Shri Saleem Khan,, Bhopal v. The ITO,, Bhopal

CO 72/IND/2009 | 2003-2004
Pronouncement Date: 06-05-2010 | Result: Dismissed

Appeal Details

RSA Number 7222723 RSA 2009
Assessee PAN AGVPK0355K
Bench Indore
Appeal Number CO 72/IND/2009
Duration Of Justice 6 month(s) 8 day(s)
Appellant Shri Saleem Khan,, Bhopal
Respondent The ITO,, Bhopal
Appeal Type Cross Objection
Pronouncement Date 06-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 06-05-2010
Date Of Final Hearing 04-05-2010
Next Hearing Date 04-05-2010
Assessment Year 2003-2004
Appeal Filed On 28-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.472/IND/2007 A.Y. 2003-04 INCOME TAX OFFICER 3(2) BHOPAL APPELLANT VS SHRI SALIM KHAN BHOPAL PAN AGVPK0355K RESPONDENT CO NO. 72/IND/09 (ARISING OUT OF ITA NO.472/IND/2007) AY: 2003-04 SHRI SALEEM KHAN BHOPAL OBJECTOR VS INCOME TAX OFFICER 3(2) BHOPAL RESPONDENT R APPELLANT BY : SHRI V.K. KARAN RESPONDENT BY : SHRI H.P. VERMA AND SHRI ASHISH GOYAL O R D E R PER JOGINDER SINGH JM 2 THE APPEAL BY THE REVENUE AND CROSS OBJECTION BY TH E ASSESSEE ARE AGAINST THE ORDER DATED 5.7.2007 OF THE LEARNED CIT(A). IN ITS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN 1. ALLOWING RELIEF ON ACCOUNT OF CONCEALED INCOME O F RS.15 778/- AND RS.22 633/- FROM UNDISCLOSED SOURCE S OUT OF AGRICULTURAL INCOME DISCLOSED BY THE ASSESSE E. 2. ALLOWING RELIEF ON ACCOUNT OF BOGUS LIABILITIES U/S 68 TOWARDS HPCIPL PACIFIC ORGOCHEM & KRISH VIKAS KENDRA KARELI TO THE TUNE OF RS.46 768/- RS.1 42 2 73/- & RS.1 90 996/- RESPECTIVELY. 3. ALLOWING RELIEF OF RS.1 83 500/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT U/S 69A. 4. ALLOWING RELIEF OF RS.1 00 000/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT U/S 69A DURING HEARING WE HAVE HEARD SHRI V.K. KARAN LEA RNED SENIOR DEPARTMENTAL REPRESENTATIVE AND S/SHRI H.P. VERMA A ND ASHISH GOYAL LD. COUNSELS FOR THE ASSESSEE. THE CROSS OBJECTION FILED BY THE ASSESSEE WAS WITHDRAWN BY THE LD. COUNSEL FOR THE ASSESSEE CONSEQUENTLY IT IS DISMISSED AS WITHDRAWN. 2. IN THE APPEAL OF THE REVENUE THE FIRST GROUND P ERTAINS TO ALLOWING RELIEF ON ACCOUNT OF CONCEALED INCOME OF RS.15 778/ - AND RS.22 633/- FROM ALLEGED UNDISCLOSED OUT OF AGRICULTURAL INCOME . THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THERE IS NO CONCRETE FINDING BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN REACHING A PARTICULAR CONCLUSION CONTRADICTING THE FINDING GIV EN IN PARA 3.1.1 OF THE 3 ASSESSMENT ORDER BY FURTHER PLEADING THAT IN THE RE CEIPT OF SALE THE NAME OF THE ASSESSEE HAS BEEN SUBSTITUTED/REWRITTEN MEA NING THEREBY THAT NO SALE WAS EFFECTED BY THE ASSESSEE. ON THE OTHER HA ND THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE IS HAV ING APPROXIMATELY 47 ACRES OF LAND NECESSARY DETAILS WERE DULY FURNI SHED BY THE ASSESSEE. THE ASSESSEE HAS ALSO FILED WRITTEN SYNOPSIS. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. RE PRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSING OFFICER CONDUCTED INQUIRIES REGA RDING AGRICULTURAL PRODUCTION AND NOTED SOME DISCREPANCIES IN THE RECE IPT ISSUED BY KRISHI UPAJ MANDI IN THREE CASES AND ALSO CERTAIN PARTIES DENIED ANY PURCHASE FROM THE ASSESSEE CONSEQUENTLY DISALLOWANCE WAS M ADE WHICH WAS DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) IN RESPECT OF TWO PARTIES I.E. M/S SHANKAR TRADERS (RS . 22 633/-) AND M/S KAMLESH AGRAWAL (RS. 15 778/-). IT IS AN UNDISPUTE D FACT THAT THE LAND HOLDING AND CONSEQUENT PRODUCTION OF CROP IS NOT DO UBTED BY THE ASSESSING OFFICER. THE ASSESSEE AT PAGE 17 TO 20 O F THE PAPER BOOK HAS FURNISHED THE DETAILS OF LAND HOLDING AS PER WH ICH APPROXIMATELY 47 ACRES OF LAND ALONG WITH DATE OF ACQUISITION NATUR E OF OWNERSHIP SOURCE OF INVESTMENT DATE OF REGISTRATION ETC. HAVE BEEN MENTIONED. THE ASSESSEE ALSO FURNISHED THE COPY OF BOOKS OF ACCOUN TS LIKE CASH BOOK LEDGER PURCHASE BILLS SALES BILLS VOUCHERS BANK LEDGERS ETC. 4 MAINTAINED IN RESPECT OF M/S M.P. TRADING COMPANY BHOPAL. THE SALE AND PURCHASE BILLS AS PER TRADING ACCOUNT WERE AL SO PRODUCED BEFORE THE ASSESSING OFFICER FOR VERIFICATION. THE ASSESS EE IS REGULARLY EARNING ITS AGRICULTURAL INCOME AND THE DETAILS OF THREE YE ARS WERE MADE AVAILABLE BY THE ASSESSEE BEFORE THE AUTHORITIES BE LOW (ALSO AVAILABLE BEFORE US AT PAGE 12 OF THE PAPER BOOK). THE ASSES SEE ALSO FURNISHED DETAILS OF SALE PROCEEDS RECEIVED IN CASH FROM DIFF ERENT PARTIES (PAGE 12 OF THE PAPER BOOK). ON A QUERY FROM THE BENCH REGA RDING SUBSTITUTION/OVER-WRITING OF NAME OF THE ASSESSEE IT WAS EXPLAINED THAT THE CROPS WERE SOLD TO M/S SHANKAR TRADERS (PAPER B OOK PAGE 39) BY SHRI ASHFAQ (CLOSE RELATIVE OF THE ASSESSEE) ON BEH ALF OF THE ASSESSEE AND THE MANDI RECEIPT WAS ISSUED IN THE NAME OF ASH FAQ WHICH WAS LATER ON GOT CORRECTED IN THE NAME OF THE ASSESSEE. IT W AS ALSO POINTED OUT THAT THIS FACT WAS ALSO EXPLAINED BEFORE THE ASSESS ING OFFICER. IT WAS ALSO POINTED OUT THAT THE ASSESSEE REQUESTED THE AS SESSING OFFICER THAT HE IS IN A POSITION TO FURNISH THE AFFIDAVIT OF SHR I ASHFAQ BUT THE ASSESSING OFFICER DID NOT ACCEPT THIS REQUEST OF TH E ASSESSEE NOR THE STATEMENT OF ASHFAQ WAS RECORDED. ON THE ISSUE OF DENIAL BY CERTAIN PARTIES ABOUT THE PURCHASE OF CROPS IT WAS CLAIMED THAT NO CROSS EXAMINATION WAS AFFORDED TO THE ASSESSEE AND EVEN T HE STATEMENT IF ANY WAS RECORDED BEHIND THE BACK OF THE ASSESSEE. WHAT IT MAY BE THE FACT REMAINS THAT THE ASSESSEE IS OWNING ABOUT 47 ACRES OF LAND AND 5 IS ALSO DOING AGRICULTURAL OPERATION. IT IS NOT TH E CASE THAT THE LAND IS LYING BARREN OR NO AGRICULTURAL OPERATION IS MADE B Y THE ASSESSEE. EVEN OTHERWISE IT IS NOT THE CASE THAT UNUSUALLY HIGH C LAIM HAS BEEN MADE FOR AGRICULTURAL PRODUCTION/SALE. WE ARE OF THE VIEW T HAT IF ANY PARTY HAS DENIED MAKING ANY PURCHASE FROM THE ASSESSEE IT WAS THE DUTY OF THE ASSESSING OFFICER TO CONFRONT THE SAME TO THE ASSES SEE WHICH HAS NOT BEEN DONE BY THE ASSESSING OFFICER. EVEN OTHERWISE IT IS SEEN THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHEREV ER HE WAS NOT SATISFIED HAS DENIED THE BENEFIT AND ALLOWED WHERE IT WAS DENIED MERELY ON SURMISES AND CONJECTURES CONSEQUENTLY THIS GRO UND OF THE REVENUE IS HAVING NO MERIT AND THE SAME IS DISMISSED. 3. THE NEXT GROUND PERTAINS TO ALLOWING OF RELIEF O N ACCOUNT OF BOGUS LIABILITIES BY THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS). THE SENIOR DEPARTMENTAL REPRESENTATIVE SUPPORTED THE AS SESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED T HE IMPUGNED ORDER. BRIEF FACTS ARE THAT AS FAR AS THE CREDITOR HFCIPL IS CONCERNED THE ASSESSING OFFICER MADE ADDITION OF RS.46 768/- ON T HE GROUND THAT IT WAS THE DIFFERENCE BETWEEN THE ONE FOUND IN THE BALANCE -SHEET OF THE ASSESSEE AND THE ONE CONFIRMED BY THE PARTY IN THE CASE OF PACIFIX ORGOCHEM AND KRISHI VIKAS KENDRA THE ADDITIONS WER E MADE ON THE GROUND THAT THE CREDITORS NEITHER CONFIRMED NOR THE Y WERE PRODUCED BEFORE THE ASSESSING OFFICER. HOWEVER THE FACT REMA INS THAT FOR THE LATTER 6 TWO CREDITORS THE ASSESSEE PRODUCED THE CONFIRMATI ON LETTERS. M/S HIND FERTILIZERS & CHEMICALS INDUSTRIES PRIVATE LIMITED (IN SHORT HFCIPL) SHOWED RS. 1 05 166/- AS LIABILITY IN THE BALANCE S HEET. THE MD OF HFCIPL VIDE LETTER DATED 3.2.2006 CLARIFIED THAT TH E OUTSTANDING BALANCE AMOUNT AGAINST M/S M.P. TRADING COMPANY WAS RS.1 51 934/-. ON CONFRONTATION TO THE ASSESSEE VIDE WRITTEN SUBMISS IONS 20.2.2006 THE DETAILS OF SOME CREDIT ENTRIES WERE FILED BY CLAIMI NG THAT THE COMPANY HAS WRONGLY CREDITED SOME DRAFTS NOT PERTAINING TO MP TRADING COMPANY AND MISSED SOME DRAFTS FROM CREDITING IN TH EIR ACCOUNTS. THE DATE DD NO. AMOUNT OF SUCH DRAFTS WERE ALSO FURN ISHED BY THE ASSESSEE ALONG WITH THE PHOTOCOPIES OF SUCH DRAFTS SENT TO HFCIPL BY M/S MP TRADING COMPANY. ON FURTHER CONFRONTATION IT WAS CLAIMED THAT THE ASSESSEE HAS ASKED THE COMPANY TO VERIFY THE EN TRIES. THE SUBMISSIONS OF THE ASSESSEE DATED 29.3.2006 WERE AL SO CONSIDERED IN THE IMPUGNED ORDER. EVEN DURING THE ASSESSMENT PRO CEEDINGS AS PER THE DIRECTION OF THE ASSESSING OFFICER THE ASSESSE E SENT A TELEGRAM TO HFCIPL (PAGE 57 TO 59 OF THE PAPER BOOK) BUT THE PA RTY DID NOT RESPOND. IN VIEW OF THESE FACTS IT CAN BE SAID THAT THE ASS ESSEE DISCHARGED ITS BURDEN. FOR THE AMOUNT OF RS. 1 42 273/- (PACIFIC O RGACHEM LIMITED) THE ASSESSEE PROVIDED THE ADDRESSES AND NAMES OF THE PA RTIES TO THE ASSESSING OFFICER. NOTICES WERE ISSUED TO THEM BY T HE ASSESSING OFFICER HOWEVER THEY DID NOT REPLY THEREFORE TH E ASSESSEE SHOULD NOT 7 SUFFER ON THAT BASIS. THE COPY OF ACCOUNT IN THEIR BOOKS (PAPER BOOK PAGE 66) WAS FILED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THE BALANCE TALLIES WITH THE BALANCE- SHEET OF THE ASSESSEE (PAPER BOOK PAGE 5). REMAND REPORT WAS ALSO CALLED FROM THE ASSESSING OFFICER (PAGE 32 OF THE PAPER BOOK) BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHEREIN NO DEFECT WAS POINTED OUT. THE REJOINDER ADDRESSED TO THE APPELLATE COMMISSIONER IS ALSO AVA ILABLE AT PAGE 33 OF THE PAPER BOOK. AS FAR AS THE AMOUNT OF RS.1 90 996 /- (KRISHI VIKAS KENDRA) IS CONCERNED THERE IS ONLY A MINOR DIFFERE NCE OF RS.100/- AND THE IMPUGNED ADDITION WAS MERELY MADE ON THE BASIS THAT KRISHI VIKAS KENDRA HAS NOT FILED THE CONFIRMATION ON THE LETTER HEAD RATHER ON A PLAIN PAPER. IN VIEW OF THESE FACTS THERE IS NO INFIRMIT Y IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). WHEN THE REMAND REPORT WAS SOUGHT BY THE LD. FIRST APPELLATE AUTHOR ITY THE ASSESSING OFFICER WAS DUTY BOUND TO VERIFY THE CORRECTNESS OF CONFIRMATION AND TO EXAMINE THE CONCERNED PERSONS IF NEED BE. NO FRESH MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER NOR THE ASSESSEE WAS CONFRONTED WITH ANY FRESH MATERIAL IF ANY. WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION CAN BE MADE U/S 68 OF THE ACT ESPECIALLY WHEN NECESSARY DETAILS WERE FURNISHED BY THE ASSESSEE. 4. THE NEXT GROUND PERTAINS TO RELIEF OF RS.1 83 5 00/- ON ACCOUNT OF SALE OF TRACTOR/SOURCE OF INVESTMENT IN LAND. THE L EARNED COUNSEL FOR THE 8 REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER AND REITER ATED ITS WRITTEN SYNOPSIS. 6. ON CONSIDERATION OF RIVAL SUBMISSIONS AND ALSO O N PERUSAL OF RECORD WE HAVE FOUND THAT THE ASSESSEE IN ITS CAS H FLOW STATEMENT (PAPER BOOK PAGE 29) SHOWED RS.1 83 500/- TO BE REC EIVED ON SALE OF TRACTOR AND CONSEQUENT PURCHASE OF AGRICULTURAL LAN D. THE OBSERVATION OF THE ASSESSING OFFICER IS AS UNDER: - A PERUSAL OF CASH FLOW STATEMENT SHOWED SHORTAGE OF FUNDS IN CASH JUST BEFORE THE PURCHASE TRANSACTION OF AGRICULTURAL LANDS. ALSO THE STATEMENT REVEALED AN ENTRY DATED 06.05.2002 FOR AN AMOUNT OF RS. 1 83 500/- BY SALE OF TRACTOR. HOWEVER THIS AMOUNT WAS NOT REFLECTED IN THE ENCLOSURES FILED WITH THE RETURN NOR DID THIS AMOUN T APPEAR ANYWHERE IN THE PERSONAL CAPITAL ACCOUNT OF THE BALANCE SHEET OF THE ASSESSEE. ON A QUERY FROM THE BENCH REGARDING SALE OF TRACTOR IT WAS EXPLAINED THAT THE TRACTOR WAS SOLD AT THE WRITTEN DOWN VALUE TO THE BROTHER OF THE ASSESSEE CONSEQUENTLY THERE WAS NO PROFIT/LOSS TO THE ASSESSEE ON SUCH SALE. IT WAS FURTHER EXPLAINED THAT PRIOR TO PURCHASE OF AGRICULTURAL LAND THERE WAS NO SHORTAGE OF CASH AS THE AMOUNT O F RS.2 69 228/- WAS AVAILABLE EVEN IF THE SALE OF TRACTOR IS NOT CONSID ERED AS THE TRACTOR WAS PURCHASED AND SOLD FOR RS.2 30 487/-. THE OBSERVATI ON MADE IN THE IMPUGNED ORDER IS AS UNDER :- 9 FURTHER THE ASSESSEE HAS FURNISHED LAST 3 YEARS COPIES OF INCOME TAX RETURNS AND BALANCE SHEET AND ALL ENCLOSURES TO THE A.O. IN COMPLIANCE OF POINT NO. 1 OF THE QUESTIONNAIRE. WHEN THE ASSESSEE SOLD THE TRACTOR AT NO PROFIT NO LOSS WHAT THE FACT HE WAS REQUIRED TO SHOW IN HIS INCOME TAX RETURN WAS NOT UNDERSTANDABLE. THE ASSET WAS WELL MENTIONED IN THE BALANCE SHEET OF THE ASSESSEE TILL 31.03.2002. DURING THE WHOLE PROCEEDINGS OF THE ASSESSMENT THE A.O. HAD NOT ASKED THE ASSESSEE TO FURNISH ANY EVIDENCE IN RESPECT OF TRACTOR SALE. IN VIEW OF TH E ABOVE THE A.R. HAS PLEADED THAT THE ADDITION MADE ON THIS ACCOUNT NEEDS TO BE NULLIFIED. IF THE ASSESSMENT ORDER IMPUGNED ORDER ARGUMENTS ADVANCED BY THE LEARNED RESPECTIVE COUNSELS ARE KEPT IN JUXTAPOSITI ON AND ANALYSED IT IS OBSERVED THAT THE ASSESSING OFFICER OBTAINED THE CO PIES OF REGISTERED DEEDS OF LAND AND ALSO EXAMINED THE SAME. THE ACQU ISITION OF LAND IS NOT IN DISPUTE. THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSESSEE EVEN IF THE AMOUNT OF SALE OF TRACTOR IS N OT CONSIDERED. THE BROTHER OF THE ASSESSEE WHO PURCHASED THE TRACTOR W AS ALSO NEVER EXAMINED BY THE ASSESSING OFFICER THEREFORE THERE IS NO INFIRMITY IN THE IMPUGNED ORDER AND THE ADDITION SEEMS TO HAVE BEEN MADE PURELY ON PRESUMPTION. 5. THE LAST GROUND PERTAINS TO THE RELIEF OF RS.1 L AC ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT U/S 69A. THE SENIOR DEPART MENTAL REPRESENTATIVE SUPPORTED THE ASSESSMENT ORDER WHERE AS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDE R. 10 ON CONSIDERATION OF RIVAL SUBMISSIONS AND ALSO ON PERUSAL OF RECORD IT IS SEEN THAT THE ASSESSING OFFICER HAS D OUBTED THE SOURCE OF CASH DEPOSIT IN THE BANK. THE CASH FLOW STATEMENT IS AVAILABLE AT PAGE 30 OF THE PAPER BOOK AS PER WHICH THE AMOUNT OF RS. 1 LAC WAS DEPOSITED IN CASH IN IDBI BANK ON 12.10.2002. THE DETAILS OF BANK ACCOUNT TRANSACTIONS FOR THE PERIOD FROM 1.4.2002 TO 31.3.2 003 ARE AVAILABLE IN SAVINGS BANK ACCOUNT NO. 030104000024134 (IDBI BANK ) (PAGE 27 OF THE PAPER BOOK) WHEREIN THE IMPUGNED AMOUNT IS AVAI LABLE. THE SOURCE OF DEPOSIT WAS ESTABLISHED FROM THE CASH FLOW STATE MENT ITSELF. EVEN OTHERWISE ALL OTHER TRANSACTIONS HAVE BEEN ACCEPTE D. IN VIEW OF THESE FACTS THERE IS NO INFIRMITY IN THE ORDER OF THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS). WE UPHOLD THE SAME. FINALLY THE APPEAL OF THE REVENUE AND THE CROSS O BJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 6 TH MAY 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 6 TH 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/ 11