M/S. RUKMANI AMUSEMENT LIMITED, Bhopal V. THE ACIT 3(1), Bhopal

ITA 184/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6065 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 02-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Principle of natural justice
• Section: 143(3); 133A; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 184/IND/2016 A.Y. : 2001-02 RUKMANI AMUSEMENT LIMITED, ACIT, 3(1), BHOPAL VS. BHOPAL APPELLANT RESPONDENT PAN NO. AABCR8389R A PPELLANT S BY : SHRI HITESH CHIMNANI, C. A. RESPONDENT BY : SHRI R. A. VERMA, SR. DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-2, BHOPAL, DATED 22.01.2016 FOR THE ASSES SMENT YEAR 2001-02. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS INCORPORATED ON 17.11.1997 AND COMMENCE D DATE OF HEARING : 24 .0 5 . 20 16 DATE OF PRONOUNCEMENT : 24 .0 5 . 201 6 RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 2 2 COMMERCIAL OPERATIONS ON 21.12.2009. NO RETURNS OF INCOME WERE FILED FROM ASSESSMENT YEAR 1998-99, 1999-2000 A ND 2000-01, THOUGH DURING THESE YEARS THE COMPANY HAD MADE HUGE INVESTMENTS IN CONSTRUCTION AND DEVELOPMENT OF THE AMUSEMENT PARK. A SURVEY U/S 133A WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 11.12.2002. DURING THE COURSE OF SURVEY, CERTAIN CASH DEBIT VOUCHERS WERE IMPOUNDE D. TWENTY SUCH VOUCHERS RELATING TO CASH PAYMENTS WERE MADE ON ACCOUNT OF MATERIALS PURCHASED ETC. IN THE PERIO D 20.5.2000 TO 18.8.2000 HAVE BEEN THE SUBJECT OF PRO TRACTED LITIGATION AND THE MATTER TRAVELLED TWICE UP TO TRIB UNAL. 3. AFTER TRAVELLING THE MATTER TO THE TRIBUNAL, THE LD . CIT(A) HAS CONFIRMED THE ADDITION OF RS. 6,17,446/- . THEREFORE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED THE WRITTEN SUBMISSION, WHICH READS AS UNDER :- A SURVEY U/S 133A WAS CARRIED OUT AT THE PREMISES O F THE ASSESSE ON 11.12.2002. TWENTY UNRECORDED 'CASH DEBI T VOUCHERS' WERE FOUND DURING THE COURSE OF SURVEY IN RESPECT OF CASH PAYMENTS MADE ON ACCOUNT OF MATERIA LS RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 3 3 PURCHASED DURING THE PERIOD 20.05.2000 TO 18.08.200 0. (I.E. BEFORE COMMENCEMENT OF COMMERCIAL ACTIVITY). THE LD. AO HAD PASSED ORDER U/S 143(3) DATED 17.03.2005 AND MADE CERTAIN ADDITIONS, OUT OF WHICH ADDITION OF RS.6,17,446/- MADE BY AD ON ACCOUNT OF UNRECORDED INVESTMENT. THE ASSESSE PREFERRED APPEAL AGAINST SA ID ORDER BEFORE LD. C1T(A) AND LD. CIT(A) PASSED ORDER ON 21.12.2005 (ENCLOSED ON PGS 77 TO 115 OF PB) AND DE LETED ENTIRE ADDITION OF RS.6,17,446/MADE BY AO ON THE GR OUND THAT THERE IS NO CORROBORATIVE EVIDENCE ESTABLISHIN G THE PAYMENT OF SUCH VOUCHERS REMAINING UNRECORDED IN TH E BOOKS OF ACCOUNTS. THE REVENUE PREFERRED APPEAL BEF ORE HON'BLE ITAT, INDORE BENCH AGAINST THE SAID ORDER A ND HON'BLE ITAT REMANDED THIS ISSUE TO THE FILE OF THE AD VIDE ORDER DATED 25.11.2009 (COPY ENCLOSED ON PGS 116 TO 118 OF PB). THE AO PASSED FRESH ORDER U/S 143(3) ON 27.12.2010 AND AGAIN MADE THE ADDITION OF RS. 6,17,446/- BY TREATING SAME AS UNEXPLAINED AND UNRECORDED VOUCHERS.(PB PGS 119 TO 129) THE ASSESSE AGAIN FILED APPEAL BEFORE LD. CIT(A) AND CIT(A) AGA IN RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 4 4 DELETED ADDITION MADE BY THE AO VIDE HIS ORDER DATE D 11.07.2011.(PB PGS 130-170- RELEVANT PAGES 138 TO 1 47). THE REVENUE AGAIN FILED APPEAL BEFORE HON'BLE ITAT AND HON'BLE BENCH VIDE HIS ORDER DATED 09.05.2012 (COPY ENCLOSED ON PGS 171 TO 196 OF PB, RELEVANT PAGES 17 9 AND 180) ONCE AGAIN RESTORED THE MATTER TO THE FILE OF THE AD FOR FRESH CONSIDERATION BY OBSERVING THAT CIT(A) HAD NO T CO- RELATED THE VOUCHERS AND PAYMENTS MADE TO DIFFERENT PERSONS WITH THE BOOKS OF ACCOUNTS. FRESH ASSESSME NT HAS BEEN MADE VIDE 143(3) R.W.S. 254 ORDER DATED 27.12.2013 AND AO HAS AGAIN MADE THE ADDITION OF RS.6,17,446/- BY HOLDING THAT THE ASSESSE HAD NOT F ILED ANY THIRD PARTY CONFIRMATION; ALSO NOT FURNISHED PR OPER EXPLANATION IN RESPECT OF ABOVE VOUCHERS; AMOUNT SH OWN IN VOUCHERS WERE NOT MATCHED WITH AMOUNT SHOWN IN LEDGER ACCOUNT. THE ID. CIT (A) ALSO UPHELD THE AD DITION MADE BY THE AO ON THE GROUND THAT ASSESSE HAD NOT PRODUCED ANY COLLABORATIVE EVIDENCE IN SUPPORT OF H IS CLAIM. IT HAD BEEN ALREADY SUBMITTED AT ALL THE STA GES OF HEARING THAT IN CASE OF ASSESSEE COMPANY PAYMENT RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 5 5 PROCESS BEGINS WITH THE PREPARATION OF PAYMENT VOUC HER, WHICH ARE BEING PREPARED BY CLERKS IN THE ACCOUNTS DEPARTMENT OR SOME OTHER CLERK AVAILABLE AT THE TIM E OF PAYMENT, WHO PUT HIS SIGNATURE ON THE VOUCHER, THEN THAT VOUCHER GOES TO THE DIRECTOR IN CHARGE, WHO PASSES THE VOUCHER FOR PAYMENT BY PUTTING HIS SIGNATURE ON THE VOUCHER. THEN, IF THE PAYMENT IS MADE TO RECIPIENT, PAYEE PUTS HIS SIGNATURE ON THE VOUCHER AS A TOKEN THAT H E HAS RECEIVED THE PAYMENT. IN THE INSTANT CASE, NONE OF THE VOUCHERS BEARS SIGNATURE OF THE DIRECTOR IN-CHARGE, WHICH MEANS NONE OF THE VOUCHER IS PASSED FOR PAYMENT BY HIM, THUS PAYMENT MENTIONED IN THE VOUCHER HAS NEVER BEEN MADE AND THEREFORE, NONE OF THEM HAS BEEN ENTERED I N THE ASSESSEE COMPANY'S BOOKS OF ACCOUNTS. NONE OF THE VOUCHER BEARS SIGNATURE OF THE PAYEE TOO. THAT COPI ES OF ALL THE LEDGER ACCOUNT WERE ALREADY PRODUCED DURING THE FIRST ASSESSMENT PROCEEDINGS.(PG. NO. 27 TO 63 OF PB). MO REOVER, THE BOOKS WERE ALREADY IMPOUNDED IN SURVEY PROCEEDI NGS. THE ALLEGATION OF AO THAT ASSESSEE DID NOT FILE CONFIRMATION FROM THE PARTIES WHOSE NAMES WERE APPEARING IN THE RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 6 6 IMPOUNDED CASH DEBIT VOUCHERS IS NOT CORRECT AND DE VOID OF MERITS. THE ASSESSEE MOST HUMBLY SUBMITS THAT IF THE ID AO HARBORED ANY DOUBT ABOUT THE INFORMATION PROVIDED B Y THE ASSESSEE, HE COULD HAVE MADE ENQUIRIES IN THE C ASE OF ALL THOSE PARTIES BY ISSUING SUMMONS FOR CROSS EXAMINATION OR BY ISSUING NOTICES U/S 133(6) OF THE ACT. HE SIMPLY ADDED TOTAL AMOUNT TO THE INCOME OF THE ASSE SSE WITHOUT APPRECIATING ASSESSEE'S EXPLANATION AND EVI DENCE PROVIDED BY HIM. HE NEVER ASKED THE ASSESSEE FOR FURNISHING THIRD PARTY CONFIRMATIONS. KINDLY APPREC IATE THAT THIS WAS THE THIRD ROUND AND THE FACT ABOUT TH IRD PARTY CONFIRMATION WAS NEVER EVER MENTIONED IN ANY OF THE PREVIOUS TWO ROUNDS. IT IS IMPRACTICAL AND ALMOST IMPOSSIBLE TO EXPECT A CONFIRMATION FROM ANY PARTY AFTER 16 YEARS OF TRANSACTION. MOREOVER, IN CERTAIN INSTA NCES, WHERE THERE IS NO CASH PAYMENT AT ALL AND NO ACTUAL TRANSACTION HAS TAKEN PLACE, THERE IS NO POSSIBILIT Y OF GETTING ANY SUCH CONFIRMATION IN RESPECT OF THAT TRANSACTION. IT IS TRITE LAW THAT A PERSON CANNOT B E EXPECTED TO PROVE THE NEGATIVE. RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 7 7 THE FOLLOWING CHART WILL SHOW THAT OUT OF 20 VOUCHERS, 6 VOUCHERS DO NOT EVEN BEAR THE SIGNATURE OF ANY PERSONS :- S. NO. NAME OF PARTY DATE OF VOUCHER AMOUNT 4. MAKHIJA 28.04.2000 70,346 7. MIDLAND CEMENT 22.04.2000 25,972 WORKS 8. ANAND STORES 19.04.2000 57,500 9. MAHAVIR TRADERS 25.05.2000 52,500 14. MAHAVIR TRADERS 05.07.2000 69,820 18. MAHAVIR TRADERS 01.08.2000 24,480 TOTAL 3,00,618 THAT ANY ADDITION TO THAT EXTENT (RS 3,00,618) IS PATENTLY ILLEGAL BEING BASED ON UNSIGNED, UNCORROBORATED PAPERS. AFTER PERUSAL OF SUMMARY OF ALLEGED-UNRECORDED VOUCHERS, YOUR HONOUR WILL FIND THAT EXPLANATION GIVEN BY THE ASSESSE IS SUFFICIENT. THE LD AO AS WELL AS LD CIT(A) HAVE NOT CONSIDERED THIS FACT AND HAVE ADDED THE AMOUNT MERELY ON PRESUMPTION THAT THE ASSESSE HAS MADE CASH PAYMENT RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 8 8 WHICH WAS NOT RECORDED IN BOOKS. FOR INSTANCE ON PG 6 OF APPELLATE ORDER, PAYMENT OF RS 4488/- MADE VIDE CHEQUE NO. 901244 DATED 9.5.2000, WHICH IS ALSO APPEARING IN BOOKS AND IS A BANK VOUCHER, IT OUGHT NOT TO HAVE BEEN ADDED AT ALL. BUT THE LD CIT(A) HAS MAINTAINED THAT ADDITION TOO. AS REGARDS CERTAIN EXPENSES WHICH COULD BE TRACED TO BOOKS OF ACCOUNTS, THE OBSERVATION OF ID AO THAT PAYMENT IS REFLECTING IN LEDGER ACCOUNT MIGHT HAVE BEEN MADE FOR SOME PURPOSE OTHER THAN THOSE FOR WHICH CASH DEBIT VOUCHERS WERE PREPARED IS MERELY GUESS WORK, SURMISES AND CONJECTURES AND DEVOID OF MERITS. THE ASSESSEE HAS EXPLAINED EACH & EVERY VOUCHER IN DETAIL IN HIS WRITTEN SUBMISSION AT ALL THE STAGES OF HEARING BEFORE VARIOUS AUTHORITIES. ( AS HAS BEEN SUMMARIZED BY WAY OF CHART BEFORE THIS HON'BLE COURT). HOWEVER, WITHOUT RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 9 9 APPRECIATING THIS FACT THE LD. AO/LD. CIT (A) REJECTED EVIDENCES/EXPLANATION PROVIDED BY THE ASSESSE WITHOUT ASSIGNING ANY COGENT REASONS. THE ID CIT(A) GROSSLY ERRED IN TREATING SIGNED AND UNSIGNED VOUCHERS ON SIMILAR LINES. LIKEWISE, TO QUOTE ANOTHER INSTANCE, PAYMENT OF RS 13,500/- BY CASH, WHICH HAS BEEN RECORDED IN BOOKS HAS BEEN ADDED BY AO AND MAINTAINED CIT(A) BY MERELY STATING THAT THE AMOUNT DOES NOT MATCH WITH THE BANK VOUCHER (13,673 - A CHEQUE WHICH WAS PREPARED BUT NEVER GIVEN TO THE PARTY SINCE THE ACCOUNT WAS SETTLED IN CASH) . ALSO, THE ID CIT(A) IN A SIMILAR INSTANCE OF A BILL OF BHARTI TELNET WHERE THE ACTUAL PAYMENT OF RS 1,167/- ALREADY STOOD RECORDED, WAS ADDED MERELY BECAUSE THE VOUCHER (1,210) WAS PREPARED CONSIDERING 'LATE FEES'. IT IS SUBMITTED THAT SINCE THE SAID BILL WAS ALREADY PAID IN CASH IN DUE TIME, RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 10 10 THEREFORE THERE WAS NO NEED TO PAY THE SAME AGAIN INCLUDING LATE FEES. THESE VOUCHERS WERE PREPARED FOR SIGNATURE OF DIRECTOR-IN- CHARGE, BUT SINCE THE PAYMENT WAS ALREADY MADE, THESE VOUCHERS REMAINED UNSIGNED. TO MAKE AN ADDITION ON THE BASIS OF SUCH UNSIGNED VOUCHERS IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE LD AO & CIT (A) MERELY STATED THAT AMOUNT MENTIONED IN VOUCHER DOES NOT MATCH WITH AMOUNT MENTIONED IN PARTY LEDGER. IT IS MOST HUMBLY SUBMITTED THAT WHEN PAYMENT HAS NOT BEEN MADE BY THE ASSESSEE AT ALL, HOW CAN A 'NON-PAYMENT' MATCH WITH A LEDGER ACCOUNT? THUS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PRESENT CASE, IT IS MOST HUMBLY PRAYED THAT THE GROUNDS RAISED BY THE ASSESSEE MAY VERY KINDLY BE ALLOWED. RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 11 11 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AO. 6. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT IN THIS CASE, A SURVEY WAS CONDUCTED ON 11.12.2002 AND IT WAS FOUND THAT NO RETURN WAS FILED. DURING THE COURSE OF THE SURVEY THAT SOME OF THE CASH VOUCHERS WERE FOUND AND SOME O F THE PAYMENTS WERE ALSO MADE THROUGH ACCOUNT PAYEE CHEQUE S. THEREFORE, THE ASSESSEE DID NOT EXPLAIN WHY THE ASSE SSEE HAS PAID THE AMOUNT IN CASH. THE CASH VOUCHERS WERE FOU ND IN THE PREMISES OF THE ASSESSEE. THEREFORE, THE BURDEN LIE S UPON THE ASSESSEE TO PROVE THAT THOUGH THE CASH VOUCHERS WERE FOUND BUT THE ASSESSEE HAS NOT PAID THIS AMOUNT IN CASH T O THE RESPECTIVE PARTIES. IN ORDER TO VERIFY THAT THE ASS ESSEE HAS NOT PAID CASH TO THESE PARTIES, THE ASSESSEE WAS ASKED T O PRODUCE THE CONFIRMATION FROM THE ABOVE PARTIES, WHOSE NAMES WERE APPEARING IN THE IMPOUNDED CASH VOUCHERS. THE ASSES SEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE OR THE PARTIES TO SHOW THAT THE ASSESSEE HAS MADE CASH PAYMENT TO THESE PA RTIES OR THESE PARTIES HAD RECEIVED THE CASH. THEREFORE, ONE HAS TO LOOK RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 12 12 THE SURROUNDING CIRCUMSTANCES. I FIND THAT THERE AR E TWO GROUPS IN WHICH FOR ONE GROUP, THE ASSESSEE HAS PAID THE AMOUNT BY CHEQUE ALSO AND THAT AMOUNT IS ALSO REFLE CTED AS PAYMENT MADE AGAINST THE CASH AND SOME OF THE VOUCH ERS ARE UNSIGNED, ROUGH, UNCORROBORATED VOUCHERS, BUT NO CONFIRMATION FROM ANY PARTY WAS PRODUCED, WHICH READS AS UNDER :- DETAILS OF VOUCHERS IMPOUNDED FOR WHICH PAYMENTS WERE MADE BY CHEQUE VOUCHER NO. AMOUNT PARTY PG# SYNOPSIS 1 1210 BHARTI TELENET E 5 4488 PURPLE COMMUNICATION E 6 50000 SURYA PIPE F 13 26000 K.N. MALVIYA G 19 44020 DIVYA STEEL I TOTAL 125718 DETAILS OF ROUGH, UNSIGNED, UNCORROBORATED VOUCHERS VOUCHER NO. AMOUNT PARTY PG# SYNOPSIS 4 70,346 MAKHIJA E 7 25,972 MIDLAND CEMENT F 8 857,500 ANAND STORES F 9 52,500 MAHAVIR TRADERS F RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 13 13 14 69,820 MAHAVIR TRADERS H 18 24,480 MAHAVIR TRADERS I TOTAL(B) 3,00,618 7. FROM THE ABOVE CHART, I FIND THAT THE ASSESSEE HA S MADE PAYMENT BY ACCOUNT PAYEE CHEQUES, IN HIS BOOKS OF ACCOUNTS. THEREFORE, IF THE CASH VOUCHERS IS FOUND, IT IS TO BE PRESUMED THAT THE ASSESSEE HAS PAID MONEY TO ABOVE PARTIES BY CHEQUE AND THIS AMOUNT IS FOR CONSTRUCTION OF AM USEMENT PARK. THEREFORE, THOUGH THE VOUCHERS WERE MADE, THE PAYMENT WAS MADE BY CHEQUE, AND CASH VOUCHERS MIGHT HAVE PRE PARED BUT PAYMENT MADE THROUGH CH EQUE. THEREFORE, I A M OF THE OPINION THAT NO ADDITION IS CALLED FOR IN RESPECT O F VOUCHER NOS. (1) BHARTIYA TELENET RS. 1210/-, VOUCHER NO. 5 PURPLE COMMUNICATION RS. 4488/-, VOUCHER NO. 6 SURYA P IPE - RS. 50,000/- AND VOUCHER NO. 13 K.N. MALVIYA RS . 26,000/- AND VOUCHER NO. 19 DIVYA STEEL RS. 44, 020/-. THEREFORE, I DELETE TOTAL AMOUNT OF RS. 1,25,718/-. RUKMANI AMUSEMENT LIMITED, BHOPAL VS. ACIT, 3(1), B HOPAL I.T.A.NO. 184/IND/2016 A.Y. 2001-02 14 14 8. IN RESPECT OF OTHER VOUCHERS, THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE THE CONFIRMATIONS/AUTHORITY LE TTERS FROM THE PARTIES AND ALSO NOT ABLE TO PRODUCE THE PARTIE S. THEREFORE, I CONFIRM THE SAME IN RESPECT OF VOUCHERS NOS. 4, 7 , 8, 9, 14 AND 18 TOTALLING TO RS. 3,00,618/-, WHICH READS AS U NDER :- VOUCHER NO. AMOUNT PARTY 4 70,346 MAKHIJA 7 25,972 MIDLAND CEMENT 8 857,500 ANAND STORES 9 52,500 MAHAVIR TRADERS 14 69,820 MAHAVIR TRADERS 18 24,480 MAHAVIR TRADERS TOTAL(B) 3,00,618 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 24 TH MAY, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 24 TH MAY, 2016. CPU*