DCIT, Ludhiana V. Sh. Narain Singla, Mandi Gobindgarh

ITA 127/CHANDI/2014

• Counselvise Citation: 12721514 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SIDHU
• Assessee Lawyers: N K SAINI
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 127/CHD/2015 ASSESSMENT YEAR: 2010-11 THE ITO, VS. M/S SINGAL POLYMERS, WARD-4(2), CHANDIGARH CHANDIGARH PAN NO. AASFS7952B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. D.S. SIDHU RESPONDENT BY : SH. N.K. SAINI DATE OF HEARING : 10.09.2015 DATE OF PRONOUNCEMENT : 23.09.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A), CHANDIGARH DATED 17.11.2014 RELATING TO ASSESSMENT YEAR 2010-11. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 31,54,433/- WITH OUT 2 PROVIDING AN OPPORTUNITY FOR EXAMINING THE FACTS AS PROVIDED IN THE ADDITIONAL EVIDENCE AFTER ADMITTING THE ADDI TIONAL EVIDENCE EVEN THOUGH THE ASSESSING OFFICER HAS REPO RTED THAT THE ADDITIONAL EVIDENCE IS NOT ADMISSIBLE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A FIRM AND DEALS WITH THE TRADING IN PLASTIC GRANULES IN WHOLESALE. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 31,54,433/- ON ACCOUNT OF DIFFE RENCE IN CREDIT BALANCE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND AS PER CONFIRM ATION OF M/S GAIL (INDIA) LTD (M/S GAIL). ACCORDING TO THE ASSESSING OFFICER, T HE ASSESSEE DID NOT MAKE PURCHASES FROM M/S GAIL AND AS PER BALANCE SHEET AN AMOUNT OF RS. 32,61,668/- WAS SHOWN AS PAYABLE TO THE SAID CONCERN. IN ORDER TO VERIFY THE GENUINENESS OF THE SUNDRY CREDITORS, A REFERENCE WAS MADE BY THE A SSESSING OFFICER TO M/S GAIL, WHO UNDER ITS LETTER DATED 4.2.2013 INTIMATED THAT AN AMOUNT OF RS. 64,16,101/- WAS STILL PAYABLE TO THEM BY THE ASSESS EE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO RECONCILE THE CREDIT BALANCE AS APPEARING IN THE BOOKS OF ACCOUNT WITH THAT AS PER IN THE BOOKS OF ACCOUNT O F M/S GAIL. THE REPLY SUBMITTED BY THE ASSESSEE WAS REJECTED BY THE ASSES SING OFFICER OBSERVING THAT AFTER 15.3.2010, THE NEW FIRM DID NOT MADE PURCHASE TO THE TUNE OF RS. 36,89,963/- AGAINST WHICH PAYMENT OF RS. 36,89,963/ - BY WAY OF RTGS OF RS. 24,00,000/- WAS MADE ON 29.3.2010 AND RS. 12,89,983 /- ON 31.3.2010. ACCORDINGLY, ASSESSING OFFICER HELD THAT DEBIT BAL ANCE OF RS. 16,64,101/- APPEARING IN THE BOOKS OF ACCOUNT OF M/S GAIL PERTA INED TO THE ASSESSEE FIRM AS AGAINST RS. 32,61,668/- AS APPEARED IN THE BOOKS O F ACCOUNT OF THE ASSESSEE FIRM. THUS, THERE WAS A DIFFERENCE OF RS. 31,54,433/-. A CCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 31,54,433/-. 4. ON APPEAL, THE CIT(A) DELETED THE ADDITION OBSER VING AS UNDER:- 5.1 M/S GAIL HAD APPOINTED M/S BANSAL AS ITS C &F AGENT. ALL THE PURCHASES MADE FROM M/S GAIL WERE THROUGH 3 M/S BANSAL AND HAVE BEEN DULY RECORDED BY THE APPEL LANT IN ITS BOOKS OF ACCOUNTS. FURTHER, ALL THE PAYMENTS WERE MADE TO M/S BANSAL, WHO IN TURN MAKES PAYMENTS TO M/S GA IL. 5.2 A PERUSAL OF THE DOCUMENTS FILED BY THE APP ELLANT REVEALS THAT THE SALES MADE BY M/S GAIL TO THE APPE LLANT ARE RECORDED IN THE BOOKS OF ACCOUNTS OF M/S BANSAL IN THE NAME OF THE APPELLANT. SIMILARLY, ALL THE PAYMENTS MAD E THROUGH CHEQUE/ RTGS AND ALL THE CREDIT NOTES CREDITED TO T HE APPELLANT HAVE BEEN RECORDED BY THE APPELLANT IN IT S BOOKS OF ACCOUNTS AND BY M/S BANSAL IN THE LEDGER ACCOUNT OF THE APPELLANT. THE APPELLANT HAS FILED RECONCILIATION S TATEMENT AS PER WHICH ALL THE PAYMENTS MADE TO M/S BANSAL TH ROUGH BANKING CHANNELS ARE DULY REFLECTED IN THE HOOKS OF ACCOUNTS OF THE APPELLANT AS WELL AS IN THE BOOKS OF ACCOUNT S OF M/S BANSAL. 5.3 AS PER THESE DOCUMENTS, M/S BANSAL HAD NOT TEND ERED THE ENTIRE AMOUNT RECEIVED FROM THE APPELLANT TO M/S GA IL, WHICH HAS RESULTED INTO THE EXCESS AMOUNT RECOVERAB LE TO THE EXTENT OF RS. 31,54,433/-. THIS AMOUNT HAS, IN FACT , BEEN PAID BY THE APPELLANT AND SHORT REMITTED BY M/S BANSAL T O M/S GAIL. IF M/S BANSAL HAS NOT MADE PAYMENT TO M/S GAI L, IT WILL BE INCORRECT TO INFER THAT THERE IS DIFFERENCE IN BALANCE. BE AS IT MAY, SINCE ALL THE PURCHASES ARE DULY RECO RDED AND ALL THE PAYMENTS ARE MADE THROUGH BANKING CHANNELS AND MOST IMPORTANTLY, THE APPELLANT HAD SHOWN MUCH LESS ER LIABILITY THAN THAT IN THE BOOKS OF M/S GAIL, THE A DDITION MADE ON ACCOUNT OF DIFFERENCE IN BALANCE WAS UNCALL ED FOR AND SO THE SAME IS DELETED. GROUND OF APPEAL NO. 3 IS ALLOWED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. THE MAIN CONTENTION OF THE AS SESSEE BEFORE THE CIT(A) WAS THAT M/S BANSAL AGENCIES WAS C&F AGAINST OF THE SUP PLIER M/S GAIL AND ALL THE GOODS WERE BEING SUPPLIED TO THE ASSESSEE THROUGH M /S BANSAL WHO IN TURN WERE 4 MAKING PAYMENTS TO M/S GAIL. IT WAS ALSO STATED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ISSUE WAS CLARIFIED TO THE ASSESSIN G OFFICER AND WITHOUT CALLING FOR ANY INFORMATION / CLARIFICATION FORM M/S BANSAL AND WITHOUT OBTAINING DETAILED COPY OF ACCOUNT FROM M/S GAIL AND WITHOUT AFFORDING ANY PROPER OPPORTUNITY TO THE ASSESSEE, THE IMPUGNED ADDITION WAS MADE. THE CONTENTION OF THE ASSESSEE WAS THAT AFTER RECEIPT OF THE ASSESSME NT ORDER, THE ASSESSEE CALLED FOR INFORMATION UNDER RTI ACT FROM M/S GAIL REGARDING TOTAL PURCHASES MADE BY IT AND PAYMENTS MADE TO THE SAID CONCERN. THE ASSESSEE SUBMITTED AN APPLICATION UNDER RULE 46A OF I.T. RULES, 1962 FOR ADMISSION OF THE SAID DOCUMENTS. IT APPEARS THAT THOSE DOCUMENTS WERE FORWARDED TO THE ASSESSING OFFICER FOR COMMENTS IN VIEW OF THE PROVISIONS OF RULE 46A(3) O F THE ACT. IN RESPONSE TO THE LETTER OF THE CIT(A), THE ASSESSING OFFICER SUBMITT ED THAT AN ADEQUATE OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING THE COURSE OF ASS ESSMENT PROCEEDINGS AND SO FRESH EVIDENCE SHOULD NOT BE ADMITTED. IT IS ALSO C LEAR THAT ASSESSING OFFICER HAS NOT COMMENTED UPON THE MERITS OF THE ADDITIONAL EVI DENCE. THEREFORE, THERE IS NO MERIT IN THIS CONTENTION OF LD. DR THAT THE LD. CIT (A) HAS VIOLATED THE PROVISIONS OF RULE 46A OF THE ACT. IT IS CLEAR THAT THE CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AFTER AFFORDING AN OPPORTUNITY OF BEING HE ARD TO THE ASSESSING OFFICER. AS REGARD THE MERITS OF THE CASE, IT IS CLEAR THAT SALES MADE BY M/S GAIL TO THE ASSESSEE ARE RECORDED IN THE BOOKS OF ACCOUNT OF M/ S BANSAL IN THE NAME OF THE ASSESSEE. IT IS ALSO APPARENT FROM THE RECORD THAT ALL THE PAYMENTS MADE THROUGH CHEQUES AND ALL THE CREDIT NOTES CREDITED TO THE AS SESSEE HAVE BEEN RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND BY M/S BAN SAL IN THE LEDGER ACCOUNT OF THE ASSESSEE. THE LD. CIT(A) HAS CATEGORICALLY OBSE RVED THAT ALL THE PAYMENTS MADE TO M/S BANSAL THROUGH BANKING CHANNELS ARE REF LECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS IN THE BOOKS OF ACCOUNT OF M/S BANSAL. IT IS ALSO OBSERVED THAT M/S BANSAL HAD NOT TENDERED ANY AMOUNT RECEIVED FROM THE ASSESSEE TO M/S GAIL WHICH RESULTED INTO EXCESS AMO UNT RECOVERABLE TO THE EXTENT OF RS. 31,54,433/-. IT IS CLAIMED THAT THIS AMOUNT IS IN FACT BEEN PAID BY 5 THE ASSESSEE AND SHORT REMITTED BY M/S BANSAL TO M /S GAIL. THUS, CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT C ASE WE HOLD THAT LD. CIT(A) HAS PASSED THE ORDER AFTER CORRECTLY APPRECIATING T HE FACTS OF THE PRESENT CASE. THE FINDINGS GIVEN BY LD. CIT(A) HAS NOT BEEN CONTR OVERTED BY LD. DR. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) AND THE SAME IS HERBY CONFIRMED. 6. IN THE RESULT THE APPEAL IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 23.09.2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 23 RD SEPTEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR