AJIT PATHRE, MUMBAI v. INCOME TAX OFFICER 24(1)(2), MUMBAI

ITA 3755/MUM/2009 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 375519914 RSA 2009
Assessee PAN AFUPP3235N
Bench Mumbai
Appeal Number ITA 3755/MUM/2009
Duration Of Justice 2 year(s) 1 month(s) 11 day(s)
Appellant AJIT PATHRE, MUMBAI
Respondent INCOME TAX OFFICER 24(1)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-07-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2005-2006
Appeal Filed On 10-06-2009
Judgment Text
1 ITA3755 /M/2009 AJIT PATHARE. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A BEFORE SHRI N.V. VASUDEVAN J.M. AND SHRI R.K. PAND A A.M. ITA NO. 3755/MUM/2009 ASSESSMENT YEAR 2005-06 AJIT PATHRE. 98 PATHRE HOUSE MALWANI CHURCH MARVE ROAD MALAD (WEST) MUMBAI 400095. PAN AFUPP3235N VS. INCOME TAX OFFICER C-13 PRATAYKSHAR BHAVAN 5 TH FLOOR BANDRA KURLA COMPLEX MUMBAI 400 051. APPELLANT RESPONDENT APPELLANT BY SHRI V.N. SRIVASTAV A RESPONDENT BY SHRI P.K.B. MENON ORDER PER R.K. PANDA A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DT. 25.3.2009 OF CIT(A)- XXIV MUMBAI RELATING TO A.Y. 2005-06. 2. THE ASSESSEE IN HIS GROUNDS OF APPEAL HAS CHALLENGE D THE ORDER OF THE LD. CIT(A) IN SUSTAINING THE ADDITION OF ` 3 89 078/- OUT OF THE ADDITION OF ` 27 20 630/- MADE BY THE A.O. ON ACCOUNT OF SUNDRY C REDITORS AND AN AMOUNT OF ` 1 25 000/- ON ACCOUNT OF DEPOSIT IN BANK ACCOUNT. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND FILED HIS RETURN OF INCOM E DECLARING TOTAL INCOME OF ` 282670/-. THE RETURN WAS ACCOMPANIED BY PROFIT & LO SS A/C AND BALANCE SHEET. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. NOTED FROM THE BALANCE SHEET THAT THE ASSESSEE HAS SHOWN SUNDRY CR EDITORS OF ` 27 20 630/- AND OUTSTANDING EXPENSES OF ` 15 30 920/-. IN THE ABSENCE OF ANY SATISFACTORY 2 ITA3755 /M/2009 AJIT PATHARE. EXPLANATION SUBMITTED BY THE ASSESSEE THE A.O. ANA LYSED THE PAST RECORDS AND NOTED THAT THE SUNDRY CREDITORS HAVE INCREASED FROM ` 26 18 308/- AS ON 31.3.2004 TO ` 27 20 630/- AS ON 31.3.2005. SIMILARLY OUTSTANDIN G EXPENSES HAVE INCREASED FROM ` 1383964 AS ON 31.3.2004 TO ` 1530920 AS ON 31.3.2005. HE THEREFORE REJECTED THE CONTENTION OF THE ASSES SEE THAT THESE ARE OUTSTANDING FROM 1996-97 AND 1997-98. HE WAS FURTH ER OF THE OPINION THAT IF THE AMOUNTS WERE OUTSTANDING FROM 1996-97 AND 1997- 98 ONWARDS THEN THE AMOUNTS HAVE SINCE BECOME BARRED BY LIMITATION. THE REFORE THE SAME IS TAXABLE U/S 41 OF THE I.T. ACT. SINCE THE ASSESSEE FAILED TO FURNISH THE NAMES AND ADDRESSES OF THE PARTIES THE A.O. ADDED THE SU NDRY CREDITORS OF ` 2720630/- AND OUTSTANDING EXPENSES OF ` 1530920/- TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 THE A.O. SIMILARLY ADDED UNSECURED LOAN OF ` 1081973/- SHOWN IN THE BALANCE SHEET SINCE THE ASSESSEE DID NOT SUBMIT ANY DETAILS LIKE CONFIRMATION NAME AND ADDRESS ETC. OF THE PARTIES. THE A.O. ALSO NOTED FROM THE BANK STATEMENT THAT THERE WERE CASH DEPOSIT OF ` 1 LAC ON 24.3.2005 AND ` 25000/- ON 22.12.2004 IN THE BANK ACCOUNT MAINTAINED WITH N EW INDIA CO-OPERATIVE BANK LTD. IN ABSENCE OF ANY SATISFACTORY EXPLANATI ON FURNISHED BY THE ASSESSEE REGARDING THE SOURCE OF THE SAME THE A.O. MADE ADD ITION OF ` 1 25 000/- TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 IN APPEAL THE LD. CIT(A) AFTER OBTAINING THE R EMAND REPORT FROM THE A.O. DELETED THE AMOUNT OF ` 23 31 552/- FROM THE ADDITION OF ` 27 20 630/- MADE BY THE A.O. ON ACCOUNT OF OUTSTANDING SUNDRY CREDI TORS. SIMILARLY HE SUSTAINED THE ADDITION OF ` 1 25 000/- BEING UNEXPLAINED CASH CREDIT U/S 68 MADE BY THE A.O. HE HOWEVER DELETED THE ADDITION OF ` 10 81 973/- AND ` 15 30 920/- MADE BY THE A.O. ON ACCOUNT OF UNSECURE D LOAN AND OUTSTANDING EXPENSES RESPECTIVELY. AGGRIEVED WITH SUCH PART REL IEF GIVEN BY THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 3 ITA3755 /M/2009 AJIT PATHARE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES PERUSED THE ORDERS OF THE A.O. AND LD. CIT(A) AND T HE VOLUMINOUS PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. FROM THE STATEMENT OF FACTS FILED BEFORE THE LD. CIT(A) AND THE WRITTEN SUBMISSION FILED BEFORE US A S WELL AS VARIOUS OTHER DOCUMENTS FILED IN THE PAPER BOOK THERE IS NO DISP UTE TO THE FACT THAT THE TOTAL TURNOVER OF THE ASSESSEE IS LESS THAN ` 40 LACS AND THE ASSESSEE HAS DISCLOSED MORE THAN 8% PROFIT OF THE GROSS TURNOVER. FURTHER THE INCOME OF THE ASSESSEE IN THE PAST HAD BEEN ASSESSED U/S 44AD OF THE I.T. ACT AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE AND NOT CONTROVERTED BY TH E LD. D.R. WE FIND FROM THE ASSESSMENT ORDER THAT THE A.O. HAD GONE FOR SPECIFI C ADDITIONS ON THE BASIS OF BALANCE SHEET FILED BY THE ASSESSEE AND MADE HUGE A DDITIONS. A SUBSTANTIAL PART OF SUCH HUGE ADDITION HAS BEEN DELETED BY THE LD. CIT(A) AND THE REVENUE IS NOT IN APPEAL AGAINST SUCH RELIEF. WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN VIEW OF PROVISIONS OF SECTION 44AD OF THE ACT NO ADDITION IS CALLED FOR SINCE THE INCOME DISCLOSE D BY THE ASSESSEE IS MORE THAN 8% OF THE GROSS CONTRACT RECEIPT AND CONTRACT RECEIPT IS LESS THAN ` 40 LACS. WE ALSO FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE CASH DEPOSITED IN THE BANK ACCOUNT IS OUT OF THE SURPLUS CASH AVAILABLE WITH THE ASSESSEE OUT OF PREVIOUS WITHDRA WALS. ADMITTEDLY THE ASSESSEE IS A SMALL CONTRACTOR WHOSE TURNOVER IS LE SS THAN ` 40 LACS AND HE HAS DECLARED PROFIT WHICH IS MORE THAN 8% OF THE CONTRA CT RECEIPT. THEREFORE IN OUR OPINION EVEN THOUGH THE ASSESSEE FAILED TO PRODUCE THE NECESSARY BOOKS OF ACCOUNT AND OTHER DETAILS BEFORE THE A.O. A PRAGMA TIC APPROACH SHOULD HAVE BEEN TAKEN BY THE REVENUE AND NO ADDITION SHOULD HA VE BEEN MADE. IN THIS VIEW OF THE MATTER WE SET ASIDE THE ORDER OF THE L D. CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITION OF ` 3 89 078/- SUSTAINED BY THE LD. CIT(A) OUT OF THE SUNDRY CREDITORS AND ` 1 25 000/- AS UNEXPLAINED BANK DEPOSIT. 4 ITA3755 /M/2009 AJIT PATHARE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 22.07.2011. SD/- SD/- (N.V. VASUDEVAN) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 22.07.2011. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIV MUMBAI 4. THE CIT 24 MUMBAI 5. THE DR BENCH A 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI 5 ITA3755 /M/2009 AJIT PATHARE. DATE INITIALS 1 DRAFT DICTATED ON 19.7.11 21.7.11 SR. PS 2 DRAFT PLACED BEFORE THE AUTHOR 20.7.1121.7.11 SR. PS 3 DRAFT PLACED BEFORE THE SECOND MEMBER 4 APPROVED DRAFT COMES TO THE SR. PS SR. PS 5 KEPT FOR PRONOUNCEMENT ON SR. PS 6 FILE SENT TO THE BENCH CLERK SR. PS 7 DATE ON WHICH FILE GOES TO THE HEAD CLERK 8 DATE ON WHICH FILE GOES TO THE AR 9 DATE OF DISPATCH OF ORDER