Sree Mahaveer Traders , Nizamabad V. Income Tax Officer, Ward-3, Nizamabad

ITA 1597/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3617 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 30-01-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L SURESH
• Assessee Lawyers: K V CHALAMAIAH
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B - SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 159 7 /HYD./201 8 ASSESSMENT YEAR: 20 09 - 1 0 M/S S REE MAHAVEER TRADERS VS. ITO, WARD 3 6 - 21 - 43/1 , SHRAD H ANAND GUNJ NIZAMA BAD NIZAMA BAD 50 3 0 01. PAN: ABAFS3301F (APPELLANT) (RESPONDENT) FOR ASSESSEE : SH. K.V.CHALAMAIAH, AR. FOR REVENUE : SH. L. SURESH, D.R. DATE OF HEARING : 30 /0 1 /2020 DATE OF PRONOUNCEMENT : 05 /0 3 /2020 O R D E R THIS IS ASSESSEES APPEAL FOR A.Y. 20 09 - 10 AGAINST THE ORDER OF LD.CIT(A) - 5 , HYDERABAD DATED 31 .05. 2018 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM , ENGAGED IN TRADING OF AGRICULTURAL PRODUCTS, FILED ITS RETURN OF INCOME FOR AY 2009 - 10 ON 07.09.2009 DECLARING TOTAL INCOME OF RS.1,10,590/ - . THE DEPARTMENT RECEIVED INFORMATION THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.2,80,000/ - FROM ONE MR. NARESH PODDAR AS AN ACCOMMODATION ENTRY. THEREFORE, THE AO WAS OF THE OPINION TH AT AN AMOUNT OF RS.2,80,000/ - WHICH SHOULD HAVE BEEN OFFERED TO TAX FOR THE RELEVANT AY , HAS ESCAPED ASSESSMENT AND THE SAME NEEDED TO BE BROUGHT TO TAX. THEREFORE, THE AO REOPENED THE ASSESSMENT BY ISSUANCE OF A NOTICE U/S 148 OF THE INCOME TAX ACT, ITA NO. 1597 /HYD/2018 AY: 20 09 - 10 M/S SREE MAHAVEER TRADERS, NIZAMABAD . 2 19 61 (THE ACT) ON 31.03.201 6. THE ASSESSEE EXPLAINED THAT THE FIRM HAD SOLD TURMERIC TO M/S SIDHARTHA TRADING CO., NAGPUR (WORTH OF RS.2,83,500/ - VIDE SALE BILL NO.1231 DATED 28.03.2008) AND IN TURN M/S SIDHARTHA TRADING CO., NAGPUR HAS SOLD THE SAME COMMOD ITY TO ONE M/S ANKUR ENTERPRISES, A COMMISSION AGENT, WHO SENT AMOUNTS TO ASSESSEE FIRM THROUGH CHEQUES OF AXIS BANK. THE ASSESSEE WAS DIRECTED TO FURNISH CONFIRMATION OF PAYMENT FROM M/S SIDHARTHA TRADING CO. IN RESPONSE THE A SSESSEE FURNISHED A C OPY OF C FORM ISSUED BY M/S SIDHARTHA TRADING CO., NAGPUR . THE AO ON VERIFICATION OF THE SAME , OBSERVED THAT THE ASSESSEE HAS SOLD TURMERIC TO M/S SIDHARTHA TRADING CO., NAGPUR BUT THE MODE OF PAYMENT WAS NOT YET PROVED. HE OBSERVED THAT THE PROPRIETOR OF M/S ANKUR ENTERPRISES HAS GIVEN AN ACCOMMODATION ENTRY, AND, THEREFORE, HE HELD THAT THE SUM OF RS.2,80,000/ - IS ADDITIONAL INCOME WHICH SHOULD BE ADDED TO THE RETURNED INCOME OF THE ASSESSEE AND SHOULD BE BROUGHT TO TAX. THE AO ACCORDINGLY , BROUGHT IT T O TAX. AGGRIEVED , ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) , WHO CONFIRMED THE ORDER OF A.O. 3. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S . 1) THE ORDER OF THE LEARNED CIT (APPEALS) IS NOT CORRECT BOTH ON FACTS AND IN LAW. 2) THE LEARNED ASSESSING OFFICER INCORRECTLY REOPENED THE ASSESSMENT INASMUCH AS HE HAD NO REASONS TO BELIEVE THAT THE ASSESSEE'S INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT MUCH LESS THE ESCAPEMENT OF INCOME WAS DUE TO THE ASSESSEE'S FAILURE TO FULLY AND TRULY DISCLOSE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. ITA NO. 1597 /HYD/2018 AY: 20 09 - 10 M/S SREE MAHAVEER TRADERS, NIZAMABAD . 3 3) WITHOUT PREJUDICE TO GROUND NO.2 ABOVE, I. THE LEARNED CIT (APPEALS) ERRED IN NOT APPRECIATING THAT THE ASSESSEE WA S NOT IN RECEIPT OF AN ACCOMMODATION ENTRY WHICH IS TAXABLE AS INCOME. II. THE LEARNED THE CIT(A) FAILED TO APPRECIATE THAT THE AMOUNT OF RS.2,80,000/ - RECEIVED BY THE ASSESSEE, MISCONSTRUED AS ACCOMMODATION ENTRY BY THE ASSESSING OFFICER, REPRESENTED THE AMO UNT RECEIVED FOR SALE OF TURMERIC ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. III. THE LEARNED CIT (APPEALS) ERRED IN NOT APPRECIATING THAT THE BOOKS OF THE ASSESSEE WERE COMPLETE IN ALL RESPECTS AND DULY AUDITED WITHOUT ANY QUALIFICATION AND THAT T HE ASSESSEE'S STOCK REGISTER, WHICH ALSO WAS COMPLETE IN ALL RESPECTS, REFLECTED THE STOCK OF TURMERIC SOLD AGAINST WHICH THE AMOUNT OF RS.2,80,000/ - WAS RECEIVED. THEREFORE, THE ASSESSING OFFICER OUGHT NOT TO HAVE MADE THE ADDITION ON ANY COUNT. 4 ) THE APPELLANT CRAVES LEAVE TO ADD TO AND/ OR ALTER ANY OF THE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING . 4 . THE LD.COUNSEL FOR THE ASSESSEE WHILE REITERAT ING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, SUBMITTED THAT THE ASSESSEE HAD SOLD STOCK OF TURMERIC TO M/S SIDHARTHA TRADING CO., NAGPUR WHICH IS ALSO ACCEPTED BY THE AO AND THAT M/S ANKUR ENTERPRISES HAS MADE THE PAYMENT TO THE ASSESSEE THROUGH BANKING CHANNELS ON BEHALF OF M/S SIDHARTHA TRADING CO., NAGPUR SINCE M/S SIDHARTHA TRADING CO. HAS SOLD THE PRODUCT TO M/S ANKUR ENTERPRISES. HE SUBMITTED THAT ALL PAYMENTS WERE RECEIVED BY ASSESSEE THROUGH CHEQUES AND THAT NO INFORMATION WAS GIVEN TO THE ASSESSEE ON THE ALLEGED ACCOMMODATION ENTRY GIVEN BY SRI NARESH PODDAR TO THE ASSESSEE . HE SUBMITTED THAT ASSESSEE HAS NEVER BEEN CONFRONTED WITH ANY STATEMENT OF ANY PERSON , AND SUBMITTED THAT ASSESSEE HAS ALREADY INCLUDED THE SUM OF ITA NO. 1597 /HYD/2018 AY: 20 09 - 10 M/S SREE MAHAVEER TRADERS, NIZAMABAD . 4 RS.2,80,000/ - IN ITS RECEIPTS AND HAS OFFERED INCOME THEREON TO TAX AND THEREFORE FURTHER ADDITION OF RS.2,80,000/ - WOULD RESULT IN A DOUBLE ADDITION. 5 . THE LD.DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . 6 . HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, I FIND THAT THE DEPARTMENT HAS NOT BROUGHT OUT ON RECORD THE BASIS ON WHICH THEY HAVE COME TO THE CONCLUSION THAT MR. NARESH PODDAR HAS GIVEN AN ACCOMMODATION ENTRY TO THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS SOLD TURMERIC TO M/S SIDHARTHA TRADING CO . AND HAS RECEIVED SALE CONSIDERATION BY WAY OF CHEQUES FROM M/S ANKUR ENTERPRISES . THE NEXUS BETWEEN THE SALE OF TURMERIC AND RECEIPT THROUGH M/S ANKUR ENTERPRISES HAS BE EN PROVED AND T HE ASSESSEE HAS ALREADY OFFERED THE SUM OF RS.2,80,000/ - TO TAX. THEREFORE, THE SAME CANNOT AGAIN BE BROUGHT TO TAX. IN VIEW OF THE SAME, THE ASSESSEES APPEAL IS ALLOWED AND THE ADDITION MADE BY THE AO IS DELETED AS IT HAS ALREADY BEEN OFFERED TO TAX. 7 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 TH MARCH , 2020. SD/ - (P MADHAVI DEVI) JUDICIAL MEMBER DATED: 05 TH MARCH , 2020 . *GMV ITA NO. 1597 /HYD/2018 AY: 20 09 - 10 M/S SREE MAHAVEER TRADERS, NIZAMABAD . 5 COPY FORWARDED TO: 1. M/S SREE MAHAVEER TRADERS, C/O SRI K.V. CHALAMAIAH, C.A. M/S SCV & ASSOCIATES, C .AS , FLAT NO.107, VENKATARAMA TOWERS, BASHEER BAGH, HYDERABAD . 2. ITO, WARD 3 , NIZAMABAD . 3. ACIT /JCIT , RANGE 3 , NIZAMABAD RANGE, NIZAMABAD . 4. CIT(A) - 5 , HYDERABAD 5. PR.CIT - 5 , HYDERABAD. 6. D.R. ITAT HYDERABAD. 7. GUARD FILE ITA NO. 1597 /HYD/2018 AY: 20 09 - 10 M/S SREE MAHAVEER TRADERS, NIZAMABAD . 6 1. DRAFT DICTATED ON 2 7 /02/2020 2. DRAFT PLACED BEFORE THE AUTHOR 02/03/ 2020 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 6. KEPT FOR PRONOUNCEMENT 0 5 /0 3 /2020 7. FILE SENT TO BENCH CLERK