Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, CUTTACK
Before: SHRI N.S SAINI
These are appeals filed by the assessee against the order of CIT(A)-
1, Bhubaneswar dated 23.1.2014 & 20.8.2014, for the assessment year
2009-2010 .
In ITA No.425/CTK/2014, Ground No.1 of the appeal is general in
nature and hence requires no separate adjudication by me.
In Ground Nos.2 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the order of the Assessing Officer disallowing
depreciation on fixed assets of Rs.1,70,780/-.
2 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
I find that the CIT(A) has deleted the addition of Rs.1,70,780/- on
the ground that such amount was paid for acquisition of assets and not
claimed as expenditure in the profit and loss account. Therefore, the
assessee can have no grievance against the order of the CIT(A). Hence,
this ground of appeal is dismissed.
In Ground No.3 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the disallowance of depreciation of
Rs.23,916/- claimed by the assessee.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. I find that the Authorised
Representative of the assessee has not controverted the findings of lower
authorities that the purchase bills furniture and machineries were found to
be false or bogus on an enquiry made by the Assessing Officer through
Inspector. As the very existence of the asset is not proved by evidence,
the question of allowing depreciation for the use of business does not arise.
Hence, I find no infirmity in the order of the CIT(A) in disallowing the claim
of depreciation of Rs.23,916/- and dismiss this ground of appeal.
In Ground No.4 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.9,906/- towards
expenditure against repair and maintenance of assets which is
proportionate to Rs.54,570/-.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. In the instant case, the
3 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
Assessing Officer disallowed proportionate expenditure on repairs and
maintenance of assets of Rs.9,906/- as he has found that purchase of
machineries and furniture of Rs.1,70,780/- as bogus.
On appeal, the CIT(A) confirmed the action of the Assessing Officer.
Before me, ld Authorised Representative of the assessee submitted
that the proportionate disallowance of expenditure was not justified.
Ld D.R. relied on the orders of lower authorities.
I find that the Assessing Officer has disallowed proportionate
expenditure of Rs.9,906/- against repairs and maintenance of assets on the
ground that he has found the purchase of machineries and furniture of
Rs.1,70,780/- as bogus. I find that no material has been brought on record
by the lower authorities to show that the assessee in the expenditure of
Rs.54,570/- has claimed any expenditure on furniture and machineries
purchase of which it was found to be bogus. In absence of any such nexus,
in my considered view, adhoc disallowance out of genuine business
expenditure cannot be made. I, therefore, vacate the disallowance of
Rs.9,906/- made by the lower authorities and allow this ground of appeal
of the assessee.
In Ground No.5 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.8,00,000/- u/s.68 of the
Act.
4 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. The Assessing Officer found
from the saving bank account with Dena Bank Account No.113010000332
of the assessee that the assessee had made cash deposit of Rs.8,00,000/-
on 28.11.2008. The assessee explained the source of deposit to be out of
amounts withdrawn earlier for payment of cement advance and other
building materials. The Assessing Officer did not find the explanation of
the assessee to be satisfactory and added Rs.8 lakhs u/s.68 of the Act as
unexplained cash credit.
On appeal before the CIT(A), the assessee reiterated the submissions
made before the Assessing Officer and submitted that the details of
withdrawals of Rs.8,15,000/- during the period 21.11.2008 to 27.11.2008,
which are recorded by the CIT(A) in his order as under:
Date Amount (Rs.) 21.11.2008 1,20,000/- 21.11.2008 15,000/- 24.11.2008 30,000/- 26.11.2008 5,50,000 27.11.2008 1,00,000/- Total : 8,15,000/-
The assessee explained that deposit of Rs.8 lakhs on 28.11.2008 was
out of previous withdrawals of Rs.8,15,000/-. The CIT(A) did not accept
the explanation of the assessee on the ground that when payment has to
be made it has to be made in cheque as section 40A(3) provides that no
cash payment in excess of Rs.20,000/- can be made by the assessee.
5 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
Before me, ld Authorised Representative of the assessee reiterated
the submissions made before the lower authorities.
Ld Departmental Representative supported the orders of lower
authorities.
I find that the explanation of the assessee that deposits of
Rs.8,00,000/- in the bank account maintained with Dena Bank on
28.11.2008 was out of his previous withdrawals during the period
21.11.2008 to 27.11.2008 of Rs.8,15,000/- as a plausible one. Further the
explanation of the assessee is that he had withdrawn this cash for payment
of cement and other building materials and when same was not necessary
for that purpose, the assessee re-deposited the amount in his bank
account. I find that no positive material has been brought on record by the
revenue to show that the assessee could not have made deposit of Rs.8
lakhs on 28.11.2008 out of his previous withdrawals of Rs.8,15,000/-made
during the period 21.11.2008 to 27.11.2008. I, therefore, set aside the
orders of lower authorities on this issue and delete the addition of Rs.8
lakhs and allow this ground of appeal of the assessee.
In the result, the appeal filed by the assessee is partly allowed. 19. In ITA No.413/CTK/2014, the grievance of the assessee is that
the CIT(A) erred in confirming the levy of penalty u/s.271D of the Act of
Rs.2,90,000/-.
Assessing Officer found that the assessee has accepted cash loan of
Rs.2,90,000/- from the following persons:
6 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
1) Shri Shankar Dinda : Rs.70,000/- 2) Shri Abhimanyu Samal : Rs.80,000/- 3) shri Pankaj Behera : Rs.85,000/- 4) Smt. Minati De : Rs.55,000/-
Therefore, he levied penalty u/s.271D of the Act of Rs.2,90,000/- for
violation of provisions of section 269SS of the Act.
On appeal, the CIT(A) confirmed the action of the Assessing Officer.
Before me, ld Authorised Representative of the assessee submitted
that the loans were taken from close relatives and they have adequate
funds from agricultural sources to meet his business necessity. He
submitted that the Hon’ble Jharkhand High Court in the case of OMEC
Engineers vs CIT,(2008) 217 CTR Jharkhand 144, has held that when
there is no finding of assessing authority or appellate authority or the
Tribunal that the transaction made by the assessee in breach of provisions
of section 269SS was not a genuine transaction, the penalty u/s.269SS is
not leviable.
Ld D.R. relied on the orders of lower authorities.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. In the instant case, I find
that there is no finding either by the Assessing officer or ld CIT(A) that the
transaction made by the assessee in breach of provisions of section 269SS
are not genuine transaction. I also find that the explanation of the assessee
before the lower authorities is that payment was received in cash from
7 Sri Sudarshan Bhuyan, Ranipatna, Balasore.
persons who are agriculturist staying in village where there is no banking
facility. Thus, it is not in dispute that the payments in cash were received
by the assessee out of commercial expediency in order to carry on his
business transaction. Therefore, the decision of Hon'ble’ Jurisdictional High
Court in the case of Omec Engineers (supra) squarely applies to the facts
of the assessee’s case. Respectfully following the same, I delete the
penalty of Rs..2,90,000/- and allow the grounds of appeal of the assessee.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 29/03/2017 in the presence of parties. Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 29/03/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sri Sudarshan Bhuyan, Ranipatna, Balasore. 2. The Respondent. JCIT, Balasore 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT1-, Bhubaneswar. 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,
SR.PRIVATE SECRETARY ITAT, Cuttack