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Income Tax Appellate Tribunal, “SMC - B” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Date of hearing : 02.03.2017 Date of Pronouncement : 19.05.2017 O R D E R
This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-
“1. The learned CIT (Appeals) erred in passing the order in the manner he did. 2. The learned CIT (Appeals) ought to have appreciated that the partner in his individual return has shown the income of Rs.3,63,442/- instead of the correct amount of Rs.7,85,542/-. Accordingly, the addition of Rs.4,22,100/- was to be made in partner’s hand and not in the hands of the firm-appellant. Thus, the addition made in the hands of the firm is required to be deleted.
3. The learned CIT (Appeals) erred in not considering the books of account and agriculture patties for genuineness of the credits for the sale of agriculture produce in the hands of the partner. Therefore, the addition made in firm's hand ought to be deleted.
4. Without prejudice, the addition as confirmed by the learned CIT (Appeals) is excessive, unreasonable and ought to be deleted in full.
5. The learned CIT (Appeals) erred in confirming the levy of interest under Sections 234A & 234C of the Act.
6. For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed.”
The facts in brief borne out from the record are that the assessee is engaged in the business of sale of agricultural produce. Shri Siddappa Gouda M. Patil representing his HUF and Shri Sidramareddy M. Patil in his individual capacity are the partners of the assessee firm. While completing the assessment, the AO has made an addition of Rs.4,22,100 towards ‘excess of liability crated in the books of account’ in respect of unsecured loans as on 31.03.2012 on the ground that in the loan account of Shri Siddappa Gouda M. Patil in the firm’s account, the loan amount outstanding is Rs.21,92,235 whereas in the return of income filed by Shri Siddappa Gouda M. Patil, the outstanding loan amount payable by the assessee firm is Rs.17,70,135.
Aggrieved, the assessee has preferred appeal before the CIT(Appeals), but the CIT(Appeals) was not convinced with the explanation furnished by the assessee and he confirmed the addition.
Now the assessee has preferred an appeal before the Tribunal and invited our attention to the revised return of income of Shri Siddappa Gouda M. Patil, in which the total agricultural income was shown at Rs.7,85,542. The ld. counsel for the assessee has made his efforts to explain the discrepancy in the accounts of the firm and the assessee with the submission that in fact there is no excess liability shown by the firm.
The ld. DR, on the other hand, has submitted that initially the agricultural income was at Rs.3,63,442 and the same was revised when the AO has made an addition on account of difference in liabilities.
Therefore, there is no valid justification for showing less agricultural income.
Having carefully examined the order of lower authorities, I find that the AO has picked up the correct figure of agricultural income at Rs.3,63,442 which was revised even after the assessment order.
Therefore, the cognizance of revised return cannot be taken. Revision is always possible at the most before completion of the assessment. As per the provisions of section 139(5) of the I.T. Act, 1961, revised return can only be filed at any time either before expiry of one year from the relevant assessment year, or before completion of assessment, whichever is earlier. In the instant case, the revised return was filed even after the completion of assessment. Therefore, it is not a valid revised return and no cognizance can be taken thereof. In the light of these facts, since there was difference in the outstanding liabilities, the lower authorities have rightly made the addition. The CIT(Appeals) has discussed the issue in detail in his order and I find no infirmity therein. However, for the sake of reference, I extract the relevant observations of CIT(Appeals) as under:-
“5.0. I have carefully gone through the facts of the case perused the assessment order and considered the arguments of the AR. I do not agree with the contentions of the appellant-firm. The AO at para Nos 2,3,4 & 4(a) of the assessment order has clearly presented the facts of the case. There are as many as five hearings in this case by the AO. Books of account and other details as called for have been submitted. Both the partners are Managing Partners drawing remuneration. During the hearing before the AO, details of sundry creditors and unsecured loan creditors were furnished. A detailed note on the business activities of the firm was also submitted to the AO by the A.R and the AO has verified the details of unsecured loan creditors apart from verifying other information furnished. The AO has also verified copies of returns of income filed by the partners. The AO vide para No. 4(a) of the assessment order had given a clear finding that the outstanding loan amount payable by the appellant firm to the partner, Sri. Siddappa Gowda H Patil as on 31.03.2012 is only Rs. 17,70,135/- and not Rs. 21,92,235/- as shown in the books of account of the appellant firm leading to the difference of Rs. 4,22,100/- which represents excess of liability created by the appellant firm. Thus, there is a clear – cut demonstration by the AO. The impugned loan creditor is none other than one of the managing partners of the firm, that too a working partner. I do not think that this is a mistake that has crept in by inadvertence. The appellant cannot throw the burden on to the partner. I fully agree with the AO and I confirm the disallowance of Rs 4,22,100/-. Thus all the grounds of appeal are dismissed.”
7. Since no defect is noticed in the order of CIT(Appeals), I confirm the same.
In the result, the appeal of assessee is dismissed.
Pronounced in the open court on this 19th day of May, 2017.