M/s S.A. Corporation, Bangalore V. ITO, Bangalore

ITA 12/BANG/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5326 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SHANBHOG
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.12/BANG/2010 (A SST. YEAR -2002-03) M/S S.A CORPORATION, NO.4 & 5, S.R NARAYANAPURA, RAMAGONDANAHALLI VARTHUR ROAD, BANGALORE-560 066. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-6(4), BANGALORE. . RESPONDENT APPELLANT BY : SHRI S.N SHANBHOG RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL. C OMMISSIONER OF INCOME-TAX O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVAN T ASSESSMENT YEAR IS 2002-03. THE APPEAL IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) III AT BANGALORE DATED 15/10/2009. TH E APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOM E-TAX ACT 1961. ITA NO.12/B/10 2 2. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASS ESSING AUTHORITY HAS MADE AN ADDITION OF RS.11,61,904/- AGAINST UNCO NFIRMED CREDITORS TREATING AS INCOME FROM OTHER SOURCES. THE ABOVE A MOUNTS WERE RELATED TO FOUR PARTIES NAMELY M/S AGRO INCORPORATI ON, DCFC LOGISTICS PVT. LTD., M/S DCFC LOGISTICS PVT. LTD., M/S GREEN BROOD AGRO TECH AND M/S ORGANIC PLASTICS PVT. LTD. IN FI RST APPEAL, THE CIT(A) DELETED THE ADDITION MADE ON ACCOUNT OF RS.4 ,75,351/- AND RETAINED THE BALANCE AS ADDITIONAL INCOME. THE ASS ESSEE HAS AGGRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A). THEREFOR E, THIS SECOND APPEAL BEFORE US. 3. THE ADDITIONS SUSTAINED BY THE CIT(A) RELATED TO M/S DCFC LOGISTICS PVT. LTD., AND M/S GREEN BROOD AGRO TECH AMOUNTING TO RS.1,29,315/- AND RS.5,37,289/- RESPECTIVELY. 4. AS FAR AS THE CREDITORS ARE CONCERNED, WE FIND T HAT THE CREDITORS ARE FOR SUPPLY OF GOODS AND RENDERING SERVICES. TH EY ARE NOT CASH CREDITS. THERE IS NO DOUBT THAT ALL THESE PARTIES H AVE REGULAR DEALINGS WITH THE ASSESSEE AND ASSESSEE IS MAINTAINING THEIR PERSONAL ACCOUNTS IN A REGULAR MANNER IN ITS LEDGER ACCOUNTS. THEREF ORE, IT IS TO BE SEEN THAT THESE ARE ALL RUNNING ACCOUNTS MAINTAINED FOR DELIVERY OF GOODS ITA NO.12/B/10 3 AND PROVIDING OF SERVICES. THEREFORE, THE NATURE O F EVIDENCES USUALLY INSISTED IN THE CASE OF CASH CREDIT ADDITION CANNOT BE AS SUCH INSISTED IN THE CASE OF REGULAR SUNDRY CREDITORS. 5. IN THESE CASES, THE ASSESSEE HAS FILED CONFIRMAT ION LETTERS FROM THE CREDITORS BEFORE THE CIT(A) AND THOSE LETTERS W ERE GOT VERIFIED BY THE ASSESSING AUTHORITY. BUT THE REASON FOR SUSTAI NING THE ABOVE TWO ADDITIONS IS THAT THE ABOVE PARTIES HAD NOT RESPOND ED TO THE LETTERS ISSUED BY THE ASSESSING AUTHORITY. 6. ON HEARING BOTH SIDES, WE FIND THAT THE CIT(A) H AS TAKEN A HARD DECISION. PRIMA FACIE, IT IS UNDISPUTABLE THAT THE CREDIT BALANCES STAND FOR GOODS SUPPLIED AND SERVICES RENDERED. THE ASSE SSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS AND OTHER DOCU MENTS TO SUPPORT THE ABOVE. THEREFORE, IT IS IMPERATIVE ON THE PART OF THE ASSESSING OFFICER TO VERIFY THE NATURE OF THE CREDITS IN THE LIGHT OF THE BOOKS OF ACCOUNTS AND OTHER MATERIALS AVAILABLE WITH THE ASS ESSEE. THE ASSESSING OFFICER HAS TO EXAMINE WHETHER THOSE BALA NCES HAVE BEEN PAID OFF LATER ON AND THE BUSINESS TRANSACTIONS ARE CONTINUING WITH THOSE PARTIES. IN THIS REGARD, WE FIND THAT THE AS SESSING OFFICER HAS NOT APPLIED HIS MIND TO THE EXTENT NECESSARY. THER EFORE, IN THE FACTS ITA NO.12/B/10 4 AND CIRCUMSTANCES OF THE CASE, WE REMIT BACK THE CA SE TO THE ASSESSING OFFICER TO RE-EXAMINE THE GENUINENESS OF THE CREDIT BALANCES OF RS.5,37,289/- AND RS.1,29,315/-. THE ASSESSING OFF ICER SHALL PROCEED IN THE LIGHT OF THE DIRECTIONS GIVEN IN THE ABOVE P ARAGRAPHS AFTER HEARING THE ASSESSEE IN DETAIL. THE CASE IS REMITT ED BACK TO THE ASSESSING AUTHORITY. 7. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY , THE 6TH DAY OF MAY 2010, AT BANGALORE. SD/- SD/- (GEORGE GEORGE K) (DR. O.K NARAYANAN ) JUDICIAL MEMBER V ICE PRESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF 7..GF, ITAT, NEW DELHI. BY ORDER ASST. REGISTRAR, ITAT, BANGALOR E.