the ito ward, bikaner vs. shree bhagwan suthar

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND

SHRI N.K.SAINI, ACCOUNTANT MEMBER

ITA NO. 367/Jodh/2013 (A.Y. 2008-09)

The I.T.O Vs. Shri Shree Bhagwan Suthar Ward - 1(4) Prop M/s Gobind Handicrafts Bikaner Village Thukariyasar Sridungargarh PAN No. AXEPS 7940 J (Appellant) (Respondent) Assessee by : Shri Suresh Ojha Department by : Shri N.A. Joshi, DR.

Date of Hearing : 28.04.2014 Date of Pronouncement : 13.05.2014

ORDER PER HARI OM MARATHA, J.M.

This appeal has been filed by the revenue for A.Y

2008-09 against the order of the CIT(A), Bikaner, dated

22.03.2013.

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2. Briefly stated, the facts of the case are that the assessee is

the proprietor of M/s Govind Handicrafts and derives his income

from the purchase and sale of handicraft items. For A.Y. 2008-09,

he field his Return of Income [ROI] on 30.09.2008, declaring of total

income of Rs. 1,46,340/-. On total sales of the year at Rs.

41,02,525/- he has disclosed gross profit of Rs. 4,09,977/- which

gives gross profit rate of 9.99%, as against shown at Rs. 8.06% in

earlier year on total sales of Rs. 36,75,015/- and gross profit of Rs.

3,16,268/-. The A.O. has computed total income of the assessee

vide order dated 18.11.2010 at Rs. 11,70,888/- after making the

following additions:

(1) disallowance out of expenses claimed Rs. 1,73,464/-

(2) addition u/s 68 of the Act Rs. 8,16,584/-

(3) on account of house hold expenses Rs. 34,500/-

2.1 Aggrieved against the above addition, the assessee went in

first appeal before the ld. CIT(A), who, in turn, has given part

relief, against which the revenue has raised the following grounds:

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"On the facts and in the circumstances of the case the

Ld. CITA) has erred in :-

i) deleting addition of Rs 8,16,584/- made a/s 68 of

the I.T. Act,1961.

ii) deleting addition of Rs. I,73,463/- made on account

of disallowance out of expenses.

iii) Deleting addition of RS. 34,500/- made on account

of low withdrawals for household expenses."

2.2 We have heard the rival submissions and have carefully

perused the entire material on record.

2.3 Ground No. (i) of this appeal pertains to deletion of an

addition of Rs. 8,16,584/- added u/s 68 of the Act. The facts

apropos this ground are that during the year the following credits

are reflected in the balance sheet of the assessee:

1. Sita Ram Suthar 63222 2. Bhagirath Suthar 202200 3. Smt. Gita Devi Bhuwal 105333 4. Smt. Ganga Devi Suthar 52283 5. Smt. Vidya Devi Saini 271296

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6. Nand Kumar Suthar 15000 7. Khinwa Ram Suthar 14500 8. Smt. Amrati Devi Suthar 12500 Total Rs. 8,16,584/-

2.4 When called upon to establish the genuinity of these 8 credits,

the assessee produced duly sworn in affidavits of 6 creditors. For

the remaining, the assessee produced confirmation through

affidavits etc. before the ld. CIT(A). After considering the

objection of the A.O., given in his remand report which was called

in relation to the additional evidence, the ld. CIT(A) has admitted

the same but the department has not challenged this aspect before

us. We have found that the creditors, in question, have admitted

their respective credits and have also explained their source(s).

The A.O. has not further examined them. Therefore, as per the

settled position of law in this regard that unless the A.O.

controverts the averments of these affidavits, the version given

therein cannot be rejected. On that reasoning only the ld. CIT(A)

has deleted the impugned addition. To further bolster the above,

we may incorporate the evidence produced by the assessee in

respect of the creditors as under:

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s. Name of the Creditors

Evidence filed Evidence File Rs.

No. before the CIT (A)

1. Sh. Sitaram Suthar Affidavit (Accepted by AO letter dated 18.7.2011 and WS to ITO

Copy of Affidavit 63222/-

by I.S. Shekhawat)

Bank Pass Book (WS to ITO by I.S. Shekhawat)

Acknowledgement of ITR Balance Sheet

Balance Sheet (WS to ITO by IS Shekhawat)

Confirmation of Accounts (WS to ITO dated 26. 7. 20 10)

2 Smt. Manju Devi Suthar

Affidavit (Accepted by AO letter dated 18.7.2011 and WS to ITO


by I.S. Shekhawat)

Bank Pass Book (WS to ITO by I.S. Shekhawat)

Acknowledgement of ITR

ITR Acknowledgement (WS to ITO by I S Shekhawat)

Balance Sheet (WS to ITO by I S Shekhawat and AO accepted in his order at page No. 2)

Balance Sheet

Confirmation of Accounts (WS to ITO dated 26. 7. 20 10)

3 Smt Vidya Devi Saini



by I.S. Shekhawat) i

Bank Pass Book (WS to ITO by I.S. Shekhawat AO accepted in his order at page No. 2)

ITR Acknowledgement (WS to ITO by I S Shekhawat)

Acknowledgement of ITR

Balance Sheet (WS to ITO by IS

Balance Sheet

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Shekhawat)

Confirmation of Accounts (WS to ITO dated 26.7.2010)

4 Smt. Geeta Devi Bhuwal



by I.S. Shekhawat)

Bank Pass Book (WS to ITO by

I.S. Shekhawat and AO accepted

in his order at page No. 2)

ITR acknowledgement (WS to

Acknowledgement

ITO by I S Shekhawat) of ITR ,


Balance Sheet

Shekhawat)

Confirmation of Accounts (WS

to ITO dated 26.7 .20 10)

5 Smt. Ganga Devi Suthar

Affidavit (Accepted by AO letter


dated 18.7,2011 and WS to ITO

by I.S. Shekhawat)


I.S. Shekhawat)


Acknowledgement

ITO by I S Shekhawat) of ITR


Balance Sheet

Shekhawat)


to ITO dated 26 .7 .20 10)

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6 Sh. Bhagirath Suthar

Affidavit (Accepted by AO letter


dated 18.7.2011 WS to ITO by







Acknowledgement

ITO by I S Shekhawat) of ITR


Balance Sheet

Shekhawat)


to ITO dated 26.7. 20 10)

7 Smt. Geetadevi Confirmation of Accounts (WS

Affidavit 14500/-

to ITO dated 26. 7 .20 10)

8 Sh. Nandram Suthar


Affidavit 15000/-

to ITO dated 26.7 .2010)

9 Sh. Khinwa Ram Suthar


Affidavit 14500/-

to ITO dated 26.7 .2010)

10 Smt. Imrati Devi Suthar


Affidavit 12500/-

to ITO dated 26.7 .20 10)

11 Sh. Om Prakash Suthar


Affidavit 13500/-

to ITO dated 26.7.2010)

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2.5 The above, is the pictograph of evidence produced in respect

of all the creditors, including the one we are concerned with in this

appeal. Resultantly, we confirm the impugned deletion of Rs.

8,16,584/- made u/s 68 of the Act and cannot allow Ground No. (i)

of revenue’s appeal.

3. The Ground No. (ii) is regarding deletion of addition of Rs.

1,73,463/- made on account of disallowance out of expenses. All

these expenses are in relation to the trading activities of the

assessee. The A.O. has not rejected the books of account. So he

cannot disturb the expenses claimed unless any particular expenses

is found to have been wrongly claimed. In this case, the A.O. has

not doubted the receipts etc and have accepted the same, so the

A.O. cannot reject some of the expenses. In this regard, the

judgment of the Hon'ble Jurisdictional High Court in the case of CIT

Vs. Maharaja Shree Ummaid Mills Ltd. [1991] 192 ITR 565 [Raj] is

relevant. Accordingly, we uphold this deletion and dismiss Ground

No. (ii) of revenue’s appeal.

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4. The Ground No. (iii) is regarding deletion of an addition of Rs.

34,500/- made on account of low household withdrawals. This

addition is based on no material but on wild guess and pure

estimation with reference to the size of the family and the standard

of living. The A.O. has not brought any evidence on record, in this

regard. Therefore, we approve this deletion as well and dismiss

Ground No. (iii) of revenue’s appeal.

5. In the result, the appeal of the revenue stands

allowed.

Order Pronounced in the Court on 13 th May, 2014.

Sd/- Sd/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 13 th May, 2014 VL/-

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Copy to:

The Appellant The Respondent The CIT By Order The CIT(A) The DR

Assistant Registrar ITAT, Jodhpur

the ito ward, bikaner vs. shree bhagwan suthar

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