The ITO, Ward-6(4), Ahmedabad V. N. Anmol Fab, Ahmedabad

ITA 1288/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8626 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 09-03-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 29-03-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: AJIT P SANDESARA
• Keywords: Unexplained cash credit; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : A HMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 1288/AHD./2007 ASSESSMENT YEAR : 2002-2003 INCOME TAX OFFICER, WARD-6(4), AHMEDABAD -VS.- N. ANMOL FAB, PROP. URMILABEN H. GIRI, AHMEDABAD (PAN : ACVPG 1163 D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.C. PANDIT, SR . D.R. RESPONDENT BY : SHRI AJIT P. SANDESARA O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 06.12.2006 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XII, AHMEDABAD FOR THE ASSESSMENT YEAR 2002-03. 2. GROUND NO. 1 OF THE APPEAL OF REVENUE READS AS U NDER :- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN REDUCING THE ADDIT ION MADE ON ACCOUNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNT FRO M RS.3,69,027/- TO RS.19,027/-. 3. THE FACTS RELATING TO CONTROVERSY INVOLVED IN TH E AFORESAID GROUND OF APPEAL ARE THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER DISCUSSED T HE ADDITION OF RS.3,69,027/- IN THE ASSESSMENT ORDER. HOWEVER, THE SAID ADDITION WAS NOT MADE WHIL E COMPUTING THE TOTAL INCOME. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) RESTRICTED THE SAID ADDITION TO RS.19,027/- FOR THE DETAILED REASONS GI VEN IN PARA 2.3 ON PAGE 3, WHICH IS RE-PRODUCED AS UNDER :- 2.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSION MADE BY THE LD. COUNSEL FOR THE APPELLANT. ON PERUS ING THE FACTS OF THE CASE, ASSESSMENT RECORD OF THE APPELLANT FOR AY 200 2-03 WAS OBTAINED FROM THE A.O. ON VERIFICATION OF THE CASE RECORDS, IT IS NOTICED THAT THE APPELLANT HAD FURNISHED ALL DETAILS AS REQUIRED BY THE A.O. IN THE ASSESSMENT PROCEEDINGS. FURTHER, THE A.O. HAS ALSO MENTIONED IN THE ASSESSMENT ORDER THAT BOOKS OF ACCOUNTS, CASH BOOK, LEDGER, PURCHASE AND SALES BILLS AND VOUCHERS FOR EXPENSES PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE TEST CHECKED WITH TH E DETAILS FILED BY THE ASSESSEE. THE APPELLANT FURNISHED BEFORE ME THE COPY OF ACCOUNT OF 2 ITA NO. 1288/AHD/2007 RANI ENTERPRISES, IN WHICH IT IS REFLECTED THAT APP ELLANT HAD REALIZED SUM OF RS.3,50,000/- FROM ONE OF ITS DEBTORS I.E. M/S. RANI ENTERPRISE BEING ITS OLD OUTSTANDING BALANCE. HOWEVER, THE APP ELLANT COULD NOT PRODUCE ANY DETAILS/ EVIDENCE FOR BALANCE AMOUNT OF RS.19,027/-. THE A.O. HAS ALSO NOT REJECTED THE BOOKS OF ACCOUNT OF THE APPELLANT WHILE MAKING SUCH ADDITION. IN VIEW OF FACTS BROUGHT OUT BY THE APPELLANT IN HIS SUBMISSION AS STATED ABOVE, I AM OF THE OPINION THAT AS THE APPELLANT HAS EXPLAINED THE SUM OF RS.3,50,000/- WITH SUPPORT ING EVIDENCE, THE SAME IS TREATED AS EXPLAINED. THEREFORE, I RESTRICT THE ADDITION MADE BY THE A.O. ON THIS COUNT TO RS.19,027/- AND THE BALAN CE ADDITION OF RS.3,50,000/- IS DELETED. THIS GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED. 4. AGGRIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, ON BEHALF OF REVENUE SHR I M.C. PANDIT, SR. D.R. APPEARED BEFORE US AND CONTENDED THAT BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS NOT FURNISHED THE EXPLANATION, THEREFORE, THE ADDITION WAS RIGHTLY MA DE. 6. ON THE OTHER HAND, SHRI AJIT M. SANDESARA, LD. C OUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD PRODUCED B OOKS OF ACCOUNTS ALONG WITH BANK A/C. AND BANK STATEMENT. THE BANK ACCOUNT IS A PART OF BOOKS OF ACCOUNTS AND ALL THE CREDIT AND DEBIT ENTRIES WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS . NO DISCREPANCY OR DEFECT IS POINTED OUT, THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSION ER OF INCOME TAX(APPEALS) BE UPHELD. 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS TRUE THAT IN THE ASSESSMENT ORDER, THE A.O. DISCUSSED THIS ADDITION, BUT IT WAS NOT MADE WHILE COMPUTING THE TOTAL INCOME. APART FROM T HIS, THE A.O. HAS MADE THE ADDITION OF RS.8,51,750/-. IT IS NOT KNOWN WHETHER THE A.O. DEC IDED NOT TO MAKE THIS ADDITION WHILE COMPUTING THE TOTAL INCOME BECAUSE HE HAS SEPARATEL Y ADDED RS.8,51,750/-. BE THAT AS IT MAY, WE ARE OF THE VIEW THAT IN THE IMPUGNED ORDER, THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR RESTRICTING THE ADDITIO N TO RS.19,027/-. WE, THEREFORE, DECLINE TO INTERFERE. THIS GROUND OF APPEAL IS REJECTED. 8. THE ONLY OTHER GROUND OF APPEAL RAISED BY THE RE VENUE IN ITS APPEAL IS AS UNDER :- 3 ITA NO. 1288/AHD/2007 THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XI I, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.8,51,950/- ON ACCOUNT OF UNEXPLAINED CRE DITS. 9. THE FACTS RELATING TO THIS ADDITION ARE THAT ON VERIFICATION OF BALANCE-SHEET, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN DEBTORS OF RS.23,05,794/- AND CREDITORS OF RS.23,70,536/-. IN RESPONSE TO NOTICE DATED 03.02.2 004, BEFORE THE A.O. THE ASSESSEE MERELY FILED COPIES OF ACCOUNT OF A FEW PARTIES STATING THAT ALL THE CREDITORS WERE OLD BALANCES. THE A.O. ON VERIFICATION OF THE COPIES OF ACCOUNT OBSERVED THAT OUT OF CREDITORS OF RS.23,05,794/-, RS.6,21,376/- WAS PERTAINING TO OLD BALANCE. BEFORE THE A.O., THE ASSESSEE HAS NOT FURNISHED ANY CLARIFICATION OF BALANCE CREDITORS OF RS.8,57,950/- , THEREFORE, HE TREATED RS.8,51,950/- AS UNEXPLAINED CREDITORS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 10. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS), THE ASSESSEE FURNISHED THE COPY OF BALANCE-SHEET FOR THE FINANCI AL YEARS 2000-01 AND 2001-02 IN ORDER TO ESTABLISH THAT CONTENTION OF A.O. IS BASELESS, VOID AND AGAINST THE FACT. AFTER CONSIDERING THE SUBMISSIONS OF LD. COUNSEL OF THE ASSESSEE, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION FOR THE DE TAILED REASONS GIVEN IN PARA 3.3 ON PAGE 5, WHICH IS AS UNDER :- 3.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSION MADE BY THE LD. COUNSEL FOR THE APPELLANT. FROM THE DETA ILS FILED BY THE APPELLANT, IT IS FOUND THAT CREDITORS ARE PERTAINING TO EARLIER YEAR S EXCEPT ONE CREDITOR NAMELY RADHIKA HAND PROCESSORS AMOUNTING TO RS.50,944/-. I N THE CASE OF RADHIKA HAND PROCESSORS, THE APPELLANT FILED COPY OF ACCOUN T FROM THE BOOKS OF THE APPELLANT BEFORE THE A.O. IN VIEW OF FACTS AND CIRC UMSTANCES STATED ABOVE, THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION OF RS.8,5 1,950/- ON ACCOUNT OF UNEXPLAINED CREDITORS, AS THE APPELLANT HAD ALREADY EXPLAINED THE POSITION OF CREDITORS BEFORE THE A.O. AND BEFORE ME BY FILING B ALANCE SHEET OF THE TWO YEARS. THE ADDITION THEREFORE, MADE BY THE A.O. WITHOUT AN Y BASIS IS DELETED. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. 11. AGGRIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 12. SHRI M.C. PANDIT, SR. D.R. POINTED OUT THAT THE ASSESSEE IS MERELY DOING JOB WORK. IT IS NOT KNOWN WHETHER THE CREDITORS AND DEBTORS ARE IN RESP ECT OF JOB CHARGES. HE FURTHER SUBMITTED THAT 4 ITA NO. 1288/AHD/2007 IT IS UNBELIEVABLE THAT JOB CHARGES CAN REMAIN OUTS TANDING FOR SUCH A LONG TIME BECAUSE THE TOTAL RECEIPT OF THE ASSESSEE IS ONLY RS.4,75,374/-. IN T HE EARLIER YEAR ALSO, TOTAL RECEIPT WERE ABOUT RS.5 LAKHS. THEREFORE, THE VIEW TAKEN BY THE ASSESSING O FFICER BE UPHELD. 13. AS AGAINST THIS, THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT THE ASSESSEE CAN MAKE AN ATTEMPT TO OBTAIN CONFIRMATION FROM ALL THE CREDITO RS BY FURNISHING COPIES OF ACCOUNTS, THE A.O. MAY VERIFY IT AND RE-ADJUDICATE THIS ADDITION AFRES H, IF REQUIRES. 14. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AU THORITIES BELOW. THE REASONING GIVEN BY THE A.O. IN THE ASSESSMENT ORDER FOR MAKING THIS AD DITION IS AS UNDER :- THE ASSESSEE WAS ASKED VIDE NOTICE DATED 3.2.2004 TO JUSTIFY THE DEBTORS AND CREDITORS, SINCE ITS RECEIPT WAS ONLY RS.4,75,374/- . THE ASSESSEE WAS ALSO ASKED TO FURNISH THE CONFIRMATION OF CREDITORS. THE ASSES SEE MERELY FILED COPIES OF ACCOUNT OF A FEW PARTIES STATING THAT ALL THE CREDI TORS WERE OLD BALANCE. THE VERIFICATION OF THE COPIES OF ACCOUNT REVEALED THAT OUT OF CREDITORS OF RS.23,05,794/-, RS.6,21,376/- WAS PERTAINING TO OLD BALANCE. NO CLARIFICATION REGARDING CREDITORS OF RS.8,57,950/- HAS BEEN FILED . SINCE THE ASSESSEE HAS NOT FILED CONFIRMATION OF CREDITORS, THE SAME IS TAXED HERE AS UNEXPLAINED CREDITORS. THE ADDITION ON THIS SCORE WORKS OUT TO RS.8,51,950 /-. PENALTY PROCEEDINGS U/S. 271(1)(C) ARE INITIATED FOR FURNISHING INACCURATE P ARTICULARS AND CONCEALMENT OF INCOME. 14.1. FROM THE REASONING GIVEN BY THE ASSESSING OFF ICER, IT IS CLEAR THAT BEFORE THE A.O., THE ASSESSEE HAS NOT FURNISHED CLARIFICATION REGARDING CREDITORS OF RS.8,57,950/-. WE, THEREFORE, SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME T AX(APPEALS) ON THIS ISSUE WITH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH THE COMP LETE CLARIFICATION, RELEVANT COPIES OF ACCOUNT DULY CONFIRMED, A.O. MAY EXAMINE THE SAME AND RE-AD JUDICATE THIS ADDITION AFRESH IN ACCORDANCE WITH LAW 15. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL OF THE REVENUE IS TREATED AS PARTLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 12.03.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12/ 03 / 2010 5 ITA NO. 1288/AHD/2007 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.