Deputy Commissioner of Income-tax, V. Mohanish Engineering Pvt. Ltd., Jalgaon

ITA 1269/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5287 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-05-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S MEENA
• Assessee Lawyers: DEVENDRA P KULKARNI
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JM . / ITA NO.1269/PUN/2016 / ASSESSMENT YEAR : 2011-12 DCIT, CENTRAL CIRCLE-2, NASHIK /APPELLANT VS. MOHANISH ENGINEERING PVT.LTD., 11, SWED BINDU, SHANTI NAGAR, YAWAL ROAD, BHUSAWAL, JALGAON PAN : AADCC7960R . /RESPONDENT ASSESSEE BY : SHRI DEVENDRA P.KULKARNI REVENUE BY : SHRI S.S. MEENA,CIT-DR / DATE OF HEARING : 23.10.2018 / DATE OF PRONOUNCEMENT: 23.10.2018 / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 28-03-2016 PASSED BY THE CIT(A)-12, PUNE IN RELATION TO THE ASSESSMENT YEAR 2011-12. 2. THE FIRST GROUND IS AGAINST THE DELETION OF ADDITION OF RS.95,56,157/- ON ACCOUNT OF UNPROVED SUNDRY CREDITOR. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE AS SESSEE DECLARED CERTAIN CREDITORS IN ITS BALANCE SHEET. ON BEING CALLED UP ON TO FURNISH CONFIRMATION, COPIES OF BILLS RAISED BY M/S. MAHAVIR CIVIL ENGINEER ING & SERVICES PVT. LTD. FOR MATERIALS PURCHASED FROM IT AND ALSO THE COPIES OF TRANSPORTATION OF BILLS AS PER WHICH THE MATERIAL WAS DELI VERED, THE ASSESSEE COULD NOT COMPLY WITH THE SAME. THIS LED TO THE ADDITION OF RS.95,56,157/- ON ACCOUNT OF UNPROVED SUNDRY CREDITOR. T HE LD. CIT(A) ITA NO.1269/PUN/2016 MOHANISH ENGINEERING PVT. LTD., 2 DELETED THE ADDITION, AGAINST WHICH THE REVENUE HAS APPRO ACHED THE TRIBUNAL. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELEVAN T MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSEE FILED CONFIRMATION FROM THE TRADE CREDITOR BEFORE THE LD. CIT(A) AS AN ADDITIONAL EVIDENCE WH ICH COULD NOT BE PRODUCED BEFORE THE AO SINCE ONLY A PERIOD OF 10 DAY S WAS GRANTED FOR DOING THE NEEDFUL. THE LD. CIT(A) SENT BACK THE COPY O F CONFIRMATION TO THE AO AND ASKED FOR HIS COMMENTS. THE AO IN HIS REM AND REPORT IMPRESSED UPON THE FACT THAT THE ASSESSEE FAILED TO PROV E THE GENUINENESS OF THE SUNDRY CREDITOR BY NOT SUBMITTING THE COPY OF CONFIRMATION DURING THE COURSE OF ORIGINAL ASSESSMENT PROCE EDINGS. IN PARA NO.4.4 OF THE REMAND REPORT, THE A.O. ACKNOWLEDGED TH E FACT THAT THE ASSESSEE DID FURNISH A COPY OF CONFIRMATION, BUT REFUSE D TO ACCEPT THE GENUINENESS OF THE CREDITOR ON THE GROUND THAT MER E FURNISHING OF CONFIRMATION DID NOT PROVE THE GENUINENESS. WE FIND THAT T HE GRIEVANCE OF THE AO IN MAKING THE ADDITION ON ACCOUNT OF UNPROVED S UNDRY CREDITOR WAS THAT THE ASSESSEE FAILED TO FURNISH THE CON FIRMATION, WHICH GOT SATISFIED DURING THE COURSE OF REMAND PROCEEDINGS. IN SUCH REMAND PROCEEDINGS, THE AO COULD NOT FIND ANYTHING NEGATIVE QUA THE PURCHASES MADE BY THE ASSESSEE FROM M/S. MAHAVIR CIVIL ENGINEERING & SERVICES PVT. LTD. NOT ONLY THIS, THE LD. CIT(A) HAS RECORDED IN P ARA NO.3.5 OF THE IMPUGNED ORDER THAT THE AO ASKED FOR THE CONFIRMATION AN D COPIES OF BILLS RAISED BY THE CREDITOR, WHICH WERE DULY SUBMITTED TO HIM. IT IS FURTHER UNDISPUTED THAT THE SAID CREDITOR WAS ALSO ASSES SED WITH THE SAME AO. THE AO HAS NOT BROUGHT ANYTHING ON RECORD T O DEMONSTRATE THAT EITHER THE CREDITOR WAS NOT GENUINE OR THE PURCH ASE TRANSACTIONS WERE BOGUS. IN VIEW OF THE FOREGOING DISCUSSION, IT IS APPARE NT THAT THE ITA NO.1269/PUN/2016 MOHANISH ENGINEERING PVT. LTD., 3 ASSESSEE SUCCESSFULLY PROVED THE GENUINENESS OF THE CRE DITOR. WE THEREFORE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIO N. 5. THE ONLY OTHER GROUND IS AGAINST THE DELETION OF ADDIT ION OF RS.6,42,939/- MADE BY THE AO ON ACCOUNT OF ESTIMATED NET PROFIT RATE TAKEN AT 6% AS AGAINST 4.17% DECLARED BY THE ASSESSEE. 6. THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE DECLARED NET PROFIT AT THE RATE OF 4.17%. THE AO REJECTED SUCH PROFIT PERCENTAGE AND ADOPTED 6% NET PROFIT RATE FOR WORKING OUT THE ADDITION OF RS.6,42,939/- THE LD. CIT(A), AFTER CONSIDERING THE REMAND REPORT OF THE AO, PREFERRED TO DELETE THE ADDITION, AGAINST WHICH THE REVENUE HAS CO ME UP IN APPEAL BEFORE THE TRIBUNAL. 7. HAVING HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH T HE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSE SSEE REGULARLY MAINTAINED BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED. R ECORDING BY THE AO THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS O F ACCOUNTS WAS CONTROVERTED BY THE ASSESSEE BEFORE THE LD. CIT(A) IN T ERMS OF NON REQUISITION OF SUCH BOOKS BY THE AO. SUCH FINDING HAS NOT BEEN SHOWN TO BE UNFOUNDED BY THE LD. DR. DURING THE REMAND PROCE EDINGS, THE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE AO FOR VERIFIC ATION. EXCEPT FOR THE FACT THAT THE NET PROFIT RATE IN THIS YEAR SCALED DOWN, THE AO HAS NOT GIVEN ANY REASON TO JUSTIFY THE REJECTION OF BOOK R ESULTS. IN VIEW OF THE FACT THAT THE BOOKS OF ACCOUNTS WERE PRODUCED ADM ITTEDLY DURING THE COURSE OF REMAND PROCEEDINGS AND THE AO COULD NOT FIND ANY DEFECTS IN SUCH BOOKS, WE ARE OF THE CONSIDERED OPINION THAT NO F AULT CAN BE FOUND WITH THE LD. CIT(A) IN DELETING THE ADDITION, WHICH WAS MADE BY THE AO BY APPLYING AN AD HOC NET PROFIT RATE OF 6% AS AGAINST 4.17% ITA NO.1269/PUN/2016 MOHANISH ENGINEERING PVT. LTD., 4 DECLARED BY THE ASSESSEE. WE THEREFORE, APPROVE THE V IEW TAKEN BY THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER, 2018. SD/- SD/- (VIKAS AWASTHY) (R.S .SYAL) /JUDICIAL MEMBER / VICE PRESIDENT PUNE; DATED : 23 RD OCTOBER, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-12, PUNE. 4. / THE PR. CIT CENTRAL, NAGPUR 5. , , / DR B, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE. *