Maruti Developers, Ahmedabad vs Assessee
- CitationITA. No. 1462/Ahd/2011
Ratio decidendi
The rule this decision rests on
A sum appearing in the balance sheet both as an unsecured loan and as a sundry creditor, where the assessee's explanation that the entry was inadvertently misclassified is not accepted as a satisfactory explanation of the credit, may be sustained as an addition under section 68 of the Act; the tribunal upholds the addition on the reasoned finding of the first appellate authority. Where the assessee's explanation for an expenditure claim is not found convincing by the Assessing Officer, the first appellate authority may restrict the disallowance to an amount it considers reasonable in the interest of justice, and such a reasoned finding of partial disallowance warrants no interference by the tribunal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s. Maruti Developers 404, Twinkle Complex, Nr. Shyamal Cross Road, Satellite, Ahmedabad Appellant
Vs.
ITO, Ward - 9(2), Ahmedabad Respondent
PAN: AAAAM7245C
अपीलाथ क ओर से /By Appellant : None (Written Submission) ू यथ क ओर से/By Respondent : Shri M. K. Singh, Sr. D.R. सुनवाई क तार!ख/Date of Hearing : 04.03.2015 घोषणा क तार!ख/Date of Pronouncement : 13.03.2015
ORDER
PER SHAILENDRA KUMAR YADAV, J.M:
This appeal has been filed by assessee against the order of Commissioner of Income Tax (Appeals)-XV, Ahmedabad, dated 23.03.2011 for A.Y. 2007-08 on the following grounds. I T A N o . 1 4 6 2 / A h d / 1 1 A. Y . 2 0 0 7 -0 8 [M / s . M a ru t i D e v e l o p e rs v s . I TO ] Page 2
"1. The learned Commissioner of Income Tax (Appeals) -
XV, had grossly erred in upholding the finding of the Income Tax Officer Ward - 9(2), Ahmedabad, that Rs. 87,263 appeared in the Balance Sheet as unsecured loans as well as sundry creditors. The learned Commissioner of Income Tax (Appeals) has grossly erred in not appreciating in proper perspective the fact that a single entry in computerized system cannot be reflected under two different heads viz. unsecured loans and sundry creditors.
2. The learned Commissioner of Income Tax (Appeals) has grossly erred in restricting the gardening expenses to Rs. 50,570 instead of allowing the full expenditure of Rs. 1,50,570. There was no justification in coming to the conclusion that out of the total gardening expenses, only Rs.50,570/- was utilized for business purposes."
2. First issue is with regards to addition of Rs.87,263/- u/s. 68 of the Act. Assessing Officer observed that Rs. 87,263 appeared in the balance sheet as unsecured loan from Shri B. R. Shah and in sundry creditors also the same amount appeared which according to assessee was inadvertently wrongly classified as sundry creditors Shri B. R. Shah being proprietor of Avi Enterprises and thinking Avi Enterprise to be a supplier this amount though actually being an unsecured loan only got classified in sundry creditors as well. Accordingly, Assessing Officer made addition, which was upheld by CIT(A).
2.1 Same has been opposed before us on behalf of assessee by way of written submission. Learned Authorized Representative through written submission submitted that I T A N o . 1 4 6 2 / A h d / 1 1 A. Y . 2 0 0 7 -0 8 [M / s . M a ru t i D e v e l o p e rs v s . I TO ] Page 3
CIT(A) erred in not appreciating in proper perspective the fact that a single entry made in computerized system cannot be reflected under two different heads viz. unsecured loans and sundry creditors. Accordingly, addition on the issue be deleted. On other hand, learned Departmental Representative supported the order of authorities below.
2.2 After going through rival submissions and material on record, we find that Rs. 87,263 appeared in the balance sheet as unsecured loan from Shri B. R. Shah and in sundry creditors as well the same amount appeared. According to assessee, same was inadvertently wrongly classified as sundry creditors Shri B. R. Shah being proprietor of Avi Enterprises and thinking Avi Enterprise to be a supplier this amount though actually being an unsecured loan only got classified in sundry creditors as well. In view of this CIT(A) was justified in upholding the addition made by Assessing Officer of Rs.87,263/-, which has been mentioned twice once in unsecured loan and other time in sundry creditor. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.
3. Next issue is with regards to disallowance of gardening expenses of Rs.1,50,570/-. This addition has been made as per on para 7 of assessment order. Matter was carried before the First Appellate Authority, wherein written submission was filed and having gone through the same, CIT(A) observed that according to assessee, it was required to incur expenses for its I T A N o . 1 4 6 2 / A h d / 1 1 A. Y . 2 0 0 7 -0 8 [M / s . M a ru t i D e v e l o p e rs v s . I TO ] Page 4
site offices but Assessing Officer stated that assessee entered into contracts with individual members and gardening expenses had to be borne by them, which was not found convincing by her. However, in the interest of justice, she restricted the addition of Rs.1,50,570/-.
4. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.
5. In the result, appeal filed by assessee is dismissed.
Pronounced in the open Court on this the 13th day of March, 2015.
Sd/- Sd/- (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 13/03/2015 True Copy S.K.SINHA
आदे श क ूितिल'प अमे'षत / Copy of Order Forwarded to:-
1. राजःव / Revenue
2. आवेदक / Assessee
3. संबंिधत आयकर आयु0 / Concerned CIT
4. आयकर आयु0- अपील / CIT (A)
5. 'वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड9 फाइल / Guard file.
By order/आदे श से,
उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।
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