RAMESH S. CHOUDHARY, PALGHAR V. ITO WD 1, PALGHAR

ITA 1772/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1366 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 05-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MALAY H SHAH
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM)& RAMLAL NEGI (JM) I.T.A. NO. 1772/MUM/2013 (ASSESSMENT YEAR 2007-08) RAMESH S. CHAUDHARY PRO. CHOUDHARY AANI BANDHU AT & POST SATPATI, PLAGHAR PIN CODE-401 405. VS. ITO-WARD-1, PALGHAR. (APPELLANT) (RESPONDENT) PAN NO. ABAPC 7750 Q ASSESSEE BY SHRI MALAY H. SHAH DEPARTMENT BY SHRI PURUSHOTTAM KUMAR DATE OF HEARING 22.12.2016 DATE OF PRONOUNCEMENT 22.12.2016 O R D E R PER B.R. BASKARAN (AM) :- THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31-10-2012 PASSED BY LD CIT(A)-II, THANE AND IT RELATES TO THE ASSESS MENT YEAR 2007-08. 2. AT THE TIME OF HEARING, THE LD A.R DID NOT PRESS GROUNDS 2 TO 7 AND HENCE THEY ARE DISMISSED AS NOT PRESSED. THE REMAINING GROUND REL ATES TO THE ADDITION OF RS.29,17,658/-. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE AO NOTICED THAT THE ASSESSEE HAS BEEN RECEIVING DISCOUNTS FROM ITS SUPPLIER NAMED M/S GAR WARE WALL ROPES LTD. THE DETAILS CALLED FROM THE ABOVE SAID COMPANY SHOWED THAT IT HAS GIVE N DISCOUNT OF RS.86,10,764/- DURING THE YEAR UNDER CONSIDERATION, WHEREAS THE PURCHASES ACC OUNTS OF THE ASSESSEE SHOWED A CREDIT OF RS.49,01,705/-. THE ASSESSEE HAS BEEN FOLLOWING TH E PRACTICE OF REDUCING DISCOUNT TO THE PURCHASES ACCOUNT. THUS THERE WAS A DIFFERENCE OF RS.37,09,059/- IN THE AMOUNT OF DISCOUNT RECEIVED. 4. THE ASSESSEE OBTAINED A LETTER FROM M/S GARWA RE WALL ROPES LTD, WHEREIN IT WAS STATED THAT A SUM OF RS.29,17,658/- DUE TO M/S CHAUDHARI AANI M ANDALI, THE PROPRIETORY CONCERN OF 1772/M/13 RAMESH S. CHOUDHARY 2 ASSESSEES BROTHER NAMED SHRI RAMKRISHNA CHAUDHARI, WAS ADJUSTED BY THE ABOVE SAID COMPANY AGAINST THE AMOUNT DUE TO THE ASSESSEE. IT WAS STA TED THAT M/S CHAUDHARI AANI MANDALI WAS PROVIDING SALES PROMOTION, DEPOT HANDLING AND FREIG HT WORKS ON BEHALF OF M/S GARWARE WALL ROPES LTD. THE AO DID NOT AGREE WITH THE SUBMISSIO NS MADE AND ACCORDINGLY ADDED THE DIFFERENCE AMOUNT OF RS.37,09,059/- (WHICH INCLUDES THE AMOUNT OF RS.29,17,658/- REFERRED ABOVE) TO THE TOTAL INCOME OF THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE ADDITION. THE ASSESSEE IS AGGRIEVED BY THE ADDITION OF RS.29,17,6 58/- CONFIRMED BY THE LD CIT(A). 5. AT THE TIME OF HEARING, THE LD A.R WAS ASKED TO FURNISH THE DETAILS OF ENTRIES PASSED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS WITH REGARD TO TH E ADJUSTMENT OF RS.29,17,658/- MADE BY M/S GARWARE WALL ROPES LTD. THE ASSESSEE WAS ALSO ASKE D ABOUT THE PAYMENT MADE TO M/S CHAUDHARI AANI MANDALI, THE PROPRIETARY CONCERN OF M/S RAMAKRISHNA CHARUDHARI. IT WAS INFORMED THAT IT IS THE DUTY OF THE ASSESSEE TO SAT ISFY THE AO THAT THE AMOUNT OF RS.29,17,658/- BELONGED TO M/S CHAUDHARI AANI MANDALI, THE PAYMENT THEREOF THROUGH DOCUMENTS AND ENTRIES PASSED IN THE BOOKS OF ACCOUNT. IT WAS POINTED OUT THAT THE ACCOUNT OF GARWARE WALL ROPES LTD CANNOT BE RECONCILED WITHOUT PASSING PROPER ACCOUNT ING ENTRIES. 6. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS N OT FURNISHED THE RELEVANT DOCUMENTS BEFORE THE TAX AUTHORITIES AND ACCORDINGLY SOUGHT AN OPPORTUNI TY TO FURNISH ALL THOSE DETAILS. THE LD A.R PRAYED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO. 7. THE LD D.R SUBMITTED THAT THE ASSESSEE HAS FAI LED TO OFFER CONVINCING EXPLANATIONS IN THIS REGARD. 8. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES TO BE SET ASIDE TO THE FILE OF THE AO, SINCE THE FACTUAL ASPECT RELATI NG THERETO HAVE NOT BEEN BROUGHT ON RECORD BY THE ASSESSEE. FURTHER, WE NOTICE THAT M/S GARWARE WALL ROPES LTD HAS CONFIRMED THAT A SUM OF RS.29,17,658/- IS PAYABLE BY IT TO M/S CHAUDHARI AA NI MANDALI AND NOT TO THE ASSESSEE. IF THAT BE THE CASE, THEN THE SUM OF RS.29,17,658/- COULD N OT BE CONSIDERED AS INCOME OF THE ASSESSEE. SINCE M/S CHARUDHARI AANI MANDALI IS A RELATED CONC ERN OF THE ASSESSEE, M/S GARWARE WALL ROPES LTD CLAIMED TO HAVE ADJUSTED THE ABOVE SAID A MOUNT AGAINST THE AMOUNT DUE FROM THE ASSESSEE, I.E., THE ASSESSEE IS REQUIRED TO PAY THE ABOVE SAID SUM TO M/S CHAUDHARI AANI MANDALI. WE HAVE NOT EARLIER NOTICED THAT THE ASSESSEE HAS N OT FURNISHED ANY DETAIL BEFORE THE TAX 1772/M/13 RAMESH S. CHOUDHARY 3 AUTHORITIES WITH REGARD TO THESE FACTUAL ASPECTS. I N ANY CASE, THE EXPLANATIONS GIVEN BY THE ASSESSEE AND M/S GARWARE WALL ROPES LTD ALSO REQUIR E VERIFICATION. HENCE, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT (A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE AB OVE SAID ISSUE AFRESH BY DULY CONSIDERING THE INFORMATION AND EXPLANATIONS THAT MAY BE FILED BY T HE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER HAS BEEN PRONOUNCED IN THE COURT ON 22.12.2 016 SD/- SD/- (RAMLAL NEGI) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 22/12/2016 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) JV.SR.PS. ITAT, MUMBAI