M/s. Apex Therm Packaging Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(1), Surat

CO 33/AHD/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9148 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 09-12-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 15-02-2010
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: RAMESH KUMAR MAL
• Keywords: Opportunity of being heard
• Section: 131; 68

Judgement Text

, , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.253/AHD/2010 A.Y. 2006-07 ITO, WARD-1(1), SURAT. VS M/S APEX THERM PACKAGING PVT. LTD. 5006, TRADE HOUSE, RING ROAD, SURAT. PAN: AAECA0982C (APPELLANT) (RESPONDENT) CROSS OBJECTION NO. 33/AHD/2010 A.Y. 2006-07 M/S APEX THERM PACKAGING PVT. LTD. 5006, TRADE HOUSE, RING ROAD, SURAT. PAN: AAECA0982C VS ITO, WARD-1(1), SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SH. O.P. BATHEJA, SR.D.R., ASSESSEE(S) BY : SH. RAMESH KUMAR MALPANI, AR / // / DATE OF HEARING : 09/12/2013 !'# / DATE OF PRONOUNCEMENT : 13/12/2013 $%/ O R D E R PER SHRI A. K. GARODIA, ACCOUNTANT MEMBER: 1. THIS APPEAL IS FILED BY THE REVENUE AND THE CROS S OBJECTION IS FILED BY THE ASSESSEE AND BOTH ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, SURAT DATED 26.11.2009 FOR AY 2006-07 . 2. BOTH THE APPEAL AND THE C.O. WERE DISPOSED OFF B Y THE TRIBUNAL AS PER ORDER DATED 15.02.13. THEREAFTER, THE ASSES SEE MOVED A MISC. APPLICATION IN MA NO. 36/AHD/2013 AND AS PER TRIBUNAL ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 2 - ORDER DATED 19.04.2013 IN THIS MA PROCEEDINGS, THE TRIBUNAL RECALLED ITS ORDER ONLY IN RESPECT OF REVENUES APP EAL TO DECIDE AFRESH THE ADDITION MADE BY A.O. U/S 68 IN RESPECT OF LOAN RECEIVED FROM SH. RATAN LAL AGAWAL OF R.L. AGARWAL & SONS HUF. REGARDING THE TRIBUNAL ORDER FOR THE C.O., TH E TRIBUNAL ORDER WAS RECALLED ON THE BASIS THAT THE C.O. RAISE D BY THE ASSESSEE WAS NOT ADJUDICATED. HENCE, IN THE PRESEN T PROCEEDINGS, WE HAVE TO DECIDE ABOUT THE C.O. OF TH E ASSESSEE AND IN REVENUES APPEAL, WE HAVE TO DECIDE ONLY ONE OF THE ISSUES BEING THE ADDITION MADE BY THE A.O. U/S 68 O F RS 12.50 LAKHS RECEIVED FROM R.L. AGARWAL & SONS HUF. 3. IT WAS SUBMITTED BY THE LD. DR OF THE REVENUE TH AT THE FACTS ARE IDENTICAL IN RESPECT OF LOAN FROM THIS PARTY I. E. M/S R.L. AGARWAL & SONS HUF OF RS 12.50LAKHS AND OTHER 16 LO AN CREDITORS AND TRIBUNAL HAS ALREADY CONFIRMED BALANC E ADDITION AND THEREFORE, FOR THIS ADDITION ALSO, THERE IS NO JUSTIFICATION FOR TAKING ANY CONTRARY VIEW. HE PLACED RELIANCE ON TH E JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF BLESSING CONSTRUCTION VS. ITO AS REPORTED IN 214 TA XMANN 645 (GUJ.). HE ALSO SUBMITTED THAT IN THAT CASE AL SO, CHEQUES WERE ISSUED BY THE LOAN CREDITOR OUT OF CASH DEPOSI T IN THEIR BANK ACCOUNT AND UNDER THESE FACTS, ADDITION WAS UP HELD BY HONBLE HIGH COURT, AND HENCE THIS ISSUE IN THE PRE SENT CASE IS COVERED AGAINST THE ASSESSEE AS PER THIS JUDGMENT O F HONBLE GUJARAT HIGH COURT. ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 3 - 4. IT WAS SUBMITTED BY LD. AR THAT THE LOAN CREDITO R WAS DULY PRODUCED BEFORE THE A.O. AND HIS STATEMENT WAS ALSO RECORDED BY THE A.O. IN WHICH HE HAS CONFIRMED THAT LOAN WAS ADVANCED BY HIM TO THE ASSESSEE. HE SUBMITTED THAT EARLIER, ONLY HINDI VERSION OF HIS STATEMENT WAS BROUGHT ON RECORD IN T HE PAPER BOOK ON PAGE 174 TO 178, BUT NOW, HE HAS SUBMITTED AN ENGLISH VERSION ALSO OF THE STATEMENT. HE POINTED OUT THAT IN REPLY TO QUESTION NO. 16, IT WAS CONFIRMED BY THIS LOAN CREDITOR THAT HE ADVANCED THIS AMOUNT OF RS 12.50 LAKHS TO T HE ASSESSEE BY CHEQUES THROUGH HIS SON SH. PUSHKAR AGARWAL. RE GARDING CASH DEPOSIT IN BANK IN HIS ACCOUNT ALSO, IT WAS EX PLAINED BY HIM THAT SUCH CASH DEPOSIT IN HIS BANK ACCOUNT WAS OUT OF CASH BALANCE REFLECTED IN HIS CASH BOOK. HE ALSO SUBMIT TED THAT HE HAD WITHDRAWN CASH FROM THE BANK IN THE MONTH OF MA Y 2005. HE SUBMITTED THAT AS PER THE STATEMENT OF THE LOAN CREDITOR, HE HAS NOT ONLY CONFIRMED ABOUT GIVING LOAN TO THE ASS ESSEE, BUT HE HAS ALSO EXPLAINED THE SOURCE OF THE CASH IN HIS HANDS AND THEREFORE NO ADDITION IS JUSTIFIED UNDER THESE FACT S. REGARDING THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT CITED B Y REVENUE, HE SUBMITTED THAT THE SAME IS NOT APPLICAB LE IN THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE LOAN CREDITOR HAS EXPLAINED THE SOURCE OF THE SOURCE ALSO. HE HAS AL SO SUBMITTED THAT INCOME TAX RETURN, BALANCE SHEET AND BANK STAT EMENT OF THE CREDITOR IS AVAILABLE ON PAGE 58 TO 65 OF THE P APER BOOK. HE PLACED RELIANCE ON THE JUDGMENT OF HONBLE GUJAR AT HIGH COURT RENDERED IN THE CASE OF CIT VS. RANCHHODDAS N AKAWA ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 4 - REPORTED IN 21 TAXMANN.COM 159. HE SUBMITTED THAT THIS JUDGMENT IS AVAILABLE ON PAGE 67 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT IN THAT CASE, IT WAS HELD BY THE HON BLE HIGH COURT THAT IF THE A.O. OF THE CREDITORS IS SATISFIE D WITH EXPLANATION GIVEN BY THE CREDITORS AS REGARDS TRANS ACTIONS, THE A.O. OF THE BORROWER HAS NO JURISDICTION TO DISBELI EVE TRANSACTIONS REFLECTED IN THE ACCOUNT OF THE CREDIT ORS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY BOTH THE SIDES. WE FIND THAT THIS IS AN ADMITTED POSITION OF FACT T HAT THIS LOAN CREDITOR RATAN LAL AGARWAL WAS PRODUCED BEFORE THE A.O. AND HIS STATEMENT WAS RECORDED BY A.O. U/S 131 OF THE I .T. ACT ON 15.10.2009. IN THAT STATEMENT, HE HAS NOT ONLY CON FIRMED THE FINANCING OF LOAN BY HIM TO THE ASSESSEE OF RS 12.5 0 LAKHS, BUT HE HAS ALSO EXPLAINED THAT SUCH LOAN WAS ADVANCED B Y HIM BY WAY OF CHEQUES. REGARDING THE CASH DEPOSIT IN HIS BANK ACCOUNT, IT WAS EXPLAINED BY HIM THAT THE SAME IS O UT OF THE CASH AVAILABLE IN HIS CASH BOOK AND AVAILABILITY OF CASH WAS EXPLAINED BEING OUT OF WITHDRAWAL FROM BANK IN MAY 2005, ALTHOUGH THE CASH WAS DEPOSITED IN THE BANK BY HIM IN SEPTEMBER 2005. THERE IS A GAP OF ABOUT 4 MONTHS IN CASH WITHDRAWAL FROM BANK AND CASH DEPOSIT INTO BANK BUT THIS ALONE DOES NOT LEAD TO THIS CONCLUSION THAT SUCH CA SH IS BELONGING TO THE ASSESSEE. THE LOAN CREDITOR IS BE ING TAXED BY THE DEPARTMENT AND IT IS NOTED BY THE LD. CIT(A) ON PAGE NO. ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 5 - 13 OF HIS ORDER THAT HE WAS ASSESSED TO TAX SINCE A Y 1980-81. THE RETURN OF INCOME WAS FILED BY HIM FOR THE PRESE NT YEAR ON 7.12.2006 AS PER THE COPY AVAILABLE ON PAGE NO. 59 OF THE PAPER BOOK AND INCOME DECLARED BY HIM IN THE RETURN WAS ACCEPTED U/S 143(1) OF THE I.T. ACT AS PER INTIMATI ON DATED 27.07.2007 AVAILABLE ON PAGE NO. 60 OF THE PAPER BO OK. THE BALANCE SHEET IS ALSO AVAILABLE ON PAGE NO. 61 OF T HE PAPER BOOK AND AS PER THE SAME, HE WAS HAVING CAPITAL OF RS 6.94 LAKHS AND LOAN LIABILITY OF RS 33.29 LAKHS AND HE W AS HAVING ASSETS OF RS 40.23 LAKHS INCLUDING THIS LOAN RS 12. 50 LAKHS MINUS REPAYMENT OF RS 2 LAKHS TO THE ASSESSEE. HEN CE, IT CANNOT BE SAID THAT THE LOAN CREDITOR IS NOT HAVING ANY ASSET OR LIABILITY APART FROM LOAN GIVEN BY HIM TO THE ASSES SEE. HE IS HAVING INVESTMENT IN EQUITY SHARES OF RS 1443200/- AND APART FROM LOAN TO THE ASSESSEE, HE HAS GIVEN LOAN TO 6 O THER PARTIES ALSO AND AS PER THE DETAIL AVAILABLE ON PAGE 63 OF PAPER BOOK, TOTAL SUCH LOAN GIVEN BY HIM IS AMOUNTING RS 273913 3/-. WHEN A PERSON IS HAVING SO MUCH INVESTMENT IN LOAN AND IN EQUITY SHARES, IT CANNOT BE SAID THAT HE IS NOT HAV ING CREDITWORTHINESS. REGARDING THE CASH DEPOSIT IN HIS BANK ACCOUNT ALSO, HE HAS GIVEN EXPLANATION THAT THE SAM E WAS OUT OF CASH AVAILABLE IN HIS CASH BOOK WHICH REPRESENTE D CASH WITHDRAWAL BY HIM FROM THE BANK IN THE MONTH OF MAY 2005. SO CONSIDERING ALL THESE FACTS, WE ARE OF THE CONSI DERED OPINION THAT THE ADDITION MADE BY THE A.O. IS NOT J USTIFIED IN THE FACTS OF THE PRESENT CASE AND THE SAME WAS RIGH TLY DELETED ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 6 - BY THE CIT(A) WE DECLINE TO INTERFERE IN HIS ORDER FOR DELETING THIS ADDITION FOR LOAN FROM THIS PARTY M/S R.L. AGA RWAL & SONS HUF ON THIS LIMITED ASPECT OF LOAN OF RS 12.50 LAKH FROM R.L. AGARWAL & SONS HUF. 6. THIS WAS ONE OF THE ARGUMENTS OF THE LD. DR OF T HE REVENUE THAT FACTS ARE IDENTICAL IN RESPECT OF ALL LOANS AN D SINCE OTHER ADDITIONS ARE UPHELD BY THE TRIBUNAL AND THAT TRIBU NAL ORDER IN RESPECT OF OTHER LOANS IS NOT RECALLED, THIS ADDITI ON SHOULD ALSO BE CONFIRMED. IN THIS REGARD, WE WANT TO OBSERVE T HAT WE CANNOT COMMENT ABOUT FACTS IN RESPECT OF OTHER LOAN S BECAUSE THAT ISSUE IS NOT BEFORE US BECAUSE AS FOR M.A. ORD ER, ONLY THIS LIMITED ISSUE WAS RECALLED. THIS TRIBUNAL ORDER IN M.A. TO RECALL FOR THIS ONE LOAN ONLY SUGGESTS THAT FACTS A RE DIFFERENT FOR THIS LOAN. BE AS IT WAS BECAUSE WE ARE CONSIDERING THE FACTS OF THIS LOAN ONLY AND DECIDING THE ISSUE ON THAT BASIS . 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS PARTLY ALLOWED BECAUSE THE LIMITED PART OF THE EARLIER TRIBUNAL OR DER WAS RECALLED AND ONLY THIS LIMITED PART IS DECIDED IN F AVOUR OF THE ASSESSEE AND REMAINING PART WAS ALREADY DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE AS PER EARLIER TRIBUN AL ORDER. 8. NOW, WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 7 - 9. AS PER THE TRIBUNAL ORDER IN THE M.A., WE HAVE T O DECIDE THIS C.O. OF THE ASSESSEE BECAUSE THE SAME WAS NOT ADJUD ICATED UPON AS PER THE EARLIER TRIBUNAL ORDER. 