Assistant Commissioner of Income Tax Circle-6(3)(1), Bangalore V. Sri Vijay Kumar Surana , Bangalore

ITA 1238/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7698 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence; Corroborative evidences; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K GARODIA, ACCOUNTANT MEMBER ITA NO.1 238/BANG/2017 (ASST. YEAR 2007-08) THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-6(3)(1), BANGALORE. . APPELLANT VS. SRI VIJAY KUMAR SURANA, NO.112, NEELA COMPLEX, 3 RD FLOOR, NAGARTHPET, BENGALURU. . RESPONDENT CO NO. 109/BANG/2017 (ASST. YEAR 2007-08) (BY ASSESSEE) APPELLANT BY : SHRI B.R RAMESH, JCIT RESPONDENT BY : SHRI ROHIT GOUTAMCHAND, C.A DATE OF HEARING : 28-06-2018 DATE OF PRONOUNCEMENT : 13-07-2018 O R D E R PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS APPEAL IS PREFERRED BY THE REVENUE AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) INTER ALIA ON FOLLOWING GROUNDS:- 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LA W AND THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.1238/B/17 CO 109 /B/17 2 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE CIT(A) ERRED IN DECIDING THE MATTER WITHOUT CONSIDERING TH AT THE ONUS TO PROVE THAT THE TRANSACTION WAS GENUINE IS ON THE ASSESSEE WHEN THE EVIDENCES FILED BY HIM HAS ALREADY BECAME STALE. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE CIT(A) ERRED IN DECIDING THE MATTER BASED ON THE FRESH EVI DENCES SUBMITTED BY THE ASSESSEE WITHOUT GIVING AN OPPORTU NITY TO THE ASSESSING OFFICER TO EXAMINE SUCH EVIDENCES WHICH I S CONTRAVENED TO THE PROVISION OF RULE 46A(3). 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION I NTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE RESPONDENT, SRI VIJAY KUMAR SURANA, OBJECTS TO THE DISALLOWANCE OF RS. 2,62,97,250/- MADE IN THE RE-AS SESSMENT ORDER OF THE LEARNED AO SO MUCH SO THAT HE HAS ERRE D IN DISREGARDING THE ORIGINAL CONFIRMATION OF ACCOUNT A ND OTHER SUPPORTING EVIDENCES RECEIVED FROM THE SUPPLI ER, M/S JEWEL DIAM, AT THE TIME OF SCRUTINY ASSESSMENT WHIC H WAS CONCLUDED ON 30.12.2009, FOR WANT OF ANOTHER ORIGIN AL CONFIRMATION OF ACCOUNT AGAIN AT THE TIME OF RE-ASS ESSMENT WHEN THE RESPONDENT HAS CHSCONTINUED DEALING WITH S UCH SUPPLIER. 2. THE RESPONDENT, OBJECTS TO THE RE-ASSESSMENT ORD ER OF THE LEARNED AO, SINCE THE ORDER WAS PASSED WITHOUT FOLL OWING THE PRINCIPLES OF NATURAL JUSTICE BY NOT FURNISHING THE STATEMENT GIVEN ON OATH BY THE REVENUE'S WITNESS, S RI GHANSHYAM RAMHET VASHISHTA WHO RETRACTED FROM HIS O WN CONFIRMATION OF ACCOUNTS AND ALSO DENYING THE RESPO NDENT OF AN OPPORTUNITY TO CROSS EXAMINE SUCH WITNESS OF THE DEPARTMENT. ITA NO.1238/B/17 CO 109 /B/17 3 3. THE RESPONDENT, OBJECTS TO THE DISALLOWANCE OF P URCHASES TO THE TUNE OF RS. 2,62,97,250/- MADE BY THE LEARNE D AO, INSPITE OF PROVING THE GENUINITY OF THE PURCHASES B Y FURNISHING THE REQUISITE DOCUMENTS AT THE TIME OF ASSESSMENT, RE- ASSESSMENT AND DURING APPELLATE PROCEEDINGS WHICH W AS APPRECIATED BY THE FIRST APPELLATE AUTHORITY IN PAR A 9 & 9.1 ON PAGE 14-15 OF 24 OF THE ORDER: & LASTLY, WE WISH TO OBJECT THE ACTION OF THE LEARN ED AO, IN DISALLOWING THE PURCHASES WTHOUT REJECTING THE BOOK S OF ACCOUNTS WHICH MEANS HAVING ACCEPTED THE REMAINING RECORDS IN FULL AS IT WAS. A COMPARISON OF THE PROFITABILIT Y STATEMENT BASED ON THE LEARNED AID'S PRESUMPTIONS AND THE AUD ITED BOOKS OF ACCOUNTS SHOW A VAST VARIANCE BOTH IN TERM S OF GP AND NP, WHICH BY NO MEANS OF IMAGINATION WOULD BE ACCEPTABLE SINCE THE SAME ARE NOT IN ANY WAY CLOSE TO THE INDUSTRY STANDARDS NOR THE APPELLANTS OWN PERFORMAN CE IN THE SRECEEDINE ASSESSMENT YEARS. 5. THE LEARNED AO, HAS NOW APPROACHED THE HONORAB LE ITAT, BANGALORE AND I WISH TO FILE THIS MEMORANDUM OF CROSS OBJECTIONS IN THE BACKGROUND OF THE AFORESAID POINT S AS HIGHLIGHTED BY APPELLATE ORDER OF THE CIT ( A ) - V , BANGALORE. 6. IN VIEW OF THE ABOVE, AND ON OTHER GROUNDS TH AT MAY BE ADDUCED AT THE TIME OF PERSONAL HEARING, IT IS REQU ESTED HEREBY TO GRANT RELIEF AND SUSTAIN THE FIRST APPELLATE ORD ER IN FAVOR OF THE RESPONDENT ASSESSEE ( POINT NO. 1, 2, 3, & 4 ABOVE). 3. SINCE THE APPEAL AND THE CROSS-OBJECTION WERE HEARD TOGETHER THEY ARE BEING DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER. 4. DURING THE COURSE OF HEARING, THE LD DR HAS INVITED OUR ATTENTION TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) WITH TH E SUBMISSION THAT THE CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES AND WI THOUT CONFRONTING IT TO THE ASSESSING OFFICER, HE DELETED THE ADDITIONS HAVING RELIED UPON THE ADDITIONAL EVIDENCES. THEREFORE, THIS IS VIOLATION OF RULE 46 A OF THE INCOME-TAX RULES. HENCE, THE ORDER OF THE CIT(A) DESERVES TO BE SET A SIDE AND MATTER BE RESTORED TO ITA NO.1238/B/17 CO 109 /B/17 4 HIS FILE FOR ADJUDICATION OF THE APPEAL AFRESH AFTE R CONFRONTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE TO THE ASSESSING OFF ICER. 5. THE LD AR STRONGLY CONTENDED THAT ALL EVIDE NCES WERE FILED BEFORE THE ASSESSING OFFICER AND THE SAME WERE RELIED UPON BY THE CIT(A) WHILE ADJUDICATING THE ISSUE, THEREFORE, THERE IS NO VIOL ATION OF RULE 46A OF THE INCOME- TAX RULES. 6. HAVING CAREFULLY EXAMINED THE ORDER OF THE C IT(A), WE FIND THAT THE REGISTRATION WAS CANCELLED BY THE GUJARAT VAT DEPAR TMENT AS ON 14/7/2016. COPY OF THE REGISTRATION STATUS OBTAINED FROM TAX I NFORMATION EXCHANGE SYSTEM ON 14/7/2016 WAS FILED BEFORE THE CIT(A), WHEREAS THE AO HAD PASSED THE ASST. ORDER ON 27/3/2015. THEREFORE, THIS EVIDENCE WAS FI LED FIRST TIME BEFORE THE CIT(A). THE CIT(A) DID NOT CONFRONT THIS EVIDENCE TO AO AND HAVING RELIED UPON THIS EVIDENCE CIT(A) HAD DELETED THE ADDITIONS. TH EREFORE, IT IS VIOLATION OF PROVISION OF RULES 46A OF THE INCOME-TAX ACT RULES . AS PER THE PROVISIONS OF RULE 46A, THE CIT(A) REQUIRED TO CONFRONT THE ADDIT IONAL EVIDENCE FILED BEFORE HIM TO THE OTHER PARTY BEFORE TAKING COGNIZANCE OF THE SAME. SINCE THE CIT(A) HAS CONSIDERED THE ADDITIONAL EVIDENCE WITHOUT CONF RONTING TO THE AO, THIS IS A CASE OF VIOLATION OF PROVISION OF 46A OF THE INCOM E-TAX RULE. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTE R TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE AFRESH AFTER CONFRONTING TH E ADDITIONAL EVIDENCE TO AO. 7. SINCE THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE CIT(A) FOR RE-ADJUDICATION, WE FIND NO REASON TO DEAL WITH THE ISSUES RAISED IN THIS CROSS- OBJECTION. ACCORDINGLY, THE ISSUE RAISED IN CROSS-O BJECTION SHOULD ALSO BE ADJUDICATED BY THE CIT(A) ALONG WITH THE ADJUDICATI ON OF THE ISSUES RAISED BEFORE HIM ON MERITS. ITA NO.1238/B/17 CO 109 /B/17 5 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2018 . SD/- SD/- (A.K GARODIA) (SUNIL K UMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 13/7/2018 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRET ARY, ITAT, BANGALORE ITA NO.1238/B/17 CO 109 /B/17 6 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT.. 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..