Sri Dinesh Kumar Sipani, Bangalore V. Assistant Commissioner of Income tax, Bangalore

ITA 1126/BANG/2014

• Counselvise Citation: 112621114 RSA 2014
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER A ND SHRI JASON P.BOAZ, ACCOUNTANT MEMBER ITA NO. 1126 / BANG/20 14 (ASSESSMENT YEAR: 20 0 9 - 10 ) SHRI DINESH KUMAR SIPANI, #868, 5 TH A CROSS, 17 T H E MAIN, 6 TH BLOCK, KORAMANGALA, BANGALORE. APPELLANT PAN: AMZPS8770L VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 7(1), BANGALORE. RESPONDENT APPELLANT BY: SHRI V.SRINIVASAN, CA. RESPONDENT BY: SHRI P.K.SRIHARI, ADDL.CIT (DR) DATE OF HEARING : 23/12/2014. DATE OF PRONOUNCEMENT: 23 /12/2014. O R D E R PER SMT.P.MADHAVI DEVI, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - III, BANGALORE, DATED 26/06/2014 SUSTAINING THE ADDITION OF RS.71,88,103/ - MADE BY THE ASSESSING OFFICER (AO) AS UNEXPLAINED SUNDRY CREDITORS, FOR THE ASSESSMENT YEAR 2009 - 10. ITA NO . 1126 /BANG/20 1 4 SHRI DINESH KUMAR SIPANI PAGE 2 OF 5 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, DEALING IN SALES AND PURCHASE OF AUTOMOBILE LPG CONVERSION KITS AN D THEIR SERVICES, FILED HIS RETURN OF INCOME ON 29/09/2009 DECLARING A TOTAL INCOME OF RS.17,70,160/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME - TAX ACT, 1961[HEREINAFTER REFERRED TO AS 'THE ACT'], THE AO OBSERVED THAT THE ASSESS EE HAS SHOWN SUNDRY CREDITORS OF RS.3,55,19,264/ - IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE WAS ASKED TO PRODUCE CONFIRMATION LETTERS FROM THE SUNDRY CREDITORS TO SUBSTANTIATE THE CLAIM. THE ASSESSEE PRODUCED CERTAIN DETAILS BUT AS REGARDS THE SUM OF RS.1,41,63,601/ - THE ASSESSEE COULD NOT PRODUCE CONFIRMATION LETTERS. THEREFORE, THE AO TREATED THE SAME AS UNEXPLAINED SUNDRY CREDITORS AND BROUGHT IT TO TAX. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) ALONG WITH CONFIRM ATION LETTERS AND THE RELEVANT MATERIAL. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE AO AND THE AO HAS ACCEPTED SUNDRY CREDITORS TO THE EXTENT OF RS.34, 80,413/ - AS EXPLAINED. ON THE BASIS OF THE REMAND REPORT, THE CIT(A) DELETED THE ADDITION OF RS.69 , 72,976/ - . AS REGARDS THE BALANCE OF RS.70,03,800/ - , THE CIT(A) OBSERVED THAT THE AMOUNTS RECEIVED WAS ADVANCE S TOWARDS SUPPLY OF LPG KITS AND LPG KITS WERE SUPPLIED IN THE SUBSEQUENT YEAR. HE OBSERVED THAT THE AO, IN THE COURSE OF ASSESSMENT PROCEEDINGS , HAS ISSUED ITA NO . 1126 /BANG/20 1 4 SHRI DINESH KUMAR SIPANI PAGE 3 OF 5 NOTICES AND FOUND THAT MOST OF THE NOTICES WERE EITHER RETURNED UN - SERVED BY THE POSTAL AUTHORITIES OR THAT THERE WAS NO RESPONSE FROM THE CONCERNED PARTY AND THAT T HE AO HAS HELD THAT THERE WAS NO EVIDENCE OF DELIVERY OF LPG KITS TO THOSE PAR TIES AND T HEREFORE, THE AMOUNTS ARE TO BE CONSIDERED AS UNEXPLAINED CREDITORS. IN RESPONSE TO THE REMAND REPORT BEFORE THE CIT(A) , THE ASSESSEE HAS ENCLOSED VAT RETURNS FOR THE FINANCIAL YEAR 2009 - 10 ALONG WITH ANNEXURES STATING THAT THIS EVIDENCE WOULD C ONFIRM THE FACT THAT SALES HAVE BEEN MADE TO THE PARTIES FROM WHOM VARIOUS AMOUNTS ARE SHOWN AS OUTSTANDING. THE CIT(A), HOWEVER, HELD THAT THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS HAD BEEN REMANDED TO THE FILE OF THE AO FOR HIS COMMENTS AND THE REMAND REPORT HAS BEEN PREPARED AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND THEREFORE, FURTHER ADDITIONAL EVIDENCE FURNISHED ALONG WITH REPLY TO THE REMAND REPORT COULD NOT BE ENTERTAINED AND ADMITTED. THEREFOR E, THE CIT(A) CONFIRMED THE ADDITION OF RS.70,03,800/ - . AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, REITERATED THE ASSESSEE S SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT TH E ASSESSEE HAS FURNISHED ALL THE RELEVANT MATERIAL BEFORE THE CIT(A) ALONG WITH HIS REPLY TO THE REMAND REPORT AND THE CIT(A) HAS REFUSED TO ADMIT THE SAME AND HAS ITA NO . 1126 /BANG/20 1 4 SHRI DINESH KUMAR SIPANI PAGE 4 OF 5 CONFIRMED THE ADDITION. HE HAS ALSO DRAWN OUR ATTENTION TO VARIOUS DOCUMENTS FILED TO DEMON STRATE THE GENUINENESS OF THE CLAIM OF SUNDRY CREDITORS. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND STATED THAT THE DOCUMENTS RELIED UPON BY THE ASSESSEE AT THIS STAGE NEED VERIFICATION BY THE AO AND THEREFORE CANNOT BE CONSIDERED AT THIS STAGE. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD SUBMITTED CERTAIN MATERIAL BEFORE THE CIT(A) IN SUPPORT OF HIS CONTENTION S AND THE AO IN THE REMAND PROCEEDINGS, WAS SATISFIED WITH REGARD TO A PORTION OF THE SUNDRY CREDITORS. WITH REGARD TO THE BALANCE, THE ASSESSEE HAS PRODUCED THE RELEVANT MATERIAL DURING THE APPELLATE PROCEEDINGS AND THE CIT(A), INSTEAD OF CALLING FOR ANOTHER REMAND REPORT ON THE ADDITIONAL EVIDENCE, HAS REFUSED TO ADMIT THE SAME AND HAS CONFIRMED THE SAME TO THE EXTENT WHICH REMAINED UNEXPLAINED. WE FIND THAT THE DOCUMENTS FILED BY THE ASSESSEE WOULD GO TO THE ROOT OF THE MATTER TO SUBSTANTIATE THE CLAIM OF THE ASSESSEE ABOUT SUP PLY OF MATERIALS BY THE ASSESSEE ON ACCOUNT OF WHICH SUNDRY CREDITORS HAS ARISEN. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT AND PROPER TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND REMIT THE ISSUE TO ITA NO . 1126 /BANG/20 1 4 SHRI DINESH KUMAR SIPANI PAGE 5 OF 5 THE FILE OF THE AO FOR VERIFIC ATION OF THE SAME AND DE NOVO CONSIDERATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION, THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARING. 6. IN THE RESULT, THE ASSESSEE S APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PR ON OUNCED IN THE OPEN COURT ON 23 RD OF DECEMBE R , 201 4. SD/ - SD/ - (JASON P BOAZ ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER EKSRINIVASULU COPY TO: 1. APPEL LANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE