Jayantibhai Devshibhai Manani v. ITO, Ward-52, Rajkot
[Citation -2019-LL-0920-84]

Citation 2019-LL-0920-84
Appellant Name Jayantibhai Devshibhai Manani
Respondent Name ITO, Ward-52, Rajkot
Court ITAT-Rajkot
Relevant Act Income-tax
Date of Order 20/09/2019
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags unexplained expenditure • reasonable opportunity • unaccounted receipt • sundry creditor • gross receipt
Bot Summary: PAN/GIR No. : AOMPM6299P Appellant by Written Submission /Respondent by Shri Anil Kumar, DR. Da te o f He a ring 19/09/2019 Date of Pro no unc ement 20/09/2019 ORDER PER WASEEM AHMED ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax-3, Ahmedabad Ld. CIT(A) in short of dated 16/03/2015, arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 dated 26/03/2013 relevant to Assessment Years 2010-11. The assessee has raised as many as 10 ground of appeal but the effective issue is that the learned CIT erred in confirming the addition of 52,472 on account of unexplained expenditure/unexplained receipts. Accordingly the AO assumed that the assessee has received such amount against the sales but the same was not shown in the books of accounts. The assessee before the learned CIT submitted that he has shown gross receipt of 2.29 crores and therefore there is no reason not to disclose such small amount of 52,472 in the books of accounts. 3.1 The assessee alternatively submitted that the entire amount cannot be added to the total income of the assessee and at the most only the profit element embedded in such amount of difference can be brought to tax. In the instant case there was difference observed by the AO with respect to the party namely M/s Mrugal Offset in the amount shown in the books of the assessee viz a viz such party. We note certain infirmity in the order of the AO. First of all, the AO at one place treated such party namely M/s Mrugal Offset as creditor of the assessee.


IN INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER I.T.A. No .223/Rjt/2015 (Assessment Year 2010-11) Jayantibha i Devshibhai ITO, Manani, Vs . Ward -52, Prop of Shiva m Traders, Rajkot. 10, Bhaktinagar Station Plot, Rajkot. PAN/GIR No. : AOMPM6299P (Appellant) (Respondent) Appellant by Written Submission /Respondent by Shri Anil Kumar, DR. Da te o f He ring 19/09/2019 Date of Pro no unc ement 20/09/2019 ORDER PER WASEEM AHMED ACCOUNTANT MEMBER: captioned appeal has been filed at instance of Assessee against order of Learned Commissioner of Income Tax (Appeals)-3, Ahmedabad [Ld. CIT(A) in short] of dated 16/03/2015, arising in matter of assessment order passed under s. 143(3) of Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 26/03/2013 relevant to Assessment Years (A.Y.) 2010-11. ITA No.223/RJT/2015 A.Y.s 2010-11 -2- assessee has raised following grounds of appeal: 1. Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 52,472/-. addition needs deletion. 2. Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 52,472/- based on factual position which he described wrongly. addition needs deletion. 3. Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 52,472/- erroneously treating same as unexplained expenditure which he described wrongly. addition needs deletion 4. Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 52,472/- erroneously treating same as unexplained receipts which he described wrongly. addition needs deletion 5. Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 52,472/- without allowing time to reconcile same. addition needs deletion. 6. Taking into consideration legal, statutory, factual and administrative aspects, no addition of amount ofRs. 52,472/- ought to have been made. additions need deletion. 7. Without prejudice, assessment made is bad in law and deserves annulment. 8. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided while passing assessment order. assessment needs annuhnent. 9. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided while passing appeal order. assessment needs annulment. 10. appellant craves leave to add/alter/amend and/or substitute any or all grounds of appeal before actual hearing takes place. assessee has raised as many as 10 ground of appeal but effective issue is that learned CIT (A) erred in confirming addition of 52,472 on account of unexplained expenditure/unexplained receipts. ITA No.223/RJT/2015 A.Y.s 2010-11 -3- 2. Briefly stated facts are that assessee in present case is individual and engaged in business of trading in papers on wholesale basis under name and style of M/s Shivam Traders. AO during assessment proceedings noticed that one of creditor namely M/s Mrugal Offset Printers has shown closing balance of 82,519 whereas assessee has shown balance of 1,34,991 leaving difference of 52,472.00. On question by AO about such difference, assessee failed to reconcile same. Accordingly AO assumed that assessee has received such amount against sales but same was not shown in books of accounts. Accordingly same was treated as unaccounted receipt and added to total income of assessee. Aggrieved assessee preferred appeal to learned CIT (A). 3. assessee before learned CIT (A) submitted that he has shown gross receipt of 2.29 crores and therefore there is no reason not to disclose such small amount of 52,472 in books of accounts. 3.1 assessee alternatively submitted that entire amount cannot be added to total income of assessee and at most only profit element embedded in such amount of difference can be brought to tax. 4. However, learned CIT (A) disregarded contention of assessee and confirmed order of AO. ITA No.223/RJT/2015 A.Y.s 2010-11 -4- 5. Being aggrieved by order of learned CIT (A) assessee is in appeal before us. 6. learned AR before us filed written submission and reiterated contentions placed before learned CIT (A). 7. On other hand learned DR before us vehemently supported order of authorities below. 8. We have heard learned DR and perused materials available on record. In instant case there was difference observed by AO with respect to party namely M/s Mrugal Offset in amount shown in books of assessee viz viz such party. Such difference was treated as income of assessee. 8.1 However, we note certain infirmity in order of AO. First of all, AO at one place treated such party namely M/s Mrugal Offset as creditor of assessee. This fact can be verified from order of AO which is reproduced as under: In connection, during course of assessment proceedings, confirmations of some Sundry Creditors were called for by issue of letter calling information u/s. 133(6) of Act. On verification of confirmation accounts received from M/s. Mrugal Offset Printers, Ankleshwar, it is found that as per contra account of Mrugal Off Set Printer closing balance shown of Rs. 82,519/-, beside on verification of your account, you have shown closing balance Rs.1,34,991 in account of Mrugal Off Set Printers. Therefore, there is difference of Rs.52,472/- between both accounts. Accordingly, difference amounting to of Rs.52,472/- which payment was already been received by you and same was not reflected in to your's accounts are proposed to be added in to your total income declared. ITA No.223/RJT/2015 A.Y.s 2010-11 -5- 8.2 If party namely M/s Mrugal Offset is treated as creditor then assessee is liable to make payment to such creditor against purchases/ expenses incurred by him. 8.3 Similarly we also note that, AO at one place has treated such party namely M/s Mrugal Offset as sundry debtors. This fact can be verified from order of AO which is reproduced as under: Also it is clear noticed from account assessee that assessee had received payments from M/s.Mrugal Offset against sales but shown in books of account. Therefore, on basis of account submitted by assessee and confirmation received from M/s.Nrugal receipts and required to be added in to total income declared. Accordingly, Rs.52,472/- is added in total income of assessee. From above, we note that AO has not applied his mind properly. Supposing impugned party is treated as sundry debtors then to our mind there cannot be any addition if assessee has received any sum of money without recording same in books of accounts. It is because such receipt was against sale which has not been disturbed by AO. 8.4 Similarly, even if we treat such party namely M/s Mrugal Offset as sundry creditor, then assessee is liable to make payment to such party. We further note that, AO also erred in presuming difference as income of assessee without disturbing purchases/expenses incurred in name of such party. ITA No.223/RJT/2015 A.Y.s 2010-11 -6- 8.5 On similar reasoning, we are not convinced with finding of learned CIT (A). Accordingly, we set aside order of learned CIT (A) and direct AO to delete addition made by him. Hence ground of appeal of assessee is allowed. 9. In result appeal of assessee is allowed. This Order pronounced in Open Court on 20/09/2019 -Sd- -Sd- (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Dated 20/09/2019 manish Jayantibhai Devshibhai Manani v. ITO, Ward-52, Rajkot
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