ITO, Chittoor V. Sri R K Kumaraswamy, Chittoor

ITA 107/HYD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3410 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 27-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H PHANI RAJU
• Assessee Lawyers: K NEERAJA
• Keywords: Set aside

Judgement Text

IN THE INCOME TX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMEBR ITA NO.107/HYD/09 : ASSTT . YEAR 2005-06 INCOME TAX OFFICER, WARD-2, HYDERABAD V/S. SHRI R.K.KUMARASWAY, CHITTOOR. ( PAN AEDPR 6698 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.PHANI RAJU RESPONDENT BY : SMT. K.NEERAJA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2005-06 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- '1. THE LEARNED CIT(APPEALS), TIRUPATI HAS ERRED I N BOTH THE LAW AND FACTS OF THE CASE IN ALLOWING THE APPEAL. 2. LEARNED CIT(APPEALS), TIRUPATI HAS ERRED IN DELETING THE ADDITION IN RESPECT OF SUNDRY CREDITOR S THEREBY VIOLATING THE RULE 46A(3) OF THE I.T. RULES . 3. THE CIT(APPEALS), TIRUPATI HAS RELIED ON THE WRI TTEN SUBMISSIONS FO THE ASSESSEE REGARDING THE ADDITIONS IN RESPECT OF TECH PACIFIC (I) LTD. AND MUKESH KUMAR & CO. TREATING THEM AS GENUINE THROUGH THE ASSESSEE NEVER BROUGHT THIS ASPECT BEFORE THE NOTICE OF THE ASSESSING OFFICER. ITA NO.107/HYD/09. SHRI R.K.KUMARASWAY, CHITTOOR. 2 4. LEARNED CIT(APPEALS) TIRUAPTI HAS ERRED IN DELE TING THE ADDITION WITH REGARD TO SUNDRY CREDITORS, VIZ. COMPACT SYSTEMS PVT. LTD. AND COMPAGE COMPUTERS GIVING CREDENCE TO THE RECONCILATION STATEMENTS THOUGH THESE STATEMENTS WERE NEVER SUBMITTED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ' 3. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) HAS ERRED IN ADMITTING FRESH EVIDENCE IN VIOLATION OF RULE 46A(3) OF THE INCO ME-TAX RULES AND HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HE SUBMITTE D THAT THE RECONCILIATION STATEMENT WITH THE THIRD PARTIES, WHO A RE TRADE PARTIES, WAS NEVER SUBMITTED TO THE ASSESSING OFFICER BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THESE FACTS, HE SUB MITTED THAT THE ORDER OF THE CIT(A) SHOULD BE SET ASIDE AND O PPORTUNITY SHOULD BE GIVEN TO THE ASSESSING OFFICER TO MAKE HIS COMMEN TS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO DIFFERENCE IN THE ACCOUNTS PERTAINING TO THE THIRD PARTIES, WHO ARE TRADE PARTIES OF THE ASSESSEE, AND THE ASSESSEE HAS CONTINUOU S TRANSACTIONS WITH THEM. THE DIFFERENCE IN THE BALANCES AS PER THE ACCOUNTS OF THE ASSESSEE WAS DUE TO LATE RESPONDING BY THE P ARTIES OR RECORDING OF RECEIPTS AFTER THEIR REALIZATION, ETC. SH E SUBMITTED THAT THE ASSESSING OFFICER WAS GIVEN AMPLE OPPORTUNITY BY THE CIT(A) AND A REMAND REPORT WAS ALSO CALLED FOR FROM HIM BY THE CIT( A) AND THE REMAND REPORT OF THE ASSESSING OFFICER WAS ALSO SENT TO THE ASSESSEE FOR HIS COMMENTS. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE IN HIS RE JOINDER SUBMITTED THAT THE RECONCILATION STATEMENT OF THE ACCOUNT S WITH THE TRADE PARTIES WAS SUBMITTED BY THE ASSESSEE ONLY AFTER THE SUBMISSION OF THE REMAND REPORT BY THE ASSESSING OFFICER. ITA NO.107/HYD/09. SHRI R.K.KUMARASWAY, CHITTOOR. 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. W E FIND THAT ALL THE PARTIES, IN WHOSE CASES SOME DIFFERENCE IN THEIR BALANCES ON A PARTICULAR DATE WERE FOUND BY THE ASSESSING OFFICER ARE ALL TRADE PARTIES OF THE ASSESSEE. THE AMOUNTS ARE RECE IVED THROUGH BANKING CHANNEL AND TRADE TRANSACTIONS ARE ALSO SUPPORT ED BY INVOICES FOR THE CREDIT RECEIPTS. THE ASSESSEE HAS EXPLAINED THAT T HE DIFFERENCE IN THEIR BALANCES ON A PARTICULAR DATE IN THE ACCOUNTS OF THESE TRADE PARTIES WAS DUE TO LATE RESPONDING BY THE PARTIES OR RECORDING OF THE RECEIPTS AFTER REALIZATION THEREOF. ASSESSEE HAS FILED RE CONCILATION STATEMENT TALLYING THE BALANCES AS ON THE PARTICULAR DAT E IN THE ACCOUNT BOOKS OF THE ASSESSEE WITH REGARD TO THE ACCOUNTS OF THESE PARTIES. THE CIT(A) HAS GIVEN OPPORTUNITY TO THE ASSE SSING OFFICER TO EXAMINE THE LEDGER ACCOUNTS OF THE ASSESSEE IN RESPECT OF TH ESE TRADE PARTIES VIS--VIS BANK STATEMENTS AND OTHER DETAILS AND THE REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER BY THE CI T(A). THE ASSESSING OFFICER HAS FURNISHED THE REMAND REPORT TO THE C IT(A). THE CIT(A) HAS RECORDED IN HIS ORDER THAT THE ASSESSING OFFICE R WAS SPECIFICALLY DIRECTED TO GO THROUGH THE LEDGER ACCOUNTS OF THE CREDITORS AND EXAMINE THE SAME VIS--VIS THE BANK STATEMENTS AND THE ASSESSING OFFICER'S REMAND REPORT WAS SILENT ON THIS ISSUE. WE FIND THAT THE ASSESSING OFFICER HAS OPTED NOT TO REPRESENT THE CASE OF THE DEPARTMENT BEFORE THE CIT(A), AFTER PROPER EXAMINAT ION OF THE MATERIAL, AS DIRECTED BY THE CIT(A) WHILE CALLING FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. IN THE CIRCUMSTANCES, WE FIND THA T THERE IS NO VIOLATION OF THE PROVISIONS OF RULE 46A IN THIS CASE. ON THE MERITS OF THE CASE, WE FIND THAT THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE RECONCILATION STATEMENT OF ACCOU NTS FILED BY THE ASSESSEE WAS NOT CORRECT. IN THESE FACTS, WE FIND NO M ERIT IN THE GROUNDS OF APPEAL OF THE REVENUE, WHICH ARE ACCORDINGL Y REJECTED. ITA NO.107/HYD/09. SHRI R.K.KUMARASWAY, CHITTOOR. 4 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 09/04/2010 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 09 APRIL, 2010 COPY FORWARDED TO: 1. SHRI R.K.KUMARASWAY, PROP. THE MICROFRAME COMPUTER S, D.NO.18-972, PRAKASAM HIGH ROAD, CHITTOOR. 2. INCOME TAX OFFICER, WARD-2, CHITTOOR. 3. COMMISSIONER OF INCOME-TAX(APPEALS), TIRUPATI. 4. COMMISSIONER OF INCOME-TAX TIRUPATI 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.