M/s.Sakthimatha Cashew Co, V. ITO, Kollam

CO 42/COCH/2008

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7134 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 10 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 12-06-2008
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Unexplained cash credit; Principle of natural justice; Period of limitation; Additional evidence; Time period of passing order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM C.O. NO. 42/COCH/2008 (ARSG. OUT OF I.T.A NO. 189/COCH/2007) ASSESSMENT YEAR: 2002-03 M/S. SAKTHIMATHA CASHEW CO., NALLILA-P.O., KOLLAM. [PAN:AADFS 4228H] VS. THE INCOME TAX OFFICER, WARD-3, KOLLAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. REVENUE BY SMT. VIJAYAPRABHA, JR. DR DATE OF HEARING 07/05/2012 DATE OF PRONOUNCEMENT 09/05/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE CROSS OBJECTION FILED BY THE ASSESSEE WAS ORIG INALLY DISMISSED BY THE TRIBUNAL AS BARRED BY LIMITATION. THE ASSESSEE CHALLENGED T HE SAID ORDER OF THE TRIBUNAL IN THE APPEAL FILED BEFORE THE HONBLE HIGH COURT OF KERAL A. THE HIGH COURT CONDONED THE DELAY AND ORDERED THE TRIBUNAL TO CONSIDER THE CROS S OBJECTION FILED BY THE ASSESSEE ON MERITS. ACCORDINGLY, THE C.O FILED BY THE ASSESSEE WAS POSTED FOR HEARING. 2. IN THE CROSS OBJECTION, THE ASSESSEE IS C HALLENGING THE DECISION OF THE LD CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.75,98,8 53/-. THE FACTS RELATING THERETO ARE STATED IN BRIEF. DURING THE COURSE OF ASSESSMENT P ROCEEDING, THE AO NOTICED THAT THE LIST OF SUNDRY CREDITORS CONTAINED NEW CREDIT BALANCES I N VARIOUS NAMES AGGREGATING TO RS.86,98,853/-. SINCE THE ASSESSEE FAILED TO FILE CONFIRMATION LETTERS FROM THE RESPECTIVE PARTIES, THE AO ADDED THE ABOVE SAID AMOUNT OF RS.8 6,98,853/- AS UNEXPLAINED CREDIT. IN C.O. NO. 42/COCH/2008 2 THE APPEAL FILED BY THE ASSESSEE, THE LD CIT(A) GRA NTED RELIEF TO THE TUNE OF RS.11.00 LAKHS AND CONFIRMED THE ADDITION OF BALANCE AMOUNT OF RS.75,98,853/-. IN THE CROSS OBJECTION, THE ASSESSEE IS ASSAILING THE DECISION O F LD CIT(A) IN CONFIRMING ADDITION OF THE ABOVE SAID AMOUNT. 3. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSMENT ORDER WAS PASSED EFFECTIVELY WITHIN 15 DAYS DURING THE FAG END OF TH E LIMITATION PERIOD, I.E. IN MARCH 2006. HENCE, THE AO DID NOT HAVE TIME TO LOOK INTO THE DO CUMENTS THAT WERE FILED BY THE ASSESSEE AND THE ASSESSEE ALSO DID NOT GET ENOUGH O PPORTUNITY TO GET THE CONFIRMATION LETTERS FROM THE CONCERNED CREDITORS, PARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATION LETTERS WITH REGA RD TO THE BALANCES THAT WERE OUTSTANDING ABOUT FOUR YEARS BACK AT THAT POINT OF TIME. HE FU RTHER SUBMITTED THAT THE ASSESSEE HAS SINCE OBTAINED CONFIRMATION LETTERS FROM ALL THE CR EDITORS AND FURNISHED THEM BEFORE THE TRIBUNAL. ACCORDINGLY HE PRAYED THAT THE MATTER MA Y BE SET ASIDE TO THE AO FOR RECONSIDERATION AFTER DULY EXAMINING THE FRESH EVID ENCES FILED NOW. 4. ON THE CONTRARY, THE LD D.R STRONGLY OBJEC TED TO THE PLEA MADE BY THE LD A.R. SHE SUBMITTED THAT THE ASSESSEE DID NOT BOTHER TO GET C ONFIRMATION LETTERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO DURING THE COURSE O F APPELLATE PROCEEDINGS AND HENCE THE ASSESSEE SHOULD NOT BE PERMITTED TO PRODUCE FRE SH EVIDENCES AT THIS STAGE. BY INVITING THE ATTENTION OF THE BENCH TO RULES 29 TO 31 OF THE APPELLATE TRIBUNAL RULES, 1963, SHE SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED TO PRO DUCE ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. SHE ALSO TOOK SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATTI VS. CIT, DELHI (107 ITR 938) TO SUBMIT THAT THE RULES 29 TO 31 REFERRED SUPRA SHOULD BE STRICTLY FOLLOWED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. FROM THE DATE SHEET FILED BY THE LD A.R, WE NOTICE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ONLY ON 15.3.2006 AND THE ASSESSMENT WAS COMPLETED ON 30-3-2006, I.E. WITHIN A PERIOD C.O. NO. 42/COCH/2008 3 OF 15 DAYS. THE AO ALSO DID NOT HAVE TIME TO VERIF Y THE DOCUMENTS, WHICH IS EVIDENT FROM THE FOLLOWING OBSERVATIONS MADE BY HIM:- THE DETAILS OF THESE CREDIT BALANCES HAVE BEEN FURN ISHED BY THE ASSESSEE ONLY ON 27.3.2006 AND NO TIME WAS AVAILABLE FOR THE DEPARTM ENT TO CONDUCT PROPER ENQUIRIES TO ASCERTAIN THE GENUINENESS OF THE CREDI T BALANCES. IN THE AFFIDAVIT FILED BEFORE THE HONBLE HIGH COUR T, THE ASSESSEE HAS EXPLAINED THE REASONS FOR ITS INABILITY TO FILE THE CONFIRMATION LETTERS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, WE ARE OF THE VIEW THAT THE ASS ESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT FILING THE CONFIRMATION LETTERS AT TH E RELEVANT POINT OF TIME BEFORE THE AO. ACCORDINGLY, IN THE INTEREST OF NATURAL JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCES, WHICH ARE IN THE FORM OF CONFIRMATION LETTERS, THAT WERE PRODUCED BEFORE US. 6. THESE NEW EVIDENCES REQUIRE EXAMINATION AT TH E END OF THE AO AND FURTHER WE FIND THAT THESE EVIDENCES GO TO THE ROOT OF THE ISSUE UN DER CONSIDERATION. ACCORDINGLY, THE ISSUE BEFORE US REQUIRES FRESH EXAMINATION AT THE E ND OF THE AO BY DULY CONSIDERING THE ADDITIONAL EVIDENCES REFERRED SUPRA. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) RELATING TO THE ADDITION OF RS.75,98,853/- AND REMI T THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER DULY CONSIDERING THE ADDITIONAL EVIDENCES THAT WERE FILED BEFORE US AND ALSO ANY OTHER MATERIALS THAT MAY BE FILED BY THE ASSESSEE BEFORE HIM. 7. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 09-05-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 9TH MAY, 2012 GJ C.O. NO. 42/COCH/2008 4 COPY TO: 1. M/S. SAKTHIMATHA CASHEW CO., NALLILA-P.O., KOLLA M. 2. THE INCOME TAX OFFICER, WARD-3, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, TR IVANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .