Narsi Timber (India) Pvt. Ltd., Kaithal V. ITO, W-1, Kaithal

ITA 1345/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6533 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Assessee Lawyers: PRANAV JAIN
• Keywords: Opportunity of being heard; Set aside
• Section: 133(6); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1345/CHD/2018 ASSESSMENT YEAR: 2014-15 NARSI TIMBER (INDIA) PVT. LTD. VS. THE ITO C/O MANMOHAN GARG, W-1 ADVOCATE 857A2/9, BALAJI MARKET KAITHAL, HARYANA KAITHAL, HARYANA PAN NO. AACCN9701A (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PRANAV JAIN REVENUE BY : SMT. CHANDRAKANTA, SR. DR DATE OF HEARING : 25/02/2019 DATE OF PRONOUNCEMENT : 25/02/2019 ORDER THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 0 4/07/2018 OF THE LD. CIT(A), KARNAL. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) W AS WRONGLY UPHELD THE ADDITION OF RS. 301542/- ON ACCOUNT OF APPLYING G.P . @ 1.01% ON ALLEGED SALE OF RS. 29855681/- BY AMIT KUMAR GOEL PROP. M/S GANAPA TI TIMBER TRADERS & WITHOUT GIVING OPPORTUNITY TO CROSS EXAMINE AMIT KUMAR GOEL PROP. M/S GANAPATI TIMBER TRADERS, KAITHAL ON WHOSE STATEMENT ADDITION WAS MA DE. THEREFORE IN CASE OF ADDITION IS CONFIRMED, AO MAY BE DIRECTED TO GRANTE D CREDIT OF TCS OF RS. 746392/- COLLECTED ON WHICH GP IS APPLIED. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE E-FILED RETURN OF INCOME ON 29/11/2014 DECLARING AN INCOME OF RS. 1,69,580/- LA TER ON THE CASE WAS SELECTED FOR SCRUTINY. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT RETURN IN FORM NO. 26AS REVEALED THAT TCS OF R S. 7,46,392/- WAS COLLECTED AND DEPOSITED ON THE SALE OF TIMBER AMOUNTING TO RS . 2,98,55,681/- MADE TO THE ASSESSEE BY SH. AMIT KUMAR GOEL PROP. M/S GANPATI T IMBER TRADERS, KAITHAL. HOWEVER THE ASSESEE COMPANY HAS NEITHER SHOWN PURCH ASE & SALE OF TIMBER NOR CLAIMED TCS IN INCOME TAX RETURN. 4. THE ASSESSING OFFICER ASKED THE INFORMATION UNDE R SECTION 133(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT), FROM SH. AMIT KUMAR GOEL PROP. M/S GANPATI TIMBER TRADERS, KAITHAL REGA RDING PURCHASE AND SALE OF TIMBER. THE ASSESSING OFFICER CONFRONTED THE REPLY OF SHRI AMIT KUMAR GOEL TO THE ASSESSEE IN RESPONSE THE ASSESSEE SUBMITTED VIDE LE TTER DT. 16/12/2016 THAT IT 2 HAD NOT PURCHASED ANY GOODS FROM SH. AMIT KUMAR GOE L PROP. M/S GANPATI TIMBER TRADERS, KAITHAL, THE SALE BILLS ISSUED BY H IM WERE MANIPULATED AND THAT OF THE GR ISSUED HAD SHOWN THAT GOODS WERE UNLOADED AT M/S GANPATI TIMBER TRADERS, KAITHAL AND NOT AT THE PREMISES OF THE ASS ESSEE. IT WAS ALSO STATED THAT THE DOCUMENTS FURNISHED BY SHRI AMIT KUMAR GOEL WER E NOT PROVIDING THAT GOODS HAD BEEN DELIVERED TO THE ASSESSEE. THE ASSESSING O FFICER DID NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THA T THE ASSESSEE HAD NOT MAINTAINED PROPER RECORD OF SALE AND PURCHASE. HE R EJECTED THE BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE ACT, AND APPLI ED G.P. RATE OF 1.01% ON THE SALE OF RS. 2,98,55,681/- AND MADE THE ADDITION OF RS. 3,01,542/-. THE ASSESSING OFFICER ALSO DISALLOWED CAR EXPENSES TO THE EXTENT OF RS. 12,000/- OUT OF RS. 60,040/- ON ACCOUNT OF PERSONAL USE AND THE ASSESSM ENT WAS FRAMED UNDER SECTION 144 OF THE ACT AT AN INCOME OF RS. 4,83,122 /-. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO OBSERVED ALLOWED THAT NO EVIDENCE OF HAVING MADE AN Y PURCHASE DURING THE YEAR WAS SUBMITTED BY THE ASSESSEE. SHE THEREFORE, CONFIRMED THE ADDITION OF RS. 3,01,542/- HOWEVER THE OTHER ADDITION OF RS. 12,000 /- WAS DELETED. 6. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO OPPORTUNITY WAS GIVEN TO CROSS EXAMINE SH. AMIT KUMAR GOEL PROP. M/S GANP ATI TIMBER TRADERS, KAITHAL ON WHOSE STATEMENT ADDITION WAS MADE BY THE ASSESSI NG OFFICER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT PURCHASE ANY TI MBER FROM SH. AMIT KUMAR GOEL PROP. M/S GANPATI TIMBER TRADERS, KAITHAL, THE REFORE THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT( A) WAS NOT JUSTIFIED. 8. IN HER RIVAL SUBMISSION LD. SR. DR STRONGLY SUPP ORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE FROM THE VERY BEGINNING STATED THAT IT HAD NOT PURC HASED ANY TIMBER FROM SH. AMIT KUMAR GOEL PROP. M/S GANPATI TIMBER TRADERS, K AITHAL, ON WHOSE STATEMENT THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSSEE . IN THE INSTANT CASE, NOTHING HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THAT THE OPPORTUNITY TO CROSS EXAMINE SH. AMIT KUMAR GOEL PROP. M/S GANPATI TIMBER TRADERS, KAITHAL, WAS PROVIDED TO THE ASSESSEE. I THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS 3 ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND IN CASE THE STATEMENT OF SH. AMIT KUMAR GOEL PROP. M/S GANPATI TIMBER TRADERS, KAITHAL IS TO BE USED A GAINST THE ASSESSEE THEN OPPORTUNITY TO CROSS EXAMINE, IS TO BE PROVIDED TO THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/2019.) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 25/02/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR