Shankarbhai Amthubhai Patel, Surendranagar V. The Joint Commissioner of Income Tax, Surendranagar Range, Surendranagar

ITA 17/RJT/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4367 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG DR A
• Assessee Lawyers: SAMIR S JANI H A
• Keywords: Opportunity of being heard

Judgement Text

I , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . A . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA . NO. 17 /RJT/2013 CR R / ASSESSMENT YEAR 2009 - 10 SHANKARBHAI AMTHUBHAI PATEL, PROP. PATEL INDUSTRIES, DUDHREJ ROAD, SURENDRANAGAR. PAN : A BXPP3460H ( N / APPELLANT) THE JOINT COMMISSIONER OF INCOME - TAX, SURENDRANAGAR RA NGE , SURENDRANAGAR. UN / RESPONDENT CREA / ASSESSEE BY SHRI SAMIR S. JANI, ADVOCATE. H A / REVENUE BY SHRI ANKUR GARG , DR. A / DATE OF HEARING 24 - 0 7 - 2013 A / DATE OF PRONOUNCEMENT 26 - 0 7 - 20 13 / ORDER . . A , / T. K. SHARMA, J. M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 1 9 - 12 - 2012 OF CIT (A) - X V , AHMEDABAD FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDER: - THE LEARNED JCIT & CIT(A) HAS ERRED IN MAKING ADDITION AND UPHOLDING ADDITION RESPECTIVELY OF RS.4,36,122/ - ON ACCOUNT OF CREDIT BALANCES OF TWO SUNDRY CREDITORS FOR SUPPLY/LABOUR. 3. THE FACTS IN BRIEF RELEVANT TO THE CONTROVERSY INVOLVED IN THIS APPEAL AR E THAT THE ASSESSEE IS AN INDIVIDUAL DOING BUSINESS OF MANUFACTURING VARIOUS AUTO PARTS WHICH ARE USED IN AUTO INDUSTRIES IN PROPRIETORSHIP CONCERN NAMELY ; M/S. PATEL INDUSTRIES. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE R ETURN OF I NCOME ON 26 - 03 - 2010 DECLARING TOTAL INCOME OF RS.59,69,390/ - . AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T. ACT ON 29 - 11 - 2011 WHEREIN, HE DISALLOWED A SUM OF RS.4,36,122/ - (I.E. RS.1,43,468 + RS.2,92,654) BEING UNEXPLAINED JOB WORK AND PURCHASE EXPENSES IN THE NAMES O F FOLLOWING TWO PARTIES: - I) M/S. BAKER GAUGES INDIA PVT. LTD.,33 - 1 - 2, NAGAR ROAD, PUNE OF RS.1,43,468/ - (OUTSTANDING AGAINST PURCHASES) ITA 17 - 2013 2 II) M/S. VISHVAKARMA ENGINEERING WORKS, PRATIK INDUSTRIAL COMPLES, MANAV MANDIR ROAD, SURENDRANAGAR OF RS.2,92,654/ - (O UTSTANDING AGAINST JOB WORK). 4. ON APPEAL BEFORE THE LD. CIT (A), ASSESSEE CONTENDED THAT BOTH THE AFORESAID TWO PARTIES ARE OLD PARTIES. THE ASSESSEE HAS DEDUCTED TDS ON AMOUNT PAID TO THEM DURING THE YEAR AND FURTHER OUTSTANDING BALANCES ARE PAID IN SU BSEQUENT YEARS , THEREFORE, BOTH THE ADDITIONS ARE UNCALLED FOR. AFTER CONSIDERING THE AFORESAID SUBMISSION, IN THE IMPUGNED ORDER, LD. CIT (A) CONFIRMED BOTH THE ADDITIONS FOR THE DETAILED REASON GIVEN IN PARA - 5.2 WHICH READS AS UNDER: - 5.2 I HAVE CAREF ULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. THE ISSUE UNDER CONSIDERATION IS REGARDING THE NON CONFIRMATION OF ACCOUNTS BY THE RESPECTIVE PARTIES. AS PER UNDISPUTED FACT OF THE CASE, THE SAID PARTIES DID NOT RESPOND TO A.OS NOTICE AND THE APPELLANT ALSO DID NOT RESPOND TO A.OS NOTICES. EVEN DURING THE COURSE OF CURRENT PROCEEDINGS ALSO THE APPELLANT HAS FAILED TO PROVIDE CONFIRMED ACCOUNTS OF THE SAID PARTIES. IT IS DIFFICULT TO UNDERSTAND AS TO IF THE TRANSACTIONS ARE G ENUINE, THEN WHY ARE THE PARTIES SHYING AWAY FROM CONFIRMATION. ACCORDINGLY, AS THE GENUINENESS OF THE TRANSACTIONS REMAINS UNEXPLAINED , IT IS HELD THAT THE ADDITION MADE BY THE A.O. DOES NOT REQUIRE ANY INTERFERENCE AND HENCE THE SAME IS CONFIRMED. AGG RIEVED WITH THE ORDER OF LD. CIT (A) , THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US ON BEHALF OF ASSESSEE, SHRI SAMIT S. JANI APPEARED AND POINTED OUT THAT AO ISSUED NOTICE U/S.133(6) TO 23 PARTIES. OUT OF THE ABOV E, MOSTLY ALL PARTIES CONFIRMED THE TRANSACTIONS WITH THE ASSESSEE. HOWEVER, M/S. VISHWAKARMA ENGINEERING WORKS AND BAKER GUAGES INDIA PVT. LTD. COULD NOT SUPPLY THE CONFIRMATIONS WHICH ARE DIRECTLY CALLED FOR BY LD. AO. HE SUBMITTED THAT BOTH THE PARTIES ARE OLD. TO M/S. VISHWAKARMA ENGINEERING WORKS THE ASSESSEE BOOKED LABOUR CHARGES AGGREGATING TO RS.4,06,070/ - OUT OF WHICH RS.2,92,654/ - REMAINED OUTSTANDING AT THE YEAR END AND AO DISALLOWED THE SAME MERELY FOR WANT OF CONFIRMATIONS. HE SUBMITTED THAT SU BSEQUENTLY PAYMENT TO THIS PARTY HAS BEEN MADE THROUGH A/C. PAYEE CHEQUE THEREFORE THERE IS NO JUSTIFICATION WHATSOEVER FOR CONFIRMING THE DISALLOWANCE. SIMILARLY, IN RESPECT OF OTHER PARTY NAMELY; M/S. BAKER GUAGES INDIA PVT. LTD., PUNE, HE SUBMITTED THA T ASSESSEE PURCHASED MATERIAL AGGREGATING TO RS.2,83,325/ - AND ONLY A SUM OF ITA 17 - 2013 3 RS.1,43,468/ - REMAINED OUTSTANDING AT THE YEAR END. THIS OUTSTAND AMOUNT IS ALSO PAID IN THE IMMEDIATELY SUCCEEDING ASSESSMENT YEAR FOR WHICH NECESSARY EVIDENCES ARE AVAILABLE. T O SUM UP, COUNSEL OF THE ASSESSEE PLEADED THAT SINCE THE OUTSTANDING AMOUNTS WERE PAID IN SUBSEQUENT YEAR THEREFORE THERE IS NO JUSTIFICATION FOR MAKING DISALLOWANCE ON DOUBT AND SUSPICIONS. AS AGAINST THIS, LD. DR POINTED OUT THAT WHETHER THE PAYMENT HAS BEEN MADE IN SUBSEQUENT YEAR NEEDS VERIFICATION AT THE END OF THE AO. HE ACCORDINGLY SUGGESTED THAT MATTER BE REMANDED TO THE FILE OF AO FOR MAKING NECESSARY VERIFICATION. 6. HAVING HEARD BOTH THE PARTIES, WE HAVE CAREFULLY GONE THROUGH THE AUTHORITIES BE LOW. IT IS WELL SETTLED LAW THAT ON DOUBT AND SUSPICION PART OF THE OUTSTANDING CANNOT BE DISALLOWED UNLESS THE AO DOUBTING THE PURCHASES MADE. IN RESPECT OF BOTH THESE PARTIES, AO ACCEPTED PART OF THE PAYMENT WHICH WAS MADE AS GENUINE AND PART OF THE PAYM ENT WHICH IS OUTSTANDING IS DISALLOWED MERELY ON THE GROUND THAT BOTH THE PARTIES COULD NOT FILE A COPY OF ACCOUNT D ULY CONFIRMED. BE THAT IT MAY BE, NOW THE ASSESSEE IS CLAIMING THAT PAYMENT TO BOTH THESE PARTIES OF OUTSTANDING AMOUNT IS PAID IN SUBSEQUEN T YEAR BY A/C. PAYEE CHEQUE WHICH NEEDS VERIFICATION AT THE END OF THE AO. WE THEREFORE, REMAND ADDITION OF RS.4,36,122/ - TO THE FILE OF AO WITH A DIRECTION THAT THE ASSESSEE WILL FURNISH THE NECESSARY EVIDENCE IN SUPPORT OF PAYMENT MADE TO BOTH THE PARTI ES IN SUBSEQUENT YEAR, THE AO WILL VERIFY THE SAME AND RE - ADJUDICATE THE ADDITION OF RS.4,36,122/ - AFRESH AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWE D. 8. THIS O RDER IS PRONOUNCED IN OP EN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . H D. K. SRIVASTAVA ) ( . . R / T. K. SHARMA) / ACCOUNTANT MEMBER C H / JUDICIAL MEMBER / ORDER DATE 24 - 0 7 - 2013. /RAJKOT NVA/ - ITA 17 - 2013 4 7 J E / COPY OF ORDER FORWARDED TO: - 1 . N / APPELLANT - SHANKARBHAI AMTHUBHAI PATEL, PROP. PATEL INDUSTRIES, DUDHREJ ROAD, SUREN DRANAGAR. 2 . UN / RESPONDENT - THE JOINT COMMISSIONER OF INCOME - TAX , SURENDRANAGAR RANGE, SURENDRANAGAR. 3 . I . / CONCERNED CIT - V, AHMEDABAD. 4 . . - / CIT (A) - X V I , AHMEDABAD. 5 . 1 CCI , I , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT