Shri Shaktisinh S Jadeja, JAMNAGAR V. The Income Tax Officer, Ward 3 (2), JAMNAGAR

ITA 1267/RJT/2010

• Counselvise Citation: 126724914 RSA 2010
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR J B JHAVERI DR
• Assessee Lawyers: CHETAN AGARWAL
• Keywords: Corroborative evidences
• Section: 69; 69C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 1267/RJT/2010 & 308/RJT/2011 / ASSESSMENT YEAR : 2007-08 SHRI SHAKTISINH S. JADEJA, PROP. OF M/S. DHARMSHAKTI ENTERPRISE, SHIVSHAKTI, OPP. BHUVA BUNGALOW, PALACE RD., JAMNAGAR PAN : AGGPJ 9142 G ( / APPELLANT) ITO, WARD 3(2) JAMNAGAR / RESPONDENT ! ' #$ / ASSESSEE BY SHRI CHETAN AGARWAL, CA % ! ' #$ / REVENUE BY DR. J. B. JHAVERI, DR # & ' ! ( / DATE OF HEARING 07.01.2014 ) ! ( / DATE OF PRONOUNCEMENT 10.01.2014 / ORDER .. , / T. K. SHARMA, J. M. : THESE TWO APPEALS BY THE ASSESSEE ARE AGAINST TWO SEPARATE ORDERS OF LD. CIT (A), JAMNAGAR FOR THE ASSESSMENT YEAR 2007-08. ALL THESE APPEALS WERE HEA RD ON THE SAME DATE, ARGUED BY COMMON REPRESENTATIVE; THEREFORE, THESE ARE BEIN G DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 1267/RJT/2010 2. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 23.09.2010 OF LD. CIT(A), JAMNAGAR CONFIRMING THE ADDITION OF RS.52,0 5,000/- MADE BY THE ASSESSING OFFICER U/S 69C OF THE INCOME-TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2007-08. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A TRANSPO RT CONTRACTOR WITH ESSAR AND RELIANCE GROUP OF COMPANIES. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 02.11.2007 DECLARING TOTAL INCOME AT RS.1 ,28,630/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER, INTER-ALIA, MADE ADDI TION OF RS.52,05,000/- UNDER SECTION 69C OF THE INCOME-TAX ACT, 1961. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER MENTIONED THAT RS.52,05,000/- WAS SHOWN BY THE ASSE SSEE AS SUNDRY CREDITORS IN THE BALANCE SHEET. THE CORRESPONDING EXPENDITURE WAS DE BITED TO PROFIT AND LOSS ACCOUNT AS TRANSPORTATION EXPENSES. ON BEING ASKED FOR PROO F OF PAYMENT TO SUNDRY CREDITORS, THE ASSESSEE PRODUCED PAYMENT VOUCHERS. THE ASSESSI NG OFFICER FOUND ALL THE 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 2 PAYMENTS WERE MADE IN THE MONTH OF MARCH 2007. HEN CE THE LIABILITIES SHOWN BY THE ASSESSEE IN BALANCE-SHEET IS BOGUS AND THE ASSESSEE HAS MADE PAYMENT FROM UNDISCLOSED SOURCES TO SUNDRY CREDITORS. FOR THIS R EASON, THE ASSESSING OFFICER MADE THE ADDITION OF RS.52,05,000/- U/S 69C IN THE ASSES SMENT ORDER. 3. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE MA DE THE FOLLOWING SUBMISSIONS:- 1. IN THE ASSESSMENT AN ADDITION OF RS.52,05,000 W AS MADE ON ACCOUNT TO OUTSTANDING CREDITORS ASSUMED TO BE PAID OUTSIDE BOOKS OF ACCOUNTS. 2. IT IS THE FIRST YEAR OF BUSINESS OF THE PROPRIET OR HAVING AGE OF 22 YEARS. IN THE YEAR UNDER CONSIDERATION HE GOT CONTR ACT FROM ESSAR AND RELIANCE HAVING GROSS RECEIPTS OF RS. 80,34,903 /-. SINCE THE ESSAR HAS NOT PAYMENT TO US (RS.49,88,233 OUTSTANDI NG) WE WERE NOT ABLE TO MADE PAYMENTS TO CREDITORS. IN SUBSEQUENT YEAR W E HAVE MADE PAYMENTS TO CREDITORS AS IT WAS RECEIVED FROM ESSAR . 3. IN THE BALANCE SHEET SUNDRY CREDITORS WAS SHOWN AT RS.52,05,000 WITH AN ANNEXURE CONTAINING NAME AND AMOUNT OUTSTANDING FOR EACH CREDITOR. IN THE COURSE OF ASSESSMENT, AO HAS ASKED APPELLANT TO PRODUCE THE VOUCHERS FOR BOOKING OF EXPENSE AND CREDITING IT TO CREDITOR'S ACCOUNTS. ALL VOUCHERS SUBMITTED FOR AO'S VERIFICATION ARE JOURNA L VOUCHERS. THE AO HAS ASSUMED THESE VOUCHERS AS PAYMENT VOUCHERS AND MADE THE ADDITION ON THE STRENGTH OF THE SAID VOUCHERS. 4. WE HUMBLY SUBMIT THAT WITHOUT UNDERSTANDING THE ACCOUNTING CONCEPTS/ THE ASSESSING OFFICER HAS MADE SUCH A HUGE ADDITION OF PROVISION JOURNAL ENTRIES CONSIDERING THEM AS CASH PAYMENTS. AO HAS E NCLOSED ANNEXURE A TO ASSESSMENT ORDER, WHICH IS LEDGER ACCOUNT OF TRA NSPORT EXPENSES, WHICH CLEARLY SHOWS THE NATURE OF TRANSACTION I.E. JOURNA L VOUCHERS. 5. WITH REGARDS TO ANNEXURE C OF ASSESSMENT ORDER I. E. COPIES OF ALL JOURNAL VOUCHERS, TO SHOW UP THE DEFECTS IN MAINTENANCE OF VOUCHERS, WE HUMBLY SUBMIT THAT TO COVER UP DEFECTS, OUR BOOKS OF ACCOU NTS ARE REJECTED BY ASSESSING OFFICER AND PROFIT WAS ESTIMATE, HENCE TH E SEPARATE ADDITION U/S. 69C IN NOT JUSTIFIED ON THE BASIS OF DEFECTIVE VOUC HERS. 6. IN THE COURSE OF ASSESSMENT, VIDE SUBMISSION DAT ED 23.12.2009, WE HAVE SUBMITTED CONFIRMATIONS OF ALL CREDITORS AN D DETAILS OF PAYMENTS MADE TO THEM IN SUBSEQUENT YEAR. HOWEVER THE ASSESS ING OFFICER HAS IGNORED THE SAME. THE APPROACH OF ASSESSING OFFICER IS IRRESPONSIBLE AND HARASSING 7. AT THE TIME OF ASSESSMENT, AUTHORISED REPRESENTA TIVE OF THE APPELLANT, SHRI MANISHBHAI KARIA WAS ENGAGED WITH HOSPITALISATION O F HIS WIFE AND ASSESSMENT PROCEEDINGS WERE ATTENDED BY APPELLANT'S ACCOUNTANT SHRI KESHUBHAI. 8. IN THE COURSE OF ASSESSMENT, WHEN AO HAS ASKED T O PRODUCE PAYMENT VOUCHERS FOR OUTSTANDING CREDITORS, WITH CONTUSION AND WITHOUT UNDERSTANDING, ACCOUNTANT HAS PREPARED CASH PAYMENT VOUCHERS AND SUBMITTED TO ASSESSING OFFICER. 9. YOUR HONOUR MAY APPRECIATE, THAT PAYMENT TO CRED ITORS WAS MADE BY ACCOUNT PAYEE CHEQUES IN NEXT FINANCIAL YEAR. WE SU BMIT HEREWITH 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 3 RELEVANT DOCUMENTS, CONFIRMATION FROM CREDITORS AND LEDGER ACCOUNT OF NEXT FINANCIAL YEAR. ALL THESE DETAILS WERE SUBMITT ED TO ASSESSING OFFICER ALSO. HOWEVER WITHOUT APPRECIATING CORRECT FACTS OF THE CASE AND IGNORING THE FACT THAT THE PAYMENT TO CREDITORS WAS MADE BY ACCOUNT PAYEE CHEQUES IN NEXT FINANCIAL YEAR AND VOUCHERS PRODUCE D BY ACCOUNTANT WAS UNDER WRONG IMPRESSION, UNDERSTANDING AND CONFUSED STATE OF MIND THE ASSESSING OFFICER HAS MADE THE ADDITION. 10. WE ENCLOSE HEREWITH AFFIDAVIT OF ACCOUNTANT AND THE APPELLANT. THE CIT(A) FORWARDED ALL THE ABOVE PAPERS ALONGWIT H AFFIDAVITS TO THE ASSESSING OFFICER FOR HIS ENQUIRY AND REPORT. VIDE LETTER DATED 16.09.2010, THE ASSESSING OFFICER SUBMITTED HIS REPORT WHICH READS AS UNDER:- 'KINDLY REFER TO YOUR LETTER NO CIT(A)/JAM/182/09-1 0 DATED 20/07/2010 ON THE ABOVE SUBJECT MATTER ALONG WITH THE DETAIL SUBM ISSION OF THE ASSESSEE AS FILED BY THE ASSESSEE BEFORE YOUR HONOUR. 2. ON GOING THROUGH THE WRITTEN SUBMISSION FILED B Y THE ASSESSEE, I HAVE ISSUED A DETAILED QUESTIONNAIRE INCORPORATING ALL P OINTS VIDE THIS OFFICE LETTER NO. ITO/WD-3(2)/JAM/SSJ/10-11 DATED 21/07/2010 WHIC H WAS DULY SERVED UPON THE AR OF THE ASSESSEE TO FURNISH THE DETAILS/ EXPLANATION/CLARIFICATION WITH ALL SUPPORTING EVIDENCES ALONG WITH THE BOOKS OF ACCOUNTS WITHIN 7 DAYS FROM THE RECEIPT OF THIS LETTER. IN RESPONSE TO THE AFORESAID LETTER THE AR OF THE ASSESSEE SHRI MANISH M KARIA, TAX CONSULTANT FROM M ANISH & COMPANY FILED WRITTEN SUBMISSION ALONG WITH BANK STATEMENT OF SB S, RANJIT ROAD, JAMNAGAR AND LIST OF SUNDRY CREDITORS ALONG WITH INDIVIDUAL LEDGER ACCOUNT OF CREDITORS. 3. THE ASSESSEE HAD SUBMITTED THE DETAILS BEFORE YO UR HONOUR DURING APPEAL PROCEEDINGS. HOWEVER THERE WAS SUFFICIENT TIME FOR THE ASSESSEE TO PRODUCE THE DETAILS BEFORE THE INCOME-TAX AUTHORITIES DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. ON VERIFICATION OF VOUCHERS FILED BY ASSESSEE DURING T HE ASSESSMENT PROCEEDING ARID VOUCHERS FILED BEFORE YO UR HONOR DURING APPEAL PROCEEDING, IT IS NOTICED THAT THE ASSESSEE HAS MAD E PAYMENT TO HIS CREDITORS BY CASH BEFORE 31 ST MARCH 2007 OF RS 52,05,000/- AND HE HAS PRODUCED ANOTHER CASH PAYMENT VOUCHER OF RS. 52,05,000/- IN WHICH HE HAS SHOWN THAT PAYMENT TO THE CREDITORS AFTER 31 ST MARCH 2007. ON VERIFICATION OF AFFIDAVIT FILED BY THE ASSESSEE IN PARA NO. 2 &3, HE HAS MENTIONED AS UNDER:- 'DUE TO LACK OF KNOWLEDGE AND