ACIT, CHENNAI v. Shri Subaschandra Bose, CHENNAI

ITA 1976/CHNY/2010 | 2007-2008
Pronouncement Date: 25-01-2011 | Result: Dismissed

Appeal Details

RSA Number 197621714 RSA 2010
Assessee PAN APCPS6920C
Bench Chennai
Appeal Number ITA 1976/CHNY/2010
Duration Of Justice 2 month(s) 5 day(s)
Appellant ACIT, CHENNAI
Respondent Shri Subaschandra Bose, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 25-01-2011
Assessment Year 2007-2008
Appeal Filed On 19-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 1976/MDS/2010 ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-V CHENNAI. V. SHRI SUBASHCHANDRA BOSE NO. 28/11 GANDHI NAGAR EXTN. EKKATTUTHANGAL CHENNAI-600 097. (PAN : APCPS6920C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN JR.STANDING COUNSEL RESPONDENT BY : SHRI SUBASHCHANDRA BOSE O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-VIII CHENNAI IN APPEAL NO. 26/09-10 D ATED 13-08-2010 FOR THE ASSESSMENT YEAR 2007-08. 2. SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL REPR ESENTED ON BEHALF OF THE REVENUE AND SHRI SUBASHCHANDRA BOSE IN PERSON REPRE SENTED ON BEHALF OF THE RESPONDENT. 3. IN THE REVENUES APPEAL THE REVENUE HAS RAISED T HE FOLLOWING GROUNDS : I.T.A. NO.1976/MDS/2010 2 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE ASSESSEE AGREED FOR THE ADDITIONS BEFORE THE ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS CONTESTED THE SAME ISSUES AGAIN ON APPEAL. 3. THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF ` 9 25 000/- ON ACCOUNT OF UNEXPLAINED ADDITION TO CAPITAL. 3.1 THE LD. CIT(A) FAILED TO APPRECIATE THAT THE A DDITION WAS MADE BY THE ASSESSING OFFICER ONLY BECAUSE THE ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4. THE LD. CIT(A) ERRED IN ADMITTING FRESH EVIDENC E IN THE FORM OF DETAILS AND DOCUMENTS IN SUPPORT OF THE ADVANCES STATED TO BE RECEIVED BY THE ASSESSEE AND RETURNED BACK LATER. 4.1 HAVING ADMITTED THE FRESH CLAIM THE LD. CIT(A ) OUGHT TO HAVE GIVEN THE ASSESSING OFFICER TO EXAMINE THE SAME AS PER THE PROVISIONS OF RULE 46A. IT IS SUBMITTED TH AT THE ACTION OF THE CIT(A) IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 5. THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLO WANCE UNDER SECTION 40(A)(IA) TO ` 54 000/- AS AGAINST ` 1 40 000/- MADE BY THE ASSESSING OFFICER. 5.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE DID NOT SUBSTANTIATE HIS CLAIM THAT ` 86 000./- ONLY PERTAINED TO MACHINERY HIRE CHARGES AND ` 54 000/- PERTAINED TO TRANSPORTATION CHARGES EITHER BEFORE THE ASSESS ING OFFICER OR BEFORE THE CIT(A). 5.2 THE LD. CIT(A) FAILED TO APPRECIATE THAT IN TH E ABSENCE OF SUBSTANTIATING EVIDENCE THE CLAIM OF THE ASSESSEE SHALL ONLY AMOUNT TO ARTIFICIAL BIFURCATION TO AVOI D COMPLIANCE TO THE PROVISIONS OF THE ACT. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASI DE AND THAT OF ASSESSING OFFICER RESTORED. IT WAS SUBMITTED BY THE LEARNED COUNSEL ON BEHALF O F THE REVENUE THAT THE ASSESSEE IS DOING SMALL TYPE CIVIL WORK AND ON EXAM INATION OF THE BANK ACCOUNT IT I.T.A. NO.1976/MDS/2010 3 WAS FOUND THAT THE ASSESSEE HAD INTRODUCED A SUM OF ` 9 25 000/- TO HIS CAPITAL ACCOUNT. IT WAS THE SUBMISSION THAT THIS AMOUNT HA D BEEN ADDED AS THE UN- EXPLAINED INCOME OF THE ASSESSEE. IT WAS THE SUBMI SSION THAT THE ASSESSEE HAD SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE AMOUNT WAS THE ADVANCES GIVEN FROM THE CUSTOMERS WHICH WERE INADVERTENTLY ACCOUNT ED BY THE ASSESSEES ACCOUNTANT IN THE CAPITAL ACCOUNT. IT WAS THE SUBM ISSION THAT THE LEARNED CIT(A) HAD DELETED THE ADDITION AFTER VERIFYING THE DETAIL S PRODUCED BY THE ASSESSEE. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD LOOK ED INTO FRESH DOCUMENTS AND THUS VIOLATED THE PROVISIONS OF RULE 46A OF THE I.T . RULES 1962. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSING OFFICER HAD M ADE THE DISALLOWANCE OF ` 1 40 000/- REPRESENTING AN AMOUNT OF ` 86 000/- CLAIMED BY THE ASSESSEE AS HIGHER CHARGES FOR MACHINERY AND ` 54 000/- AS TRANSPORTATION CHARGES ON THE GROUND THAT NO TDS HAD BEEN MADE. CONSEQUENTLY TH E ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD ACCEPTED THE CLAIM OF THE AS SESSEE THAT ` 86 000/- RELATED TO THE HIRE CHARGES OF MACHINERY AND HOLDIN G THAT NO TDS WAS LIABLE TO BE MADE ON THE SAID AMOUNT HAD DELETED THE ADDITIO N. HE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICE R. 4. IN REPLY THE ASSESSEE SUBMITTED THAT IN REGARD T O THE AMOUNT OF ` 9 25 000/- THE ASSESSEE WAS DEPENDENT UPON HIS ACCO UNTANT WHO HAD MADE THE MISTAKE IN PASSING ENTRIES. IT WAS THE SUBMISSION THAT ALL THE EVIDENCES HAD I.T.A. NO.1976/MDS/2010 4 BEEN PRODUCED BEFORE THE LOWER AUTHORITIES. HOWEVE R THE ASSESSING OFFICER HAD NOT ACCEPTED THE CONTENTIONS. IT WAS THE SUBMISSIO N THAT THE LEARNED CIT(A) AFTER VERIFYING ALL THE EVIDENCES AS PRODUCED HAD A CCEPTED THE CLAIM. 5. IN REGARD TO THE HIRE CHARGES OF ` 86 000/- IT WAS THE SUBMISSION THAT NO TDS WAS LIABLE TO BE MADE AND EVEN THE EVIDENCES OF THE HIRE CHARGES HAD BEEN PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSE E VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LEARNED CIT(A) CLEARLY SHOWS THAT NO FRESH EVIDENCE AS SUCH HAD BEEN CONSIDERED BY THE LEARNED CIT(A). THE SO-CALLED CANCELLATION DEED WHICH HAD BEEN LOOKED INTO BY THE LEARNED CIT(A) DOES NOT ASSIST THE CASE INSOFAR AS IT IS A DOCUMENT OF 30-08-2006 WHEREBY THE ASSESSEE HAD RETURNED THE AM OUNTS RECEIVBED FROM MR. KINGSTON DEVASAGAYAM. A PERUSAL OF THE ASSESSING O FFICER CLEARLY SHOWS THAT BEFORE THE ASSESSING OFFICER ALSO THE ASSESSEE HAD SUBMITTED THAT THE AMOUNT WAS RECEIVED AS AN ADVANCE FROM ONE OF THE CUSTOMER S AND THAT IT WAS A WRONG ENTRY DONE BY THE ACCOUNTANT OF THE ASSESSEE. THE ASSESSING OFFICER WITHOUT VERIFYING THE CLAIM OF THE ASSESSEE IT IS NOTICED HAD CONTINUED TO ASK THE ASSESSEE TO SUBSTANTIATE HIS CASE. OBVIOUSLY AN A SSESSEE CAN PRODUCE IDENTIFICATION AND EVIDENCES. THEN IT IS THE DUTY OF THE ASSESSING OFFICER TO REBUT IF HE SUSPECTS IT. THIS HAS NOT BEEN DONE BY THE A SSESSING OFFICER. WITH A SINGLE LINE THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT CONVINCING AN ADDITION I.T.A. NO.1976/MDS/2010 5 CANNOT BE MADE. A PERUSAL OF THE ORDER OF THE LEAR NED CIT(A) CLEARLY SHOWS THAT THE LEARNED CIT(A) HAS VERIFIED AND HAS FOUND THAT THE AMOUNT OF ADVANCE WAS INADVERTENTLY RECORDED BY THE ACCOUNTANT IN THE CAP ITAL ACCOUNT OF THE ASSESSEE. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE F INDING OF THE LEARNED CIT(A) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CA LL FOR ANY INTERFERENCE. 7. IN REGARD TO THE ISSUE OF THE ADDITION DELETED B Y THE LEARNED CIT(A) OF ` 86 000/- A PERUSAL OF THE ORDER OF THE ASSESSING OF FICER CLEARLY SHOWS THAT THE ASSESSEE HAS CLAIMED BEFORE HIM THAT THE AMOUNT WAS THE MIXTURE MACHINE HIRE CHARGES. IT WAS NOTICED THAT THE ASSESSING OFFICER HAS HELD THAT THE BIFURCATION OF ` 1 40 000/- INTO ` 86 000/- TOWARDS MIXTURE MACHINE HIRE CHARGES AND TRANSPORTATION CHARGES OF ` 54 000/- IS MADE BY THE ASSESSEE I.E. IT IS ONLY A CLAIM OF THE ASSESSEE AND NOT SUBSTANTIAL. ON THIS GROUND THE ASSESSING OFFICER HAS HELD THAT THE EXPLANATION IS NOT CONVINCING. IF SUCH A CLAIM THE ASSESSEE HAD MADE WHY SHOULD THE ASSESSEE HAVE NOT SAID THAT THE HIRE CHARGES WERE ` 91 000/- AND THE TRANSPORTATION CHARGES ONLY 49 000 /- WHICH WOULD HAVE KEPT BOTH THE AMOUNTS BELOW THE TDS LIMITS. OBVIOUSLY THE FACT THAT THE ASSESSEE HAD PRODUCED THE BILLS FOR THE AMOUNT OF ` 86 000/- AND ` 54 000/- CLEARLY SHOWS THAT THAT WAS THE ACTUAL AMOUNT INCURRED BY THE AS SESSEE AND IT IS NOT A FANCIFUL CLAIM OF THE ASSESSEE. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) HAS CONSIDERED THIS ISSUE AND HAS DELETED THE ADDITION OF ` 86 000/- AND HAS CONFIRMED THE I.T.A. NO.1976/MDS/2010 6 ADDITION OF ` 54 000/-. IN THE CIRCUMSTANCES THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. 9. THE ORDER WAS PRONOUNCED IN THE COURT ON 25-01-2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 25 TH JANUARY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE