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Income Tax Appellate Tribunal - Allahabad

M/S Pandey Construction Co., ... vs Acit-Range-Iii, Mirzapur on 6 November, 2020

          IN THE INCOME TAX APPELLATE TRIBUNAL
            ALLAHABAD (SMC) BENCH, ALLAHABAD
                 (THROUGH VIRTUAL COURT)

    BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER


                    I.T.A. No.300/ALLD/2017
                     Assessment Year: 2004-05
        M/s.Pandey                         Asst. Commissioner
        Construction Co.,           Vs     of Income Tax,
        Turra, Piperi,                     Range-III,
        Sonebhadra                         Mirzapur
        [PAN: AACFP8806H]
             (Appellant)                      (Respondent)

             For Assessee       : Shri Praveen Godbole,
                                                Advocate
             For Revenue        : Shri A.K.Singh, Sr.DR

             Date of Hearing       : 05-11-2020
             Date of Pronouncement : 06-11-2020

                                ORDER

This appeal by the assessee is directed against the order dated 31-08-2017 of the Commissioner of Income Tax(Appeals)-Allahabad for the AY.2004-05. In this appeal, the assessee has raised the following Grounds:

1-That in any view of the matter the assessment order dated 22/10/2006 passed u/s 143(3) of the IT Act by the assessing officer by determining the income at Rs. 8,46,078/- as against the retuned income of Rs.6,33,482/- by making arbitrary additions/ disallowances under various heads ignoring the correct facts and his actions as partly maintained by the Commissioner of Income Tax (Appeal) is bad both on the facts and in law.

2-That in any view of the matter observations and findings of the two lower authorities in their orders for making and maintaining the additions/ disallowances under various heads are totally unjustified general , vague, incorrect and contrary to the actual facts of the case :- 2 -:

hence the additions/disallowances so made and maintained are liable to be deleted.

3-That in any view of the matter disallowances of Rs. 4,533/- on account of depreciation on Armada jeep as made and maintained by the two lower authorities ignoring the correct facts is highly unjustified and illegal in the facts and circumstances of the case hence the same is liable to be deleted.

4-That in any view of the matter disallowances of Rs. 4,607/- as made by the assessing officer on account of charity and donation and his action as confirmed by the Commissioner of income Tax (Appeal) is unjustified and illegal, therefore the disallowances so made and maintained is liable to be deleted in the facts and circumstances of the case.

5-That in any view of the matter the disallowances of Rs. 18,012/- as made u/s 40A(3) of the IT Act by the assessing officer in arbitrary manner and his action as confirmed by the Commissioner of income Tax (Appeal) without appreciating the correct facts of the case is highly unjustified and incorrect in the facts and circumstances of the case, hence the same is liable to be deleted. 6-That in any view of the matter the addition of Rs. 1,05,522/- as made on account of unsecured loan by the assessing officer ignoring the correct facts and his action as confirmed by the Commissioner of income Tax (Appeal) without appreciating the correct facts is highly unjustified, incorrect and injustice and hence the same is liable to be deleted in the facts and circumstances of the case. 7-That in any view of the matter the interest charged under differect sections of the IT Act is highly unjustified and illegal in the facts and circumstances of the case.

8- That in any view of the matter the appellant reserves his right to take any fresh ground before the hearing of the appeal.

2. At the time of hearing, Ld.Counsel for the assessee stated at Bar that the assessee does not press all other grounds, except Ground No.6 of the appeal. Accordingly, Ground Nos.1 to 5, 7 & 8 are dismissed being not pressed.

3. Ground No.6 is regarding addition made by the Assessing Officer on account of un-explained cash credits.

:- 3 -:

Ld.AR for the assessee has submitted that there is a cash credit in the name of Ramji Baishwar under the head 'Sundry Creditors' which is the opening balance brought forwarded from the earlier year and does not relate to the year under consideration. Thus, the Ld.AR has submitted that no addition can be called-for for the year under consideration when the assessee has not introduced any cash credit in the books of accounts and it is only a brought forward balance from the earlier year. Hence, the Ld.AR has submitted that the addition made by the Assessing Officer is not justified and to be deleted. In support of his contention, he relied upon the decision of the Mumbai Benches of the Tribunal in the case of James P. D'Silva Vs. DCIT [175 ITD 533].

4. On the other hand, the Ld.DR has submitted that the Assessing Officer has asked the assessee to explain the credit shown in the name of Ramji Baishwar but the assessee has not produced any confirmation and therefore the genuineness of the claim is not established by the assessee. So, the Ld.DR has relied upon the orders of the authorities below.

5. Having considered the rival submissions as well as the relevant material on record, it is noted that as per the Balance Sheet for the year under consideration as well as for the preceding year, it is clear that there is no change of the credit balance in the name of Ramji Baishwar as on 31-03-2003 and 2004. Even the same balance is appearing in the Balance Sheet for the Financial Year 2004-05. Thus, the credit shown in the name of Ramji Baishwar is not introduced during the :- 4 -:

year under consideration, but it is only a brought forward balance from the earlier year hence, it is only an opening balance of credit. Once it is established from the record and evident from the Balance Sheet for the Financial Year 2002-03 and 2003-04 that this credit was not introduced during the year under consideration, then, even if the assessee has failed to discharge its onus of proving the creditworthiness, genuineness and identity of the creditor, the addition cannot be made for the year under consideration. Hence, the addition made by the Assessing Officer on account of un-explained cash credit is deleted. Once it is brought on record that the cash credit is not introduced during the year under consideration, the Assessing Officer was not remediless as to consider this in the year in which the assessee has introduced the cash credit by re-opening of the assessment. But, instead of following the correct process of law, the Assessing Officer has made a wrong addition.

6. In the result, the appeal of assessee is allowed.

Order pronounced in the open court on 6 th November, 2020 Sd/-

(VIJAY PAL RAO) JUDICIAL MEMBER Allahabad, Dated: 06-11-2020 TNMM :- 5 -:

Copy of the order forwarded to:-

1. The Appellant

2. The Respondent

3. The CIT

4. The CIT(A)

5. The DR, ITAT

6. Guard File True copy By Order (ITAT, ALLAHABAD)