR INDIVIDUAL TAX RETURN FILED BY THE RESPECTIVE PARTNERS. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. CIT(A) HAS GIVEN A FINDING THAT THERE IS NOT DISPUTE WITH REGARD TO HOLDING OF AGRICULTURAL LAND IN THE INDIVIDUAL NAMES OF THE PARTNERS. THE LD. CIT(A) HAS ALSO TAKEN NOTE O F THE FACT THAT THE PARTNERS HAVE GIVEN CONFIRMATIONS AND HAVE ALSO FILED JAMABA NDI AND THE PROOF OF SALE OF AGRICULTURAL PRODUCE ALONG WITH ANAAJ MANDI VOUC HERS DURING THE ASSESSMENT PROCEEDING. REGARDING THE OBJECTIONS OF THE AO OF NOT REPORTING THE AGRICULTURAL INCOME BY THE PARTNERS IN THEIR IN DIVIDUAL RETURN OF INCOME, THE LD. CIT(A) HELD THAT IF THE INDIVIDUAL PARTNERS HAVE FAILED TO DECLARE SUCH AGRICULTURAL RECEIPTS IN THEIR RETURN OF INCOME, T HEN THEY SHOULD BE HELD 3 ITA NO. 959/JP/2017. JAGDAMBE STONE COMPANY VS. DCIT RESPONSIBLE FOR THE OMISSION AND NECESSARY ACTION M AY BE INITIATED AGAINST THEM BY THE REVENUE. HOWEVER, AS FAR AS THE FIRM I S CONCERNED, IT IS A SEPARATE LEGAL ENTITY AND THE FIRM HAS DISCHARGED I TS ONUS BY PROVIDING ALL THE NECESSARY DETAILS WITH REGARD TO CAPITAL RECEIVED D URING THE YEAR UNDER CONSIDERATION. THE LD. CIT(A) THEREAFTER EXAMINED T HE INDIVIDUAL SOURCE OF INCOME IN THE HANDS OF THE EACH OF THE FOUR PARTNER S VIS--VIS CAPITAL INTRODUCED AND HAS GIVEN A FINDING THAT SHRI OM PRA KASH IS A ONLY PARTNER WHO HAS THE ADEQUATE AGRICULTURAL INCOME TO COVER THE I NVESTMENT IN THE SHARE CAPITAL AND AS FAR AS OTHER THREE PARTNERS ARE CONC ERNED, THERE IS A SHORT FALL OF RS. 3,90,137/-, THE SOURCE OF WHICH REMAIN UNEXP LAINED. IT WAS ACCORDINGLY HELD BY THE LD. CIT(A) THAT THE PARTNERS CAPITAL IN VESTMENT TO THE EXTENT TO RS. 44,09,863/- HAS BEEN EXPLAINED. HOWEVER, THE B ALANCE AMOUNT OF RS. 3,90,137/- REMAINS UNEXPLAINED AND TO THAT EXTENT THE ADDITION MADE BY THE AO U/S 68 WAS SUSTAINED. THERE IS NOTHING ON RECORD TO CONTROVERT THE SAID FINDINGS OF THE LD CIT(A). WE THEREFORE DO NOT SEE ANY INFIRMITY IN THE SAID ORDER OF THE LD. CIT(A) AND THE ADDITION SO MADE BY THE AO IS HEREBY CONFIRMED. IN THE RESULT, GROUND NOS. 1 & 2 OF THE ASSESSEES APPEAL ARE DISMISSED. 4. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN SUSTAINING THE DISALLOWANCE OF RS. 12,330 /- OUT OF RS. 40,660/- MADE BY THE AO ON ACCOUNT OF VARIOUS EXPENSES. THE LD. CIT(A) WHILE CONFIRMING THE SAID DISALLOWANCE HELD THAT THE TELE PHONE AND TRAVELLING 4 ITA NO. 959/JP/2017. JAGDAMBE STONE COMPANY VS. DCIT EXPENSES DO HAVE AN ELEMENT OF PERSONAL EXPENSES AN D HE THEREFORE, CONFIRMED THE SAME. WE DO NOT SEE ANY INFIRMITY IN THE SAID FINDINGS OF THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. IN THE RESULT, GROUND NO. 3 OF THE ASSESSEES APPEAL IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/03/2018. SD/- SD/- ( JH FOT; IKY JKO ) ( FOE FLAG ;KNO ( VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL; /ACCOUNTANT MEMBER JAIPUR DATED:- 27/03/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S JAGDAMBE STONE COMPANY, BHARA TPUR. 2. THE RESPONDENT DCIT, CIRCLE-BHARATPUR. 3. THE CIT. 4. THE CIT (4), 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 959/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 959/JP/2017. JAGDAMBE STONE COMPANY VS. DCIT