SHRI Satish Vyawahare, Nagpur V. Assistant Commissioner of Income-Tax,Circle-I, Nagpur

ITA 17/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3098 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 24-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K DAHARIA
• Keywords: Additional evidence; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 17/NAG/2012 / ASSESSMENT YEAR 2006-07 SHRI SATISH VYAWAHARE, M/S. RAM MEDICAL AGENCIES, RAMDASPETH, NAGPUR. PAN: ABBPV 9715 D VS. ACIT, CIRCLE-1 NAGPUR. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : NONE ! / RESPONDENT BY : SHRI A.K. DAHARIA, DCIT ' ! #$% / DATE OF HEARING : 24-01-2013 &' ! #$% / DATE OF PRONOUNCEMENT : 30-01-2013 () / O R D E R PER RAJENDRA, AM FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY THE AS SESSEE, AGAINST THE ORDER DT. 04-10-2011 OF THE CIT(A)-I, NAGPUR. 1. THE LEARNED CIT(A) ERRED IN NOT ADMITTING THE EVIDE NCE PRODUCED IN THE FORM OF CONFIRMATIONS OF THE LENDERS. 2. THE LEARNED CIT(A) ERRED IN NOT FOLLOWING THE DECIS ION OF BOMBAY HIGH COURT IN 231 ITR 1 (BOM). 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 4,97,000/- AS UNDISCLOSED INCOME. 2. ASSESSEE, AN INDIVIDUAL DEALING IN WHOLESALE MEDICI NE, FILED HIS RETURN OF INCOME ON 31-10-2006 DECLARING A TOTAL INCOME AT RS . 14.71 LAKHS. ITA NO. 17/NAG/2012 SHRI SATISH VYAWAHARE 2 3. DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFIC ER (AO) DIRECTED THE ASSESSEE TO FILE CONFIRMATION OF FRESH LOANS INTROD UCED DURING THE YEAR UNDER CONSIDERATION. AS PER AO, ASSESSEE FAILED TO FURNI SH CONFIRMATION FOR FEW LOAN TRANSACTIONS. SO, HE MADE AN ADDITION AMOUNTING T O RS. 4.97 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE U/S. 68 OF THE INCOME TAX AC T 1961, (ACT). 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA). HE SUBMITTED THAT LOAN CONFIRMATIONS WERE OBTAINED FRO M SIX PARTIES, THAT IN CASE OF ONE CREDITOR WHEREABOUTS WERE NOT KNOWN, THAT SHE HAS S HIFTED HER ADDRESS, THAT LOANS WERE ARRANGED THROUGH A BROKER. FAA FORWARDED THE LIST OF CONFIRMATION TO THE AO FOR SUBMITTING A REMAND REPORT. AO STATED THAT ADEQUAT E OPPORTUNITIES WERE GIVEN TO ASSESSEE TO PRODUCE CONFIRMATION, THAT, HE DID NOT AVAIL THE SAME, THAT, ADDITIONAL EVIDENCES SHOULD NOT BE ADMITTED AS PER RULE 46A OF THE ACT. COMMENTING UPON THE AOS REMAND REPORT, ASSESSEE SUBMITTED BEFORE THE F AA THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EV IDENCE BEFORE THE AO, THAT THE ASSESSEE WAS NOT ABLE TO PRODUCE THE CONFIRMATIONS BECAUSE THESE CONFIRMATIONS WERE REQUIRED TO BE OBTAINED THROUGH BROKER, THAT THE LO ANS WERE TAKEN THROUGH HIM, THAT ASSESSEE DID NOT KNOW THE PARTIES PERSONALLY, THAT SAME COULD NOT BE PRODUCED AT THAT TIME OF ASSESSMENT, THAT ASSESSEE COULD GET THE EVI DENCES ONLY AFTER THE ASSESSMENT WAS MADE, THAT RULE 46A(B) CAME INTO PLAY AND THE E VIDENCE SHOULD BE ACCEPTED. 4.1 RELYING UPON THE ORDER OF THE PRABHAVATI SHAH (231 ITR 1) DELIVERED BY THE HONBLE BOMBAY HIGH COURT, ASSESSEE SUBMITTED THAT OBJECTIONS OF THE AO SHOULD BE REJECTED. HE FURTHER SUBMITTED THAT CREDITORS HAD GIVEN THEIR PAN CARD NUMBERS IN THE CONFIRMATION LETTERS, THAT THE PAYMENTS WERE THROUG H CHEQUES, THAT THESE TWO THINGS PROVED THE CREDITWORTHINESS OF THE CREDITORS, THAT GENUINENESS OF THE LOANS WAS PROVED IN CASE OF SIX CREDITORS, IN THE CASE OF LOAN FROM MRS. MAYA VIDHANI, ASSESSEE HAD ENCLOSED A COPY OF HER LEDGER ACCOUNT FOR THE FINAN CIAL YEAR 2005-06 AND 2006-07, THAT LOAN FROM MRS. MAYA VIDHANI, WAS TAKEN THROUGH ACCOUNT-PAYEE CHEQUE AND SAME HAD BEEN RE-PAID BY AN ACCOUNT-PAYEE CHEQUE IN NEXT FINANCIAL YEAR. A COPY OF THE BANK STATEMENT WAS ALSO ANNEXED TO THE RELEVANT PAPERS. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND DISCUSSING THE FACTS OF THE CASE OF PRABHAVATI SHAH (SUPRA), FAA HELD THAT FACTS OF THE CASE UNDER CONSIDERATION WERE ENTIRELY DISTINGUISHABLE FROM TH E FACTS OF PRABHAVATI SHAH (SUPRA). FAA FURTHER HELD THAT NO PERSON WAS ENTITLED TO SEE K ADMISSION OF ADDITIONAL EVIDENCES AS A MATTER OF RIGHT, THAT RULE 46 OF ITA T RULES 1962 (RULES) WAS COUCHED IN NEGATIVE TERMINOLOGY, THAT APPELLATE AUTHORITY W AS VESTED WITH POWERS TO ADMIT/REJECT APPLICATION FOR PRODUCTION OF ADDITION AL EVIDENCES. FAA FINALLY HELD THAT ASSESSEE HAD NOT MADE ANY APPLICATION FOR ADMITTING THE ADDITIONAL EVIDENCES U/S. 46A OF THE RULES, INSTEAD OF JUSTIFYING THE CIRCUMSTANC ES OF ADMITTING ADDITIONAL EVIDENCES, THE ASSESSEE HAD STATED THAT IT WAS INCUMBENT UPON THE FAA TO ADMIT THE ADDITIONAL EVIDENCES, THAT AO HAD POINTED OUT THAT NUMEROUS OP PORTUNITIES WERE GIVEN TO THE ASSESSEE TO FURNISH CONFIRMATION, THAT DURING THE R EMAND PROCEEDINGS, AO HAD DIRECTED THE ASSESSEE TO PRODUCE THE CREDITORS ALON G WITH THE BANK A/C STATEMENT, BALANCE SHEET AND OTHER SUPPORTING EVIDENCES, THAT IN RESPONSE TO THIS ASSESSEE HAD SUBMITTED COPIES OF CONFIRMATION LETTERS ONLY, THAT ASSESSEE DID NOT PRODUCE CREDITORS/COPIES OF BANK A/CS AND BALANCE SHEET/ANY SUPPORTING DOCUMENT, THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS PLACED ON HIM TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CREDITORS. FAA DID NOT AGREE WITH THE ITA NO. 17/NAG/2012 SHRI SATISH VYAWAHARE 3 ASSESSEES SUBMISSION THAT AFTER FILING THE CONFIRM ATION LETTER, HE WAS NOT SUPPOSED TO SUPPLEMENT IT. AS PER FAA, ASSESSEE HAD NOT ADMITT ED TO PRODUCE EVEN THE SUPPORTING DOCUMENT REQUIRED BY THE AO. IN THESE CIRCUMSTANCE S, FAA UPHELD THE ORDER OF THE AO AND DISMISSED THE APPEAL. 6. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORD ER OF THE AO AND FAA. WE HAVE PERUSED THE MATERIAL AVAILABLE ON FILE. IT IS A FACT THAT ASSESSEE HAS NOT PRODUCED CREDITORS LIST. DURING THE ASSESSMENT PRO CEEDINGS BEFORE THE FAA, LOAN CONFIRMATION FROM SIX PARTIES WAS FILED. THOUGH TH E AO AND FAA HAS STATED THAT ADEQUATE OPPORTUNITIES WERE ACCORDED TO THE ASSESSE E, THEY HAVE NOT MENTIONED ON WHICH DATES, ASSESSEE WAS ASKED TO FILE THE DETAILS ABOUT THE CREDITORS. FILING SIX CONFIRMATION LETTERS FROM SIX PARTIES IS ONE OF THE EVIDENCES PRODUCED BY THE ASSESSEE. ASSESSEE MIGHT HAVE NOT MADE FORMAL APPLICATION AS PER THE PROVISIONS OF RULE 46A OF THE RULES BEFORE THE FAA. BUT MENTIONING THAT C ONFIRMATION LETTER SHOULD BE CONSIDERED IN LIGHT OF THE JUDGMENT OF PRABHAVATI SHAH (SUPRA) WAS AN INDICATION THAT ASSESSEE WANTED ADDITIONAL EVIDENCE TO BE PRODUCED. WE FIND THAT ASSESSEE HAS CLAIMED THAT LOANS WERE ARRANGED BY SOME BROKERS. AO HAS NOT MADE AN ATTEMPT TO MAKE VERIFICATION FROM THE BROKERS ABOUT GENUINENES S OF THE CLAIM MADE BY THE ASSESSEE. CONSIDERING THE PECULIAR FACTS AND CIRCU MSTANCES OF THE CASE, WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE, MATTER SHO ULD BE RESTORED BACK TO THE FILE OF THE AO FOR LIMITED PURPOSE OF VERIFICATION OF LOANS REC EIVED FROM THE CREDITORS, HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO CO-OPERATE FULLY WITH THE AO. GRO UND NOS.1 TO 3 FILED BY THE ASSESSEE ARE PARTLY ALLOWED. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. + ,- . +# / (01 ! ' ) . ,23 ! # 45. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 3 0 TH DAY OF JANUARY, 2013 ,7' 0-# ' - 789 / 30 $ 2013 ' () &':# ; . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) (- / JUDICIAL MEMBER % (- / ACCOUNTANT MEMBER ,7' MUMBAI, ;( DATE: 30 TH JANUARY, 2013 TNMM ITA NO. 17/NAG/2012 SHRI SATISH VYAWAHARE 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE :# # //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT