ASHOK KUMAR AGARWALA,MAYURBHANJ vs. ITO, BARIPADA

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ITA 424/CTK/2015Status: DisposedITAT Cuttack15 July 2019AY 2010-114 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the appeal regarding the addition for unexplained bank credit as the source was explained by a cheque. It also allowed the deletion of depreciation addition as the asset purchases were not disputed. However, other additions were dismissed.

What were the facts?

The assessee appealed additions made by the Assessing Officer and sustained by the CIT(A) regarding investment in hotel building, loans, unexplained bank credit, and depreciation. The assessee did not press some grounds, while others were decided on merits.

What were the issues?

Whether the addition for unexplained credit in the bank account is justified when the assessee provides evidence of the source. Whether depreciation on capital assets can be denied when their purchase is not disputed.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK ‘SMC’ BENCH, CUTTACK

Before: SHRI CHANDRA MOHAN GARG

For Appellant: Shri D.K.Sheth, AR
For Respondent: Shri Subhendu Dutta, DR
Pronounced: 15/07

This is an appeal filed by the assessee against the order of the

Commissioner of Income Tax(Appeals), Cuttack dated 25.5.2015 for the

assessment year 2010-2011.

2.

Ground No.1 is general in nature and hence, requires no separate

adjudication.

2.

Ground No.2 & 3 read as under:

“2. For that the addition of Rs.22,000/- under the head “investment in hotel building” as sustained by the CIT(A) is uncalled for. 3. For that the addition of Rs.39,000/- in respect of loans from different persons as sustained by the CIT(A) is also improper.”

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3.

At the time of hearing, ld A.R. of the assessee did not press these

grounds and hence, they are dismissed as not pressed.

4.

In Ground No.4 of appeal, the grievance of the assessee is that the

CIT(A) erred in sustaining the addition of Rs.4,00,000/- under the head

“unexplained credit in Bank account” made by the AO.

5.

During the course of assessment proceedings, on verification of bank

account of the assessee maintained with Odisha Gramya Bank, Rairangpur

Branch, the Assessing Officer noticed that Rs.4,00,000/- has been credited

to the bank account on 25.3.2010 through cheque No.261101. Since the

assessee could not offer any explanation regarding the source of

Rs.4,00,000/- credited in the bank account, the Assessing officer added the

same to the income of the assessee, which was upheld in first appeal.

6.

Before me, ld A.R. furnished a xerox copy of cheque of Rs.4,00,000/-

given by Shri Mohan Lal Agarwal in the name of the assessee on 25.3.2010

A/c No.CC 48 placed in paper book and submitted that since the amount

has been credited in the bank through cheque, no adverse inference can be

drawn regarding the credit of account and, therefore, the addition made

may kindly be deleted.

6.

Replying to above, ld D.R. submitted that before the lower

authorities no such proof was furnished by the assessee.

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7.

Having heard the rival submissions, we find that the lower authorities

had doubted the source of money credited in the bank account of the

assessee. Now, the assessee has filed a xerox copy of cheque of

Rs.4,00,000/- to prove that Shri Mohan Lal Agarwal has issued the cheque

in favour of the assessee and, therefore, the source of which is explained.

Ld D.R. could not controvert to the submission of xerox copy of the cheque.

I find that the cheque No. mentioned in the assessment order is tallied with

the copy of cheque now furnished by ld A.R. of the assessee. In view of

above, I am satisfied that the source of Rs.4,00,000/- is duly explained by

the assessee and, therefore, same is deleted. This ground of appeal is

allowed.

8.

Ground No.5 of appeal relates to confirmation of addition under the

head “depreciable assets”.

9.

I have heard the rival submissions. On perusal of the impugned

order, I find that the assessee has shown capital assets in the balance sheet

and liability, which was not questioned by the AO. However, the CIT(A) in

the first appeal, has directed to restrict the disallowance of depreciation of

Rs.54,800/-. The CIT(A) also accepted the purchases of assets to be

genuine but observed that same should be allowed. From the above

notings of the CIT(A), I find that the findings of the CIT(A) is contradictory

that on one hand, he observed that the depreciation should be allowed and

on other hand, restricted the allowance of depreciation of Rs.54,800/-. I

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am of the view that the depreciation cannot be denied to the capital assets,

where the purchases of the assets are not disputed. In view of above, I

delete the addition of Rs.54,800/- towards depreciation of capital assets and

allow this ground of appeal.

10.

Ground No.6 relates to confirmation of addition of Rs.32,800/- &

Rs.3,290/- towards difference in bills for A.C. & T.V.

11.

After hearing both the sides, I do not find any infirmity in the order

of the CIT(A) in confirming the disallowances as the discrepancies were not

complied with by the assessee. Hence, this ground of appeal is dismissed.

12.

In the result, appeal of the assessee is partly allowed.

Order pronounced on 15 /07/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 15/07/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant: Ashok Kumar Agarwal, Ward No.5, Rairangpur

2.

The Respondent. ITO, Ward-1, Palabani, Baripada 3. The CIT(A)-Cuttack 4. Pr.CIT- Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order

Sr. Pvt. Secretary, ITAT, Cuttack

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