M/s Akula Boards Ltd., Tanuku V. THE ACIT, Rajahmundry

CO 42/VIZ/2014

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3015 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S RAVI SHANKAR NARAYANSR
• Assessee Lawyers: R PRASAD
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HONBLE JUDICIAL MEMBER & SHRI G. MANJUNATHA, HONBLE ACCOUNTANT MEMBER ITA NO. 281/VIZ/2014 (ASST. YEAR : 2010-11) ACIT, CIRCLE-1, RAJAHMUNDRY. V. M/S. AKULA BOARDS LTD., D.NO. 35-32-2, AB BHAVAN, YANAMANDRA VARI STREET, TANUKU, W.G. DISTRICT PAN NO. AAECA 3781 F (APPELLANT) (RESPONDENT) C.O.NO.42/VIZ/2014 (ITA NO. 281/VIZ/2014) (ASST. YEAR : 2010-11) M/S. AKULA BOARDS LTD., D.NO. 35-32-2, AB BHAVAN, YANAMANDRA VARI STREET, TANUKU, W.G. DISTRICT V. ACIT, CIRCLE-1, RAJAHMUNDRY. PAN NO. AAECA 3781 F (APPLICANT) (NON-APPLICANT) ASSESSEE BY : SHRI M.S.R. PRASAD CA. DEPARTMENT BY : SHRI S. RAVI SHANKAR NARAYANSR.DR DATE OF HEARING : 24/04/2017. DATE OF PRONOUNCEMENT : 28/04/2017. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE AND C.O. BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), VISAKHAPATNAM, DATED 06/03/2014 FOR THE ASSESSMENT YEARS 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE IS A COMPANY, ENGAGED IN THE PAPER BUSINESS ACTIVITY OF MANUFACTURING OF WRITING AND 2 ITA NO.281/VIZ/2014 & C.O.NO.42/VIZ/2014 (M/S. AKULA BOARDS LIMITED) PRINTING PAPERS, FILED ITS RETURN OF INCOME ON 14/10/2010. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') AND AFTER DUE PROCESS, ASSESSMENT WAS COMPLETED UNDER SECTION 143(3). IN THE ASSESSMENT ORDER, ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS FAILED TO FURNISH SUNDRY CREDITORS ABOUT 59 PARTIES, TOTAL AMOUNT SHOWN BY THE ASSESSEE OF RS. 2,87,37,599/-. THE DETAILS ARE MENTIONED BY THE ASSESSING OFFICER, IN HIS ORDER, AT PAGE NOS. 2 & 3. THE ASSESSING OFFICER HAS NOTED THAT THE CREDIT LIABILITY IN THIS REGARD TO THESE PARTIES WAS NOT PROVED SATISFACTORILY BY THE ASSESSEE. ACCORDINGLY, HE MADE ADDITION OF RS. 2,87,37,599/-. 3 . ON APPEAL IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT IT COULD FILE CONFIRMATION LETTERS IN RESPECT OF 15 PARTIES, AMOUNTING TO RS.2,49,89,603/-. THE ASSESSING OFFICER IGNORED THIS INFORMATION WHILE MAKING THE IMPUGNED ADDITION. IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE LETTERS DATED 24/01/2013, 07/02/2013 & 25/02/2013 SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE IS NOT IN POSITION TO GET CONFIRMATION LETTERS FROM OTHER PARTIES AND SUBSEQUENTLY, THE LIABILITY RELATING TO THOSE PARTIES HAVE BEEN DISCHARGED IN SUBSEQUENT YEARS. THE DETAILS OF PAYMENTS MADE TO DISCHARGE THE LIABILITY IN SUBSEQUENT YEARS WERE ALSO FILED BEFORE THE ASSESSING OFFICER. THE ASSESSEE ALSO FILED LEDGER EXTRACT OF THE PARTIES AS ON 31/03/2010 AND AS ON 31/03/2012. A COPY OF INVOICE AND BANK 3 ITA NO.281/VIZ/2014 & C.O.NO.42/VIZ/2014 (M/S. AKULA BOARDS LIMITED) STATEMENT, EVIDENCING PAYMENT MADE TO THE SAID PARTIES WAS ALSO FILED IN THE PAPER BOOK. IT WAS ALSO SUBMITTED THAT THESE DETAILS WERE BEFORE THE ASSESSING OFFICER AND SUBMITTED THAT ALL THE TRANSACTIONS WITH THE SAID CREDITORS WERE GENUINE, THERE IS NO NEED FOR DISALLOWANCE AND ADDITION MADE BY THE ASSESSING OFFICER IS WARRANTED. 4. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION AND ALSO CONSIDERING THE DETAILS FILED BY THE ASSESSEE, DIRECTED THE ASSESSING OFFICER TO EXAMINE THE CONFIRMATION LETTERS AND IF IT IS FOUND THAT THERE IS NO DISCREPANCY ON THE BALANCES CONFIRMED, DELETE THE ADDITION IN RESPECT OF TRADE CREDITORS. IN RESPECT OF OTHER PARTIES, TO WHOM PAYMENTS WERE MADE IN SUBSEQUENT YEARS, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO EXAMINE THE DETAILS AND IF THE CLAIM MADE BY THE ASSESSEE IS FOUND TO BE IN ORDER, DIRECTED TO BE DELETED THE ADDITION. 5. ON BEING AGGRIEVED, REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 6 . LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION BY CONSIDERING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, ITS AMOUNTING TO VIOLATION OF SECTION 46A OF THE I.T. RULES, 1962. 7 . ON THE OTHER HAND, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 8 . WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND ORDERS OF THE AUTHORITIES BELOW. 4 ITA NO.281/VIZ/2014 & C.O.NO.42/VIZ/2014 (M/S. AKULA BOARDS LIMITED) 9. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT ASSESSEE IS NOT FILED CONFIRMATION LETTERS IN RESPECT OF 59 PARTIES, WHICH ARE RECORDED IN PAPER BOOK AT PAGE NOS. 2 & 3, AMOUNTING TO RS.2,87,37,599/-, ADDITION WAS MADE ON THE GROUND THAT ASSESSEE IS NOT ABLE TO SUBSTANTIATE HIS CASE BEFORE THE ASSESSING OFFICER. ON APPEAL, ASSESSEE HAS FILED SOME DETAILS RELATING TO 15 PARTIES, AMOUNTING TO RS. 2,49,89,603/- AND FOR REMAINING PARTIES, HE SUBMITTED THAT IN SUBSEQUENT YEARS, HE ALREADY MADE PAYMENTS AND DISCHARGED HIS LIABILITY. THE ASSESSEE ALSO FILED LEDGER EXTRACT AND CONFIRMATION LETTERS OF THE PARTIES BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE DETAILS FILED AND ALSO CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE, DIRECTED THE ASSESSING OFFICER TO EXAMINE THE DETAILS AND IF IT IS FOUND CORRECT, DELETE THE ADDITION. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER:- 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE. IT IS CLAIMED THAT THE ASSESSEE COULD FILE THE CONFIRMATION LETTERS IN RESPECT OF THE FOLLOWING 15 PARTIES BEFORE THE AO; THE DETAILS ARE AS UNDER:- SL. NO. NAME OF SUNDRY TRADE CREDITOR/ DEBTOR BALANCE OF SUNDRY TRADE CREDITOR OUTSTANDING CREDITIN THE ACCOUNT BOOKS OF THE ASSESSEE (IN RS.) 1 APL PEROXY CHEMICALS LTD 5,25,423 2 DURGA VIJAYA ENGINEERING WORKS 38,194 3 NZA INFORTECH 38,14,112 4 KS RAMARAO PACKING CONT - 29,440 _____ 5 RAMASWAMY SPINNING MILLS PVT. LTD. 10,18 , 567 6 RAVIRAJ ENTERPRISES PVT LTD 97,66,457 7 R. SATYANARAYANA 1,05,965 8 SANAM INDUSTRIES SPARES 51,928 9 SRI KRISHNA HARDWARE ENTERPRISES 77,113 10 TYCHE CHEM LTD 11,164 5 ITA NO.281/VIZ/2014 & C.O.NO.42/VIZ/2014 (M/S. AKULA BOARDS LIMITED) HENCE, THE AO IS DIRECTED TO EXAMINE THE CONFIRMATION LETTERS SAID TO BE FILED FROM THE ABOVE TRADE CREDITORS, AND IF IT IS FOUND THAT THERE IS NO DISCREPANCY ON THE BALANCES CONFIRMED, THE AO IS DIRECTED TO DELETE THE ADDITION IN RESPECT OF THESE TRADE CREDITORS. 5.3 WITH REFERENCE TO THE OTHER PARTIES, THE ASSESSEE HAS MADE A CLAIM THAT THE PAYMENT WAS MADE IN THE SUBSEQUENT YEARS TO THESE PARTIES. THE RELEVANT DETAILS IN THIS ARE FILED IN THE FORM OF PAPER-BOOK. I HAVE CONSIDERED THE DETAILS AND APPARENTLY THERE APPEARS TO BE MERIT N THE ASSESSEE'S CLAIM. HENCE, THE AO IS DIRECTED TO EXAMINE THESE DETAILS AND FT THE CLAIM MADE BY THE ASSESSEE S FOUND TO BE N ORDER, THEN THE ADDITION MADE IN REGARD TO THOSE CREDITORS MAY BE DELETED. 10 . WE FIND THAT LD. CIT(A) ONLY DIRECTED THE ASSESSING OFFICER TO VERIFY THE DETAILS AND IF IT IS FOUND CORRECT, DELETE THE ADDITION. WE FIND THAT THERE IS NO VIOLATION OF RULE 46A AND ALSO FIND THAT NO ERROR IN THE ORDER PASSED BY THE LD. CIT(A) AND THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 11 . INSOFAR AS CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, AS IT IS FILED IN SUPPORT OF THE ORDER OF THE LD. CIT(A), IN VIEW OF OUR DECISION ABOVE, THE SAME IS DISMISSED. 12 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND THE C.O. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF APRIL, 2017. SD/- SD/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :28 TH APRIL, 2017. 11 SRI BALAJI TRADERS 42,94,083 12 SRI SRINVASA CORPORATION 45,94,356 13 B. SRINVAS 4,77,306 14 SHEKAR LOGISTIC PVT. LTD. 1,45,749 15 GOVINDA AGROCHEM PVT LTD 39,746 TOTAL 2,49,89,603 6 ITA NO.281/VIZ/2014 & C.O.NO.42/VIZ/2014 (M/S. AKULA BOARDS LIMITED) VR/- COPY TO: 1. THE ASSESSEE - M/S. AKULA BOARDS LTD., D.NO. 35-32-2, AB BHAVAN, YANAMANDRA VARI STREET, TANUKU, W.G. DISTRICT. 2. THE REVENUE - ACIT, CIRCLE-1, RAJAHMUNDRY. 3. THE CIT, RAJAHMUNDRY. 4. THE CIT(A), VISAKHAPATNAM. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER