ITO, Rayagada V. Jami Gouri Prasad, Rayagada

ITA 198/CTK/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0744 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2010
• Court: TRIBUNAL
• Department Lawyers: A K MOHAPATRA
• Assessee Lawyers: N ANAND RAO AR OF
• Keywords: Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER ITA NO.198/CTK/2010 (ASSESSMENT YEAR 2006 - 07) ITA NO. 238/CTK/2010 (ASSESSMENT YEAR 2006 - 07) I.T.O., RAYAGADA WARD, RAYAGADA. .. APPELLANT - VERSUS - SRI JAMI GOURI PRASAD PROP. HJ. G.P.BHAWANI AGENCIES, OPP.HOTEL MARUTI, NEW COLONY, RAYAGADA. PAN : ACEPJ 7871 J .. RESPONDENT SRI JAMI GOURI PRASADPROP. HJ.G.P.BHAWANI AGENCIES, OPP.HOTEL MARUTI, NEW COLONY, RAYAGADA. PAN : ACEPJ 7871 J .. APPELLANT - VERSUS - I.T.O., RAYAGADA WARD, RAYAGADA. .. RESPONDENT FOR THE DEPARTMENT : SHRI A.K.MOHAPATRA, DR FOR THE ASSESSEE : SHRI N.ANAND RAO, AR OF THE ASSESSEE / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THESE TWO APPEALS, ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE AGAINST THE ORDER DT.22.2.2010 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) PERTAINING TO THE ASSESSMENT MADE U/S.143(3) FOR THE ASSESSMENT YEAR 2006 - 07 WERE HEARD TOGETHER AND ARE NOW DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN THE REVENUES APPEAL, THE ONLY ISSUE IS IN REGARD TO CERTAIN DELETIONS OF THE ADDITION MADE BY THE ASSESSING OFFICER, WHICH ARE DISCUSSED BELO W. 3. AS REGARDS THE DELETION OF THE ADDITION OF 6,30,000 THE FACTS UNDISPUTED ARE THAT THE ASSESSEE HAD CLAIMED OUTSTANDING LIABILITY OF 13,62,351 IN CASE OF THE CREDITOR M/S.MSP STEEL PVT. LTD., KEONJHAR AS AGAINST ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 2 CLOSING BALANCE OF 3,80,024 IN THE BOOKS O F ACCOUNT OF THE SAID CONCERN. IT WAS EXPLAINED BY THE ASSESSEE THAT 6,30,000 WAS PAID TO M/S.MSP STEEL PVT.LTD., KEONJHAR BUT THE AMOUNT WAS BOOKED TO HAVE BEEN PAID TO ONE SP STEELS LTD., BARBIL, WHICH WAS DETECTED SUBSEQUENTLY BUT BEFORE FILING THE RET URN AND THE AMOUNT WAS REDUCED FROM THE TOTAL BALANCE OUTSTANDING TO THE SUNDRY CREDITORS BY MAKING AN ENTRY OF 6,30,000 RECEIVABLE FROM SP STEELS LTD.,BARBIL. THE ASSESSING OFFICER CONSIDERED THE SAID EXPLANATION AS UNACCEPTED AS ACCORDING TO HIM, THERE WAS NO EXISTENCE OF FIRM LIKE SP STEEL, BARBIL AS ENQUIRED THROUGH INSPECTOR OF INCOME - TAX AND MADE ADDITION TREATING THE SUM OF 6,30,000 AS BOGUS CASH CREDIT. IN APPEAL, THE LEARNED CIT(A) ACCEPTED THE ABOVE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED IN H IS ORDER THAT THE ASSESSEE ISSUED TWO CHEQUES BEARING NO.683491 AND 687578 OF 2,00,000 AND 4,30,000 RESPECTIVELY IN FAVOUR OF M/S.MSP STEEL PVT. LTD., KEOJHAAR FOR PURCHASE OF M.S.ROUND WHICH WERE CREDITED IN LATERS ACCOUNT ON 17.1.2006 AND 20.2.2006, B UT THE ASSESSEE BY MISTAKE BOOKED THE ISSUE OF CHEQUES IN THE NAME OF THE SP STEELS LTD., BARBIL. ON DETECTION OF THE WRONG ENTRY, THE ASSESSEE MADE IT GOOD BY REDUCING THE OUTSTANDING BALANCE OF SUNDRY CREDITORS FROM 47,66,769 TO 41,36,769 BY MAKING AN ENTRY OF 6,30,000 AS RECEIVABLE FROM M/S.S.P.STEELS LTD.,BARBIL. THE LEARNED DR COULD NOT CONTROVERT THE ABOVE FACTS. WE FIND THAT THE DIFFERENCE WAS DUE TO WRONG ENTRY IN THE ACCOUNTS AS STATED EARLIER. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN DELETING THE SAID ADDITION OF 6,30,000. 3.1. AS REGARDS DELETION OF THE ADDITION OF 3,44,838, WE FIND THAT THE ASSESSING OFFICER HAS STATED THERE WAS AN OUTSTANDING BALANCE OF 3,44,838 IN THE SUNDRY CREDITORS ACCOUNT OF M/S.NAHID ENTERPRISES, SUNDARGARH. ON ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 3 ENQUIRY, THE ASSESSING OFFICER OBSERVED THAT THE SAID CONCERN WAS NON - EXISTENT AND THE ASSESSEE FAILED TO PRODUCE THE ORIGINAL PURCHASE BILLS AS WELL. ACCORDINGLY, TREA TING THE SAID TRANSACTION AS BOGUS, THE ASSESSING OFFICER MADE THE ADDITION OF 3,44,838. IN APPEAL, THE LEARNED CIT(A) VERIFIED THE PURCHASE BILL SHOWING PURCHASES OF 16.450 MT OF MS RODS FROM M/S.NAHID ENTERPRISES, WHICH WAS DELIVERED TO THE GODOWN OF TH E ASSESSEE BY TRUCK NO.OR 14 L 7501 ON 11.2.2006. THE PURCHASE BILL WAS FOUND DULY CHECKED AT RMC , JHARSUGUDA. MAJOR PART OF THE OUTSTANDING HAS BEEN PAID BY WAY OF D.D.NO.903590 AND 694774. THE LEARNED CIT(A) CONSIDERING THE ABOVE HELD THE TRANSACTION T O BE GENUINE AND THEREFORE, DELETED THE ADDITION. THE LEARNED DR CONTENDED IN SUPPORT OF THE ADDITIONAL GROUND FILED ON 2.12.2010 THAT THE LEARNED CIT(A) WAS NOT CORRECT IN ADMITTING ADDITIONAL EVIDENCE, WHICH IS IN CONTRAVENTION OF RULE 46A WITHOUT AFFORD ING REASONABLE OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE AND REBUT SUCH EVIDENCE. WE FIND THAT THE MATERIALS PRODUCED BEFORE THE LEARNED CIT(A) ARE PART OF ACCOUNTS AND THEY CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCE AND THEREFORE, WHEN THE LEARNED CIT(A) BY EXERCISING HIS CO - TERMINOUS POWER WITH THAT OF ASSESSING OFFICER HAS EXAMINED THE SAME AND COMPUTED THE CORRECT INCOME AND FURTHER IN ABSENCE OF ANY MATERIAL ON RECORD TO NEGATE THE ABOVE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE L EARNED CIT(A), WHICH WE HAVE NO HESITATION TO UPHOLD CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE APPEAL FILED BY THE ASSESSEE, A REVISED GROUNDS OF APPEAL HAS BEEN FILED, WHICH WE ARE DEALING WITH ISSUE - WISE AS UNDER. ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 4 5.1. AS REGARDS THE CONFIRMATION OF THE ADDITIONS OF 1,98,375, 3,32,881, 6,48,515 AND 43,984 SHOWN AS OUTSTANDING BALANCE IN THE NAMES OF M/S.BEE PEE REROLLER,ROUEKALA, M/S.JALANI AGENCIES,CUTTACK,M/S.GBD STEEL SYNDICATE PVT.LTD., BHUBANESWAR AND M/S.ROY & SONS PLUMBING STORE, BALASORE, RESPECTIVELY, THE LEARNED CIT(A) WHILE DEALING WITH THE ABOVE ISSUES, HAS OBSERVED IN HIS ORDER AS FOLLOWS : IN COURSE OF APPELLATE PROCEEDINGS, THE LD. A/R COULD NOT PRODUCE ANY EXPLANATION AND BY ACCEPTING THE ADDITION, HE DID NOT PRESS FOR ADJUDICATION OF THE GROUND OF APPEAL. ACCORDINGLY, THE ADDITION MADE BY THE A.O.IS CONFIRMED. FROM THE ABOVE OBSERVATION, WHICH COULD NOT BE NEGATED BY THE LEARNED AR OF THE ASSESSEE BEFORE US, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE DID NOT PRESS FOR ADJUDICATION OF THE GROUND OF APPEAL IN RESPECT OF THE ABOVE ADDITIONS BEFORE THE FIRST APPELLATE AUTHORITY, THE SAME CANNOT BE ACCEPTED AS A SUBJECT MATTER OF DISPUTE HEREIN BEFORE THE TRIBUNAL AN ISSUE NOT RAISED, NOT ADJUDICATED BY THE FIRST APPELLATE AUTHORITY CANN OT BE ALLOWED TO BE RAISED AND ADJUDICATED IN SECOND APPEAL. WE, THEREFORE, CONFIRM THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ABOVE ADDITIONS AND DISMISS THE GROUND RAISED BY THE ASSESSEE IN THIS REGARD. 5.2. THE NEXT ISSUE RAISED BY THE ASSESSEE IS AGAINST DISALLOWANCE OF 3,52,327 IN RESPECT OF MSP STEEL LTD. 5.3. AS DISCUSSED IN PARAGRAPH 3 ABOVE, THE DIFFERENCE OF CREDIT WAS 9,82,327, OUT OF WHICH THE ASSESSEE COULD EXPLAIN CREDIT OF 6,30,000 THUS LEAVING A BALANCE OF 3,52,327 AS UNEXPLAINED. THE LEARNED CIT(A) HAS OBSERVED IN HIS ORDER THAT THE LEARNED A/R HAS NO EXPLANATION TO THE BALANCE ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 5 DIFFERENCE OF 3,52,327. BEFORE US, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE PART DISALLOWANCE IN THE CASE OF M/S.MSP STEEL LTD., OF 3,52,327 IS UNJUST AS THE PURCHASES ARE THERE , WHICH RELATED TO EARLIER YEARS . WE FIND THAT THE AUTHORITIES BELOW HAVE ONLY CONSIDERED THE PURCHASES OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR. THERE IS ALSO NO FINDING OF EITHER OF THE AUTHORITI ES BELOW THAT THERE WAS NO EARLIER PURCHASES MADE BY THE ASSESSEE FROM M/S.MSP STEEL LTD. THEREFORE, THE DISALLOWANCE AS SUSTAINED BY THE LEARNED CIT(A) BEING RELATED TO PURCHASES OF EARLIER YEAR IS NOT JUSTIFIED. ACCORDINGLY, WE DELETE THE SAID ADDITION O F 3,52,327. 5.4. THE NEXT ISSUE AS RAISED BY THE ASSESSEE IS AGAINST CONFIRMATION OF THE DISALLOWANCE/ADDITION OF EXPENSES ON ACCOUNT OF TRANSPORTATION AND UNLOADING AND LOADING OF 15,000. 5.5. THE ASSESSING OFFICER NOTICED THAT THE TRANSPORTATION CHA RGES OF 44,276 AND LOADING & UNLOADING EXPENSES OF 1,92,113 ARE NOT SUPPORTED BY BILLS AND VOUCHERS. THEREFORE, THE ASSESSING OFFICER DISALLOWED 5,000 AND 10,000 RESPECTIVELY, WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A) IN APPEAL. 5.6. . AFTER HEA RING BOTH THE PARTIES AND GOING THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE LEARNED CIT(A) HAS CATEGORICALLY OBSERVED THAT THE LEARNED A/R HAS NOT RAISED ANY OBJECTION TO THESE ADDITIONS AT THE TIME OF APPELLATE PROCEEDINGS. THE LEARNED AR OF THE ASSESSEE, HOWEVER, SUBMITTED BEFORE US THAT THE DISALLOWANCE IS UNJUST INTERFERENCE TO THE NATURE OF BUSINESS AND VOLUME OF TRANSACTIONS. BUT ADMITTEDLY THE ABOVE EXPENSES ARE NOT SUPPORTED BY BILLS AND VOUCHERS AND THEREFORE, THE ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 6 EXPENS ES CLAIMED CANNOT BE ALLOWED IN FULL. CONSIDERING THE NATURE OF EXPENDITURE AND ALSO VOLUME OF BUSINESS, WE UPHOLD THE DISALLOWANCE MADE BY THE AUTHORITIES BELOW, WHICH IS BELOW 10% OF THE TOTAL EXPENDITURE AND DISMISS THE GROUND IN THIS REGARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. TO SUM UP, THE APPEAL OF THE REVENUE IS DISMISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 14 TH MARCH, 2011 SD/ - SD/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DATE: 14 TH MARCH, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : I. T.O., RAYAGADA WARD, RAYAGADA. 2 / THE RESPONDENT: SRI JAMI GOURI PRASAD PROP. HJ.G.P.BHAWANI AG ENCIES, OPP.HOTEL MARUTI, NEW COLONY, RAYAGADA. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIO R.PRIVATE SECRETARY. ITA NO.198/CTK/2010 AND ITA NO. 238/CTK/2010 (CROSS APPEALS) 7