M/s. Adarsh Textile Mills, Surat V. The ACIT.,Range-5, Surat

ITA 1265/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63069 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR
• Assessee Lawyers: RASESH SHAH
• Keywords: Additional evidence

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.1265/AHD/2010 ( ! ) ! ) ! ) ! ) / / / / ASSESSMENT YEAR : 2003-04) M/S.ADARSH TEXTILE MILLS C-24 & 25, LUTHRA APARTMENT NAWABWADI, BEGUMPURA SURAT ! ! ! ! / VS. ADDL.CIT RANGE-5 SURAT * $% ./+, ./ PAN/GIR NO. : AAEFA 3936 F ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 $ / APPELLANT BY : SHRI RASESH SHAH, A.R. ./*- 1 0 $ / RESPONDENT BY : SHRI T.SHANKAR, SR. D.R. !2 1 % / / / / DATE OF HEARING : 01/11/2012 34) 1 % / DATE OF PRONOUNCEMENT : 9.11.12 $5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LD.CIT(A)-IV, SURAT DATED 20/01/2010. THE APPELLAN T IS AGGRIEVED BY THE CONFIRMATION OF PENALTY OF RS.61,740/- LEVIED U/S.2 71(1)(C) OF IT ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE IT ACT DATED 27.3.2009 AND THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE IT ACT DATED 28/03/ 2006 WERE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PRINTING AND DYEING OF ART SILK CLOTH ON JOB WORK BASIS. THE PENALTY HAS BEEN LEV IED IN RESPECT OF ITA NO.1265/AHD /2010 M/S.ADARSH TEXTILE MILLS VS. ADDL.CIT ASST.YEAR 2003-04 - 2 - DISALLOWANCE OUT OF REPAIRS AND MAINTENANCE. IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD DEBITED AN EXPENDITURE OF RS. 1,68,000/- IN THE NAME OF M/S.OM SAI TRADERS. HOWEVER, IT WAS ALSO NOTED THAT THE AFORESAID AMOUNT WAS SHOWN AS AN OUTSTANDING LIABILITY IN THE NAME OF THE SAID PARTY, I.E. M/S.OM SAI TRADERS. IT WAS CLAIMED B Y THE ASSESSEE THAT ROTARY-SCREEN WAS PURCHASED ON DIFFERENT DATES. DU E TO SOME DISPUTE WITH THE SAID SUPPLIER THE PAYMENT COULD NOT BE MAD E. THE AO HAS NOTED THAT CONFIRMATION FROM THE SAID PARTY WAS NOT FURNI SHED. A NOTICE U/S.133(6) WAS ISSUED. THE INSPECTOR OF THE REVENU E DEPARTMENT HAD REPORTED THAT THE SAID PARTY WAS NOT AVAILABLE AT T HE ADDRESS. BECAUSE OF THE SAID REASON, THE AFORESAID AMOUNT WAS TAXED IN THE HANDS OF THE ASSESSEE. IN APPELLATE PROCEEDINGS, LD.CIT(A) HAS CONFIRMED THE ADDITION. DURING PENALTY PROCEEDINGS, IT WAS NOT ED BY THE AO THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS A BOUT THE SAID PARTY. A FINDING HAS ALSO BEEN GIVEN THAT THE BOGUS/FAKE PAR TICULARS WERE FURNISHED, SO AS TO CONCEAL THE INCOME. WHEN THE L EVY OF PENALTY WAS CHALLENGED, LD.CIT(A) HAS HELD AS UNDER:- I HAVE CONSIDERED THE REASONS GIVEN BY ASSESSING O FFICER AND ALSO THE SUBMISSIONS OF APPELLANT. AFTER GOING THROUGH THE FACTS OF THE CASE, I AM OF THE OPINION THAT ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF EXPENDITURE. IT IS SEEN THAT ASSESS EE ONLY PRODUCED BILLS IN SUPPORT OF THE EXPENDITURE & NO OTHER EVID ENCE HAS BEEN PRODUCED. THE ASSESSEE HAS NOT MADE ANY PAYMENT TO ABOVE PARTY ON THE GROUND THAT THERE WAS A DISPUTE RELATING TO THE QUALITY OF GOODS SUPPLIED BY THE PARTY I.E. M/S.OM SAI TRADERS . HOWEVER, MERELY BY SAYING THAT THERE WAS A DISPUTE WITH THE PARTY, IT DOES NOT ABSOLVE ASSESSEE FROM PROVING THE GENUINENESS O F THE EXPENDITURE. THE NOTICE ISSUED U/S.133(6) OF THE A CT HAS ALSO BEEN RETURNED UNSERVED AND THUS, EXPENDITURE CANNOT BE S AID TO BE ITA NO.1265/AHD /2010 M/S.ADARSH TEXTILE MILLS VS. ADDL.CIT ASST.YEAR 2003-04 - 3 - GENUINE PURELY ON THE GROUND THAT BILLS HAVE BEEN P RODUCED. THE ASSESSEE OUGHT TO HAVE FURNISHED DETAILS RELATING T O LATEST WHEREABOUTS OF THE PARTY AND AT LEAST SOME EVIDENCE AS TO WHAT IS THE NATURE OF DISPUTE SHOULD HAVE BEEN BROUGHT ON R ECORD. HOWEVER, AS SAME IS NOT DONE, I DO NOT FIND ANY REA SON TO INTERFERE WITH THE ACTION OF ASSESSING OFFICER IN IMPOSING TH E PENALTY FOR CONCEALING THE PARTICULARS OF INCOME. VARIOUS CASE LAWS RELIED UPON THE BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF INSTANT CASE AND HENCE, PENALTY IMPOSED BY ASSESSING OFFICE R IS HEREBY CONFIRMED. 3. LD.AR MR.R.SHAH HAS PLACED RELIANCE ON THE SUBM ISSIONS MADE BEFORE LD.CIT(A), REFERRED PARA-5 AS UNDER:- 5. IN THE COURSE OF APPELLATE PROCEEDINGS, IT IS SUBMITTED THAT ASSESSEE HAS GIVEN COGENT EXPLANATION WITH REGARD T O THE CLAIM OF EXPENSES OF RS.1,68,000/-. IT IS SUBMITTED THAT AS SESSEE FILED COPIES OF BILLS OF M/S.OM SAI TRADERS IN SUPPORT OF EXPENS ES DEBITED IN PROFIT & LOSS ACCOUNT. IT WAS EXPLAINED THAT ASSES SEE PURCHASED ROTARY SCREEN ON VARIOUS DATES FROM SAID PARTY. HO WEVER, AS THERE WERE DISPUTE WITH PARTY RELATING TO THE QUALITY OF GOODS SUPPLIED BY THEM, THE PAYMENTS REMAINED OUTSTANDING. AS REGARD S THE CONTENTION OF ASSESSING OFFICER THAT PARTY IS NOT A VAILABLE AT THE GIVEN ADDRESS, IT IS SUBMITTED THAT ASSESSING OFFIC ER NEVER POINTED OUT THIS FACT TO ASSESSEE IN THE COURSE OF ASSESSME NT PROCEEDINGS OTHERWISE CLARIFICATION IN THIS REGARD COULD HAVE B EEN GIVEN AT THE ASSESSMENT STAGE ITSELF. THE ASSESSEE ALSO EXPLAIN ED ITS WILLINGNESS TO GIVE DETAILS RELATING TO RECENT WHEREABOUTS OF S AID PARTY DURING THE APPELLATE PROCEEDINGS IF THE MATTER IS REMANDED TO ASSESSING OFFICER, BUT THIS PLEA OF ASSESSEE WAS NOT ENTERTAI NED. IT IS A CONTINUING LIABILITY SO FAR AS ASSESSEE IS CONCERNE D & PAYMENT WILL HAVE TO BE MADE WHEN THE DISPUTE IS RESOLVED. THE ASSESSING OFFICER HAS INCORRECTLY OBSERVED THAT ASSESSEE PROD UCED FAKE BILL IN SUPPORT OF THE EXPENSES OF RS.1,68,000/-. THERE IS NO MATERIAL WHICH INDICATES THAT THE BILL IS NOT GENUINE. IN F ACT ABOVE OBSERVATION HAS BEEN MADE BY ASSESSING OFFICER ONLY FOR THE REASON THAT THE PARTY WAS NOT FOUND AT THE ADDRESS MENTION ED IN THE BILL. ITA NO.1265/AHD /2010 M/S.ADARSH TEXTILE MILLS VS. ADDL.CIT ASST.YEAR 2003-04 - 4 - THE AMOUNT HAS BEEN KEPT OUTSTANDING ONLY ON ACCOUN T OF DISPUTE WITH THE PARTY AS EXPLAINED ABOVE. IT IS ALSO PERT INENT TO POINT OUT HERE THAT ASSESSEE GAVE ADDRESSES ON THE BASIS OF B ILLS ISSUED BY SAID PARTIES. FURTHER, ASSESSING OFFICER HAS FAILE D TO BRING ANY EVIDENCE ON RECORD WHICH INDICATES THAT CONTENTION OF ASSESSEE THAT THERE IS DISPUTE WITH THE PARTY IS INCORRECT. 3.1. NOW HE HAS PLACED THE BANK STATEMENT TO DEMONS TRATE THAT THE AFORESAID AMOUNT WAS IN FACT RE-PAID WHEN THE MATTE R WAS RESOLVED. 4. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LD.DR MR.T.SHANKAR HAS OBJECTED THE PLACING OF AN EVIDENC E, I.E. A BANK STATEMENT WHICH WAS NOT PLACED BEFORE THE REVENUE A UTHORITIES. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SID ES, AT THE OUTSET, WE HEREBY GIVE OUR FINDING THAT THE BANK STATEMENT IS NOT TO BE CONSIDERED AS AN ADDITIONAL EVIDENCE BUT ONLY REFERRED IN SUPPORT OF THE PRELIMINARY EXPLANATION THAT THE LIABILITY IN QUESTION WAS IN F ACT IN EXISTENCE AND IT HAD NEVER CEASED TO EXIST. THIS EVIDENCE IS NOT IN RESPECT OF A FRESH CLAIM BUT IN CONTINUATION OF THE SUBMISSIONS OF THE ASSES SEE THAT THERE WAS A DISPUTE OF THE ASSESSEE WITH THE SAID SUPPLIER AND WHEN THE DISPUTE WAS SOLVED THE ASSESSEE HAS ACTUALLY REPAID THE OUTSTAN DING BALANCE. AS FAR AS THE BILLS OF THE SAID SUPPLIER WAS CONCERNED, THOSE WERE ALREADY ON RECORD AND WE HEREBY PLACE RELIANCE ON THOSE BILLS ONLY AN D ON THAT BASIS WE HEREBY HOLD THAT ALTHOUGH THOSE BILLS WERE BEFORE T HE AO BUT THOSE WERE NOT FOUND TO BE FALSE OR FAKE BILLS. LD.AR HAS AL SO MADE A STATEMENT AT BAR THAT THE ENQUIRY CONDUCTED BY THE INSPECTOR OF THE REVENUE ITA NO.1265/AHD /2010 M/S.ADARSH TEXTILE MILLS VS. ADDL.CIT ASST.YEAR 2003-04 - 5 - DEPARTMENT WAS MADE AT THE BACK OF THE ASSESSEE. T HAT ENQUIRY WAS NOT CONFRONTED TO THE ASSESSEE. THEREFORE, KEEPING TH E TOTALITY OF THE CIRCUMSTANCES OF THE CASE, WE HEREBY HOLD THAT ALTH OUGH THE CONFIRMATION LETTER WAS NOT PLACED ON RECORD, BUT THE RELEVANT B ILLS OF THE SAID SUPPLIER WERE VERY MUCH BEFORE THE AO AND IN THE ABSENCE OF ANY MATERIAL TO PROVE THAT THOSE BILLS AS FAKE BILLS, IT WAS WRONG TO IMPOSE THE CONCEALMENT PENALTY, ALTHOUGH THE EXPENDITURE WAS D ISALLOWED. WITH THESE REMARKS, PENALTY IS HEREBY DELETED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED . SD/- SD/- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 9 / 11 /2012 6..!, .!../ T.C. NAIR, SR. PS $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-IV, SURAT 5. 7<= .! , , / DR, ITAT, AHMEDABAD 6. = >2 / GUARD FILE. $5! $5! $5! $5! / BY ORDER, /7 . //TRUE COPY// ? ?? ?/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD