M/S Bhandary industrial Metals Pvt. Ltd., Panaji V. ACIT, Circle - 1(1), Panaji

ITA 134/PAN/2013

• Counselvise Citation: 13424114 RSA 2013
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 1998-1999
• Appeal Filed On: 13-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NISHANT K
• Keywords: Unexplained cash credit; Peak credit; Additional evidence; Assessment record
• Section: 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 134/PNJ/2013 : (ASST. YEAR : 1998 - 99) M/S. BHANDARY INDUSTRIAL METALS (PVT.) LTD., C/O. AYIKIDA TOOLS P. LTD., F - 409, RANI PRAMILA ARCADE, 18 TH JUNE ROAD, PANAJI, GOA PAN : AAACB7726P (APPELLANT) VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), PANAJI, GOA. (RESPONDENT) ITA NO. 176/PNJ/2013 : (ASST. YEAR : 1998 - 99) ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), PANAJI, GOA. (APPELLANT) VS. M/S. BHANDARY INDUSTRIAL METALS (PVT.) LTD., C/O. AYIKIDA TOOLS P. LTD., F - 409, RANI PRAMILA ARCADE, 18 TH JUNE ROAD, PANAJI, GOA PAN : AAACB7726P (RESPONDENT) REVENUE BY : NISHANT K., DR ASSESSEE BY : NONE DATE OF HEARING : 21/08/2013 DATE OF PRONOUNCEMENT : 28 /08/2013 O R D E R PER P.K. BANSAL : 1. BOTH THE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORDER OF CIT(A) DT. 23.4.2013. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH NOTICE HAS BEEN DULY SENT BY REGISTERED A.D WHICH WAS DULY RECEIVED. APPLICATION FOR ADJOURNMENT WAS FILED WHEN THE DEPA RTMENT APPEAL WAS FIXED ON 13.8.2013 AND ACCORDINGLY THE APPEAL WAS ADJOURNED AND THE DEPARTMENTS APPEAL WAS ALSO ADJOURNED FOR 21.8.2013 AS THE ASSESSEES APPEAL WAS FIXED FOR HEARING. 2 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) 2. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AUTHORITY BELOW ERRED IN HOLDING THAT THERE WAS NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER WITH REGARD TO ISSUE OF NOTICE U/S 148. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT - APPEALS ERRED IN CONFIRMING THE ADDITION OF RS.2,94,500 AS UNEXPLAINED CREDIT FOR THE YEAR IN THE CASE OF M/S. J.J. METALS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT - APPEALS ERRED IN CONFIRMING THE ADDITION OF RS.3,00,000 AS UNEXPLAINED CRED IT FOR THE YEAR IN THE CASE OF M/S. POONAM REALTORS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AUTHORITIES BELOW, WHILE CONFIRMING THE ABOVE ADDITIONS, ERRED IN NOT CONSIDERING THAT ALL TRANSACTIONS WERE THROUGH BANKING CHANNELS ONLY AND PAYMENTS WERE RECEIVED VIA ACCOUNT PAYEE CHEQUES. WHILE THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL), PANAJIS ORDER IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN ALLOWING RELIEF IN THE CASE OF M/S. J J METALS, WHEREIN THE AO HAS ADDED BACK THE UNPROVED CREDITORS ONLY AFTER PROVIDING SUFFICIENT OPPORTUNITIES EITHER AT THE TIME OF REGULAR ASSESSMENT OR AT THE TIME OF SET ASIDE ASSESSMENT. 3. THE LD. C OMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ALLOWING RELIEF IN THE CASE OF POONAM REALATORS. THE CONFIRMATION DATED 18.12.2003 SUBMITTED BY ASSESSEE DURING REGULAR ASSESSMENT AND WHICH PRODUCED ON 26.10.2009 WHILE SET ASIDE ASSESSMENT ARE UNDER INDIVIDUAL PAN AND BEARING DIFFERENT SIGNATURE BEING A PROPRIETORSHIP. HOWEVER, THE LD. CIT(A) HAS ALLOWED THE RELIEF AFTER ACCEPTING CONFIRMATION FROM POONAMREALATORS LIMITED, WHICH IS SUBMITTED AT THE TIME OF APPEAL PROCEEDINGS WHICH IS CONTRARY TO THE FACTS OF T HE CASE. 4. THE LD. CIT(A) ERRED TO NOTE THAT, WHILE COMPLETING ASSESSMENT THE ASSESSEE HAS SUBMITTED THE CONFIRMATION FROM POONAM REALATORS AS BEING A PROPRIETORSHIP ON 18.12.2003 AND ON 26.10.2009, WHICH IS NOW ALLOWED BY CIT(A) AFTER CONSIDERING CREDIT OF RS.3,00,000/ - UNDER THE BOOKS OF POONAMREALATORS LIMITED (A COMPANY IN STATUS AS PER PAN) 5. THE LD. CIT(A) IS ERRED IN ALLOWING RELIEF IN THE CASE OF M/S. STEEL EX., WHERE IN THE AO HAS TREATED IT AS UNDISCLOSED INCOME AFTER ASSESSEE FAILED TO PROVE SOURCE S AND 3 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) GENUINENESS OF THE TRANSACTION AND WHILE DOING SO THE AO HAS ADOPTED PEAK CREDIT OF RS.44,46,725/ - AS THE UNDISCLOSED INCOME. 6. THE LD. CIT(A) IS ERRED IN ALLOWING SUBMISSION OF ADDITIONAL EVIDENCE, WHICH WAS NOT BROUGHT AT THE TIME OF ASSESSMENT OR S ET ASIDE ASSESSMENT, WHEREIN ASSESSEE IS NOT ENTITLED TO PRODUCE ANY ADDITIONAL EVIDENCE BEFORE CIT(A) AS PER RULE 46A OF THE IT RULES 1962. 7. THE LD. CIT(A) HAS FAILED TO NOTE THAT IN ALL THE CONFIRMATIONS SUBMITTED BY ASSESSEE DURING REGULAR ASSESSMENT AN D SET ASIDE ASSESSMENT, THE SIGNATURES OF THE PROPRIETORS CONFIRMING THE CREDIT BALANCE VARY AND WHICH CLEARLY INDICATES THAT THE CONCLUSION OF AO IS CORRECT AND THAT THE EVIDENCES ADDUCED BY THE ASSESSEE ARE FABRICATED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY. REGULAR ASSESSMENT U/S 1 4 3(3) R/W SEC. 147 WAS COMPLETED ON 22.3.2004 AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). CIT(A) VIDE HIS ORDER ENHANCED THE INCOME OF TH E ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ITS ORDER DT. 11.9.2008 RESTORED THE MATTER BACK TO THE FILE OF THE AO. IN CONSEQUENCE THEREOF, THE AO PASSED AN ASSESSMENT ORDER DETERMINING THE TOTAL INCOME AS ENHANCED BY THE CIT(A) I.E. AT RS.71,00,755/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). CIT(A) WHEN THE ASSESSEE CHALLENGED THE ORDER OF THE AO, BOTH ON LEGALITY AS WELL AS ON MERIT, OBSERVED IN RESPECT OF LEGALITY OF THE RE - OPENING OF THE ASSESSMENT U/S 147 T HAT THE ORDER UNDER APPEAL PASSED BY THE AO IS THE ORDER GIVING EFFECT TO THE ORDER OF THE HON'BLE ITAT AND THEREFORE THIS GROUND STANDS REJECTED. 4. THE ASSESSEE IN HIS APPEAL IN GROUND NO. 1 CHALLENGED BEFORE US THE ISSUE OF NOTICE U/S 148. 4.1 AFT ER HEARING THE LD. DR, WE NOTED THAT THE CIT(A) HAS GIVEN CLEAR - CUT FINDING THAT THE ORDER PASSED BY THE AO IS THE ORDER GIVING EFFECT TO THE ORDER GIVEN BY THE ITAT AND THERE IS NO WHISPER THAT THIS ISSUE WAS BEFORE ITAT AND ON THIS ISSUE THE ITAT HAS RES TORED THE MATTER TO THE FILE OF THE AO. IN VIEW OF THIS FACT, WE ARE OF THE VIEW THAT THIS ADJUDICATED GROUND CANNOT NOW BE TAKEN UP 4 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) BY THE ASSESSEE AND WE CANNOT ADJUDICATE THIS ISSUE. THE ORDER OF THE TRIBUNAL EARLIER PASSED IS FINAL. ONLY THE ISSUE W HICH HA S ARIS E N IN THE ORDER OF THE TRIBUNAL DT. 11.9.2008 AND RESTORED TO THE FILE OF THE AO CAN BE RAISED BEFORE US. THUS, THIS GROUND STANDS DISMISSED. 5. GROUND NO. 2 IN ASSESSEES APPEAL AS WELL AS GROUND NO. 2 IN THE REVENUES APPEAL RELATE TO THE COMMON ISSUE. THE FACTS RELATING TO THESE GROUNDS ARE THAT THE AO MADE AN ADDITION OF RS.14,67,300/ - IN THE INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT. WHEN THE MATTER WENT BEFORE THE CIT(A), CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF THE ASS ESSEE NOTED THAT OUT OF THE SUM OF RS.14,67,300/ - , A SUM OF RS.11,72,800/ - ARE THE OPENING BALANCE AND THERE HAD BEEN A RISE IN THE ACCOUNT OF M/S. J.J. METALS TO THE EXTENT OF RS.2,94,500/ - . SINCE THE ASSESSEE DID NOT FILE ANY CONFIRMATION AND OTHER EVIDE NCE FROM M/S. J.J. METALS, THEREFORE, HE SUSTAINED THE ADDITION TO THE EXTENT OF RS.2,94,500/ - . AFTER HEARING THE LD. DR WE NOTED THAT THE ONLY SUM OF RS.2,94,500/ - HAS BEEN RECEIVED BY THE ASSESSEE DURING THE YEAR FROM M/S. J.J. METALS. THE ONUS, IN OUR OPINION, IS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. SINCE THE ASSESSEE DID NOT PRO DUC E ANY EVIDENCE IN THI S REGARD TO DISCHARGE HIS ONUS BEFORE THE AO AS WELL AS BEFORE CIT(A), WE CONFIRM THE ORDER OF CIT(A) SUSTAINING THE ADDITION OF RS.2,94,500/ - . CIT(A) HAS DELETED THE SUM OF RS.11,72,800/ - SINCE SAID AMOUNT REPRESENTS THE OPENING BALANCE AND THEREFORE IT CANNOT BE ADDED DURING THE YEAR. THE LD. DR EVEN THOUGH VEHEMENTLY AGITATED BUT COULD NOT PRODUCE ANY EVIDENCE WHICH MAY COMPEL US TO REVERSE THE FINDING OF THE CIT(A). WE, THEREFORE, CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.11,72,800/ - . THUS, GROUND NO. 2 OF THE ASSESSEES AS WELL AS REVENUES APPEAL STANDS DISMISSED. 5 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) 6. GROUND NO S . 3 & 4 IN ASSESSEES APPEAL AS WELL AS GROUND NOS. 3 & 4 IN REVENUES APPEAL RELATE TO THE COMMON ISSUE IN RESPECT OF DELETION AS WELL AS SUS TENANCE OF ADDITI ON OF RS.3,00,000/ - OUT OF RS. 6 LACS RECEIVED BY THE ASSESSEE FROM M/S. POONAM REAL TORS . THE BRIEF FACTS OF THESE GROUNDS ARE THAT THE AO NOTED THAT THE ASSESSEE HAS SHOWN CREDIT BALANCE OF RS. 6 LACS IN THE ACCOUNT OF M/S. POONAM REALTORS. THE AO ADD ED THE SUM U/S 68. WHEN THE MATTER WENT BEFORE THE CIT(A), BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT THERE ARE TWO DIFFERENT PARTIES, M/S. POONAM R EALTORS P. LTD. AND M/S. POONAM REALTORS. RS. 3 LACS HAS BEEN RECEIVED BY THE ASSESSEE FROM EACH OF THE M BUT BY MISTAKE CREDIT WAS RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN THE NAME OF M/S. POONAM REALTORS P. LTD. IN ONE ACCOUNT. T O DISCHARGE HIS ONUS , THE ASSESSEE ALSO SUBMITTED THE COPY OF THE LEDGER EXTRACT, COPY OF VIJAYA BANK STATEMENT SHOW ING RECEIPT OF THE MONEY, PAN NUMBER, NEW AND CORRECT ADDRESS OF M/S. POONAM REALTORS AND LETTER FROM VIJAYA BANK. CIT(A) AFTER GOING THROUGH THE SUBMISSIONS AND RECEIVING THE REMAND REPORT FROM THE AO DELETED THE ADDITION OF RS. 3 LACS. 6.1 WE HAVE HE ARD THE LD. DR. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A) SO FAR AS THE DELETION OF THE ADDITION OF RS. 3 LACS IS CONCERNED AS THE ASSESSEE HAS DULY DISCHARGED HIS ONUS AND CIT(A) HAS RIGHTLY DELETED THE ADDITION. SO FAR AS THE SUSTENANCE OF THE ADDITION OF RS. 3 LACS IS CONCERNED, NO EVIDENCE HAS BEEN FILED BEFORE US FROM THE ASSESSEES SIDE WHICH MAY PROVE THAT THE ASSESSEE HAS DISCHARGED HIS ONUS. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A). THUS, GROUND NOS. 3 & 4 OF TH E REVENUES APPEAL STANDS DISMISSED AND GROUND NOS. 3 & 4 OF THE ASSESSEES APPEAL ALSO STANDS DISMISSED. 7. GROUND NOS. 5, 6 AND 7 IN REVENUES APPEAL RELATE TO THE DELETION OF THE ADDITION OF RS. 44,46,725/ - . THE FACTS RELATING TO THIS ADDITION ARE THA T THE AO 6 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) NOTED CREDIT ENTRY IN THE CASE OF M/S. STEEL EX. AND THERE WAS RECEIPTS TO THE EXTENT OF RS. 50,96,825/ - , PAYMENTS WERE FOR RS.28,64,000/ - . THE CLOSING BALANCE WAS RS.22,32,725/ - . THE AO ALSO NOTED THE MAXIMUM BALANCE TO BE RS.44,46,725/ - . IT WAS ALSO NOTED BY THE AO THAT IN THE AUDITED REPORT IN FORM 3CD, THE OPENING BALANCE WAS SHOWN AS NIL. SINCE THE ASSESSEE COULD NOT PROVE THE SOURCE AND GENUINENESS OF THE SUM OF RS.44,46,725/ - , THE AO ADDED THE SUM U/S 68. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 12.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AND CONTENTIONS OF THE APPELLANT. I HAVE ALSO PERUSED ALL THE RELEVANT EVIDENCES PLACED ON RECORD. IN MY OPINION, THE APPELLANT HAS PROVED THE GENUINENESS OF THE TRANSACTION IN THE CASE OF M/S STEEL EX BEYOND DOUBT, AND THE ADDITION MADE BY THE AO WAS NOT JUSTIFIED, IN VIEW OF ALL THE EVIDENCES AND PERSONAL ATTENDANCE OF THE LOAN CREDITOR MR. JASMINE B. SHAH. THE AO IS D IRECTED TO DELETE THE ADDITION AMOUNTING TO RS.44,46,725/ - . 7.1 WE HAVE HEARD THE LD. DR. FROM THE ORDER OF THE CIT(A) WE NOTED THAT THE ASSESSEE SUBMITTED FRESH EVIDENCE BEFORE THE CIT(A) FOR THE FIRST TIME CONSISTING OF LEDGER EXTRACT AND COPY OF BANK ACCOUNT STATEMENT AND ALSO NEW ADDRESS OF JASMINE SHAH . THESE DOCUMENTS WERE NOT FI LED BEFORE. THIS FACT IS APPARENT FROM THE ORDER OF CIT(A). CIT(A) UNDER PARA 12.2 REPRODUCED THE ORDER SHEET DT. 10.12.2009 OF THE AO. THE ORDER SHEET TALKS OF THE AP PEARANCE OF SHRI JASMINE BHOGILAL SHAH, PROPRIETOR OF M/S. STEEL EX HAVING PAN NO. ABAPS7229N AND ALSO SUBMITTED LETTER OF 26.10.2009 REGARDING BALANCE CONFIRMATION. THIS ORDER SHEET AS PRODUCED BY THE CIT(A) FROM THE ASSESSMENT RECORD DOES NOT STATE ABOU T THE PRODUCTION OF LEDGER EXTRACT AND COPY OF THE BANK ACCOUNT STATEMENT AND NEW ADDRESS OF JASMINE SHAH BY THE ASSESSEE. IN VIEW OF THIS FACT, WE AGREE WITH THE LD. DR THAT THIS IS A CLEAR - CUT CASE OF VIOLATION OF RULE 46A AND ADDITIONAL EVIDENCE WERE PRODUCED BY THE ASSESSEE BEFORE THE CIT(A). IN VIEW OF THIS FACT, WE SET ASIDE THIS ISSUE AND RESTORE THIS ISSUE TO THE 7 ITA NOS. 134 & 176/PNJ/2013 (ASST. YEAR : 1998 - 99) FILE OF AO WITH THE DIRECTION THAT THE AO SHALL RE - DECIDE THIS ISSUE AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE WITH THE AO AND TO SUBMIT ALL THE EVIDENCES WHICH HE MAY RELY IN THIS REGARD BEFOR E THE AO. 7.2 IN THE RESULT, GROUND NOS. 5, 6 AND 7 OF REVENUES APPEAL ARE STATISTICALLY ALLOWED. 8. GROUND NO. 1 IN REVENUES APPEAL IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISM ISSED WHILE THE APPEAL OF THE REVENU E IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 28 /08/2013. SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 28 /08/ 2013 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT, PANAJI (4) CIT(A), PANAJI (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , SR. P RIVATE S ECRETARY ITAT, PANAJI, GOA