Kabra Services, HYd, Hyderabad V. ITO, Ward- 5(3), Hyderabad

ITA 1068/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66428 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 11-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: S RAMA RAO
• Keywords: Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1068/HYD/2012 ASSESSMENT YEAR: 2006-07 KABRA SERVICES, APPELLANT HYDERABAD. (PAN AADFK9513B) VS. INCOME TAX OFFICER, RESPONDENT WARD 5(3), HYDERABAD APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING : 17/10/2012 DATE OF PRONOUNCEMENT : 07/11/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-V, HYDERABAD DATED 15/06/2012 F OR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FIRM FILED ITS RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 38,4 34/- AND THE SAME WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTE R, THE ASSESSING OFFICER REOPENED THE ASSESSMENT AND COMPL ETED THE SAME DETERMINING THE TOTAL INCOME OF THE ASSESSEE FIRM A T RS. ITA NO. 1068/HYD/2012 KABRA SERVICES 2 21,07,299/- BY MAKING AN ADDITION OF RS. 20,68,865/ - ON ACCOUNT OF UNDISCLOSED INCOME U/S 68 OF THE ACT. 3. BEFORE THEN ASSESSING OFFICER, THE ASSESSEE SUBM ITTED THAT IT HAD RECEIVED COMMISSION FROM BIRLA WHITE TO THE TUN E OF RS. 2,54,3436/- AND ALSO REIMBURSEMENT OF HAMALI CHARGE S OF RS. 18,14,429/- FROM BIRLA WHILE AND GRASIM CEMENT TOTA LING TO RS. 20,68,865/-. IT WAS FURTHER SUBMITTED THAT IT HAD P AID AN AMOUNT OF RS. 19,25,641/- AS HAMALI CHARGES AND ONLY AS REIMB URSEMENT AFTER EFFECTING TDS AND THE BALANCE AMOUNT OF RS. 1,11,21 2/- WAS DEBITED TO P&L A/C. AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE, THE ASSESSING OFFICER NOTED THAT THE METHOD ADOPTED BY THE ASSESSEE IN NETTING OFF OF RECEIPTS IS NOT ACCEPTABLE A ON VERI FICATION OF TDS CERTIFICATES, NOWHERE IT IS MENTIONED THAT THE PAYM ENTS TOTALING RS. 18,14,429/- WERE MADE ON ACCOUNT OF REIMBURSEMENT O F HAMALI CHARGES, BUT, WERE MENTIONED AS CONTRACT RECEIPTS. HENCE, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS SPECI FICALLY ASKED TO PRODUCE SUPPORTING DOCUMENTS SUCH AS LEDGER EXTRACT S, CONFIRMATION FROM THE PARTIES IN RESPECT OF HAMALI CHARGES PAID ETC. THE ASSESSEE FURNISHED LEDGER EXTRACT MAINTAINED BY IT AND BANK ACCOUNTS. IT, HOWEVER, FAILED TO PRODUCE ANY CONFIRMATION FROM TH E COMPANIES THAT HAMALI CHARGES EXPENDED BY THE COMPANY WERE RE IMBURSED TO THE EXTENT OF RS. 18,14,429/-. THE ASSESSING OFFICE R FURTHER NOTED THAT ON VERIFICATION OF THE BANK TRANSACTION, THE T OTAL RECEIPTS RECEIVED BY THE ASSESSEE FROM THE COMPANIES IS MATC HING WITH THE GROSS RECEIPTS OF RS. 35.96 LAKHS. HE, THEREFORE, H ELD THAT IN THE ABSENCE OF ANY SUPPORTING EVIDENCE THAT HAMALI CHAR GES WERE REIMBURSED BY THE COMPANIES AND ALSO IN VIEW OF THE FACT THAT THE TOTAL RECEIPTS AS PER BANK TRANSACTIONS ARE TALLYIN G WITH THE TOTAL ITA NO. 1068/HYD/2012 KABRA SERVICES 3 CONTRACTS, THE DIFFERENCE IN GROSS RECEIPTS AS SHOW N BY THE ASSESSEE AND AS PER THE TDS CERTIFICATES IS BROUGHT TO TAX A S UNDISCLOSED INCOME U/S 68 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), THE ASSESSEE STATED THAT IT H AD RECEIVED COMMISSION AND REIMBURSEMENT OF HAMALI CHARGES WHIL E IT HAD ALSO PAID CERTAIN HAMALI CHARGES, THEREFORE, THE AMOUNT WAS NOT SHOWN. 6. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT THE ASSESSING OFFICER HAD RIGHTLY STATED THAT THE TDS CERTIFICATE SHOWS CONTRACT RECEIPTS OF RS. 18,14,42 9/- AND THE ASSESSEE DID NOT PRODUCE ANY AUTHENTIC EVIDENCE IN SUPPORT OF ITS CONTENTIONS. HE FURTHER HELD THAT NO BANK ACCOUNTS WERE PRODUCED TO SHOW THAT MONEY HAD BEEN GIVEN AND NO CONTRACTS AND NO OTHER EVIDENCE WAS PRODUCED TO SHOW THAT ITS CONTENTION W AS CORRECT. HE, THEREFORE, CONFIRMED THE ADDITION MADE BY THE ASSES SING OFFICER ON THIS COUNT. 7. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US RA ISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOT H ON FACTS AND IN LAW. 2. THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS. 20,66,861/- U/S 6 8 OF THE ACT. THE CIT(A) OUGHT TO HAVE SEEN THAT THE AMOUNTS RECE IVED FROM GRASIM CEMENT AND BIRLA WHITE ARE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT BY CREDITING THE SAME TO HAMALI ACCOUNT. THE CIT(A) OUGHT TO HAVE SEEN THAT THE TOTAL HAMALI CHA RGES INCURRED AMOUNTED TO RS. 19,25,601/- AND AFTER REDU CING THE ITA NO. 1068/HYD/2012 KABRA SERVICES 4 HAMALI CHARGES REIMBURSED BY THE SAID TWO COMPANIES OF RS. 18,14,429/- THE BALANCE OF RS. 1,11,172/- IS DEBITE D TO THE PROFIT AND LOSS ACCOUNT. 3. THE CIT(A) OUGHT TO HAVE SEEN THAT ALL THE DEPOS ITS MADE INTO BANK ACCOUNT ARE PROPERLY EXPLAINED. 4. THE CIT(A) ERRED IN MENTIONING THAT THE APPELLAN T COULD NOT PRODUCE ANY EVIDENCE WITH REGARD TO THE RECONCILIAT ION BETWEEN THE FIGURES SHOWN IN THE TDS CERTIFICATES AND THE F IGURES ADMITTED IN THE PROFIT AND LOSS ACCOUNT. THE LEARNE D CIT(A) OUGHT TO HAVE OBSERVE THAT THE AMOUNT RECEIVED FROM THE ABOVE MENTIONED TWO COMPANIES I.E. GRASIM CEMENT AN D BIRLA WHITE WAS PROPERLY RECONCILED WITH REFERENCE TO THE TDS CERTIFICATES ISSUED BY THEM AND, THEREFORE, OUGHT T O HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 8. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE ISSUE, WE FIND THAT THE GRIEVANCE OF THE AUTHORITIES BELOW IS THAT THE ASSE SSEE FAILED TO EXPLAIN PROPERLY AND FAILED TO SUBSTANTIATE ITS CLA IM BY FILING NECESSARY EVIDENCE BEFORE THEM. THEREFORE, WE ARE O F THE VIEW THAT TO MEET THE ENDS OF JUSTICE ONE MORE OPPORTUNITY MA Y BE GIVEN TO THE ASSESSEE TO APPEAR BEFORE THE ASSESSING OFFICER AND FILE NECESSARY MATERIAL IN SUPPORT OF ITS CLAIM. HENCE, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DECID E THE ISSUE AFTER EXAMINING THE EVIDENCE, WHICH WILL BE PUT FORTH BY THE ASSESSEE BEFORE HIM AND HE SHALL DECIDE THE ISSUE IN ACCORDA NCE WITH LAW. THE ASSESSEE IS DIRECTED TO FURNISH NECESSARY DOCUMENTA RY EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE AO. ACCORDINGLY, TH E APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1068/HYD/2012 KABRA SERVICES 5 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 07/11/2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 7 TH NOVEMBER, 2012. KV COPY TO:- 1) KABRA SERVICES, C/O SHRI S. RAMA RAO, ADVOCATE, FLAT NO. 103, H.NO. 3-6-542/4, INDIRADEVI NILAYAM, ST. NO. 7, HIMAYAT NAGAR, HYDERABAD 500 020. 2) M/S C. GOPAL REDDY & CO., 13-2-79, SHIRIDI NAGAR, ANANTAPUR. 3) THE CIT (A)-V, HYDERABAD 4) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.