Income Tax Appellate Tribunal - Delhi
T.P. Agarwal (Huf), Meerut vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'H' : NEW DELHI)
BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER
AND
SHRI B.C. MEENA, ACCOUNTANT MEMBER
ITA Nos.4815 & 4816/Del./2010
(ASSESSMENT YEARS : 2005-06 & 2006-07)
ACIT, Circle - 1, vs. Smt. Mukul Aggarwal,
Meerut. 61, Shivaji Road,
Meerut.
(PAN : ACYPA9780H)
ITA No.1884/Del./2012
(ASSESSMENT YEAR : 2005-06)
ACIT, Circle - 2, vs. M/s. T.P. Agarwal (HUF),
Meerut. 61, Shivaji Road,
Meerut.
(PAN : AACHT0273Q)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri K. Sampath, Advocate
REVENUE BY : Shri R.S. Meena, CIT DR and
Shri Sameer Sharma, Senior DR
ORDER
PER B.C. MEENA, ACCOUNTANT MEMBER :
ITA No.4815/Del/2010
This appeal filed by the revenue emanates from the order of CIT (A), Meerut dated 18.03.2010 for the assessment year 2005-06.
2. The assessee is a proprietress of M/s. Agarwal Eye Hospital, Shivaji Road, Meerut. A search was conducted at residential and business premises 2 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012 of the assessee. A notice u/s 153A was served. The Assessing Officer made certain additions. The CIT (A) has deleted. Now, the assessee is in appeal by taking the following grounds of appeal :-
"1. Whether in the facts and circumstances of the case, the CIT(A) has erred in not considering the merits of the case and in deleting the addition made by the AO after disallowing interest of Rs.66,000/- paid to others, ignoring the specific finding of the AO based on the copies of accounts furnished by the assessee before him wherein no interest has been shown in the respective accounts.
2. Whether in the facts and circumstances of the case, the CIT(A) has erred in reducing the addition of Rs.43,301/- to Rs.22,460/- made by the AO 1/4th of the expenses claimed under the head electricity expenses, generator expenses, repair and maintenance without appreciating that the assessee is staying in the same premises where business activities are being carried out.
3. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.7,70,000/- made by the AO on account of purchase of Retinal camera holding that the AO's version from the word "direct" meaning payment is not all that sound. It can mean transaction wherein there are no intermediataries and not necessarily mean that full and final payment has been made. The learned CIT(A) has not appreciated the specific and documentary evidential finding of the AD that the assessee purchased one Topcon Retinal Camera from the funds not disclosed to the department as per seized material annexed A-22 pages 61 and 62.
4. Whether in the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs.4,74,240/- without appreciating the finding of the AO while making the addition after rejecting the books of accounts on the basis of seized documents in Annexure A-2 pages 21-28 on the basis which glaring discrepancies in the results declared by the assessee were evident.
5. In the facts circumstances of the case, the order of the Commissioner of Income Tax (Appeals) may be set aside and that of the AO restored.
3. In the ground no.1, the issue involved is deleting the addition of Rs.66,000/- made on account of interest paid to others. 3 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012
4. The Assessing Officer noted that the assessee has debited a sum of Rs.1,50,000/- on account of interest paid to others which he did not believe to be genuine in view of copy of accounts filed by the assessee wherein no interest has been shown in respect of these accounts.
5. We have heard both the sides on the issue. We find that the copy of balance sheet and profit and loss account submitted by the assessee clearly shows that loans and interest were appearing as liability as on 31.03.2005 at Rs.18,50,000/- which stands tallied with the bank accounts which was also placed before the authorities below. The ld. DR was unable to controvert the submissions of the assessee in this regard, therefore, we find no fault in the order of the CIT (A) and we sustain the same on this ground.
6. In the ground no.2, the issue involved is reducing the addition of Rs.43,301/- to Rs.22,460/- being 1/4th of the expenditure towards electricity, generator expenses, repair and maintenance etc. for personal use.
7. As per the Assessing Officer, the Eye Hospital of the assessee and her family was both residing in the same premises, therefore, he disallowed 1/4th of expenses claimed on account of electricity, generator, repair and maintenance for personal use.
8. We have heard both the sides on the issue. We find that there are separate meters for residential portion and the Eye Hospital portion. Therefore, there was no scope for any disallowance out of the electricity 4 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012 expenses. Further, in respect of generator expenses, repair and maintenance expenses, we find that the CIT (A) has sustained 1/4th of the addition for which assessee is not in appeal. In view of these facts, we find no fault in the order of the CIT (A) on this issue and the ground is rejected.
9. In the ground no.3, the issue involved id deleting the addition of Rs.7,70,000/- made on account of purchase of Retinal Camera.
10. Ld. DR relied on the order of the Assessing Officer and submitted that CIT (A) was not justified in deleting this addition. He submitted that the CIT (A) has not appreciated the specific and documentary evidences and finding of the Assessing Officer. He submitted that the assessee has purchased one Topcon Retinal Camera from undisclosed source of income. On the other hand, ld. AR relied on the order of the CIT (A) and submitted that Topcon Retinal Camera was agreed to be purchased on trial basis and same was purchased from Shri Ravi Mehra of M/s. Eye Tech Industries. This equipment was not found to be up-to-mark as claimed earlier, therefore, the same sale offer was rejected. The assessee has submitted that e-message received from the said company was also placed before the authorities below. There was no evidence that the assessee has made the payment for the camera. There is also no evidence that M/s. Eye Tech Industries has received the payment for the camera. In view of these facts, he submitted that there are no merits in this revenue's ground of appeal.
5 ITA Nos.4815 & 4816/Del./2010ITA No.1884/Del/2012
11. We have heard both the sides on the issue. We have also gone through the records carefully. The assessee filed the evidence that M/s. Eye Tech Industries has not received the payment against the camera and the e-message has been submitted in this regard. The revenue is not able to prove that e- message received from M/s. Eye Tech Industries was not genuine. The revenue is also failed to prove that the apparent is not the real and the onus is on the party who claims it to be so. Therefore, we find no merits in this ground and dismiss the same.
12. In the ground no.4, the issue involved is deleting the addition of Rs.4,74,240/- after rejecting the books of account on the basis of the seized documents.
13. We have heard both the sides and also perused the documents on which this addition was made. The documents are not having any heading and it do not mention any period for which it pertains to. The revenue has not related the name of the person for whom the various figures appearing therein, therefore, in our considered view, no addition can be made on the basis of such bald and cryptic document. The Assessing Officer has gone to reject the books of account as he cannot accept the results declared by the assessee but, in our considered view, books of account cannot be rejected summarily without any basis. It can be done only when he is not satisfied about the correctness or completeness of the accounts and where method of accounting 6 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012 or accounting standards has not been regularly followed by the assessee. In view of these facts, we find no merits in the appeal of the revenue on this ground.
14. Ground No.5 is general in nature and does not require any adjudication.
15. In the result, the appeal filed by the revenue being ITA No.4815/Del/2010 stands dismissed.
ITA No.4816/Del/2010
16. This appeal filed by the revenue emanates from the order of CIT (A), Meerut dated 18.03.2010 for the assessment year 2006-07.
17. In the ground no.1, the issue involved is against the deletion of addition of interest of Rs.78,500/- paid to others.
18. We have heard both the sides on the issue. We find that the loans and interest appearing in the liability as on 31.03.2006 at Rs.12,50,000/- in the books of assessee. The interest paid has been shown in the profit and loss account as Rs.1,62,500/- which stands tallied with the bank accounts, therefore, in our considered view, there is no merit in this ground of revenue's appeal and the same is dismissed.
19. In the ground no.2, the issue involved is deleting the addition of Rs.30,00,000/- made on account of purchase of property as claimed by Shri T.P. Agarwal in his statement.
7 ITA Nos.4815 & 4816/Del./2010ITA No.1884/Del/2012
20. We have heard both the sides on the issue. After hearing, we find that there was no evidence found during the search operation which could suggest that the property in question was purchased for Rs.79,00,000/- instead of Rs.49,00,000/-. Further, there is no evidence that assessee has paid any on money on purchase of this property. We find that assessee's husband made a statement in the mid-night during the search operation that Rs.30 lacs was paid in cash, however, the same was retracted by way of an affidavit filed before the DGIT (Inv.), Lucknow. We have gone through the affidavit of retraction by the husband of the assessee with regard to the discloser made during the search operation. This statement was recorded in the night at 3.00 AM. Further, there is no corroborative evidence on the record found and seized during the search operation. We also get strength from the Circular No.286/2/2003-I.e. (Inv.) dated 10.03.2003 where such disclosers were held to be of no consequence without corroborative documents. In view of these facts, we find no fault in the order of the CIT (A).
21. Ground No.3 is general in nature and does not require any adjudication.
22. In the result, the appeal filed by the revenue being ITA No.4816/Del/2010 stands dismissed.
ITA No.1884/Del/2012
23. This appeal filed by the revenue emanates from the order of CIT (A), Meerut dated 27.01.2012 for the assessment year 2005-06. 8 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012
24. The assessee is an HUF. The CIT (A) deleted the addition of Rs.10,90,000/- made on account of unexplained cash credits u/s 69 of the Income-tax Act, 1961. The revenue is contending that since the assessee has failed to furnish any source of the funds which has been invested in the KVPs, the onus was certainly on the assessee to prove the credit appearing in its books which remained totally undischarged. The revenue has also placed reliance on the following decisions :-
(i) CIT vs. Korley Trading Co. Ltd. - 232 ITR 820 (Cal.);
(ii) Krishan Kumar Khanb vs. ITO and Anr. - 17 DTR 249 (P&H);
(iii) M/s. Sejai International Ltd. vs. CIT, Meerut (All.) Appeal No.306 of 2010;
(iv) V. Dachinamurthy vs. ADI - (1984) (MAD) 149 ITR 341;
(v) CIT vs. R.S. Rathore - (1985) 212 ITR 390 (Raj.).
25. We have heard both the sides on the issue. The assessee claims that the Karta of M/s. Trilok Prakash Agarwal HUF, his father, Shri Bhagwati Prasad has given a large sum of money during a period between 1979 - 1984 which was earned by agricultural income from the ancestral agricultural land. It was also claimed that some cash was also received from Shri Dal Chand, father and uncle, Shri Pyare Lal and confirmation in this regard duly signed by these people was filed. A copy of Will dated 17.08.1982 of his uncle, Shri Pyare Lal was also produced. All these facts show that the corpus of Trilok Prakash 9 ITA Nos.4815 & 4816/Del./2010 ITA No.1884/Del/2012 Agarwal HUF came to be in existence in 1982 itself. Therefore, it is justified to be assessed income of Trilok Prakash Agarwal HUF. As far as, the source of investment of Rs.10,90,000/- is concerned, we find that investment in KVPs/NSCs were made as early as in 1998 as these were renewed regularly thereafter. The bank accounts with Indraprastha Bank Limited was found during the search and these accounts were pertained to Trilok Prakash Agarwal HUF. The investments were made in the name of coparceners and the members of HUF. The source of investment of KVPs for the financial year 2004-05 was out of maturity and re-maturity of earlier investments. The assessee submitted a fund flow chart and the revenue could not controvert the facts of fund flow chart. The assessee has able to demonstrate that he was having Rs.10,70,000/- with him which was invested during the year. In view of these facts, we find no fault in the order of the CIT (A) and we dismiss the ground of revenue's appeal.
26. In the result, the appeal of the revenue being ITA No.1884/Del/2012 stands dismissed.
27. To sum up : all the three appeals filed by the revenue are dismissed.
Order pronounced in open court on this 24th day of April, 2014.
Sd/- sd/-
(DIVA SINGH) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 24th day of April, 2014/TS
10 ITA Nos.4815 & 4816/Del./2010
ITA No.1884/Del/2012
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A), Meerut.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.