Sejai International Ltd, Uttar Pradesh V. ACIT, Meerut

ITA 1314/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9673 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 02-09-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 08-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Section: 80HHC; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI C.L. SETHI AND SHRI V.K. GUPTA ITA NO.1314/D/09 ASSESSMENT YEAR : 2001-02 M/S SEJAI INTERNATIONAL LTD., VS. A.C.I.T., 78 HOUSE, 82/1, GJS HOUSE, CIRCLE-2, MEERUT MEERUT PAN NO.AABCS9376H ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI ASHWANI KUMAR JAIN, RESPONDENT BY : SHRI KISHORE B., SR. DR O R D E R PER V.K. GUPTA, AM: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF THE ORDER OF CIT(A)- MEERUT IN APPEAL NO. 535/06-07 DATED 3 RD DECEMBER, 2008 FOR THE ASSESSMENT YEAR 2001-02. 2. WE HAVE HEARD BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL ON RECORD. 2.1 IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY TH E DECISION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION OF RS.14,89,000/- MADE BY ASSESSING ITA NO.2335/D/08 2 OFFICER IN RESPECT OF UNVERIFIED CREDITORS AND ALSO NOT GRANTING DEDUCTION U/S 80HHC THEREON. 2.2 THE FACTS, IN BRIEF, ARE THAT ORIGINAL ASSESSME NT HAS COMPLETED U/S 143(1). SUBSEQUENTLY, NOTICE U/S 148 WAS SERVED ON ASSESSEE ON 29.03.2006. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE DETAILS/CONFIRMATORY LETTERS FROM THE SUNDRY CREDITORS. THE ASSESSEE FAILED TO FURNISH THE CONF IRMATORY LETTERS. THE ASSESSING OFFICER ALSO NOTED THAT THE CONFIRMATORY LETTERS HAD ALSO NOT BEEN FILED BEFORE THE TAX AUDITOR, HENCE, THE ASSESSING OFFICER MADE AN ADDITION OF RS.14.89,000/- IN THE ACCOUNTS OF FOLLOWING THREE C REDITORS FOR THE AMOUNT OF ADDITION IN SUCH ACCOUNT IN THE YEAR UNDER CONSIDER ATION:- VIDE ORDER SHEET ENTRY DATED 24.11.2006 ASSESSEE WA S REQUIRED TO FILE NAME, ADDRESSES, PAN AND CONFIRMATION OF SU NDRY CREDITORS. ASSESSEE WAS UNABLE TO PRODUCE CONFIRMA TION BEFORE THE UNDERSIGNED. ALSO BEFORE AUDITOR NO CONFIRMATI ON WAS AVAILABLE AT THE TIME OF EXAMINATION OF BOOKS OF AC COUNTS. HENCE, IT IS CONCLUDED THAT THE CREDITORS ARE NOT V ERIFIABLE THEREBY THE ADDITION IN CREDITORS DURING THE YEAR I S ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 1. MEENAKSHI TEXTILES RS.6,89,000/- 2. KAMAL FABRICS RS.5,00,000/- 3. MAHAVIR TEXTILES RS.3,00,000/- 2.3 AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE LEARNED CIT(A) WHEREIN ASSESSEE CONTENDED THAT ASSE SSING OFFICER DID NOT ACT UPON THE ASSESSEES REQUEST TO ISSUE SUMMONS U/ S 131 OR CALL INFORMATION ITA NO.2335/D/08 3 U/S 133(VI) OF THE ACT. THE LEARNED CIT(A) DIRECTE D THE ASSESSING OFFICER TO DO SO. THE ASSESSING OFFICER ACCORDINGLY ISSUED NO TICES U/S 133(VI) OF THE ACT WHICH, AS PER ASSESSING OFFICER CAME BACK WITH THE OBSERVATIONS OF THE POSTAL AUTHORITIES THAT CREDITORS DID NOT EXIST WIT H ADDRESS GIVEN BY THE ASSESSEE. THE LEARNED CIT(A) ACCORDINGLY CONFIRMED THE ACTION OF ASSESSING OFFICER TREATING SUCH CREDITORS AS BOGUS. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 2.4 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WAS ENGAGED IN THE EXPORT ACTIVITIES AND THE VERIFICATI ON EXERCISE WAS DONE AFTER 8 YEARS FROM THE DATE OF TRANSACTIONS. AT THIS STA GE, IT WAS POINTED OUT TO HIM THAT THESE TRANSACTIONS TOOK PLACE IN FINANCIAL YEA R 2000-01 AND FROM THE SCHEDULE OF SUNDRY CREDITORS ANNEXED TO THE BALANCE SHEET AT PAGE 25 (THE PAPER BOOK). IT WAS NOTED THAT THE ASSESSEE WAS HA VING LARGER TRANSACTIONS FROM THESE PARTIES BECAUSE THE OUTSTANDING BALANCE WAS MUCH MORE THE AMOUNT OF ADDITION MADE BY THE ASSESSEE. THE LEARN ED COUNSEL COULD NOT GIVE ANY SATISFACTORY REPLY TO THIS QUERY. HOWEVER , HE CONTINUED TO STRESS ON THE FACT THAT DUE TO TIME GAP, THE NOTICES U/S 133( VI) COULD NOT BE SERVED ON THE ADDRESS AVAILABLE WITH THE ASSESSEE. HE FURTHE R CONTENDED THAT IN ANY CASE, THESE CREDITORS WERE IN CONNECTION WITH THE P URCHASES MADE IN RESPECT ITA NO.2335/D/08 4 OF EXPORT ACTIVITIES, HENCE, THIS ADDITION WAS SUST AINED THEN THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION THEREON U/S 80HHC OF THE ACT . 2.5 THE LEARNED DR, ON THE OTHER HAND, PLACED STRON G RELIANCE ON THE ORDER OF LEARNED CIT(A). 2.6 WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, ALSO PERUSED THE MATERIAL ON RECORD AND THE ORDERS OF TH E AUTHORITIES BELOW. IT IS NOTED THAT THE IMPUGNED ADDITION HAD BEEN MADE ONLY WITH RESPECT TO THE AMOUNT OF ADDITIONS OCCURRING IN THE ACCOUNT OF THR EE CREDITORS IN THE YEAR UNDER CONSIDERATION. IT IS ALSO NOTED THAT THE OUT STANDING BALANCE IN THE ACCOUNT OF SUCH CREDITORS IS MUCH HIGHER, HENCE, TH E ASSESSEE CANNOT BE SAID TO HAVE NOT BEEN IN TOUCH WITH SUCH CREDITORS. I T IS ALSO NOTED THAT NOTICES U/S 133(VI) HAVE BEEN ISSUED AT THE INSTANCE OF THE ASSESSEE, HENCE, WHICH HAVE REMAINED UNSERVED. THUS, NON SERVICE OF SUCH NOTICE CAN RESULT INTO AN ADVERSE INFERENCE AGAINST THE ASSESSEE. IT IS ALSO NOTED THAT THE ASSESSEE DID NOT MAKE ANY CLAIM OF DEDUCTION THEREON U/S 80HHC. IN THIS REGARD, WE ALSO FIND THAT THE ASSESSEE HAS NOT PRODUCED ANY MATERIA L ON RECORD TO SHOW THAT THE GOODS PURCHASED BY THE ASSESSEE FROM THESE CRED ITORS WERE ACTUALLY USED IN THE BUSINESS OF EXPORT OF THE ASSESSEE, HENCE, T HE ASSESSEES CLAIM FOR DEDUCTION U/S 80HHC IF THE IMPUGNED ADDITION IS SUS TAINED, CANNOT BE ITA NO.2335/D/08 5 ACCEPTED. THUS, IN VIEW OF THESE FACTS AND CIRCUMS TANCES OF THE CASE, WE REJECT BOTH THE GROUNDS OF THE ASSESSEE. 3. IN RESULT, APPEAL FILED BY THE ASSESSEE IS DISMI SSED. 4. ORDER PRONOUNCED IN THE OPEN COURT ON -09-2009 . ( C.L. SETHI ) ( V.K. GUPTA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : /09/2009 NS : COPY FORWARDED TO : - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY DY. REGISTRAR, ITA NO.2335/D/08 6