Sh. Viney Gupta, Chandigarh v. DCIT, Ambala

ITA 808/CHANDI/2014 | 1997-1998
Pronouncement Date: 31-07-2015 | Result: Partly Allowed

Appeal Details

RSA Number 80821514 RSA 2014
Assessee PAN AAWPG7056J
Bench Chandigarh
Appeal Number ITA 808/CHANDI/2014
Duration Of Justice 10 month(s) 5 day(s)
Appellant Sh. Viney Gupta, Chandigarh
Respondent DCIT, Ambala
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 31-07-2015
Date Of Final Hearing 15-07-2015
Next Hearing Date 15-07-2015
Assessment Year 1997-1998
Appeal Filed On 25-09-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA HON'BLE VICE PRESIDENT ITA NO. 808/CHD/2014 (ASSESSMENT YEAR: 1997-98) SH.VINEY GUPTA VS. THE D.C.I.T. H.NO.163 SECTOR 38 AMBALA. CHANDIGARH. PAN NO. AAWPG7056J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI D.S.SIDHU DR DATE OF HEARING : 30.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER H.L.KARWA VP : THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PANCHKULA DATED 30.7.2014 RELATING TO AS SESSMENT YEAR 1997-98. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ACTION OF LEARNED CIT (APPEALS) IN CONFIRMING THE A DDITION OF RS.5 29 450/- MADE BY THE ASSESSING OFFICER BEING T HE 2 EXPENSES PAYABLE. THE ASSESSEE IS A CIVIL CONTRACTOR. DURING THE PERIOD UNDER CONSIDERATION THE ASSESSEE HAD CONSTRUCTED MOTORABLE BRIDGE OVER RIVER RAVI TO CO NNECT VILLAGE MAHILA 20 METERS PLATE GIRD BRIDGE OVER SA L NALAH ON SARNAM RAM ZHUMER ROAD AND 50 METERS BRIDGE OVER RI VER SAHOO. ALL THESE WORK CONTRACTS WERE ALLOTTED BY H PPWD BIRMOUR CHAMBA (H.P.). THE ASSESSING OFFICER HAS OBSERVED THAT AN AMOUNT OF RS.5 29 452/- WAS SHOWN UNDER THE HEAD MATERIAL PAYABLE AS ON 31.3.1997. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH COMPLETE NAMES AND AD DRESSES OF THE PERSONS/PARTIES FROM WHOM THE SAID PURCHASES WERE MADE. THE ASSESSING OFFICER ALSO REQUIRED THE ASSE SSEE TO GIVE REASONS FOR PAYMENT BEING OUTSTANDING. THE AS SESSING OFFICER ALSO ASKED TO FILE CONFIRMATIONS FROM THE P ARTIES IN RESPECT OF OUTSTANDING PAYMENTS. THE ASSESSING OF FICER HAS CATEGORICALLY STATED THAT WHEN THE ASSESSEE WAS ASK ED TO SHOW PURCHASE BILLS THE ASSESSEE SUBMITTED ONLY THE LOO SE SHEETS OF A NOTEBOOK WITH THE HEADING CASH/CREDIT MEMO (NAKAD/UDHAR PATRA). THE ASSESSING OFFICER ALSO OBSERVED THAT NO SERIAL NUMBER IS GIVEN ON THESE MEMOS. TH E ASSESSING OFFICER FURTHER NOTICED THAT ALL THESE SO -CALLED PURCHASE BILLS APPEARED TO HAVE BEEN WRITTEN BY ONE PERSON ONLY. THE ASSESSEE FURNISHED PHOTOCOPIES OF MANY OF THESE BILLS RUNNING INTO PAGES 1 TO 137. THE ASSESSING O FFICER TOOK THE VIEW THAT THE ASSESSEE HAS SHOWN BOGUS CREDIT O F RS.5 29 452/- WITH A VIEW TO SUPPRESS HIS INCOME NO T DISCLOSED FOR THE PURPOSE OF INCOME TAX. THE ASSES SING OFFICER MADE THE IMPUGNED ADDITION HOLDING THAT THE ASSESSEE 3 HAD EARNED ADDITIONAL INCOME TO THE TUNE OF RS.5 29 452/- DURING THE YEAR UNDER CONSIDERATION. IN THIS CASE THE ORIGINAL ASSESSMENT WAS FRAMED ON 21.2.2000. WHEN THE MATTER CAME UP IN APPEAL BEFORE THE LEARNED CIT (AP PEALS) THE LEARNED CIT (APPEALS) DELETED THE ADDITION. T HE REVENUE CHALLENGED THE ORDER OF THE LEARNED CIT (APPEALS) B EFORE THE TRIBUNAL AND THE TRIBUNAL SET ASIDE THE ORDER OF TH E LEARNED CIT (APPEALS) AND REMANDED THE MATTER TO THE ASSESS ING OFFICER FOR FRESH DECISION. IN PURSUANCE TO THE O RDER OF THE TRIBUNAL THE ASSESSING OFFICER PASSED A FRESH ORDE R ON 24.3.2006 IN WHICH THE IMPUGNED ADDITION WAS ONCE AGAIN MADE. THE ASSESSEE FILED THE APPEAL BEFORE THE LE ARNED CIT (APPEALS) AND THE LEARNED CIT (APPEALS) CONFIRMED T HE ORDER OF THE ASSESSING OFFICER. 3. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE OR DER OF THE LEARNED CIT (APPEALS) BEFORE THE TRIBUNAL AN D THE TRIBUNAL VIDE ITS ORDER DATED 29.4.2009 IN ITA NO.569/CHD/2007 REMANDED THIS ISSUE BACK TO THE FIL E OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. IN PURS UANCE TO THE ORDER OF THE TRIBUNAL DATED 29.4.2009 THE ASSESSIN G OFFICER PASSED A FRESH ORDER ON 31.8.2010 BY WHICH HE AGAI N MADE ADDITION OF RS.5 29 450/-. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER BEFORE T HE LEARNED CIT (APPEALS) AND THE LEARNED CIT (APPEALS) VIDE IM PUGNED ORDER CONFIRMED THE ADDITION AND HENCE THE ASSESSE E IS IN APPEAL BEFORE THE TRIBUNAL. 4 4. I HAVE HEARD SHRI TEJ MOHAN SINGH LEARNED COUN SEL FOR THE ASSESSEE AND SHRI D.S.SIDHU LEARNED D.R. A T LENGTH AND ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER DATED 3 1.8.2010 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). IN RES PONSE TO THE NOTICE ISSUED BY THE ASSESSING OFFICER THE ASSESSE E FILED HIS REPLY ON 30.7.2010 WHEREIN THE ASSESSEE PLACED THE FOLLOWING CONTENTIONS BEFORE THE ASSESSING OFFICER : 1. COMPLETE DETAILS OF MATERIAL PAYABLE ALONG WITH TH E DATES ON WHICH PAYMENTS WERE MADE WERE GIVEN TO THE AO IN COURSE OF ORIGINA L ASSESSMENT PROCEEDINGS ON 22.1.2000. (-A COPY OF THIS ALONG WITH NAMES OF 8 PERSONS FROM WHOM MATERIAL WAS CLAIMED TO BE PURCHASED WAS ENCLOSED) 2. THE PURCHASE SAND AND BAJRI WAS MADE FROM PETTY SUP PLIERS RESIDING BY RIVER BEDS AND HAVE NO PERMANENT PLACE OF BUSINESS NO REGULAR BOOKS OF ACCOUNTS AND NO SYSTEM OF ISSUING CREDIT BILLS FOR SUPPLY OF THEIR GOODS. 3. AFTER A GAP OF 12 YEARS IT IS NOT POSSIBLE TO LOCA TE SUCH PERSONS AND GET THEIR CONFIRMATIONS AS EXPECTING THE SAME IS UNREASONABL E AND IMPOSSIBLE. 4. ADDITION U/S 68 WAS NOT JUSTIFIED WHERE THE ASSESSE E WAS ASKED TO PRODUCE THE CASH CREDITS MORE THAN 10 YEARS AFTER THEY WERE INT RODUCED IN THE BOOKS OF ACCOUNTS. 5. AS THE ADDITION WAS MADE U/S 68 THE PURCHASE WAS H ELD TO BE GENUINE. THEREFORE THE CREDIT THAT REMAINED OUTSTANDING SHOU LD NOT BE TREATED AS UNEXPLAINED. 6. KEEPING IN VIEW THE GROUND REALITIES AND BUSINESS C OMPULSIONS DISALLOWANCES SHOULD NOT BE MADE MERELY ON SUSPICION. 7. ALTERNATIVELY CREDIT SHOULD BE GIVEN FOR RS 3 LAKH S DECLARED IN VDIS IN 1997 RS 1 LAKHS RECEIVED FROM ENCASHMENT OF INDIRA VIKAS PATRA AND RS 3 LAKHS SHOWN AS INCOME FROM OTHER SOURCES IN ASSTT Y EAR 2001-02 5 WHICH WAS ACTUALLY AVAILABLE TO THE ASSESSEE FROM ASSTT YEAR 1997-98. THE ASSESSEE FILED AN AFFIDAVIT REITERATING THIS CLAIM. 8. AS PROOF OF VDIS DECLARATION THE ASSESSEE FILED A COPY OF CERTIFICATE U/S 68(2) BEARING NO 2083 ISSUED BY THE WORTHY COMMISSIONER OF INCOME TAX PANCHKULA ON 31.03.1998. 9. IN SUPPORT OF MATERIAL PAYABLE THE ASSESSEE FILED AFFIDAVITS OF 3 PERSONS NAMELY SRI SUBHASH S/O SRI SOHAN; SRI SUBHASH S/O S RI RAM SINGH AND SRI KULWINDER. HE ALSO STATED THAT THE AFFIDAVIT OF DR KAILASH OF HIMACHAL STONE CRUSHER CHAMBA WAS AWAITED AND WILL BE SOON SUBMI TTED. 10. IN SUPPORT OF HIS CONTENTIONS THE ASSESSEE ALSO RE LIED ON THE FOLLOWING CASE LAWS : A. PRAGATI CONSTRUCTION CO. VS ITO 142 TAXATION 16 B. JINDAL UDYOG VS ITO 78 TTJ 9 C. JCIT VS MATHURA DASS ASHOK KUMAR 101 TTJ 810 D. R-IMBAVALLA VS ITO 83 TTJ 352 E. CIT VS PANCHAM DAS JAIN 205 CTR 444 F. ITO VS TWINLE PAPERS 987 ITD 235 G. CIT VS SUPERTECH HOSPITALS 211 CTR 360 H. CIT VS LEADERS VALVES PVT LTD 206 CTR 463 I. ITO VS. CHAMANLAL NAGPAL 102 TTJ 890 5. THE ASSESSING OFFICER HAS OBSERVED THAT IN ORDE R TO VERIFY THE CORRECTNESS OF ASSESSEES CLAIM THE INS PECTOR SHRI K.C.MALHOTRA OF THE REVENUE WAS DEPUTED TO MAKE ENQ UIRIES ABOUT SHRI SUBHASH S/O SHRI SOHAN SINGH AND SHRI SU BHASH S/O SHRI RAM SINGH. WITH REGARD TO SHRI KULWINDER THE ASSESSING OFFICER OBSERVED THAT THE ADDRESS GIVEN B Y THE ASSESSEE WAS INCOMPLETE AND HENCE SUMMONS UNDER SE CTION 131 OF THE ACT WERE RECEIVED BACK WITH POSTAL AUTH ORITIES REMARKS INCOMPLETE ADDRESS. THE ASSESSING OFFICER AFTER 6 CONSIDERING THE REPORT OF THE INSPECTOR ASKED THE A SSESSEE TO PRODUCE SHRI SUBHASH S/O SHRI SOHAN SINGH AND SHRI SUBHASH S/O SHRI RAM SINGH FOR EXAMINATION. THE A SSESSING OFFICER RECORDED THE STATEMENTS OF BOTH THE PERSONS UNDER SECTION 131 OF THE ACT ON 30.8.2010. SHRI SUBHASH S/O SHRI RAM SINGH HAS CATEGORICALLY STATED THAT HE HAD SUPP LIED BAJRI TO THE ASSESSEE DURING THE FINANCIAL YEAR 1996-97 W ORTH RS.1300/- AND THE PAYMENT OF THE SAME WAS RECEIVED IN CASH IN NEXT YEAR. HE HAS ALSO STATED THAT HE ALONGWIT H OTHER 4-5 LABOURERS WERE ENGAGED IN THE SUPPLY OF SAND AND BA JRI. ANOTHER PERSON NAMELY SHRI SUBHASH S/O SHRI SOHAN SINGH HAS CATEGORICALLY STATED IN HIS STATEMENT RECORDED UNDER SECTION 131 OF THE ACT THAT DURING THE FINANCIAL YE AR 1996-97 HE HAD SOLD SAND AND BAJRI WORTH RS.90 000/- TO THE ASSESSEE. HOWEVER IN HIS AFFIDAVIT THE AMOUNT MENTIONED WAS RS.50 000/- ONLY. IN HIS AFFIDAVIT SHRI SUBHASH S /O SHRI SOHAN SINGH HAS CATEGORICALLY STATED THAT DURING TH E ACCOUNTING YEAR 1996-97 HE HAD SUPPLIED BAJRI AND SAND TO THE ASSESSEE ON DIFFERENT DATES. HOWEVER HE HAS STATED THAT HE DID NOT REMEMBER THE DATES SINCE THE MATTER PERT AINED TO ACCOUNTING YEAR 1996-97 AND ON ESTIMATED BASIS HE HAD STATED THAT THE ESTIMATED COST WAS ABOUT RS.50 000/ -. ADMITTEDLY THE AFFIDAVIT WAS EXECUTED IN THE YEAR 2010. THE ASSESSING OFFICER STATED THAT THE AMOUNT MENTIONED IN THE STATEMENT WAS DIFFERENT FROM THE ONE MENTIONED IN T HE AFFIDAVIT. IT APPEARS THAT THE ASSESSING OFFICER HAS REJECTED THE STATEMENT OF SHRI SHRI SUBHASH S/O SHRI SOHAN S INGH ON THE GROUNDS THAT THIS PERSON IS CURRENTLY EMPLOYEE OF 7 ASSESSEES FATHER AND HE HAS GIVEN WRONG ADDRESS AN D AMOUNT IN HIS AFFIDAVIT. THE ASSESSING OFFICER HAS ALSO REJECTED THE AFFIDAVIT FILED BY SHRI KULVINDER S/O SHRI MANGAT R AM WHEREIN HE HAS STATED THAT DURING THE ACCOUNTING YE AR 1996- 97 SAND AND BAJRI VALUING RS.45 000/- WAS SUPPLIED TO THE ASSESSEE ON TRUCKS HIRED FROM LOCAL AREA. HE FUR THER STATED THAT THE PAYMENT OF THE MATERIAL SUPPLIED WAS RECEI VED IN PARTS ON DIFFERENT DATES IN THE NEXT YEAR. IT IS ALSO STATED THAT NEITHER ANY BILL NOR ANY RECEIPT FOR THE AMOU NT RECEIVED WAS ISSUED AS HE HAD NOT MAINTAINED ANY BOOKS OF AC COUNT. THE ASSESSING OFFICER HAS REJECTED THE AFFIDAVIT OF SHRI KULVINDER /SO SHRI MANGAT RAM ON THE GROUND THAT TH E NAME OF THIS PERSON DID NOT APPEAR ANYWHERE IN THE ORIGI NAL PROCEEDINGS. THE ASSESSING OFFICER FURTHER OBSERV ED THAT IN THE FURTHER PROCEEDINGS THE SAME LIST WAS RE-SUBMI TTED WHEREIN THE NAME OF SHRI KULVINDER WAS WRITTEN IN P EN AGAINST TRUCK NO.HP 48-097. HE FURTHER STATED THAT SHRI KU LVINDER IS ALSO AN EMPLOYEE OF SHRI J.C.GUPTA ASSESSEES FATH ER FOR THE PAST MANY YEARS AS PER THE LIST OF EIGHT PERSONS F ILED BY THE ASSESSEE DURING THE EARLIER AS WELL AS PRESENT ASSE SSMENT PROCEEDINGS. THE ASSESSING OFFICER ALSO OBSERVED THAT NO AFFIDAVIT OF DR.KAILASH OF HIMACHAL STONE CRUSHER CHAMBA WAS EVER FILED DESPITE A GAP OF ONE MONTH FROM THE FILING OF INITIAL REPLY. THE ASSESSEE CLAIMED THAT DURING A SSESSMENT YEAR UNDER CONSIDERATION IT HAD INCURRED AN EXPEND ITURE OF RS.17 37 642/- BEING MATERIAL PURCHASED AND CONSUME D DURING THE YEAR IN THE COURSE OF ITS CONSTRUCTION A CTIVITIES. OUT OF THE TOTAL EXPENDITURE OF RS.17 37 642/- A S UM OF 8 RS.5 29 492 REMAINED PAYABLE AS ON 31.3.1997 WHICH WAS ADDED BY THE ASSESSING OFFICER. IT IS SEEN THAT T HE DETAILS OF MATERIAL PAYABLE ALONGWITH DATES ON WHICH THE PAY MENTS WERE MADE IN THE SUBSEQUENT YEAR WERE PLACED ON REC ORD DURING THE ORIGINAL ASSESSMENT PROCEEDINGS ON 22.1. 2000. THE PHOTOCOPY OF THE SAME WAS AGAIN SUBMITTED BEFOR E THE PRESENT ASSESSING OFFICER. THE ASSESSEES CONTENT ION IS THAT THE PERSONS FROM WHOM SAND BAJRI AND OTHER SUCH PE TTY ITEMS WERE PURCHASED ARE MOSTLY ILLITERATE PERSONS WHO D O NOT MAINTAIN ANY REGULAR BOOKS OF ACCOUNT. THEY SELL MATERIAL ON ISSUE OF SMALL CHITS WHICH WERE PRODUCED BEFORE TH E ASSESSING OFFICER. IT IS ALSO STATED THAT SUCH PE RSONS ARE PETTY SUPPLIERS WHO COME FROM FARAWAY PLACES AND R ESIDE BY RIVER BEDS AND HAVE NO PERMANENT PLACE OF BUSINESS AS SUCH IT IS NOT POSSIBLE AFTER A GAP OF ABOUT 14 YEARS TO LOCATE SUCH PERSONS AND GET THEIR CONFIRMATIONS. 6. AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE I AM OF THE VIEW THAT THE ASSE SSING OFFICER HAS REJECTED THE EXPLANATION OF THE ASSESSEE ON FLI MSY GROUNDS. IT IS OBSERVED THAT THERE ARE MINOR CONT RADICTIONS IN THE AFFIDAVITS AS COMPARED WITH THE STATEMENTS R ECORDED UNDER SECTION 131 OF THE ACT OF SHRI SUBHASH S/O S HRI RAM SINGH AND SHRI SUBHASH S/O SHRI SOHAN SINGH. SUCH MINOR CONTRADICTIONS ARE OBVIOUS BECAUSE THERE WAS A GAP OF ABOUT 14 YEARS BETWEEN THE YEAR OF SUPPLY OF MATERIALS AN D THE YEAR OF RECORDING OF STATEMENTS. THE AUTHORITIES BELOW HAVE NOT CORRECTLY APPRECIATED THE STATEMENTS OF BOTH THE PE RSONS IN 9 RIGHT PERSPECTIVE. IT IS ALSO RELEVANT TO OBSERVE HERE THAT AFTER A GAP OF ABOUT 14 YEARS THE ASSESSEE COULD N OT HAVE PRODUCED EVIDENCE OF SUCH OLD TRANSACTIONS. IN TH E INSTANT CASE THE ASSESSING OFFICER HAS ACCEPTED THE TRADIN G RESULTS. THE TOTAL CONTRACT WORK OF THE ASSESSEE HAS BEEN AC CEPTED. THE CONSTRUCTION WORK DONE BY THE ASSESSEE IN THIS YEAR HAS BEEN ACCEPTED AND CONSTRUCTION OF BRIDGE CANNOT BE COMPLETED WITHOUT USING SAND AND BAJRI. THE TOTAL EXPENDITU RE CLAIMED BY THE ASSESSEE WAS TO THE TUNE OF RS.17 37 642/- OUT OF WHICH A SUM OF RS.5 29 492/- WAS SHOWN AS PAYABLE. THUS IT IS CLEAR THAT THE ASSESSING OFFICER HAS ACCEPTED THE EXPENDITURE TO THE EXTENT OF MORE THAN RS.12 LACS A ND THE AMOUNT OF RS.5 29 492/- WAS DISALLOWED MERELY ON TH E GROUND THAT THESE EXPENSES ARE NOT GENUINE. SHRI TEJ MOH AN SINGH LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT CON SIDERING THE SALES/TURNOVER OF THE ASSESSEE THERE WAS NO JU STIFICATION IN DISALLOWING PART OF THE EXPENSES. ACCORDING TO HIM THE ENTIRE EXPENSES WERE INCURRED FOR THE PURPOSE OF BU SINESS. IN MY OPINION THE ENTIRE CLAIM OF THE ASSESSEE CAN NOT BE ACCEPTED. THE ONUS WAS ON THE ASSESSEE TO PROVE T HAT THE ENTIRE EXPENSES CLAIMED WERE INCURRED FOR THE PURPO SE OF THE BUSINESS. THE DEFECTS POINTED OUT BY THE ASSESSIN G OFFICER IN THE BOOKS OF ACCOUNT HAVE ALREADY BEEN MENTIONED HEREINABOVE. IT IS ALSO FACT THAT TWO PERSONS APP EARED BEFORE THE ASSESSING OFFICER AND THEY HAVE CATEGORICALLY S TATED THAT DURING THE FINANCIAL YEAR 1996-97 THEY HAD SUPPLIE D SAND AND BAJRI TO THE ASSESSEE AND THEY HAD ALSO RECEIVE D THE PAYMENTS IN CASH IN THE NEXT YEAR. IT IS ALSO TRU E THAT THE 10 STATEMENTS OF THESE PERSONS WERE RECORDED AFTER A G AP OF 13- 14 YEARS. IT IS ALSO TRUE THAT AFTER A GAP OF MOR E THAN 12 YEARS THE ASSESSEE COULD NOT PRODUCE ALL THE PERSO NS BEFORE THE ASSESSING OFFICER FOR EXAMINATION. IN VIEW OF THE ABOVE DISCUSSION I AM OF THE CONSIDERED VIEW THAT THE AD DITION OF RS.2 50 000/- IN THIS CASE WILL MEET THE ENDS OF JU STICE. THUS THE ASSESSEE GETS A RELIEF OF RS.2 79 450/-. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 31 ST JULY 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR ITAT CHANDIGARH 11