ITO, Gwalior v. Sh. Charanjeet Singh Sethi, Gwalior

ITA 406/AGR/2009 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Partly Allowed

Appeal Details

RSA Number 40620314 RSA 2009
Assessee PAN AGGPS1646C
Bench Agra
Appeal Number ITA 406/AGR/2009
Duration Of Justice 2 year(s) 6 month(s) 6 day(s)
Appellant ITO, Gwalior
Respondent Sh. Charanjeet Singh Sethi, Gwalior
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 30-03-2012
Date Of Final Hearing 21-03-2012
Next Hearing Date 21-03-2012
Assessment Year 2005-2006
Appeal Filed On 24-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI A.L. GEHLOT ACCOUNTANT MEMBER ITA NO.406/AGR/2009 ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER VS. SHRI CHARANJEET SINGH SE THI WARD 1(2) GWALIOR. A-701 ASHADEEP APARTMENTS PLOT 2B SECTOR 2 DWARKA NEW DELHI (PAN: AGGPS 1646 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD SR. D.R. RESPONDENT BY : SHRI PANKAJ GARGH ADVOCATE DATE OF HEARING : 21.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER A.L. GEHLOT ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 30.06.2009 PASSED BY THE LD. CIT(A) GWALIOR FOR THE ASSESSMEN T YEAR 2005-06 ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(APPEALS) HAS ERRED IN DELEING THE ADDITION OF R S.13 60 000/- ON ITA NO.406/AGR/2009 A.Y. 2005-06 2 ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 FOR LOAN G IVEN TO SMT. HARLEEN KAUR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 6 50 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S. 69 FOR ADVAN CE GIVEN TO PROPERTY DEALERS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.9 14 570/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S. 69A FOR CHEQ UES-IN-HANDS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT (APPEALS) HAS ERRED IN DELETING THE CONSOLIDATED AD DITION OF RS.2 10 043/- ON ACCOUNT OF INCOME FROM LIQUOR SHOP S. 2. THE BRIEF FACTS OF FIRST GROUND ARE THAT THE ASS ESSING OFFICER MADE ADDITION OF RS.22 60 000/- DEPOSITED BY THE ASSESSEE WITH SM T. HARLEEN KAUR. THE ASSESSING OFFICER MADE PROTECTIVE ADDITION OF RS.22 60 000/- IN THE HANDS OF THE ASSESSEE AND SUBSTANTIVE ADDITION IN THE HANDS OF S MT. HARLEEN KAUR. THE AMOUNT OF ADDITION WAS TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF BALANCE SHEET FILED BY THE ASSESSEE WHEREAS THE AMOUNT OF ADDITION AS P ER ORDER IN CASE OF SMT. HARLEEN KAUR IS ` 22 07 172/-. IN THE REMAND REPORT THE ASSESSING O FFICER ACCEPTED THAT THESE ADDITIONS CANNOT BE MADE UNDER SECTION 69 OR 69A OF THE INCOME TAX ACT 1961 AS THEY ARE PART OF THE ASSET SIDE OF THE BALANCE SHEET. THE EXPLANATION IN CASE OF SMT. HARLEEN KAUR WHERE ADD ITION OF RS.22 60 000/- HAS BEEN MADE HAS BEEN FOUND CORRECT. THE CIT(A) DELE TED THE ADDITION AS OUT OF ITA NO.406/AGR/2009 A.Y. 2005-06 3 ADDITION OF RS.22 07 172/- RS.9 00 000/- HAS BEEN ACCEPTED IN REPORT BY ASSESSING OFFICER FILED BEFORE THE CIT(A) IN CASE OF SMT. HAR LEEN KAUR. THE CIT(A) ALSO DELETED BALANCE AMOUNT RS.13 07 172/- MADE U/S. 68 OF THE ACT IN THE HANDS OF SMT. HARLEEN KAUR. 3. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES WE FIND THAT SUBSTANTIVE ADDITION MADE IN THE HANDS OF SMT. HARLEEN KAUR HAS BEEN ACCEPTED AS GENUINE DEPOSIT WHICH HAS BEEN DECIDED BY I.T.A.T. AGRA BE NCH IN ITA NO.380/AGR/2009 ORDER DATED 23.03.2012. THE RELEVANT FACTS AND FIN DING IS REPRODUCED AS UNDER :- 13. THE BRIEF FACTS IN RESPECT OF FIRST GROUND OF REVENUES APPEAL ARE THAT THE ASSESSING OFFICER MADE ADDITION OF ` 91 24 737/- UNDER SECTION 68 OF THE ACT. ITEM-WISE DETAILS HAS BEEN GIVEN BY THE CIT(A) IN HIS ORDER AT PAGE NO.2. THE ASSESSEE FURNISHED THE DETAILED SUBMISSIONS TO THE CIT(A). THE CIT(A) FORWARDED TH E SAME TO THE ASSESSING OFFICER FOR HIS REMAND REPORT. THE ASSES SING OFFICER FURNISHED REMAND REPORT DATED 25.06.2009. IN THE R EMAND REPORT THE ASSESSING OFFICER SATISFIED WITH THE CASH CREDIT OF ` 59 04 840/- BUT HE DID NOT SATISFY WITH THE EXPLANATION OF THE ASSESSE E IN RESPECT OF BALANCE AMOUNT OF ADDITION ` 32 19 897/- AS DETAILED UNDER :- JAPINDER KAUR ` 555992 CHARANJEET SINGH SETHI ` 1307172 SHARANJEET SINGH SETHI ` 1356733 -------------- ` 3219897 ------------- ITA NO.406/AGR/2009 A.Y. 2005-06 4 14. AFTER CONSIDERING THE ASSESSEES SUBMISSION AND REMAND REPORT OF THE ASSESSING OFFICER THE CIT(A) DELETED THE AD DITION OF BALANCE AMOUNT ` 32 19 897/- AS UNDER :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION MADE BY THE LEARNED A.R. ALSO THE COMMEN TS OF A.O. IN THE REMAND REPORT. THE A.O. HAS VERIFIED T HAT THE AMOUNT GIVEN TO THE APPELLANT BY ALL THE 3 PERSONS HAVE COME FROM THE AMOUNT THEY RECEIVED BY WAY OF REDEMP TION OF UNITS OF FRANKLIN TEMPLETON MANUAL FUNDS. THE PARTICULARS IN CASE OF JAPINDER KAUR HAS BEEN VERIF IED AND CONFIRMED THAT A SUM OF ` 535992/- HAS BEEN RECEIVED BY JAPINDER KAUR FROM THIS MUTUAL FUND AND HAS BEEN CREDITED IN HER BANK A/C. THE EVIDENCES OF BOTH TH E BANK A/C AND MUTUAL FUND ARE ON RECORD. THIS HAS BEEN C REDITED IN HER BANK A/C ON 10.04.04 AND ` 555992/- HAS BEEN GIVEN TO THE APPELLANT ON 12.04.04. THE A.O. HAS FURTHER GONE NEXT STEP TO VERIFY FROM WHERE THESE MFS WERE PURC HASED BY HER. THEY WERE PURCHASED IN PREVIOUS A.Y. 2004- 05 IN MARCH 2004 HOWEVER NO SUCH WITHDRAWAL APPEARS IN CANARA BANK A/C OF JAPINDER KAUR HENCE THE A.O. HA S NOT ACCEPTED. THE A.R. HOWEVER SAYS THAT IT IS NOT POS SIBLE FOR THE APPELLANT TO SHOW FROM WHERE THESE MFS WERE PURCHASED BY A THIRD PARTY AND THEY ARE ALSO NOT IN THIS A.Y. 2005-06. HOWEVER IN CASE OF CHARANJEET SINGH THE A.O. HAS GONE FURTHER. HE HAS VERIFIED THAT THE AMOUNT RECE IVED FROM FRANKLIN TEMPLETON MUTUAL FUND IS CREDITED IN HIS B ANK A/C AND OUT OF THIS ` 1307172/- HAS BEEN GIVEN TO THE APPELLANT ON 12.04.04 AND OUT OF THIS ` 1 LAC. THE A.O. HAS VERIFIED THAT SHRI CHARANAJEET SINGH SETHI HAS PURCHASED THE SE MFS FROM THIS BANK A/C ` 1 LAC ON 10.03.04 & 11.03.04 RESPECTIVELY IS APPEARING HOWEVER THE APPELLANT I S UNABLE TO EXPLAIN THE SOURCE OF THESE CREDITS IN A/C OF SH RI CHARANJEET SINGH SETHI. ITA NO.406/AGR/2009 A.Y. 2005-06 5 THE SITUATION IN CASE OF SHARANJEET SINGH ANAND ` 1356766/- IS SIMILAR TO MS. JAPINDER KAUR. THE LEARNED COUNSEL FOR THE APPELLANT VEHEMENTLY ARGUED THAT TO ESTABLISH GENUINENESS OF CREDIT THE APPELLANT HAS TO ESTABLISH IDENTITY GENUINENESS AND ALSO CRED IT WORTHINESS BY FILING ALL NECESSARY PAPERS INCLUDING THEIR AFFIDAVITS AND BANK A/C. TO MAKE APPELLANT RESPONS IBLE TO ESTABLISH SOURCE OF SOURCE IN CASE OF JAPINDER KAUR AND SHRANJEET KAUR AND SOURCE OF SOURCE OF SOURCE IN CA SE OF CHARANJEET SINGH ANAND IS TOO DIFFICULT FOR THE APP ELLANT. IN FACT CHARANJEET SINGH ` 61600/- AND JAPINDER KAUR ` 120120/- IN THE SAME A.Y. HAS BEEN ACCEPTED BY THE A.O. HIMSELF. THE LEARNED A.R. HAS RELIED UPON THE SUBM ISSION OF CONFIRMATION AFFIDAVIT THE SOURCE FROM WHERE THES E DEPOSITS ARE MADE THE RECORD OF THEIR PERSONAL ASS ESSMENTS THEIR BALANCE SHEET THEIR BANK A/CS COPY OF STATEM ENT OF A/C WITH FRANKLIN TEMPLETON MUTUAL FUNDS. ALL THESE SH OW TO ESTABLISH THAT THE APPELLANT HAS DISCHARGED HIS ONU S TO PROVE THE IDENTITY GENUINENESS AND CREDIT WORTHINE SS OF ALL THE THREE DEPOSITORS. 15. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE CIT(A) HIM SELF ADMITTED THE FACT THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SO URCE OF DEPOSIT. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED T HAT THE ASSESSING OFFICER IS EMPOWERED TO EXAMINE THE SOURCE OF SOURC E. HE RELIED UPON THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE C ASE OF RAM LAL AGARWAL VS. CIT 280 ITR 547 (ALL) AND THE JUDGEMEN T OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. BIJU PATNAIK 160 ITR 674 (SC). 16. LD. AUTHORISED REPRESENTATIVE ON THE OTHER HAN D RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE SOLE OBJ ECTION OF THE ASSESSING OFFICER WAS THAT THE ASSESSEE FAILED TO P ROVE THE CAPACITY OF DEPOSITOR. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS FURNISHED SUFFICIENT EVIDENCE IN THE FORM OF BA LANCE SHEET COPY OF BANK ACCOUNT ETC. LD. AUTHORISED REPRESENTATIVE RE FERRED PAGE NOS. 3 ITA NO.406/AGR/2009 A.Y. 2005-06 6 5 6 7 & 8 OF PAPER BOOK IN RESPECT OF JAPINDER KA UR FROM WHOM THE ASSESSEE ACCEPTED DEPOSIT OF ` 5 55 992/-. LIKEWISE PAGE NOS.15 16 18 & 20 OF PAPER BOOK WAS REFERRED IN RESPECT OF CH ARANJEET SINGH SETHI AND PAGE NOS.28 29 30 & 33 OF PAPER BOOK WA S REFERRED IN CASE OF SHARANJEET SINGH ANAND. 17. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE NOTICED THAT THE CIT(A) BEFORE DELETING THE ADDITION CALLED THE REMAND REPORT FROM THE ASSESSIN G OFFICER AND THE ASSESSING OFFICER HIMSELF ACCEPTED THE EXPLANATION OF THE ASSESSEE IN RESPECT OF PART CASH CREDIT FOR ` 59 04 840/-. THE CIT(A) HAS DELETED THAT ADDITION OF ` 59 04 840/- AGAINST WHICH THE REVENUE IS NOT IN APPEAL. IN RESPECT OF REMAINING THREE CASH CREDITS THE CIT(A) RECORDED THE FACT THAT THE ASSESSEE HAS SHOWN SOURC E OF FUND FROM WHERE IT WAS DEPOSITED WITH THE ASSESSEE. THE ASSE SSEE HAS FURNISHED THE RELEVANT EVIDENCE OF BANK ACCOUNT AND DETAILS O F MUTUAL FUNDS. THE ASSESSEE HAS ALSO FURNISHED EXPLANATION OF INVE STMENTS IN MUTUAL FUND WHICH WERE MADE IN EARLIER YEAR BY THE DEPOSIT OR. THE CIT(A) HAS ALSO CONSIDERED THE CONFIRMATION AFFIDAVIT AND SOURCE OF THE DEPOSITOR. THE CIT(A) OBSERVED THAT THE ASSESSEE I S UNABLE TO EXPLAIN THE SOURCE OF CREDITS IN THE ACCOUNT OF CHARANJEET SINGH SETHI WHICH MEANS THAT THE ASSESSEE IS UNABLE TO EXPLAIN THE SO URCE OF THE SOURCE. WHEREAS THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE IMMEDIATE SOURCE OF THE DEPOSITS THE DEPOSITS WERE OUT OF MA TURITY OF MUTUAL FUND OF DEPOSITOR. THUS THE DECISION CITED BY THE LD. DEPARTMENTAL REPRESENTATIVE DOES NOT HELP THE REVENUE AS THE ASS ESSEE HAS SHOWN EVEN IMMEDIATE SOURCE OF DEPOSIT. IN ADDITION TO T HE ABOVE THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERI AL TO THE FINDING OF CIT(A). IN THE LIGHT OF THE FACTS AND ABOVE DISCUS SIONS WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AS THE ASSESSEE HAS DISCHARGED HER ONUS TO PROVE THE IDENTITY GENUINEN ESS AND CREDIT WORTHINESS OF ALL THE THREE DEPOSITORS. 4. IT IS TO MENTION THAT IN THE GROUNDS OF APPEAL T HE AMOUNT IS TAKEN AS RS.13 60 000/- INSTEAD OF 22 60 000/-. AS STATED A BOVE THE AMOUNT OF ADDITION RS.22 60 000/- WAS TAKEN IN THE HANDS OF ASSESSEE W HEREAS IN THE HANDS OF SMT. ITA NO.406/AGR/2009 A.Y. 2005-06 7 HARLEEN KAUR IT WAS RS.22 07 172/-. IN THE LIGHT O F THE ABOVE DISCUSSION WE CONFIRM THE ORDER OF CIT(A). 5. THE BRIEF FACTS OF GROUND NOS.2 & 3 ARE THAT THE ASSESSING OFFICER MADE ADDITION OF RS.6 50 000/- ON ACCOUNT OF ADVANCE GIV EN TO PROPERTY DEALERS AND RS.9 14 570/- BEING CHEQUES-IN-HANDS. HOWEVER BEF ORE THE CIT(A) THE ASSESSING OFFICER IN THE REMAND REPORT ADMITTED THAT THESE AD DITIONS CANNOT BE MADE NEITHER UNDER SECTION 69 NOR UNDER SECTION 69A OF THE INCOM E TAX ACT AS THESE ARE PART OF THE ASSET SIDE OF THE BALANCE SHEET. THE CIT(A) D ELETED THE ADDITION AS UNDER :- I HAVE GONE THROUGH THE ASSESSMENT ORDER RECORDS REMAND REPORT OF THE A.O. AND WRITTEN SUBMISSION FILED BY THE LEARNED A.R. ALONGWITH HIS ORAL ARGUMENTS. THE ADDITION RS.2260 000/- IS ON PROTECTIVE BASIS RELATING TO ADVANCE GIVEN TO HARLE EN KAUR. THE ADDITION IN CASE OF SMT. HARLEEN KAUR ON ACCOUNT OF CREDIT FROM CHARANJEET SINGH SETHI HAS BEEN ACCEPTED. AS THERE IS NO CREDIT NO ADDITION IN INCOME IS POSSIBLE. THE OTHER TWO ADDI TION U/S 69 OR 69A IS NOT POSSIBLE AS THEY ARE NOT OUT OF BOOKS. THEY ARE APPEARING IN THE BALANCE SHEET I.E. APPLICATION OF SECTION 69 & 69A IS NOT AT ALL APPLICABLE. IN REMAND REPORT THE A.O. HAS ACCEPTE D THAT ADDITION OF RS.9 14 570/- IS ALREADY COVERED AND IT SHOULD BE D ELETED. AS REGARDS OTHER TWO ADDITIONS OF RS.22 60 000/- AND RS.6 50 0 00/- THE A.O. IN REMAND REPORT HAS ACCEPTED THAT THESE ADDITIONS CAN NOT BE MADE U/S 69 OR 69A AS THEY ARE PART OF ASSES SIDE OF THE BAL ANCE SHEET. THE EXPLANATION IN CASE OF HARLEEN KAUR WHERE ADDITION OF ` 22 60 000/- HAS BEEN MADE HAS BEEN FOUND CORRECT. AS REGARDS RS.6 50 000/- ALSO THE REASON THAT BOOKS WERE NOT PRODUCED IS NOT SUFFICIENT AS THE BANK A/C DETAILS FROM WHERE THIS ITA NO.406/AGR/2009 A.Y. 2005-06 8 CHEQUE ORIGINATES WAS MADE AVAILABLE AND CREDIT IN THE SAME BANK A/C HAS ALSO BEEN EXPLAINED. ALTHOUGH THE A.O. HAS OBJ ECTED THAT SINCE BOOKS WERE NOT AVAILABLE THESE ADDITIONS SHOULD NOT BE DELETED. AS REGARDS RS.914570/- THE LEARNED A.O. HIMSELF HAS AC CEPTED THAT THIS ADDITION SHOULD BE WITHDRAWN. THE FACT THAT THESE ADDITIONS ARE MADE U/S 69 & 69A ARE ALSO OTHERWISE EXPLAINED BY WAY OF BANK A/C FROM WHERE THESE CHEQUES ARE ISSUED THEREFORE NO ADDITI ON IS JUSTIFIED. I THEREFORE DELETE ALL THE THREE ADDITION OF RS.22600 00/- 650000/- & 914570/-. 6. AFTER HEARING THE LD. REPRESENTATIVES OF THE PAR TIES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AS THE ASSESSING O FFICER HIMSELF ACCEPTED IN REMAND REPORT THAT THESE ADDITIONS CANNOT BE MADE N EITHER UNDER SECTION 69 NOR UNDER SECTION 69A OF THE INCOME TAX ACT. IN THE LI GHT OF THE FACTS THE ORDER OF CIT(A) IS CONFIRMED ON BOTH THE GROUNDS I.E. GROUND NOS.2 & 3. 7. BRIEF FACTS IN RESPECT OF 4 TH GROUND ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE AS SESSEE DID NOT CO-OPERATE IN ASSESSMENT PROCEEDINGS AND THE ASSESSEE DID NOT PRO DUCE BOOKS OF ACCOUNTS AND VOUCHES FOR VERIFICATION. IN ABSENCE OF VERIFICATI ON THE ASSESSING OFFICER ON THE BASIS OF JUDGEMENT OF M.P. HIGH COURT IN THE CASE O F BADRI PRASAD BHAGWAN DAS & COMPANY VS. CIT 82 TAXMAN 109 (MP) HAS APPLIED THE FORMULA LAID DOWN IN THE SAID JUDGMENT OF 2.5 TIMES OF LICENCE FEE AND THE N ET PROFIT WAS ESTIMATED @ 5% IN RESPECT OF SHOP AT GOL PAHARIA GWALIOR. THE ASSES SING OFFICER ESTIMATED PROFIT OF ITA NO.406/AGR/2009 A.Y. 2005-06 9 RS.1 09 739/- ON LICENCE FEE OF RS.8 77 917/- APPLY ING FORMULA OF LICENCE FEE X 2.5 X 5%. SIMILARLY IN RESPECT OF SHOP AT BHODAPUR G WALOR CALCULATED RS.1 00 375/- ON LICENCE FEE OF RS.8 03 000/-. ASSESSING OFFICER ALSO TAKEN IN TOTAL INCOME ON ACCOUNT OF COMMISSION AND DISCOUNT RS.39 754/- IN R ESPECT OF GOL PAHARIA SHOP AND RS.65 817/- ON ACCOUNT OF SHOP AT BHODAPUR GWA LIOR. THE CIT(A) DELETED THE ADDITIONS OF RS.1 05 571/- ON ACCOUNT OF COMMIS SION/DISCOUNT AND RS.93 890/- ON ACCOUNT OF PROFIT. THE RELEVANT FACTS AND FINDI NG OF CIT(A) IS REPRODUCED AS UNDER:- GROUNDS NO.7 & 8 RELATE TO ADDITION IN TRADING A/C AND DISALLOWANCE OUT OF EXPENSES RS.1 09 739/- & 1 00 3 75/- AND RS.39 754 + 65 817 RESPECTIVELY. THESE ADDITIONS A RE TOWARDS BUSINESS INCOME FROM LIQUOR SHOPS EARNED BY THE APP ELLANT. THE A.O. IN HIS ORDER HAS STATED THAT THE APPELLANT WAS ALLO TTED 2 LIQUOR SHOPS OF GOL PAHARIA AND BHODAPUR FOR THE F.Y.2004-05. H OWEVER THE APPELLANT WAS UNABLE TO RUN AND THEREFORE HE SURREN DERED THE SAME IN FAVOUR OF SHRI RAJENDRA KUMAR. HOWEVER THE APPELLA NT RAN THESE SHOPS FROM 01.04.04 TO 31.08.2004 AND SUBMITTED P&L A/C DECLARING INCOME OF RS.1 06 224/-. THE TOTAL LICENSE FEE PAI D FOR THE SHOPS IS RS.8 03 000/- FOR BHODAPAUR SHOP & RS.8 77 917/- FO R GOL PAHARIA SHOP. THE A.O. DID NOT ACCEPT THESE RESULT AND APP LIED FORMULA OF 2 TIMES AND 5 APPLIED 5% ARE OF PROFIT ON LICENSE FEE THUS ASSESSED INCOME OF RS.1 09 739/- OF GOL PAHARIA SHOP AND RS. 1 00 375/- OF BHODAPUR SHOP AGGREGATING RS.200114/- AS AGAINST DE CLARED INCOME RS.106224/-. IN ADDITION TO THIS INCENTIVE & COMMI SSION EARNED AND SHOWN IN P&L A/C RS.1 05 571/- HAS ALSO BEEN ADDED WHICH IS RS.39 754/- FOR GOL PAHARIA & RS.65 817/- FOR BHODA PUR SHOP. THE LD. COUNSEL FOR THE APPELLANT SUBMITTED THAT TH E A.O. HAS NOT MENTIONED ANY REASONS FOR ESTIMATING INCOME 2 TIMES @ 5% ON THE BASIS OF OLD JUDGEMENT OF MP HIGH COURT IN CASE OF BADARI PRASAD BAHAGWAN DAS & CO. & 82 TAXMAN 109. THIS IS BASED ON OLD ITA NO.406/AGR/2009 A.Y. 2005-06 10 LIQUOR POLICY AND LIMITED TO ONLY COUNTRY LIQUOR. IN FACT THE LICENSE FEE NOW ALSO INCLUDES VALUE OF MATERIAL SUPPLIED FR EE WHICH DID NOT EXIST EARLIER. HE FILED JUDGEMENT IN CASE OF ITO V S. LAXMINARAIN RAM SWAROOP SHIVHARE 119 ITD 15 OF ITAT BENCH AGRA OF T HIRD MEMBER DECISION. THIS AGRA BENCH IS JURISDICTIONAL BENCH AND THIS ORDER HAS BEEN PASSED BY FOLLOWING THE RATIONALE DECIDED BY H ONBLE MP HIGH COURT IN CASE OF CIT VS. GANDALAL HAZARAILAL & CO. 134 TAXMAN 384 (MP). IT WAS HELD THAT SINCE BOOKS OF A/C ARE MAIN TAINED AS PER BUSINESS OF THE APPELLANT THE BOOK RESULT MUST BE A CCEPTED. AS THESE 2 JUDGEMENTS HONBLE MP HIGH COURT AGRA ITAT ARE RELE VANT THE ADDITION OF RS.93083/-IN INCOME OF 2 LIQUOR SHOPS I S UNJUSTIFIED AND THEREFORE BE DELETED. THE FURTHER ADDITION ON DISCOUNT & INCENTIVE IS RS. 1 05 571/- IS TOTALLY UNJUSTIFIED. THESE DISCOUNT AND INCENTIVES ARE FROM SUPPLIER OF LIQUOR. THE ADDITION EVEN AFTER APPLYING PROFIT RA TE IS TOTALLY UNJUSTIFIED. THE APPELLANT HAS WORKED OUT PROFIT O F RS.106224/- AFTER TAKING THE DISCOUNT & INCENTIVES IN P&L A/C. I HAVE GONE THROUGH THE ORDER OF A.O. & SUBMISSION OF THE LEARNED A.R. THE APPLICATION NET PROFIT RATE AS HE LD IN CASE OF BADRI PRASAD BHAGWANDAS SUPRA IS BASED ON OLD LIQUOR POLI CY AND IS NOW NOT APPLICABLE. THE ORDER OF ITAT BENCH AGRA IS RE LEVANT IN CASE OF ITO VS. LAXMINARAIN RAM SWAROOP SHIVHARE 119 ITR 15 APPLYING THE DECISION OF HONBLE M.P. HIGH COURT IN CASE OF CIT VS. GENDALAL HAZARILAL & CO. 134 TAXMAN 384 (MP) HAS TO BE APPLI ED IN CASE OF THE APPELLANT. THE INCOME IN LIQUOR BUSINESS AS DE CLARED BY APPELLANT BEING MORE THAN THE RELIED UPON JUDGEMENT IS ACCEPT ED RS.106224/-. THUS THE APPELLANT GET RELIEF OF RS.93890/-. THE FURTHER ADDITION OF RS.105571/- BEING THE AMOUN T RECEIVED AS COMMISSION AND INCENTIVE FROM SUPPLIERS OF LIQUO R CAN NOT BE MADE AS THE SAME IS ALREADY INCLUDED IN THE 2 P&L ACCOUN TS FOR 2 BRANCHES AND THEREFORE ALREADY INCLUDED IN THE INCOME BY T HE APPELLANT. FURTHER ADDITION OF THE SAME WILL AMOUNT TO DOUBLE ADDITION OF THE SAME INCOME. THE ADDITION OF RS.1 05 571/- IS THER EFORE HEREBY DELETED. ITA NO.406/AGR/2009 A.Y. 2005-06 11 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED AND GONE THROUGH THE DECISIONS CITED. THE ASSESSING OF FICER INCLUDED THREE ITEMS OF THE INCOME OF WHICH DETAILS ARE AS UNDER :- 1) LICENCE FEE AND EXCISE DUTY UNDER SECTION 69C :- A) GOL PAHARIA SHOP RS.77 917 + RS.1 02 126 = RS.1 80 043/- B) BHODAPUR SHOP RS.3 000 + RS.1 19 789 = R S.1 22 789/- RS.3 02 832/- 2) ON ACCOUNT OF BUSINESS PROFIT FROM WINE BUSINESS :- A) GOL PAHARIA SHOP RS.1 09 739/- B) BHODAPUR SHOP RS.1 00 375/- RS.2 10 114 3) COMMISSION AND DISCOUNT :- A) GOL PAHARIA SHOP RS.39 754/- B) BHODAPUR SHOP RS.65 817/- RS.1 05 571/- 9. THE ASSESSEE CHALLENGED TWO ADDITIONS OUT OF THE ABOVE THREE ADDITIONS I.E. RS.2 10 114/- AND RS.1 05 571/- BEFORE THE CIT(A). THE ASSESSEE DID NOT CHALLENGE AMOUNT OF RS.3 02 832/- TAKEN AS INCOME BY THE ASSE SSING OFFICER ON ACCOUNT OF DIFFERENCE IN LICENCE FEE PAID AS PER BOOKS OF ACCO UNTS AND AS PER DETAILS OBTAINED FROM THE EXCISE DEPARTMENT. THE CIT(A) HAS DELETED BOTH THE ADDITIONS. BEFORE US THE REVENUE HAS CHALLENGED ONLY THE ADDITION RS .2 10 043/-. THE CORRECT FIGURE IS RS.2 10 114/-. THE REVENUE DID NOT CHALLENGE DE LETION OF ADDITION AMOUNT OF RS.1 05 571/- ON ACCOUNT OF COMMISSION AND DISCOUNT . WE THEREFORE DO NOT EXPRESS ANY OPINION ON THAT ISSUE. NOW THE QUESTIO N TO EXAMINE BEFORE US IS ONLY ITA NO.406/AGR/2009 A.Y. 2005-06 12 IN RESPECT OF RS.2 10 114/-. AS PER THE DISCUSSION S MADE IN BRIEF FACTS STATING THAT THE ASSESSING OFFICER HAS CALCULATED PROFIT FROM LI QUOR BUSINESS APPLYING FORMULA LAID DOWN BY THE M.P. HIGH COURT IN THE CASE OF BAD ARI PRASAD BHAGWAN DAS & CO. VS. CIT 82 TAXMAN 109 (M.P.) THE CIT(A) DELET ED THE SAID ADDITION FOLLOWING THE ORDER OF I.T.A.T. AGRA BENCH IN THE CASE OF IT O VS. LAXMINARAIN RAM SWROOP SHIVHARE 119 ITD 15 (AGRA)(TM) WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNT WHICH WAS SUBJE CT TO REGULAR AUDIT. A SMALL VARIATION IN THE PROFIT WAS QUIT POSSIBLE. IN THAT CASE THE CIT(A) HIMSELF RECORDED THE FACT THAT THE ASSESSING OFFICER DID NOT POINT O UT SIGNIFICANT DEFECTS IN THE BOOKS OF ACCOUNTS EXCEPT THE LACK OF SALE BILLS. I.T.A.T . CONFIRMED THE VIEW OF ONE OF THE MEMBER DIRECTING THE REVENUE TO ACCEPT THE DECLARED RESULT. WE NOTICE THAT THE SAID ORDER OF I.T.A.T. RELIED UPON BY THE CIT(A) IS DISTINGUISHABLE ON FACTS AS IN THE CASE UNDER CONSIDERATION THE ASSESSEE HIMSELF A CCEPTED AMOUNT OF RS.3 02 832/- WHICH HAS BEEN TAKEN BY THE ASSESSING OFFICER AS IN COME WHILE COMPUTING THE TOTAL INCOME. THE SAID AMOUNT WAS ON ACCOUNT OF DI FFERENCE IN LICENCE FEE RECORDED IN THE BOOKS OF ACCOUNTS AND DETAILS SUBMI TTED BY THE EXCISE DEPARTMENT. IT HAS ALSO BEEN NOTED BY THE ASSESSING OFFICER THA T THE ASSESSEE DID NOT CO-OPERATE IN THE ASSESSMENT PROCEEDINGS AND NO BOOKS OF ACCOU NTS WAS FURNISHED THEREFORE THE BOOKS OF ACCOUNT COULD NOT BE VERIFIED. THE NO N-CHALLENGING OF RS.3 02 832/- THE DIFFERENCE ON ACCOUNT OF LICENCE FEE TAKEN BY T HE ASSESSING OFFICER AS INCOME ITA NO.406/AGR/2009 A.Y. 2005-06 13 THAT SOLE REASON IS SUFFICIENT FOR REJECTING THE BO OKS OF ACCOUNTS AS IN THE BOOKS OF ACCOUNTS THE PAYMENT OF LICENCE FEE OR EXCISE DUTY WAS PROPERLY RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER. IT HAS ALSO BEEN NOTICED TH AT THE ASSESSING OFFICER WHILE COMPUTING THE TOTAL INCOME HAS CONSIDERED INDIVIDU AL ITEM OF INCOME AND ADDITIONS. THE ASSESSING OFFICER DID NOT TAKE NET PROFIT FROM PROFIT & LOSS ACCOUNT. IN RESPECT OF ADDITION OF RS.2 10 114/- THIS AMOUNT HAS BEEN CALCULATED BY THE ASSESSING OFFICER AGAINST THE INCOME DECLARE D BY THE ASSESSEE RS.1 06 224/- . THUS THE EFFECTIVE NET ADDITION AMOUNT IS RS.93 89 0/-. IN THE LIGHT OF THE ABOVE DISCUSSIONS WE ARE OF THE VIEW THAT THE CIT(A) HAS WRONGLY ALLOWED RELIEF OF RS.93 890/- FOLLOWING THE ORDER OF I.T.A.T. AGRA B ENCH IN THE CASE OF ITO VS. LAXMINARAIN RAM SWROOP SHIVHARE 119 ITD 15 (AGRA)( TM). AS STATED ABOVE THE SAID DECISION IS NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. THE ASSESSING OFFICER AFTER POINTING OUT DEFECTS IN THE BOOKS OF ACCOUNT CALCULATED THE PROFIT FROM LIQUOR BUSINESS FOLLOWING THE JUDGEMENT OF M.P. HIGH COURT IN THE CASE OF BADARI PRASAD BHAGWAN DAS & CO. VS. CIT 82 TAXM AN 109 (M.P.). WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE ASSESSING OFFICER. THEREFORE THE ORDER OF CIT(A) IS SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED. GROUND NO.4 OF THE REVENUE IS THUS ALLOW ED. ITA NO.406/AGR/2009 A.Y. 2005-06 14 10. IN THE RESULT APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED AS DISCUSSED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.03.2012) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30 TH MARCH 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT RESPONDENT CIT CONCERNED CIT (APPEALS) CONCERNED D.R. ITAT AGRA BENCH AGRA GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY