THE ITO, Sehore v. SHRI MAHENDRA SINGH KHANUJA, Sehore

ITA 408/IND/2015 | 2010-2011
Pronouncement Date: 28-09-2016 | Result: Dismissed

Appeal Details

RSA Number 40822714 RSA 2015
Assessee PAN AIOPK0443P
Bench Indore
Appeal Number ITA 408/IND/2015
Duration Of Justice 1 year(s) 3 month(s) 23 day(s)
Appellant THE ITO, Sehore
Respondent SHRI MAHENDRA SINGH KHANUJA, Sehore
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 28-09-2016
Date Of Final Hearing 28-09-2016
Next Hearing Date 28-09-2016
Assessment Year 2010-2011
Appeal Filed On 04-06-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE .. .. % BEFORE SHRI D.T. GARASIA JUDICIAL MEMBER AND SHRI O.P. MEENA ACCOUNTANT MEMBER ITO SEHORE .. ./ PAN: AAAIOPK0443P VS. SHRI MAHENDRA SINGH KHANUJA PROP. M/S. MAHENDRA SINGH KHANUJA TRANSPORT SERVICES SEHORE. / APPELLANT / RESPONDENT / APPELLANT BY SHRI MOHD. JAVED SR. DR / RESPONDENT BY SHRI S. S. DESHPANDE C.A. DATE OF HEARING 28.09.2016 DATE OF PRONOUNCEMENT 28.09.2016 / O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) BHOPAL [ HEREINAFTER .. . / I.T.A. NO.408/IND/2015 %' ' / ASSESSMENT YEAR : 2010-11 I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 2 OF 11 REFERRED TO AS THE CIT(A)] DATED 30.03.2005 AND PER TAINS TO ASSESSMENT YEAR 2010-11 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT DATE D 31.03.2013 OF ITO WARD 2(3) BHOPAL [HEREINAFTER RE FERRED TO AS THE AO]. 2. GROUND NO. 1 RELATES TO DELETION OF ADDITION OF RS. 38 53 633/- ON ACCOUNT OF UNEXPLAINED CREDITORS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE TRANSPORTATION BUSINESS AND HAS FILED THE RETURN OF INCOME ON 14.10.2010 DECLARING TOTAL INCOME OF RS. 4 96 930/- EARNED FROM FREIGHT RECEIP T OF RS. 4.70 CRORES ALONGWITH INCOME OF RS. 1.68 LAKHS DECLA RED U/S 44AE OF THE INCOME-TAX ACT 1961 FROM FOUR SELF OWN ED TRUCKS. ACCORDING TO THE AO THE ASSESSEE HAS SHOWN THAT THE CREDITORS OF RS. 39 18 475/- AS ON 31.03.2010 IN TH E BALANCE SHEET FOR WHICH NO BOOKS OF ACCOUNTS WAS PRODUCED AND NO CONFIRMATION WAS FILED. MERELY A LETTER IN THE CASE OF M/S. KANHAIYALAL MANTRI HAS BEEN FILED. HENCE THE AO MA DE THE I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 3 OF 11 ADDITION OF ENTIRE CREDITORS AMOUNTING TO RS. 39 18 475/- AS UNEXPLAINED CREDIT U/S 68 OF THE INCOME-TAX ACT 19 61. 4. BEFORE THE CIT(A) THE ASSESSEE HAS GIVEN THE DETAI LS WHICH WAS ALSO FURNISHED BEFORE THE AO AS UNDER :- (I) M/S.KANHAIYALAL MANTRI HP DEALER RS.38 53 633/- (II) M/S. BHAI MIYA TYRE SHOP INDORE RS. 38 600/ - NAKA (III) M/S. MANSOOR BHAI ELEC. MECHANIC INDORE NAKA RS. 9 800/- (IV) M/S.RASHID BHAI MECHANIC INDORE NAKA RS. 8 502/- (V) M/S. MAZID BHAI MECHANIC INDORE NAKA RS. 7 940/- RS.39 18 475/- 5. THE LD. CIT(A) NOTED THAT OUT OF THE TOTAL SUNDRY CREDITORS OF RS. 39 18 475/- THE ASSESSEE HAS GIVE N CONFIRMATION FROM HIS MAJOR CREDITOR VIZ. M/S. KANH AIYALAL MANTRI H.P. DEALER FOR RS.38 53 633/-. THE AO HAS ALSO SOUGHT INFORMATION U/S 133(6) FROM THE SAID CREDITO R VIDE LETTER DATED 28.12.2912. HOWEVER NO ADVERSE MATER IAL BEING BROUGHT BY THE AO BEFORE REJECTING ASSESSEES SUBMI SSION. I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 4 OF 11 EVEN IN THE REMAND REPORT THE AO HAS NOT MADE ANY FURTHER ENQUIRY. THE LD. CIT(A) FURTHER NOTED THAT THE CRED ITOR HAS GIVEN HIS PAN AND IS ALSO ASSESSED WITH THE SAME AO AND ALSO FILED CONFIRMATION AND COPY OF LEDGER ACCOUNT AND B ANK ACCOUNT SHOWING SUBSEQUENT PAYMENT MADE TO M/S. KANHAIYALAL MANTRI IN RESPECT OF CLOSING BALANCE OF RS. 38 53 633/- WAS DELETED. HOWEVER AS REGARDS BALAN CE CREDITOR OF RS. 64 842/- NO SATISFACTORY EXPLANATI ON WAS FILED. THEREFORE THE SAME WAS CONFIRMED. THE REVENUE AGGRI EVED WITH THE ORDER FILED THE APPEAL BEFORE THIS TRIBUNAL . 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF AO. 7. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAILABL E ON RECORD. WE FIND THAT THE CREDITOR M/S. KANHAIYA LAL MANTRI WHO WAS HP DEALER HAS DULY FILED A COPY OF CONFIRMATI ON LETTER COPY OF BANK STATEMENT THE COPY OF LEDGER ACCOUNT AND ALSO ASSESSED WITH THE SAME AO. FURTHER NO ADVERSE INFOR MATION HAS BEEN BROUGHT BY THE AO AND ALSO NO ADVERSE INF ORMATION WAS RECEIVED U/S 133(6) OF THE ACT. THEREFORE THE L D. CIT(A) I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 5 OF 11 WAS JUSTIFIED IN DELETING THE SAID ADDITION. IN VIEW OF THESE FACTS THIS GROUND OF APPEAL OF THE REVENUE IS DISM ISSED. 8. GROUND NO. 2 RELATES TO ADDITION OF CASH DEPOSIT OF RS. 39 36 500/- FOUND MADE IN THE ASSESSEES BANK ACCO UNT. 9. THE AO NOTED THAT THE ASSESSEE HAS SHOWN CASH DEPOSIT OF RS. 39 36 500/- IN HIS AXIS BANK ACCOUNT AT SEHORE. THE AO MADE AN ADDITION FOR NON-PRODUCTION OF BOOKS OF ACCOUNTS ALONGWITH EXPLANATION FOR SOURCE THEREIN B Y THE ASSESSEE. 10. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED THE APP EAL BEFORE THE CIT(A). 11. THE LD. CIT(A) NOTED THAT THE ASSESSEE HAS STATED T HAT THE SAID BANK ACCOUNT WAS DULY SHOWN IN HIS AUDITED B OOKS OF ACCOUNTS AND THE AMOUNTS DEPOSITED THEREIN ARE OUT OF WITHDRAWALS MADE FROM HIS CASH CREDIT ACCOUNT WITH BAN K OF BARODA SEHORE. THE ASSESSEE HAS GIVEN COMPLETE DAT E-WISE AND MONTH-WISE DETAILS OF BOTH THESE BANK ACCOUNTS. THE SAME HAVE ALSO BEEN SENT TO THE AO ASKING FOR HIS C OMMENTS. HOWEVER EVEN IN REMAND REPORT THE AO HAS NOT MAD E ANY I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 6 OF 11 ADVERSE COMMENTS REGARDING ASSESSEES SUBMISSION EXPLANATION ALONGWITH COPY OF BOTH THESE BANK ACCOUN TS AS SENT TO HIM BY THE LD. CIT(A). THE AO HAS MERELY RE ITERATED THE ASSESSMENT ORDER PASSED BY THE THEN AO IN THIS REG ARD. CONSIDERING THESE FACTS THE LD. CIT(A) HAS DELETED THE AFORESAID ADDITION. 12. BEFORE US THE LD. SR. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE AO. 13. WE HAVE CONSIDERED THE FACTS AND MATERIALS AVAIL ABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS FILED COMP LETE DETAILS OF CASH DEPOSITS IN BANK ACCOUNT WHICH HAS BEEN DUL Y REFLECTED IN THE AUDITED BOOKS OF ACCOUNTS AND SAME ALSO STANDS VERIFIED BY THE LD. CIT(A) . IT IS ALSO SEEN THAT THE LD. CIT(A) HAS ALLOWED OPPORTUNITY TO THE AO BY WAY OF R EMAND REPORT TO EXAMINE THE CONTENTION OF THE ASSESSEE. H OWEVER NO ADVERSE INFERENCE WAS REPORTED IN THE REMAND REPORT SIMPLY REITERATING THE FACTS AS MADE IN THE ASSESSMENT ORD ER. CONSIDERING THESE FACTS WE ARE OF THE OPINION THAT THE LD. I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 7 OF 11 CIT(A) IS JUSTIFIED IN DELETING THE SAID ADDITION. ACCORDINGLY THIS GROUND OF APPEAL IS DISMISSED. 14. GROUND NO. 3 RELATES TO ESTIMATING BUSINESS RECEIPT S AT RS. 5 00 00 000/- AS AGAINST THE ESTIMATION MADE BY THE AO AT RS. 5 30 00 000/- AND APPLYING NET PROFIT @ 1% T HEREON INSTEAD OF 8 % APPLIED BY THE AO. 15. THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS. 4.7 CRORES AND ON PERUSAL OF FORM NO. 26AS THE AO NOTE D THAT THE ASSESSEE HAS ALSO RECEIVED TRANSPORT RECEIPT OF RS. 1 09 600/- AND ALSO NOTED THAT THE SAVING BANK ACCO UNT WITH HIS WIFE HAS SHOWN THE TRANSPORT FREIGHT RECEIPT AMOU NTING TO RS. 51.90 LAKHS. SINCE THE ASSESSEE COULD NOT SUBST ANTIATE THESE TRANSPORT FREIGHT RECEIPTS DEPOSITED IN INDIV IDUAL NAME SAVING BANK ACCOUNT AND INCLUDED THE SAME IN GROSS RECEIPT OF RS. 4 70 52 932/- AS NO BOOKS OF ACCOUNTS WERE PRO DUCED. ACCORDINGLY THE AO CONSIDERED THE GROSS RECEIPT AT RS. 5 30 00 000/- ON TAKING PROFIT RATE AT 8% ON TOTAL FREIGHT RECEIPT CONSIDERED THE PROFIT RATE AT RS. 42 40 000 /-. I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 8 OF 11 16. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE LD. CIT(A) VIDE PARA 9 OF HI S ORDER HELD AS UNDER :- 9. THE FIRST ADDITION PERTAINS TO ESTIMATION OF APPELLANT'S FREIGHT RECEIPTS AT RS.5 30 00 000/- AS AGAINST DECLARED AT RS. 4 70 52 932/- AND THEN ESTIMATING NET PROFIT @ 8% THEREON. ACCORDINGLY APPELLANT'S BUSINESS PROFITS BEEN ESTIMATED AT RS.42 40 000/- I.E. @ 26.09% OF FREIGHT RECEIPTS AS AGAINST SHOWN AT RS.3 28 929/- I.E. @ 0.69%. A.O. HAS DONE THIS FOR NON DECLARATION OF RECEIPTS OF RS.1 09 600/- FROM M/S RAJIV ENTERPRISES (RS.86 400/-) AND RAJIV KIRTI KOTHORI (HUF) (RS.23 200/-) NOT CLAIMED TO BE SHOWN BY THE APPELLANT ALONG WITH RECEIPTS OF RS. 51 90 000/- DEPOSITED IN APPELLANT'S JOINT BANK ACCOUNT IN ABSENCE OF PRODUCTION OF HIS BOOKS OF ACCOUNTS BY THE APPELLANT DESPITE THERE BEING BANK CERTIFICATE OF I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 9 OF 11 DISHONOURING OF CHEQUE OF RS.25 00 000/- IN THIS REGARD. ALSO NO JUSTIFICATION BEEN GIVEN BY THE A.O. EVEN IN REMAND PROCEEDINGS FOR APPLYING NET PROFIT RATE OF 8% ON THESE ESTIMATED BUSINESS RECEIPTS. IT IS PERTINENT TO NOTE THAT A.O. HAS NOT MADE ANY ADVERSE COMMENTS IN HIS REMAND REPORT REGARDING APPELLANT'S BOOKS OF ACCOUNTS AS PRODUCED IN ASSESSMENT (AS PER AFFIDAVIT OF THE APPELLANT AND ASSESSMENT RECORDS) AND NOW IN APPEAL AND AS SENT TO THE A.O. ALSO FOR REMAND REPORT ALONG WITH OTHER ISSUES. KEEPING IN VIEW FACTS AND CIRCUMSTANCES OF THE CASE PAST HISTORY OF THE APPELLANT APPELLANT'S SUBMISSIONS ASSESSMENT ORDER REMAND REPORT AND RECORDS OF THE AO IT IS FOUND REASONABLE AND JUSTIFIED TO ESTIMATE APPELLANT'S BUSINESS RECEIPTS AT RS.5 00 00 000/- AND APPLYING NET PROFIT @ 1 % THEREON. ACCORDINGLY APPELLANT'S NET BUSINESS PROFITS ARE I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 10 OF 11 FOUND ASSESSABLE AT RS.5 00 000/- AS AGAINST SHOWN AT RS.3 28 929/- BY THE APPELLANT AND ESTIMATED AT RS.42 40 000/- BY THE A.O. ACCORDINGLY ADDITION OF RS. 1 71 071/- IS HEREBY CONFIRMED ON ACCOUNT OF APPELLANT'S NET BUSINESS INCOME. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). WE UPHOLD HIS ACTION. GROUND NO.3 OF THE APPEAL IS ALSO REJECTED. 18. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 28 TH SEPTEMBER 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 28 TH SEPTEMBER 2016. I.T.A.NO. 408/IND/2015 A.Y.2010-11 SHRI MAHENDRA SINGH KHANUJA SEHORE PAGE 11 OF 11 CPU*