Sh. Sunil Kumar, Ludhiana v. DCIT, Ludhiana

ITA 1144/CHANDI/2010 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 114421514 RSA 2010
Assessee PAN AFBPK4387C
Bench Chandigarh
Appeal Number ITA 1144/CHANDI/2010
Duration Of Justice 1 year(s) 6 month(s) 15 day(s)
Appellant Sh. Sunil Kumar, Ludhiana
Respondent DCIT, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-03-2012
Date Of Final Hearing 27-03-2012
Next Hearing Date 27-03-2012
Assessment Year 2006-2007
Appeal Filed On 15-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE MS SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 1144 /CHD/2010 ASSESSMENT YEAR: 2006-07 SUNIL KUMAR V. D.C.I.T PROP. M/S SUNIL AGENCIES CIRCLE II LUDHIANA NEAR SHINGAR CINEMA SAMRALA ROAD LUDHIANA PAN: AFBPK 4387 C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING: 27.3.2012 DATE OF PRONOUNCEMENT: 30.03.2012 ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-I LUDHIANA DATED 6.8.2010 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. GROUND NO. 1 RAISED BY THE ASSESSEE IS GENERAL I N NATURE. HENCE THE SAME IS DISMISSED. 3. GROUND NO. 2 RAISED BY THE ASSESSEE IS AGAINST T HE ADDITION OF RS. 40 000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. THE AO DURING THE ASSESSMENT PROCEEDINGS SOUGHT INFORMATION REGARDING HOUSEHOLD EXPENSES ALONG WITH THE SIZE OF THE FAMILY. ADMITTEDLY THE FAMILY OF THE ASSESSEE CONSIDERED OF SELF HIS WIFE MINOR DAUGHTER AND HI S PARENTS. THE TOTAL HOUSEHOLD WITHDRAWALS MADE BY THE FAMILY MEMBERS WE RE TO THE TUNE OF RS. 1 44 000/- OUT OF WHICH A SUM OF RS. 9 000/- WA S CLAIMED TO HAVE BEEN SPENT ON THE EDUCATIONAL EXPENSES OF THE DAUGHTER. THE AO REQUISITIONED THE ASSESSEE TO FILE THE DETAILS OF ELECTRICITY EXP ENSES WHICH WERE NOT 2 FURNISHED. THE AO ESTIMATED THE SAID EXPENSES AT R S. 40 000/- PER ANNUM. THE AO CONCLUDED THAT THE BALANCE AMOUNT AV AILABLE IN HOUSEHOLD EXPENSES WAS ONLY RS. 95 000/- WHICH COME S TO ABOUT RS. 19 000/- PER ANNUM PER FAMILY MEMBER. THE AO ACCOR DINGLY ESTIMATED THE ADDITION OF RS. 40 000/- ON THIS ACCOUNT. THE CIT(A) UPHELD THE SAID ADDITION. 4. THE LD AR FOR THE ASSESSEE STRESSED THAT THE ADD ITION OF RS. 40 000/- WAS NOT WARRANTED. DURING THE COURSE OF HEARING T HE LD AR FOR THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF ELECTR ICITY EXPENSES WHICH WERE NOT AVAILABLE WITH THE ASSESSEE. IN THE ABSEN CE OF THE SAME AND LOOKING INTO THE TOTALITY OF THE FACTS AND CIRCUMST ANCES OF THE CASE WE FIND THAT THE ESTIMATION MADE BY THE AO TO BE REASONABLE . UPHOLDING THE ADDITION OF RS. 40 000/- WE DISMISSED GROUND NO. 2 RAISED BY THE ASSESSEE. 5. THE ISSUE IN GROUND NOS. 3 TO 6 IS AGAINST THE A DDITION IN VARIOUS HEADS I.E. ADDITION ON ACCOUNT OF REBATE AND DISCO UNT RS. 94 596/- ADDITION ON ACCOUNT OF OUT OF CONFERENCE EXPENSES RS. 10 9939/- ADDITION ON ACCOUNT OF ADVERTISEMENT EXPENSES RS . 62 050/- AND ADDITION ON ACCOUNT OF SCHEME DISCOUNT RS. 98 5 30/-. 6. THE FACTS RELATING TO THE AFORESAID ADDITIONS AR E THAT THE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH VOUCHERS. HOWEVER CER TAIN EXPENSES WERE FOUND TO BE NOT SUPPORTED BY NECESSARY EVIDENCE. TH E ASSESSEE FILED LETTER DATED 14.12.2008 PLACED AT PAGES 6 AND 7 OF THE PAP ER BOOK. ADMITTING THAT IT COULD NOT PRODUCE THE REQUISITE VOUCHERS T HE ASSESSEE HAD NO OBJECTION IF THE SAME WERE ADDED BACK TO HIS INCOME . ACCORDINGLY FOLLOWING ADDITIONS WERE MADE BY THE AO WHILE COMPL ETING THE ASSESSMENT: ADDITION ON ACCOUNT OF REBATE AND DISCO UNT RS. 94 596/- ADDITION ON ACCOUNT OF OUT OF CONFERENCE EXPENSES RS. 10 9939/- 3 ADDITION ON ACCOUNT OF ADVERTISEMENT EXPENSES RS . 62 050/- AND ADDITION ON ACCOUNT OF SCHEME DISCOUNT RS. 98 53 0/- 7. ALONG WITH MEMO OF APPEAL FILED WITH THE CIT(A) THE ASSESSEE ENCLOSED COPIES OF BILLS WHICH WERE NOT PRODUCED BE FORE THE AO. THE PLEA OF THE ASSESSEE WAS THAT THE SAID BILLS WERE L OCATED AFTER A FEW DAYS AND THE SAME WERE PRODUCED BEFORE THE AO WHO EXPRES SED HIS INABILITY TO DEAL WITH THE EVIDENCE AS THE ASSESSMENT ORDER HAD ALREADY BEEN PASSED. THE ADDITIONAL EVIDENCE IN THE FORM OF BILLS AND CO PIES OF ACCOUNT OF THE PARTIES WERE SENT TO THE AO WHO IN THE REMAND REPO RT POINTED OUT THAT THE ASSESSEE WAS REPEATEDLY ASKED TO PRODUCE THE BILLS AND THE BOOKS OF ACCOUNT FOR NECESSARY VERIFICATION ON VARIOUS DATES . THE AO FURTHER SUBMITTED THAT IN VIEW OF SURRENDER LETTER OF THE A SSESSEE DATED 12.12.2008 AND THE ORDER SHEET ENTRY DATED 12.12.2008 WHERE TH E ASSESSEE HAD HIMSELF WRITTEN UNDER HIS OWN SIGNATURES NO BILLS COULD BE PRODUCED AS BILLS WERE MIS-PLACED THE ADDITIONAL EVIDENCE SOUGHT TO BE S UBMITTED SHOULD BE REJECTED. THE ASSESSEE IN REPLY TO THE REMAND REPO RT POINTED OUT THAT THE PERUSAL OF THE SO CALLED SURRENDER LETTER REFLECTS THAT THE SAME IS TYPED DATED 24.12.2008 WHICH DATE HAS BEEN CHANGED BY PEN TO 14.12.2008 AND ORDER SHEET ENTRY IS DATED 12.12.2008. THE PLEA OF THE LD AR FOR THE ASSESSEE IN THIS REGARD WAS THAT THE LETTER WAS SIG NED AT THE FAG END OF TIME BARRING END AND NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE. THE CIT(A) REJECTED THE EXPLANATION OF THE ASSESSEE UP HOLDING THE ADDITION MADE BY THE AO. 8. THE LD AR FOR THE ASSESSEE POINTED OUT THAT THE PHOTOCOPIES OF THE RESPECTIVE BILLS ARE OF DIFFERENT HEADS OF EXPENDIT URE ARE PLACED AT PAGES 10-28 OF THE PAPER BOOK ALONG WITH THE COPIES OF AC COUNT OF THE RESPECTIVE EXPENSES. THE PLEA OF THE LD AR FOR THE ASSESSEE W AS THAT BECAUSE OF THE CIRCUMSTANCES IT WAS PREVENTED FROM FURNISHING THE SAID EVIDENCE BEFORE THE AO. HOWEVER THE SAME WERE ATTACHED ALONG WITH THE MEMO OF APPEAL 4 AS THE SAME WAS TRACED BY THE ASSESSEE BEFORE FILIN G OF APPEAL BEFORE THE CIT(A). THE LD AR FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CIT V . MUKTA METAL WORKS 336 ITR 555 (P & H). 9. THE LD. DR FOR THE REVENUE POINTED OUT THAT THE ADDITION AGREED UPON COULD NOT BE CONTESTED IN APPEAL AS HELD BY TH E HON'BLE PUNJAB & HARYANA HIGH COURT IN BANTA SINGH KARTAR SINGH V. C IT PATIALA 125 ITR 239 (P & H). THE LD. DR FOR THE REVENUE FURTHER PO INTED OUT THAT THERE WAS NO MERIT IN THE APPLICATION MADE BY THE ASSESSE E FOR THE ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE CIT(A) IN VIEW OF TH E PROVISIONS OF RULE 46A OF IT RULES. THE LD. DR FOR THE REVENUE DREW O UR CONTENTION TO THE BILL PLACED AT PAGE 15 OF THE PAPER BOOK IN WHICH T HOUGH THE BILL WAS IN COMPUTER FORM AT THE NAME OF THE ASSESSEE WAS WRITT EN IN PEN. THE CONTENTION OF THE LD AR FOR THE ASSESSEE WAS THAT N O RELIANCE COULD BE PLACED AT THE SAID EVIDENCE. IN VIEW OF THE SURREN DER LETTER WHICH WAS UNCONDITIONAL THE LD AR FOR THE ASSESSEE IN REJOIN DER POINTED OUT THAT THE PAYMENT IN RESPECT OF BILL PLACED AT PAGE 15 OF THE PAPER BOOK WAS MADE BY CHEQUE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S ADMITTEDLY WAS UNABLE TO PRODUCE CERTAIN BILLS IN RESPECT OF EXPEN DITURE BOOKED UNDER THE DIFFERENT HEADS OF EXPENSE. DURING THE COURSE OF A SSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED A LETTER OF SURRENDER IN WHI CH IT WAS ADMITTED THAT THE BILLS RELATING TO THE EXPENSES MENTIONED THEREI N WERE NOT TRACEABLE AND THE ASSESSEE HAD NO OBJECTION IF THE SAID AMOUNTS W ERE ADDED BACK IN THE HANDS OF THE ASSESSEE. THE SAID SURRENDER WAS MADE BY THE ASSESSEE AS PER LETTER PLACED AT PAGE 6 AND 7 OF PAPER BOOK. THE P ERUSAL OF THE SAID LETTER REFLECTS THAT THE DATE OF LETTER IS TYPED AS 24.12. 2008 WHICH BY PEN WAS CHANGED TO 14.12.2008. THE AO HOWEVER IN THE REM AND REPORT SUBMITTED 5 BEFORE THE CIT(A) REFERRED TO LETTER DATED 12.12.20 08 AND ALSO THE ORDER SHEET ENTRY DATED 12.12.2008 UNDER WHICH THE ASSESS EE HAD AGREED TO ADDITION AS NO BILLS COULD BE PRODUCED AS THE BILL S WERE MIS-PLACED. 11 THE ASSESSEE ON RECEIPT OF ASSESSMENT ORDER FI LED APPEAL BEFORE THE CIT(A) AND THE PERUSAL OF THE GROUNDS OF APPEAL REF LECT THE CONTENTION OF THE ASSESSEE THAT THE SAID BILLS WERE TRACED AND TH E COPIES OF THE SAME WERE ANNEXED TO THE APPEAL MEMO. THE ASSESSEE ALSO MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE BE FORE THE CIT(A) UNDER RULE 46A OF THE IT RULES WHICH WAS REJECTED BY THE CIT(A). 12. THE ISSUE ARISING IN THE PRESENT APPEAL IS WHET HER WHERE THE ASSESSEE HAD SURRENDERED AN INCOME DURING THE ASSES SMENT PROCEEDINGS ON HIS OWN MOTION CAN AGITATE THE SAID ADDITION IN APP ELLATE PROCEEDINGS BEFORE THE APPELLATE AUTHORITY. ADMITTEDLY WHOLE P ROCEDURE LAID DOWN UNDER THE IT ACT IS FOR THE PURPOSE OF DETERMINATIO N OF CORRECT INCOME IN THE HANDS OF THE ASSESSEE. EACH CASE IS TO BE SEEN IN ENTIRETY AND CANNOT BE LOOKED IN DIS-FUNCTION. IN THE FACTS OF THE CA SE BEFORE US THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS UNA BLE TO PRODUCE THE BILLS IN RELATION TO CERTAIN EXPENDITURE. HOWEVER THE PERUSAL OF THE LEDGER ACCOUNT OF THE REBATE AND DISCOUNT WHERE ADD ITION OF RS. 94 596/- WAS MADE REFLECTS REBATE ALLOWED AT RS. 73 605/- AN D RS. 20 991/- WHICH HAS BEEN ALLOWED BY WAY OF CREDIT NOTES. FURTHER O UT OF CONFERENCE EXPENSES THE ADDITION OF RS. 10 939/- WAS MADE. T HE ENTRY IN THE LEDGER ACCOUNT OF CONFERENCE EXPENSES REFLECTS THE AMOUNT PAID FOR LUNCH IN MEETINGS ON 21.2.2006 WHICH IS EVIDENCED BY A BILL PLACED AT PAGE 15 OF THE PAPER BOOK IN WHICH THE NAME OF THE ASSESSEE IS WRITTEN BY HAND. FURTHER LEDGER ACCOUNT ON ADVERTISEMENT REFLECTS DA TE-WISE AMOUNT PAID TO PARTIES ALONG WITH RESPECTIVE BILL / CASH MEMO NUMB ER. THE ASSESSEE HAS ANNEXED RESPECTIVE BILLS THOUGH PAID IN CASH AT PAG ES 18 TO 21 OF THE PAPER BOOK. SIMILARLY THE EVIDENCE HAS BEEN FILED IN RES PECT OF SCHEME DISCOUNT 6 FUND. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANC ES OF THE CASE WHERE THE ASSESSEE WITHIN SHORT PERIOD HAD PRODUCED THE EVIDE NCE OF THE EXPENDITURE INCURRED BY IT AND ANNEXED THE COPIES OF THE SAME A LONG WITH THE MEMOS OF APPEAL FILED BEFORE THE CIT(A) WE ARE OF THE V IEW THAT THE EVIDENCE FILED BY THE ASSESSEE NEEDS TO BE ADMITTED FOR ADJU DICATING THE ISSUE IN VIEW OF THE PROVISIONS OF RULE 46A OF THE IT RULES. IN VIEW THEREOF WE ARE ADMITTING THE ADDITIONAL EVIDENCE FURNISHED BY THE CIT(A). HOWEVER FOR ADJUDICATING THE ISSUE I.E. THE ALLOWANCE OF C LAIM IN THE HANDS OF THE ASSESSEE IN VIEW OF THE ADDITIONAL EVIDENCE FURNISH ED BY THE ASSESSEE WE REMIT THE MATTER BACK TO THE FILE OF CIT(A) WHO SHA LL CALL FOR THE REMAND REPORT FROM THE AO AND VERIFY OF THE CLAIM OF THE E XPENDITURE BY THE ASSESSEE. REASONABLE OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASSESSEE IN THIS REGARD. 13. THE LD. DR FOR THE REVENUE HAS PLACED RELIANCE ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN BANTA SINGH KARTAR SINGH (SUPRA) IN THE FACTS OF WHICH CASE AND THE ASSESSE E MADE A SURRENDER. THE RETURN OF INCOME WAS ORIGINALLY FILED BY THE ASSESS EE AT RS. 42 131/-. THE ASSESSMENT WAS COMPLETED AT RS. 74 110/-. SUBSEQUE NTLY THE AO DISCOVERED THE ASSESSEE TO HAVE OBTAINED HUNDI LOAN FROM ONE PARTY WHO DENIED HAVING MADE THE ADVANCES IN LOAN TO THE ASSE SSEE AND OBSERVED THAT THEY WERE INDULGING IN HAWALA AFFAIR. RE-ASSESSMEN T PROCEEDINGS WERE INITIATIATED U/S 147 OF THE ACT AND NOTICE U/S 148 OF THE ACT WAS ISSUED. THE ASSESSEE THEREAFTER SUBMITTED A LETTER TO THE C OMMISSIONER PURPORTEDLY IN WHICH IT DISCLOSED PEAK OF BOGUS HUN DI LOANS AMOUNTING TO RS. 1.50 000/- THE ASSESSEE FURTHER FILED THE RETU RN OF INCOME DECLARING THE AFORESAID ADDITIONAL INCOME WITH A NOTE THAT IN TEREST AMOUNT WAS SURRENDERED ON THE SAID LOAN. THE CIT REJECTED THE APPLICATION OF THE ASSESSEE BEING PRE-MATURE AND THEREAFTER THE ASSESS EE MADE A SURRENDER BEFORE THE AO ALONG WITH ANOTHER REVISED RETURN. TH EREAFTER THE SAID INCOME WAS ACCEPTED UNDER THE SETTLEMENT AND PENALT Y U/S 271(1)(C) OF THE 7 ACT WAS LEVIED ON AGREED BASIS. THE ASSESSEE CHALL ENGED THE ABOVE SAID PENALTY U/S 271(1)(C) OF THE ACT AND THE COURT HELD THAT THE ORDER PASSED BY AN AGREEMENT CANNOT GIVE RISE TO A GRIEVANCE AND THE SAME CANNOT BE AGITATED IN APPEAL. WE FIND THAT THE ADDITIONS ARE ON VARIANCE TO THE FACTS OF THE PRESENT CASE AND THE RATIO LAID BY THE HON'B LE PUNJAB & HARYANA HIGH COURT CANNOT BE APPLIED TO THE PRESENT FACTS RAISED BEFORE US. 14. THE LD. 'DR' FOR THE REVENUE ALSO PLACED RELIA NCE ON THE RATIO LAID BY THE CHANDIGARH BENCH OF THE TRIBUNAL IN ITA NO. 1160/CHD/2011 ASSESSMENT YEAR 2005-06 IN THE MARKET COMMITTEE PI PLI V. ACIT CIRCLE KURUKSHETRA. IN THE FACTS OF THE CASE THE DISPUTE RELATING TO THE ADDITION OF RS. 855 089/- WHICH HAS NOT APPLIED FOR THE AIMS AND OBJECTS OF THE TRUST AND THE AMOUNT WAS ADDED IN THE HANDS OF THE ASSESSEE AS THE A.R AGREED TO PROPOSE THE ADDITION. THE ASSESSEE T HOUGH AGITATED THE ISSUE IN APPEAL BUT NO ARGUMENT WAS RAISED BY THE L D. COUNSEL FOR THE ASSESSEE IN RESPECT OF THE SAID NON-APPLICATION OF THE INCOME TO AIMS AND OBJECTS OF THE ASSESSEE BOTH BEFORE THE AO OR BEFOR E THE CIT(A). IN VIEW THEREOF ADDITIONS WERE UPHELD IN THE HANDS OF THE A SSESSEE. THE FACT SITUATION IN THE PRESENT CASE BEFORE US IS AT VARIA NCE WITH THE FACT SITUATION IN THE CASE OF MARKET COMMITTEE PIPLI (SUPRA). 15. WHILE FILING THE APPEAL BEFORE THE CIT(A) AGAIN ST THE ORDER OF AO THE ASSESSEE HAD FURNISHED THE REQUISITE INFORMATIO N AND EVIDENCE OF ITS CLAIM. THE ADDITION WAS AGREED UPON BY THE ASSESSE E PURELY BECAUSE IT MISPLACED CERTAIN EXPENDITURE BILLS HOWEVER ENTRY IN RESPECT OF SUCH EXPENSES WAS AVAILABLE IN ITS LEDGER AND ON TRACING THE BILLS THE SAME WERE MADE TO THE AUTHORITIES FOR ADJUDICATION. IN VIEW OF THE SAID FACTS AND CIRCUMSTANCES OF THE CASE WE DIRECT THE CIT(A) TO ADMIT THE ABOVE SAID 8 EVIDENCE AND DECIDE THE ISSUE IN LINE WITH OUR DIRE CTIONS. GROUND NOS. 3 TO 6 ARE ALLOWED FOR STATISTICAL PURPOSES. . 16. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30TH DAY OF MARCH 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH MARCH 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR