ACIT, Coimbatore V. M/s. Sakthi Auto Ancillary Pvt. Ltd., Coimbatore

ITA 1836/CHNY/2013

• Counselvise Citation: 183621714 RSA 2013
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-11-2013
• Assessment Year: 2010-2011
• Appeal Filed On: 14-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K RAGHU
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence
• Section: 143(3); 115JB; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO.1836/MDS/2013 ASSESSMENT YEAR : 2010-11 THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE IV(2) COIMBATORE VS M/S SAKTHI AUTO ANCILLARY PVT. LTD IDIGARAI ROAD, NGO COLONY COIMBATORE 641 022 [PAN AABCB 0064 H] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : SHRI K. RAGHU, CA DATE OF HEARING : 28-11-2013 DATE OF PRONOUNCEMENT : 03-12-2013 O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2010- 11, IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS)-I, COIMBATORE, DATED 10.7.2013, PASSED IN APPEAL NO.153/ 12-13, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.1836/13 :- 2 -: 2. IN THE COURSE OF HEARING, THE ONLY GRIEVANCE AGITAT ED BY THE REVENUE IS THAT THE CIT(A) HAS WRONGLY DELETED ADD ITION OF ` 46,48,323/- MADE BY THE ASSESSING OFFICER IN THE NA TURE OF UNEXPLAINED CREDITS. THE REVENUE SUBMITS THAT THE CIT(A) OUGHT TO HAVE SUSTAINED THE ADDITION ON THE BASIS OF FACTS A ND CIRCUMSTANCES INVOLVED IN THE INSTANT CASE. ACCORDINGLY, IT PRAY S FOR RESTORATION OF THE IMPUGNED ADDITION. 3. THE ASSESSEE SUPPORTS THE CIT(A)S ORDER UNDER CHA LLENGE AND ARGUES THAT THE IMPUGNED ADDITION HAS BEEN RIGH TLY DELETED. 4. THE ASSESSEE IS A PRIVATE LIMITED COMPANY RUNNIN G AN ENGINEERING INDUSTRY. ON 31.8.2010, IT HAD FILED I TS RETURN DISCLOSING LOSS OF ` 1,02,30,142/- AND ALSO ADMITTED INCOME OF ` 1,68,97,823/- U/S 115JB OF THE ACT. THE SAME WAS SUMMARILY PROCESS ED. 5. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER FOUND FROM THE ASSESSEES RECORD THAT IT HAD SHOWN A CREDIT OF `46,48,323/- IN THE CASE OF M/S SRI LAKSHMI AGENCIES , CHENNAI, AS SUNDRY CREDITS. HE SENT A LETTER TO THE SAID CREDITOR WH ICH WAS RETURNED BACK WITH THE REMARK NO SUCH ADDRESSEE . THEREAFTER, IN THE ASSESSMENT ORDER DATED 15.2.2013, THE ASSESSING OFFICER HELD T HAT THE ASSESSEE I.T.A.NO.1836/13 :- 3 -: HAD FAILED TO FILE CONFIRMATION OF THE SAID CREDITO R AND PROVE THE GENUINENESS OF THE CREDITS IN QUESTION. ACCORDINGL Y, HE ADDED THE SAID AMOUNT IN ASSESSEES INCOME. 6. IN LOWER APPELLATE PROCEEDINGS, THE CIT(A) HAS DELE TED THE IMPUGNED ADDITION BY OBSERVING AS FOLLOWS: 4. GROUND NO.1 TO 4: THESE GROUNDS OF APPEAL ARE AGAINST THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF NOT FILING CONFIRMATION FROM THE SUNDRY CREDITORS. 4.1 SUBMISSIONS : THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT THE CONFIRMATION LETTER FROM SHRI LAKSHMI AGENCIES, CHE NNAI COULD NOT BE RECEIVED AS THE PARTY DID NOT RECEIVE ANY SU CH COMMUNICATION ALLEGED TO HAVE BEEN SENT BY HIM. IN THE COURSE OF ASSESSMENT PROCEEDINGS, STATEMENT OF ACCOUNTS OF SHRI LAKSHMI AGENCIES, CHENNAI AS APPEARING IN THE BOOKS OF ACCOUNT AND ALSO CONFIRMATION FROM THE PARTY FOR TH E AMOUNT DUE HAS BEEN FILED. THIS WAS NOT IN THE LETTER HEAD OF THE PARTY. THE ASSESSING OFFICER HAS STATED THAT THE LE TTER HAS SENT TO THE CREDITOR RETURNED MARKED 'IN SUCH ADDRESSEE' . THE ASSESSEE DID NOT KNOW THE REASONS AS TO WHY IT WAS RETURNED UNSERVED. FURTHER, THE ACCOUNT COPY OF THE PARTY AS APPEARING IN THE BOOKS OF THE APPELLANT COMPANY DIS CLOSING THE PAYMENTS MADE IN THE SUBSEQUENT YEAR DURING THE REG ULAR COURSE OF BUSINESS HAVE BEEN FILED DURING THE COURS E OF ASSESSMENT PROCEEDINGS. THEREAFTER, THE ASSESSEE HA S RECEIVED THE CONFIRMATION ON ITS LETTER HEAD. IT IS ALSO SUBMITTED THAT THE ORIGIN OF CREDIT IN T HE PARTIES ACCOUNT LIES IN BUSINESS TRANSACTIONS SUPPORTED BY APPROPRI ATE SALE INVOICES RAISED ON THE APPELLANT IN THE ORIGINAL CO URSE OF BUSINESS OF SHRI LAKSHMI AGENCIES AND THESE TRANSAC TIONS ARE ALSO REFLECTED APART FROM THE BOOKS OF ACCOUNT IN T HE QUANTITATIVE TALLY IN THE ANNEXURES TO THE ANNUAL A CCOUNTS, FILED WITH THE RETURN OF INCOME AND RESPECTIVE VAT RETURN FILED EVERY MONTH WITH THE VAT AUTHORITY. HENCE, ADDITION U/S 68 IS CLEARLY UNSUSTAINABLE AND MAY BE DELETED. I.T.A.NO.1836/13 :- 4 -: 4.2 I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE APPELLANT AND ALSO THE ORDER OF THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FILED THE LEDG ER ACCOUNT OF SHRI LAKSHMI AGENCIES, CHENNAI. THE LEDGER ACCOUNT COPY OF THE FINANCIAL YEAR 2010 WAS ALSO FILED. THE APPELLANT HAS PAID DU RING THE MONTHS OF MAY 2010, JUNE 2010 AND JULY 2010 AMOUNTS TOTALLING RS.46,48,320/-. THE APPELLANT ALSO PRODUCED THE IND IAN OVERSEAS BANK, GANAPATHY BRANCH BANK ACCOUNT SHOWING THE RTG S TRANSFERS MADE BY THE ASSESSEE DURING THE FINANCIAL YEAR 2010 -11. IT IS CLEAR FROM THE VERIFICATION MADE THAT THE APPELLANT WAS P URCHASING RAW MATERIAL FROM SHRI LAKSHMI AGENCIES AND MAKING PAYM ENTS WHICH IS IN THE NATURE OF REGULAR BUSINESS TRANSACTIONS. THE ASSESSING OFFICER WITHOUT VERIFICATION OF ALL THE DETAILS CONCLUDED T HAT THE CREDIT IS NOT GENUINE AND ADDED TO THE INCOME. CONSIDERING ALL TH E FACTS DISCUSSED ABOVE, I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. THESE GROUNDS OF APPEAL ARE ALLOWED. IN THIS BACKDROP OF FACTS, THE REVENUE IS AGGRIEVED . 7. WE HAVE HEARD BOTH PARTIES AT LENGTH AND PERUSED T HE CASE FILE. WE MAKE IT CLEAR THAT IT IS NOT THE CASE OF THE REVENUE THAT THE CIT(A) HAS ADMITTED ANY ADDITIONAL EVIDENCE IN VIOL ATION OF PRINCIPLES OF NATURAL JUSTICE OR THE IMPUGNED FINDINGS GO CONT RARY TO THE RECORD. WE ALSO FIND THAT THE ASSESSEE HAS DULY PROVED IN THE LOWER APPELLATE PROCEEDINGS LEDGER ACCOUNT COPY OF ITS CREDITOR AND ALSO PAYMENTS MADE TOTALLING ` 46,83,320/- IN THE MONTHS OF MAY, JUNE AND JULY, 2010. THE CIT(A) ALSO RECORDS THAT IN FINANCIAL YE AR 2010-11, THE NECESSARY PAYMENTS WERE MADE BY THE ASSESSEE THROU GH RTGS TRANSACTION FOR THE PURPOSE OF PURCHASING RAW MATE RIAL FROM THE VERY CREDITOR IN THE NATURE OF REGULAR BUSINESS TRANSACT IONS. IT IS TO BE SEEN I.T.A.NO.1836/13 :- 5 -: FROM THE ORDER UNDER CHALLENGE THAT THE CIT(A) HAS GIVEN SPECIFIC FINDING THAT THE ASSESSING OFFICER HAS NOT VERIFIED ALL THE DETAILS MADE AVAILABLE IN THE COURSE OF ASSESSMENT. IN THESE CI RCUMSTANCES, WE OBSERVE THAT THE IMPUGNED ADDITION HAS BEEN RIGHTLY DELETED IN THE LOWER APPELLATE PROCEEDINGS. 8. THE REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 03 RD OF DECEMBER, 2013, AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S. S. GODARA) JUDICIAL MEMBER DATED: 03 RD DECEMBER, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR