ACIT, New Delhi V. M/s. Woodhill Infrastructure Ltd., New Delhi

ITA 1148/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69216 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 08-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK GA NDHI
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 1148/DEL/2012 ASSTT. YR: 2008-09 ACIT, CIR. 18(1), VS. M/S WOODHILL INFRASTRUCTUR E LTD., NEW DELHI. KOLABA CHAMBER, C-25/5, CONNAUGHT PLA CE, NEW DELHI-110001. PAN: AAACW 4394 E ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SUNIL GAUTAM DR RESPONDENT BY : SHRI ASHOK GANDHI ADV. O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 26-12- 2011 RELATING TO A.Y. 2008-09. FOLLOWING GROUNDS A RE RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE A DDITION OF RS. 34,44,889/- MADE BY THE AO ON ACCOUNT OF NON SUBMIS SION OF A CONFIRMATION FROM A CREDITOR FROM WHOM PURCHASES HA D BEEN MADE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS ERRED IN ADMITTING ADDI TIONAL EVIDENCE IN THE SHAPE OF CONFIRMATION OF M/S BHAGWA TI ASSOCIATES WHICH HAD NOT BEEN FILED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. 2. BRIEF FACTS ARE: THE ASSESSEE COMPANY IS ENGAGE D IN THE BUSINESS OF ROADS CONSTRUCTION AND TRADING OF BUILDING MATERIAL AT VARIOUS SITES. THE ISSUE 2 IN QUESTION PERTAINS TO CONSTRUCTION OF ROAD AT TEH RI GARHWAL (UTTARAKHAND). DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSI NG OFFICER NOTICED THAT THE ASSESSEE PURCHASED STONE GRIT AMOUNTING TO RS. 34,44,889/- FROM ONE M/S BHAGWATI ASSOCIATES, TEHRI GARWAL, AGAINST WHICH I T CLAIMED TO HAVE MADE PAYMENT OF RS 21,55,640/- IN THE YEAR, LEAVING OUTS TANDING BALANCE OF RS. 12,89,249/- AS ON 31-3-2008. IT WAS ALSO FOUND THAT BETWEEN 3-11-2007 TO 18-12-2007 ASSESSEE HAD PURCHASED GRIT BY CASH PAYM ENTS; AND FROM 20-12- 2007 TO 19-2-2008 THE PAYMENTS WERE MADE THROUGH CH EQUES. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH COPIES OF ACCOUNTS IN THIS BEHALF, WHICH WERE PRODUCED. ASSESSING OFFICER, HOWEVER, FU RTHER SKED FOR CONFIRMATION FROM M/S BHAGWATI ASSOCIATES. AS THE A SSESSEE COULD NOT FURNISH CONFIRMATION FROM M/S BHAGWATI ASSOCIATES, THE ASSESSING OFFICER TREATED THE ENTIRE PURCHASES OF STONE GRIT AMOUNTIN G TO RS. 34,44,889/- AS NON GENUINE AND ADDED BACK THE SAME TO THE INCOME OF TH E ASSESSEE. 2.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WH ERE THE CONFIRMATION FROM THE SAID M/S BHAGWATI ASSOCIATES HAD BEEN FILE D BY WAY OF ADDITIONAL EVIDENCE WHICH WAS DULY ADMITTED BY CIT(A). CIT(A) HELD THAT THE PURCHASES FROM SAID M/S BHAGWATI ASSOCIATES WERE GE NUINE AND THE ADDITION WAS DELETED. AGGRIEVED, THE REVENUE IS IN APPEAL BE FORE US. 3 3. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND CONTENDS THAT CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE OF CO NFIRMATION OF M/S BHAGWATI ASSOCIATES, WHICH WAS NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FURTHER PLEADED THAT THE ASSESS EE WAS NOT PREVENTED BY REASONABLE AND SUFFICIENT CAUSE IN NOT FILING THE S AME BEFORE ASSESSING OFFICER. ON MERITS, THE ORDER OF ASSESSING OFFICER IS RELIED ON. 4. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND CONTENDS AS UNDER: (I) THE ASSESSEE COMPANY IS BASED AT DELHI AND ROAD WA S TO BE CONSTRUCTED AT A DISTANT PLACE I.E. TEHRI GARHWAL, WHERE IT WAS NEW AND COULD NOT PURCHASE ON CREDIT THEREFORE, SOME OF THE INITIAL PURCHASE WERE MADE BY WAY OF CASH FROM BHAGWATI TRA DERS. THEREAFTER, AS THE ASSESSEES CREDIBILITY GREW, M/S BHAGWATI ASSOCIATES SUPPLIED STONE GRIT ON CREDIT FOR WHICH REPAYMENTS ARE MADE IN CASH. . (II) DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSE E FILED A DETAILED ACCOUNT OF M/S BHAGWATI ASSOCIATES FROM IT S ACCOUNTS AS WELL AS FROM THEIR ACCOUNT, WHICH IS REFERRED TO BY THE ASSESSING OFFICER. DESPITE THESE MATCHING ACCOUNTS, ASSESSIN G OFFICER INSISTED FOR CONFIRMATION FROM M/S BHAGWATI ASSOCIATES. THE ASSESSEE REPLIED THAT THEY HAVE ASKED M/S BHAGWATI ASSOCIATE S TO SEND THE SAME BUT THE SAME WAS AWAITED, WHICH COULD NOT BE F ILED BY THE TIME THE ASSESSMENT WAS FRAMED. THE ASSESSING OFFIC ER IN HIS ORDER ITSELF HAS MENTIONED THAT THE CONFIRMATION WAS SPE CIFICALLY ASKED ON 23-12-2007 TO BE PRODUCED ON 29-12-2007. DESPITE ASSESSEES REPLY, THE ASSESSMENT WAS FRAMED REJECTING THE ENTI RE PURCHASES. IT 4 IS PLEADED THAT THERE IS NO MISTAKE IN CIT(A)S ORD ER IN ADMITTING THE ADDITIONAL EVIDENCE INASMUCH AS THE ASSESSEE AT DELHI CANNOT BE EXPECTED TO BRING THE CONFIRMATION WITHIN 6 DAYS FROM TEHRI GARHWAL. THE OUTSTANDING BALANCE WAS VISIBLE FROM T HE COPY OF ACCOUNT FILED BY THE ASSESSEE. THEREFORE, THE INSUF FICIENT TIME GIVEN BY ASSESSING OFFICER, WHICH IS DEMONSTRATED BY ASSE SSING OFFICERS OWN ORDER, WHICH WAS AGAINST THE PRINCIPLE OF NATU RAL JUSTICE, CIT(A) ADMITTED THE ADDITIONAL EVIDENCE IN PROPER M ANNER. NO FAULT CAN BE FOUND ON THIS ASPECT. 4.1. COMING TO THE MERITS OF THE CASE, LD. COUNSEL CONTENDS THAT ALL THE PURCHASES AND OUTSTANDING BALANCES ARE CORROBORATED FROM THE RESPECTIVE ACCOUNTS I.E. ASSESSEES BOOKS AS WELL AS M/S BHAGW ATI ASSOCIATES BOOKS. THEREFORE, THE PURCHASES WERE GENUINE, USED FOR THE PURPOSE OF BUSINESS. INITIALLY CASH PAYMENTS WERE MADE AS THE ASSESSEE W AS NEW AND THAT CANNOT BE MADE THE BASIS OF DISALLOWANCE. ORDER OF CIT(A) IS RELIED ON. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT HAS NOT BEEN DISPUTED THAT THE ASSESSEE PRODUCED COPIES OF ACCOUNTS OF M/S BHAGWATI ASSOCIATES FROM ITS BOOKS AS WELL AS VENDORS BOOKS. THE CONFIRMATION COULD NOT BE PRODU CED BY THE ASSESSEE WITHIN 6 DAYS AND FOR WANT OF THE SAME, ENTIRE PURC HASES WERE DISALLOWED, DISREGARDING THE CONFIRMED ACCOUNTS IN THIS BEHALF. WE FIND NO FAULT IN THE ACTION OF CIT(A) IN ADMITTING THE ADDITIONAL EVIDEN CE AS 6 DAYS TIME CANNOT 5 BE CONSIDERED TO BE A REASONABLE TIME FOR A DELHI B ASED TRADER TO PRODUCE A CONFIRMATION FROM TEHRI GARHWAL. THE CIT(A) CALLED FOR THE ASSESSING OFFICERS REMARKS THEREON. THUS, WE SEE NO INFIRMIT Y IN THE ORDER OF CIT(A) IN ADMITTING THE ADDITIONAL EVIDENCE. 5.1. APROPOS MERITS OF THE ADDITION, THE PURCHASES STAND CONFIRMED BY THE ACCOUNTS FROM BOTH ENDS I.E. ASSESSEE AS WELL AS M/ S BHAGWATI ASSOCIATES ALONG WITH THE CONFIRMATION. ONCE THE PURCHASES AR E DEMONSTRATED BY THE ASSESSEE, THEY ARE TO BE ALLOWED AS BUSINESS EXPEND ITURE. IN VIEW THEREOF, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) DELETING T HE ADDITION IN QUESTION WHICH IS UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 14-08-2013. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14 TH AUGUST 2013. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 6