DHARAM CHAND SOHAN LAL & CO., Alwar V. ITO, Alwar

MA 146/JPR/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5447 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 23-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRITHIVI RAJ MEENA
• Assessee Lawyers: GHANSHYAM THAKURIA
• Keywords: Opportunity of being heard
• Section: 15

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH DQY HK KJ R ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT , JM & SHRI VIKRAM SINGH YADAV, AM M.A. NO.1 46 /JP/16 (ARI SING OUT OF I TA N O. 37 / JP/201 5 ) FU/KZKJ.K O 'K Z @ ASSESSMENT YEAR : 20 10 - 11 M/S D HAR AM CHAND SOHAN LAL & COMPANY, A - 13, NEW SABZI MANDI, ALWAR. CUKE VS. THE ITO, WARD - 2(3), ALWAR. LFKK;H YS[KK LA - @THVKBZVKJ LA - @ PAN/GIR NO.: AA HFD 6576 D VIHYKFKHZ@ APPELLAN T IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI GHANSHYAM THAKURIA ( ADVOCATE ) JKTLO DH VKSJ LS @ REVENUE BY : SHRI PRITHIVI RAJ MEENA ( ADDL. C IT ) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 0 3 / 0 3 /201 7 MN ?KKS 'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 07 / 0 3 /201 7 VKNS'K@ ORDER PE R : VIKRAM SINGH YADAV , A .M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CO - ORDINATE BENCH DATED 27.04.2016 IN ITA NO.37/JP/2015. 2. IN ITS APPLICATION, THE AS SESSEE HAS RA I SED THE FOLLOWING CONTENTIONS: M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 2 REGARDING CONFIRMING OF ADDITION OF RS.10,00,000/ - ON ACCOUNT OF FRESH CAPITAL INTRODUCED BY PARTNERS 1 ) SIR , YOUR HONORABLE BENCH ORDER AT PAGE 4, PARA 2.2 AND PAGE 5, PARA 2.3 HAD OBSERVED THAT CIT(APPEALS) H AD DIRECTED TO THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNTS BEFORE THE AO, BUT AS SUCH LEARNED CIT (APPEALS), ALWAR HAS NOT MADE ANY DIRECTION IN THIS CONTEXT. THUS IT IS APPARENT MISTAKE OF FACTS. 2 ) THE ASSESSEE HAS INTRODUCED FRESH CAPITAL OF RS.11,50,000/ - D URING THE YEAR AND THE HONORABLE BENCH HAS OBSERVED THAT THE ASSESSEE HAS NOT MADE ANY EFFORTS TO EXPLAIN THE SOURCE OF CAPITAL WHICH IS WRONG ON THE FACTS THAT THE ASSESSEE HAD DULY FURNISHED COPY OF ITR OF ALL THE INDIVIDUAL PARTNERS WHICH SHOWS THAT TH EY HAVE CASH IN HAND. SIR THE PARTNERS HAVE SHOWN INTEREST INCOME IN THEIR ITR WHICH SHOWS THAT THEY HAD FUNDS WITH THEM WHICH WAS LATER INTRODUCED IN FIRM. 3 ) SIR THE LEARNED CIT (APPEALS), ALWAR AT PAGE 14 PARA 6.8 OF HIS ORDER (I.E. PAGE 7 PARA 2.7 OF HONO RABLE BENCH ORDER) HAD MENTIONED THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN WHETHER THE CAPITALS INTRODUCED BY THE PARTNERS ARE IN CASH OR BY CHEQUE WHICH IS WRONG AND MISTAKE APPARENT FROM RECORDS ON THE BASIS OF FACTS THAT THE ASSESSEE HAS EVERY TIME MENT IONED THAT ALL THE CAPITAL INTRODUCED BY PARTNERS ARE IN CASH AND THEY DO NOT HOLD BANK ACCOUNTS. 4 ) SIR THE HONORABLE BENCH HAS OVERLOOKED ALL THE PAPERS SUBMITTED BY US SUCH AS INCOME CHART FROM AY 1994 - 95 ONWARDS, COMPUTATION AND BALANCE SHEET OF INDIVIDUA L PARTNERS. SIR IN M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 3 BALANCE SHEET, ALL THE PARTNERS HAS SUFFICIENT CASH WHICH WAS INTRODUCED AS CASH LATER ON IN FIRM. 5 ) SIR THE AO HAS NEVER DEMANDED AND RAISED THE MATTER FOR SUBMITTING THE PROOF OF SOURCE OF CAPITAL INTRODUCED BY PARTNERS IN FIRM. HE TOO HAD SUFFICIENT EVIDENCES AND PAPERS IN HIS OFFICE OF PREVIOUS YEARS BUT EVEN THEN HE DID NOT VERIFY THE SAME FROM HIS RECORDS. ALSO THE LEARNED CIT(APPEALS), ALWAR HAS NOT GIVEN DIRECTION TO AO TO VERIFY THE SAME AND HE HIMSELF PASSED THE ORDER WITHOUT LOO KING INTO THE FACTS. AFTER THAT THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT PAPERS AND EVIDENCES BEFORE YOUR HONBLE BENCH WHICH WAS OVERLOOKED AND APPARENT MISTAKE OF FACTS AND HENCE WE ARE FILING THE RECTIFICATION APPLICATION U/S 254. REGARDING CREDITOR S OF RS.10,00,000/ - (REMANDED BACK TO AO) 1 ) SIR YOUR HONORABLE BENCH AT PAGE 14 LAST PARA HAS OBSERVED AND COMMENTED THAT THE AR IS REFERRING THE ADDITION FOR CREDITORS WHEREAS AO AND CIT(A) ARE REFERRING TO DEBTORS AND HENCE THE MATTER IS REMANDED BACK TO AO WHICH IS MISTAKE APPARENT FROM RECORD ON THE FACTS THE ASSESSEE HAS ALREADY MENTIONED BEFORE THE CIT(A), ALWAR THAT THE MATTER RELATES TO CREDITORS. ALSO THE AMOUNT OF RS.52,76,366/ - MENTIONED BY THE AO IN HIS ORDER IS SAME WHICH IS SHOWN BY ASSESSEE UN DER SUNDRY CREDITORS HEAD OF BALANCE SHEET. 2 ) SIR THE LEARNED CIT(APPEALS), ALWAR HAS NOT GIVEN DIRECTION TO AO REGARDING CONFIRMATION OF MATTER, WHETHER AMOUNT RELATES TO CREDITORS AND DEBTORS. SIR THE LEARNED CIT(APPEALS) HAS M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 4 HIMSELF NOT TAKEN APPROPRIATE ACTION TO CONFIRM THE MATTER WHICH IS MISTAKE APPARENT FROM RECORDS AND NEEDS TO BE RECTIFIED. 3 ) SIR THE HONORABLE BENCH HAS OVERLOOK ALL THE PAPERS SUBMITTED BY THE ASSESSEE AND HAS NOT COMMENTED ON THE SAME IN THE ORDER. THE ASSESSEE HAS ALREADY MENTIONED THAT THE CREDITORS SHOWN BY THE ASSESSEE ARE SMALL FARMERS WHO GENERALLY COME TO THE ASSESSEE FOR SELLING THEIR GREEN VEGETABLES IN MANDI AND THEY GENERAL LY CLEAR THERE ACCOUNT IN A CYC LE OF 2 - 3 MONTHS. THE ASSESSEE HAS ALSO PRODUCED COMPARATIVE BALANCE S HEET FOR 3 YEARS IN WHICH THE AMOUNT OF CREDITORS ARE REFLECTED FOR 3 YEARS. 4 ) SIR YOUR HONORABLE BENCH AT PAGE 15 PARA 1 ST HAS MENTIONED THAT THE ASSESSEE IS FREE TO PRODUCE ALL THE NECESSARY DOCUMENTS AND MATERIAL BEFORE AO TO SUBSTANTIATE ITS CLAIM. SIR B UT THE ASSESSEE HAS PRODUCED ALL THE RELEVANT PAPERS BEFORE HONORABLE BENCH WHICH WAS NOT CONSIDERED WHICH IS MISTAKE APPARENT FROM RECORDS. REGARDING CONFIRMING OF ADDITION OF RS . 3,25,000/ - ON ACCOUNT OF DISALLOWANCE OF EXPENSES 1 ) SIR YOUR HONORABLE BENC H AT PAGE 15 PARA 2.16 HAS OBSERVED THAT THE LEARNED CIT(APPEALS ) , ALWAR IS VERY CONSIDERATE IN GIVING REASONABLE RELIEF TO THE ASSESSEE AND IS VERY MUCH CAUTIOUS TO GO THROUGH THE SUBMISSION WHICH IS WRONG AS THE ASSESSEE NATURE OF BUSINESS IS SIMILAR FRO M PAST MANY YEARS M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 5 AND THE EXPENSES INCURRED BY THE ASSESSEE ARE OF SIMILAR TYPES IN ALMOST EVERY YEAR. 2 ) SIR THE ASSESSEE HAS PRODUCED BEFORE THE HONORABLE BENCH THE COMPARISON CHART FROM AY 2005 - 06 TO AY 2010 - 11 AND THE NET PROFIT DECLARED BY THE ASSESSEE IS MUCH MORE IN AY 2010 - 11 AS COMPARED TO PREVIOUS YEAR. 3 ) SIR ALSO IN THE SCRUTINY ASSESSMENT IN PREVIOUS YEAR THE LEARNED CIT(APPEALS ) , ALWAR HAS DELETED ALL THE ADDITIONS WHICH WERE MADE BY AO ON ACCOUNT OF DISALLOWANCE OF EXPENSES WHICH SHOWS THAT THE QU ANTUM AND AMOUNT OF EXPENSES SHOWN BY ASSESSEE ARE GENUINE ENOUGH. SIR THE HONORABLE BENCH HAS ALSO OVERLOOKED THE FACTS ABOVE FACTS WHICH ARE MISTAKE APPARENT FROM RECORDS. SIR FROM THE ABOVE CONTENTIONS IT IS CLEAR THAT THERE IS MISTAKE APPARENT FROM REC ORDS WHILE FINALIZING THE ORDER AND THE SAME NEED TO BE RECTIFIED. HONOR THE ASSESSEE HAS ALREADY SUBMITTED AND PRODUCE ALL THE RELEVANT PAPERS BEFORE THE HONORABLE BENCH AT THE TIME OF HEARING CONTAINING OF 152 PAPERS FOR WHICH DETAILS IS AS FOLLOWS: A ) S UBMISSIO N IN MATTER OF CAPITAL I NTRODUCE D BY PAR T NERS PAGE 8 TO 56 B ) SUBMISSIONS IN MATTER OF SUPPORT OF CREDITORS PAGE 57 TO 102 C ) SUBMISSION IN MATTER OF DISALLOWANCE OF EXPENSES PAGE 103 TO 152 M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 6 IN LIGHT OF ABOVE, IT WAS SUBMITTED BY THE LD AR THAT THE B E NCH MAY KINDLY RECALL THE MATTER AND FURTHER REQUEST TO RECTIFY THE ORDER U/S 254 AND GIVE RELIEF TO ASSESSEE. 3. IN RESPECT OF EACH OF THE GROUNDS RAISED IN THE MISCELLANEOUS PETITION, WE HAVE GONE THROUGH THE ORDER AND THE FINDINGS OF THE CO - ORDINATE B ENCH IN ITS ORDER DATED 27.4.2016 . 3.1 IN RESPECT OF CAPITAL INTRODUCED BY THE PARTNERS, THE COORDINATE BENCH HAS TAKEN INTO CONSIDERATION THE FACTUAL POSITION AS OBSERVED BY THE AO IN PARA 2.3, LD CIT(A)S FINDINGS IN PARA 2.7, THE SUBMISSIONS OF THE LD AR IN PARA 2.10 OF ITS ORDER AND THEREAFTER, HAS GIVEN ITS FINDINGS AT PARA 2.12 OF ITS ORDER, THE SAME ARE REPRODUCED A S UNDER: 2.12 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORDS THAT TH E ASSESSEE HAS NOT MADE ANY EFFORTS TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE ASSESSEES PARTNERS WHO HAVE INTRODUCED SUCH A BIG AMOUNT IN CASH IN THE FIRM. IT IS IMPERATIVE FOR THE ASSESSEE TO SUBSTANTIATE THE SOURCE OF THE TRANSACTIONS WITH PROPER DOCUMENTARY EVIDENCE WHERE THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF THE FUNDS, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE PARTNERS BEFORE THE LOWER AUTHORITIES INCLUDING M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 7 BEFORE US. THUS FOR WANT OF PROPER EVI DENCES AS TO INTRODUCTION OF CAPITAL IN THE ASSESSEE FIRM, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS SUSTAINED ON THIS ISSUE. 3.2 IN LIGHT OF ABOVE, IT IS CLEAR THAT AFTER TAKING INTO CONSIDERATION THE OBSERVATIONS/FINDINGS OF THE AO , LD CIT(A) AS WELL AS THE ASSESSEES SUBMISSIONS, THE COORDINATE BENCH HAS ARRIVED AT ITS FINDINGS. WE THEREFORE DONOT SEE ANY FACTUAL MISTAKE WHICH IS APPARENT FROM THE RECORDS. 3.3 REGARDING MATTER RELATING TO RS 10,00,000 WORTH CREDITORS WHICH HAS BE EN REMANDED BACK TO THE AO, IT IS AGAIN NOTED THAT THE COORDINATE BENCH HAS TAKEN INTO CONSIDERATION THE FACTUAL POSITION AS OBSERVED BY THE AO IN PARA 2.4, LD CIT(A)S FINDINGS IN PARA 2.15, THE SUBMISSIONS OF THE LD AR IN PARA 2.13 OF ITS ORDER AND THERE AFTER, HAS GIVEN ITS FINDINGS AT PARA 2.15 OF ITS ORDER, THE OPERATIVE PART IS REPRODUCED AS UNDER: FROM THE CONJOINT READING OF THE AO, LD. CIT(A) AND LD. AR, IT IS APPARENT THAT THE LD. AR IS REFERRING THE ADDITIONS OF RS.10.00 LACS AS SUNDRY CREDITORS WHEREAS THE AO AND LD. CIT(A) ARE REFERRING TO THE DEBTORS. THUS RECORD IS NOT CLEAR AS TO WHAT AMOUNT WAS ADDED AS DEBTORS OR AS CREDITORS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 8 CASE, THE LUMP SUM ADDITION MADE BY THE AO AND CONFIRMED BY THE LD . CIT(A) REQUIRES TO BE REVISITED BY THE AO. WE, THEREFORE, REMAND THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS FREE TO PRODUCE ALL THE NEC ESSARY DOCUMENTS AND MATERIALS BEFORE THE AO TO SUBSTANTIATE ITS CLAIM IN THIS REGARD. THUS THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3.4 IN LIGHT OF ABOVE, IN RESPECT OF SECOND GROUND OF MISC. APPLICATION, IT IS CLEAR THAT AFTER T AKING INTO CONSIDERATION THE OBSERVATIONS/FINDINGS OF THE AO , LD CIT(A) AS WELL AS THE ASSESSEES SUBMISSIONS, THE COORDINATE BENCH HAS ARRIVED AT ITS FINDINGS. IN RESPECT OF FRESH DOCUMENTS WHICH ARE CLAIMED TO BE SUBMITTED FOR THE FIRST TIME BEFORE THE BENCH, IT IS IMPERATIVE THAT THE SAME ARE EXAMINED BY THE LOWER AUTHORITIES AND A FINDING OF FACT BEEN ARRIVED AT AND WE DONT SEE ANY PREJUDICE WHICH IS BEING CAUSED TO THE ASSESSEE BY REMANDING THE MATTER BACK TO THE AO . WE THEREFORE DONOT SEE ANY FACTUA L MISTAKE WHICH IS APPARENT FROM THE RECORDS. M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 9 3.5 REGARDING MATTER RELATING TO DISALLOWANCE OF EXPENSES WORTH RS 3,25,000, IT IS AGAIN NOTED THAT THE COORDINATE BENCH HAS TAKEN INTO CONSIDERATION THE FACTUAL POSITION AS OBSERVED BY THE AO IN PARA 2.5, LD CIT(A)S FINDINGS IN PARA 2.8, THE SUBMISSIONS OF THE LD AR IN PARA 2.13 OF ITS ORDER AND THEREAFTER, HAS GIVEN ITS FINDINGS AT PARA 2.16 OF ITS ORDER, THE OPERATIVE PART IS REPRODUCED AS UNDER: NOW WE TAKE UP THE ISSUE OF DISALLOWANCE OF CERTAIN EXPE NSES AMOUNTING TO RS.3.25 LACS. WE HAVE CONSIDERED THE ARGUMENTS, WRITTEN SUBMISSION OF THE ASSESSEE INCLUDING THE SUBMISSIONS OF THE LD. DR DURING THE COURSE OF HEARING. WE FIND THAT THE LD. CIT(A) HAD BEEN VERY MUCH CAUTIOUS TO GO THROUGH THE SUBMISSIONS OF BOTH THE PARTIES. THE LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE DETAILS OF ALL THE EXPENSES INCURRED BY THE ASSESSEE FIRM (SUPRA). ALTHOUGH, IT WAS ALSO DIFFICULT FOR LOWER AUTHORITIES TO DEDUCE THE ACTUAL EXPENSES INCURRED FOR WANT OF PROPER DETAILS /BILLS AND VOUCHERS ETC. YET THE LD. CIT(A) HAS BEEN VERY CONSIDERATE IN GIVING REASONABLE RELIEF TO THE ASSESSEE IN THE RESPECTIVE HEADS MENTIONED ABOVE. THUS THE ORDER OF THE LD. CIT(A) IS SUSTAINED ON THE ISSUE OF DISALLOWANCE OF CERTAIN EXPENSES . 3.6 IN LIGHT OF ABOVE, IT IS CLEAR THAT AFTER TAKING INTO CONSIDERATION THE OBSERVATIONS/FINDINGS OF THE AO, LD CIT(A) AS WELL AS THE ASSESSEES M.A. NO. 146 /JP/16 M/S DHARAM CHAND SOHAN LAL & CO. VS. ITO, WARD - 2(3) , ALWAR 10 SUBMISSIONS, THE COORDINATE BENCH HAS ARRIVED AT ITS FINDINGS. WE THEREFORE DONOT SEE ANY FACTUAL MISTAKE WHICH IS APPARENT FROM THE RECORDS. 3.7 IN LIGHT OF ABOVE, WE DONOT SEE ANY MISTAKE WHICH IS APPARENT FROM RECORD AND RECTIFIABLE UNDER THE SCOPE OF SECTION 254(2) OF THE ACT. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 07/03/2017 . SD/ - SD/ - DQY HK KJ R FOE FLAG ;KNO ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTAN T MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED: - 07 /0 3 /2017. * SANJEEV. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - M/S DHARMA CHAND SOHAN LAL & COMPANY, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT - THE ITO, WARD - 2(3), ALWAR . 3 . VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {M.A. NO. 146 /JP/16 } VKNS'KKUQLKJ@ BY ORDE R, LGK;D IATHDKJ@ ASST. REGISTRAR