ACIT, Faridabad V. M/s. Carrymore Hoists Pvt. Ltd., New Delhi

ITA 1812/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8034 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: R B MATHUR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

1 ITA NO.1812/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 1812/DEL/2014 (ASSESSMENT YEA R-2009-10) ACIT CIRCLE-11 FARIDABAD (APPELLANT) VS CARRYMORE HOISTS PVT. LTD. PLOT NO. 256, SECTOR, 24 NEW DELHI AAACC6652K (RESPONDENT) APPELLANT BY SH.V. R. SONBHADRA, SR. DR RESPONDENT BY SH. R. B. MATHUR, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 16/01/2014 PASSED BY CIT (A) FARIDABAD. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) WAS RIGHT ON FACT AND IN LAW IN DE LETING THE ADDITION OF RS.85,39,595/- OUT OF ADDITION OF RS.89,82,018/- MADE BY THE A.O FOR UNVERIFIED SUNDR Y CREDITORS WHEN THE ASSESSEE COULD NOT PROVE GENUINE NESS OF THESE CREDITORS DURING COURSE OF ASSESSMENT PROCEEDINGS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, CIT(A) WAS RIGHT ON FACT AND IN LAW IN DELETI NG THE DATE OF HEARING 17.03.2016 DATE OF PRONOUNCEMENT 09.05.2016 2 ITA NO.1812/DEL/2014 ADDITION OF RS.85,39,595/- AFTER CONSIDERING ADDITI ONAL EVIDENCE ACCEPTED DURING APPELLATE PROCEEDINGS WHIC H WERE NOT PRODUCED BY THE ASSESSEE BEFORE A.O THOUGH THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITIES TO D O SO. 3. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANU FACTURING OF CARRYMORE. THE RETURN INCOME OF RS.1,09,38,181/- W AS ASSESSED AT RS.1,99,41,790/-. A SURVEY U/S 133(A) OF THE INCOM E-TAX ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 2/3/2009. DURING THE COURSE OF SURVEY, THE ASSESSEE SURRENDER ED ADDITIONAL INCOME FOR TAXATION AMOUNTING TO RS.1 CRORE 5 LAKHS . DURING THE COURSE OF SURVEY IN STATEMENT DIRECTOR OF THE COMPA NY OFFERED A SUM OF RS. 70,50,000/- FOR TAXATION FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2009-10 AGAINST SUNDRY CREDITORS , OUTSTANDING ON THAT DATE. THE ASSESSEE WAS FINALLY ASKED ON 23 /12/2011 TO FILE CONFIRMATION OF SUNDRY CREDITORS MORE THAN RS. 50,0 00/- AS ON 31/3/2009. AS RELATES TO 16 PARTIES WHEREIN THE AM OUNT INVOLVED WAS OF RS.89,82,018/-. THE ASSESSEE HAS NOT FILED ANY CONFIRMATION OR THERE WAS NO SUFFICIENT DOCUMENTARY EVIDENCE AS RECORDED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREFORE , MADE DISALLOWANCE OF RS.89,82,018/- AS UNCONFIRMED SUNDR Y CREDITORS. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE A SSESSEE FILED ADDITIONAL EVIDENCE AS RELATED TO CONFIRMATION OF T HE SAID CREDITORS ALONG WITH THE STATEMENT OF ACCOUNT FOR THE SUBSEQU ENT YEARS SHOWING PAYMENT MADE TO THEM BY THE ASSESSEE. THE CIT(A) CALLED FOR A REMAND REPORT FROM ASSESSING OFFICER WHEREIN THE ASSESSING OFFICER NOTED THAT DESPITE REPEATED OPPORTUNITIES THE ASSESSEE HAS DELIBERATELY AVOIDED FILING EVIDENCE BEFORE THE ASS ESSING OFFICER . 3 ITA NO.1812/DEL/2014 THUS, THE ASSESSING OFFICER WAS UNDER BONAFIDE BELI EF THAT THE ASSESSEE HAS NOT PROVED HIS BONAFIDE AS TO WHY THE CONFIRMATIONS WERE NOT SUBMITTED. THE CIT(A) HELD THAT THE ASSES SEE NOT ONLY PROVIDED CONFIRMATIONS OF THE SUNDRY CREDITORS BUT ALSO GAVE A COPY OF ACCOUNT OF VARIOUS SUNDRY CREDITORS SHOWSING PAY MENT FOR THE SUBSEQUENT YEAR. AFTER LOOKING INTO THIS, THE CIT( A) COME TO THE CONCLUSION THAT ALL PAYMENTS OF THIS SUNDRY CREDITO RS WAS MADE BY CHEQUE. THUS, NOT ONLY THE ASSESSEE ABLE TO PROVID E CONFIRMATION IN RESPECT OF SUNDRY CREDITORS BUT HAS ALSO SHOWN HOW THE AMOUNT OUTSTANDING AGAINST THE SUNDRY CREDITORS. AS AT TH E END OF THE YEAR, THIS WAS SUBSEQUENTLY PAID BY THE ASSESSEE. THE CIT(A) FURTHER HELD THAT EXCEPT THE TWO PARTIES IE. M/S HA RYANA STEEL MONGERS PVT. LTD AND INDIA INTERNATIONAL MARKETING COMPANY ALL THE OTHER CONFIRMATIONS WERE PROVIDED. THUS, THE C IT(A) HAS REDUCED THE ADDITION AND CONFIRMED ONLY TO THE EXTE NT OF RS. 4,44,423/-. 4. THE LD. DR SUBMITTED THAT THE ASSESSEES LIABILI TY WAS NOT GENUINE. IN-FACT, THIS IS THE SURVEY CASE AND A.O IN ASSESSMENT ORDER RECORDED THAT IT WAS THE ONUS OF THE ASSESSEE TO PROVE GENUINENESS OF THE SUNDRY CREDITORS SHOWN PAYABLE A S AT THE END OF THE YEAR WHICH THE ASSESSEE HAS FAILED TO DISCHARGE AND HENCE THE SUNDRY CREDITORS AMOUNTING TO RS.89,82,018/- SHOULD BE TREATED AS UNEXPLAINED CREDITORS. THE LD. DR FURTHER SUBMITTE D THAT THERE WAS NO OPPORTUNITY GIVEN TO THE ASSESSING OFFICER B Y THE CIT (A) OR THERE WAS NO ANY ENQUIRY CONDUCTED BY THE CIT(A) HI MSELF AND THUS THE ADDITION MADE BY THE ASSESSING OFFICER WAS RIG HT AND CIT(A) 4 ITA NO.1812/DEL/2014 HAS OVER LOOKED THAT THE CONFIRMATION WAS NOT FILED BEFORE THE ASSESSING OFFICER . 5. THE LD. DR RELIED UPON THE JURISDICTIONAL HIGH C OURT DECISION IN THE CASE OF CIT VS. M/S GANA SAMPARK ADVERTISING AND MARKETING PVT. LTD WHEREIN IT WAS HELD THAT ASSESSM ENT PROCEEDINGS UNDER THE INCOME-TAX ACT ARE NOT A GAME OF HIDE AND SEEK. FURTHER, ENQUIRE ENVISAGED U/S 250 (4) IS GENERALLY BY CALLI NG WHAT IS KNOWN AS REMAND REPORT. THE PURPOSE OF THIS ENABLING CLA USE IS ESSENTIALLY TO ENSURE THAT THE MATTER OF ASSESSMENT REACHES FIN ALITY WITH OF THIS PHYSIC FACTS FOUND. 6. THE AR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT MADE OUT ANY CASE IN RESPECT OF SECTION 68 RELATED TO UNEXPL AINED INCOME. IT WAS NOT AT ALL A CASE OF OLD OUTSTANDING LIABILITIE S THIS WAS RELATED TO THE CURRENT TRANSACTION WHICH WAS SUBSEQUENTLY FULF ILLED BY THE ASSESSEE IN SUBSEQUENT YEARS. THE CIT(A) HAS RIGHT LY HELD THAT THE CONFIRMATION IN RESPECT OF SUNDRY CREDITORS WAS FIL ED BEFORE THE CIT(A) AND IT SHOWS HOW THE AMOUNT OUTSTANDING AGAI NST THE SUNDRY CREDITORS AS AT THE END OF THE YEAR WAS PAID IN THE SUBSEQUENT YEAR. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT TAKEN INTO ACCOUNT THE TRANSACTIONS AND THE CO- RELATION BETWEEN THE CLOSING BALANCES OF THE ASSESS EE. THE LD. AR RELIED ON THE PUNJAB & HARYANA DECISION IN THE CASE OF CIT VS. SPEEDWAYS TIRE LTD 2014 SOT TAXMAN.COM 113 WHEREIN IT WAS HELD THAT THE LIABILITIES TOWARDS THE SUNDRY CREDITORS W HEN MADE IN THE SUBSEQUENT ASSESSMENT YEARS. THE SAME HAS TO BE TA KEN INTO 5 ITA NO.1812/DEL/2014 ACCOUNT WHICH WAS ACCEPTED BY THE REVENUE AND THUS THE REVENUE CANNOT TAKE THE SAID IN RESPECT OF SECTION 41(1) RE MISSION OR CESSATION OF TRADING LIABILITY. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS GIVEN OPPORTUNITY BY THE CIT (A) AND IN FACT THE REMAND REPORT HAS ALSO TAKEN THE COGNIZANCE OF THE ADDITIONAL EVIDENCE FIELD BY THE ASSESSEE BEFORE THE CIT(A) AN D ASSESSING OFFICER HAS NOT COMMENTED IN ANY RELATED TO THE EV IDENCE AS THE SAME ARE WHETHER GENUINE OR FALSE. 7. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY OF PRO DUCING CONFIRMATION BEFORE THE ASSESSING OFFICER. THE CIT (A) THOUGH HAS VERIFIED THE CONFIRMATION YET THE ENQUIRY RELATED T O THAT CONFIRMATION HAS NOT BEEN MADE BY THE ASSESSING OFF ICER AND THERE IS NO MENTION IN RESPECT OF ENQUIRY BY THE ASSESSIN G OFFICER IN REMAND REPORT. THUS, THE CONFIRMATION WHETHER GENU INE OR NON- GENUINE, CANNOT BE COMMENTED AT THIS STAGE AND THE MATTER NEEDS TO BE VERIFIED BY THE ASSESSING OFFICER. THEREFORE, THE MATTER IS REMANDED BACK TO THE ASSESSING OFFICER TO VERIFY TH E CONFIRMATION. 8. IN RESULT, THE APPEAL IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 TH OF MAY, 2016. SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/05/2016 *R. NAHEED* 6 ITA NO.1812/DEL/2014 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 17/03/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 18/03/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 09/05/2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 0 9 . 0 5 .2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.