Bhupinder Singh Sohal, Ludhiana V. ITO, W-1(1), Ludhiana

ITA 1294/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1529 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-06-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 11-10-2018
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CH A, CHANDIGARH .., !' '# $, % &' BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, JM ITA NO. 1294/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BHUPINDER SINGH SOHAL PROP. M/S SUPER TOOLS INDIA, D-575, PHASE-II, FOCAL POINT, LUDHIANA THE ITO W-1(1) LUDHIANA PAN NO: AFIPS4486R APPELLANT RESPONDENT !' ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE #!' REVENUE BY : SHRI ASHISH ABROL, CIT DR $ %! & DATE OF HEARING : 12/06/2019 '()*! & DATE OF PRONOUNCEMENT : 12/06/2019 &(/ ORDER PER N.K. SAINI, VICE PRESIDENT THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-1, LUDHIANA DT. 09/08/2018. 2. IN THE PRESENT APPEAL, ASSESSEE HAS RAISED ONLY ONE GROUND WHICH READ AS UNDER: THE HON'BLE CIT (APPEALS)-1 HAS GROSSLY NEGLECTED THE CLAIM OF THE ASSESSEE THAT THE AMOUNT RECEIVED FROM OVERSEAS BUYERS ARE ONLY A DVANCES RECEIVED AND IT IS NOT AN INCOME UNDER ANY CIRCUMSTANCES. THE ASSESSEE HAS EVEN MADE EXPORT OF GOODS TO THOSE BUYERS FROM WHOM ADVANCE WAS RECEIVE D AND THE LD. A.O. HAS TREATED IT INCOME AND THE HON'BLE CIT(APPEALS)-1 HA S REFUSED TO GIVE ANY RELIEF TO THE ASSESSEE ON APPEAL. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. REC EIVED INFORMATION FROM THE ADDITIONAL DIRECTOR OF INCOME TAX (INV-1) LUDHIANA TO THE EFFECT THAT THE ASSESSEE HAD RECEIVED 14 REMITTANCES AS EXPORT ADVA NCE AGGREGATING TO RS. 300.53 LAKHS IN HIS CURRENT ACCOUNT MAINTAINED WITH INDUSIND BANK, URBAN ESTATE, LUDHIANA, DURING THE CURRENT FINANCIAL YEAR 2012-13 RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IT WAS ALSO COMMUNICATED TO THE A.O. THAT THE INFORMATION GATHERED BY THE INVESTIGATION WING REVE ALED THAT DURING THE CURRENT PERIOD UNDER CONSIDERATION, THE ASSESSEE HAD NOT MA DE ANY EXPORT AGAINST THE PURPORTED ADVANCES AND THE INDUSIND BANK ALSO CONFI RMED THAT NO EXPORT RELATED DOCUMENTS WERE SUBMITTED QUA THE 14 FOREIGN REMITTANCES FOR THE 2 SETTLEMENT OF EXPORT ACCOUNT. THE A.O. ON THE BASIS OF THE AFORESAID INFORMATION AND AFTER ANALYZING THE RETURN OF INCOME OF THE ASS ESSEE FORMED A PRIMAFACIE BELIEF OF ESCAPEMENT OF INCOME FROM TAXATION TO THE TUNE OF RS. 300.41 LACS AND THEREAFTER ISSUED A NOTICE UNDER SECTION 148 OF THE ACT. THE A.O. MADE THE ADDITION OF RS. 3,23,31,401/- BY OBSERVING THAT THE ASSESSEE COULD NOT BRING ANYTHING WHICH SUPPORTED HIS VIEW THAT TEN YEARS WE RE AVAILABLE FOR EXPORT IN HIS CASE. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) AND HAD SUBMITTED THAT THE ADVANCES HAD BEEN RECEIVED FROM OVERSEAS PARTY FOR EXPORT OF GOODS WHICH COULD NOT BE EFFECTED AND HENCE REMA INED AS ADVANCES IN THE ACCOUNTS. THE ASSESSEE ALSO FURNISHED SOME CORRESPO NDENCES TO SHOW THAT THE OVERSEAS PARTIES WERE THREATENING TO TAKE NECESSARY REMEDIAL ACTION FOR NOT HAVING RECEIVED THE SUPPLIES IN RETURN FOR ADVANCES REMITTED BY THEM. THE LD. CIT(A) HOWEVER DID NOT FIND MERIT IN THE SUBMISSION OF THE ASSESSEE AND SUSTAINED THE ADDITION MADE BY THE A.O. BY OBSERVING IN PARA 6 OF THE IMPUGNED ORDER AS UNDER: 6 . AFTER HEARING THE APPELLANT THROUGH HIS AUTHORISED REPRESENTATIVE AND ALSO CAREFULLY PERUSING THE DOCUMENTS ADDUCED BY HIM AS ALSO THE OBTAINING FACTS BROUGHT OUT IN THE IMPUGNED ORDER OF ASSESSMENT, IT IS APPARENT THAT THE APPELLANT HAS NO CREDIBLE EXPLANATION REGARDING THE PURPOSE FOR WHICH SUCH PURPORTED ADVANCES WERE RECEIVED. NOR THE SOURCE OF SUCH 'ADVANCES' COULD BE EXPLAINED EITHER TO THE SATISFACTION OF THE AO OR T O THIS APPELLATE AUTHORITY. IT IS A FACT ON RECORD THAT THE APPELLANT DID NOT HAVE ANY WRITTEN AGREEMENT WITH THE OVERSEAS PARTIES FOR EXPORT OF GOODS. THERE IS NOTH ING ON RECORD OR WITH THE APPELLANT TO DEMONSTRATE THAT GOODS OF SOME SPECIFI CATIONS WERE DESIRED TO BE RECEIVED BY THE OVERSEAS PARTIES WHO PURPORTED TO H AVE MADE REMITTANCES IN THE ACCOUNT OF THE APPELLANT. THE ENTIRE AMOUNT OF MONE Y WAS ALSO SEEN TO HAVE BEEN IMMEDIATELY TRANSFERRED TO AN ASSOCIATE COMPAN Y BY THE NAME M/S SUPER THREADING (INDIA) PVT. LTD. EITHER ON THE SAME DAY OR THE FOLLOWING DAY OF RECEIPT OF THE PURPORTED EXPORT REMITTANCES. THERE HAS ALSO BEEN NO EXPORT TILL DATE AGAINST SUCH ADVANCES. THE APPELLANT COULD NOT EVEN EXPLAIN THE NON- COMPLIANCE TO THE EXTANT REGULATORY GUIDELINES REGA RDING THE OBLIGATION OF THE EXPORTER TO MAKE EXPORTS AGAINST ADVANCE WITHIN A Y EAR FROM THE DATE OF REMITTANCES AND SUBMISSION OF EXPORT DOCUMENTS TO T HE AUTHORISED DEALER BANK WITH GR/SDF/PP FORMS WITHIN 21 DAYS FROM THE DATE O F SHIPMENT. THE DOCUMENTS ADDUCED DURING THE APPELLATE PROCEEDINGS AIMED AT S HOWING THAT THE OVERSEAS PARTIES ARE NOW DEMANDING THE MONEY BACK ARE PRIMA FACIE UNRELIABLE AND INSPIRE NO-CONFIDENCE. THEY ARE MERELY COPIES OF CO MPUTER-GENERATED LETTERS. THE APPELLANT, THUS, MISERABLY FAILS IN DEMONSTRATI NG ITS BONAFIDES REGARDING THE CLAIM OF HIS BEING AN EXPORTER AND RECEIVING REMITT ANCES AS 'ADVANCES' FOR SUCH EXPORTS, WHICH EXPORTS NEVER MATERIALISED. NO FAULT CAN, THUS, BE FOUND IN THE ACTION OF THE AO IN TREATING THE AFORESAID REMITTAN CES AS UNEXPLAINED CREDIT AND BRINGING THE SAME TO TAX. THE GROUND OF APPEAL PREF ERRED BY THE APPELLANT IS, THUS, DISMISSED EX CATHEDRA. IT IS ORDERED ACCORDIN GLY. 5. NOW THE ASSESSEE IS IN APPEAL. 3 6. THE ASSESSEE HAD FURNISHED AN APPLICATION DT. 29 /05/2019 UNDER RULE 29 OF THE ITAT RULES 1963, REQUESTING FOR ADMISSION OF TH E ADDITIONAL EVIDENCES, THE SAID APPLICATION READS AS UNDER: IT IS SUBMITTED THAT THE ABOVE SAID CASE HAD BEEN FIXED EARLIER AND NOW THE SAME HAS BEEN FIXED FOR 10TH OF JUNE 2019 AND IN TH E PAPER BOOK WHICH WE FILED DURING THE COURSE OF LAST HEARING, CERTAIN ADDITION AL EVIDENCES HAVE BEEN FILED FROM PAGES 7 TO 17 OF THE PAPER BOOK FOR WHICH, THE REQUEST IS BEING MADE FOR ADMISSION AS ADDITIONAL EVIDENCE UNDER RULE 29. 2. IT SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE EXPORT OF CERTAIN GOODS AND FOR THAT, CERTAIN ORDERS FOR SUPPLY OF MATERIAL WERE RE CEIVED FROM DIFFERENT PARTIES FROM ABROAD AND ADVANCES IN CONSEQUENCE TO THAT WER E ALSO RECEIVED FROM THREE PARTIES NAMELY TASA RESOURCES & TRADING PTE. LTD, TYREN TRADING RESOURCES LLC AND FROM I.S. BUILDING MATERIALS TRADING. THE T OTAL SUM OF RS. 3,23,31,401/- WAS RECEIVED FROM ABOVE SAID THREE PARTIES AS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE CONFIRMATION FROM THE ABOVE SAID PARTIES AND ALSO THAT, WHETHER, ANY MATERIAL HAVE BEEN SUPPLIED IN THE YEAR UNDER CONSI DERATION OR IN THE SUBSEQUENT YEARS. THE ASSESSEE COULD NOT FILE ANY CONFIRMATION BEFORE THE ASSESSING OFFICER, BUT, THEN BEFORE THE CIT (A), CONFIRMATION FROM THE PARTIES WERE FILED, IN WHICH, THEY HAD CONFIRMED ABOUT THE ADVANCE BEING SENT TO THE ASSESSEE FOR THE PURCHASE OF MATERIAL. HOWEVER, THE CIT(A) CONFIRMED THE ADDITION AND THAT MATTER IS NOW BEFORE YOUR HONOURS. 4. IN FACT, THE ASSESSEE IS A SENIOR CITIZEN AGED A BOUT 68 YEARS AND PROP, OF 'SUPER TOOLS INDIA' AND THE GOODS AGAINST SUCH ORDERS/ADVA NCES COULD NOT BE SUPPLIED IN THE PAST BECAUSE THERE HAS BEEN THEFT IN THE FAC TORY AND ALL THE COMPUTERS AND CERTAIN OTHER RECORDS WERE STOLEN FROM THE BUSI NESS PREMISES. THEREAFTER, THE SONS OF THE AGED ASSESSEE, ALSO DESERTED HIM AND TH ERE WAS DELAY IN SUPPLY OF MATERIAL TO THESE PARTIES AND THE ASSESSEE TOOK SOM E TIME TO SETTLE HIS BUSINESS AGAIN AND ON ACCOUNT OF ABOVE SAID FACTS AND CIRCUM STANCES, THE GOODS AGAINST SUCH ORDERS COULD NOT BE SUPPLIED TO SUCH P ARTIES, BUT ALL THE PARTIES HAD BEEN INSISTING UPON FOR SUPPLY OF MATERIAL. THE FAC TS HAVE BEEN MENTIONED IN THE ORDER OF ASSESSING OFFICER AT PAGE 7. 5. FURTHER, THE ASSESSEE'S WIFE HAS ALSO NOT BEEN KEEP ING GOOD HEALTH AND HAS BEEN HOSPITALIZED AT VARIOUS INTERVAL OF TIME A S PER NECESSARY EVIDENCE BEING ENCLOSED HEREWITH IN RESPECT OF THE FACT THAT SHE H AD OPERATED EVEN AND REMAINED IN HOSPITAL AND THEREAFTER CERTAIN COMPLIC ATIONS HAD BEEN THERE. ALSO, THE ASSESSEE HIMSELF HAD BEEN HOSPITALIZED ON ACCOU NT OF DENGUE FEVER IN THE YEAR 2017 AS PER NECESSARY EVIDENCE BEING ENCLOSED HEREWITH AND DUE TO WHICH, THE ASSESSEE COULD NOT SUPPLY THE MATERIAL TO THE P ARTIES. THE ASSESSING OFFICER HAS MENTIONED AT PAGE 8 OF THE ORDER THAT SINCE THE ASSESSEE HAS NEITHER FURNISHED THE PROOF OF EXPORT MADE AGAINST SUCH AMO UNT RECEIVED AS ADVANCES OR REFUND OF THE EXPORT ADVANCES IN RESPECT OF THE REMITTANCES RECEIVED AND, THEREFORE, MADE THE ADDITION U/S 68 OF THE INCOME T AX ACT. 6. THE ASSESSEE HAS NOW BEEN ABLE TO MAKE PART OF E XPORT TO ONE PARTY NAMELY TASA RESOURCES & TRADING PTE., VERY RECENTLY , FOR WHICH NECESSARY EVIDENCES HAVE BEEN ENCLOSED FROM PAGES 7 TO 27 OF THE PAPER BOOK AND THE NECESSARY DEBIT HAVE BEEN TO THE ACCOUNT OF THE SAI D PARTY, NAMELY TASA RESOURCES & TRADING PTE. LTD.. THESE EVIDENCES GO T O THE ROOT OF DECIDING THE ISSUE IN HAND AND RELEVANT FOR CONSIDERATION IN THE ABOVE SAID APPEAL. THE TOTAL VALUE OF EXPORTS MADE TO TASA RESOURCES ET TRADING PTE. LTD., IS RS. 42,74,290/- AND NECESSARY DEBIT HAS BEEN MADE THE ACCOUNT OF TH E PARTY AS PER PAPER BOOK PAGES 5-6 ALREADY SUBMITTED. 7. AS STATED ABOVE, THAT THESE EVIDENCES COULD NOT BE SUBMITTED EARLIER ON ACCOUNT OF THE FACTS AS SUBMITTED IN PARA 4 & 5 ABO VE AND WHICH IS EVIDENCED 4 BY THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICE R AS WELL, WHICH HAVE BEEN REPRODUCED IN THE ORDER AT PAGE 7. THESE EVIDENCES BECAUSE OF THE ABOVE SAID FACTS AND CIRCUMSTANCES MAY, PLEASE, BE ADMITTED AS ADDITIONAL EVIDENCES BY VIRTUE OF POWER VESTED WITH YOUR KIND HONOUR AND IN THE FOLLOWING MONTHS, CERTAIN MORE EXPORTS ARE LIKELY TO BE MADE IN THE NEAR FUTU RE AND, AS SUCH, IT IS REQUESTED THAT THE MATTER MAY, PLEASE, BE RESTORED TO THE FIL E OF THE ASSESSING OFFICER BY ADMITTING THE ABOVE SAID EVIDENCES IN ORDER TO VERI FY THE ABOVE SAID CONTENTION OF THE ASSESSEE AND IN THE MEANWHILE, FURTHER EXPOR TS SHALL BE MADE. BESIDES, THE EVIDENCES WERE FILED BEFORE THE CIT(A) AS CONFIRMAT ION FROM THE PARTIES AND WHICH HAS BEEN DISCUSSED AT PAGES 5 -6 OF THE ORDER OF CIT(A). THE CIT(A) HAS SUMMARILY NOT CONSIDERED SUCH DOCUMENTARY EVIDENCES AND NOW IN VIEW OF PART EXPORTS MADE TO ONE PARTY, IT IS REQUESTED THAT MAT TER REQUIRES RECONSIDERATION AT THE LEVEL OF ASSESSING OFFICER AND, AS SUCH, IN THE INTEREST OF JUSTICE AND EQUITY, THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. 8. WE RELY ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF SH. TEK RAM AS REPORTED IN 357 ITR 133 AND ALSO IN THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKTA METAL WORKS AS REPO RTED IN 336 ITR 555, WHEREIN, IT HAS BEEN HELD THAT IF CERTAIN DOCUMENTS ARE OF SOME RELEVANCE FOR DECIDING THE APPEAL, THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED AND IN THE PRESENT CASE, SUCH EVIDENCES GO TO THE ROOT OF DECIDING THE ISSUE IN HAND. 7. THE ADDITIONAL EVIDENCES BY THE ASSESSEE ARE PLA CED AS PAGE NO. 7 TO 17 OF THE ASSESSEES PAPER BOOK WHICH ARE THE COPIES O F THE LEDGER ACCOUNT OF TASA RESOURCES & TRADING PTE. LTD. IN THE BOOKS OF THE ASSESSEE FROM 01/04/2018 TO 31/03/2019 AND THE COMPLETE EXPORT DOCUMENTS INC LUDING E-BRC, PURCHASE LIST, INVOICE, SHIPPING BILLS EVIDENCING THE EXPORT MADE BY THE ASSESSEE TO TASA RESOURCES & TRADING PTE. LTD. 8. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTS OF THE APPLICATION DT. 29/05/2019 AND REQUESTED TO ADMIT THE ADDITIONAL EVIDENCES. 9. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR OBJECTED THE ADMISSION OF ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE AND STATED THAT THE AMPLE OPPORTUNITIES OF BEING HEARD WERE GIVEN BY THE A.O. AND THE LD. CIT( A) BUT THE ASSESSEE HAD NOT FILED ANY SUCH EVIDENCES BEFORE THEM THEREFORE THE EVIDENCES PRODUCED NOW MAY NOT BE ADMITTED. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE ASSESSEE HAD FURNISHED THE A DDITIONAL EVIDENCES AND ALSO NARRATED THE REASONS AS TO WHY THOSE WERE NOT FURNISHED EARLIER BEFORE THE A.O. OR THE LD. CIT(A), THE REASONS WERE MAINLY HEA LTH OF HIS WIFE WHO REMAINED IN HOSPITAL, HE ALSO SUFFERED FROM DENGUE FEVER AND COULD PROCURE THE NECESSARY EVIDENCES FROM M/S TASA RESOURCES & TRADING PTE. LT D. RECENTLY. THE ADDITIONAL EVIDENCES NOW FURNISHED BY THE ASSESSEE ALONGWITH O THER EVIDENCES FURNISHED 5 BEFORE THE LD. CIT(A) ARE PLACED AT PAGE NO. 1 TO 2 8 OF THE ASSESSEES PAPER BOOK, THOSE DOCUMENTS GO TO THE ROOT OF THE MATTER AND ARE RELEVANT TO RESOLVE THE PRESENT CONTROVERSY. WE THEREFORE CONSIDERING T HE TOTALITY OF THE FACTS ADMIT THE ADDITIONAL EVIDENCES AND SINCE THOSE EVIDENCES WERE NOT AVAILABLE TO THE AUTHORITIES BELOW, WE THINK IT APPROPRIATE TO SET A SIDE THIS CASE BACK TO THE FILE OF THE A.O. TO BE ADJUDICATED AFRESH IN ACCORDANCE WIT H LAW AFTER CONSIDERING THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE AND BY GIVING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/06/2019). SD/- SD/- '# $ .., (SANJAY GARG ) ( N.K. SAI NI) % &'/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 12/06/2019 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR