DCIT, Coimbatore V. M/s. Dhanalakshmi Paper Mills (P) Ltd., Coimbatore

ITA 1963/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61117 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO.1963(MDS)/2011 ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE I(3), COIMBATORE. VS. M/S.DHANALAKSHMI PAPER MILLS(P) LTD., 10-Z, BHARATHI PARK ROAD, 7-SAIBABA COLONY, COIMBATORE-641011 PAN AAACD7352D. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P JA COB, IRS, ADDL.CIT RESPONDENT BY : NONE DATE OF HEARING : 9 TH MAY, 2012 DATE OF PRONOUNCEMENT : 9 TH MAY, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I AT - - ITA 1963 OF 2011 2 COIMBATORE, DATED 14-9-2011 AND ARISES OUT OF THE A SSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961. 2. THE ONLY ISSUE RAISED BY THE REVENUE IN THE PRE SENT APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEA LS) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSIN G OFFICER OF ` 25,79,246/- ON THE GROUND THAT THE ASSESSING OFFIC ER HAD NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT THERE WAS CESSATION OF LIABILITY. 3. WHEN THE MATTER WAS CALLED ON FOR HEARING, NOBO DY WAS PRESENT FOR THE RESPONDENT-ASSESSEE, EVEN THOUG H NOTICE OF POSTING WAS SERVED ON THE ASSESSEE THROUGH THE DEPA RTMENT. THE PROOF OF SERVICE OF NOTICE IS AVAILABLE ON RECO RD. THEREFORE, WE PROCEED TO DISPOSE OF THE APPEAL EX PARTE, QUA T HE ASSESSEE. SHRI SHAJI P JACOB, THE LEARNED COMMISSIONER OF INC OME-TAX, APPEARED FOR THE REVENUE. 4. THE ASSESSING OFFICER HAS MADE AN ADDITION OF ` 25,79,246/- UNDER SECTION 41(1). HE FOUND THAT A BALANCE OF - - ITA 1963 OF 2011 3 ` 25,79,246/- IS STANDING AS PAYABLE IN THE ACCOUNT OF M/S.SRINIVASA PAPERS, NAMAKKAL. M/S.SRINIVASA PAPE RS. NAMAKKAL IS ONE OF THE TRADE CREDITORS AS PER THE A CCOUNTS OF THE ASSESSEE. WHEN THE ASSESSING OFFICER ISSUED LETTER TO THE CREDITOR IN THE ADDRESS AVAILABLE ON RECORD, THE LE TTER HAS BEEN RETURNED UNSERVED. IT IS STATED THAT THE PARTY HAS CLOSED DOWN THE BUSINESS. IN THESE CIRCUMSTANCES, THE ASSESSIN G OFFICER HELD THAT IT WAS NOT NECESSARY FOR THE ASSESSEE TO PAY ANYMORE THE BALANCE OF ` 25,79,246/- AND THUS THE LIABILITY HAS CEASED TO EXIST. THEREFORE, THE SAID AMOUNT WAS ADDED UNDER SECTION 41(1) OF THE ACT. 5. IN FIRST APPEAL THE COMMISSIONER OF INCOME- TAX(APPEALS) ACCEPTED THE CONTENTION OF THE ASSESSE E THAT THE ASSESSEE HAD PAID AN AMOUNT OF ` 24,80,122/- TO THE CREDITORS THROUGH INDIAN OVERSEAS BANK AND THEREAFTER THE ACC OUNT WAS SQUARED UP IN THE MONTH OF MAY. ACCORDINGLY HE DEL ETED THE ADDITION. - - ITA 1963 OF 2011 4 6. THE MAIN GRIEVANCE OF THE REVENUE IS THAT THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE COMMI SSIONER OF INCOME-TAX(APPEALS) WERE NEVER PLACED BEFORE THE ASSESSING OFFICER FOR HIS REBUTTAL AND THAT THE ASSESSING AUT HORITY HAD NO OPPORTUNITY TO VERIFY THE CASE IN THE LIGHT OF THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME- TAX(APPEALS). 7. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE CASE, WE FIND THAT THE ASSESSEE HAS NOT PRODUCED TH E RELEVANT EVIDENCES BEFORE THE ASSESSING OFFICER TO PROVE THA T IT HAS DISCHARGED THE CREDIT BALANCE PAYABLE AFTER THE CLO SE OF THE PREVIOUS YEAR. WHEN THE ASSESSEE HAD PRODUCED THE EVIDENCES BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), THE ASSESSING AUTHORITY WAS NOT GIVEN AN OPPORTUNITY TO REBUT THO SE EVIDENCES, IF NECESSARY. IT IS TO BE SEEN THAT THE EARLIER EN QUIRIES MADE BY THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT D ID NOT YIELD ANY RESULT, AS THE LETTER SENT TO THE CREDITOR WAS NOT SERVED ON THE GROUND THAT THE CREDITOR HAD STOPPED THE BUSINESS. NEITHER THE ASSESSEE COULD PRODUCE A CONFIRMATION BEFORE THE AS SESSING - - ITA 1963 OF 2011 5 OFFICER, NOR COULD THE ASSESSEE PRODUCE THE CREDITO R HIMSELF BEFORE THE ASSESSING OFFICER. THEREFORE, WHEN WE F IND THAT THE CREDIT HAS NOT AT ALL BEEN PROVED BEFORE THE ASSESS ING OFFICER INSPITE OF A SPECIFIC ISSUE RAISED BY THE ASSESSING OFFICER, IT IS NOT PROPER ON THE PART OF THE COMMISSIONER OF INCOM E- TAX(APPEALS) TO ACCEPT THE EVIDENCES FILED BEFORE H IM BY THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSES SING OFFICER TO VERIFY THE SAME. THE COMMISSIONER OF INCOME-TAX (APPEALS) SHOULD HAVE ATLEAST CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. 8. IN THE FACTS AND CIRCUMSTANCES, WE FIND THAT TH IS MATTER SHOULD GO BACK TO THE ASSESSING OFFICER SO T HAT THE ASSESSING OFFICER SHALL HAVE AN OPPORTUNITY TO VERI FY THE EVIDENCES RELIED ON BY THE ASSESSEE TO DEFEND ITS C ASE. THE FILE IS REMITTED BACK TO THE ASSESSING OFFICER WITH A DI RECTION TO RECONSIDER THE ISSUE OF ADDITION OF ` 25,79,246/-. THE ASSESSING OFFICER SHALL GIVE THE ASSESSEE AN EFFECTIVE OPPORT UNITY TO PRODUCE THE NECESSARY EVIDENCES, IF AVAILABLE, AND ALSO OF BEING HEARD. - - ITA 1963 OF 2011 6 9. THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS) IS SET ASIDE AND THE ISSUE IS REMITTED TO THE ASSESSING OFFICER. 10. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDERS PRONOUNCED IN THE OPEN COURT AT THE TIME O F HEARING ON WEDNESDAY, THE 9 TH OF MAY, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 9 TH MAY, 2012. V.A.P. COPY TO: 1. ASSESSEES 2. DEPARTMENT 3. CIT 4. CIT(A) 5. DR 6. GF.