Mandeep Maheswari, Rajahmundry V. Income Tax Officer, Ward-2(1), Rajahmundry

ITA 177/VIZ/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0307 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 1 7 7 /VIZ/ 201 8 ( / ASSESSMENT YEAR: 20 1 4 - 20 1 5 ) MANDEEP MAHESWARI D.NO.76 - 1 - 18 BHAGYODAYA APARTMENTS DANAVAIPETA RAJAHMUNDRY [PAN : A BVPM3001B ] INCOME TAX OFFICER WARD - 2( 1 ) RAJAHMUNDRY ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N.HARI , AR / RESPONDENT BY : S MT. SUMAN MALIK, DR / DATE OF HEARING : 27 . 1 1 . 2018 / DATE OF PRONOUNCEMENT : 07 . 1 2 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(CIT(A)] - 12 , HYDERABAD VIDE APPEAL NO. 10310/2017 - 18 DATED 27 . 02 .201 8 FOR THE A SSESSMENT Y EAR (A.Y.) 20 14 - 15 . 2 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY 2. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.10,92,230/ - ON 24.11.2014. THE CASE WAS SELECTED FOR SCRUTINY AN D DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) MADE ENQUIRIES WITH REGARD TO THE GENUINENESS OF SUNDRY CREDITORS BY ISSUE OF NOTICE U/S 133(6) OF THE INCOME TAX ACT (HEREINAFTER CALLED AS ACT) AND RECEIVED THE REPL IES FROM ALL THE SUNDRY CREDITORS EXCEPT IN T HREE CASES. IN THE CASE OF M/S JAY ENTERPRISE AND M/S SEEMANTH TRADING CO. , THE NOTICES ISSUED U/S 133(6) WERE RETURNED UNSERVED WITH COMMENTS OF LEFT AND UNKNOWN RESPECTIVELY. IN THE CASE OF M/S PARAMOUNT CONSULTING & CORPORATE ADVISORS P.LTD., NO COMMUNICATION WAS RECEIVED. THE AO ASKED THE ASSESSEE AS TO WHY THE OUTSTANDING AMOUNTS OF THE SAID CREDITORS SHOULD NOT BE BROUGHT TO TAX AND THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE TRANSACTIONS IN RESPECT OF SUNDRY CR EDITORS WERE GENUINE WHICH IS VERIFIABLE FROM THE BOOKS OF ACCOUNTS WITH THE RELEVANT DOCUMENTS AND ENTRIES BUT NOT BEING SATISFIED WITH THE EXPLANATION, THE AO MADE THE ADDITION OF RS.5,32,462/ - RELATING TO THE OUTSTANDING SUNDRY CREDITORS IN THE ABOVE AC COUNTS . 3. AGAINST THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE AO OBSERVING THAT THE AO HAS GIVEN ENOUGH OPPORTUNITIES AND ONLY AFTER NON SUBMISSION 3 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY OF INFORMATION, THE AO MADE THE ADDITION. ACCORDINGLY , CONFIRMED THE ORDER OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD.AR SUBMITTED T HAT THERE WAS AN OUTSTANDING AMOUNT OF RS.3,81,005/ - IN THE CASE OF M/S JAY ENTERPRISES AS ON 31.03.2014 WHICH WAS ADDED BY THE AO. THE LD.AR FILED A PAPER BOOK AND TAKEN OUR ATTENTION TO THE PAGE NO.40 - 41 OF THE PAPER BOOK RELATING TO THE ACCOUNT COPIES OF THE CREDITORS IN THE BOOKS OF THE ASSESSEE . IN PAGE NO.40 IN THE CASE OF JAY ENTERPRISE, THERE WAS OPENING BALANCE OF RS.18,81,005/ - AS ON 01.04.2013 AND THE ASSESSEE MADE THE PAYMENT OF RS.15,00,000/ - DURING THE YEAR AND THE CLOSING BALANCE WAS RS.3,8 1,005/ - AS AT THE END OF THE YEAR . PAGE NO.41 ALSO PERTAINS TO ACCOUNT COPY OF M/S JAY ENTERPRISE FROM 01.04.2014 TO 31.03.2015. THE ACCOUNT REVEALS SERIES OF TRANSACTIONS IN THE CREDITORS ACCOUNT RELATING TO THE PURCHASES AND THE PAYMENTS MADE DURING TH E SUBSEQUENT YEAR I.E. 01.04.2014 TO 31.03.2015 AND THERE WAS CLOSING BALANCE OF RS.79,78,575/ - AS AT THE END OF THE YEAR . THE ASSESSEE ALSO INVITED OUR ATTENTION TO PAGE NO.52 OF THE PAPER BOOK, WHICH SHOWS THE ACCOUNT FOR THE PERIOD FROM 01.04.2015 TO 3 1.03.2016. AS PER THE ACCOUNT COPY, THE ASSESSEE HAS MADE THE NUMBER OF TRANSACTIONS DURING THE YEAR AND ULTIMATELY ON 29.04.2015 THE ENTIRE PAYABLE WAS PAID 4 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY BY CHEQUE DRAWN ON ORIENTAL BANK OF COMMERCE. ALL THE ACCOUNT COPIES FOR THE 3 YEARS WERE PLACED BEFORE THE AO AT THE TIME OF ASSESSMENT. FROM THE ACCOUNT COPIES AND THE BILLS FURNISHED IN THE PAPER BOOK CLEARLY SHOWS THAT THE ASSESSEE HAS MADE THE REGULAR PURCHASES FROM JAY ENTERPRISES AND THE PAYMENTS WERE MADE THROUGH CHEQUE. THE AO DID NOT SUSP ECT HE PURCHASES MADE BY THE ASSESSEE FROM M/S JAY ENTERPRISES. HAVING ACCEPTED THE PURCHASES BY THE AO, MERELY BECAUSE THE AMOUNT WA S OUTSTANDING AS AT THE END OF THE YEAR AND THE ASSESSEE COULD NOT PRODUCE THE SUNDRY CREDITORS, THE ADDITION CANNOT BE MAD E. THE ASSESSEE HAS FURNISHED THE ACCOUNT COPIES FROM 2011 - 12 TO 2015 - 16 ALONG WITH THE BILLS. ALL THE BILLS CLEARLY SHOWS THAT THE TRANSACTIONS WERE GENUINE. NO EVIDENCE WAS BROUGHT ON RECORD BY THE REVENUE TO CONTROVERT THE EVIDENCE PLACED BY THE ASSES SEE. THEREFORE, WE ARE UNABLE TO SUSTAIN THE ORDER OF THE LD.CIT(A) AND THE SAME IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5 . SEEMANT TRADING CO .: THE AO MADE THE ADDITION OF RS.1,47,593/ - AS AT THE END OF THE YEAR IN THIS CASE . THE AO MADE THE ADDITION AS THE NOTICE ISSUED U/S 133(6) WAS RETURNED UNSERVED AND THE ASSESSEE WAS UNABLE TO PRODUCE THE EVIDENCE TO PROVE THE GENUINENESS OF OUTSTANDING. THE ASSESSEE FURNISHED THE PAPER BOOK IN PAGE NO.53 TO 56 RELATING TO THE ACCOUNT COPIES O F THE CREDITOR FOR THE PERIOD FROM 01.04.2012 TO 5 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY 3 1.0 3 .201 6 . AS PER THE ACCOUNT COPIES, THERE WAS CLOSING BALANCE OF RS.1,47,593/ - AS ON 31.03.2013 WHICH WAS CARRIED FORWARD TO THE SUBSEQUENT YEARS AND AT THE END OF THE FINANCIAL YEAR (F.Y.)2015 - 16, THE AS SESSEE PASSED A JOURNAL ENTRY DEBITING TO DISCOUNTS ACCOUNT AND STATED THAT THE SAID AMOUNT WAS OFFERED TO INCOME FOR THE F.Y. 2015 - 16 RELEVANT TO THE A.Y. 2016 - 17. FROM THE ABOVE DETAILS FURNISHED BY THE ASSESSEE, IT IS OBSERVED THAT THE ASSESSEE WAS UNA BLE TO PRODUCE ANY EVIDENCE TO SHOW THAT THE AMOUNT OUTSTANDING WAS GENUINE AND ULTIMATELY WRITTEN OFF IN 2015 - 16. NO EVIDENCE WAS FILED BEFORE THE AO OR BEFORE THE CIT(A) OR BEFORE THE TRIBUNAL TO ESTABLISH THE GENUINENESS OF THE OUTSTANDING AND TO PROVE THAT THE OUTSTANDING BALANCE WAS NOT PAID OUT OF UNACCOUNTED RESOURCES. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD.AR THAT THE OUTSTANDING WAS GENUINE. SINCE THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS AND IDENTIFY THE SUNDRY CREDI TOR, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. THE ASSESSEES APPEAL IN RESPECT OF ADDITION OF RS.1,47,593/ - IN THE CASE OF SEEMANT TRADING CO. IS DISMISSED. 6 . PARAMOUNT CONSULTANT AND CORPORATE ADVISORS PVT. LTD. THERE WAS AN OUTSTANDING AMOUNT OF RS.2,864/ - AS AT THE END OF THE YEAR. THE 6 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY ASSESSEE STATED THAT THE TRANSACTION WAS RELATED TO THE PURCHASES MADE BY THE ASSESSEE FROM THE CREDITOR. THE ASSESSEE FURNISHED THE PAPER BOOK AND THE ACCO UNT COPIES FOR PURCHASES AND ALSO THE ACCOUNT COPIES OF THE CREDITOR, AS PER WHICH THE ASSESSEE HAS MADE THE SERIES OF TRANSACTIONS FROM PARAMOUNT CONSULTING & CORPORATE ADVISORS PVT. LTD. AND PAID THE BROKERAGE. THE LD.AR ARGUED THAT THE PAYMENT WAS MADE THROUGH CHEQUE. SINCE THE AO DID NOT DISPUTE THE FACT THAT THE PAYMENT WAS MADE BY CHEQUE, WHICH IS EVIDENT FROM THE ACCOUNT COPY IN PAGE NO.95 AND ONLY DEFECT WAS NON SUBMISSION OF REPLY FROM THE CREDITOR. THE NOTICE WAS SERVED AND THE AO DID NOT MAKE ANY FURTHER ENQUIRY TO ASCERTAIN T HE CORRECTNESS OF THE OUTSTANDING. SINCE THE IDENTITY IS ESTABLISHED AND THE BOOKS OF ACCOUNTS SHOW SERIES OF TRANSACTION , WE DO NOT SEE ANY REASON TO SUSPECT THE GENUINENESS OF THE EXPENDITURE / OUTSTANDING . ACCORDINGLY, WE SET ASIDE THE ORDE R OF THE LD.CIT(A) AND DELETE THE ADDITION MADE BY THE AO. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . 7 I.T.A. NO . 17 7 /VIZ/201 8 MANDEEP MAHESWARI, RAJAHMUNDRY O RDER PRONOUNCED IN THE OPEN COURT ON 7 TH DECEMBER , 2018 . S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 07 . 1 2 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE MANDEEP MAHESWARI , D.NO.76 - 1 - 18 , BHAGYODAYA APARTMENTS , DANAVAIPETA , RAJAHMUNDRY 2 . / THE REVENUE INCOME TAX OFFICER, WARD - 2(1), RAJAHMUNDRY 3. THE PR. COMMISSIONER OF INCOME TAX, RAJA HMUNDRY 4. THE COMMISSIONER OF INCOME TAX - (APPEALS) - 12 , HYDERABAD 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM