OM Prakash Bhargava, Haldwani v. DCIT, Haldwani

CO 108/DEL/2009 | 2005-2006
Pronouncement Date: 11-03-2011 | Result: Dismissed

Appeal Details

RSA Number 10820123 RSA 2009
Assessee PAN ADOPB1474E
Bench Delhi
Appeal Number CO 108/DEL/2009
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant OM Prakash Bhargava, Haldwani
Respondent DCIT, Haldwani
Appeal Type Cross Objection
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 11-03-2011
Date Of Final Hearing 08-03-2011
Next Hearing Date 08-03-2011
Assessment Year 2005-2006
Appeal Filed On 27-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.3633/DEL./2008 (ASSESSMENT YEAR : 2005-06) DCIT CIRCLE VS. SHRI OM PRAKASH BHARGAVA HALDWANI. C/O BHARGAVA MOTORS HALDWANI. (PAN : ADOPB1474E) CO NO.108/DEL/2009 (IN ITA NO.3633/DEL./2008) (ASSESSMENT YEAR : 2005-06) SHRI OM PRAKASH BHARGAVA VS. DCIT CIRCLE C/O BHARGAVA MOTORS HALDWANI. HALDWANI. (PAN : ADOPB1474E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL CA REVENUE BY : SHRI PIYUSH SONKAR SENIOR DR ORDER PER B.C. MEENA ACCOUNTANT MEMBER : THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJEC TION FILED BY THE ASSESSEE ARISE OUT OF THE ORDER OF THE CIT (APPEALS )-II DEHRADUN DATED 25.9.2008. THE GROUNDS OF REVENUES APPEAL READ AS UNDER :- ITA NO.3633/DEL./2008 CO NO.108/DEL/2009 2 1. LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.2 00 000/- ON ACCOUNT OF REJECTION O F CLAIM OF AGRICULTURAL INCOME WITHOUT APPRECIATING THE FACT T HAT ASSESSEE FAILED TO PRODUCE ANY RECORD BANK PASS BOOK ETC. T O SUBSTANTIATE THE AGRICULTURAL INCOME DECLARED BY HIM. LD. CIT ( A) FAILED TO APPRECIATE EVERY YEAR IS A NEW YEAR AND AGRICULTURA L INCOME CANNOT BE ACCEPTED ON THE BASIS OF PAST HISTORY. 2. LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.9 00 000/- ON ACCOUNT OF DISALLOWANC E FROM COMMISSION EXPENDITURE WITHOUT APPRECIATING THE FAC T THAT NECESSARY EVIDENCE WERE NOT PRODUCED BEFORE THE ASS ESSING OFFICER TO SUBSTANTIATE HIS CLAIM OF COMMISSION EXP ENDITURE. A GENERAL REPLY WITHOUT THE SUPPORTING DOCUMENTARY EV IDENCES DOES NOT DISCHARGE THE ONUS LAID ON THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF ANY EXPENDITURE. 2. THE ASSESSEE IS AN INDIVIDUAL AND INDULGED IN TH E BUSINESS OF TRADING OF VEHICLES. THE RETURN OF INCOME WAS FILED DECLARING INCOME OF RS.11 10 230/- PLUS AGRICULTURAL INCOME OF RS.2 50 000/- ON 29.10. 2005. THE CASE WAS SELECTED FOR SCRUTINY. 3. IN THE GROUND NO.1 THE ISSUE INVOLVED IS DELETI NG THE ADDITION OF RS.2 LACS ON ACCOUNT OF REJECTION OF CLAIM OF AGRICULTUR AL INCOME AND SUSTAINING THE ADDITION ONLY TO RS.50 000/-. 4. LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. WHILE THE LEARNED AR RELIED ON THE ORDER OF THE CIT (A) AND S UBMITTED THAT THE ASSESSEE WAS DERIVING AGRICULTURAL INCOME ON ACCOUNT OF GROW ING FLOWERS AND ORNAMENTAL PLANTS WHICH HAD BEEN ACCEPTED BY THE DE PARTMENT IN THE EARLIER YEARS. THE ASSESSEE WAS HAVING AGRICULTURAL LAND O F MORE THAN 24 BIGHAS. ITA NO.3633/DEL./2008 CO NO.108/DEL/2009 3 THE ASSESSING OFFICER ESTIMATED INCOME AT RS.50 000 /- ON THE BASIS OF INFORMATION RECEIVED FROM CHIEF AGRICULTURE OFFICER WHICH WAS NEVER PROVIDED TO ASSESSEE. IT WAS ALSO POINTED OUT THAT SUCH ESTIMATES WERE FOR GROWING OF GRAINS NOT FOR THE FLOWERS AND DECORATIV E PLANTS. THE REVENUE HAD ACCEPTED THE AGRICULTURAL INCOME TO THE TUNE OF RS. 4 26 000/- IN ASSESSMENT YEAR 2004-05. HE RELIED ON THE ORDER OF THE CIT (A ) AND PLEADED TO SUSTAIN THE SAME. 5. AFTER HEARING BOTH THE SIDES WE FIND THAT ASSES SING OFFICER ESTIMATED THE INCOME ON THE BASIS OF GENERAL INFORMATION FROM CHIEF AGRICULTURE OFFICER WHICH WAS NEVER CONFRONTED WITH ASSESSEE. FURTHER SUCH GENERAL INFORMATION WAS WITH RESPECT OF EARNING FROM GRAIN CROP. BUT A SSESSEE WAS GROWING FLOWERS AND DECORATIVE PLANTS WHICH HAVE BEEN ACCEP TED BY THE REVENUE IN PAST YEARS. THE ASSESSEE IS HOLDING THE LAND OF 24 BIGHAS. INCOME OF RS.4 26 000/- HAVE BEEN ACCEPTED IN THE IMMEDIATE P RECEDING YEAR I.E. 2004- 05. IN THIS YEAR INCOME FROM AGRICULTURE IS ONLY RS.2 50 000/-. CONSIDERING ALL THESE RELEVANT FACTS AND THE PLEADINGS OF THE A SSESSEE WE FIND THAT THE CIT (A) HAS RIGHTLY ACCEPTED THE CLAIM OF THE ASSESSEE AND WE SUSTAIN THE SAME ON THE ISSUE. ACCORDINGLY GROUND NO.1 OF REVENUES A PPEAL IS DISMISSED. 6. IN THE GROUND NO.2 THE ISSUE INVOLVED IS DELETI NG THE ADDITION OF RS.9 LACS MADE OUT OF THE COMMISSION PAID TO THE ASSESSE E. ITA NO.3633/DEL./2008 CO NO.108/DEL/2009 4 7. LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. LEARNED AR RELIED ON THE ORDER OF THE CIT (A) AND ALSO SUBMITT ED THAT THE COMMISSION PAID WAS FOR BUSINESS PURPOSES. THE COMMISSION WAS PAID ON THE SALES TO VARIOUS PARTIES. THE ASSESSING OFFICER ACCEPTED PA RT OF THE PAYMENT OF COMMISSION AS GENUINE AND BALANCE AS NON-GENUINE. THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT DETAILS INCLUDING THE AS SESSMENT RECORD OF PERSONS TO WHOM THE COMMISSION WAS PAID. EVEN THE STATEMEN T WAS RECORDED OF MS. MONICA BHARGAV TO WHOM COMMISSION WAS PAID. SHE HA D CATEGORICALLY STATED THAT SHE WAS WORKING FOR THE ASSESSEE COMPANY AND W AS RECEIVING THE COMMISSION. THE COMMISSION INCOME HAS BEEN ASSESSE D IN HER HANDS BY THE ORDER U/S 143(3) OF THE INCOME-TAX ACT FOR THE SAME ASSESSMENT YEAR. THE COPY OF THE ASSESSMENT ORDER OF MONIKA BHARGAV IS P LACED ON RECORD. HE FINALLY SUBMITTED THAT THE COMMISSION HAS BEEN PAID FOR THE BUSINESS PURPOSES OF THE ASSESSEE. COMPLETE DETAILS OF PERSONS TO WH OM COMMISSION PAID WAS SUBMITTED WHICH INCLUDES FULL ADDRESS AMOUNT OF T DS COMMISSION PAID AND PAN. THEREFORE THE ORDER OF THE CIT (A) MAY BE SU STAINED. 8. AFTER HEARING BOTH THE SIDES WE HOLD THAT ASSES SEE SUBMITTED ALL RELEVANT INFORMATION IN RESPECT OF PERSONS TO WHOM COMMISSION WAS PAID. THE NAME AND FULL ADDRESS ALONG WITH THEIR I.T. RET URNS AND PAN WERE PROVIDED TO ASSESSING OFFICER. THE BASIS ON WHICH COMMISSION WAS PAID WAS ALSO EXPLAINED. THE TOTAL COMMISSION PAID BY THE A SSESSEE WAS ITA NO.3633/DEL./2008 CO NO.108/DEL/2009 5 RS.13 29 300/-. THE STATEMENT OF MONICA BHARGAV O NE OF THE PERSONS TO WHOM COMMISSION PAID SHOWS THAT SHE HAS WORKED FOR THE BUSINESS OF THE ASSESSEE AND CONFIRMED THE RECEIPT OF THE COMMISSIO N. SHE HAS ALSO NARRATED THE STYLE OF WORKING IN HER STATEMENT BY STATING TH AT SHE HAD DIRECT CONTACTS WITH THE PROSPECTIVE PURCHASERS WHICH WERE MAINLY T RANSPORT COMPANIES. SHE HAS ALSO STATED THAT SHE OPERATED FROM THE OFFICE O F THE ASSESSEE. SHE HAS STATED THAT SHE HAD CONTACTED THE GOVERNMENT AGENCI ES FOR MAKING SALES EFFECTIVE. HER COMMISSION INCOME HAD BEEN ASSESSED U/S 143(3) OF THE INCOME-TAX ACT BY THE DCIT LOCATED AT HALDWANI ITSE LF. WE ALSO NOTE THAT THE PAYMENT OF THE COMMISSION IS BUSINESS REQUIREMENT I N SUCH TYPE OF BUSINESS. THE BUSINESS OF SELLING VEHICLES IS OF COMPETITIVE NATURE AND PERSONAL CONTACTS ARE REQUIRED TO BE MADE WITH PROSPECTIVE CUSTOMERS. FURTHER THE ASSESSEE HAD DEDUCTED NECESSARY TDS ON COMMISSION PAID. THE C OPIES OF THE INCOME-TAX RETURNS OF THE PERSONS TO WHOM THE COMMISSION WERE PAID WERE ALSO FILED ON THE RECORD. THESE PERSONS TO WHOM COMMISSION PAID ARE ASSESSED TO INCOME- TAX. ALL RELEVANT DETAILS INCLUDING THE NAMES AND ADDRESS DETAILS OF TDS AND PAN NUMBERS OF THESE PERSONS TO WHOM THE COMMISSION WAS PAID WERE FILED ON RECORD. THEY ARE ASSESSED TO INCOME-TAX. REVEN UE IS NOT ABLE TO PROVE THAT THE PAYMENT OF COMMISSION WAS NOT GENUINE AND WERE NOT FOR BUSINESS PURPOSES. KEEPING ALL THESE FACTS IN VIEW WE UPHO LD THE ORDER OF THE CIT (A) ON THIS ISSUE AND DISMISS THIS GROUND OF REVENUES APPEAL. ITA NO.3633/DEL./2008 CO NO.108/DEL/2009 6 9. LEARNED AR FOR THE ASSESSEE HAS NOT PRESSED THE ISSUES RAISED IN THE CROSS OBJECTION THEREFORE THE SAME IS DISMISSED F OR NON-PROSECUTION. 10. IN THE RESULT THE APPEAL OF THE REVENUE AND CR OSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 11 TH DAY OF MARCH 2011. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 11 TH DAY OF MARCH 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II DEHRADUN. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.