The ITO 2 (3), v. Shri Manoj Kumar Agrawal, Sehore

ITA 175/IND/2009 | 2004-2005
Pronouncement Date: 10-12-2010 | Result: Dismissed

Appeal Details

RSA Number 17522714 RSA 2009
Bench Indore
Appeal Number ITA 175/IND/2009
Duration Of Justice 1 year(s) 8 month(s) 3 day(s)
Appellant The ITO 2 (3),
Respondent Shri Manoj Kumar Agrawal, Sehore
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 10-12-2010
Date Of Final Hearing 06-12-2010
Next Hearing Date 06-12-2010
Assessment Year 2004-2005
Appeal Filed On 06-04-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.175/IND/09 A.Y.2004-05 INCOME TAX OFFICER 2(3) BHOPAL APPELLANT VS MANOJ KUMAR AGRAWAL NASRULLAGANJ DISTT.SEHORE PAN AAXPA-1941K RESPONDENT APPELLANT BY : SHRI P.K. MITRA RESPONDENT BY : SHRI B.C. JAIN O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 23.1.2009 WHEREIN FIRST GROUND RAISED PERTAINS TO DELETING THE ADDITION OF RS. 20 565/- MADE BY THE ASSESSING OFFICER BY DISALLOWING PAYMENT MADE TOWARDS TRUCK INSURANCE. T HE CONTENTION RAISED ON BEHALF OF THE REVENUE IS RELIANCE ON THE ASSESSMENT ORDER. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SU PPORTED THE IMPUGNED ORDER. 2 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LEAR NED REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE MAIN BUSINESS OF T HE ASSESSEE IS GRAIN TRADING DECLARED INCOME OF RS.1 58 430/- IN ITS RE TURN FILED ON IST MARCH 2005. THE ASSESSEE SHOWED TRUCK INCOME U/S 44AE OF THE ACT AND DEBITED AN AMOUNT OF RS. 20 565/- TOWARDS TRUCK INS URANCE WHICH AS PER THE REVENUE IS NOT ALLOWABLE EXPENDITURE AS THE ASS ESSEE HAS OPTED FOR TAXATION ON PRESUMPTIVE BASIS CONSEQUENTLY THE IM PUGNED AMOUNT WAS DISALLOWED. HOWEVER ON APPEAL THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) CONSIDERED THE SUBMISSIONS OF THE ASS ESSEE AND ALLOWED THE IMPUGNED INSURANCE EXPENSES WHICH IS UNDER CHAL LENGE BEFORE THE TRIBUNAL. THE CLAIM OF THE ASSESSEE IS THAT THE AS SESSEE SHOWED THE INCOME OF RS. 1 58 430/- AS BUSINESS INCOME INCLUD ING THE TRUCK INCOME OF RS.10 500/-. THERE IS A FINDING IN THE ASSESSME NT ORDER THAT THE TAX AUDIT REPORT WAS FILED ALONG WITH THE RETURN AND TH E ASSESSEE PRODUCED BOOKS OF ACCOUNTS AND OTHER RELEVANT DOCUMENTS WHIC H WERE VERIFIED BY THE ASSESSING OFFICER AND HE FOUND THAT THE NET PRO FIT AND GROSS PROFIT CHARGED WERE AT THE SAME TREND FOR THE LAST TWO YEA RS. SINCE THE TRUCK WAS USED FOR BUSINESS PURPOSES CONSEQUENTLY WE ARE OF THE VIEW THAT THE TRUCK INSURANCE IS A BUSINESS NECESSITY THEREF ORE WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE CLAIM OF THE ASSESSEE ESP ECIALLY WHEN IT IS NOT 3 THE CLAIM OF THE REVENUE THAT THE TRUCK WAS NOT USE D FOR BUSINESS PURPOSES THEREFORE THERE IS NO MERIT IN THIS GROU ND OF THE REVENUE CONSEQUENTLY IT IS DISMISSED. 3. THE NEXT GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.13 253/- OUT OF THE TOTAL ADDITION OF RS.27 253/ - (CONFIRMING THE ADDITION OF RS. 14 000/-). THE LEARNED SENIOR DEPAR TMENTAL REPRESENTATIVE PLACED STRONG RELIANCE ON THE ASSESS MENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE IMPU GNED ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED T O HAVE PAID A SUM OF RS.68 132/- TOWARDS PAYMENT OF FIVE TELEPHONE BILLS . WHEN THE ASSESSING OFFICER ASKED ABOUT THE NECESSITY OF FIVE TELEPHONE CONNECTIONS IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAME ARE INSTALLED AT SHOP GODOWN MANDI PREMISES RESIDEN CE AND ONE WAS CELL PHONE. THE ASSESSEE HOWEVER COULD NOT QUOTE THE NUMBER OF THE CELL PHONE. THE ASSESSING OFFICER THEREFORE IN THE ABS ENCE OF PROPER REPLY ABOUT THE PERSONAL USE THEREOF DISALLOWED AN AMOU NT EQUAL TO 40% OF THE TOTAL BILL I.E. RS. 27 253/-. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF RS.13 253/- OUT OF THE TOTAL ADDITION MADE BY THE ASSESSING OFFICER AGAINST WHI CH THE REVENUE IS IN APPEAL BEFORE US. KEEPING IN VIEW THE TOTALITY OF F ACTS AND CIRCUMSTANCES 4 AVAILABLE ON RECORD AND ALSO NARRATED BEFORE US T HE PERSONAL USE OF TELEPHONE FOR OTHER THAN BUSINESS PURPOSES CANNOT B E RULED OUT BUT AT THE SAME TIME THE ADDITION AT 40% OF THE TOTAL EXP ENSES CLAIMED TO HAVE BEEN INCURRED IS ALSO EXCESSIVE CONSEQUENTLY WE F IND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CHOSEN A REASO NABLE APPROACH THEREFORE THERE IS NO MERIT IN THIS GROUND OF THE REVENUE. THE SAME IS ACCORDINGLY DISMISSED. 5. THE LAST GROUND PERTAINS TO DELETING THE ADDITIO N OF RS.8 09 940/- MADE BY THE ASSESSING OFFICER U/S 69C OF THE ACT. THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE PLACED R ELIANCE ON THE ASSESSMENT ORDER WHEREAS THE LD. COUNSEL FOR THE AS SESSEE DEFENDED THE IMPUGNED ORDER. ON CONSIDERATION OF RIVAL SUBMISSIONS AND ALSO ON P ERUSAL OF RECORD BRIEF FACTS ARE THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE ALLEGED SUPPRESSION OF PURCHASES ON ACCOUNT OF BARDANA. THE STAND OF THE REVENUE IS THAT AS PER THE DETAILS OF PURCHASE OF BARDANA THE ASSESSEE PURCHASED 60 652 BAGS @ RS. 1 2/- PER BAG. THE ASSESSEE AS PER THE REVENUE SOLD 1 24 591 QUINTAL S OF GRAINS DURING THE YEAR WHICH REQUIRES MORE BARDANAS. AS PER THE REVENUE THE BARDANA WAS SHORT BY 67495 NUMBERS OF BAG. AS PER THE REVENUE THERE IS A SUPPRESSION OF PURCHASE OF BARDANA CONSEQUENT LY THE AMOUNT OF RS.8 09 940/- (67495 X RS. 12/-) WAS ADDED AS UNEX PLAINED EXPENDITURE 5 U/S 69C OF THE ACT. ON APPEAL THE ADDITION WAS DEL ETED WHICH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. THE CLAIM OF THE ASS ESSEE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS WEL L AS BEFORE US HAS BEEN THAT WHENEVER THE GOODS/GRAINS ARE SOLD ON COM MISSION BASIS/ADAT OR SUPPLIED TO THE PLANT OWNERS THEY SUPPLY THEIR OWN BARDANA (JUTE BAGS) FOR WHICH THE SELLER OF THE GOODS DO NOT CHAR GE A SINGLE PAISA FOR SUCH BARDANA AS A COST. THE WHOLE ADDITION MADE BY THE ASSESSING OFFICER IS ON PRESUMPTIVE BASIS THEREFORE DESERVE S TO BE DELETED BECAUSE THE CLAIM OF THE ASSESSEE HAS NOT BEEN CONT ROVERTED BY THE REVENUE AT ANY STAGE. NO CONTRARY FACTS HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER EVIDENCING THAT IN FACT NO BA RDANA WAS SUPPLIED BY THE PURCHASERS TO THE SELLER. EVEN THE TRADE PRACT ICE HAS NOT BEEN CONTROVERTED BY THE REVENUE. SECTION 69C OF THE ACT DEALS WITH UNEXPLAINED SOURCES OF EXPENDITURE. IF FROM THE DO CUMENTS IT APPEARS THAT THERE WAS EXPENDITURE UNLESS ITS SOURCE IS SA TISFACTORILY EXPLAINED THE SAME WOULD ALSO BE DEEMED TO BE THE INCOME OF T HE ASSESSEE. HOWEVER IN THE PRESENT APPEAL NO SUCH CLAIM HAS B EEN MADE BY THE ASSESSEE. THERE IS NO EVIDENCE ON RECORD THAT THE EXPENDITURE WAS ACTUALLY INCURRED. THEREFORE THE ESTIMATION OF AD DITION ON PRESUMPTIVE BASIS CANNOT BE MADE. IN VIEW OF THESE FACTS SUCH AN AD HOC ADDITION CANNOT BE SAID TO BE JUSTIFIED. CONSEQUENTLY THERE IS NO JUSTIFICATION IN APPLYING SECTION 69C TO THE CASE OF THE ASSESSEE. THE RATIO LAID DOWN IN 6 THE CASE OF CIT V. BHAGWATI DEVELOPERS PRIVATE LIMI TED; 261 ITR 658 (CAL) AND CIT V. C.L. KHATRI; 147 TAXMAN 652 (M.P.) SUPPORTS THE CASE OF THE ASSESSEE. FINALLY THE APPEAL OF THE REVENUE IS HAVING NO MER IT THEREFORE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 10 TH DECEMBER 2010. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.12.2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE DN/- 7