Shri Saurabh Goyal,, Bhopal v. The I.T.O., Bhopal

ITA 33/IND/2010 | misc
Pronouncement Date: 18-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 3322714 RSA 2010
Bench Indore
Appeal Number ITA 33/IND/2010
Duration Of Justice 29 day(s)
Appellant Shri Saurabh Goyal,, Bhopal
Respondent The I.T.O., Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 18-02-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year misc
Appeal Filed On 20-01-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO.33/IND/2010 ASSESSMENT YEAR 2005-06 SHRI SAURABH GOYAL BHOPAL .APPELLANT VS INCOME TAX OFFICER 2(2) BHOPAL .RESPONDENT APPELLANT BY : SHRI YESHWANT SHARMA CA RESPONDENT BY : SMT. APARNA KARAN SR. DR O R D E R THIS APPEAL IS BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 13.10.2009. DURING HEARING OF THIS AP PEAL I HAVE HEARD SHRI YESHWANT SHARMA LEARNED COUNSEL FOR THE ASSESSEE AND SMT. A PARNA KARAN LEARNED SENIOR DR. GROUND NOS. 1 AND 4 IN THE GROUNDS OF APPEAL HAVE NOT BEEN PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE THEREFORE BOTH T HESE GROUNDS ARE DISMISSED AS NOT PRESSED. 2. THE NEXT GROUND I.E. GROUND NO. 2 IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WRONG IN CONFIRMING THE ADDITION OF RS. 15 000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF T HE ACT. IT WAS ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE CASH WAS DEPOSITED BY THE FRIEND NAMELY SHRI LOKESH SHARMA OF THE ASSESSEE ON 24.3.2005 AN D THE AMOUNT WAS RETURNED BACK ON 14.2.2006. IT WAS POINTED OUT THAT CONFIRM ATION OF DEPOSITING THE CASH 2 SUPPORTED BY AFFIDAVIT WAS DULY FILED BEFORE THE LD . CIT(A) WHEREIN THE LEARNED FIRST APPELLATE AUTHORITY IGNORED THE AFFIDAVIT AND MERELY COMMENTED UPON THE CONFIRMATION. IT WAS POINTED OUT THAT SHRI LOKESH SHARMA IS SERVING WITH A PRIVATE COMPANY AND IS GETTING SALARY OF RS. 12 000/- P.M. AND ALSO HAVING AGRICULTURAL INCOME FROM TWO ACRES OF AGRICULTURAL LAND. IT WAS PLEADED THAT THE ASSESSEE IS NOT SUPPOSED TO PROVE THE SOURCE OF SOURCE FOR WHICH RE LIANCE WAS PLACED ON THE DECISION IN CIT V. DAULAT RAM RAWATMAL; 87 ITR 349 (SC). RELIANCE WAS ALSO PLACED ON THE DECISION IN CIT V. METACHEM INDUSTRIES; 245 ITR 160 (M.P.). IT WAS POINTED OUT THAT EVEN THE ASSESSEE REQUESTED THE LEARNED FI RST APPELLATE AUTHORITY TO SUMMON THE DEPOSITOR SO THAT TRUTH CAN BE ASCERTAIN ED BUT FOR THE REASONS BEST KNOWN TO HIM THIS OPTION WAS NOT EXERCISED. FOR T HIS ASSERTION MY ATTENTION WAS INVITED TO LETTER FILED BEFORE THE LD. CIT(A) (PAGE S 7 AND 8 OF THE PAPER BOOK) FILED BEFORE THE TRIBUNAL). RELIANCE WAS PLACED ON THE DE CISION IN 2 ITJ 286 (M.P.). IT WAS SPECIFICALLY ASSERTED THAT THERE WAS NO SHORTAG E OF CASH WITH THE ASSESSEE REQUIRING DUBIOUS CASH AS THE CASH BOOK WAS ALSO FU RNISHED BEFORE THE LD. CIT(A) FOR WHICH MY ATTENTION WAS INVITED TO PAGES 9 TO 11OF T HE PAPER BOOK. IT WAS SPECIFICALLY POINTED OUT THAT NO INVESTMENT WAS MAD E OUT OF THIS AMOUNT EITHER WITHIN THE RELEVANT ASSESSMENT YEAR OR THE NEXT YEA R. ON THE OTHER HAND THE LEARNED SR. DR STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT NO SOURCE OF DEPOSIT WAS GIVEN BY THE ASSESSEE IN THE AFFIDAV IT AND NO RETURN WAS FILED BY THE DONOR IN EARLIER YEARS BY FURTHER SUBMITTING THAT T HERE IS NO PROOF OF AGRICULTURAL LAND FILED BY THE ASSESSEE. THE IMPUGNED ORDER WAS DEFENDED. IN REPLY THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT IN EARLIER YEARS SINCE THE INCOME WAS BELOW TAXABLE LIMIT THEREFORE NO RETURN WAS F ILED 3 3. I HAVE CONSIDERED THE SUBMISSIONS PUT FORTH BY T HE LEARNED RESPECTIVE COUNSELS AND PERUSED THE MATERIAL AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT A DEPOSIT OF RS. 15 000/- WAS MADE IN CASH WITH THE A SSESSEE BY HIS FRIEND NAMELY SHRI LOKESH SHARMA WHO WAS WORKING IN A PRIVATE FIR M IN BHOPAL. THE IMPUGNED AMOUNT WAS TAKEN BACK IN THE NEXT FINANCIAL YEAR ON 14.2.2006. THE LEARNED AO ADDED THE AMOUNT OFRS.15 000/- AS CASH CREDIT ON TH E GROUND THAT NO CONFIRMATION WAS FILED NOR THE DEPOSITOR WAS PRODUCED. ON APPEA L THE ADDITION WAS AFFIRMED ON THE GROUND THAT THE CREDIT WORTHINESS OF THE ASS ESSEE AND THE GENUINENESS OF THE DEPOSIT HAS NOT BEEN PROVED WHICH IS UNDER CHAL LENGE BEFORE THIS TRIBUNAL. IT IS SEEN THAT BEFORE THE LEARNED FIRST APPELLATE AUTHOR ITY THE ASSESSEE FURNISHED AFFIDAVIT (PAGE 5 OF THE PAPER BOOK) WHEREIN THE DE PONENT (SHRI LOKESH SHARMA) HAS CATEGORICALLY SWORN/AFFIRMED THAT THE AMOUNT OF RS. 15 000/- WAS DEPOSITED BY HIM ON 24.3.2005 WITH THE ASSESSEE OUT OF SALARY AN D AGRICULTURAL INCOME. THE REVENUE HAS NOT DISPUTED THE CONTENTS AND AUTHENTIC ITY OF THE AFFIDAVIT. THE ASSESSEE HAS ALSO CONFIRMED (PAGE 6 OF THE PAPER BO OK) THAT THE AMOUNT OF RS. 15 000/- WAS ADVANCED TO THE ASSESSEE. ADMITTED LY THERE IS NO DATE MENTIONED ON THE CONFIRMATION LETTER AS OBJECTED BY THE ELARNED SR. DR NOR THE SOURCE. HOWEVER THROUGH ITS AFFIDAVIT THE DEPOSITO R HAS EXPLAINED THE SOURCE AND ALSO MENTIONED THE DATE AS AVAILABLE IN PARAS 1 AND 3 OF THE AFFIDAVIT (PAGE 5 OF THE PAPER BOOK). IT IS ALSO SEEN THAT THROUGH LETT ER (PAGES 7 & 8 OF THE PAPER BOOK) BEFORE THE LEARNED CIT(A) THE ASSESSEE HAS SPECIFIC ALLY REQUESTED THAT SUMMONS U/S 131 OF THE ACT MAY BE ISSUED TO THE DEPOSITOR T O VERIFY THE FACTS IF DEEMED FIT. THIS OPTION WAS ALSO NOT EXERCISED BY THE LEARNED C IT(A). IN THE LIGHT OF THESE FACTS THE DECISION OF THE HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT V. 4 RAMESH CHANDRA SHUKLA (2008) 10 ITJ 286 (M.P.) SUPP ORTS THE CASES OF THE ASSESSEE WHEREIN THE THEN HONBLE CHIEF JUSTICE (VIDE PARA 12) HELD AS UNDER :- 12. IT IS NOW WELL SETTLED THAT WHERE THE ASSESSE E REQUESTS THE ASSESSING OFFICER TO ISSUE SUMMONS TO ENFORCE ATTENDANCE OF THE CREDITORS TO ESTABLISH TH E GENUINENESS AND CAPACITY OF THE CREDITORS IT IS DU TY OF THE ASSESSING OFFICER TO ENFORCE ATTENDANCE OF CRED ITORS BY ISSUING SUMMONS. IF THE ASSESSING OFFICER DOES NOT CHOOSE TO ISSUE SUMMONS AND EXAMINE THE CREDITORS HE CANNOT SUBSEQUENTLY TREAT THE LOANS STANDING IN THE NAME OF SUCH CREDITORS AS NON-GENUINE NOR ADD THE AMOUN T THEREOF TO THE ASSESSEES INCOME VIDE THE DECISION OF THE ALLAHABAD HIGH COURT IN NATHU RAM PREMCHAND VS. COMMISSIONER OF INCOME TAX U.P. (1963) 49 ITR 561 AND DECISION OF THIS COURT IN R.S. SETH GOPIKISAN AGRAW AL VS. ASSTT. COMMISSIONER OF S.T.; 1971 TAX LR 355. 4. EVEN OTHERWISE I AM OF THE CONSIDERED OPINION T HAT ONCE THE CASH CREDITOR ACCEPTS THE DEPOSIT THE DEPARTMENT IS AT LIBERTY T O START PROCEEDINGS U/S 69 AGAINST HIM BUT NO ADDITION CAN BE MADE IN THE HAND S OF THE ASSESSEE. FOR THIS PROPOSITION RELIANCE CAN BE PLACED ON THE DECISION IN CIT V. METACHEM INDUSTRIES (SUPRA) NEMICHAND KOTHARI (264 ITR 254) (GAU) AND THE CASE OF RAJENDRA BANSAL V. ITO; 6 ITJ 122 (IND). THE CLAIM OF THE ASSESSEE SHO ULD NOT BE DOUBTED BECAUSE THE ASSESSEE DULY FURNISHED THE COPY OF THE CASH BOOK ( PAGES 9 TO 11 OF THE PAPER BOOK) WHEREIN THE IMPUGNED AMOUNT HAS BEEN DULY REF LECTED TO BE RECEIVED FROM SHRI LOKESH SHARMA IN CASH AND THE TOTAL AMOUNT AVA ILABLE WITH THE ASSESSEE WAS RS. 86 507/-. EVEN VIDE LETTER DATED 12 TH OCTOBER 2009 ADDRESSED TO THE LD. CIT(A) (PAGE 12_ THERE IS A SPECIFIC MENTION THAT NO INVESTMENT WAS MADE BY THE ASSESSEE IN ANY MOVABLE OR IMMOVABLE ASSETS EITHER IN THE CURRENT OR NEXT FINANCIAL YEAR BEFORE THE DATE OF DEPOSIT REQUIRING THE ASSES SEE TO INTRODUCE ANY FICTITIOUS CASH. THE BOOKS OF ACCOUNTS OF CURRENT AND NEXT FIN ANCIAL YEAR WERE DULY PRODUCED BEFORE THE LEARNED FIRST APPELLATE AUTHORITY. THIS ASSERTION OF THE ASSESSEE ALSO HAS 5 NOT BEEN CONTROVERTED BY THE REVENUE. EVEN AS PER T HE BALANCE SHEET (A.Y. 2004- 05) THE ASSESSEE HAS SHOWN LIABILITY OF THE IMPUGNE D AMOUNT (RECEIVED FROM LOKESH) AND IN THE ASSET SIDE THE ASSET WORTH RS.49 19 416.50 HAS BEEN SHOWN. ON THE IMPUGNED ISSUE I ALSO DRAW SUPPORT FROM THE RATIO LAID DOWN IN THE DECISION IN THE CASE OF SHRI SANJAY MEHRA V. ITO (ITA NO. 26 /IND/2010) OF EVEN DATE. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS (SU PRA) I AM OF THE CONSIDERED OPINION THAT NO ADDITION U/S 68 IS WARRANTED. THE S AME IS DELETED CONSEQUENTLY THIS GROUND OF THE ASSESSEE IS ALLOWED. 5. THE NEXT GROUND PERTAINS TO DISALLOWANCE OF RS.2 7 496/- OUT OF CAR EXPENSES. INSURANCE EXPENSES AND DEPRECIATION BEING 1/3 RD AND RS.2 000/- OUT OF TELEPHONE EXPENSES BEING 1/3 RD OF THE CLAIMED AMOUNT/EXPENSES. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE DIS ALLOWANCE IS HIGHLY EXCESSIVE. ON THE OTHER HAND THE LEARNED SENIOR DR DEFENDED T HE DISALLOWANCE. 6. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL SUBMISSIONS IT IS SEEN THAT AS PER REPLY DATED 19.10.2007 THE ASSESSEE WAS HAVI NG A CAR AND A MOTOR-CYCLE BY CLAIMING THAT THE CAR IS USED FOR BUSINESS PURPOSES WHEREAS THE MOTOR-CYCLE WAS USED FOR PERSONAL USE. THE ASSESSEE DID NOT CLAIM D EPRECIATION ON MOTOR-CYCLE BEING USED FOR PERSONAL PURPOSES. HOWEVER THE LD. AO WAS OF THE VIEW THAT SINCE THE SHOP OF THE ASSESSEE IS SITUATED IN SARAFA BAZA R THEREFORE HE PRESUMED THAT THE CAR WAS USED FOR PERSONAL PURPOSES AND THE MOT OR-CYCLE WAS USED FOR BUSINESS PURPOSES THEREFORE HE MADE THE ADDITION OF RS.82 448/- (RS. 3271/- AS CAR EXPENSES RS. 68 189/- AS DEPRECIATION ON CAR AND R S.11 028/- AS CAR INSURANCE EXPENSES) AND OUT OF THE TELEPHONE EXPENSES OF RS.6 000/- RS. 2 000/- WERE ADDED BEING OF PERSONAL USE. THE LD. CIT(A) SUSTAIN ED THE ADDITION OF RS. 27 496/- (1/3 RD OF RS. 82 448/-) AND AFFIRMED THE DISALLOWANCE OF RS.2 000/- (IN BOTH CASES 6 1/3 RD OF THE CLAIMED EXPENSES). UNDER THE AFOREMENTIONE D FACTS AND TO PUT AN END TO THE LITIGATION THE DISALLOWANCE IS RESTRICTED T O 20% AS AGAINST THE CLAIM OF THE ASSESSEE TOWARDS THESE EXPENSES CONSEQUENTLY THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. FINALLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 18.2.2010. (JOGINDER SINGH) JUDICIAL MEMBER FEBRUARY 18 TH 2010 COPY TO APPELLANT RESPONDENT CIT CIT(A) DR GUA RD FILE DBN/-