Income Tax Officer -1,, RAJNANDGAON v. Ku. Sumedha Karmahe,, RAJNANDGAON

ITA 196/BIL/2011 | 2008-2009
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 19624714 RSA 2011
Assessee PAN AXDPK9357Q
Bench Raipur
Appeal Number ITA 196/BIL/2011
Duration Of Justice 3 year(s) 9 month(s) 12 day(s)
Appellant Income Tax Officer -1,, RAJNANDGAON
Respondent Ku. Sumedha Karmahe,, RAJNANDGAON
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 31-07-2015
Assessment Year 2008-2009
Appeal Filed On 19-10-2011
Judgment Text
1 ITA NO. 196/BLPR/2011 IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH RAIPUR BEFORE SHRI MUKUL K. SHRAWAT JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER. I.T. A. NO. 196/BLPR/2011 ASSESSMENT YEAR : 2008-09. THE INCOME-TAX OFFICER-1 KUMARI SUMEDHA KARMAHE RAJNANDGAON. V/S. C/O GYANESH KARMAHE MIF/B-1 KAMLA COLLEGE ROAD KUNJ BIHARI COLONY RAJNANDGAON (C.G.) PAN AXDPK 9357Q (APPELLANT) RESPONDENT. APPELLANT BY : SMT. SHEETAL S. VERMA. RESPONDENT BY : SHRI SUNIL KUMAR AGRAWAL. DATE OF HEARING : 16-06-2015 DATE OF PRONOUNCEMENT : 31 ST JULY 2015. O R D E R PER SHRI SHAMIN YAHYA A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) RAIPUR DATED 20-07-2011 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL READ AS UNDER : 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN RESTRICTING THE DISALLOWANCE OF ` .7 00 000/- MADE BY THE AO OUT OF TRAVELLING EXPENSES TO ` .2 00 000/- THEREBY GIVING RELIEF OF ` .5 00 000/-. 2 ITA NO. 196/BLPR/2011 2. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN RESTRICTING THE DISALLOWANCE OF ` .4 00 000/- MADE BY THE AO OUT OF OTHER EXPENSES TO ` .1 60 000/- THEREBY GIVING RELIEF OF ` .2 40 000/-. 3. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF ` .8 53 646/- MADE BY THE AO U/S 68 OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED CASH CREDITS/L OANS. 2. APROPOS GROUND NO 1 AND 2: THE ASSESSEE IN THIS CASE IS AN UPCOMING YOUNG LADY SINGER. THE ASSESSING OFFICER IN THIS CA SE OBSERVED THAT THE ASSESSEE HAS CLAIMED ` .7 87 452/- TOWARDS TRAVELLING EXPENSES AND CLAIMED ` .6 13 045/- UNDER OTHER HEADS. THE ASSESSEE EXPLAINED BEFORE TH E ASSESSING OFFICER THAT THE ASSESSEE WAS TO STAGE THE PROGRAMME AT DIFFERENT P LACES IN INDIA AND ABROAD AND HAD TO TRAVEL EXTENSIVELY IN RESPECT OF PROGRAMMES CONDUCTED THROUGH ZEE ENTERTAINMENT. IT WAS SUBMITTED THAT THE ASSESSEE D URING THE YEAR WAS 21 YEAR OLD AND WAS AN UNMARRIED GIRL AND HENCE HER MOTHER USED TO ACCOMPANY HER TO THE PLACES OF TRAVEL AND HENCE THESE EXPENDITURE WERE W HOLLY AND EXCLUSIVELY FOR THE PURPOSE OF PROFESSION. FURTHER MORE FOR DAY TO DAY PRACTICE AND REHEARSAL SHE NEEDED TO GO TO STAGE AND OTHER MUSICIANS. THE ASS ESSEE HAD TO ALSO INCUR EXPENDITURE ON PAYMENT / HONORARIUM PAYABLE TO HER MASTER (GURU-USTAD). THE ASSESSEE HAD TO INCUR EXPENDITURE ON MAINTAINING RE LATIONSHIP WITH MUSIC DIRECTORS. SHE HAD TO EXPEND EXPENDITURE ON COSTUMES TO PRESE NT HERSELF ON A STAGE. SHE ALSO HAD TO STAY IN BOMBAY AND HAD TO INCUR VARIOUS EXPE NDITURE. SHE CAME THIRD IN THE WORLD-RENOWNED MUSICAL COMPETITION SA RE GA MA PA CONDUCTED BY ZEE ENTERTAINMENT. HOWEVER THE AFORESAID JUSTIFICATION FOR INCURRING THE EXPENDITURE WERE NOT FULLY ACCEPTED BY THE ASSESSING OFFICER. H ENCE ACCORDING TO THE ASSESSING OFFICER COMPLETE BOOKS OF ACCOUNT WERE N OT PRODUCED AND THE EXPENSES WERE NOT SUPPORTED BY PROPER BILLS AND VOUCHERS AND HENCE OUT OF TRAVELLING EXPENSES CLAIMED AT ` .7 87 452/- THE ASSESSING OFFICER MADE ESTIMATED A DHOC 3 ITA NO. 196/BLPR/2011 DISALLOWANCE OF ` .7 LAKHS AND ` . 4 LAKHS WERE DISALLOWED ON ADHOC BASIS OUT OF OTHER EXPENSES CLAIMED AT ` .6 13 045/-. 3. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED B EFORE THE LEARNED CIT(APPEALS). IT WAS SUBMITTED BEFORE THE LEARNED C IT(APPEALS) THAT THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR WAS 21 YEARS OLD. SHE WAS RECOGNIZED AS A PLAY BACK SINGER. SHE HAD HARDLY ANY KNOWLEDGE OF ACCOU NTS AND INCOME TAX RETURNS. IT WAS FURTHER SUBMITTED THAT DURING THE RELEVANT P REVIOUS YEAR SHE HAD RECEIPT OF ` .16 75 055/- FROM ZEE ENTERTAINMENT ` .75 000/- FROM USHODAYA ENTERTAINMENT PVT. LTD. RAMOJI FILM CITY HYDERABAD (AP) AND TH E REMAINING RECEIPT OF ` .74 458/- WAS FROM OTHERS. THE SUM TOTAL OF ALL THE SE RECEIPTS WAS ` .18 24 513/-. THE RECEIPTS FROM ZEE ENTERTAINMENT AND USHODAYS E NTERPRISES WERE SUBJECTED TO TDS. THE CORRECTNESS OF THE GROSS RECEIPT SHOWN AT ` .18 24 513/- WAS ACCEPTED BY THE AO SINCE THE SAME WAS NOT ESTIMATED BY HIM. F OR EARNING THE AFOREMENTIONED RECEIPT THE ASSESSEE HAD INCURRED EXPENDITURE UNDE R VARIOUS HEADS SUCH AS ` .7 87 452/- TOWARDS TRAVELLING EXPENSES ` .1 28 991/- CLAIMED UNDER THE HEAD DRESS AND CONSUMES EXPENSES ` .42 154/- TOWARDS COMMUNICATION EXPENSES ` .35 456/- AS CONVEYANCE EXPENSES ` .68 752/- AS REFRESHMENT EXPENSES ` .36 452/- AS GENERAL EXPENSES AND ` .3 01 240/- AS SALARY EXPENSES ALL TOTALED TO ` .14 30 497/-. 4. CONSIDERING THE ABOVE THE LEARNED CIT(APPEALS) FOUND THAT IN THE AUDIT REPORT THE AUDITORS HAVE CERTIFIED THE RECEIPT AND EXPENSES. THE DISALLOWANCES OF ` .11 LAKH OUT OF ` .14 30 497/- WAS MORE THAN 75% OF THE TOTAL CLAIM. LEARNED CIT(APPEALS) RESTRICTED THE DISALLOWANCE IN THE CAS E OF THE TRAVELLING EXPENSES TO ` . 2 LAKHS AND IN CASE OF OTHER EXPENSES AMOUNTING T O ` .6 13 045/- LEARNED CIT(APPEALS) RESTRICTED THE ADDITION TO ` .1.60 LAKHS. 4 ITA NO. 196/BLPR/2011 5. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BE FORE US. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT A S PER THE EMANATING FACTS OF THE CASE THE ASSESSEE IS A YOUNG AND UPCOMING LADY SING ER FROM A SMALL TOWN RAJNANDGAON. SHE HAD WON THE COMPETITION ORGANIZED BY ZEE T.V. SHE HAD TO STAGE PROGRAMMES AT VARIOUS PART IN THE COUNTRY. F OR A LARGE PART IN THE PROFESSIONAL CAREER SHE HAS TO STAY AT BOMBAY. BE ING A YOUNG GIRL HER MOTHER HAS TO ACCOMPANY HER TO VARIOUS PLACES. SHE HAD TO ATTE ND REHEARSAL AND MAKE PAYMENT TO MUSIC TEACHERS. IT IS ALSO CORRECT THAT SHE WAS NOT VERY MUCH ACQUAINTED WITH TECHNICALITIES OF MAINTENANCE OF BOOKS OF ACCOUNTS . THE ASSESSING OFFICER HAS ALSO NOT POINTED OUT ANY BOGUS EXPENDITURE. HE HAS MADE AN ADHOC DISALLOWANCE. IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE RESTRICTION OF DISALLOWANCE BY THE LEARNED CIT(APPEALS) IS BASED O N COGENT MATERIAL AND SERVES OF INTEREST OF JUSTICE. HENCE WE UPHOLD THE ORDER O F LEARNED CIT(APPEALS) GRANTING RELIEF OF ` .5 LAKHS ON ACCOUNTING OF TRAVELLING EXPENSES AND ` .2 40 000 ON ACCOUNT OF OTHER EXPENSES. 6. APROPOS GROUND NO. 3: ON THIS ISSUE THE ASSESSING OFFICER OBSERVED THAT IN THE AUDIT REPORT THE ASSESSEE HAD SHOWN SUNDRY CREDITORS AT ` .16 55 303/-. THESE WERE UNSECURED LOANS TAKEN FROM RELATIVES AND ACQUAINTANCES . THE ASSESS ING OFFICER PROCEEDED TO EXAMINE THE SAME. ACCORDING TO THE ASSESSING OFFICE R THE UNSECURED LOANS PRESUMED TO HAVE BEEN OBTAINED FROM 17 PERSONS (MEN TIONED IN PARA NO. 6 OF THE ASSESSMENT ORDER) TOTALING TO ` .7 60 827/- AND UNSECURED LOANS OF ` .87 822/- PRESUMED TO HAVE BEEN OBTAINED FROM SHRI RAKESH THA KUR AND ` .5 007/- FROM OTHERS TOTALING TO ` .8 53 656/- REMAINED UNEXPLAINED. 7. UPON ASSESSEES APPEAL LEARNED CIT(APPEALS) EXA MINED THE ISSUE AND OBSERVED AS UNDER : 5 ITA NO. 196/BLPR/2011 3.4 FOR ASCERTAINING THE CORRECTNESS IN THE AO'S AFOREMENTIONED ASSERTIONS IT WAS CONSIDERED EXPEDIENT TO EXAMINE THE AUDITED BOOKS OF ACCOUNT. EXAMINATION OF THE AUDITED BOOKS REVEALED THAT NO SUCH LOANS WERE OBTAINED BY THE APPELLANT FROM ANY OF THE ABOVE E XCEPTING FROM KU. SNIGDHA KARMAHE FROM WHOKM ALSO THE APPELLANT IN FACT TOOK LOAN OF ` . 2 LAKHS DURING THE RELEVANT PREVIOUS YEAR AND NOT ` .31 831/ INCORRECTLY PRESUMED AND MENTIONED BY THE AO IN PARA NO. 6 O F THE ASSESSMENT ORDER. IT WAS EXPLAINED BEFORE THE AO AND ALSO IN PROCEE DINGS BEFORE ME THAT THE APPELLANT MOST OF THE TIME RESIDED AT BOMBAY FOR H ER PROFESSIONAL PROGRESSION AND SHE WAS NOT CONVERSANT AS TO HOW THE STORY OF THE AFOREMENTIONED UNSECURED LOANS FROM 17 PERSONS WA S PRESUMED AND GENERATED AGAINST THE APPELLANT. IT MAY BE THAT TH E THEN COUNSEL OF THE APPELLANT HAVING COME UNDER THE INFLUENCE OF THE AO MIGHT HAVE ACTED IN THE ABOVE DIRECTION BUT THEN SINCE NO UNSECURED LOANS WERE TAKEN FROM THE ABOVE 17 PERSONS WHICH FACT IS EVIDENT FROM THE A UDITED BOOKS OF ACCOUNT IT WAS VEHEMENTLY SUBMITTED ON THE BEHALF OF THE APPE LLANT THAT THE IMPUGNED ADDITION MADE BY THE AO U/S 68 IS UNSUSTAINABLE ON FACTS AND IN LAW. VERIFICATION OF THE AUDITED BOOKS OF ACCOUNT EVIDE NCED THAT THIS SUBMISSION OF THE APPELLANT WAS FOUND CORRECT. 3.5 ASSESSMENT ORDER EVIDENCES THE FACT THAT OUR O F THE AFOREMENTIONED 17 PERSONS THE AO CLAIMED TO HAVE RECORDED THE STAT EMENTS OF S/SHRI RAKESH THAKUR SMT. LAKSHMI KARMAHE SHRI RAVINDRANATH KA RMAHE AND SHRI VIBHA KARMAHE AND THE AO CONCLUDED IN UNAMBIGUOUS TERMS THAT APPELLANT HAD NOT TAKEN UNSECURED LOANS FROM ANY OF THE ABOV E FOUR PERSONS AS MENTIONED IN PARA NO. 6.4/PAGE NOS. 9 AND 10 OF TH E ORDER APPEALED AGAINST. THIS FACT ADMITTED BY THE AO IS ALSO EVIDENT FROM THE AUDITED BOOKS OF ACCOUNT WHICH SUBSTANTIATED THE FACT THAT THE APPE LLANT HAD NOT TAKEN UNSECURED LOAN FROM ANY OF THE ABOVE FOUR PERSONS. 3.6 REGARDING THE REMAINING 14 PERSONS (17 MINUS 3 ) ALSO AFTER VERIFICATION OF THE CASH BOOK PRODUCED BY THE APPE LLANT THE AO VIDE PARA NO. 6.6/PAGE NO. 10 OF THE ASSESSMENT ORDER ADMIT TED IN UNAMBIGUOUS TERMS THAT THE APPELLANT HAD NOT TAKEN UNSECURED LOANS OF ` .8 53 656/- FROM ANY OF THESE PERSONS INCLUDING THE AFOREMENTIONED FOUR PERSONS AND FROM OTHERS MENTIONED SUPRA. SINCE THERE WERE NO CREDI TS APPEARING IN THE BOOKS 6 ITA NO. 196/BLPR/2011 OF ACCOUNT FOR THE RELEVANT PREVIOUS YEAR IN ANY OF THE AFOREMENTIONED NAMES AS ADMITTED BY THE AO THE IMPUGNED ADDITI ON OF ` .8 53 656/- MADE U/S 68 OF THE ACT IS UNJUSTIFIED ON FACTS ADMITT ED BY THE AO HIMSELF. APART FROM THE CATEGORICAL ADMISSION OF AO THE AUDITED BOOKS OF ACCOUNT ALSO REVEALED THAT NO SUCH UNSECURED LOANS WERE TAKEN B Y THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR FROM THE REMAIN ING 14 PERSONS. THE LEARNED CIT(APPEALS) FURTHER REFERRED TO THE P ROVISIONS OF SECTION 68. THE LEARNED CIT(APPEALS) FURTHER OBSERVED AS UNDER THE GUJ. HC FOLLOWED THE DECISION OF SC IN CIT V . CITY MILLS DISTRIBUTORS P. LTD. (1996) 219 ITR 1 (SC) WHEREIN IT WAS EMPHA TICALLY MADE CLEAR THAT ; THE CRUX OF THE ISSUE THEREFORE IS THAT THERE H AVE TO BE CREDITS OF ANY SUM IN THE B OOKS OF AN APPELLANT MAINTAINED FOR ANY P REVIOUS YEAR ONLY THEN THE SUM SO CREDITED CAN BE BROUGHT TO TAX AS THE INCOM E OF THE APPELLANT OF THAT PREVIOUS YEAR. IN OTHER WORDS FIRST OF ALL THERE HAVE TO BE CREDITS IN A PREVIOUS YEAR AND ONLY IN THE ASSESSMENT RELATABL E TO THAT PREVIOUS YEAR NAMELY YEAR OF CREDIT CANA THE SUM BE BOUGHT TO TAX. IN THE CASE OF THE APPELLANT UNDER CONSIDERATION NO EVIDENCE WHATSOEVER WAS BROUGHT BY THE AO ON RECIORD TO PR OVE THAT THE IMPUGNED SUMS ADDED U/S 68 SOF THE ACT WERE THE UNEXPLAINE D CASH CREDITS/UNEXPLAINED UNSECURED LOANS RAISED BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR. ON THE OTHER HAND AS MENT IONED SUPRA THE AO ADMITTED IN CATEGORICAL TERMS THAT THE AFOREMENTI ONED LOANS WERE NOT TAKEN BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR . THE AO HAD ALSO NOT BROUGHT ANY EVIDENCE ON RECORD TO SUBSTANTIATE HIS ALLEGATION THAT THE IMPUGNED SUMS ASSESSED U/S 68 OF THE ACT WERE TH E INCOME EARNED BY THE APPELLANT DURING THE RELEVANT PREVIOUS YEAR FROM SOURCES UNDISCLOSED TO THE DEPARTMENT. FOR THE REASONS EXTENSIVELY ENUMERATED ABOVE THE IMPUGNED ADDITION OF ` .8 53 656/- MADE BY THE AO UNSUBSTANTIATED ON T HE STRENGTH OF ANY EVIDENCE BROUGHT AGAINST THE APPELLANT IN MY CONS IDERED VIEW IS UNSUSTAINABLE ON FACTS AND IN LAW. THE SAME IS TH EREFORE DELETED. THE APPELLANT ACCORDINGLY GETS RELIEF OF ` .8 53 656/-. 7 ITA NO. 196/BLPR/2011 8. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BE FORE US. 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT THE ASSESSING OFFICER HAS MADE OUT THE CASE THAT ` .8 53 646/- BEING SUNDRY CREDITORS IS AN UNEXPLAINED AMOUNT AND UNDISCLOSED INCOME OF THE ASSESSEE HERSELF. HOWEVER WE FIND THAT THE LEARNED CIT(APPEALS) HAS EXAMINED THE BOOKS OF ACCOUNTS HIMSELF AND FOUND THAT THE ASSESSING OFFICER HAS ERRONEOUSL Y ASSUMED THAT THE ASSESSEE HAS TAKEN THOSE UNSECURED LOANS. REFERRING TO THE VARIO US FACTS OF THE CASE AND THE FINDINGS OF THE ASSESSING OFFICER HIMSELF IN HIS OR DER LEARNED CIT(APPEALS) HAS FOUND THAT THE SAID ADDITION OF ` .8 53 646/- IS UNJUSTIFIED AS IN FACT NO SUCH UNSECURED LOANS WERE TAKEN BY THE ASSESSEE DURING T HE RELEVANT PREVIOUS YEAR FROM THE REMAINING 14 PERSONS. IN THESE CIRCUMSTANCES I N OUR CONSIDERED OPINION LEARNED CIT(APPEALS) HAS GIVEN A CORRECT ORDER AFTE R EXAMINING ALL THE FACTS AND BOOKS ON RECORDS. HENCE WE DO NOT FIND ANY INFIRMIT Y IN THE SAME. ACCORDINGLY WE UPHOLD THE SAME. 10. IN THE RESULT THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/- SD/- (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. DATED: 31 ST JULY 2015. 8 ITA NO. 196/BLPR/2011 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT 5. THE D.R. ITAT RAIPUR. 6. GUARD FILE. T RUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR ITAT NAGPUR