UNDERSTANDING AND UND ER THE IMPRESSION OF ASSESSING OFFICER, OUR ACCOUNTANT HAS PREPARED PAYMENT VOUCHERS FOR CREDITOR AND SUBMITTED TO ASSESSING OF FICER IN THE COURSE OF ASSESSMENT. IN FACT PAYMENTS TO CREDITORS WERE MADE IN SUBSEQUENT YEAR BY ACCOUNT PAYEE CHEQUES. THOUGH THE DETAILS O F PAYMENT MADE TO CREDITORS WAS SUBMITTED TO ASSESSING OFFICER, BU T HE HAS IGNORED THE SAME AND GIVEN MORE IMPORTANCE TO WRONG VOUCHERS SU BMITTED BY OUR ACCOUNTANT'. OUR ACCOUNTANT HAS PREPARED VOUCHERS AT THE TIME O F ASSESSING FOR SOLE PURPOSE OF PRODUCING BEFORE ASSESSING OFFICER. IN FACT THE PAYMENT WAS MADE IN SUBSEQUENT YEAR THROUGH ACCOUNT PAYEE C HEQUE'. 4. IN AFORESAID AFFIDAVIT HE HAS WRITTEN THAT PAYM ENT TO THE CREDITORS WERE MADE IN SUBSEQUENT YEAR BY ACCOUNT PAYEE CHEQUE BUT ON VERIFICATION OF PAYMENT VOUCHERS WHICH WAS PRODUCE BEFORE YOUR HONO UR, IT IS CLEARLY SEEN THAT THE ASSESSEE HAS MADE PAYMENT TO HIS CREDITORS BY CASH PAYMENT. 5. THE ABOVE REPLY FILED BY AR OF THE ASSESSEE VIDE REPLY DATED NIL IS CONSIDERED BUT NOT FULLY ACCEPTABLE. ON CLOSE VERIF ICATION OF BOTH VOUCHERS 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 4 (PRODUCED DURING ASSESSMENT. PROCEEDINGS & PRODUCED DURING APPEAL PROCEEDINGS) IT IS NOTICED THAT THE CREDITORS HAS S IGNED ON REVENUE STAMP AFFIXED ON VOUCHER FOR RECEIPT OF PAYMENT IN CASH M ADE TO THEM BY ASSESSEE. SO IT IS PRESUMED THAT THE ASSESSEE HAS EITHER TRAN SFERRED HIS OWN MONEY FROM OTHER ACCOUNT OR LOAN TAKEN FROM SOME BODY ELS E AS UNSECURED LOANS AND /OR PAYMENT MADE FROM UNDISCLOSED INCOME. THE A SSESSEE HAS NOR FILED ANY CONFIRMATION FROM ESSAR CONSTRUCTION (INDIA) IT D WHEREIN IN THE NATURE OF MONEY IF ANY GIVEN TO THE ASSESSEE IS DISCLOSED. TH E SMALL PERSONS LIKE LABOUR DO NOT KEEP PAYMENTS PENDING FOR A LONG TIME BUT IN THE INSTANT CASE THE ASSESSEE HAS SHOWN IN THE LIABILITY SIDE AS PAYABLE TO THE TUNE OF RS. 52,05,000/-. 6. HOWEVER, THE ASSESSEE HAS NOT DISCHARGED THE ON US CAST UPON HIM UNDER LAW TO SUBMIT THE NECESSARY DOCUMENTS BEFORE THE ASSESSING OFFICER IN TIME. THE ASSESSEE HAS NOT ESTABLISHED THAT THE CAS E OF THE ASSESSEE IS COVERED UNDER THE EXCEPTION PRESCRIBED IN RULE 46A FOR ADMISSION OF NEW EVIDENCE THEREFORE, THE DOCUMENTS SUBMITTED BY THE ASSESSEE FOR THE FIRST TIME DURING THE APPELLATE PROCEEDINGS WHICH WERE NO T SUBMITTED DURING THE ASSESSMENT PROCEEDINGS IN SPITE OF SEVERAL OPPORTUN ITIES GRANTED TO THE ASSESSEE SHOULD NOT BE ACCEPTED AT THIS STAGE. 7. IN VIEW OF THE ABOVE STATED FACTS, IT IS TO SUB MITTED TO YOUR HONOUR THAT ON CONSIDERING THE ABOVE SITUATION, THE ORDER PASSE D BY THE THAN AO IS ABSOLUTELY IN ORDER ON THE BASIS OF MATERIALS AVAIL ABLE TO THE BEST OF HIS JUDGMENT. I DON'T WANT TO OFFER ANY COMMENT OVER TH E ORDER PASSED FOR WANT OF ANY MATERIAL EVIDENCE RECEIVED FROM THE ASSESSEE'S END. AFTER CONSIDERING THE ASSESSING OFFICERS REPORT, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 52,05,000/- FOR THE DETAILED REASON GIVEN IN PARAGRAPH 11 OF THE IMPUGNED ORDER, WHICH READS AS UNDER:- 11. I HAVE CONSIDERED THE ISSUE AND GONE THROUGH T HE RECORDS, RIVAL CONTENTIONS AND THE REPORT OF THE AO. IT IS SEEN TH AT THE APPELLANT HAS SUBMITTED PAYMENT VOUCHERS IN THE COURSE OF ASSESSM ENT, ALL VOUCHERS ARE PART OF' ASSESSMENT ORDER, AND ON PERUSAL OF VOUCHE RS IT IS CLEAR THAT THE APPELLANT HAS MADE PAYMENT BETWEEN 21.03.2007 TO 31 .0,3.2007. THERE CANNOT BE ANY OTHER INTERPRETATION OF THESE VOUCHER S OTHER THAN PAYMENT VOUCHERS. THE SAID PAYMENT VOUCHERS ARE NOT REFLECT ED IN REGULAR BOOKS OF ACCOUNTS AND INSTEAD LIABILITIES ARE SHOWN. THE CON TENTION THAT THE TAX CONSULTANT WAS BUSY WITH PERSONAL MATTER AND ACCOUN TANT HAS SUBMITTED VOUCHERS PREPARED AT THE INSTANT OF ASSESSING OFFIC ER HAS NO FORCE. THE VOUCHERS ARE SIGNED BY RECIPIENT, DATED AND DULY AC KNOWLEDGED. HENCE IT IS APPARENT THAT ACTUAL PAYMENT WAS MADE DURING THE PE RIOD 21-03-2007 TO 31- 03- 2007, OUT OF UNACCOUNTED MONEY OF THE ASSESSEE, WHICH IS NOT RECORDED IN BOOKS OF ACCOUNTS. THE ALLEGED PAYMENT TO CREDITORS IN NEXT YEAR IS MERELY AN ACCOMMODATION ENTRY TO CREATE A FACADE OF GENUINENE SS. WHEN THE VOUCHERS SHOW ACTUAL PAYMENT DURING THE YEAR, THEN THERE IS NO QUESTION OF ACCEPTING THAT THE PAYMENTS WERE MADE LATER. THEREFORE, ADDIT ION OF RS.52,05,000 U/S.69C IS CONFIRMED. 4. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI CHETAN AGARWAL, CA, APPEARED AND POINTED OUT THAT VOUCHERS WHICH WERE PREPARED BY THE ACCOUNTANT DO NOT BEAR ACTUAL SIGNATURES OF SUNDRY CREDITORS/RECIPIENTS. THE AFFIDAVIT OF THE ASSESSEES PART TIME ACCOUNTANT, SUBMITTED B EFORE THE LD. CIT(A), CLEARLY 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 5 INDICATES THAT THE CASH VOUCHERS WERE PREPARED AT T HE INSTANCE OF THE ASSESSING OFFICER AND THIS IS NOT DENIED BY THE ASSESSING OFF ICER IN HIS REMAND REPORT. HE ALSO SUBMITTED THAT THE ACTUAL PAYMENTS WERE MADE IN NEX T YEAR THROUGH ACCOUNT PAYEE CHEQUES. IN SUPPORT OF THIS, COPY OF CONFIRMED ACC OUNT OF PAYEE WERE PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS LD. CIT(A). IN THE IMPUGNED ORDER, NO ADVERSE FINDING WITH RESPECT TO REAL PAYMENTS MADE THROUGH CHEQUE HAS NOT BEEN RECORDED NOR ANY FINDING THERETO HAS BEEN POINTED O UT BY MAKING FURTHER ENQUIRIES FROM THE RESPECTIVE PAYEES. THE CASH VOUCHERS WERE MERELY PAPER WORK, PREPARED AT THE INSTANCE OF ASSESSING OFFICER AND WERE NOT T HE REAL PAYMENTS MADE TO SUCH CREDITORS. THESE CASH PAYMENTS WERE ALSO NOT RECOR DED BY THE APPELLANT IN HIS BOOKS OF ACCOUNTS. THE CREDITORS HAVE ALSO NOT STATED TH AT THEY HAVE RECEIVED ANY CASH PAYMENTS FROM THE ASSESSEE FOR WHICH THE ALLEGED VO UCHERS WERE PREPARED BY THE ACCOUNTANT OF THE ASSESSEE AT THE INSTANCE OF ASSES SING OFFICER. THE SAME, THEREFORE, DO NOT CONSTITUTE RELIABLE EVIDENCE FOR MAKING ADDITION U/S. 69C OF THE INCOME-TAX ACT, 1961. THE BURDEN WAS ON THE REVENU E TO PROVE THAT THE PAYMENT IN CASH HAS BEEN MADE IS REAL. UNDER THESE CIRCUMSTANC ES, THE ADDITION MADE U/S 69C OF THE INCOME-TAX ACT IS LIABLE TO BE DELETED. 5. ON THE OTHER HAND, DR. J. B. JHAVERI, DR, APPEAR ED FOR THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES B ELOW. THE LD. DR POINTED OUT THAT THE ASSESSEE HAS SUBMITTED CASH VOUCHERS SHOWING PA YMENTS MADE TO THE CREDITORS. THEREFORE, THE LD. CIT(A) RIGHTLY CONFIRMED THE ADD ITION U/S 69C OF THE INCOME-TAX ACT, 1961. 6. IN REJOINDER, THE LD. COUNSEL OF THE ASSESSEE RE LIED UPON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. L. SOHAN LAL GUPTA, REPORTED IN [1958] 33 ITR 786 (ALL.), FOR THE PROPOSITION THAT WHAT AN ASSESSEE FILED AN AFFIDAVIT, HE WAS NEITHER CROSS-EXAMINED NOR THE ASSESSEE WAS REQUIRED TO PRODUCE OR BRING ANY OTHER EVIDENCE TO SUPPORT HIS CLAIM, THE ASSESS EE WAS ENTITLED TO ASSUME THAT THE INCOME-TAX AUTHORITIES WERE SATISFIED WITH THE AFFIDAVIT AS SUFFICIENT PROOF ON THIS POINT. THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT IN THIS CASE THE AFFIDAVIT OF THE ASSESSEES ACCOUNTANT WAS SUBMITTED BEFORE THE LD. CIT(A) AND THE ASSESSING 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 6 OFFICER DURING THE COURSE OF REMAND PROCEEDINGS NOT EXAMINED THE SUNDRY CREDITORS; THEREFORE, IT SHOULD BE PRESUMED THAT THE AFFIDAVIT IS ACCEPTED AND THE LD. CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION OF RS.52, 05,000/- WHICH WAS MADE ON DOUBT AND SUSPICION U/S 69C OF THE INCOME-TAX ACT, 1961. IN SUPPORT OF THIS CONTENTION, THE LD. COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THA T THE AGE OF THE ASSESSEE IS 22 YEARS. THIS IS THE FIRST YEAR BUSINESS OF THE ASSES SEE. THE ASSESSEE IS DOING CONTRACT WORKS FROM ESSAR AND RELIANCE GROUP OF COMPANIES. T HE ASSESSEE HAS NOT RECEIVED THE TRANSPORTATION PAYMENTS FROM ESSAR IN RESPECT O F TRANSPORT SERVICES RENDERED BY THE ASSESSEE AMOUNTING TO RS.49,88,233/- WHICH IS E VIDENT FROM THE BALANCE-SHEET OF THE ASSESSEE AND FOR THIS REASON, HE WAS NOT IN A P OSITION TO PAY HIS SUNDRY CREDITORS FOR RS.52,05,000/- WHICH WERE OUTSTANDING. HE SUBM ITTED THAT THE ASSESSEE CANNOT BE PENALIZED FOR MISTAKE COMMITTED BY THE ASSESSEE S ACCOUNTANT IN PREPARING THE VOUCHERS AND PUTTING THE SIGNATURES/THUMB IMPRESSIO NS OF THE CREDITORS, WITHOUT THE KNOWLEDGE OF THE ASSESSEE OR EVEN SUNDRY CREDITORS. SINCE THE ASSESSING OFFICER HAS NOT CONDUCTED ANY FURTHER ENQUIRES / CROSS VERI FICATION FROM THE SUNDRY CREDITORS, THE ADDITION OF RS.52,05,000/- BE DELETED. 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE AFFIDAVIT OF THE ASSESSEE S ACCOUNTANT. THE AFFIDAVIT FURNISHED BY THE ACCOUNTANT IS REPRODUCED HEREUNDER :- I, KESHAVLAL N. AJANI, RESIDING AT JAMNAGAR DO HER EBY SOLEMNLY DECLARED AS UNDER. 1. THAT I AM WORKING AS PART TIME ACCOUNTANT OF SHR I SHAKTISINH S. JADEJA, PROPRIETOR OF M/S. DHARAMSHAKTI ENTERPRISE. 2. THAT AT THE TIME OF ASSESSMENT PROCEEDINGS OF TH E SAID CONCERN, SINCE OUR ADVOCATE SHRI MANISHBHAI KARIA WAS ENGAGED WITH HIS WIFES HOSPITALIZATION, I WAS ATTAINING BEFORE ASSESSING O FFICER. WHEN ASSESSING OFFICER HAS ASKED ME TO SUBMIT DETAILS OF PAYMENT M ADE TO CREDITOR, I HAVE SUBMITTED LEDGER ACCOUNT OF NEXT ASSESSMENT YEAR, I N WHICH PAYMENT WAS MADE BY CHEQUE, HOWEVER THE ASSESSING OFFICER HAS F URTHER ASKED TO SUBMIT VOUCHERS, SO I HAVE PREPARED PAYMENT VOUCHER S AND SUBMITTED TO ASSESSING OFFICER. AFTER COMPLETION OF ASSESSMENT, I REALISE THE CORRECT STATE OF FACT AND IMPLICATION OF VOUCHERS, WHICH I HAVE PREPARED AT THE TIME OF ASSESSMENT. 3. THE VOUCHERS WERE PREPARED BY ME AT THE INSTANCE OF ASSESSING OFFICER TO PRODUCE VOUCHERS AND IN ABSENCE OF OUR ADVOCATE. 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 7 ALL ABOVE FACTS ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. FROM THE PERUSAL OF THE AFORESAID AFFIDAVIT OF THE ACCOUNTANT OF THE ASSESSEE, IT IS CLEAR THAT AT SERIAL NO.3, THE ACCOUNTANT OF THE ASSESSEE HAS DEPOSED THAT VOUCHERS WERE PREPARED BY HIM AT THE INSTANCE OF TH E ASSESSING OFFICER AND THE SAME WERE PRODUCED IN THE ABSENCE OF THE ASSESSEES ADVOCATE. THE ACCOUNTANT WAS A PART TIME ACCOUNTANT AS HAS ALSO BEEN DEPOSED IN PARAGRAPH 1 OF THE AFFIDAVIT. THE ASSESSING OFFICER DID NOT REBUT THE AFORESAID D EPOSITION IN THE REMAND PROCEEDINGS WHICH IS FOUND REPRODUCED IN THE IMPUGN ED ORDER AT PP 3-6. THE ASSESSEE HAS ALSO LAID ON RECORD OF THE AUTHORITIES BELOW, THE COPIES OF ACCOUNTS OF ALL THESE CREDITORS IN THE SUBSEQUENT YEAR WHICH AR E DULY CONFIRMED ACCOUNT AND REFLECTED PAYMENT RECEIVED BY THEM THROUGH ACCOUNT PAYEE CHEQUE. THE LD. CIT(A) ASKED THE ASSESSING OFFICER TO CONDUCT NECESSARY EN QUIRY ON AFFIDAVIT. AS PER THIS DIRECTION, THE ASSESSING OFFICER OUGHT TO HAVE EXAM INED THE SUNDRY CREDITORS SO AS TO ASCERTAIN WHETHER THE SUNDRY CREDITORS PUT THEIR SI GNATURES/THUMB IMPRESSIONS ON REVENUE STAMP ON CASH VOUCHERS WHICH WERE RELIED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IN MAKING THE ADDITION OF RS.52,05 ,000/-. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) IN THIS ISSUE AND REMAND THE ADDITION OF RS.52,05,000/- TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSING OFFICER SHALL MAKE A CROSS-VERIFICATION F ROM THE SUNDRY CREDITORS WHETHER THEY HAVE SIGNED THE CASH VOUCHERS/RECEIPTS FOR THE TRANSPORT CHARGES MENTIONED IN THE CASH VOUCHERS AND RE-ADJUDICATE THE ADDITION OF RS.52,05,000/- AFRESH IN ACCORDANCE WITH LAW. THEREFORE, FOR STATISTICAL PUR POSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ITA NO. 308/RJT/2011 8. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 30.06.2011 OF LD. CIT(A), JAMNAGAR CONFIRMING THE PENALTY OF RS.19,09 ,350/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 I N RESPECT OF ADDITION OF RS.52,05,000/- MADE BY THE ASSESSING OFFICER U/S 69 C OF THE INCOME-TAX ACT. 9. WE HAVE HEARD BOTH THE SIDES. VIDE OUR ORDER IN ASSESSEES APPEAL NO.1267/RJT/2010 (SUPRA), WE HAVE RESTORED THE ADDI TION OF RS.52,05,000/- TO THE FILE 1267-RJT-10 & 308-RJT-11 SHRI SHAKTISINH S JADEJA 8 OF THE ASSESSING OFFICER. WE, THEREFORE, CANCEL TH E PENALTY OF RS.19,09,350/- WITH THE OBSERVATION THAT THE ASSESSING OFFICER IS AT L IBERTY TO INITIATE THE SAME WHILE RE- ADJUDICATING THE ADDITION OF RS.52,05,000/- AFRESH AS PER OUR DECISION IN ITA NO.1267/RJT/2010 (SUPRA). 10. IN THE RESULT, ASSESSEES APPEAL BEARING ITA NO . 1267/RJT/2010 IS ALLOWED AND FOR STATISTICAL PURPOSES, ITA NO.308/RJT/2011 IS AL SO ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARMA) $( #*% / ACCOUNTANT MEMBER #*% /JUDICIAL MEMBER *$+ ,*-/ ORDER DATE 10.01.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- SHRI SHAKTISINH S. JADEJA, JAMNAGAR 2. /RESPONDENT- ITO, WARD 3(2), JAMNAGAR 3. #-2- & 3 / CIT, JAMNAGAR 4. & 3 - / CIT (A), JAMNAGAR 5 . 678 , , / DR, ITAT, RAJKOT 6 . 89 :; / GUARD FILE. *$+ #$ / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.