The ACIT,Vapi Circle, Vapi V. M/s. Asian Engineering, Vapi

ITA 1433/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80423 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: B N RAO
• Section: 37

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1433/AHD/2011 WITH CO NO.159/AHD/2011 [ASSTT.YEAR : 2006-2007] ACIT, VAPI CIRCLE VAPI. /VS. M/S.ASIAN ENGINEERING PLOT NO.A-2-29/593 100, SHED AREA CHANOD COLONY VAPI, GUJARAT. ( (( ( -. -. -. -. / APPELLANT) ( (( ( /0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 ) / REVENUE BY : SHRI M.K. SINGH, SR.DR 4& 1 2 ) / ASSESSEE BY : SHRI B.N. RAO 5 1 &(* / DATE OF HEARING : 15 TH SEPTEMBER, 2014 678 1 &(* / DATE OF PRONOUNCEMENT : 17/10/2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND THE CO BY THE ASSESSEE FOR THE ASSTT.YEAR 2006- 2007 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSE D OF WITH THIS CONSOLIDATED ORDER. ITA NO.1433/AHD/2011 (REVENUES APPEAL) 2. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: ITA NO.1433/AHD/2011 WITH CO -2- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE ADDITI ON OF RS.11,01,089/- OUT OF SUNDRY CREDITORS. 3. THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAS F AILED TO PROVE THE GENUINENESS OF THE CREDITORS AND THEIR BALANCES AS APPEARED IN THE LIABILITY SIDE OF THE BALANCE SHEET OF THE ASSESSEE-COMPANY. THE ASSESSEE COULD NOT FILE THEIR CONFIRMATION NOR COULD PRODUCE THEM BEFO RE THE AO TO PROVE THE GENUINENESS OF THE CREDIT ENTRY. HE REFERRED TO TH E RELEVANT PORTIONS OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVE NUE. HE SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITI ON MADE IN RESPECT OF TWO CREDITOR PARTIES VIZ. PREEJA ENGINEERING AND EL LORA ENGINEERING & MANPOWER SOLUTIONS. HE RELIED ON THE ORDER OF THE AO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE CREDIT ENTRIES WERE GENUINE IN THIS CASE. MOREOVER, THE ASSESSEE HAS NOT WRITTEN OFF THE AMOUNTS WITH REGARD TO THESE PARTIES, AND THEREFORE , NO ADDITION COULD BE MADE UNDER SECTION 41(1) OF THE ACT. HE SUBMITTE D THAT THE AMOUNTS REPRESENTED THE OPENING BALANCES IN THE ACCOUNTS OF BOTH THESE TWO CREDITOR PARTIES, AND THEREFORE, NO ADDITION COULD BE MADE D URING THE RELEVANT YEAR UNDER SECTIONS 41(1) AND 68 OF THE ACT. HE RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, AHMEDABAD IN ACIT VS . SHRI HARDAS BHASKARAN P, IN ITA NO.2755/AHD/2012 DATED 29.4.201 4. HE RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT IT IS UNDISPUTED F ACT THAT THE BALANCE IN THE ACCOUNTS OF THESE CREDITOR PARTIES STANDS IN TH E LIABILITY SIDE OF THE BALANCE SHEET OF THE ASSESSEE, AND HAVE NOT BEEN WR ITTEN OFF BY THE ASSESSEE DURING THE YEAR. MOREOVER, THE AMOUNTS IN THE ACCO UNTS OF THESE TWO ITA NO.1433/AHD/2011 WITH CO -3- CREDITOR PARTIES WERE OPENING BALANCES AND NOT CRED ITED DURING THE RELEVANT PERIOD UNDER APPEAL, AND THEREFORE, COULD NOT BE AD DED UNDER SECTION 68 OF THE ACT OR DISALLOWED UNDER SECTION 37 OF THE ACT. IT IS ALSO NOT A CASE OF CESSATION OF LIABILITY UNDER SECTION 41(1) OF THE A CT, AS THE AMOUNTS WERE NOT WRITTEN OFF BY THE ASSESSEE IN THE BOOKS OF ACC OUNTS. THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, AHMEDABAD IN ACI T VS. SHRI HARIDAS BHASKARAN P (SUPRA) SUPPORTS THE CASE OF THE ASSESS EE. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT NO CASE OF ADDITION/D ISALLOWANCE COULD BE MADE OUT BY THE DEPARTMENT, AND ACCORDINGLY, THE CI T(A) WAS JUSTIFIED IN DELETING THE ADDITION OUT OF SUNDRY CREDITORS AND H IS ORDER ON THIS ISSUE IS CONFIRMED AND THE GROUND NO.1 OF THE REVENUE IS DIS MISSED. CO NO.159/AHD/2011 (ASSESSEES CO) 6. THE ONLY GROUND OF THE CO OF THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ADDITION O F RS.10,83,048/- OUT OF SUNDRY CREDITORS. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS NOT WRITTEN OFF THE AMOUNT IN QUESTION PERTAINING T O M/S.SURAJ FABRICATORS AND THE AMOUNT WAS OPENING BALANCE IN THE ACCOUNTS OF THE ASSESSEE, AND THEREFORE, COULD NOT BE ADDED UNDER SECTION 68 OR S ECTION 37 OR UNDER SECTION 41(1) OF THE ACT. HE RELIED ON THE DECISIO N OF THE CO-ORDINATE BENCH OF THE ITAT, AHMEDABAD IN ACIT VS. SHRI HARDA S BHASKARAN P, IN ITA NO.2755/AHD/2012 DATED 29.4.2014. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). HE SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE CREDIT ENTRY, WHICH THE ASSESSEE HAS FAILED TO DISCHARGE. ITA NO.1433/AHD/2011 WITH CO -4- 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE AMOUNT IN QUESTION OF THE CREDITOR, M/S.SURAJ FABRICATORS DOES NOT PERTAIN TO THE RELEVANT PERIOD WHICH REPRESENTED THE OPENING BALANCE IN THEIR ACCO UNT, AND THE ASSESSEE HAS FILED COPY OF THEIR CONFIRMATION LETTER ALONG W ITH LEDGER ACCOUNT COPY. THE ASSESSEE HAS NOT WRITTEN OFF THE AMOUNT IN QUES TION IN ITS BOOKS OF ACCOUNTS, AND THEREFORE, THE AMOUNT COULD NOT BE AD DED UNDER SECTION 41(1) OF THE ACT. WE FIND THAT THE AMOUNT REPRESEN TS THE OPENING BALANCE IN THE ACCOUNTS OF M/S.SURAJ FABRICATORS, NO ADDITI ON UNDER SECTION 68 OR DISALLOWANCE UNDER SECTION 37 COULD BE MADE FOR THE RELEVANT ASSTT.YEAR 2006-07. THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, AHMEDABAD IN ACIT VS. SHRI HARDAS BHASKARAN P (SUPRA) SUPPORT S THE CASE OF THE ASSESSEE. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT NO CASE OF ADDITION OF THE CREDIT BALANCE IN THE ACCOUNT OF M/ S.SURAJ FABRICATORS COULD BE MADE OUT BY THE DEPARTMENT, AND ACCORDINGLY, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE, AND THE ADDITION MADE IS DE LETED, AND THE GROUND NO.1 OF THE CO IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND THE CO OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER