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Income Tax Appellate Tribunal, CUTTACK
Before: SHRI N.S SAINI
This is an appeal filed by the assessee against the order of CIT(A)-
Cuttack, dated 28.11.2013, for the assessment year 2008-09.
Ground Nos. 1 & 7 of the appeal are general in nature and hence,
requires no separate adjudication by me.
In Ground No.2 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the order of the Assessing Officer making
adhoc disallowance of Rs.20,000/- on estimate basis towards fuel
expenditure.
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I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. In the instant case, the
Assessing Officer observed that the assessee has claimed expenses of
Rs.80,134/- towards purchase of fuel. The Assessing Officer observed that
the assessee only produced a list showing the fuel purchases on different
dates, which did not indicate the details of quantity of fuel purchased and
the concerns from where purchases were made on different dates. He
noted that the assessee is a wholesale distributor of pharmaceuticals and
the gross turnover was Rs.1,21,74,018/-. The assessee possesses motor-
cycle/car, etc, which may not have been used by the assessee for the
business of the assessee. Since, the assessee could not produce the bills
and vouchers of fuel, the Assessing Officer, therefore, disallowed fuel
expenses of Rs.20,000/- out of the total claim of Rs.80,134/-.
On appeal, the CIT(A) confirmed the action of the Assessing Officer.
Before me, the contention of the ld Authorised Representative of the
assessee is that the Assessing Officer was not justified in making adhoc
disallowance of Rs.20,000/- out of fuel expenses of Rs.80,134/- claimed by
the assessee.
On the other hand, ld Departmental Representative vehemently
opposed the submission of the ld Authorised Representative of the assessee
and argued that the assessee failed to produce bills and vouchers for
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purchase of fuel and, therefore, the disallowance made by the Assessing
Officer was fully justified.
In the above facts and circumstances of the case, in my considered
opinion, the assessee was required by the Assessing Officer to produce bills
and vouchers for purchase of fuel. The assessee failed to produce the
same. When asked by the Bench whether the bills could be produced by
the assessee before the Tribunal, the Authorised Representative of the
assessee expressed his inability to do so. In the absence of bills for
purchase of fuel, in my considered opinion, the disallowance made by the
Assessing officer was justified. Therefore, I find no infirmity in the order of
the CIT(A), which is hereby confirmed and the ground of appeal of the
assessee 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 Rs.40,710/- towards
payment of freight charges.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. In the instant case, the
Assessing Officer observed that the assessee has claimed Rs.3,19,110/-
towards payment of freight charges. He observed that the assessee could
not produce any evidence in support of freight charges of Rs.40,710/-. In
absence of evidence, he disallowed Rs.40,710/-.
On appeal, the CIT(A) confirmed the action of the Assessing Officer.
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Before us, ld Authorised Representative of the assessee submitted
that adhoc disallowance was not justified by the Assessing Officer and the
CIT(A) erred in confirming the action of the Assessing Officer.
On the other hand, ld Departmental Representative vehemently
opposed the submission of ld A.R. of the assessee and submitted that the
disallowance was made in absence of any evidence for making payments.
In the above facts and circumstances of the case, I find that the
disallowance of Rs.40,710/- out of freight charges was made in absence of
any evidence for payment. On a query by the Bench, whether evidence
for the payments could be produced before the Tribunal, ld A.R. expressed
his inability to do so. In view of above, I find that the disallowance made
by the Assessing Officer is fully justified and there is no error in the order
of the CIT(A) in confirming the same. Hence, I confirm the order of the
CIT(A) and dismiss the ground of appeal of the assessee.
Ground No.4 of the appeal reads as under:
“For that the alleged addition on account of sundry creditors amounting to Rs.2,30,331/- by the AO without giving the assessee a chance of cross-examination to the person concern and failure of the CIT(A) to seek a remand report to this effect even though remand report was sought on account of other head of addition is illegal and arbitrary and complete denial of natural justice.” 16. At the time of hearing, ld Authorised Representative of the assessee
did not press this ground of appeal and, therefore, same is dismissed as
not pressed.
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In Ground No.5 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.5,18,500/- u/s.68 of the
Act.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. The Assessing Officer
observed that the assessee has received unsecured loan of Rs.8,19,500/-
from his father Shri Natabar Dash in cash. On oath, Shri Natabar Dash,
father of the assessee admitted the fact of advancing Rs.8,19,500/- in cash
by drawing from his bank account. On verification of bank account, the
Assessing Officer found that there was withdrawal of Rs.4,20,500/- on
17.12.2007, 30,000/- on 31.7.2007, Rs.76,000/- on 14.11.2007 and
Rs.62,000/- on 1.12.2007 and that rest of the withdrawals made during
the period under consideration were very nominal and considered the same
towards personal expenses of Shri Natabar Dash. Thus, the Assessing
Officer found that the father of the assessee could explain the source of
loan of Rs.5,88,500/- by withdrawing from his bank account. He, therefore,
confirmed the balance amount of addition of Rs.2,31,000/- under section
68 of the Act as not explained
Similarly, the Assessing Officer found that the assessee received loan
of Rs.2,59,500/- from Smt. Ashalata Acharya, mother of the assessee, who
is a retired teacher. She admitted on oath of having advancing
Rs.2,59,500/- in cash from her bank account. On a perusal of bank
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statement, the Assessing Officer found that she had withdrawn Rs.50,000/-
on 22.6.2007, Rs.27,000/- on 18.7.2007, Rs.1,00,000/- on 16.11.2007
and Rs.30,000/- on 31.3.2008 aggregating to Rs.2,07,000/-. He observed
that during the whole year, the total withdrawal from bank account by Smt.
Acharya was Rs.2,24,000/- against which she claimed of advancing
Rs.2,59,500/-. Therefore, he considered the loan of Rs.2,07,000/- as
explained an made addition of Rs.52,500/- u/s.68 of the Act.
Similarly, he observed that the assessee has received loan of
Rs.66,000/- from Bapuji Maiti in cash, who is a retail trader. The loan
creditor admitted on oath of advancing the money withdrawing from his
cash credit account. On examination of the bank account, the Assessing
Officer found that Shri Maiti had not drawn any amount in cash of
Rs.66,000/- from his bank. The amounts were withdrawn by cheques for
specific purposes and hence, he treated the loan of Rs.66,000/- as not
genuine and added the same to the income of the assessee.
Similarly, the Assessing Officer found that the assessee has claimed
to have received Rs.1,29,000/- from Shri Rama Chandra Das, a retired
teacher who was uncle of the assessee. Shri Ram Chandra Das admitted
that he had advanced Rs.1,29,000/- from his bank account . On verification
of the said bank account, the Assessing Officer found that total withdrawal
during the whole period was Rs.85,100/- which was much less than the
amounts said to have been advanced to the assessee. Moreover, he found
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that drawals of Rs.85,000/- constitutes nominal amounts drawn on
different dates of the whole period and considered the same to be for
personal expenses of Shri Ram Chandra Das. Hence, the Assessing Officer
considered the same to be not genuine and made the addition u/s.68 of
the Act.
Similarly, the assessee claimed to have received Rs.40,000/- in cash
from Shri Asish Kumar Mohapatra, who is working as a medicine
representative. Shri Mohapatra filed an affidavit alongwith his bank
account. On verification of the bank account, it was found that the total
withdrawal during the whole period was only Rs.38,965/-. The Assessing
Officer, therefore, held that the medicine representative is required by
profession to move from one place to another to develop the sale of the
medicines of the company for which is working. So, he held that the
withdrawal of Rs.38,965/- after meeting his personal expenses, was not
sufficient to advance Rs.40,000/- to the assessee. Hence, he considered
the same as not genuine and added u/s.68 of the Act.
In this way, the Assessing Officer made addition Rs.5,18,500/- u/s.68
of the Act to the total income of the assessee.
On appeal, the CIT(A) confirmed the action of the Assessing officer
on the ground that the Assessing Officer had made sufficient efforts to go
into the details of the case to find out the genuineness, creditworthiness
and identity of each of the loan creditors carefully. Therefore, the CIT(A)
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upheld the action of the Assessing Officer in adding Rs.5,18,500/- u/s.68
of the Act for the above five loan creditors .
Before me, ld Authorised Representative of the assessee reiterated
the submissions made before the lower authorities.
On the other hand, ld Departmental Representative relied on the
orders of lower authorities.
I find that the addition of Rs.5,18,500/- out of loans received from
five persons was made by the Assessing Officer on the ground that the
creditworthiness of the loan creditors could not be proved by the assessee.
Before me, ld A.R. could not bring any material on record to controvert the
findings of the Assessing Officer as well as the CIT(A) that the loan creditors
did not have creditworthiness to advance the amount to the assessee. In
absence of the same, I find no good reason to interfere with the order of
the CIT(A), which is hereby confirmed and the ground of appeal of the
assessee is dismissed.
In Ground No.6 of the appeal, the grievance of the assessee is that
the CIT(A) erred in confirming the addition of Rs.2,50,000/- made by the
Assessing Officer under the head “loans from 25 persons”.
I have heard the rival submissions and perused the orders of lower
authorities and materials available on record. The Assessing Officer
observed that the assessee has claimed to have received loan of
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Rs.10,000/- each from 27 persons amounting to Rs.2,70,000/-. The
assessee was required to file confirmations in support of advancement of
loan. The assessee did not file any confirmation letters from loan creditors.
Therefore, the Assessing Officer made addition of Rs.2,70,000/- u/s.68 of
the Act considering the loan to be non-genuine.
On appeal, the CIT(A) observed that the assessee claimed to have
received loan from 27 persons of Rs.10,000/- each. The assessee could
produce four persons for verification by the Assessing Officer regarding
payment of Rs.10,000/- each in cash. One person confirmed having
advancing Rs.10,000/- in Financial Year 2007-08, which was adjusted in in
the financial year 2007-08 against purchase. Two persons stated that they
had advanced Rs.10,000/- each during the financial year 2007-08 and
same amount were adjusted against purchase in the financial year 2008-
One person stated that he had advanced Rs.10,000/- during the year
2011-12 and same was adjusted against purchase of medicines in the year
2011-12.. Therefore, the CIT(A) concluded that the veracity of the clam of
receipt of Rs.2,70,000/- as advance in the year 2007-08 has boiled down
to two persons advancing Rs.10,000/- only. Therefore, he confirmed the
addition of Rs.2,50,000/- out of total addition of Rs.2,70,000/- made by
the Assessing Officer.
Ld Authorised Representative of the assessee reiterated the
submissions made before the lower authorities.
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Ld Departmental Representative supported the order of the CIT(A).
I find that the assessee claimed to have received loan of Rs.10,000/-
each from 27 persons. The assessee failed to produce any confirmation
letters from the loan creditors. Therefore, the Assessing Officer added
Rs.2,70,000/- u/s.68 of the Act for considering the loan being not genuine.
Before the CIT(A), assessee could produce four persons and on
examination of the four persons, he found that two persons had advanced
loan of Rs.10,000/- each during the financial year 2007-08. Therefore, he
allowed credit of Rs.20,000/- and confirmed the balance addition of
Rs.2,50,000/-.
Before me also, no material has been produced by the assessee to
controvert the findings of the CIT(A). In absence of the same, I find no
good and justifiable reason to interfere with the order of the CIT(A), which
is hereby confirmed and ground of appeal of the assessee is dismissed.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 15/03/2017 in the presence of parties. Sd/- (N.S Saini) ACCOUNTANT MEMBER
Cuttack; Dated 15/03/2017 B.K.Parida, SPS
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Copy of the Order forwarded to : 1. The Appellant :Naba Kishore Dash,Iswarpur, Po: Balikuda, Dist: Jagatsinghpur 2. The Respondent. ITO, Ward-1, Paradeep 3. The CIT(A) Cuttack 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. BY ORDER, //True Copy//
SR.PRIVATE SECRETARY ITAT, Cuttack