V.N.Mehta & Co., CHENNAI V. ACIT, CHENNAI

ITA 1766/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7738 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-06-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Additional evidence; Non compliance
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , ' # BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 1766/MDS/2016 / ASSESSMENT YEAR : 2007-08 SHRI V. N. MEHTA & CO., NO. 32, SEMBUDOSS STREET, GEORGE TOWN, CHENNAI - 600 001. [PAN: AAAFV 1974G] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE - IX, CHENNAI - 600 006. ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE )*% & / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT & /DATE OF HEARING : 24.11.2016 & /DATE OF PRONOUNCEMENT : 29.12.2016 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE ASSESSEE HAS FILED APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 13, CHENNAI, ITA NO. 276/CIT (A)-13/20016-07 DATED 12.05.2016 PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT. AT THE TIME OF HEARING THE LD. AR HAS NOT PRESSED THE GROUND NO. 3 AND 4 OF GROUNDS OF APPEAL :-2-: I.T.A. NO. 1770/MDS/2016 AND MADE ENDORSEMENT AND TREATED AS DISMISSED. THE ONLY SUBSTANTIVE GROUND RAISED BY THE ASSESSEE THAT THE CIT(A) ERRED IN SUS TAINING THE ADDITION OF RS. 4,20,000/- IN RESPECT OF SUNDRY CREDITORS FOR THE W ANT OF ADDITIONAL EVIDENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM AND DOES TRADING IN COPPER AND ALUMINIUM WIRES AND FILE D RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 10.11.2007 AND THE RETUR N OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED. IN C OMPLIANCE TO THE NOTICE, LD. AR APPEARED FROM TIME TO TIME PRODUCED BOOKS OF ACCOUN TS, BILLS, VOUCHERS FOR EXPENSES, BANK ACCOUNTS, LOAN CONFIRMATIONS, VAT OR DER, INVOICE OF FIXED ASSETS AND OTHER DETAILS. IN THE ASSESSMENT PROCEEDINGS, THE LD. AO FOUND THE ASSESSEE HAS DISCLOSED SUNDRY CREDITORS IN BALANCE SHEET AND TRA DE CREDITS EXPLANATIONS ARE CALLED FOR WITH INCOME TAX DETAILS AND PAN. THE ASSESSEE COULD NOT PRODUCE CONFIRMATIONS AND SUPPORT WITH GENUINENESS OF TRANSACTIONS AND TH E LD. AO DUE TO NON COMPLIANCE OF DETAILS MADE AN ADDITION OF RS. 4,20,000/- TO RE TURNED INCOME AND ASSESSED THE TOTAL INCOME OF RS. 75,66,260/- AND RAISED THE DEMA ND. 3. AGGRIEVED BY THE ORDER, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE LD. AR OF THE ASSESS EE REITERATED THE SUBMISSIONS IN THE ASSESSMENT PROCEEDINGS. THE LD. CIT(A) OBSERVE D THAT THE ASSESSING OFFICER MADE ADDITION OF TRADE CREDITS WITHOUT APPRECIATING THE FACT THAT THERE IS INCREASE IN TRADE CREDITS COMPARED TO EARLIER YEARS AND THE ASS ESSEE COULD NOT FILE THE DETAILS IN THE ABSENCE OF ANY SPECIFIC DIRECTIONS OF THE ASSES SING OFFICER AND THE ASSESSEE :-3-: I.T.A. NO. 1770/MDS/2016 INITIALLY AGREED TO THE ADDITIONS AND LATER RETRACT ED AND THE PRODUCED EVIDENCE IN APPELLATE PROCEEDINGS AND SAME WAS NOT ACCEPTED AND CONFIRMED THE ADDITION OF RS. 4,20,000/- AND UPHELD THE LD. AO ACTION. AGGRIEVED BY THE ORDER, ASSESSEE ASSILED AN APPEAL WITH THE TRIBUNAL 4. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESSE E FIRM HAS BEEN IN BUSINESS OF DEALING COPPER AND ALUMINIUM WIRES AND FILED INCOME TAX RETURNS REGULARLY AND THE LD. AR RELIED ON THE CO-ORDINATE BENCH DECISION OF S. VELUMANI VS. ITO IN ITA NO. 1839/MDS/2013 DATED 28.02.2014 ON AG REED ADDITION EMPHASIZING ON THE HON'BLE SUPREME COURT DECISION, AND THE LD. CIT (A) HAS REJECTED THE ADDITIONAL EVIDENCE VITAL TO PROVE THE CREDITABILITY OF CREDIT ORS AND PRAYED FOR ALLOWING THE GROUND OF THE APPEAL. CONTRA, THE LD. DR RELIED ON LOWER AUTHORITIES ORDER AND OPPOSED THE GROUNDS. 5. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS. THE LD. AR SOLE ARGUMENTS THAT ASSESSEE HAS FILED THE CONFIRMATION IN ASSESSMENT PROCEEDINGS AND THE LD. AO HAS VERIFIED THE LEDGER ACCOUNT OF CREDITORS AND VOLUME OF BUSINESS AND MAD E ADDITION. WHEREAS, THE LD. CIT(A) REJECTED THE ADDITIONAL EVIDENCE PRODUCED BY WAY OF CONFIRMATION OF THE CREDITORS. WE PERUSED THE LOWER AUTHORITIES ORDERS AND THE REASONS ENVISAGED BY THE CIT(A), ON REJECTING THE ADDITIONAL EVIDENCE AN D THE CO-ORDINATE BENCH DECISION OF S. VELUMANI (SUPRA), WHERE THE TRIBUNAL HAS TAKE N DECISION IN THE INTEREST OF JUSTICE RELYING ON SUPREME COURT CASE IN URVIBEN CH IRAGBHAI SHETH VS. VIJAYBHAI SLP(C) NO. 896 OF 2006. THE ASSESSEE HAS FAILED TO FILE THE INFORMATION BEFORE THE :-4-: I.T.A. NO. 1770/MDS/2016 LD. AO AND PRODUCE ADDITIONAL EVIDENCE BEFORE THE C IT(A) WHICH WAS REJECTED AND APPEAL WAS DISMISSED ON SOLE REASON OF AGREED ADDIT ION. CONSIDERING THE FACTS AND MATERIAL ON RECORD AND JUDICIAL DECISIONS, WE ARE O F THE OPINION THAT THE ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO REPRESENT T HE CASE WITH ADDITIONAL EVIDENCE BEFORE THE CIT(A). ACCORDINGLY, WE SET ASIDE THE D ISPUTED ISSUE TO THE FILE OF THE CIT(A) TO ADJUDICATE ON MERITS AND THE ASSESSEE SHO ULD PRODUCE ADDITIONAL EVIDENCE AND SHALL CO-OPERATE WITH THE APPELLATE AUTHORITY I N DISPOSAL OF APPEAL. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE ORDER PRONOUNCED ON THURSDAY, THE 29TH DAY OF DECEM BER, 2016 AT CHENNAI. SD/ - ( ) (SANJAY ARORA) ' / ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) $ ' /JUDICIAL MEMBER /CHENNAI, / /DATED: 29TH DECEMBER, 2016 JPV & )'12 32 /COPY TO: 1. APPELLANT 2. )*% /RESPONDENT 3. 4 ( )/CIT(A) 4. 4 /CIT 5. 2 )'' /DR 6. 8 /GF