ITO, New Delhi v. Sh. Mukesh Kumar,, Delhi

ITA 3325/DEL/2009 | 2005-2006
Pronouncement Date: 16-04-2010 | Result: Partly Allowed

Appeal Details

RSA Number 332520114 RSA 2009
Bench Delhi
Appeal Number ITA 3325/DEL/2009
Duration Of Justice 8 month(s) 23 day(s)
Appellant ITO, New Delhi
Respondent Sh. Mukesh Kumar,, Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-04-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 16-04-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2005-2006
Appeal Filed On 24-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI I.P.BANSAL AND SHRI K.G. BANSAL I.T.A. NO. 3325(DEL)/2009 ASSESSMENT YEAR: 2005-06 INCOME-TAX OFFICER SHRI MUKESH KUMAR WARD 36(4) NEW DELHI. VS. C-11 164-A NEW ASHOK NAGAR DELHI-91. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.S. SAHOTA SR. DR RESPONDENT BY: NONE ORDER PER K.G. BANSAL : AM THIS APPEAL HAS BEEN FILED AGAINST THE ORDER O F CIT(APPEALS)- XXVII NEW DELHI PASSED ON 31.03.2009 IN APPEA L NO. 152/07-08 PERTAINING TO ASSESSMENT YEAR 2005-06. THE COR RESPONDING ORDER OF ASSESSMENT WAS PASSED BY THE AO ON 5.12.2007 U NDER THE PROVISIONS OF SECTION 144 OF THE INCOME-TAX ACT 1961. 2. GROUND NO. 1OF THE REVENUE IS THAT ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) ERRED IN DELETING ADDITIONS OF RS. 3 91 536/- AND RS. 80 000/- MADE BY THE AO AS UNEXPLAINED CASH CREDIT BY INVOKING THE PROVISION CONTAINED IN SECTION 68OF THE ACT. ITA NO. 3325(DEL)/2009 2 2.1 IN THIS CONNECTION IT IS MENTIONED IN PARAGR APHS 3 AND 4 OF THE ASSESSMENT ORDER THAT NO EVIDENCE WAS FILED REGA RDING IDENTITY CREDITWORTHINESS AND GENUINENESS OF THESE CREDIT S. THEREFORE THESE AMOUNTS WERE BROUGHT TO TAX AS UNEXPLAINED CR EDITS. 2.2 IN THE COURSE OF HEARING THE LD. CIT(A) OB TAINED THE EVIDENCE IN REGARD TO THE CREDITS. THIS EVIDENCE WAS FOR WARDED TO THE AO FOR HIS REPORT WHICH WAS FILED VIDE LETTER DATED 17 .2.2009. AFTER CONSIDERING THE REPORT AND THE SUBMISSIONS HE CAME TO THE CO NCLUSION THAT NONE OF THE AFORESAID AMOUNTS COULD BE BROUGHT TO TAX IN TH E HANDS OF THE ASSESSEE U/S 68. IT WAS INTER-ALIA MENTIONED THAT THE UNSECURED LOAN OF RS. 3 91 536/- WAS AN OLD LOAN AND THERE WAS NO ADDITION OR SUBTRACTION FROM THE OPENING BALANCE CARRIED FORWARD FROM T HE EARLIER YEAR. IN RESPECT OF THE CREDIT OF RS. 80 000/- IT WAS MENTIONED THAT THE CREDITOR SHRI N.B. SHARMA FILED A CERTIFICATE IN SUP PORT OF THE CREDIT WHICH CONTAINED HIS FULL ADDRESS AND PERMANENT ACCOUN T NUMBER. THEREFORE THESE ADDITIONS WERE DELETED. 2.3 BEFORE US THE LD. DR SUBMITTED THAT NO EV IDENCE WAS FILED TO SUPPORT THE LOAN IN THE ASSESSMENT PROCEEDINGS WHICH HAS ALSO BEEN ITA NO. 3325(DEL)/2009 3 OBSERVED BY THE LD. CIT(APPEALS) IN PARAGRAPH 6 .4. NONE ATTENDED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING O N 7.4.2010. 2.4 WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS AVAILABLE ON RECORD. IN SO FAR AS LOAN OF RS. 3 91 536/- FROM SHRI PANKAJ SHARMA IS CONCERNED THE CREDIT WAS CARR IED FORWARD FROM AN EARLIER YEAR. THUS IT CANNOT BE SAID THAT TH E AMOUNT WAS CREDITED FOR THE FIRST TIME IN THIS YEAR. ON THAT BASIS ITSEL F THIS AMOUNT CANNOT BE CONSIDERED FOR ADDITION IN THE PROCEEDINGS FOR THIS YEAR. IN RESPECT OF THE OTHER LOAN OF RS. 80 000/- FROM SHRI N.B. S HARMA A CERTIFICATE WAS FURNISHED IN THE COURSE OF APPELLATE PROCEEDINGS AND THIS CERTIFICATE CONTAINED THE FULL ADDRESS AND PERMANENT ACCOUNT NUMBER OF THE CREDITOR. THE AO DID NOT MAKE ANY FURTHER ADDITION IN TH E COURSE OF REMAND REPORT. THEREFORE THE CERTIFICATE HAS TO BE TA KEN AS CORRECT IN SO FAR AS ITS CONTENTS ARE CONCERNED. ACCORDINGLY IT IS HELD THAT THE LD. CIT(APPEALS) WAS RIGHT IN DELETING BOTH THESE AMOUNTS FROM THE TOTAL INCOME OF THE ASSESSEE. 2.5 IN THE RESULT GROUND NO. 1 IS DISMISSED. ITA NO. 3325(DEL)/2009 4 3. GROUND NO. 2 IS THAT ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS. 50 000/- MADE BY THE AO BEING UNEXPLAINED INVESTMENT BY INVOKI NG THE PROVISION CONTAINED IN SECTION 69 OF THE ACT. 3.1 IN THIS CONNECTION IT IS MENTIONED IN THE ASSESSMENT ORDER THAT NO EVIDENCE WAS PRODUCED IN SUPPORT OF INVESTMENT OF RS. 50 000/- MADE BY THE ASSESSEE FOR BOOKING A PLOT OF LAND. IN THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE FILED A COPY OF BANK RECEIPT FROM STATE BANK OF PATIALA NOIDA. NO ADVERSE COMMENT WAS MADE BY THE AO IN THE REMAND REPORT EXCEPT THAT NO EVIDENCE WAS FILE D IN THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE THE LD. CIT (A) DELETED THE ADDITION. 3.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE INVESTMENT IS SUPPORTED BY AUDITED ACCOUNTS AND THE EVIDENCE FROM THE BANK WAS ALSO FILED IN THE PRO CEEDINGS BEFORE THE LD. CIT(APPEALS). IN THESE CIRCUMSTANCES WE ARE O F THE VIEW THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THIS ADDIT ION BECAUSE THE SOURCE OF INVESTMENT HAS BEEN PROVED BEFORE HIM. 3.3 IN THE RESULT GROUND NO. 2 IS DISMISSED. ITA NO. 3325(DEL)/2009 5 4. GROUND NO. 3 IS AGAINST DISALLOWANCE OF EXPEND ITURE OF RS. 1 67 310/- AND RS. 40 420/- MADE BY THE AO REP RESENTING 10% OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RUNNING T HE BUSINESS. THE DETAILS OF THE EXPENDITURE HAVE BEEN MENTIONED BY THE AO IN PARAGRAPHS 1 AND 2 OF THE ASSESSMENT ORDER. THESE EXPENSES ARE USUAL BUSINESS EXPENSES AND PERTAIN TO TWO BUSINESSES OF RUNNING WINE SHOP AND CARRYING BUS OPERATION. THE TOTAL EXPENDITURE IN RESPECT OF BUS OPERATION WAS RS. 16 73 131/- AND IT WAS RS. 4 02 345/- IN RESPEC T OF WINE SHOP. 10% OF THE EXPENDITURE WAS DISALLOWED AS NO EVIDENCE WAS PRODUCED BEFORE THE AO. 4.1 IN THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE EXPLAINED THE NATURE OF EXPENSES BEFORE THE AO. IT WAS ALSO SUBMITTED THAT THE EXPENSES WERE INCURRED IN THE COURSE OF BUSINESS . IN THE REMAND REPORT IT WAS SUBMITTED BY THE AO THAT ONLY LEDGER ACCOU NTS OF THE EXPENSES WERE FILED AND THE SAME WERE NOT SUPPORTED BY PRODUCING BILLS OR VOUCHERS. IN VIEW THEREOF IT WAS SUBMITTED BE FORE THE LD. CIT(A) THAT THE BOOKS OF ACCOUNT HAVE BEEN AUDITED AND TH EREFORE THERE IS NO REASON TO DISBELIEVE THE AUDITED ACCOUNT. VO UCHERS BILLS ETC. WERE ALSO ITA NO. 3325(DEL)/2009 6 PRODUCED BEFORE THE LD. CIT(APPEALS) FOR VERI FICATION. THE LD. CIT(A) DELETED THE ADDITION BY RELYING ON THE AUDIT REPORT FURNISHED U/S 44AB OF THE ACT AND IT WAS MENTIONED THAT THE AUDI TORS HAVE NOT POINTED OUT ANY DISCREPANCY IN ACCOUNTING FOR ALL THE EXPE NSES. 4.2 BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO. THERE WAS NO REPRESENTATION ON BEHALF OF THE ASSESSEE. 4.3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT IS NO DOUBT TRUE THAT THE ASS ESSEE HAD NOT PRODUCED ANY EVIDENCE REGARDING ACTUAL INCURRING OF THE EX PENSES IN THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE COURSE OF REMAND PROCEEDINGS LEDGER ACCOUNTS OF THE EXPENSES WERE FILED BEFORE THE A O BUT VOUCHERS AND BILLS ETC. WERE NOT FURNISHED. THESE VOUCHERS WERE PRODUCED BEFORE THE LD. CIT(APPEALS). THERE IS NO FINDING BY THE LD. C IT(A) THAT HE VERIFIED THE BILLS AND VOUCHERS AND FOUND THE EXPENSES IN ORDER. HE RELIED ON THE TAX AUDIT REPORT IN WHICH NO DISCREPANCY WA S MENTIONED. WE ARE OF THE VIEW THAT REMARKS IN TAX AUDIT REPORT DO NOT PR ECLUDE THE AO FROM MAKING ENQUIRY INTO GENUINENESS OF THE EXPENSES BY EXAMINING THE VOUCHERS BECAUSE THE AUDITOR DOES NOT REPLACE THE AO AS INVESTIGATING ITA NO. 3325(DEL)/2009 7 OFFICER OF THE ASSESSEE. IN SUCH CIRCUMSTANCES WE THINK IT FIT TO RESTORE THIS MATTER TO THE FILE OF THE AO TO EXAMINE THE VOUCHERS HEAR THE ASSESSEE AND THEREAFTER DECIDE THIS ISSUE AGAIN. 4.4 IN THE RESULT THIS GROUND IS TREATED AS AL LOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 6 APRIL 2010. SD/- SD/- (I.P.BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 16.04.2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- 1. SHRI MUKESH KUMAR NEW ASHOK NAGAR DELHI. 2. ITO WARD 36(4) NEW DELHI. 3. CIT(A) 4. CIT NEW DELHI. 5. DR ITAT NEW DELHI. ASSISTANT REGISTRA R.