ITO, Rohtak v. Sh. Krishan Kant, Rohtak

ITA 366/DEL/2010 | 2006-2007
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 36620114 RSA 2010
Bench Delhi
Appeal Number ITA 366/DEL/2010
Duration Of Justice 4 month(s) 3 day(s)
Appellant ITO, Rohtak
Respondent Sh. Krishan Kant, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 31-05-2010
Date Of Final Hearing 31-05-2010
Next Hearing Date 31-05-2010
Assessment Year 2006-2007
Appeal Filed On 27-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D DELHI BEFORE SHRI A.D.JAIN AND SHRI K.G. BANSAL I.T.A.NO. 366(DEL)/2010 ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICER SHR I KRISHAN KANT WARD-1 ROHTAK. VS. S/O SHRI VIDYA BHUSHAN SHARMA PROP. M/S SUPRA TRADING CO. V& PO: KAHNNAUR ROHTAK. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. CHAND SR. DR. RESPONDENT BY : SHRI V.S. AGGA RWAL ADVOCATE ORDER PER K.G. BANSAL ; AM THIS APPEAL EMANATES FROM A CONSOLIDATED ORDER P ASSED BY THE CIT(APPEALS) ROHTAK ON 18.11.2009 IN APPEAL NO S.489 & 492/RTK/08- 09 AND IT PERTAINS TO ASSESSMENT YEAR 2006-07. THE CORRESPONDING ORDER OF ASSESSMENT WAS FRAMED BY THE INCOME-TAX OFFI CER WARD-1 ROHTAK ON 23.12.2008 UNDER THE PROVISIONS OF SECTION 1 43(3) OF THE INCOME-TAX ACT 1961. THE REVENUE HAS TAKEN TWO GROUNDS IN THE APPEAL AS UNDER:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING ADDITIONS MADE IN THE HANDS OF THE ASSESSEE ON THE PROTECTIVE BASIS WHILE SUBSTANTIVE AD DITIONS MADE IN THE HANDS OF M/S PACL INDIA LTD. NEW DELHI IN TH E ITA NO. 366(DEL)/2010 2 ASSESSMENT YEAR 2006-07 WERE STILL PENDING A T THE FIRST APPELLATE STAGE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO GIVE CREDIT OF TDS TO THE ASSESSEE EVEN AFTER HOLDING THAT THE AMOUNTS ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE HAS ACTUALLY NO T BEEN RECEIVED BY THE ASSESSEE. 2. BEFORE US THE LD. DR SUBMITS THAT THERE ARE ABOUT 80 SUCH CASES AS THE CASE OF THE ASSESSEE WHERE THEIR NAMES HAVE BEEN USED BY PACL (I) LTD. FOR SIPHONING OFF OF THE MONEY BY US ING THE DEVICE OF CONTRACT WORK. THE ADDED FEATURE OF THIS CASE IS THAT THE STATEMENT OF THE ASSESSEE HAS BEEN RECORDED THE SALIENT FEATURE OF WHICH HAVE BEEN MENTIONED IN PARAGRAPH 4 OF THE ASSESSMENT ORDE R. THE SUMMARY OF THE STATEMENT AS MENTIONED IN THE ASSESSMENT ORDER IS REPRODUCED BELOW:- 4. ON 13.9.2007 THE ASSESSEE ATTENDED THE PROCEEDINGS AND STATEMENT OF THE ASSESSEE WAS RECORDED. IN THE STATEMENT THE ASSESSEE HAS SPECIFICALLY DEPOSED THAT :- A) NO WORK HAS BEEN DONE BY HIM AS CONTRACTOR OF ANY COMPANY NOR HE KNOWS ANY COMPANY NAMED M/S PACL INDIA LI MITED NEW DELHI NOR HE HAS DONE ANY KIND OF WORK FOR THIS COMPANY. B) HE HAS NOT DONE ANY TRANSACTION IN THE ACCOUN T OPENED IN HIS NAME. SHRI DEV RAJ HAS KEPT SIGNED BALANCE CHEQU E-BOOK WITH HIM (SHRI DEV RAJ) IF HE HAS DONE ANY TRANS ACTION HE ITA NO. 366(DEL)/2010 3 (THE ASSESSEE) DOES NOT HAVE ANY KNOWLEDGE. WHEN IT CAME TO HIS KNOWLEDGE THAT SHRI DEV RAJ IS MISUSING HIS BANK ACCOUNT HE CLOSED DOWN HIS BANK ACCOUNT FIVE-S IX MONTH BACK. C) HE HAS SIGNED MANY PAPERS ON THE DIRECTIONS O F SHRI DEV RAJ TO WHOM HE USED TO VISIT TO LEARN THE WORK OF PANDTAI. D) HE HAS PASSED B.A. IN THE YEAR 2005. THEREAF TER HE WENT TO GOA FOR THREE MONTHS AND AFTER RETURNING FROM GOA HE FELL ILL- SUFFERED FROM STIFFNESS IN THE JOINTS AND FOR THE NEXT SIX MONTHS GOT TREATMENT FROM THE PGI ROHTAK. THEREA FTER HE REMAINED JOBLESS AND DID NOT WORK. E) HE HAS NOT FILED ANY RETURN OF INCOME AS HE H AS STARTED WORKING ONLY FROM FOUR-FIVE MONTHS (IT MEANS WOR K STARTED IN THE YEAR 2007). WHEN SHOWN THE RETURN OF I NCOME FILED IN HIS NAME HE REMARKED THAT THIS RETURN HAS NO T BEEN FILED BY ME NOR HE HAS GOT IT FILLED FROM ANYONE ELSE. SIGNATURE ON IT IS HIS AND THIS IS ONE OF THE PAPERS SIG NED BY HIM ON THE DIRECTIONS OF SHRI DEV RAJ. F) WHEN HE WAS ASKED ABOUT HIS PROPRIETARY CON CERN (AS PER RETURN OF INCOME) I.E. M/S SAPRA TRADING COMPANY HE DEPOSED THAT HE HAS NEVER WORKED WITH THE NAME & STYLE OF M/S SAPRA TRADING CO. NOR HE HAS HEARD ABOUT M/S SAPRA TRDING C. G) WHEN HE WAS ASKED ABOUT M/S PACL INDIA LIMI TED NEW DELHI HE DEPOSED THAT HE DOES NOT KNOW ANYTHIN G ABOUT THIS COMPANY NOR HE HAD ANY CONCERN WITH THE COMPANY OF THIS NAME. H) WHEN ASKED ABOUT ANY AMOUNT OF TAX PAYABLE OR REFUNDABLE FROM THE INCOME-TAX DEPARTMENT HE HAS STATED TH AT HE HAS NOTHING TO PAY NOR ANYTHING IS RECEIVABLE TO HI M FROM THE INCOME-TAX DEPARTMENT. ITA NO. 366(DEL)/2010 4 2.1 IN THE LIGHT OF THE FACTS MENTIONED IN THE ORD ERS OF THE LOWER AUTHORITIES AND THE AFORESAID STATEMENT IT IS ARGUED THAT NO EXPENDITURE HAS BEEN INCURRED IN EARNING THE INCOME. IT IS A LSO NOT SPECIFICALLY SUBMITTED THAT THE MONEY WITHDRAWN FROM THE BA NK ACCOUNT HAS BEEN RETURNED TO PACL(I) LTD. THEREFORE THE WHOL E OF THE AMOUNT RECEIVED BY THE ASSESSEE FROM THE AFORESAID COMPANY IS LIABLE TO BE TAXED U/S 56 OF THE ACT. 2.2 IN REPLY THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF SMT. KAMLESH & OTHERS I N ITA NO. 225(DEL)/2010 ETC. DATED 31.3.2010 A COPY OF WHICH HAS BEEN PLACED BEFORE US. THE OPERATIVE PORTION OF THE ORDER IS CONTAINED IN PARAGRAPHS 4 AND 5 WHICH ARE REPRODUCED BELOW:- 4. WE HAVE HEARD THE LD. DR. NONE WAS P RESENT ON BEHALF OF THE ASSESSEE AND HENCE WITH THE HELP OF THE LD. DR WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW. IF THE ASSESSING OFFICER WAS OF THE VIEW THAT NO WORK HAS BEEN DONE BY ANY OF THE CONTRACTOR THE AMOUNT RECEIV ED ITSELF CANNOT BE CONSIDERED TO BE INCOME OF THE ASSESS EE BUT ONLY THE PROFIT FROM SUCH RECEIPT CAN BE BROUGHT TO TAX. THE ASSESSEE HEREIN BEING FOUND TO BE NAME LENDERS COU LD HAVE CHARGED ONLY THE COMMISSION FOR SO LENDING THE N AME. IN THE FORM OF BANK STATEMENT IT IS ALSO EVIDENT THAT THE AMOUNT RECEIVED WAS PURPORTED TO BE REFUNDED BACK TO P ACL INDIA LTD. THEREFORE INCOME OF THE PRESENT ASSESSEES ARE ONLY TO ITA NO. 366(DEL)/2010 5 THE EXTENT OF RECEIVING COMMISSION AND SINCE AL L THESE PERSONS HAVE OFFERED 8% OF THEIR INCOME NO FU RTHER AMOUNT IS TAXABLE. AT THE SAME TIME THE LD. CIT(A) HAS FOUND THAT THE INCOME IS NOT ASSESSABLE AS BUSINESS INC OME OR UNDER SECTION 44AD OF THE ACT BUT ONLY AS INCOME FROM OTHER SOURCES WHICH IN ANY CASE COULD NOT HAVE EXCEE DED THE AMOUNT OFFERED FOR TAX. SINCE CORRECT INCOME HAS BEEN OFFERED FOR TAX BY THE ASSESSEES HEREIN THE ASSESSING OFFICER WAS THEREFORE IN ERROR IN TAXING THE ENTIRE SUM RECEIVED AS INCOME. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). 5. AS REGARDS CREDIT FOR TDS SINCE THE INCOME HAS BEEN ASSESSED IN THE HANDS OF THE ASSESEES AND THE T AX WAS DEDUCTED FROM THEIR INCOME THE PERSONS ARE EN TITLED TO CREDIT FOR THE TAX DEDUCTED AT SOURCE. THEREFORE HER E ALSO THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A). 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. WE ARE OF THE VIEW THAT THE SUBMIS SIONS OF THE REVENUE STAND ON SOUNDER FOOTING IN THIS CASE THAN ANY OTHER CASES AS FURTHER FACTS HAVE COME TO LIGHT UPON RECORDING THE STATEMEN T OF THE ASSESSEE. NONETHELESS IT IS THE CASE OF THE ASSESSEE THAT HE HAS NOT CONDUCTED ANY BUSINESS AND THE WHOLE SHOW WAS PUT UP ON THE DIRECTIONS OF SHRI DEV RAJ. IN SUCH A CIRCUMSTANCE HE CAN ONLY BE TAKEN AS A NAME-LENDER WHOSE INCOME MAY NOT EXCEED 8% OF THE AMOUNT FOR WHICH ENTRIES WERE PROVIDED. IN THIS VIEW OF THE MATTER THE ORDER OF THE TRIBUNAL IN THE CASE OF SMT. KAMLESH & OTHERS IS MADE APPLICABLE TO THIS CASE ALSO SUBJECT TO THE RIGHT OF THE REVENUE TO ARGUE IND EPENDENTLY IN THE CASE OF ITA NO. 366(DEL)/2010 6 PACL (I) LTD. THAT THE EXPENDITURE CLAIMED BY WAY OF JOB WORK WAS BOGUS. 4. IN THE RESULT THE APPEAL IS DISMISSED SUBJEC T TO THE AFORESAID REMARKS. 5. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31.05.2010 SOON AFTER THE HEARING WAS CONCLUDED. SD/- SD/- (A.D. JAIN) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 31.05.2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI KRISHAN KANT S/O SHRI VIDYA BHUSHAN SHARMA R OHTAK. ITO WARD-1 ROHTAK. CIT(A) CIT THE DR ITAT NEW DELHI. ASSISTANT REGIST RAR.