The ITO, Ward-3, Palanpur V. Shri Jitendrakumar Parthibhai Chaudhary,

ITA 1247/AHD/2008

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6428 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: VIVEK N CHAVDA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 25/5/2011 DRAFTED ON: 30 /5/2011 ITA NO.1247/AHD/2008 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER WARD-3 PALANPUR VS. SHRI JITENDRAKUMAR PARTHIBHAI CHAUDHARY PROP.MANGLAM CHAUDHARY CO. AT MAHI, TA. VADGAM DIST.BANASKANTHA PAN/GIR NO. : ADDPC 8078 N ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI P.L. KUREEL, SR.D.R. RESPONDENT BY: SHRI VIVEK N.CHAVDA, A.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -XV, AHMEDABAD DATED 07/02/2008 PASSED FOR ASSESSMENT YEAR 2005-0 6. THE ONLY SUBSTANTIVE GROUND IS GROUND NO.1; REPRODUCED BELOW : 1. THE LD. COMMISSIONER OF INCOME-TAX(A)-XV, AHMED ABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF UNPAID MACHINERY RENT OF RS.6,81,500/- MADE ON THE BASIS OF INQUIRY U/S.133(6) OF THE ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S. 143(3) OF THE I.T. ACT, 1961 DATED 28/ 02/2007 WERE THAT THE ITA NO.1247/AHD /2008 ITO VS. SH.JITENDRAKUMAR PARTHIBHAI CHAUDHARI ASST.YEAR 2005-06 - 2 - ASSESSEE IN INDIVIDUAL CAPACITY IS IN CONSTRUCTION BUSINESS. ON VERIFICATION OF ACCOUNTS, IT WAS NOTED BY THE ASSES SING OFFICER THAT THE ASSESSEE HAD PAID MACHINERY IN RENT OF RS.20,12,839 /-. ON THE SCRUTINY OF MACHINERY RENT ACCOUNT, IT WAS NOTED THAT A SU M OF RS.12,62,937/- WAS PAID TO HINDUSTAN CONSTRUCTION CO. IT WAS ALSO NOTED THAT A SUM OF RS.7,50,000/- WAS PAID TO ONE SHRI SURESH K.PARMAR AS A MACHINERY RENT. THE ASSESSING OFFICER HAD MADE ENQUIRIES WITH SHRI SURESH K.PARMAR U/S.133(6) OF THE I.T.ACT, WHO HAS CONFIRMED THAT A SUM OF RS.68,500/- WAS PAID TO HIM. FOR REST OF THE AMOUNT, I.E. 6,81 ,500/- IT WAS INFORMED THAT THE SAID AMOUNT WAS PAID TO EIGHT PERSONS, HOW EVER, IT WAS WRONGLY SHOWN AS A LIABILITY IN ONE NAME. THE ASSESSING OFFICER WAS NOT CONVINCED AND THE ADDITION WAS MADE WHICH WAS CHALL ENGED BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED CIT(APPEALS) THOUGHT IT PROPER TO CA LL FOR A REMAND REPORT, A COPY OF THE SAME DATED 11/01/2007 IS PLAC ED BEFORE US AND HELD AS UNDER:- 7. DURING THE COURSE OF APPELLATE PROCEEDINGS, SH RI ANIL KSHATRIYA, ADVOCATE APPEARED ON BEHALF OF THE APPEL LANT AND FILED WRITTEN SUBMISSIONS. THESE WRITTEN SUBMISSIONS DAT ED 2.6.07 AND 29.10.07, THROUGH WHICH AFFIDAVIT OF THE ACCOUNTANT WHO COMMITTED THE MISTAKE OF SHOWING THE LIABILITY OF R S.6,81,500 WERE SENT FOR COMMENTS OF THE AO. THE AO WAS ALSO ASKE D VIDE THIS OFFICE LETTER DATED 5.12.07 TO MAKE FURTHER VERIFIC ATIONS IN THE LIGHT ITA NO.1247/AHD /2008 ITO VS. SH.JITENDRAKUMAR PARTHIBHAI CHAUDHARI ASST.YEAR 2005-06 - 3 - OF THE CONTENTIONS OF THE APPELLANT RAISED DURING T HE COURSE OF APPELLATE PROCEEDINGS. 8. THE AO VIDE HIS LETTER DATED 11 TH JANUARY, 2008 SUBMITTED A DETAILED REPORT. HE ISSUED SUMMONS TO THE EIGHT PE RSONS WHOSE AFFIDAVITS HAD BEEN FURNISHED, ALL OF THEM CONFIRME D THAT VEHICLES WERE SUB-LET ON HIRE TO SHRI JITENDRABHAI PARTHIBHA I CHAUDHARY ON FIXED RATES. THE ACCOUNTANT WAS ALSO EXAMINED WHO EXPLAINED THE CIRCUMSTANCES TO THE AO BECAUSE OF WHICH THE MISTA KE OCCURRED. THE AO EXAMINED THE APPELLANT ALSO AND FOUND THAT HE HAD NO KNOWLEDGE ABOUT THE ACCOUNTS, AND THAT THEY WERE MA INTAINED BY THE ACCOUNTANT. 9. I HAVE GONE THROUGH RIVAL SUBMISSIONS. THE VERI FICATIONS MADE BY THE AO DO NOT REVEAL ANY DISCREPANCY IN TH E QUANTUM THAT IS AMOUNT WHICH WAS PAYABLE TO THE EIGHT PERSO NS, EIGHT PERSONS WERE FOUND TO BE REAL PERSONS WHO CONFIRMED BY APPEARING IN THE OFFICE OF THE AO THE TRANSACTION AS WELL AS THE AMOUNT WHICH WAS PAYABLE TO THEM. JUST BECAUSE A LIABILITY WAS SHOWN IN THE NAME OF O NE PERSON INSTEAD OF EIGHT PERSONS, ESPECIALLY WHEN THE, SAID EIGHT PERSONS, THE ACCOUNTANT AS WELL AS THE APPELLANT HAVE ALL BE EN EXAMINED BY THE AO, AND NO DISCREPANCY HAS BEEN REPORTED BY THE AO IN MY VIEW, IN THE CIRCUMSTANCES, NO ADDITION IS WARRANTE D. THE ADDITION OF RS.6,81,500 IS THEREFORE, DIRECTED TO BE DELETED . ITA NO.1247/AHD /2008 ITO VS. SH.JITENDRAKUMAR PARTHIBHAI CHAUDHARI ASST.YEAR 2005-06 - 4 - 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HEREBY AFFIRM THE VERDICT OF LEARNED CIT(APPEALS). WE HAVE PERU SED THE REMAND REPORT FURNISHED BY THE ASSESSING OFFICER AND HAVE NOTICED THAT THE LEARNED CIT(APPEALS) HAS RIGHTLY HELD THAT THOSE EI GHT PERSONS WERE FOUND TO BE REAL PERSONS WHO HAVE CONFIRMED BEFORE ASSESSING OFFICER ABOUT THE IMPUGNED TRANSACTIONS. IN THE ABSENCE OF ANY CONTRARY MATERIAL FROM THE SIDE OF THE REVENUE, WE HAVE NO OPTION BUT TO AFFIRM THE FINDINGS ON FACTS GIVEN BY THE LEARNED CIT(APPEALS) . THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 31/ 5 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 31 / 05 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.1247/AHD /2008 ITO VS. SH.JITENDRAKUMAR PARTHIBHAI CHAUDHARI ASST.YEAR 2005-06 - 5 - 1. DATE OF DICTATION..27/5/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/05/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S31/5/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/5/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER