ITO, Cuttack v. M/s Biswal Constrction, Jajpur

ITA 390/CTK/2012 | 2007-2008
Pronouncement Date: 10-10-2013 | Result: Dismissed

Appeal Details

RSA Number 39022114 RSA 2012
Assessee PAN AAHFB6097P
Bench Cuttack
Appeal Number ITA 390/CTK/2012
Duration Of Justice 1 year(s) 3 month(s) 26 day(s)
Appellant ITO, Cuttack
Respondent M/s Biswal Constrction, Jajpur
Appeal Type Income Tax Appeal
Pronouncement Date 10-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 10-10-2013
Date Of Final Hearing 03-06-2013
Next Hearing Date 03-06-2013
Assessment Year 2007-2008
Appeal Filed On 14-06-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI P.K.BANSAL(ACCOUNTANT MEMBER) AND SHRI D.T.GARASIA (JUDICIAL MEMBER) I.T.A NO.390/ CTK/2012 ASSESSMENT YEAR: 2007 - 08 INCOME TAX OFFICER WARD - 1(2) CUTTACK VS M/S. BISWAL CONSTRUCTION JAJPUR ROAD JAJPUR - 755019 PA NO.AAHFB 6097 P APPELLANT RESPONDENT APPELLANT BY: SHRI K.AJAY KUMAR RESPONDENT BY : NONE (WRITTEN SUBMISSION) DATE OF HEARING: 08/10/2013 DATE OF PRONOUNCEMENT: 10 /10/2013 O R D E R PER BENCH: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DTD. 26.3.2012 OF LD CIT(A) CUTTACK FOR THE ASSESSMENT YEAR 2007 - 08 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. 2. GROUND NO. 1 READS AS UNDER: IN THE FACTS AND CIRCU MSTANCES OF THE CASE LD FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED TO DIRECT THE AO TO ESTIMATE NET PROFIT @ 8% ON THE DIFFERENTIAL AMOUNT OF BILL RECEIVABLE AND ACTUAL AMOUNT SHOWN IN THE BALANCE SHEET - WHEN THE AO HAS CONSIDERED SUCH DIFFERENTIAL AMOUNT OF RS.37 25 865/ - AS UNEXPLAINED INVESTMENT U/S.69A. AS THE ASSESSEE HAS ALREADY DEBITED ALL RELEVANT EXPENSES IN ORDER TO GET THE BILLS RECEIVABLE WHICH HAS NOT BEEN INCLUDED IN THE GROSS RECEIPT IT IS NOT PROPER TO DECIDE THAT THE DIFFERENTIAL OF BILLS RECEIVABLE IS TO BE TAXED @ 8%. 2 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CIVIL CON TRACTOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICE R ISSUED AND SERVED NOTICE U/.S 143(2) ON THE ASSESSEE ON 12.9.2009 FIXING THE HEARING ON 29.9.2009. THERE WAS NO COMPLIANCE BY THE ASSESSEE ON VARIOUS DATES. HOWEVER ON 29.9.2009 LD AR APPEARED BEFORE THE AO AND HAS FILED COPY OF BANK ACCOUNT OF URBAN CO - OPERATIVE BANK LTD. GENERAL LEDGER AND TAX AUDIT REPORT . AO OBSERVED THAT EXCEPT THESE DOCUMENTS NOTHING WAS PRODUCED TO SUBSTANTIATE THE CLAIM OF EXPENSES IN THE PROFIT AND LOSS ACCOUNT. IN VIEW OF ABOVE AO ESTIMATED PROFIT @ 8% ON GROSS CONTRACT RECEIPTS DISCLOSED BY THE ASSESSEE AT RS.1 91 11 948.17 WHICH COM ES TO RS.15 28 955/ - . FURTHER AO ALSO TREATED THE DIFFERENTIAL AMOUNT OF RS.37 25 865/ - AS CONCEALED ASSETS AND BROUGHT IT TO TAX U/S.69 A OF THE ACT. 4. IN THE FIRST APPEAL LD CIT(A) DIRECTED THE AO TO ESTIMATE THE NET PROFIT @ 8% ON GROSS RECEIPTS OF RS.1 91 11 948.17 NET DEPRECIATION BY OBSERVING AS UNDER: 6.1 I HAVE GONE THROUGH THE ASSESSMENT FOLDER FOR THE AY 2007 - 08. THE APPELLANT IS A CIVIL CONTRACTOR. THE APPELLANT IN THE PRESENT CASE FAILED TO FILE THE DETAILS CALLED FOR BY THE AO U/S. 142( 10 ON 20.10.2009 WHICH WAS SERVED ON THE ASSESSEE ON 23.10.2009 FIXING THE CASE FOR HEARING ON 04.11.2009. THE AO HAD ANNEXED A QUESTIONNAIRE INCORPORATING 17 ITEMS ALONG WITH NOTICE U/S. 142(1) DATED 20.10.2009. THERE WAS NO COMPLIANCE BY THE ASSESSEE ON 04.11.2009. THE AO AGAIN SENT A NOTICE ON 09.11.2009 FIXING THE CASE FOR HEARING ON 18.11.2009. AGAIN THERE WAS NO COMPLIANCE BY THE ASSESSEE. THE AO ADJOURNED THE CASE FOR HEARING ON 07.12.2009 AND ASKED THE ASSESSEE TO PRODUCE BOOKS OF A/C. AND OTHER R ELEVANT DOCUMENTS IN SUPPORT OF THE INCOME SHOWN BY HIM. AGAIN THERE WAS NO COMPLIANCE BY THE ASSESSEE. THE A/R OF THE ASSESSEE COULD PRODUCE BEFORE THE AO ON 07.12.2009 ONLY COPY OF BANK ACCOUNT GENERAL LEDGER AND TAX AUDIT REPORT. HE COULD NOT PRODUC E THE OTHER DETAILS NUMBERING 17 ASKED BY THE AO VIDE NOTICE U/S. 142(1) ISSUED ON 20.10.2009 WHICH WAS SERVED ON THE ASSESSEE ON 23.10.2009. IN VIEW OF THE ABOVE THE AO WAS JUSTIFIED IN REJECTING THE BOOKS OF A/S. AND ESTIMATING THE PROFIT. A PERUSAL OF THE ABOVE FACTS CLEARLY INDICATE THAT THE CASE OF THE APPELLANT IS DISTINGUISHABLE FROM THE CASE OF CIT V. EAST COAST CONSTRUCTIONS AND IND. LTD. & CIT V. SIMPLEX CONCRETE PILES (INDIA) P. LTD. IN THE ABOVE TWO CASES RELIED ON BY THE LD. A/R THE BOOKS OF A/C. HAVE NOT BEEN REJECTED AND PROFIT HAS NOT BEEN ESTIMATED. IN THOSE CASES THE ISSUE WAS TIME OF ACCRUAL. IT HAS BEEN HELD IN PADMASUNDRA RAO V. STATE OF TN 255 ITR 147 (SC); CIT V. RAM NARAIN 227 ITR 401; GOVT. OF INDIA V. JAGADISH 221 ITR 338 AND CF VANAJA V. CIT 208 ITR 161 THAT RELIANCE SHOULD NOT BE PLACED ON A DECISION WITHOUT DISCUSSING HOW THE FACTUAL SITUATION FITS IN WITH THE FACTUAL SITUATION OF THE DECISION ON WHICH RELIANCE IS PLACED. IT HAS ALSO BEEN HELD IN PADMASUNDRA RAO V. STATE OF T N THAT CIRCUMSTANTIAL FLEXIBILITY E.G. ONE ADDITIONAL OR DIFFERENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS 3 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 IN TWO CASES. THEREFORE THE CASE OF THE APPELLANT IS DISTINGUISHABLE FROM T HE CASES RELIED ON BY THE LD. A R. 6.2 SECTION 145A OF THE ACT 1961 STATES THAT PURCHASE SALE AND INVENTORY SHALL BE VALUED BY TAKING INTO ACCOUNT THE AMOUNT OF ANY TAX DUTY CESS OR FEE. AN EXTRACT OF SECTION 145A IS AS FOLLOWS: (A) THE VALUATION OF PURCHASE AND SALE OF GOODS AND INVENTORY FOR THE PURPOSES OF DETERMINING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL BE (I) IN ACCORDANCE WITH THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THE ASSESSEE AND (II) FURTHER ADJUSTED TO INCLUDE THE AMOUNT OF ANY TAX DUT Y CESS OR FEE (BY WHATEVER NAME CALLED) ACTUALLY PAID OR INCURRED BY THE ASSESSEE TO BRING THE GOODS TO THE PLACE OF ITS LOCATION AND CONDITION AS ON THE DATE OF VALUATION. EXPLANATION FOR THE PURPOSES OF THIS SECTION ANY TAX DUTY CESS OR FEE (BY WHATEV ER NAME CALLED) UNDER ANY LAW FOR THE TIME BEING IN FORCE SHALL INCLUDE ALL SUCH PAYMENT NOTWITHSTANDING ANY RIGHT ARISING AS A CONSEQUENCE TO SUCH PAYMENT. IN GOVERNMENT OF ANDHRA PRADESH V. EAST INDIA COMMERCIAL CO. LTD. AIR 1957 AP 83 86 88(FB) IT IS HELD THAT THE TURNOVER OF THE DEALER INCLUDES THE ENTIRE SUM PAID BY THE PURCHASER AS CONSIDERATION FOR THE SALE OF GOODS THOUGH PART OF ITS MIGHT BE STYLED PRICE AND ANOTHER PART AS SALES TAX IN THE BILL OR INVOICE ISSUED TO THE PURCHASER. IN VIEW OF THE ABOVE THERE IS NO MERIT IN THE CONTENTION OF THE LD. A/R THAT WHILE ESTIMATING INCOME VAT HAS TO BE EXCLUDED FROM GROSS TURNOVER AS IT DOES NOT CONTAIN ANY ELEMENT OF PROFIT. 6.3 THE HONBLE ITAT CUTTACK BENCH CUTTACK IN THE CASE OF M/S. SN KANUNGO & ASSOCIATES V. ACIT CIRCLE - 2(1) CUTTACK (ITA NO. 090/CTK/2011 FOR AY 2006 - 07) FOUND IT REASONABLE FOR THE AO TO ADOPT THE NET PROFIT @8% ON THE GROSS RECEIPTS FROM CIVIL CONTRACT. THE HONBLE TRIBUNAL ALSO FOUND ADOPTION OF 8% NET DEPRECIATION IN THE CASE OF ANOTHER CIVIL CONTRACTOR IN ITO V. NITYANANDA SWAIN (ITA NO. 491/CTK/2011 & CO NO. 35/CTK/2011 FOR THE AY 2008 - 09) REASONABLE. IN VIEW OF THE ABOVE DECISIONS OF THE HONBLE TRIBUNAL IN SIMILAR CASES THE AO IS DIRECTED TO ESTIMATE NET PROFIT @8% ON GROSS RECEIPTS OF RS. 1 91 11 948/ - NET DEPRECIATION. 6.4. THE AO HAS GONE THROUGH THE TDS CERTIFICATE ISSUED BY THE CONTRACTEE VISA STEEL LTD. AMOUNTS HAVE BEEN CREDITED TO THE ASSESSEES ACCOUNT BUT NOT CREDITED IN THE BANK ACCOUNT AS ON 31.03.2007. H E HAS ARRIVED AT A DIFFERENTIAL AMOUNT BETWEEN THE BALANCE RECEIVABLE AND THE ONE SHOWN IN THE BALANCE SHEET. THE DIFFERENTIAL AMOUNT COMES TO RS. 37 25 865/ - . 4 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 6.5. IN THE CASE OF CIT VS.PRESIDENT INDUSTRIES (2002) 258 ITR 654 (GUJ) IN THE COURSE OF SUR VEY CONDUCTED IN THE PREMISES OF THE ASSESSEE EXCISE RECORDS WERE FOUND WHICH DISCLOSED GODOWN SALES NOT DISCLOSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE AO MADE ADDITION OF UNDISCLOSED INCOME OF THE ENTIRE SALE PROCEEDS THEREOF. THE HONBLE HIGH COURT HELD THAT THE AMOUNT OF SALES COULD NOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAD NOT DISCLOSED THE SALES. THE SALES ONLY REPRESENTED THE PRICE RECEIPT BY THE SELLER OF THE GOODS; ONLY THE REALIZATION OF THE EXCESS OVER THE COST INCURRED COULD FO RM PART OF THE PROFIT INCLUDED IN THE CONSIDERATION FOR THE SALES. SINCE THERE WAS NO FINDING TO THE EFFECT THAT INVESTMENT BY WAY OF INCURRING THE COST IN ACQUIRING THE GOODS WHICH WERE SOLD HAD BEEN MADE BY THE ASSESSEE AND THAT INVESTMENT WAS ALSO NOT DISCLOSED ONLY THE EXCESS OVER THE COST INCURRED COULD BE TREATED AS PROFIT. . 6.6 IN VIEW OF THE LEGAL PRINCIPLES LAID DOWN AT PARA 6.5 HEREINABOVE THE AO IS DIRECTED TO ESTIMATE NET PROFIT @ 8% ON THE DIFFERENTIAL AMOUNT OF RS.37 25 865/ - AND BRING IT TO TAX. 5 . LD D.R. SUBMITTED THAT ASSESSEE DID NOT FILE ALL DOCUMENTS REQUIRED BY THE AO AND ON THE BASIS OF WHATEVER DOCUMENTS SUBMITTED BEFORE THE AO THE AO HAS ALREADY ESTIMATED THE NET PROFIT @ 8% OF DIFFERENTIAL AMOUNT OF BILL RECEIVABLE S ON THE ACTUAL AMOUNT SHOWN IN THE BALANCE SHEET. AO HAS ALREADY CONSIDERED THE DIFFERENTIAL AMOUNT OF RS.37 25 865/ - AS UNEXPLAINED INVESTMENT UNDER SECTION 69A OF THE ACT. THEREFORE LD CIT(A) IS NOT JUSTIFIED IN HOLDING THAT THE DIFFERENTIAL RECEIVABL E HAS TO BE TAXED @ 8%. 6 . NO ONE APPEARED ON BEHALF OF ASSESSEE. HOWEVER WRITTEN SUBMISSION HAS BEEN PLACED ON RECORD. IN THE WRITTEN SUBMISSION IT IS INTER ALIA SUBMITTED AS UNDER: THE RESPONDENT IS A PARTNERSHIP FIRM CARRYING ON THE BUSINESS OF WORKS CONTRACT. DURING THE FINANCIAL YEAR 2006 - 07 THE RESPONDENT HAS EXECUTED WORKS CONTRACT OF RS.1 91 11 948.17 WHICH WAS FOR & ON BEHALF OF ONE PARTY ONLY I.E. VISA STEEL LTD. THE ABOVE COMPANY HAS CERTIFIED THE VALUE OF WORKS AND ISSUED TDS CERTIFIC ATES ACCORDINGLY. THAT THE RESPONDENTS BALANCE SHEET FILED WITH THE IT DEPARTMENT WAS WRONG AS BECAUSE THE BILLS RECEIVABLE OF RS.37 25 865/ - THOUGH INCLUDED IN THE GROSS TURNOVER OF RS.1 91 11 948/ - WAS NOT APPEARING IN THE BALANCE SHEET. SINCE THE RES PONDENT HAD NOT PRODUCED THE ACCOUNTS BEFORE THE LD AO THE PROFIT WAS ESTIMATED @ 8% ON TURNOVER AND THE AO FURTHER ADDED RS.37 25 865/ - TO 5 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 THE TOTAL INCOME. BEING AGGRIEVED THE RESPONDENT FILED AN APPEAL BEFORE THE CIT WHO CONFIRMED THE RATE OF ESTIMATIO N @ 8% AND DIRECTED TO ESTIMATE FURTHER 8% ON DISPUTED AMOUNT OF RS.37 25 865/ - . EVEN THOUGH T HE FACT WAS THAT THE AMOUNT OF R S.37 25 865/ - WAS INCLUDED IN THE TURNOVER OF RS.1 91 11 948/ - AND THE ASSESSEE HAD OFFERED IT AS INCOME IT WAS JUST THAT THE BA LANCE SHEET WAS ERRONEOUS AND NOT THE TURNOVER DISCLOSED IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE TO BUY PEACE AND MIND ACCEPTED THE LD CIT DECISION AND DID NOT PREFER ANY APPEAL. THE APPELLANTS CONTENTION THAT THE WHOLE AMOUNT OF RS.37 25 865/ - SHOULD BE TREATED AS INCOME ALONGWITH RS.15 28 955/ - (I. E. 8% OF RS.1 91 11 948.17) WHICH COMES TO A TOTAL OF RS.52 54 820/ - I.E. 27.49% OF THE GROSS TURNOVER WHICH IS EXCESSIVE AND UNREASONABLE IN THIS LINE OF BUSINESS. THE APPELLANT HAS NOT PROVED ANY SUPPRE SSION OF TURNOVER. THE APPELLANTS CONTENTION THAT THE BILLS RECEIVABLE OF RS.37 25 865/ - HAS NOT BEEN INCLUDED IN GROSS RECEIPT IS FALSE. 7. WE HAVE HEARD LD D.R AND PERUSED THE ORDERS OF AUTHORITIES BELOW AS WELL AS WRITTEN SUBMISSION FILED BY THE ASSESSEE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND THAT ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON THE BUSINESS OF WORKS CONTRACT. DURING THE YEAR ASSESSEE HAS EXECUTED WORKS CONTRACT OF RS.1 91 11 948.17 WHICH WAS FOR & ON BEHALF OF ONE PARTY ONLY I.E. VISA STEEL LTD. THE ABOVE COMPANY HAS CERTIFIED THE VALUE OF WORKS AND ISSUED TDS CERTIFICATES ACCORDINGLY. ASSESSEE HAS FILED BALANCE SHEET WHEREIN RECEIVABLE AMOUNT OF RS.37 25 865/ - THOUGH INCLUDED IN THE GROSS TURNOVER BUT WAS N OT APPEARING IN THE BALANCE SHEET. EVEN THOUGH ASSESSEE HAS INCLUDED RS.37 25 865/ - IN THE TURNOVER OF RS.1 91 11 948/ - AND ASSESSEE HAD OFFERED IT AS INCOME AND ACCEPTED THIS BALANCE SHEET BECAUSE ASSESSEE DID NOT FILE APPEAL AGAINST THE DECISION OF LD C IT(A). ASSESSEE DID NOT SUPPRESS ANY TURNOVER. LD CIT(A) AFTER VERIFYING THE BOOKS HAS HELD THAT RECEIVABLE AMOUNT HAS BEEN INCLUDED IN TOTAL TURNOVER . THIS FACT IS NOT DISPUTED BY THE DEPARTMENT. THEREFORE LD CIT(A) HAS ESTIMATED 8% ON GROSS RECEIPT OF RS.1 91 11 948.17 NET DEPRECIATION FOLLOWING THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. S.N.KANUNGO & ASSOCIATES VS ACIT (I.T.A. NO.090/CTK/2011 FOR A.Y. 2006 - 07). IN THAT CASE THE TRIBUNAL HAS ALSO ADOPTED 8% NET DEPRECIA TION IN ANOTHER CIVIL CONTRACTOR CASE IN I.T.A. NO.491/CTK/2011 IN THE CASE OF ITO VS. NITYANANDA SWAIN. WE ALSO FIND THAT LD CIT(A) 6 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 HAS FOLLOWED THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRESIDENT INDUSTRIES 258 ITR 654 (GUJ) W HEREIN IT WAS HELD THAT THE SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE EXCISE RECORD WERE FOUND WHICH DISCLOSED GODOWN SALES NOT DISCLOSED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE AO MADE THE ADDITION OF UNDISCLOSED INCOME OF THE ENTIRE SA LE PROCEEDS. THE HONBLE HIGH COURT HAS TAKEN A VIEW THAT THE AMOUNT OF SALES COULD NOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAD NOT DISCLOSED THE SALES. THE SALES ONLY REPRESENTED THE PRICE RECEIPT BY THE SELLER OF THE GOODS; ONLY THE REALIZATION OF THE EXCESS OVER THE COST INCURRED COULD FORM PART OF THE PROFIT INCLUDED IN THE CONSIDERATION FOR THE SALES. FOLLOWING THE ABOVE DECISIONS LD CIT(A) HAS DIRECTED THE AO TO ESTIMATE THE NET PROFIT @ 8% ON DIFFERENTIAL AMOUNT OF RS.37 25 865/ - AND BRING T O TAX. NO CONTRARY DECISION HAS BEEN PLACED ON RECORD BY THE DEPARTMENT TO TAKE A DIFFERENT VIEW THAN TAKEN BY LD CIT(A). THEREFORE IN OUR VIEW LD CIT(A) IS JUSTIFIED IN DIRECTING THE AO TO ESTIMATE NET PROFIT @ 8% ON THE DIFFERENTIAL AMOUNT OF RS.37 2 5 865/ - . THIS GROUND IS THEREFORE REJECTED. 8 . GROUND NO.2 READS AS UNDER: IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.6 00 000/ - TOWARDS INTRODUCTION OF FRESH CAPITAL BY THE PARTNERS IN THE FIRM - WHEN THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF SUCH INTRODUCTION OF CAPITAL DURING THE ASSESSMENT PROCEEDINGS. 9 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT ALL THE PARTNERS OF THE FIRM HAVE INTRODUCED FRESH CAPITAL OF RS.2 00 000/ - EACH TOTALING TO RS.6 00 000/ - DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. SINCE THE GENUINENESS OF THE INTRODUCTION OF CAPITAL BY PARTNERS IS NOT PROVED AO TREATED THE SAME AS INCOME OF THE FIRM FROM SOURCES NOT DISCLOSED TO THE DEPARTMENT. 10. . IN FIRST APPEAL LD CIT(A) DELETED THE ADDITION OF RS.6 00 000/ - BY OBSERVING AS UNDER: 7 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 THE ADDITION OF RS.6 00 000/ - MADE BY THE AO ON FRESH CAPITAL INTRODUCED BY THE PARTNERS IS DEVOID OF EVIDENCE WITHOUT ANY SUPPORT FROM ENQUI RY. THEREFORE THE ADDITION OF RS.6 00 000/ - MADE BY HIM AS INCOME FROM UNDISCLOSED SOURCES IS DELETED. 11 . IN THE WRITTEN SUBMISSION ASSESSEE HAS SUBMITTED THAT ALL THREE PARTNERS HAD SUFFICIENT DRAWINGS IN THE EARLIER ASSESSMENT YEARS AND ALSO HAD OT HER SOURCES OF INCOME. LD D.R. SUBMITTED THAT GENUINENESS OF THE PARTNERS IS NOT PROVED; THEREFORE AO HAS MADE THE ADDITI ON WHICH IS TO UPHEL D. 12 . HAVING HEARD LD D.R. WE FIND THAT LD CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT AO HAS NOT MADE ANY ENQUIRY IN RESPECT OF THIS ADDITION. IT IS THE CONTENTION OF THE ASSESSEE IN THE WRITTEN SUBMISSION THAT THE PARTNERS HAD SUFFICIENT DRAWING IN EAR LIER ASSESSMENT YEARS AND ALSO HAD OTHER SOURCE OF INCOME. HON'BLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. JAISWAL MOTOR FINANCE (1983) 141 ITR 706 HAS HELD THAT IF THERE ARE CASH CREDIT ENTRIES IN THE BOOKS OF A FIRM IN WHICH THE ACCOUNTS OF THE INDIVID UAL PARTNERS EXISTS AND IT IS FOUND AS A FACT TH AT CASH WAS RECEIVED BY THE FIRM FROM ITS PARTNERS THEN IN THE ABSENCE OF ANY MATERIAL TO INDICATE THAT THEY WERE THE PROFITS OF THE FIRM IT COULD NOT BE ASSESSED IN THE HANDS OF THE FIRM. THE SAME VIEW HAS A LSO BEEN TAKEN BY HON'BLE MP HIGH COURT IN CASE OF CIT VS. METACHEM INDUSTRIES (2000) 245 ITR 160 THAT ONCE IT IS ESTABLISHED THAT THE AMOUNT HAS BEEN INVESTED BY A PARTICULAR PERSON BE HE A PARTNER OR AN INDIVIDUAL THEN THE RESPONSIBILITY OF THE A SSESSEE IS OVER. WHETHER THAT PERSON IS AN INCOME TAX PAYER OR NOT AND WHERE HE HAD BROUGHT THIS MONEY FROM IS NOT THE RESPONSIBILITY OF THE FIRM. THE MOMENT THE FIRM GIVES A SATISFACTORY EXPLANATION AND PRODUCES THE PERSON WHO HAS DEPOSITED THE AMOUNT T HEN THE BURDEN OF THE FIRM IS DISCHARGED AND IN THAT CASE THAT CREDIT ENTRY CANNOT BE TREATED TO BE THE INCOME OF THE FIRM FOR THE PURPOSE OF INCOME TAX. IN THE CASE BEFORE US MERELY BECAUSE IN ASSESSEES FIRM OTHER PARTNERS HAVE INTRODUCED FRESH CAPITA L IS NOT A GROUND TO DISALLOW THE SAME WITHOUT BRINING ANY MATERIAL ON RECORD TO ESTABLISH THAT THE AMOUNT IS THE INCOME NOT DISCLOSED TO THE DEPARTMENT. CONSIDERING 8 I.T.A NO.390/CTK/2012 ASSESSMENT YEAR:2007 - 08 THE FACTS OF THE CASE IN THE LIGHT OF ABOVE DECISIONS WE DO NOT FIND ANY MERIT IN THE D EPARTMENTAL APPEAL . THIS GROUND IS REJECTED. 1 3 . IN THE RESULT APPEAL FILED BY DEPARTMENT IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER 2013 SD/ - (P.K.BANSAL) (ACCOUNTANT MEMBER) SD/ - (D.T.GARASIA) (JUDICIAL MEMBER) CUTTACK: DATED 10 /10/2013 PARIDA COPY TO: 1. THE APPELLANT : INCOME TAX OFFICER WARD - 1(2) CUTTACK 2. THE RESPONDENT : M/S. BISWAL CONSTRUCTION JAJPUR ROAD JAJPUR - 755019 3. COMMISSIONER OF INCOME TAX (APPEAL) CUTTACK 4. COMMISSIONER OF INCOME TAX CUTTACK 5. DEPARTMENTAL REPRESENTATIVE ITAT CUTTACK //TRUE COPY// BY ORDER SR.PS ITAT CUTTACK