Jagdish Kumar Narang v. ACIT Range 2(1), Ujjain
[Citation -2016-LL-1003-61]

Citation 2016-LL-1003-61
Appellant Name Jagdish Kumar Narang
Respondent Name ACIT Range 2(1), Ujjain
Court ITAT-Indore
Relevant Act Income-tax
Date of Order 03/10/2016
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags business of construction • proprietary concern • agricultural income • source of income • capital account • interest income • rental income • audit report • other source • cash flow
Bot Summary: The assessee has also prepared the capital accounts in various years and the same are filed with the income tax department. The assessee has prepared separate books of accounts for contractorship business only and has shown other income of rent, bank interest agricultural income directly in his return of income. Sir, as the assessee was having proven source of income and filing return of income since the year 1968, he was also a wealth tax payee person. 00 from previous savings, rental income and interest income in the contractorship business. Two sets of capital accounts were filed at the time of filing of income tax return as well as during the assessment proceedings reflecting the capital transferred from one source of income for other source of income. As the assessee was having huge amount of capital from other sources of income and he was filing the return of income long back, we request you to kindly grant the relief to the assessee by deleting the addition made to the extent ofRs.8,00,000. We reverse the finding of the learned CIT(A) and restore this issue to the Assessing Officer with the direction to the assessee to give evidence before the Assessing Officer including the return of income, cash flow income and set of books and the Assessing Officer is directed to verify the same and decide the matter afresh after providing the assessee opportunity of being heard.


Jagdish Kumar Narang ITA No. 93 Ind 2015 , , IN INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE, BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER . . . I.T.A. No.93 Ind 2015 Assessment Year: 2005-06 Jagdish Kumar Narang Ujjain PAN ADWPN 9757G :: Appellant Vs ACIT Range 2(1) Ujjain :: Respondent Revenue by Shri Aditya Namjoshi Assessee by Shri Mohd. Javed 3..10.2016 Date of hearing 3.10.2016 Date of pronouncement ORDER PER SHRI D.T. GARASIA, JM This appeal has been filed by assessee against order of learned CIT(A),Ujjain,dated 14.11.2014. 1 Jagdish Kumar Narang ITA No. 93 Ind 2015 2. Ground no. 1 relating to addition made on account of payment made to labours of Rs.1,08,593 - is not pressed by learned counsel for assessee at time of hearing, therefore, same is dismissed. 3. Ground no. 2 is that learned CIT(A) was not justified in confirming addition on account of capital introduction to extent ofRs.8,00,000 -by assessee which was added by Assessing Officer. 4. short facts of case are that assessee filed return of income on 30.10.2005. assessee is engaged in business of construction of road. assessee has filed copies of final audit and profit and loss account. During year under consideration it was noticed that assessee has introduced capital of Rs. 8 lakhs in capital account of proprietary concern, therefore, assessee was asked to explain source of 2 Jagdish Kumar Narang ITA No. 93 Ind 2015 capital introduced in business. assessee has submitted that capital was introduced out of routine capital in construction business for which separate books of accounts are maintained. assessee did not file any evidence, therefore, addition was made by learned Assessing Officer. On appeal, addition was confirmed by learned CIT(A). Now assessee is in appeal before Tribunal. 5. Before us, learned counsel for assessee submitted as under :- As regards addition of Rs.8,00,000.00 it was explained to Assessing Officer tdhat assessee was having two sources of income first one is rental income and second is contractorship business. assessee was having rental income and income from other sources since long back and was paying taxes i.e. income tax aswell as wealth 3 Jagdish Kumar Narang ITA No. 93 Ind 2015 tax. assessee has also prepared capital accounts in various years and same are filed with income tax department. department has accepted income which was filed by assessee. Sir, assessee has taken one contract during financial year 2003-04 only and which was completed in year 2005-06. assessee has prepared separate books of accounts for contractorship business only and has shown other income of rent, bank interest agricultural income directly in his return of income. He was not prepared separate books of accounts for these heads of inome but continued with preparation of capital account for this income. Copies of income tax returns and copies of capital account are enclosed. assessee has also transferred 4 Jagdish Kumar Narang ITA No. 93 Ind 2015 capital from other sources to capital for contractorship business in year 2004. Copy of audit report is enclosed. Sir, as assessee was having proven source of income and filing return of income since year 1968, he was also wealth tax payee person. Therefore, he is having huge amount of capital built up over years and he continuously filing copy of capital account with return of income. He had invested Rs.8,00,000.00 from previous savings, rental income and interest income in contractorship business. Two sets of capital accounts were filed at time of filing of income tax return as well as during assessment proceedings reflecting capital transferred from one source of income for other source of income. 5 Jagdish Kumar Narang ITA No. 93 Ind 2015 learned Assessing Officer has not denied other sources and income generated therefrom. Hon'ble Sir, it was held in case of CIT vs. Ramwshwar Sikar (1994) 74 Taxman(Cal that :- That where after going through assessment records and other materials produced, it was found that amount had infact been transferred to capital account from assessee s personal account, deletion of addition under section 68 was justified. Copy of case law is enclosed. As assessee was having huge amount of capital from other sources of income and he was filing return of income long back, we request you to kindly grant relief to assessee by deleting addition made to extent ofRs.8,00,000.00 6 Jagdish Kumar Narang ITA No. 93 Ind 2015 6. On other hand, learned DR relied upon order of Assessing Officer. 7. We have considered submissions of both sides. We find that it is case of assessee that he was filing return of income and he has invested Rs. 8 lakhs from previous year s savings, rental income and interest income in contractorship business and two sets of capital account show that capital is transferred from one source to another source of income. Therefore, we are of view that this requires verification at level of Assessing Officer. Therefore, we reverse finding of learned CIT(A) and restore this issue to Assessing Officer with direction to assessee to give evidence before Assessing Officer including return of income, cash flow income and set of books and Assessing Officer is directed to verify same and decide matter afresh after providing assessee opportunity of being heard. 7 Jagdish Kumar Narang ITA No. 93 Ind 2015 8. Ground no. is is that learned CIT(A) was not justified in confirming addition on account of depreciation of Rs.41,583 - which was added by Assessing Officer. 9. short facts of case are that assessee claimed depreciation of Rs.41,583 - on motor car. Out of above Assessing Officer has disallowed Rs.41,583 - being not used for business purposes. On appeal, learned CIT(A) confirmed disallowance. Now assessee is in appeal before Tribunal. 10. learned counsel for assessee has submitted that car was exclusively used for business purposes. On other hand, learned DR relied upon orders of authorities below. 11. We have considered submissions of both sides. We find that assessee has utterly failed to produce any evidence such as registration of car, etc. to prove that 8 Jagdish Kumar Narang ITA No. 93 Ind 2015 car has been actually used for business purposes. We, therefore, find ourselves in agreement with findings of learned CIT(A) and dismiss this ground. 12. In result, appeal of assessee is partly allowed for statistical purposes. order has been pronounced in open Court on 3rd October, 2016. Sd - sd - (O.P.Meena) (D.T.Garasia) Accountant Member Judicial Member Dated : 3 October, 2016. Dn 9 Jagdish Kumar Narang ITA No. 93 Ind 2015 10 Jagdish Kumar Narang v. ACIT Range 2(1), Ujjain
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