M/s Akash Ganga Homes Pvt Ltd, Patna V. DCIT, Central Circle-1, Patna

ITSSA 31/PAT/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5470 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: INDERJI T SINGH
• Keywords: Presumptive income; TDS
• Section: 40(a)(ia); 142(2A)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA , . . , BEFORE SHRI CHANDRA MOHAN GARG, J M & SHRI L .P. SAHU, AM IT (SS) A NO. 3 1 / PAT /201 6 ( / ASSESSMENT YEAR : 20 0 7 - 20 0 8 ) M/S AKASH GANGA HOMES PVT. LTD 3 RD FLOOR, ASHIANA TOWERS, EXHIBITION ROAD, PATNA VS. DCIT, CENTRAL CIRCLE - 1, PATNA - 800001 ./ PAN NO. : A AECA 8030 F ( / APPELLANT ) .. ( / RESPOND ENT ) /ASSESSEE BY : SHRI NISHANT MAITIN, CA /REVENUE BY : SHRI INDERJIT SINGH , CIT - DR / DATE OF HEARING : 1 8 /0 9 /2019 / DATE OF PRONOUNCEMENT : 19 /0 9 /2019 / O R D E R PER BENC H : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY LEARNED CIT(A) - 3 , PATNA , DATED 23 .0 9 .201 6 FOR THE ASSESSMENT YEAR 20 0 7 - 20 0 8 ON THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN CONFIRMING THE PROCEEDING U/S 153C/153A OF THE INCOME TAX ACT. 2. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN NOT HOLDING THAT THE ORDER PASSED U/S 153C IS BARRED BY LIMITATION. 3. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN NOT HOLDING THE SPECIAL AUDIT U/S 142(2A) AS AB - INITIO VOID, ARBITRARY, ILLEGAL AND CONTRARY TO THE PROVISIONS OF LAW. IT (SS) A NO . 3 1 / PAT /201 6 2 4. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN NOT HOLDING THAT SPECIAL AU DIT CONDUCTED U/S 142 (2A) BY THE SPECIAL AUDITOR IS BARRED BY LIMITATION. 5. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN SUSTAINING DISALLOWANCE OF RS .19,320/ - BY INVOKING SECTION 40(A)(IA) ON ACCOUNT OF EXPENSES INCURRED FOR LABOUR CHARGES. 6. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN SUSTAINING ADDITION OF RS 14,36,173/ - U/S 69D ON ACCOUNT OF CASH LOANS RECEIVED FROM SKC (HUF). 7. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN NOT HOLDING THAT THE ORDER PASSED BY ID AO IS BAD BOTH IN LAW AND ON FACTS. 8. FOR THAT THE COMMISSIONER OF INCOME - TAX (APPEALS) - 3, PATNA HAS ERRED IN NOT HOLDING THAT ORDER OF LEARNED ASSESSING OFFICER IS BASED ON PRESUMPTIONS, SURMISES AND CO NJECTURES. 9. FOR ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. OUT OF THE ABOVE NINE GROUNDS, LD. AR AT THE TIME OF HEARING DID NOT PRESS GROUND NOS.1 TO 4, ACCORDINGLY, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. FURTHER GROUND NOS. 7 TO 9 ARE GENERAL IN NATURE, THEREFORE, THE SAME ARE NOT NECESSARY FOR ADJUDICATION. NOW, THE GROUND S REMAINED I.E. GROUND NO S .5 & 6 WITH REGARD TO SUSTENANCE OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXPENSES INCURRED FOR LABOUR CHARGES BY IN VOKING SECTION 40(A)(IA) OF THE ACT AND ADDITION MADE ON ACCOUNT OF CASH LOANS RECEIVED FROM SKC(HUF) U/S.69D OF THE ACT. GROUND NO.5 : 3. L D. AR SUBMITTED THAT SINCE THE ASSESSEE HAS ALREADY OFFERED TOTAL RECEIPTS TO BE TAXED UNDER PRESUMPTIVE TAXATION U/S .44AD OF THE ACT, IT (SS) A NO . 3 1 / PAT /201 6 3 THEREFORE, THE ADDITION MADE U/S.40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TDS ON THE SAID EXPENSES MAY KINDLY BE DELETED. 4 . REPLYING TO THE ABOVE , LD. DR RELIED ON THE ORDERS OF BOTH THE AUTHORITIES BELOW. 5. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBMISSIONS OF BOTH THE PARTIES AS WELL THE MATERIAL AVAILABLE ON RECORD OF THE TRIBUNAL, WE FIND THAT THE ASSESSING OFFICER HIMSELF IN PARA 9.1 NOTED THAT THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT OF RS.19,320/ - DOES NOT ATTRACT T DS PROVISIONS AND, THUS, PROVISION OF SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABLE AND, THEREFORE, THE ADDITION IS NOT SUSTAINABLE. HOWEVER, THE ASSESSING OFFICER IN THE SAME PARA AT SUB - PARA (B) STATED THAT THERE WAS A TYPOGRAPHICAL ERROR IN THE QUESTI ONNAIRE ISSUED TO THE ASSESSEE BUT LASTLY IN SUB - PARA(C) MADE ADDITION OF RS.19,320/ - WHICH, IN OUR OPINION, IS NOT SUSTAINABLE AS PROVISIONS OF TDS DOES NOT APPLY TO THE AMOUNT LESS THAN RS.20,000/ - . ACCORDINGLY, GROUND NO.5 OF THE ASSESSEE IS ALLOWED. GR OUND NO.6 : 6 . LD. A R SUBMITTED THAT THE AMOUNT OF R S.14,36,873/ - RECEIVED FROM S.K.CHOUDHARY(HUF) IS NOT LOAN BUT THE SAID AMOUNT WAS PROVIDED TO THE ASSESSEE FOR CARRYING OUT SPECIFIC REPAIRS AND MAINTENANCE WORK AS DESIRED BY THE PAIR (HUF). LD.AR VEHEM ENTLY POINTED OUT THAT IN THE CORRESPONDING DEBIT SIDE OF ANNEXURE - C FOR IT (SS) A NO . 3 1 / PAT /201 6 4 A.Y.2006 - 2007 AND ANNEXURE - F FOR A.Y.2007 - 2008 TO THE REPORT OF THE SPECIAL AUDITOR CLEARLY REFLECTS THAT THERE WAS WORK - IN - PROGRESS/ASSETS AND THIS WORK - IN - PROGRESS REPRESENTS THE AM OUNT OF EXPENDITURE INCURRED BY THE ASSESSEE FOR CARRYING OUT SPECIFIC WORK FOR WHICH THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE AND PROVIDED BY S.K.CHOUDHARY (HUF). LD.AR FURTHER SUBMITTED THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THIS EXPLANATION OF THE ASSESSEE SUPPORTED BY DOCUMENTARY EVIDENCE CONTAINED IN THE SPECIAL AUDITOR REPORT AND PROCEEDED TO MAKE ADDITION U/S.69D OF THE ACT TREATING THE SAME AS HUNDI TRANSACTION ON ERRONEOUS BASIS, THEREFORE, ADDITION IS NOT CORRECT, JUSTIFIED AND SUSTAIN ABLE. 7 . REPLYING TO THE ABOVE, LD. DR, IN ALL FAIRNESS, ADMITTED THAT THERE IS NO IOTA OF ALLEGATION THAT DURING THE RELEVANT PREVIOUS YEAR EITHER THE ASSESSEE BORROWED OR REPAID ANY AMOUNT IN HUNDI TRANSACTION. HOWEVER, HE SUPPORTED THE ACTION OF THE AS SESSING OFFICER AS WELL AS FIRST APPELLATE ORDER BY STATING THAT THE IMPUGNED AMOUNT WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). HE FURTHER SUBMITTED MER ELY BECAUSE ADDITION HAS BEEN MADE IN WRONG PROVISION THE SAME CANNOT BE HELD AS UNSUSTAINABLE. 8 . ON CAREFUL PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION U/S.69D OF THE ACT. FOR THE SAKE OF IT (SS) A NO . 3 1 / PAT /201 6 5 CONVENIENCE WE WOULD LIK E TO REPRODUCE THE PROVISIONS OF SECTION 69D OF THE ACT, WHICH READ AS UNDER : - SECTION 69D . WHERE ANY AMOUNT IS BORROWED ON A HUNDI FROM, OR ANY AMOUNT DUE THEREON IS REPAID TO, ANY PERSON OTHERWISE THAN THROUGH AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK, TH E AMOUNT SO BORROWED OR REPAID SHALL BE DEEMED TO BE THE INCOME OF THE PERSON BORROWING OR REPAYING THE AMOUNT AFORESAID FOR THE PREVIOUS YEAR IN WHICH THE AMOUNT WAS BORROWED OR REPAID, AS THE CASE MAY BE : PROVIDED THAT, IF IN ANY CASE ANY AMOUNT BORROW ED ON A HUNDI HAS BEEN DEEMED UNDER THE PROVISIONS OF THIS SECTION TO BE THE INCOME OF ANY PERSON, SUCH PERSON SHALL NOT BE LIABLE TO BE ASSESSED AGAIN IN RESPECT OF SUCH AMOUNT UNDER THE PROVISIONS OF THIS SECTION ON REPAYMENT OF SUCH AMOUNT. EXPLANATION . - FOR THE PURPOSES OF THIS SECTION, THE AMOUNT REPAID SHALL INCLUDE THE AMOUNT OF INTEREST PAID ON THE AMOUNT BORROWED. THUS, FROM THE ABOVE PROVISIONS OF SECTION 69D, IT IS CLEAR THAT WHERE THE AMOUNT IS BORROWED ON A HUNDI FROM, OR ANY AMOUNT DUE THEREO N IS REPAID TO, ANY PERSON OTHERWISE THAN AN ACCOUNT PAYEE CHEQUE, THEN THE AMOUNT BORROWED OR REPAID SHOULD BE DEEMED TO BE THE INCOME OF THE PERSON BORROWING OR REPAYING THE AFORESAID AMOUNT. FROM OBSERVATION OF LD. CIT(A) AT PAGES 14 & 15 OF FIRST APPEL LATE ORDER, WE ARE UNABLE TO SEE ANY FINDING OF FACTS THAT THE ASSESSEE BORROWED OR REPAID ANY AMOUNT UNDER HUNDI TRANSACTION DURING RELEVANT PREVIOUS YEAR/FINANCIAL YEAR. AT TOP PARA AT PAGE 15, THE LD.CIT(A) NOTED THAT THIS CONTENTION IS NOT ACCEPTABLE IN VIEW OF THE INTRODUCTION OF CASH OF RS.14,36,873/ - FROM UNDISCLOSED SOURCES. THERE IS NO IOTA OF ALLEGATION THAT THE ASSESSEE BORROWED OR REPAID AMOUNT OF HUNDI TRANSACTION IT (SS) A NO . 3 1 / PAT /201 6 6 WHICH ATTRACTS PROVISION OF SECTION 69D OF THE ACT. THUS, THE ADDITION MADE U/S .69D OF THE ACT IS NOT SUSTAINABLE. 9. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS , WE ARE OF THE VIEW THAT IN THE EARLIER PART OF THIS ORDER, WE OBSERVED THAT THERE WAS NO TRANSACTION OF BORROWING OR REPAYING UNDER HUNDI TRANSACTION AND IMPUGNED A MOUNT IS NOT PERTAINING TO ANY HUNDI TRANSACTION, THEREFORE, PROVISION OF SECTION 69D OF THE ACT DOES NOT ATTRACT TO THE IMPUGNED TRANSACTIONS AND ALLEGATION OF AUTHORITIES BELOW IN THIS REGARD AND BASIS TAKEN FOR MAKING ADDITION IS NOT AS PER SCHEME OF PR OVISION OF SECTION 69D OF THE ACT. FURTHER, WHEN WE CONSIDER THE EXPLANATION OF THE ASSESSEE THAT THE AMOUNT WAS RECEIVED FROM S.K.CHOUDHARY (HUF) FOR CARRYING OUT SPECIFIC REPAIR AND MAINTENANCE WORK AS DESIRED BY THE PERSON CONCERNED I.E. PAYEE S.K.CHOUD HARY (HUF). ANNXURE - C AND ANNEXURE - F PERTAINING TO A.Y.2006 - 2007 & 2007 - 2008, RESPECTIVELY ANNEXED TO THE SPECIAL AUDITORS REPORT CLEARLY REFLECTS WORK - IN - PROGRESS ON THE ASSETS SIDE, WHICH REPRESENTS EXPENDITURE INCURRED BY THE ASSESSEE FOR CARRYING OUT SPECIFIC WORK FOR WHICH THE ASSESSEE HAS RECEIVED THE IMPUGNED AMOUNT FROM S.K.CHOUDHARY(HUF). THEREFORE, THE PURPOSE OF RECEIPT OF THE IMPUGNED AMOUNT IS EXPLAINED AND NO ADDITION IS CALLED FOR ON THIS COUNT. CONSEQUENTLY, THE ADDITION MADE BY THEAO AND S USTAINED BY THE LD.CIT(A) UNDER IRRELEVANT PROVISIONS OF SECTION 69D OF THE ACT ON IT (SS) A NO . 3 1 / PAT /201 6 7 WRONG APPRECIATION OF THE FACTS, BEING DEVOID OF MERITS, IS DELETED. ACCORDINGLY, GROUND NO.6 OF THE ASSESSEE IS ALLOWED. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 /0 9 /201 9 . S D/ - (L.P.SAHU) SD/ - ( C.M.GARG ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /PATNA ; DATED 19 / 0 9 /201 9 PRAKASH KUMAR MISHRA , S R.P.S. (ON TOUR) / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE S ECRETARY ) , / ITAT, PATNA 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, PATNA 6. / GUARD FILE. //TRUE COPY//