Shri Pradeep Kumar Samaiya, V. Income Tax Officer-1,

ITA 151/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1058 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 16-05-2013
• Court: TRIBUNAL
• Department Lawyers: DR HEMANT S MODH
• Assessee Lawyers: D R LATHORIYA
• Keywords: Loose papers; Reassessment proceedings
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 151/JAB/2013 A.Y. : 2002-03 SHRI PRADEEP KUMAR SAMIAYA, M/S. P.K. SAMAIYA, SANGAM COMPLEX, MOTI NAGAR, SAGAR VS ITO - I, SAGAR APPELLANT RESPONDENT PAN NO. : AVOPS1482K DEPARTMENT BY : DR.HEMANT S.MODH ASSESSEE BY : SHRI D.R. LATHORIYA, DR DATE OF HEARING : 2 2 . 0 5 .201 5 DATE OF PRONOUNCEMENT : 25 . 0 6 .201 5 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A),JABALPUR, DATED 03.12.2012 FOR THE ASSES SMENT YEAR 2002-03. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE TO UPHOLD THE ADDITION OF RS. 10,39,512/- WITHOUT APPRECIATING THE FACTS PROPERLY. 2. THAT THE ADDITION CONFIRMED AT RS. 10,39,512/- ON ACCOUNT OF VIOLATION OF PROVISIONS OF SECTION 40A(3 ) IS UNJUSTIFIED. 3. THAT THE REASONS RECORDED FOR CONFIRMING THE ORDER OF ADDITION IS NOT JUSTIFIED. 3. ALL THE GROUNDS ARE INTERCONNECTED AND IT IS RELAT ING TO THE ADDITION MADE U/S 40A(3) OF RS. 10,39,512/- FOR ASSESSMENT YEAR 2002-03. -: 3: - 3 4. WE FIND THAT THE ASSESSEE HAS FILED THE APPEAL FOR ASSESSMENT YEAR 2002-03 ONLY. 5. THE SHORT FACTS OF THE CASE ARE AS UNDER. 6. THE ASSESSEE IS IN THE BUSINESS OF READYMADE GARMENTS. THERE WAS SURVEY IN THE CASE OF THE ASSES SEE ON 30.10.2002 AND SOME DIARIES AND LOOSE PAPERS WERE S EIZED, FROM WHICH IT WAS GATHERED THAT THE ASSESSEE HAS MA DE PURCHASES ABOVE RS. 20,000/- IN CASH IN VIOLATION O F SECTION 40A(3). IT WAS CONTENDED THAT THE ASSESSEE HAS MADE PURCHASES OF READYMADE GARMENTS IN RETAIL FROM FOOT PATH TRADERS OF KOLKATTA HAT BAZAAR, WHICH DO NOT ACCEPT THE CHEQUES, THEREFORE, DUE TO COMPELLING CIRCUMSTANCES , THE ASSESSEE HAS MADE PURCHASES HAVING NO ALTERNATIVE. THE ASSESSEE HAS MADE PURCHASES IN ASSESSMENT YEAR 2002 -03 AT RS. 51,97,564/- IN VIOLATION OF SECTION 40A(3), 20 % OF WHICH WAS DISALLOWED I.E. AT RS. 10,39,512/-. 7. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. 8. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED BEFORE US THAT THERE WAS SURVEY IN THE CASE OF THE ASSESSEE, WHEREIN -: 4: - 4 DURING THE COURSE OF SURVEY, SOME DIARIES AND LOOSE PAPERS WERE FOUND AND FROM THE LOOSE PAPERS, IT WAS FOUND THAT THE ASSESSEE HAS MADE PURCHASES OF RS. 51,97,564/- IN V IOLATION OF SECTION 40A(3). THE PHOTOCOPIES OF RESPECTIVE SE IZED DIARIES, WHICH SHOW THAT IT IS THE SALE PROCEEDS OF GOODS PU RCHASED AND ACTUAL PAYMENT MADE TO PURCHASERS. THE PHOTOCOP IES FOUND SHOW THAT SALE PROCEEDS TILL THERE WAS A SALE PROCEEDS AND NO PAYMENTS WERE MADE TO SELLERS, BUT AFTER CON SIDERING THE REPLY FROM THE ASSESSEE. DURING THE COURSE OF S URVEY, THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS MADE PURCH ASE FROM CALCUTTA FOOT PATH BAZAR AND PAYMENTS HAVE BEEN MAD E. 9. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT SIMILAR ISSUE HAD COME UP BEFORE THE TRIBUNAL IN AS SESSEES OWN CASE FOR ASSESSMENT YEAR 2001-02 AND IN ASSESSM ENT YEAR 2001-02, THE TRIBUNAL HAS DELETED THE ADDITION. THE REFORE, THIS IS A CASE OF ASSESSMENT YEAR 2002-03 AND IT MUST BE FOLLOWED AND ASSESSEES APPEAL MAY BE ALLOWED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE TRIBUNAL IN THE CASE OF ASSESSEE F OR -: 5: - 5 ASSESSMENT YEAR 2001-02 HAS DELETED THIS ADDITION B Y OBSERVING AS UNDER :- 3. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE IS A DEALER IN READYMADE GARMENTS. DURING THE COURSE OF THE REASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS MADE CERTAIN PAYMENTS, IN CASH, FOR PURCHASES OF READYMADE GARMENTS. HE THUS DISALLOWED 20% OF THE PURCHASES SO MADE U/S 40A(3) OF THE ACT. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. WHILE HE DID TAKE NOTE OF THE ASSESSEES SUBMISSION THAT THE PURCHASES WERE MADE FROM FOOTPATH VENDORS AT KOLKATA HAAT, HE DECLINED TO ACCEPT THAT THERE WERE COMPELLING CIRCUMSTANCES TO MAKE THESE PURCHASES AS THERE WAS NO COGENT EVIDENCE TO SUBSTANTIATE THE SAME NOR THE CONFIRMATION LETTERS ARE PRESENTED. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUSED THE MATERIAL ON RECORD, I FIND THAT IT IS N OT A -: 6: - 6 DISPUTED FACT THAT THE ASSESSEE HAS MADE PAYMENTS TO THE AGENT FOR ONWARDS PURCHASES FROM FOOTPATH VENDORS. THIS FACT IS ALSO BORNE OUT OF THE ASSESSMENT ORDER ITSELF AS ALSO FROM THE PAPER BOOK FILED BEFORE ME. THE LD. DR ALSO DID NOT DISPUTE TH IS FUNDAMENTAL POSITION. IN THESE CIRCUMSTANCES, AND BEARING IN MIND THE FACT THAT UNDER RULE 6DD(K), TH E SITUATIONS IN WHICH THE ASSESSEE MAKES PAYMENTS TO THE AGENTS, WHO, IN TURN, ARE REQUIRED TO MAKE CASH PAYMENTS TO THE PERSONS FROM WHOM PURCHASES ARE MADE, THE RIGOUT OF SECTION 40A(3) IS RELAXED. AS I T IS A SMALL MATTER AND THE RELEVANT ACCOUNTING PERIOD HAS ENDED ALMOST ONE AND A HALF DECADE AGO, NO USEFUL PURPOSE WILL BE SERVED BY REMITTING THE MATT ER FOR THIS FACTUAL VERIFICATION. I, ACCORDINGLY, DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED DISALLOWANCE. THE ASSESSEE GETS RELIEF ACCORDINGLY. 11. WE, RESPECTFULLY FOLLOWING THE ORDER OF TRIBUNAL PA SSED IN ASSESSEES CASE IN I.T.A.NO. 150/JAB/2013 DATED 31.10.2014, ALLOW THE APPEAL OF THE ASSESSEE. -: 7: - 7 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER IS PRONOUNCED IN ACCORDANCE WITH RULE 34(4) OF I.T.A.T. RULES, BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 25 TH JUNE, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 25 TH JUNE , 2015. CPU* 256