M/s. Shanti Developers,, RAJKOT-GUJARAT v. The Income Tax Officer, Ward-1(3),, RAJKOT-GUJARAT

ITA 1363/RJT/2010 | 2005-2006
Pronouncement Date: 18-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 136324914 RSA 2010
Assessee PAN AADFS5965L
Bench Rajkot
Appeal Number ITA 1363/RJT/2010
Duration Of Justice 2 month(s) 19 day(s)
Appellant M/s. Shanti Developers,, RAJKOT-GUJARAT
Respondent The Income Tax Officer, Ward-1(3),, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 18-03-2011
Assessment Year 2005-2006
Appeal Filed On 29-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO.1363/RJT/2010 (ASSESSMENT YEAR 2005-06) M/S SHANTI DEVELOPERS VS ITO WD.1(3) 401 SHITAL APARTMENT RAJKOT JALARAM-2 NR. INDIRA CIRCLE UNIVERSITY ROAD RAJKOT PAN : AADFS5965L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DR ADHIA RESPONDENT BY : : SHRI AVINASH KUMAR O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-I RAJKOT DATED 18-11-2010 FOR THE ASSESSMENT YEAR 200 5-06. 2. THE FIRST AND SECOND EFFECTIVE GROUNDS ARE IN RE SPECT OF ADDITION OF RS. 3 90 809 U./S 40A(3) OF THE ACT. THE BRIEF FACTS O F THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE MADE CASH PAYMENT OF RS.19 73 835 TO VARIOUS JCB OWNERS. THE CASH PAYMENT WAS MADE IN EXCESS OF RS.20 000 WHICH IS HIT BY PROVISI ONS OF SECTION 40A(3) OF THE ACT. THE ASSESSING OFFICER ACCORDINGLY DISALLOWED 20% OF THE SAID AMOUNT OF RS.3 90 809. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3. THE LD.AR DREW OUR ATTENTION TO PAGES 2 TO 9 OF THE PAPER BOOK WHERE DETAILS OF EACH BILLS OF EARTHMOVING MACHINE RENT E XPENSES HAS BEEN PLACED. THE AMOUNT OF EACH BILL WAS LESS THAN RS.20 000. T HE LD.AR SUBMITTED THAT THE EXPENSES HAVE BEEN MADE ON VARIOUS DATES AND NO EXP ENSES EXCEEDED RS.20 000 ON ANY DATES. THE LD.AR SUBMITTED THAT TH E BIFURCATION OF THE BILLS COULD NOT BE FURNISHED BEFORE THE ASSESSING OFFICER AS THE ASSESSING OFFICER ITA NO.1363/RJT/2010 2 INITIATED SCRUTINY PROCEEDINGS ON 27-11-2007 AND PA SSED ORDER ON 07-12-2007. THE LD.AR SUBMITTED THAT THE ASSESSING OFFICER HAS PROVIDED ONLY 2 DAYS TIME FOR FURNISHING THE DETAILS I.E. 28-11-2007 TO 30-11-20 07 AS PER PARAGRAPH 5 OF THE ASSESSMENT ORDER PAGES 2 & 3. THE LD.AR SUBMITTED THAT DUE TO ACUTE SHORTAGE OF TIME AND NOT GIVING REASONABLE TIME BY THE ASSES SING OFFICER THE ASSESSEE COULD NOT FURNISH DETAILS BEFORE THE ASSESSING OFFI CER. HOWEVER DETAILS WERE FURNISHED BEFORE THE CIT(A). THE LD.AR FURTHER SUB MITTED THAT THE PROVISIONS OF SECTION 40A(3) OF THE ACT IS VERY CLEAR THAT DISALL OWANCE HAVE TO BE MADE IF EXPENDITURE AS WELL AS CASH PAYMENTS EXCEEDS 20 000 . THE LD.AR SUBMITTED THAT IN THE CASE UNDER CONSIDERATION ALTHOUGH THE P AYMENTS EXCEED RS.20 000 BUT IT PERTAINED TO EXPENDITURE LESS THAN RS.20 000 ON VARIOUS DATES. THE LD.AR IN SUPPORT OF HIS CONTENTION RELIED UPON THE FOLLOW ING DECISIONS: M/S SHREENATHJI ROADWAYSITA NO.1165/RJT/2010 ORDER DATED 25-10-2010 M/S LILARAM TEHALMAL VS ITO ITA NO. 697/RJT/2002 ORDER DT 22-07-2002 4. THE LD.DR ON THE OTHER HAND RELIED UPON THE OR DER OF CIT(A). 5. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES RECORD PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE BIFURCA TION AS POINTED OUT BY THE LD.AR WERE NOT FILED BEFORE THE ASSESSING OFFICER MAY BE DUE TO SHORTAGE OF TIME AND NOT PROVIDING REASONABLE OPPORTUNITY OF HEARING BY THE ASSESSING OFFICER TO THE ASSESSEE. THE ASSESSEE FILED THE DETAILS BEFORE TH E CIT(A). THE CIT(A) OUGHT TO HAVE EXAMINED THOSE DETAILS BUT CIT(A) OBSERVED TH AT THE ASSESSEE FAILED TO PRODUCE THE BILLS FOR EXPENDITURE. AFTER CONSIDERI NG THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE I FIND PROPER T O SEND BACK THIS ISSUE TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO EXAMINE THE DET AILS FILED BY THE ASSESSEE AND VERIFY WHETHER AMOUNT OF EACH BILL IS LESS THAN RS. 20 000 OR NOT. IF AMOUNT OF BILL IS LESS THAN RS.20 000 THE DECISIONS OF ITAT CITED ABOVE ARE SQUARELY APPLICABLE. THE CIT(A) SHALL VERIFY THE DETAILS AND RECORD COMP LETE FACTS AND DECIDE THE ISSUE IN THE LIGHT OF ABOVE DISCUSSION AND IN ACCOR DANCE WITH ITAT ORDERS M/S ITA NO.1363/RJT/2010 3 SHREENATHJI ROADWAYS ITA NO.1165/RJT/2010 ORDER D ATED 25-10-2010 AND M/S LILARAM TEHALMAL VS ITO ITA NO. 697/RJT/2002 ORDE R DT 22-07-2002 AFTER PROVIDING OPPORTUNIKTY OF HEARING TO BOTH SIDES. 6. THE THIRD AND FOURTH GROUNDS ARE IN RESPECT OF A DDITION OF RS.30 000 MADE U/S 68 BEING THE CREDIT APPEARING IN THE NAMES OF S HRI HITESH JAMNADASBHAI PATEL RS.15 000 AND SHRI VISHAL NANALAL LADANI RS.1 5 000. THE BRIEF FACTS OF THE ISSUE ARE THAT IN THE ASSESSMENT PROCEEDINGS THE AS SESSING OFFICER HAS NOTICED THAT TWO LOANS IN THE NAMES OF SHRI HITESH JAMNADAS BHAI PATEL RS.15 000 AND SHRI VISHAL NANALAL LADANI RS.15 000 WERE TAKEN ON 02-04-2004. THE ASSESSING OFFICER MADE THE ADDITION AS THE ASESSEE HAS FAILED TO FURNISH ADEQUATE AND NECESSARY PROOF TO ESTABLISH THE GENUINENESS OF THE CASH CREDIT. THE ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(A) BY OBSERVING THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. 7. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES RECORD PERUSED. THE LD.AR DID NOT ARGUE MUCH ON THIS GROUND. I FIN D THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME DECLARING INCOME OF RS.17 978. THE ASSESSEE HAS FAILED TO SATISFY THE CONDITIONS OF SECTION 68 TO ESTABLISH T HE CREDITWORTHINESS AND GENUINENESS OF THE CREDITORS. THERE IS NO CONTRARY MATERIAL TO THE FINDING OF THE CIT(A) AND THE ASSESSING OFFICER. I THEREFORE IN CLINE TO UPHOLD THE ORDER OF THE CIT(A). THE ADDITION OF RS.30 000 IS CONFIRMED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18- 03-2011 . SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT DT : 18 TH MARCH 2011 ITA NO.1363/RJT/2010 4 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-I RAJKOT 4. THE CIT-I RAJKOT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT