Sri. T. Veeranna, V. ITO,

ITA 1833/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9301 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Assessee Lawyers: SRINIVASAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1833/BANG/2013 ASSESSMENT YEAR : 2008-09 SHRI. T. VEERANNA, BANK COLONY, MRUTHYUNJYA NAGAR, RANEBENNUR, HAVERI. PAN : AHNPP 9925 B VS. INCOME TAX OFFICER, WARD-1, HAVERI. APPELLANT RESPONDENT ASSESSEE BY : SHRI. SRINIVASAN, CA REVENUE BY : MS. SWAPNA DAS, JCIT DATE OF HEARING : 07.09.2016 DATE OF PRONOUNCEMENT : 31.10 .2016 O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE DIRECTED AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), HUBLI DATED 30-10-2013 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.1833/BANG/2013 PAGE 2 OF 5 2. THE APPELLANT RAISED THE FOLLOWING GROUN DS OF APPEAL. 3. BRIEFLY THE FACTS OF THE CASE ARE THE ASSESSEE I S AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF COMMISSION AGENCY. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 WAS FILED ON 30.09.2008 DECLARING A TOTAL INCOME OF RS.1,64,660/-. AFTER PROCESSING THE SAID RETURN OF INCOME UNDER THE PROVISIONS OF SECTION 143(1) OF INCOME TAX ACT AND ISSUING REQUIRED NOTICE U/S 143(2), THE ASSESSMENT WAS COMPLETED BY THE LEARNED INCOME TAX OFFICER, WARD-1, HAVERI U/S 143 R.W.S. 144A OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 30.12.2010 AT A TOTAL INCOME OF RS.1,43,10,410/-. ITA NO.1833/BANG/2013 PAGE 3 OF 5 WHILE DOING SO, THE LEARNED AO MADE DISALLOWANCE OF RS.1,38,96,832/- ON ACCOUNT OF UNPROVED SUNDRY CREDITOR AND ALSO MADE D ISALLOWANCE OF RS.30,000/- ON ACCOUNT OF DISBELIEVING AGRICULTURAL INCOME, ETC. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE CIT(A), HUBLI WHO VIDE IMPUGNED ORDER RESTRICTED THE ADDITION ON ACCOUNT OF UNPROVED SUNDRY CREDITORS TO THE EXTENT OF RS.43,97,867/-. PARTIAL RELIEF WAS GRANTED BY THE CIT(A) AFTER CALLING FOR THE REMAND REPORT F ROM AO ON THE ADDITIONAL INFORMATION FILED BEFORE IT. BEING AGGRIEVED, THE APPELLANT IS BEFORE US CHALLENGING THE CONFIRMATION OF ADDITION ON ACCOUNT OF UNPROVED CREDITORS TO THE EXTENT OF RS.43,97,867/- AND THE CONFIRMATION O F ADDITION ON ACCOUNT OF AGRICULTURAL INCOME OF RS.30,000/-. THE APPELLANT RAISED 5 GROUNDS OF APPEAL OUT OF WHICH GROUND NOS. 1 AND 5 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. GROUND NO. 2 IS CHALLENG ING THE ADDITION TO THE EXTENT OF RS.43,97,867/- ON ACCOUNT OF UNPROVED SUN DRY CREDITORS. GROUND NO. 3 CHALLENGING THE ADDITION ON ACCOUNT OF DISBEL IEVING AGRICULTURAL INCOME IS NOT PRESSED BEFORE US AND HENCE DISMISSED AS SUCH. 5. GROUND NO. 4 IS ONLY A CONSEQUENTIAL IN NATURE A ND DOES NOT REQUIRE ANY ADJUDICATION. THUS THE EFFECTIVE GROUND OF APP EAL IS ONLY GROUND NO.2 CHALLENGING THE ADDITION TO THE EXTENT OF RS.43,97, 867/- ON ACCOUNT OF UNPROVED SUNDRY CREDITORS. THE LEARNED COUNSEL HAD ARGUED THAT DURING THE COURSE OF PROCEEDINGS BEFORE THE AO, THE APPELL ANT HAD PRODUCED THE CONFIRMATION LETTERS FROM ALL THE SUNDRY CREDITORS TO PROVE THE GENUINENESS OF THE CREDITORS. IT IS FURTHER SUBMITTED THAT TH E SUNDRY CREDITORS ARE ON ITA NO.1833/BANG/2013 PAGE 4 OF 5 ACCOUNT OF PURCHASE OF SEEDS FROM AGRICULTURISTS. HE FURTHER SUBMITTED THAT THE ADDITION WAS MADE ON MERE ASSUMPTIONS AND SURMI SES. THE TIME GAP BETWEEN THE PURCHASE OF SEEDS AND PAYMENT TO THE CR EDITORS IS ON ACCOUNT OF THE FACT THAT PAYMENTS WERE MADE TO THE AGRICULT URISTS ONLY AFTER COMPLETION OF CERTAIN TESTS LIKE GERMINATION TEST A ND GROW-OUT TEST TO ASSESS THE QUALITY OF THE SEEDS SUPPLIED BY THE AGR ICULTURISTS. IT IS FURTHER SUBMITTED THAT THE ADDITIONS WERE MADE BY THE AO BA SED ON THE REPORT SUBMITTED BY THE INSPECTOR WITH GIVING AN OPPORTUNI TY OF REBUTTAL TO THE ASSESSEE. HE FINALLY SUBMITTED THAT THE VERY FACT THAT IN THE SUBSEQUENT YEAR THE PAYMENTS WERE MADE TO SUNDRY CREDITORS WOU LD SUGGEST THAT SUNDRY CREDITOR WAS GENUINE AND THEREFORE SHOULD HA VE BEEN ACCEPTED AS GENUINE. HE FINALLY HE CONTENDS THAT THE CIT(A) CO NFIRMED THE ADDITION TO THE EXTENT OF RS.43,97,867/- BASED ON THE REMAND RE PORT SUBMITTED BY THE AO WITHOUT FURNISHING A COPY OF REMAND REPORT. IN THIS CONNECTION HE HAD DRAWN OUR ATTENTION TO PAGE NO. 47 OF THE PAPER BOO K WHEREIN THE APPELLANT HAD REQUESTED CIT(A) TO FURNISH THE COPY OF REMAND REPORT. THUS HE SUBMITTED THAT THE ADDITION WAS CONFIRMED WITHOUT A NY BASIS TO THE EXTENT OF RS.43,97,867/-. ON THE OTHER HAND, THE LEARNED DR PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. WE FIND FROM THE ORDER OF THE CIT(A) THAT NO REASON WAS GIVEN BY HIM AS TO WHY THE ADDITION ON ACCOUNT OF UNPROVED SUNDRY CRED ITORS TO THE EXTENT OF RS.43,97,867/- WAS CONFIRMED BY HIM. NO DOUBT THE CIT(A) HAD DELETED THE ADDITION TO THE EXTENT OF 1,12,87,791/- BASED O N THE REMAND REPORT OF ITA NO.1833/BANG/2013 PAGE 5 OF 5 THE AO. BUT THE APPELLANT WAS NOT FURNISHED WITH A COPY OF THE REMAND REPORT. THUS THE APPELLANT WAS NOT MADE KNOWN AS T O WHY THE ADDITION TO THE EXTENT OF RS.43,97,867/- WAS CONFIRMED. NOTHIN G IS DISCERNIBLE FROM THE ORDER OF THE CIT(A) AS TO WHY THE ADDITION WAS CONFIRMED. IT IS TRITE LAW THAT THE ASSESSEE BE MADE KNOWN REASONS AS TO WHY T HE ADDITION WAS CONFIRMED. IN THE CIRCUMSTANCES, IN ORDER TO MEET THE ENDS OF JUSTICE, WE REMAND THE MATTER BACK TO THE FILE OF AO FOR DENOVO ASSESSMENT ON THIS LIMITED ISSUE, AFTER AFFORDING DUE OPPORTUNITY TO T HE ASSESSEE. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2016. SD/- SD/- (ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACC OUNTANT MEMBER BANGALORE. DATED: 31 ST OCTOBER, 2016. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.