10. IT WAS SUBMITTED BY THE AR BEFORE US THAT ADDIT ION WAS MADE ON THE BASIS OF THE STATEMENT OF ONE OF THE LENDERS SH. OM PRAKASH SHARMA REGARDING LOAN ADVANCED BY HIM OF RS 2 LAKHS. HE SUBMITTED THAT AS PER LETTER DT. 15.7.20 09 SUBMITTED BEFORE LD. CIT(A) RELEVANT PORTION OF WHICH IS AVAI LABLE AT PAGE NO. 119 OF PAPER BOOK, IT WAS SUBMITTED BY ASS ESSEE BEFORE LD. CIT(A) THAT HIS STATEMENT WAS RECORDED B EHIND THE BACK OF THE ASSESSEE. HE SUBMITTED THAT BEFORE MAK ING AN ADDITION ON THE BASIS OF STATEMENT RECORDED BEHIND THE BACK OF THE ASSESSEE, IT IS ESSENTIAL THAT THE OPPORTUNITY OF CROSS- EXAMINATION SHOULD BE PROVIDED TO THE ASSESSEE BUT THIS WAS NOT DONE AND THEREFORE, HIS STATEMENT CANNOT BE USE D AGAINST THE ASSESSEE AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION AFTER PROVIDING AN OPPORTUNITY TO THE ASSESSEE FOR CROSS-EXAMINATION. 11. THE LD. DR OF THE REVENUE SUPPORTED THE ORDER O F THE OF THE A.O. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF TH E HONBLE APEX COURT RENDERED IN THE CASE OF ITO VS. M. PIRAI CHOODI AS REPORTED IN 20 TAXMANN.COM 733 AND HE SUBMITTED A COPY OF THIS JUDGMENT. ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 8 - 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL PLACED ON RECORD AND GONE THROUGH THE JUDG MENT CITED BY THE LD. DR. WE FIND THAT THIS FACT IS UNDISPUTE D THAT NO OPPORTUNITY OF CROSS-EXAMINATION WAS PROVIDED BY TH E A.O. TO THE ASSESSEE REGARDING THE STATEMENT OF SH. RATAN L AL SHARMA ON THE BASIS OF WHICH THIS ADDITION WAS MADE BY THE A.O. AND CONFIRMED BY THE CIT(A). SUBMISSION WAS MADE BY TH E ASSESSEE BEFORE THE CIT(A) IN THIS REGARD BUT IN SP ITE OF THIS, NO SUCH OPPORTUNITY OF CROSS-EXAMINATION WAS PROVID ED TO THE ASSESSEE. THIS IS SETTLED LEGAL POSITION THAT NO AD VERSE STATEMENT CAN BE USED AGAINST THE ASSESSEE WITHOUT PROVIDING OPPORTUNITY OF CROSS-EXAMINATION OF THE DEPONENT. REGARDING THE JUDGMENT OF HONBLE APEX COURT CITED BY THE LD. DR IN THE CASE OF ITO VS. M. PIRAI CHOODI(SUPRA) WE FIND THAT IT WAS HELD BY THE HONBLE APEX COURT IN THAT CASE THAT HI GH COURT SHOULD HAVE DIRECTED THE A.O. TO GRANT AN OPPORTUNI TY TO THE ASSESSEE TO CROSS-EXAMINE THE CONCERNED WITNESS. B UT HIGH COURT SHOULD NOT HAVE QUASHED THE ASSESSMENT PROCEE DINGS ON THIS BASIS. FOLLOWING THIS JUDGMENT OF THE HONBLE SUPREME COURT, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF A.O. FOR FRESH DECISION. A.O. IS DIRECTED TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE CONCERNED WITNESS SH. RATAN LAL SHARMA AND THEREAFTER PASS ORDER AS PER LAW AFT ER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEES C.O. STANDS ALLOWED FOR S TATISTICAL ITA NO.253/AH D/2010 & CO NO. 33/AHD/2010 ITO WD-1(1), SURAT VS. APEX THERM PACKAGING PVT. LTD. FOR A.Y. 2006-07 - 9 - PURPOSE. IN THE RESULT, THE C.O. OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. 13. IN THE COMBINED RESULT, APPEAL OF THE REVENUE I S PARTLY ALLOWED AND C.O. OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON THE DATE MENTIONED ON CAPTION PAGE. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( A.K. GARODIA) ACCOUNTANT MEMBER AHMEDABAD; DATED 13/12/2013 GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA, SR. P , SR. P , SR. P , SR. P. .. .S SS S. .. . TRUE COPY $% & ' ($'# $% & ' ($'# $% & ' ($'# $% & ' ($'#/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. &+)* / THE RESPONDENT. 3. ,, - / CONCERNED CIT 4. -() / THE CIT(A)-III, AHMEDABAD 5. '01 & , , / DR, ITAT, AHMEDABAD 6. 123 4 / GUARD FILE. $% $% $% $% / BY ORDER, 5 55 5/ // / ,6 ,6 ,6 ,6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD