Sangeetha Traders, CHENNAI V. ACIT, CHENNAI

ITA 1789/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81143 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 08-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 23-09-2013
• Court: TRIBUNAL
• Department Lawyers: C V PAVANA KUMAR
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Bogus loan

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHE NNAI . . . , !' , # $! % BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 1789/MDS/2013 / ASSESSMENT YEAR : 2004-05 M/S.SANGEETHA TRADERS, B-10, 305, TTK ROAD, ALWARPET, CHENNAI 18 [PAN: AAAFS 1943 G] ( '& /APPELLANT) VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III(4), CHENNAI ( '('& /RESPONDENT) / APPELLANT BY : SHRI B.RAMAKRISHNAN, FCA., / RESPONDENT BY : SHRI C.V.PAVANA KUMAR, JCIT / DATE OF HEARING : 08-09-2014 ! / DATE OF PRONOUNCEMENT : 08-09-2014 $) / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS), CENTRAL-I, CHENNAI DATED 25-07-2013 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2004-05. I.T.A. NO. 1789/MDS/2013 2 2. A SEARCH AND SURVEY ACTION WAS TAKEN ON THE BUSI NESS AND RESIDENTIAL PREMISES OF THE GROUP CONCERNS OF THE A SSESSEE AND THEIR PROMOTERS ON 07-10-2010. IN THE GROUP, THERE ARE 18 BUSINESS CONCERNS INCLUDING ASSESSEE. THE AY UNDER CONSIDERATION IS JUST PRECEDING THE BLOCK OF SIX AY S INVOLVED IN SEARCH ASSESSMENTS. DURING THE COURSE OF SEARCH, I T WAS FOUND THAT THE ASSESSEE HAD CLAIMED BOGUS LOAN CREDITS AN D COMMISSION EXPENSES. IN THE BACKGROUND OF THESE FACTS, NOTICE U/S.148 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED ON 29-03-2011 IN RESPECT OF AY.2004-05. IN RESPONSE TO NOTICE ISSUED U/S.148, THE ASSESSEE HAD FILED ITS R ETURN OF INCOME FOR THE IMPUGNED AY ON 09-09-2011 ADMITTING TOTAL I NCOME OF ` 21,08,443/-. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DT.26-12-2011 PASSED U/S.143(3) R.W.S.147, MADE ADD ITION OF ` 3,23,796/- ON ACCOUNT OF BOGUS INTEREST PAYMENT AND ` 17,19,686/- ON ACCOUNT OF BOGUS COMMISSION PAYMENTS . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS ) VIDE IMPUGNED ORDER, DISMISSED THE APPEAL OF THE ASSESSE E. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBU NAL. I.T.A. NO. 1789/MDS/2013 3 3. SHRI B.RAMAKRISHNAN, APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE RE-ASSESSMENT PROCEEDINGS WERE I NITIATED IN THE AY UNDER CONSIDERATION ON THE BASIS OF INFORMATION GATHERED BY THE DEPARTMENT DURING SEARCH OPERATIONS. THE IMPUGNED AY IS JUST PRECEDING THE SEARCH ASSESSMENT PERIOD. THE ASSESS EE COULD NOT PRODUCE ACKNOWLEDGMENTS FROM THE PARTIES CONCERNED ON ACCOUNT OF LONG TIME GAP. NOW, WITH GREAT EFFORT, ASSESSEE HAS BEEN ABLE TO SECURE ALL DOCUMENTS IN SUPPORT OF THE COMMISSIO N PAYMENTS. THE LD.AR FURTHER CONTENDED THAT AS REGARDS THE SEA RCH ASSESSMENT PERIOD IS CONCERNED, THE ASSESSEE IS ALR EADY BEFORE SETTLEMENT COMMISSION. 4. ON THE OTHER HAND, SHRI C.V.PAVANA KUMAR, APPEAR ING ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE FIN DINGS OF CIT(APPEALS). THE LD.DR SUBMITTED THAT THE ASSESSE E COULD NOT FURNISH EVIDENCE EITHER BEFORE THE ASSESSING OFFICE R OR THE CIT(APPEALS). THE CIT(APPEALS) HAS GIVEN A REASONE D FINDING FOR REJECTING THE SUBMISSIONS OF THE ASSESSEE. THE LD. DR PRAYED FOR DISMISSAL OF APPEAL OF THE ASSESSEE. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BEL OW PERUSED. THE RE-ASSESSMENT PROCEEDINGS WERE INITIATED AGAINS T THE I.T.A. NO. 1789/MDS/2013 4 ASSESSEE ON THE BASIS OF INFORMATION COLLECTED BY T HE DEPARTMENT DURING SEARCH CARRIED OUT ON 07-10-2010 AT THE BUSI NESS PREMISES OF THE GROUP COMPANIES/FIRMS MANAGED BY SHRI RAJEND RA KUMAR LATH AND HIS BROTHERS. IN THE GROUP, THERE ARE 18 BUSINESS CONCERNS INCLUDING THE ASSESSEE. THE LD.AR HAS PRA YED THAT DURING RE-ASSESSMENT PROCEEDINGS AND BEFORE THE FIR ST APPELLATE AUTHORITY, THE ASSESSEE COULD NOT PRODUCE CONFIRMAT ION LETTERS FROM THE PARTIES TO WHOM COMMISSIONS WERE PAID IN LIEU O F SERVICES RENDERED BY THEM. THE MAIN REASON FOR NOT PRODUCIN G THE EVIDENCE/CONFIRMATION LETTERS WAS LONG TIME GAP BET WEEN THE TRANSACTIONS AND RE-ASSESSMENT PROCEEDINGS. THE LD .AR HAS PRAYED THAT NOW, THE ASSESSEE IS IN POSSESSION OF C ONFIRMATION LETTERS AND OTHER RELEVANT MATERIAL. WE ARE OF THE CONSIDERED OPINION THAT AN OPPORTUNIT Y SHOULD BE AFFORDED TO THE ASSESSEE TO PRODUCE NECESSARY MATERIALS/CONFIRMATIONS IN SUPPORT OF ITS CONTENTIO NS. THE FILE IS REMITTED BACK TO ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH ON THE BASIS OF MATERIALS FURNISHED BY THE ASSESSEE IN SUPPORT OF COMMISSION PAYMENTS MADE TO VANDANA SALES CORPORATI ON, RAMBO PACKERS INDIA PRIVATE LIMITED AND SHRI VISHNU KHEMANI. THE ASSESSING OFFICER SHALL PASS AFRESH ORDERS AFTE R AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDAN CE WITH LAW. I.T.A. NO. 1789/MDS/2013 5 THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 8 TH SEPTEMBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( !' ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 08 TH SEPTEMBER, 2014 TNMM &* +,-, /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF