Shri Gaurishanker Ksabra S/o Shri Manmalji Kabra, Indore v. The I.T.O., Indore

ITA 77/IND/2010 | 2006-2007
Pronouncement Date: 20-05-2010 | Result: Dismissed

Appeal Details

RSA Number 7722714 RSA 2010
Bench Indore
Appeal Number ITA 77/IND/2010
Duration Of Justice 3 month(s) 3 day(s)
Appellant Shri Gaurishanker Ksabra S/o Shri Manmalji Kabra, Indore
Respondent The I.T.O., Indore
Appeal Type Income Tax Appeal
Pronouncement Date 20-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 20-05-2010
Date Of Final Hearing 20-05-2010
Next Hearing Date 20-05-2010
Assessment Year 2006-2007
Appeal Filed On 16-02-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.77/IND/2010 A.YS. 2006-07 GAURISHANKAR KABRA INDORE PAN ADQPK-4242F APPELLANT VS INCOME TAX OFFICER 4(4) INDORE RESPONDENT APPELLANT BY : SHRI S.K. KHANDELWAL RESPONDENT BY : SHRI K.K. SINGH O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A) DATED 9.10.2009. THE CRUX OF GROUNDS OF APP EAL RAISED BEFORE US IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 2 57 19 1/- MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE. 2. THIS APPEAL IS BARRED BY LIMITATION BY 21 DAYS F OR WHICH PETITION FOR CONDONATION OF DELAY HAS BEEN FILED BY THE ASSESSEE STATING 2 THAT DURING THE RELEVANT TIME THE ASSESSEE WAS BED RIDDEN DUE TO ILLNESS AND REMAINED UNDER TREATMENT FOR A MONTH THEREFORE COULD NOT FILE THIS APPEAL WITHIN THE TIME BEFORE THE TRIBUNAL RESULTED INTO DELAY OF 21 DAYS. THE ASSESSEE HAS ALSO FILED A MEDICAL CERTIFICATE I N HIS SUPPORT. ON THE OTHER HAND THE LEARNED CIT DR CONTENDED THAT IT WA S THE DUTY OF THE ASSESSEE TO REMAIN VIGILANT. KEEPING IN VIEW THE T OTALITY OF FACTS AND THE ASSERTION MADE BEFORE US WHICH IS SUPPORTED BY A M EDICAL CERTIFICATE WE ARE SATISFIED THAT THE CAUSE OF DELAY IS REASONA BLE WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE THEREFORE THE DELAY I S CONDONED. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHR I S.K. KHANDELWAL LD. COUNSEL FOR THE ASSESSEE AND SHRI K .K. SINGH LEARNED SENIOR DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE IMPUGNED AMOUNT IS CREDIT CARD PAYMENT WHICH WAS AD DED AS UN- EXPLAINED EXPENDITURE BY THE ASSESSING OFFICER WHIC H IS PURELY BASED ON ASSUMPTIONS AND PRESUMPTIONS. IT WAS FURTHER SUBMIT TED THAT THESE ARE PERSONAL LOANS ONLY AND IT IS A CLEAR CUT CASE OF R EPAYMENT OF LOAN. ON THE OTHER HAND THE LEARNED CIT DR DEFENDED THE IM PUGNED ORDER BY CONTENDING THAT THE NATURE AND SOURCE OF THE EXPENS ES WAS NOT EXPLAINED BY THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS PROPR IETOR OF M/S K.G. 3 PHARMA ENGAGED IN RETAIL BUSINESS OF PHARMACEUTICA LS. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME A T RS. 1 09 614/- FROM PROPRIETARY CONCERN M/S. K.G. PHARMA. IN THE RETU RN THE ASSESSEE DECLARED PROFIT U/S 44AF OF THE ACT AT RS. 1 34 000 /- ON SALES OF RS.14 23 996/- ON ESTIMATE BASIS AS NO BOOKS OF ACC OUNTS WERE MAINTAINED. THE ASSESSEE WAS REQUIRED BY THE ASSESS ING OFFICER TO FURNISH DETAILS OF BUSINESS INCOME INVESTMENT IN M OVABLE AND IMMOVABLE PROPERTY DETAILS OF BANK ACCOUNTS HOUSE HOLD EXPENSES ETC. WHICH WERE FURNISHED BY THE ASSESSEE. AS PER THE INFORMATION FURNISHED THE ASSESSEE HAD INCURRED EXPENSES OF RS .2 57 191/- ON ACCOUNT OF CREDIT CARD BILLS OF CITI BANK DURING FI NANCIAL YEAR 2005-06. THE ASSESSING OFFICER ALSO REQUIRED THE ASSESSEE TO FURNISH DETAILS AND EXPLANATION ALONG WITH SOURCE OF PAYMENT OF CREDIT CARD BILLS. IN RESPONSE THERETO THE ASSESSEE SUBMITTED THAT AS TH E ASSESSEE DID NOT MAINTAIN BOOKS OF ACCOUNTS THEREFORE CREDIT CARD DETAILS WERE NOT AVAILABLE. THE ASSESSING OFFICER IN THE ABSENCE O F PROPER DETAILS AND EXPLANATION ADDED THE AMOUNT OF RS. 2 57 191/- U/S 69C OF THE ACT AS UNEXPLAINED EXPENDITURE. 4. FELT AGGRIEVED WITH THE ADDITION MADE BY TH E ASSESSING OFFICER THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHO OBSERVED THAT THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS AND E XPLANATION ABOUT THE 4 SOURCE OF EXPENSES INCURRED ON CREDIT CARD BILLS AT RS. 2 57 191/- DESPITE GIVING SUFFICIENT OPPORTUNITY TO DO SO. HE FURTHER OBSERVED THAT SIMPLY BECAUSE NO BOOKS OF ACCOUNTS ARE MAINTAINED AND THE ASSESSEE IS FILING RETURN OF INCOME U/S 44AF OF THE ACT IT WILL NOT A BSOLVE THE ASSESSEE FROM OFFERING NECESSARY DETAILS AND EVIDENCE IN SUP PORT OF THE EXPENSES INCURRED DURING THE YEAR. HE ALSO NOTED THE ASSESS EE COULD NOT PRODUCE ANY DETAILS OR EVIDENCE REGARDING THE SOURCE OF INC URRING OF EXPENDITURE OF RS.2 57 171/- ON CREDIT CARD BILLS. HE ALSO FOUN D THAT NOTHING HAS BEEN BROUGHT ON RECORD TO ESTABLISH THE LINK OF SUCH EXP ENSES WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE NOR THE AMOUNT OF INCOME DISCLOSED IS FOUND TO BE PRIMA FACIE SUFFICIENT TO EXPLAIN SU CH HUGE EXPENDITURE ON CREDIT CARD BILLS. IN THIS VIEW OF THE MATTER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE A SSESSING OFFICER AND DISMISSED THE APPEAL OF THE ASSESSEE. THE AGGRIEVED ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. IF THE TOTALITY OF FACTS AND THE ASSERTION MADE BEF ORE US IS ANALYASED WE FIND THAT FROM PAGES 17 TO 29 OF THE PAPER BOOK THE ASSESSEE HAS FURNISHED THE NATURE OF THE EXPENDITUR E AND THE AMOUNT WAS NORMALLY PAID FOR PAYLITE TOP UP WHICH IS A REP AYMENT OF LOAN. THE CONTENTS OF THE STATEMENT (PAGES 17 TO 29) WERE NOT CONTROVERTED BY THE REVENUE. IT WAS ALSO SUBMITTED THAT THE ASSESSEE T OOK LOAN FROM THE BANKS AND MADE REPAYMENT OF SUCH LOAN. THE ASSESSE E HAS ALSO 5 FURNISHED STATEMENT OF ACCOUNT RECEIVED FROM CITI BANK IN SUPPORT OF THIS CLAIM. THE WHOLE CASE OF THE REVENUE IS THAT NECES SARY DETAILS WERE NOT FURNISHED BY THE ASSESSEE. IN THE ABSENCE OF SUCH DETAILS THE IMPUGNED AMOUNT WAS ADDED U/S 69C BY THE ASSESSING OFFICER B Y TREATING THE SAME AS UNEXPLAINED EXPENDITURE. HOWEVER WE ARE S ATISFIED THAT SINCE IS A REPAYMENT OF PERSONAL LOANS AND IN PARA 2 (PAG E 2 OF THE IMPUGNED ORDER) IT HAS BEEN MENTIONED THAT THE ASSESSEE FIL ED THE NECESSARY DETAILS OF BUSINESS INCOME INVESTMENT MADE IN MOVA BLE AND IMMOVABLE PROPERTY DETAILS OF BANK ACCOUNTS HOUSEHOLD EXPEN SES AND THE SAME WERE EXAMINED BY THE ASSESSING OFFICER AND SINCE TH E PAYMENT MADE THROUGH CREDIT CARD IS OUT OF INTERNAL ACCRUAL OF B USINESS THEREFORE NO ADDITION IS JUSTIFIED. THE ASSESSEE HAS ALREADY DIS CLOSED PROFIT MORE THAN 5% OF THE GROSS RECEIPTS AS PER PROVISIONS OF SECTI ON 44AF OF THE INCOME TAX ACT AND WAS NOT SUPPOSED TO MAINTAIN BOOKS OF A CCOUNTS. SMALL LOAN TAKEN BY THE ASSESSEE WAS UTILISED FOR THE PUR POSE OF BUSINESS AND THE REPAYMENT OF LOAN WAS ALSO OUT OF BUSINESS GENE RATION. THERE IS NO EVIDENCE IN THE HANDS OF THE ASSESSING OFFICER THA T PAYMENT ON ACCOUNT OF CREDIT CARD WAS FOR PERSONAL EXPENSES. WE HAVE VERIFIED THE RELEVANT ENTRIES IN THE STATEMENT OF CREDIT CARD AS PLACED O N RECORD AND FOUND THAT SAME PERTAINS TO REPAYMENT OF LOAN SOURCE OF WHICH IS INTERNAL ACCRUALS. ACCORDINGLY THERE IS NO MERIT IN THE ACTION OF THE LOWER AUTHORITIES FOR 6 MAKING ANY ADDITION ON ACCOUNT OF SUCH REPAYMENT OF LOAN. THEREFORE THIS APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25 TH NOVEMBER 2010. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.11.2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE