The ITO, Ward-4(4), Ahmedabad V. Mark Leasing & Finance Ltd., Ahmedabad

ITA 123/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80440 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-10-2014
• Assessment Year: 1999-2000
• Appeal Filed On: 19-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Section: 142(1)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !'# !'# !'# !'# !$ !$!$ !$0 00 0! !! !0 00 0 %$ %$ %$ %$, , , , &' ( &' ( &' ( &' ( & & & & BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 123/AHD/2011 ASSESSMENT YEAR: 1999-2000 INCOME TAX OFFICER, WARD-4(4), AHMEDABAD. VS. MARK LEASING & FINANCE LTD., 36, HIRABHAI MARKET, DIWAN BUILDING MARG, KANKARIA, AHMEDABAD. PAN: AAACM8010H )* / APPELLANT +,)* / RESPONDENT REVENUE BY : SHRI V.K. SINGH, SR. DR ASSESSEE(S) BY : WRITTEN SUBMISSION $'- . /'/ // / DATE OF HEARING : 15/10/2014 123 . /' / // / DATE OF PRONOUNCEMENT: 17/10/2014 &4 &4 &4 &4/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE ASSESSEE A GAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-X XI DATED 29.10.2010. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDIT ION OF RS 12,20,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED CREDITORS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE TRIBUN AL VIDE CONSOLIDATED ORDER DATED 14.02.2008 IN ITA NO. 333/AHD/2004 FOR ASSESSMENT YEAR ITA NO. 123/AHD/2011 MARK LEASING & FINANCE LTD., AHMEDABAD. AY 1999-2000 - 2 - 2000-01 AND ITA NO.1164/AHD/2004 FOR ASSESSMENT YEA R 1999-2000 SET ASIDE THE ASSESSMENT FRAMED BY THE ASSESSING OFFICE R AND DIRECTED THE ASSESSING OFFICER TO FRAME THE FRESH ASSESSMENT AFT ER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE A ND ASCERTAIN FROM THE ASSESSEE ALL THE NECESSARY EVIDENCES AS HE MAY THIN K PROPER FOR VERIFICATION. THE ASSESSEE WAS ALSO DIRECTED TO COOPERATE WITH TH E ASSESSING OFFICER AND FURNISH ALL RELEVANT AND NECESSARY INFORMATION AND EVIDENCES BEFORE THE ASSESSING OFFICER AS MAY BE DESIRED BY HIM WITHOUT DELAYING THE PROCEEDINGS. 4. IN PURSUANCE TO THIS DIRECTION, THE ASSESSING O FFICER ISSUED NOTICE TO THE ASSESSEE U/S. 142(1) ON 13.03.2009 AND 27.03 .2009 AND ASKED THE ASSESSEE TO PRODUCE THE CONFIRMATION IN RESPECT OF FOLLOWING CREDITORS: (I) RAJESHBHAI JAVERI RS. 11,00,000/- (II) AUADIT & PROFESSIONAL FEES PAYABLE TO PIPARA & CO. RS 1,20,000/- TOTAL RS 12,20,000/- 5. THE ASSESSEE FILED LETTER DATED 09.07.2009 IN R ESPONSE TO THE NOTICE ISSUED WHEREIN IT STATED AS UNDER: '1. THIS ADDITION HAS BEEN MADE BY THE A.O. IN THE ORIGINAL ASSESSMENT ORDER WHILE OBSERVING THAT THE ASSESSEE HAS NOT FIL ED THE CONFIRMATIONS OF THE PARTIES AND ACCORDINGLY THE SAME IS ADDED TO THE INCOME OF THE ASSESSEE. 2. THE BREAK-UP OF THE CREDITORS FOR EXPENSES IN RE SPECT OF WHICH THE DISALLOWANCE HAS BEEN MADE IS AS UNDER:- NAME AMOUNT (RS.) RAJESH JHAVERI 11,00,000/- AUDIT AND PROFESSIONAL FEES 1,20,000 /- PAYABLE TO PIPARA & CO. (CHARTERED ACCOUNTANTS) TOTAL 12,20,000/- 3. IN THIS RESPECT, IT IS SUBMITTED THAT AS EVIDENT FROM THE BREAK UP OF CREDITORS FOR EXPENSES FURNISHED BY THE ASSESSEE AN D REPRODUCED BY ITA NO. 123/AHD/2011 MARK LEASING & FINANCE LTD., AHMEDABAD. AY 1999-2000 - 3 - THE A.O. ON PAGE-7 OF THE ASSESSMENT ORDER, COMPLET E ADDRESS OF THE PARTIES WERE FURNISHED AND A.O. COULD HAVE VERIFIED THE VERACITY OF THE FACTS PRIOR TO MAKING THE IMPUGNED ADDITION MERELY ON SURMISES AND ASSUMPTIONS. IT MAY BE NOTED THAT THE PAYMENT TO RA JESH JHAVERI WAS ON ACCOUNT OF TRANSACTIONS IN SHARES. IT MAY BE NOT ED THAT THE PAYMENT OF THE SAID AMOUNT HAS BEEN MADE IN THE SUB SEQUENT YEAR BY ACCOUNT PAYEE CHEQUES AS EVIDENT FROM THE COPY OF A CCOUNT OF SUBSEQUENT YEARS FURNISHED ON PAGE NO.136 & 137. 4. IN SO FAR AS THE PAYMENT TO PIPARA &. CO., AS ME NTIONED BY THE A.O. HIMSELF, THE SAME PERTAINS TO AUDIT AND PROFESSIONA L FEES. THE FACT THAT THE AUDIT OF THE ASSESSEE COMPANY HAS BEEN CARRIED OUT BY PIPARA & CO. IS ALSO EVIDENT FROM THE BALANCE SHEET ENCLOSED WITH THE RETURN OF INCOME AND IN ABSENCE OF ANY EVIDENCE WHATSOEVER IN POSSESSION OF THE A.O., THE DISALLOWANCE OF SUCH EXPENDITURE MERE LY ON SURMISES IS WHOLLY UNJUSTIFIED AND UNWARRANTED. 5. WITHOUT PREJUDICE TO ABOVE, THE DETAILS ALONGWIT H EVIDENCES IN RESPECT OF CREDITORS FOR EXPENSES OF RS.12,20,000/- IS ENCLOSED HEREWITH VIDE EXHIBIT-IV (PAGE NO.63 TO 67] IN VIEW OF THE ABOVE FACTS, DETAILS AND EVIDENCES, THE ADDITION OF RS.12,20,000/- MADE IN THE ORIGINAL ASSESSMENT ORDE R IS WHOLLY UNWARRANTED.' 6. THE ASSESSING OFFICER WAS NOT SATISFIED WITH TH E ABOVE WRITTEN SUBMISSION OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE HAS NOT SUBMITTED THE CONFIRMATIONS OF THE CREDITORS THOUGH THE TRIBUNAL IN ITS ORDER DIRECTED THE ASSESSEE TO COOPERATE WITH THE ASSESSI NG OFFICER AND FURNISH ALL THE RELEVANT AND NECESSARY INFORMATION AND EVIDENCE S BEFORE THE ASSESSING OFFICER AS MAY BE DESIRED BY HIM WITHOUT DELAYING T HE PROCEEDINGS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SI MPLY SUBMITTED A COPY OF LEDGER ACCOUNT IN THE BOOKS OF ACCOUNT OF THE COMPA NY AND HAS NOT SUBMITTED THE CONFIRMATION OF THE CREDITORS. THERE FORE, HE MADE ADDITION OF RS 12,20,000/- TO THE INCOME OF THE ASSESSEE. 7. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE CO NTENTIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CAREFULLY . IT IS SEEN THAT THE DISALLOWANCE HAS BEEN MADE IN RESPECT OF PAYMEN T MADE TO RAJESH JHAVERI FROM WHOM SHARES WORTH RS 11 LAKHS W ERE PURCHASED ITA NO. 123/AHD/2011 MARK LEASING & FINANCE LTD., AHMEDABAD. AY 1999-2000 - 4 - AND PAYMENT MADE TO M/S. PIPARA & CO. TOWARDS PROFE SSIONAL CHARGES. IT IS SEEN THAT BILLS FROM RAJESH JHAVERI WERE FILE D DURING THE ASSESSMENT PROCEEDINGS OF THE APPELLANT IN THE AY 2 000-01 AND M/S. PIPARA & CO. ARE THE AUTHORIZED REPRESENTATIVES OF THE APPELLANT COMPANY. THUS THE ADDRESS OF THESE PERSONS WAS AVA ILABLE WITH THE AO. THE AO HAS NOT MADE ANY ATTEMPT TO VERIFY THE GENUINENESS OF THESE CREDITS. HE HAS MADE THE ADDITION ONLY ON TH E GROUND THAT NO CONFIRMATION FROM THESE PARTIES WAS FILED BEFORE HI M. IN VIEW OF THE FACT THAT ADEQUATE EVIDENCES AVAILABLE BEFORE THE A O TO MAKE SUFFICIENT INQUIRIES WHICH HAVE NOT BEEN DONE IN TH IS CASE, IT IS CLEAR THAT THE ADDITION MADE IS NOT JUSTIFIED. THE SAME IS HENCE DELETED. 8. THE DEPARTMENTAL REPRESENTATIVE RELIED ON THE O RDER OF THE ASSESSING OFFICER WHEREAS THE AUTHORIZED REPRESENTA TIVE OF THE ASSESSEE IN THE WRITTEN SUBMISSION HAS SUPPORTED THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE DEPARTMENTAL REPRESENTATIVE HAS MERELY RELIED ON TH E ORDER OF THE ASSESSING OFFICER. NO SPECIFIC ERROR COULD BE POINTED OUT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS QUOTE D ABOVE IN THIS ORDER. WE, THEREFORE, DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSE D. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 17 TH OF OCTOBER, 2014 AT AHMEDABAD. SD/- SD/- (G. C. GUPTA) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 17/10/2014 GHANSHYAM MAURYA ITA NO. 123/AHD/2011 MARK LEASING & FINANCE LTD., AHMEDABAD. AY 1999-2000 - 5 - TRUE COPY &4 . +5 6&53 &4 . +5 6&53 &4 . +5 6&53 &4 . +5 6&53/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. ## 7 / CONCERNED CIT 4. 7() / THE CIT(A)-III, AHMEDABAD 5. 5': +$ , , / DR, ITAT, AHMEDABAD 6. ;< =- / GUARD FILE. &4$ &4$ &4$ &4$ / BY ORDER, / // / # # # # ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD