M/s. Nap Jess Trading, Baroda V. The Income tax Officer,Ward-2(2), Baroda

ITA 1940/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6035 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 18-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-08-2011
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: M J SHAH
• Keywords: Additional evidence; Corroborative evidences

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , ! '# ! '# ! '# ! '#, , , , $ $ $ $ BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 1940/AHD/2011 ASSESSMENT YEAR 2006-07 NAP JESS TRADING S-50, SITARAM SUPER MARKET, CHHANI, VADODARA. PAN: AAEFN9912G VS INCOME TAX OFFICER WARD-2(2), BARODA. %&/ APPELLANT ()%& / RESPONDENT REVENUE BY : SHRI P.L. KUREEL, SR. DR ASSESSEE(S) BY : SHRI M.J. SHAH AR !* + #,/ // / DATE OF HEARING : 18/06/2014 -./ + #, / DATE OF PRONOUNCEMENT : 27/06/2014 0 0 0 0/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, BARODA DA TED 23.11.2010. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. COMMISSIONER OF INCOME TAX(A)-III, BARODA WAS E RRED IN REJECTING APPLICATION UNDER RULE 46A OF THE I.T. RU LES FOR ADDITION OF RS 5,24,087/- TOWARDS OUTSTANDING BALANCE OF CRE DITORS ON THE GROUND THAT NONE OF THE CONDITION UNDER RULE 46 A IS SATISFIED. ITA NO. 1940/AHD/2011 NAP JESS TRADING, BARODA. AY 2006-07 - 2 - 2. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AS WEL L AS IN LAW, THE LD. COMMISSIONER OF INCOME TAX(A)-III, BARODA WAS E RRED IN CONFIRMING THE ADDITION OF RS COMMISSIONER OF INCOM E TAX(A)- III, BARODA ON THE GROUND THAT SUPPORTING EVIDENCE WERE UNVERIFIABLE AND WITHOUT ADMITTING OUR APPLICATION UNDER RULE 46A OF THE IT RULES. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS SHOWN OUTSTANDING SU NDRY CREDITORS EXCEEDING RS 50,000/- AS ON 31 ST MARCH, 2006 AS UNDER: SR.NO. NAME OF THE CREDITORS AMOUNT OUTSTANDING (RS.) 1 FLEETGUARD FILTERS PVT. LTD. 156110.30 2 ABC CONSTRUCTION 53266.83 3 TECHNOCRAT ENGINEERS 209833.12 4 DIESEL POWER SPARES (GUJ) PVT. LTD. 104877.00 TOTAL RS 5,24,087.25 THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO PRODUCE CONFIRMATION OF THE CREDITORS ALONGWITH THE BOOKS OF ACCOUNT AND BILLS AND VOUCHERS. THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION AND THE REFORE HE ADDED RS 5,24,087/- TO THE INCOME OF THE ASSESSEE BY TREATIN G THE SAME AS NON- EXISTENT CREDITORS. 3. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R BY OBSERVING AS UNDER: 5.2 I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE F ACTS OF THE CASE AS ALSO THE OBSERVATION OF THE AO AND THE ARGUMENTS PU T FORTH BY THE ID. AR OF THE APPELLANT. FROM THE BODY OF ASSESSMENT OR DER AND ALSO REMAND REPORT FURNISHED BY THE AO IT IS CRYSTAL CLE AR THAT THE COPY OF ACCOUNTS OF RESPECTIVE CREDITOR FOR WHICH ADDITION WAS MADE IN THE SAID ASSESSMENT ORDER WERE NOT FURNISHED DURING THE ASSE SSMENT PROCEEDINGS. THE APPELLANT HAD ALSO NOT FURNISHED A NY REASONS FOR NOT PRODUCING THE SAME NOR FURNISHED CONTRA ACCOUNT CON FIRMATIONS OF THE CREDITORS. FROM THE REMAND REPORT, IT IS ALSO EVIDE NT THAT THE SUBMISSION OF THE APPELLANT ON THE ISSUE OF ADDITIO NAL EVIDENCES IS WITHOUT ANY SUBMISSION, 5.2.I THE AO IN ASSESSMENT ORDER HAS NOTED THAT CON TRA ACCOUNT CONFIRMATIONS WERE ASKED ON 3.7.2008. AGAIN, ON 24. 7.2008, IT WAS REMINDED TO FURNISH THE SAME WITH BOOKS, BILLS, AND VOUCHERS FOR ITA NO. 1940/AHD/2011 NAP JESS TRADING, BARODA. AY 2006-07 - 3 - VERIFICATION. THE APPELLANT WAS AGAIN REMINDED ON 5 .12.2008 WITH SHOW CAUSE TO ADD AS INCOME IF NOT COMPLIED WITH BY 15.12.2008, BUT THE APPELLANT DID NOT RESPOND AND NEITHER ANY ADJOU RNMENT NOR MORE TIME WAS SOUGHT. 5.2.II THE ADMISSIBILITY OF ADDITIONAL EVIDENCE IS GOVERNED BY RULE 46A AND ON GIVEN FACTS, THERE IS HARDLY ANY CASE WHICH WARRANT FOR ADMISSIBILITY OF THE DOCUMENTS WHICH ARE EVEN OTHER WISE DEFICIENT AND DOES NOT MEET THE REQUIREMENT OF RULE 46A OF THE IT RULE 1962 AS MENTIONED BELOW: (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED TO AD MIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDEN CE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDE R APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO TH E APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (UNDERLINED EMPH ASIS IS SUPPLIED.) NONE OF THE CONDITIONS IS SATISFIED HENCE I TEND TO AGREE WITH THE VIEWS OF AO IN THE REMAND PROCEEDING IN RESPECT OF ADMISS IBILITY OF ADDITIONAL EVIDENCE. 5.2.III ON MERIT, ALSO FOLLOWING OBSERVATIONS ARE M ADE: A) IN CASE OF M/S FLEETGAURD FILTERS PVT LTD (RS 1, 56,110.30) THE CONTRA ACCOUNT IS UNSIGNED XEROX COPY AND THE BALAN CE AS ON 31.3.2006 DOES NOT MATCH. B) IN CASE OF ABC CONSTRUCTION (RS 53,266.83), NOTH ING IS PRODUCED IN APPEAL OR IN REMAND PROCEEDINGS. AS PER ITS APPEAL SUBMISSION DATED OCT.7, 2010 WITHOUT NAMING OR IDENTIFYING/PINPOINTING THE PARTY THE APPELLANT HAD STATED THAT AO MADE ADDITION WITHOUT VERIFYING THE PARTY AND THE N ATURE OF BALANCE WHICH IS A PROVEN WRONG STATEMENT BY THE APPELLANT. IT IS A FALSE STATEMENT BY THE APPELLANT IN THE SAID SUBMISSION T HAT AO ASKED ON 15 TH DEC., 2008 TO PRODUCE THE CONFIRMATIONS. AS ALREADY POINTED OUT HEREINABOVE (PARA 5.2.1 SUPRA) AND DISCUSSED ON PAGE 2 AND 3 OF THE ORDER, THE AO REQUESTED FOR IT AS EARLY AS IN 3ULY 3, 2008 (Q.VIII). THE 15 TH OF DEC., 2008 WAS THE FINAL OPPORTUNITY. AS REGARD S NAME AND DR./CR. BALANCES, ONE CAN REFER TO THE ORIGINAL QUE STIONNAIRE OF THE AO AS WELL AS THE PARA 3 ON PAGE 2 OF THE ASSESSMENT O RDER WHERE THE NAMES WITH OUTSTANDING BALANCES ARE NARRATED WHICH HAVE BEEN FROM THE ACCOUNTS OF ASSESSEE AS MENTIONED THEREIN BY TH E AO AND THE APPELLANT HAS NOT QUESTIONED THAT BEFORE THE AO. ITA NO. 1940/AHD/2011 NAP JESS TRADING, BARODA. AY 2006-07 - 4 - C) INSTEAD OF THE AFORESAID CONCERN, THE APPELLANT HAS PRODUCED ONE COPY OF ACCOUNT WHICH IS NOT FROM THE BOOKS OF THE RACHANA ENTERPRISE BUT ITS OWN BOOKS AND SIGNED AS PROPRIET OR WITHOUT ANY PAN NUMBER. STRANGE ENOUGH, THE STATEMENT HAS OTHERWISE BEEN DATED 1 ST APRIL, 2006. WHEREAS, THE APPELLANT CLAIM THAT IT D OES NOT KEEP SUCH CONFIRMATION READY BUT PROCURES ON DEMAND. THUS, T HE CONTRADICTORY STATEMENT AS WELL AS THE FACT THAT NO SUCH PARTY WA S NOTICED BY AO AND IF SUCH A PARTY'S CONFIRMATION WAS READY ON 1.4 .2006, THEN THERE IS NO LOGICAL EXPLANATION FOR ITS NON-PRODUCTION BEFOR E THE AO. NEEDLESS TO ADD THE PAYMENTS TO THIS PARTY HAVE ALL BEEN SHO WN IN CASH. D) M/S TECHNOCRAT ENGINEERS (RS 2,09,833.12) IS A B ARODA BASED PARTY HAVING ITS ADDRESS VERY CLOSE TO THE OFFICE O F THE APPELLANT I.E. S- 54, SITARAM SUPER MARKET WHEREAS THE APPELLANT IS H AVING ITS ADDRESS AS S-50, SITARAM SUPER MARKET. THE SIGNATURE AS PRO PRIETOR IS WITHOUT ANY DATE AND PAN NUMBER. MOREOVER, THERE IS NO EXPL ANATION AS TO HOW COULD THE APPELLANT MISSED A NEIGHBORHOOD PARTY , NEXT TO 3 SHOPS AWAY TO HAVE CORRECT CONFIRMATIONS AND FILING IT BE FORE THE AO. E) M/S DIESEL POWER SPARES (GUJ.) PVT LTD (RS 1,04, 877.00) IS CONTESTED BY THE AR AS DEBTOR AND NOT CREDITOR. HOW EVER, AS POINTED OUT HEREINABOVE, NO SUCH PLEA WAS TAKEN BEFORE THE AO FOR ALMOST 6 MONTHS WHEN THE CONFIRMATIONS AS CREDITORS WERE BEI NG ASKED FOR. EVEN AT THE TIME OF SHOW CAUSE, NOTHING LIKE THIS W AS BROUGHT TO THE NOTICE OF AO. THE CONFIRMATION IS ON THE COPY OF ST ATEMENT OF THE APPELLANT AND DATED 1.4.2006. THAT IS AGAIN STRANGE AND THE LOGIC SIMPLY DOES NOT GET IN FAVOUR OF THE APPELLANT THAT IF SUCH CONFIRMATION WAS READY ON 1.4.2006 THEN WHAT PREVENTED IT TO PRO DUCE BEFORE THE AO FOR SCRUTINY THEREOF. 5.3 THUS, ON MERIT ALSO, THE SUBMISSIONS SO MADE AS ABOVE DOES NOT MEET THE REQUIREMENT OF PROVING THE CREDIT BALANCES AS GENUINE WHICH ARE DEVOID OF EVIDENTIARY VALUE AS IT LACKS SUPPORT ING EVIDENCES.. UNDER THESE CIRCUMSTANCES, THE VERACITY OF CLAIM AS MADE BY THE APPELLANT STANDS UNVERIFIABLE. IN VIEW OF THE GIVEN FACTS AND CIRCUMSTANCES, I DO NOT FIND ANY MERIT TO INTERVENE IN THE ACTION TAKEN BY THE AO IN MAKING ADDITION OF RS 5,24,087/-. THUS , THIS GROUND OF APPEAL IS DISMISSED. 4. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED BEFORE THE COMMISSIONER OF INCOM E TAX (APPEALS) ADDITIONAL EVIDENCES IN THE FORM OF LEDGER ACCOUNT OF FLEETGUARD FILTERS P. LTD. FROM 01.04.2005 TO 31.03.2006, CONFIRMATION FR OM DIESEL POWER SPARE (GUJ) PVT. LTD. FROM 01.12.2005 TO 31.03.2006, CONF IRMATION FROM RACHANA ENTERPRISE AND LEDGER ACCOUNT OF NAP JESS TRADING C O. FROM 01.04.2005 TO ITA NO. 1940/AHD/2011 NAP JESS TRADING, BARODA. AY 2006-07 - 5 - 08.02.2006 AND REQUESTED THE COMMISSIONER OF INCOME TAX (APPEALS) TO ADMIT THE SAME AND AFTER EXAMINING THE SAME, TO DEL ETE THE ADDITION MADE BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE CO MMISSIONER OF INCOME TAX (APPEALS) HAD NOT ADMITTED THE ADDITIONAL EVIDE NCES ON THE GROUND THAT AT THE TIME OF HEARING BEFORE THE ASSESSING OFFICER , THE ASSESSEE FAILED TO SUBMIT THOSE EVIDENCES AND THEREFORE, HE DID NOT CO NSIDER THE SAME. IT WAS THE PRAYER OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE HAD SUBMITTED BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS) BY WAY OF WRITTEN SUBMISSION THAT THE ASSESSEE COUL D NOT GET THE CONFIRMATION FROM THE CREDITORS AS REQUIRED BY THE ASSESSING OFFICER AT THE TIME OF THE HEARING BEFORE THE ASSESSING OFFICER. HE COULD COLLECT THE CONFIRMATION ONLY AFTER THE ASSESSMENT PROCEEDINGS WERE OVER AND THEREFORE, THE SAME COULD NOT BE FILED BEFORE THE A SSESSING OFFICER AND REQUESTED THE COMMISSIONER OF INCOME TAX (APPEALS) TO CONSIDER THE ADDITIONAL EVIDENCES BY DISPOSING OFF THE APPEAL OF THE ASSESSEE. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JU STIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WITHOUT TAKING I NTO CONSIDERATION ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. HE REQ UESTED THAT THE TRIBUNAL MAY PLEASE ADMIT THE ADDITIONAL EVIDENCES FILED BEF ORE THE TRIBUNAL ALSO AND THEREAFTER RESTORE THE MATTER BACK TO THE FILE OF T HE ASSESSING OFFICER FOR ADJUDICATION OF THE ISSUE AFRESH AS PER LAW. 5. THE DEPARTMENTAL REPRESENTATIVE DID NOT HAVE AN Y OBJECTION TO THE ABOVE SUBMISSION OF THE AUTHORIZED REPRESENTATI VE OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE ADDITION OF RS 5,24,087/- AS NON-EXISTENT SUND RY CREDITORS AS THE ASSESSEE COULD NOT PRODUCE THE CREDITORS AND BOOKS OF ACCOUNT BEFORE HIM. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), TH E ASSESSEE FILED ADDITIONAL EVIDENCES IN THE FORM OF LEDGER ACCOUNT OF FLEETGUARD FILTERS P. ITA NO. 1940/AHD/2011 NAP JESS TRADING, BARODA. AY 2006-07 - 6 - LTD. FROM 01.04.2005 TO 31.03.2006, CONFIRMATION FR OM DIESEL POWER SPARE (GUJ) PVT. LTD. FROM 01.12.2005 TO 31.03.2006, CONF IRMATION FROM RACHANA ENTERPRISE AND LEDGER ACCOUNT NAP JESS TRADING CO. FROM 01.04.2005 TO 08.02.2006. BUT THE COMMISSIONER OF INCOME TAX (AP PEALS) DID NOT ACCEPT THE SAME ON THE GROUND THAT THE ASSESSEE HAD NOT PR ODUCED THE SAME BEFORE THE ASSESSING OFFICER. THE AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE HAS REQUESTED FOR ADMISSION OF THE ADDITIONAL EVIDE NCES WHICH COULD NOT BE FILED BEFORE THE ASSESSING OFFICER BUT COULD BE FIL ED FOR THE FIRST TIME BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AS THE ASS ESSEE COULD COLLECT THE CONFIRMATIONS OF THE CREDITORS ONLY AFTER THE ASSES SMENT PROCEEDINGS WERE OVER. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSE E HAS REQUESTED THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A SSESSING OFFICER FOR ADJUDICATION OF THE ISSUE AFRESH AFTER CONSIDERING ADDITIONAL EVIDENCES. THE DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION TO THI S SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. WE FIND THAT IN THE INSTANT CASE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER FOR WANT OF CONFIRMATION. WE, THEREFORE, IN THE INTEREST OF JUSTICE, SET ASID E THE ORDERS OF LOWER AUTHORITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION OF THE ISSUE OF SUNDRY CREDITORS O F RS 5,24,087/- AFRESH AS PER LAW AFTER CONSIDERING THE EVIDENCES WHICH THE A SSESSEE MAY FILE BEFORE HIM AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HE ARING TO THE ASSESSEE. THUS, THE GROUNDS OF APPEAL ARE ALLOWED FOR STATIST ICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 27 TH OF JUNE, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/ /06/2014 GHANSHYAM MAURYA, SR. P.S.