SHRI ASHOK KUMAR TAWLI,ALIRAJPUR vs. THE ITO-2, RATLAM

आदेश /O R D E R PER KUL BHARAT, J.M. : This appeal is filed by the assessee against the order of ld. Commissioner of Income tax (Appeals), Ujjain, pertaining to assessment year 2006-07.

It was proved before the ld. AO and Ld. CIT(A) that the assessee has purchased goods through Mandi Committee from these farmers and has made the payment in the month of April, 2006. The addition of Rs. 5,93,217/- may please be deleted. 2. The Ld. CIT(A) erred in maintaining the addition of Rs. 23,513/- on account of low household withdrawals. The same may please be deleted.

assessee has shown the credit of Rs. 5,93,270/- from 42

persons. The credited amount shown was less than Rs.

20,000/-. Out of 42 persons, the assessee produced four

persons. The AO recorded the statement of four persons,

-: 3 :- Shri Ashok Kumar Tawli, Alirajpur viz., Shri Ram Singh Aman Singh, Shri Mansu Kanya, Shri

Ramaliya Kakadiya and Shri Mansukh Kaniya. The AO

found from the statement recorded that these persons were

not having any credit balance with the assessee. During

the course of appellate proceedings, the assessee filed new

evidences, which were forwarded to the AO for remand

report. The AO was asked specifically to check remaining

38 persons on the points of identity, creditworthiness and

genuineness. The assessee failed to produce these persons

before the AO on the appointed date. On appeal, the Ld.

CIT(A) confirmed the addition. Aggrieved by this, the

assessee is in appeal before us.

assessee is an individual doing the business of trading in

foodgrains, cereals and cotton. The assessee is a small

trader and the total sale is approximately Rs. 90 lacs. The

assessee purchases the goods from the farmers and

-: 4 :- Shri Ashok Kumar Tawli, Alirajpur traders. The payments are made within a short time.

Sometimes the payments are made within a period of 2 to 3

months. While framing the assessment, the AO observed

that the amounts payable at the end of the year for the

purchases made were Rs. 5,93,270/- from 42 persons. The

AO asked the assessee to produce four persons. The

assessee produced these persons and affidavits were also

filed. These persons were examined and everyone

confirmed the transactions of sale with the assessee. The

Ld. Counsel for the assessee further contended that in

appeal, the Ld. CIT(A) called for the remand report with a

direction to verify the identity, creditworthiness and the

genuineness of the transaction. In remand proceedings, the

AO asked the assessee to produce all the 38 persons and

handed over notices u/s 131 to the assessee. The assessee

requested vide letter dated 26.07.2015 to exempt the

personal presence of the farmers since they were from the

-: 5 :- Shri Ashok Kumar Tawli, Alirajpur Tribal area of Jhabua and were busy in agricultural

activities during that period and were not ready to come to

Ratlam. However, the assessee filed the khasra nakal

alongwith the affidavits of 35 farmers and submitted that

the payments to all of them were made during the short

period in next year. The AO did not find favour with the

submissions of the assessee and made the addition. The

Ld. CIT(A) dismissed the assessee’s appeal on the ground

that the assessee failed to discharge the burden of proof for

establishing the genuineness of the transaction. The Ld.

Counsel for the assessee further submitted that there was

no dispute that the purchases were made from the farmers

since the sales were effected during the year under

consideration and there was no much stock remaining with

the assessee except the stock of Tuwar of Rs. 2,53,872/-.

Under these circumstances, the small credits in the

accounts of the tribal farmers cannot be considered as

-: 6 :- Shri Ashok Kumar Tawli, Alirajpur non-genuine and no addition can be made. The Ld.

Counsel for the assessee prayed that the addition made

may please be deleted.

orders of the lower authorities .

perused the material available on record. We have also

gone through the written submissions submitted by the

Ld. Counsel for the assessee, which is on record. We find

that the assessee is doing business in a small place which

is backward area in Jhabua District. We also find that the

purchases are made from the Tribal farmers who were

doing small farming. The amounts due are paid within a

short period of 15 days to 1 month. We find that the

assessee has filed the details of payments. The assessee

has also filed the papers regarding B-I and P-II Khasras

alongwith the affidavits in 35 cases. We find that the

-: 7 :- Shri Ashok Kumar Tawli, Alirajpur sufficient material was produced before the AO and four

persons were also produced before the AO. We find force in

the submission made by the Ld. Counsel for the assessee.

Under the above facts and circumstances, the small credits

in the accounts of the tribal farmers cannot be considered

as non-genuine. The addition made by the AO and

confirmed by the Ld. CIT(A) at Rs. 5,93,217/- is hereby

deleted. Ground no. 1 is allowed.

made on account of low house hold withdrawals.

hold withdrawals. The AO considered it low and made the

addition of Rs. 23,513/- , which the Ld. CIT(A) confirmed.

there are only five members in his family. Assessee

submitted reply before the AO that his children are

studying in Government school and living in the house

-: 8 :- Shri Ashok Kumar Tawli, Alirajpur which is near to the School. There are no expenses of fee

and transportation. The Ld. Counsel for the assessee

contended that their standard of living is also general. The

amount withdrawn is sufficient in a small village.

orders of the lower authorities.

perused the material available on record. We find force in

the submission of the Ld. Counsel for the assessee. We find

that the withdrawal of Rs. 30,483/- is sufficient and

reasonable. We, therefore, delete the addition of Rs.

23,513/- made by the AO and maintained by the Ld.

CIT(A). Ground no. 2 is allowed.

allowed.

-: 9 :- Shri Ashok Kumar Tawli, Alirajpur

The order is pronounced in the open court on 11.05.2018.

Sd/- Sd/- (मनीष बोरड) (कुल भारत) लेखा सद�य �या�यक सद�य (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore; �दनांक Dated : 11/05/2018 CPU/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore