M/s. Select Hardware Stores, CHENNAI V. Additional CIT, CHENNAI

ITA 1297/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4908 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K RAVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER A ND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1297/MDS/2010 ASSESSMENT YEAR : 2005-06 M/S. SELECT HARDWARE STORES, 14/80, SEMBUDOSS STREET, MANNADY, CHENNAI-600 001. V. THE ADDITIONAL COMMISSIONER OF INCOME-TAX, BUSINESS RANGE-IX, CHENNAI. (PAN: AATFS3616B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RAVI RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-XII, CHENNAI IN ITA NO. 251/07-08 DATE D 26-02-2010 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI K. RAVI, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF T HE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE HAD RECEIVED LOANS FROM 19 LOAN CREDITORS FOR A TOT AL AMOUNT OF ` 25 LAKHS. IT WAS I.T.A. NO.1297/MDS/2010 2 THE SUBMISSION THAT THE ASSESSEE HAD PRODUCED THE C ONFIRMATION LETTERW OF ALL THE LOAN CREDITORS. IT WAS THE SUBMISSION THAT 4 OF TH E LOAN CREDITORS HAD ALSO BEEN PRODUCED. THE ASSESSEE WAS UNABLE TO PRODUCE THE B ALANCE CREDITORS BEFORE THE ASSESSING OFFICER. CONSEQUENTLY, THE ASSESSING OFF ICER HAD TREATED THE UNSECURED LOANS AS THE INCOME OF THE ASSESSEE. IT WAS THE SU BMISSION THAT ALL THE LOAN CREDITORS WERE INCOME-TAX ASSESSEES. IT WAS THE SU BMISSION THAT THE ASSESSEE MAY BE GRANTED ONE MORE OPPORTUNITY TO SATISFY THE ASSESSING OFFICER IN REGARD TO THE LOAN CREDITORS. 4. IN REPLY, THE LEARNED DR SUBMITTED THAT THE ASSE SSEE WAS GIVEN ADEQUATE OPPORTUNITY AND THE ASSESSEE HAD FAILED TO TAKE FUL L USE OF THE OPPORTUNITY. IT WAS THE SUBMISSION THAT EVEN THE LEARNED CIT(A) HAD CAT EGORICALLY GIVEN A FINDING THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY I N SOME OF THE CASES BY NOT PRODUCING THE CREDITORS BEFORE THE ASSESSING OFFICE R AND THE GENUINENESS OF THE TRANSACTION WAS UNDER CLOUD AND THE CREDITWORTHINES S OF THE CREDITORS WERE NOT AT ALL PROVED. IT WAS THE SUBMISSION THAT THE ASSESSE E ITSELF HAD SPECIFICALLY MENTIONED THAT SOME OF THE CREDITORS WHO ARE PARDA NASHIN WOMEN COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. HE VEHEMENT LY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER AS ALSO THE ORDER OF THE LEARNED CIT(A) CLEAR LY SHOWS THAT THE ASSESSEE HAS BEEN GRANTED SUFFICIENT OPPORTUNITY TO PRODUCE THE CREDITORS. THE ASSESSING I.T.A. NO.1297/MDS/2010 3 OFFICER HAD ASKED FOR THE LIST OF LOAN CREDITORS AL ONG WITH THEIR FULL ADDRESSES AND CONFIRMATION AND THE SAME WERE FURNISHED BY THE ASS ESSEE. THE ASSESSING OFFICER HAD ISSUED SUMMONS ON 21.11.2006 ASKING THE CREDITO RS TO APPEAR BEFORE HIM ON THE SPECIFIED DATE AND TIME. ON 15.12.2006 THE ASS ESSEE WAS GIVEN AN OPPORTUNITY TO EXPLAIN AND OUT OF THE SUMMONS ISSUE D, 9 LOAN CREDITORS HAD SENT THEIR CONFIRMATIONS BETWEEN 5.1.2007 AND 9.1.2007 B Y REGISTERED POST. 4 OF THE LOAN CREDITORS HAD BEEN PRODUCED BEFORE THE ASSESSI NG OFFICER BY THE ASSESSEE. THUS OUT OF THE 19 LOAN CREDITORS 4 HAD APPEARED AN D 9 HAD SENT CONFIRMATION LETTERS. THE PAPER BOOK FILED BY THE ASSESSEE BEFO RE US ALSO CLEARLY SHOWS THAT CONFIRMATION LETTERS OF 19 PERSONS HAD BEEN PRODUCE D AND THAT ALL THE 19 PARTIES ARE INCOME-TAX ASSESSEES. ALL THE CREDITORS ARE HAV ING PERMANENT ACCOUNT NUMBERS (PAN). ONCE IT IS ESTABLISHED THAT THE LOA N CREDITORS ARE HAVING PAN, THEN THE IDENTITY OF THE CREDITORS CANNOT BE DISPUT ED. NOW WHAT REMAINS TO BE PROVED WOULD BE THE GENUINENESS OF THE TRANSACTION AS ALSO THE CREDITOWORTHINESS OF THE LOAN CREDITORS. IN THE INTEREST OF JUSTICE WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GRANTED ONE MORE OPPORTUNITY TO PROVE THE GENUINENESS OF THE TRANSACTION AS ALSO THE CREDITWORTHINESS OF THE LOAN CREDITORS. IN THE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL IN REGARD T O THE LOAN CREDITORS IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDIC ATION. THE ASSESSEE SHALL SUBSTANTIATE ITS CLAIM IN REGARD TO THE LOAN CREDIT ORS WITH ADEQUATE PROOF AS ALSO PRODUCING THE LOAN CREDITORS AS CALLED FOR BY THE A SSESSING OFFICER. THE ASSESSING I.T.A. NO.1297/MDS/2010 4 OFFICER SHALL GRANT THE ASSESSEE ADEQUATE OPPORTUNI TY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. IN THE CIRCUMSTANCES, THE A PPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 15/06/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 15 TH JUNE, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE