Mahesh Agrawal v. ITO, Mandsaur
[Citation -2019-LL-0821-115]

Citation 2019-LL-0821-115
Appellant Name Mahesh Agrawal
Respondent Name ITO, Mandsaur
Court ITAT-Indore
Relevant Act Income-tax
Date of Order 21/08/2019
Assessment Year 2013-14
Judgment View Judgment
Keyword Tags disallowance of depreciation • impugned assessment order • depreciation allowance • charging of interest • material on record • unexplained credit • unaccounted money • cash receipt • time limit • undisclosed source • disallowance of expenses
Bot Summary: Bhanpura, Maa Anapurana Traders, Pachor Ajay Prahlad Agrawal Garoth, it was found that the assessee has claimed excessive credit balance. In respect of Maa Anapurana Traders, Pachor the assessee had claimed credit balance of Rs.6,26,967/- as on 31.03.2013 but as per the books of the said creditor no balance was outstanding. In respect of Ajay Prahlad Agrawal Garoth the assessee had claimed credit balance as on 31.03.2013 of Rs.13,34,362/- however, the said person confirmed the credit balance of Rs. 11,90,362/-, as on 31.03.2013, thus, the assessing officer found excess of Rs.1,44,000/-. The written submissions of the assessee are as under: The appellant humbly submits that the creditor Shri Naveen Co. and M/s Maa Annapurna Traders have old balances in the account which was payable on account of the purchases made from them. Moreover we find that the assessee has not placed any evidence in support of his contention ground no.1 of the assessee s appeal is rejected. The A.O. to verify claim of the assessee whether credit balances are related to earlier years and those have been repaid in the subsequent years. The Ld. D.R. supported the orders of the authorities below and submitted that the claim of depreciation is made by the assessee.


IN INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA No.639/Ind/2017 Assessment Year 2013-14 Shri Mahesh Agrawal, Prop. ITO, AmbikaDall Mill, Mandsaur Gandhi Chowk, Garoth, Distt. Vs. Mandsaur (Appellant) (Revenue) P.A. No.AAWPA5979L Appellant by Written Submission Revenue by ShriAmit Kumar Soni, Sr. DR Date of Hearing: 18.07.2019 Date of Pronouncement 21.08.2019 ORDER PER KUL BHARAT, J.M: This is appeal filed by Assessee against order of Commissioner of Income Tax(Appeals), Ujjain dated 24/07/2017 pertaining to assessment year 2013-14. Assessee has raised following grounds of appeal: ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur 1. That Learned CIT (A) failed to appreciate that Assessment order as well as notice of demand has not been passed and communicated to appellant within time limit prescribed in law and accordingly same is bad in law. Relief Claimed: Impugned assessment order may kindly be quashed. 2. In facts and circumstances of case, Learned CIT (A) failed to appreciate that entire assessment proceedings have been carried out by learned Income Tax Officer in gross violations of principles of natural justice. No information prior to appointing commission u/s 131 (1)(d) was given nor report of such commissions, account statement or other material as submitted by such creditors were ever shared with appellant despite demands. Even opportunity of cross examining creditors who has disputed outstanding was never given to appellant. order thus suffers from gross violation of principle of natural justice. Relief Claimed: Additions made consequent to assessment order deserves to be quashed and may kindly be quashed. 3. That in facts and circumstances of case, Learned CIT (A) erred in confirming addition of 8,98,939/- towards difference in balances of creditors. Learned CIT (A) failed to appreciate that no transaction was made with such parties during relevant previous year. All these creditors were appearing in books of appellants from earlier years. Thus no addition could have been made to income of Appellant for PY 2012-13. Relief Claimed: Assessing officer may kindly be directed to delete addition of Rs. 8.98.939/- made to income of appellant. 