Appeal details
Counselvise Citation
[2010] 135 COUNSELVISE.COM (IT) 9672 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-10-2010
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
C
Next Hearing Date
01-10-2010
Assessment Year
2006-2007
Appeal Filed On
30-04-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL SHRAWAT, JM & SHRI A N PAHUJA,AM ITA NO.1385/AHD/2010 (ASSESSMENT YEAR:-2006-07) INCOME-TAX OFFICER, WARD- 5(2), AHMEDABAD V/S PARKER MULTI COMMODITIES (INDIA) PVT. LTD., 1, 3 RD FLOOR, HDFC HOUSE, MITHAKHALI SIX ROAD, NAVRANGPURA, AHMEDABAD [PAN: AAACP 9355 J] [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI K M MAHESH,. DR ASSESSEE BY:- SHRI VASANT C TANNA, AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 03- 03-2010 OF THE LD. CIT(APPEALS)-XI, AHMEDABAD, RAIS ES THE FOLLOWING GROUNDS:- 1 THE LD. CIT(A)-XI, AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF TRADING LO SS OF RS.6,38,491/-. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A)-XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A)-XI, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2 ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, FAC TS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING INCOME OF RS.4,03,938/- FILED ON 27-11-2006 BY THE ASSESSEE, TRADING IN VARIOUS COMMODITIES LIKE GOLD, SILVER AND OTHER AGR O BASED COMMODITIES, AFTER BEING PROCESSED U/S 143(1) OF T HE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], W AS SELECTED FOR SCRUTINY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 01-10- 2007.DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER (AO IN SHORT) NOTICED THAT THE ASSESSEE CLA IMED RATE ITA NO.1385/AHD/2010 2 DIFFERENCE OF RS.5,17,181/- AND ADDED THE SAME TO T HE TOTAL COST OF PURCHASES. TO A QUERY BY THE AO, SEEKING CERTAIN DE TAILS MENTIONED IN PARA 3 OF THE ASSESSMENT ORDER, THE ASSESSEE MER ELY SUBMITTED A COPY OF ACCOUNT OF RATE DIFFERENCE (GOLD) WITHOUT A NY EXPLANATION OR SUPPORTING EVIDENCES. SINCE THE ASSESSEE INCURRED H UGE LOSS IN THE TRADING ACTIVITIES, IN ORDER TO VERIFY THE RATE DI FFERENCE AND THE TRANSACTION ENTERED INTO WITH RELATED PARTIES, THE AO ISSUED A DETAILED QUESTIONNAIRE AND SOUGHT PRODUCTION OF BOO KS OF ACCOUNTS AND BILLS/VOUCHERS FOR VERIFICATION. HOWEVER, THE A SSESSEE DID NOT PRODUCE THE RELEVANT BOOKS OF ACCOUNTS AND BILLS/VO UCHERS ETC. SOUGHT BY THE AO. ACCORDINGLY, THE AO DISALLOWED TH E CLAIM FOR RATE DIFFERENCE OF RS.5,17,181/- AS ALSO THE TRADING LOS S OF RS.6,38,491/-. 3. ON APPEAL, THE LEARNED CIT(A) DELETED BOTH THE D ISALLOWANCES. AS REGARDS DISALLOWANCE OF RS. 6,38.491/- IMPUGNED BEFORE US IN GROUND NO.1 IN THE APPEAL, THE LD. CIT(A) CONCLUDED MERELY ON THE BASIS OF SUBMISSIONS OF THE ASSESSEE ,AS UNDER: 4.2 AS REGARDS THE DISALLOWANCE OF LOSS IN TRADI NG OF RS.6,38,491/-, THE CONTENTIONS OF THE APPELLANT ARE BRIEFLY STATED AS FOLLOW. THE TRADING LOSS INCLUDES RATE DIFFERENCE OF RS.5,17,181/-; BOTH THE ACTIVITIES OF TRADING IN PRECIOUS ITEMS AS WELL AS DERIVATIVE TRANSACTIONS A RE INTERRELATED; THE TRANSACTIONS WERE ENTERED IN ORDINARY COURSE OF BUS INESS AND ARE AT ARM'S LENGTH ; PURCHASE FROM THE RELATED PARTIES ARE ONLY 13.92% OF TOTAL PURCHASES AND IN RESPECT OF THESE TRANSACTIONS ALSO THE A.O HAS NOT MADE OUT ANY CASE THAT THE PAYMENTS WERE EXCESSIVE OR UN REASONABLE IN TERMS OF SECTION 40A(2). HAVING CONSIDERED THE CONTENTION S OF THE APPELLANT I AM INCLINED TO AGREE WITH THEM AND DELETE THE DISALLOW ANCE MADE BY THE AO. THIS GROUND OF APPEAL IS ALLOWED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR WHIL E INVITING OUR ATTENTION TO THE IMPUGNED ORDERS CONTENDED THAT SIN CE THE ASSESSEE DID NOT PRODUCE THE RELEVANT BOOKS OF ACCOUNTS AND BILLS/VOUCHERS BEFORE THE AO DESPITE SUFFICIENT OPPORTUNITY ALLOW ED NOR THESE SEEM TO HAVE BEEN VERIFIED BY THE LD. CIT(A), THE LATTER WAS NOT JUSTIFIED IN ALLOWING THE TRADING LOSS OF RS.6,38,491/-. ON THE OTHER HAND, THE ITA NO.1385/AHD/2010 3 LEARNED AR ON BEHALF OF THE ASSESSEE SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 5 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT SINCE THE ASSESSEE DID P RODUCE RELEVANT BOOKS OF ACCOUNTS AND BILLS/VOUCHERS OR ANY OTHER RELEVANT EVIDENCE ALONG WITH COMPLETE DETAILS OF TRADING LOSS, THE AO DISALLOWED THE CLAI M FOR THE SAID LOSS. THERE IS NOTHING IN THE ORDER OF THE LD. CIT(A) NOR EVEN BEF ORE US AS TO WHY THE ASSESSEE DID NOT PRODUCE THE RELEVANT BOOKS OF ACCOUNTS AND BILLS/VOUCHERS BEFORE THE AO DESPITE OPPORTUNITY ALLOWED.. EVEN WHEN THE ASSESSE E SUBMITTED CERTAIN DETAILS BEFORE THE LD. CIT(A), THERE IS NO MATERIAL BEFOR E US AS TO WHETHER OR NOT THE SAID DETAILS WERE CONFRONTED TO THE AO OR THE LD. C IT(A) UNDERTOOK ANY INDEPENDENT ENQUIRIES OR EVEN CALLED FOR ANY REPO RT FROM THE AO IN THE LIGHT OF HIS FINDINGS IN THE ASSESSMENT ORDER. IN T HESE CIRCUMSTANCES AND IN THE INTEREST OF NATURAL JUSTICE, ESPECIALLY WHEN THE LD. CIT(A) HAVE NOT ASCERTAINED THE COMPLETE FACTS NOR ALLOWE D SUFFICIENT OPPORTUNITY TO THE AO AND NOR EVEN SEEMS TO HAVE EXAMINED THE RELEVAN T BOOKS OF ACCOUNTS OR VOUCHERS, WE HAVE NO ALTERNATIVE BUT TO VACATE T HE FINDINGS OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH THE DIRECTIONS TO READJUDICATE THE ISSUE IN ACCORDANCE WITH LAW IN THE LIGHT OF OUR AFORESAID O BSERVATIONS AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. SUBJECT TO THESE DIRECTIONS, GROUND NO. 1 IS DISPOSED OF 6. GROUND NOS.2 AND 3 BEING MERE PRAYER AND GENERAL IN NATURE, DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE, T HEREFORE, DISMISSED. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 8 -10-2010 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 8-10-2010 ITA NO.1385/AHD/2010 4 COPY OF THE ORDER FORWARDED TO: 1. PARKER MULTI COMMODITIES (INDIA) PVT. LTD., 1, 3 RD FLOOR, HDFC HOUSE, MITHAKHALI SIX ROAD, NAVRANGPURA, AHMEDABAD 2. THE ITO, WARD-5(2), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XI, AHMEDABAD 5. THE DR, BENCH-C, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD
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