4. That in facts and circumstances of case, Learned CIT (A) erred in confirming addition of Rs. 1,71.797 - towards difference in account of Navin & com. Bhanpura without even appreciating or ascertaining reasons for alleged difference in account of M/s Navin and Com. Even opportunity was not extended to appellant to 2 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur explain or/reconcile same. Relief Claimed: It is most humbly prayed that addition of Rs. 1,71,797/made to income of appellant may kindly be deleted in full. 5. That in facts and circumstances of case, Learned CIT (A) erred in confirming addition of Rs. 6, I 0.6-+2/- towards difference in account of M/s Annapurna Traders placing excessive reliance on concocted story of depositing cash by appellant with M/s Annapurna Traders without properly applying mind to facts and circumstance of case and appreciating probability of such assessee having deposited his own unaccounted money in name of appellant to avoid tax. Relief Claimed: It is most humbly prayed that addition of Rs. 6,10,642/- made to income of appellant on this count may kindly be deleted in full. 6. That in facts and circumstances of case, Learned CIT (A) erred in making addition of Rs. 1,44,000/- to income of appellant holding that no confirmation of account was submitted though same was stated to be submitted in written reply on 8th March 2016 whereas same was duly submitted by appellant during assessment proceedings as well as during appeal proceedings. addition of Rs. 1,44,000/- thus deserves to be deleted in full. Relief Claimed: It is most humbly prayed that addition of Rs. 1,44,000/- made to income of appellant on this count may kindly be deleted in full 7. That in facts and circumstances of case, Learned CIT (A) erred in confirming adhoc disallowance of Rs.10,000/- out of depreciation claimed on vehicles for want of logbook which is not statutorily required to be maintained. Further CIT (A) failed to appreciate that depreciation allowance is statutory allowance and no disallowance could have been made by AO especially without there being any positive evidence of' personal use of vehicle by appellant. Relief Claimed: It is most humbly prayed that addition of Rs. 3 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur 10,000/- made to income of appellant on this Count may kindly be deleted in full. 8. Impugned order has been passed by learned CIT (A) without properly appreciating facts and circumstances of case and order so passed is bad in law and deserves to be set aside. Relief Claimed: Appellant most humbly prays to set aside order so passed and quash demand confirmed consequent thereto. 9. learned CIT(A) has erred in confirming charging Interest u/s 2348 and 234C of IT act and Interest so charged deserves to be quashed in facts and circumstances of case. Relief Claimed: appellant therefore most humbly prays to delete interest so charged. 10. Appellant further craves leave to add, alter and/or to amend aforesaid ground of appeal as and when required. 3. facts in brief are that assessee company is engaged in business of Trading of various agro commodity items i.e. cereals, ginger, coriander and garlic. assessee has filed his return of income for A.Y. 2013- 14 declaring total income of Rs.4,00,640/-along with audit report. case was selected for scrutiny assessment and assessment u/s 143(3) of Income Tax Act 1961(hereinafter called as Act ) was framed vide order dated 20.03.2016. assessing officer noticed that as per balance 4 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur sheet as on 31.03.2013 assessee had disclosed total creditors of Rs.1,45,56,704/-. On inquiry in respect of Navin & Com. Bhanpura, Maa Anapurana Traders, Pachor & Ajay Prahlad Agrawal Garoth, it was found that assessee has claimed excessive credit balance. It was also noticed that in case of Navin & Com. Bhanpura, there was excess balance outstanding amounting to Rs.2,44,327/- against sum of Rs.4,16,124/- as claimed by assessee. In respect of Maa Anapurana Traders, Pachor assessee had claimed credit balance of Rs.6,26,967/- as on 31.03.2013 but as per books of said creditor no balance was outstanding. In respect of Ajay Prahlad Agrawal Garoth assessee had claimed credit balance as on 31.03.2013 of Rs.13,34,362/- however, said person confirmed credit balance of Rs. 11,90,362/-, as on 31.03.2013, thus, assessing officer found excess of Rs.1,44,000/-. assessing officer after considering submissions of assessee treated sum of Rs.9,26,439/- as amount paid out of undisclosed sources. Further assessing officer made disallowance of various expenses i.e. out of Hammali Expenses of Rs.20,000/-, 5 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur disallowance out of shop expenses of Rs.7,500/- and disallowance out of depreciation claimed on vehicles of Rs.10,000/-. 4. Aggrieved by this assessee preferred appeal before Ld. CIT(A) who after considering submissions partly allowed appeal. Thereby, Ld. CIT(A) confirmed disallowance of Rs.9,26,349/- and deleted addition of Hammali Expenses and out of shop expenses. other addition out of disallowance of depreciation was confirmed. 5. Now, assessee is in present appeal. No one appeared on behalf of assessee however written submissions have been made. written submissions of assessee are as under: appellant humbly submits that creditor Shri Naveen & Co. and M/s Maa Annapurna Traders have old balances in account which was payable on account of purchases made from them. a. In case of Naveen & Co. purchases were made during financial year 2009-10 and 2010-11 and balances have been carried over during this year. copy of bill for purchase also has been during financial year 2010-11 is enclosed herewith. amounts were paid during financial year 2014-15 and subsequently balance was paid to him by cheques. copy of bank statement is enclosed herewith. It is not understood how creditor has shown lesser amount. subsequent payments clearly prove that amounts were due to be payable to him. 6 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur b. Regarding account of Maa Annapurna Traders purchase were made of Soyabean of Rs.6,52,045/- during financial year 2010-11. balance was due to be payable to him. How he squared up account be cash receipt is not understandable. During financial year 2015-16 amount was cleared by sale of garlic to him. Under no circumstances this amount can be added as income of assessee. sale of garlic has already been accounted for in books and income is offered on such sale. c. Regarding credit in account of Shri Ajay Agrawal, it is submitted that same is on account of salary payable to him. Subsequently, payment has been made to him by cheque. copy of bank statement for payment to him is enclosed herewith. Under above circumstances additions are not sustainable and deserved to be deleted. 6. Per contra Ld. Departmental Representative (DR) opposed submissions and supported orders of authorities below. 7. We have heard rival submissions, perused material available on record. 8. Ground No.1 is against order being barred by time. No submission is made by assessee in this regard. Moreover we find that assessee has not placed any evidence in support of his contention, therefore, ground no.1 of assessee s appeal is rejected. 7 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur 9. Ground No.2 is against violation of principles of natural justice. No argument is addressed or submissions are made in this regard by assessee. Therefore, we do not see any reason to interfere into orders so this ground of assessee is dismissed. 10. Ground Nos.3, 4, 5 & 6 are in respect of addition of unexplained credit balance. Apropos to these grounds, it is submitted that these balances relate to earlier years and assessee has repaid amount in subsequent years. This fact, in our view, requires verification at end of A.O. Hence, issue of credit balance related to Navin & Com. Bhanpura, Maa Annapurna Traders, Pachor and Ajay Prahalad Aggarwal, Garoth is restored to file of A.O. for decision afresh. A.O. to verify claim of assessee whether credit balances are related to earlier years and those have been repaid in subsequent years. If this fact is found to be correct, A.O. would delete additions. These grounds of assessee s appeal are allowed for statistical purposes. 11. Ground No.7 is against confirming disallowance of Rs.10,000/- out of depreciation claimed on vehicles for want of log 8 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur book. It is stated that both A.O. and Ld. CIT(A) failed to appreciate that depreciation allowance is statutory allowance and no disallowance could have been made by A.O. specially without there being any positive evidence of personal use of vehicles by authority. Ld. D.R. supported orders of authorities below and submitted that claim of depreciation is made by assessee. It was required to demonstrate that vehicle has been used wholly and exclusively for business purposes. In absence of such evidence, it cannot be inferred that vehicle was not used for personal use. 12. We have considered rival submissions. assessee has not brought any material on record suggesting that vehicle was used exclusively for business purposes. In absence of such evidence, inference drawn by authorities below is correct. No interference is called for. This ground of assessee s appeal is rejected. 13. Ground No.9 is against charging of interest. charging of interest being consequential, we hold accordingly. 9 ITA No.639/Ind/2017 Mahesh Agrawal, Prop. Ambika Dall Mill, Mandsaur 14. Ground No.10 is general in nature needs no separate adjudication. 15. In result, appeal of assessee is partly allowed for statistical purposes. Order was pronounced in open court on 21.08.2019. Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore Dated 21/08/2019 VG/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR) Guard file. By order Assistant Registrar, Indore Mahesh Agrawal v. ITO, Mandsaur
Report Error