The Income tax Officer, Bathinda V. Sh. Ramesh Kumar,

ITA 203/ASR/2010

• Counselvise Citation: 20320914 RSA 2010
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2014
• Assessment Year: 1993-1994
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Unexplained investment
• Section: 32; 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 PAN: 29-580-FZ-5580 INCOME TAX OFFICER, VS. SH. RAMESH KUMAR, PROP. WARD-2(1), BATHINDA M/S RAM DAYAL BUDH RAM, GIDDERBAHA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. MAHAVIR SINGH, SR. DR RESPONDENT BY: SH. P.N. ARORA, ADVOCATE DATE OF HEARING: 29.01.2014 DATE OF PRONOUNCEMENT: 29.01.2014 ORDER PER BENCH 1. THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15.02.2010 PASSED BY LEARNED CIT(A), BATHINDA , FOR THE ASSESSMENT YEAR 1993-94 ON THE FOLLOWING GROUNDS: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 16 ,42,602/- OUT OF TOTAL ADDITION MADE BY THE AO AT RS. 17,42,602/- ON ACCOU NT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF WHEAT. 1.1 THE LEARNED CIT(A) HAS ERRED IN RELYING UPON T HE PROVISIONS OF SECTION 32 OF THE SALE OF GOODS ACT, 1930, AS THIS ACT IS APPLICABLE TO THE SALES OF WHEAT AND FOR INVESTMENT IN THE PURCHASE O F WHEAT THIS ACT IS NOT RELEVANT. 1.2 THE LEARNED CIT(A) HAS ERRED IN REFERRING TO T HE INQUIRIES MADE BY THE A.O. THROUGH HIS INSPECTOR IN RESPECT OF THE ASSESSMENT YEAR 1994- 95, AS NO SUCH INQUIRIES WERE MADE IN THE YEAR UNDE R APPEAL I.E. 1993-94 2 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 AND IT IS SETTLED LAW THAT EVERY IS AN INDEPENDENT YEAR FOR INCOME TAX PURPOSES. 2. IT IS PRAYED THAT THE ORDER OF LEARNED CIT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 2. IN THE PRESENT CASE, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 17,42,602/- ON ACCOUNT OF UNEXPLAINED INVESTMEN T IN THE SALES OF WHEAT MADE BY THE ASSESSEE DURING THE YEAR, BESIDES OTHER ADDITIONS WHICH ARE NOT IN DISPUTE. IN THE PRESENT APPEAL, WH ILE MAKING THE ADDITION, THE THEN ASSESSING OFFICER EXAMINED THE B OOKS OF ACCOUNT OF THE ASSESSEE AND ALSO APPRAISED VARIOUS FACTS RELAT ING TO THE SALES MADE BY THE ASSESSEE. THE ASSESSEE CLAIMED BEFORE THE ASSES SING OFFICER THAT HE HAD NOT MADE ANY INVESTMENT IN THE PURCHASE OF THE WHEAT WHICH WAS SOLD BY HIM TO VARIOUS DEALERS OF SOUTH INDIA AT TH E RAILWAY PLATFORM. THE ASSESSEE CLAIMED THAT THE PAYMENT IN RESPECT OF PUR CHASE OF WHEAT FROM VARIOUS FARMERS IN CASH WAS MADE TO THEM ON RECEIPT OF CASH PAYMENT RECEIVED BY HIM FROM THE PURCHASERS ON THE RAILWAY STATION ITSELF. THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE A SSESSEE BY HOLDING THAT HOW THE ASSESSEE IS ABLE TO ENTER INTO AN UNDERSTAN DING WITH THE PURCHASER AND BOOK WAGONS WITHOUT HAVING ANY CONTROL OVER GOO DS TO BE TRANSPORTED AND SECONDLY GIVEN THE UNCERTAINTIES IN THE AVAILABILITY OF WAGONS AFTER THE BOOKING, HOW IS THE PURCHASER SITT ING IN SOUTH INDIA ABLE 3 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 TO ENSURE READY AVAILABILITY OF CASH AT RAILWAY STA TION, GIDDERBAHA. AGGRIEVED WITH THE AFORESAID ADDITION, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY, WHO VIDE IMP UGNED ORDER DATED 15.02.2010, DELETED THE ADDITION OF RS. 16,34,245/ - OUT OF THE TOTAL ADDITION OF RS. 17,42,602/- IN THE FIRST ROUND OF APPEAL PREFERRED BY THE ASSESSEE. HOWEVER, IN THE SECOND APPEAL FILED BY T HE REVENUE, THE I.T.A.T. RESTORED THE MATTER BACK TO THE FILE OF LE ARNED CIT(A) FOR RE- ADJUDICATION OF THE ISSUE IN DISPUTE. IN THE SECOND ROUND OF FIRST APPEAL BEFORE LEARNED CIT(A), THE COUNSEL FOR THE ASSESSE E RAISED VARIOUS ARGUMENTS, WHICH INCLUDED THAT THE THEN ASSESSING O FFICER HAD MADE INQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDIN GS FROM THE FARMERS CONCERNED THROUGH HIS INSPECTOR WHO HAD RECORDED TH E STATEMENTS OF THE FARMERS ON THE ISSUE. LEARNED CIT(A) CALLED FOR A R EMAND REPORT FROM THE UNDERSIGNED ON THE ARGUMENTS OF THE ASSESSEES COUN SEL AND LEARNED CIT(A) HAS AGAIN DELETED THE ADDITION OF RS. 16,34, 245/- OUT OF THE TOTAL ADDITION MADE BY THE ASSESSING OFFICER AT RS. 17,42 ,602/- ON THE SAME LINES WHICH WAS EARLIER ALLOWED BY THE THEN CIT(A). LEARNED FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT OF WHEAT PURCHASED BY HIM WAS MADE AFTER RECEIVING THE PAYMENT OF SAME WHEAT SOLD TO THE DEA LERS AT RAILWAY 4 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 STATION. FOR THAT PURPOSE, HE RELIED UPON THE PROVI SIONS OF SECTION 32 OF THE SALE OF GOODS ACT, 1930 AND HAS ALSO TAKEN REFE RENCE FROM THE ASSESSMENT ORDER IN THE CASE OF THIS VERY ASSESSEE FOR THE ASSESSMENT YEAR 1994-95 WHEREIN THE ASSESSING OFFICER HAD GOT THE I NQUIRES CONDUCTED THROUGH HIS INSPECTOR IN RESPECT OF CASH PURCHASES OF WHEAT MADE BY THE ASSESSEE IN THAT YEAR. 3. IN THE PRESENT APPEAL, THE REVENUE HAS CHALLENGE D THE IMPUGNED ORDER IN WHICH LEARNED CIT(A) HAS DELETED THE ADDIT ION OF RS. 16,34,245/- OUT OF THE TOTAL ADDITION MADE BY THE ASSESSING OFF ICER I.E. AMOUNTING TO RS. 17,42,602/-. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES AND WE ARE OF THE VIEW THAT THE ASSESSING OFFICER H AS MADE THE ADDITION IN DISPUTE BY COMPLETING THE ASSESSMENT ON 23.03.19 98 UNDER SECTION 144 READ WITH SECTION 147 OF THE INCOME-TAX ACT, 19 61 (IN SHORT THE ACT). IN THE APPELLATE PROCEEDING, LEARNED FIRST A PPELLATE AUTHORITY HAS NARRATED THE COMPLETE FACTS OF THE CASE ON HAND IN THE IMPUGNED ORDER AND AFTER CONSIDERING THE WRITTEN SUBMISSION FILED BY THE ASSESSEE AND THE REMAND REPORT CALLED FROM THE ASSESSING OFFICER CON CERNED, HE DELETED THE ADDITION IN DISPUTE. LEARNED FIRST APPELLATE AU THORITY HAS ALSO 5 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 DELETED THE ADDITION IN DISPUTE ON THE BASIS OF THE DECISION OF I.T.A.T. IN THE CASE OF J.H. METALS VS. INCOME TAX OFFICER REPO RTED IN 71 TTJ (ASR) TM 683 AS WELL AS KEEPING IN VIEW THE PROVISIONS OF SECTION 32 OF THE SALE OF GOODS ACT, 1930. 5. IT IS PERTINENT TO MENTION HERE THAT THE ASSESSE E IS A COMMISSION AGENT DEALING IN FOOD GRAIN BUSINESS. AS PER DETAIL S FILED AND THE REPORT OF THE ASSESSING OFFICER, ALL PURCHASES AND SALES OF W HEAT HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT. OUT OF SALES OF R S. 90,11,325/- OF WHEAT, MORE THAN 40% HAS BEEN MADE ON CREDIT BASIS AND BALANCE HAS BEEN MADE IN CASH. THE ASSESSEE HAS ALSO FILED AFFI DAVITS OF VARIOUS FARMERS TO PROVE THE SOURCE OF PURCHASE. THE INDEPE NDENT INQUIRIES HAVE ALSO BEEN MADE BY THE ASSESSING OFFICER THROUGH HIS INSPECTOR AS ADMITTED IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 1994-95. NO ADVERSE FINDING THAT THE ASSESSEE HAS RECEIVED THE PAYMENT NOT IMMEDIATELY BUT RECEIVED THE SAME AFTER THE PERIOD OF SEVEN DAYS. IN THE ABSENCE OF ANY ADVERSE FINDING, PROVISIONS OF SECTI ON 32 OF THE SALE OF GOODS ACT, 1930 HAVE RELEVANCE I.E. PAYMENT AND DEL IVERY ARE CONCURRED CONDITIONS. 6. LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DE LETED THE ADDITION IN DISPUTE ON THE BASIS OF DOCUMENTARY EVI DENCE PRODUCED BY THE 6 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 ASSESSEE AND AS PER LAW BY HOLDING THAT NO INVESTME NT IS REQUIRED FOR SUCH PURCHASE AND SALES AS HAS ALREADY BEEN SETTLED BY T HIS BENCH IN THE CASE OF J.H. METALS VS. INCOME TAX OFFICER, REPORTED IN 71 TTJ(ASR) TM 683, IN WHICH ONLY GP HAS BEEN UPHELD, WHICH THE LEARNED CIT(A), BATHINDA, HAS DONE. 7. IN VIEW OF THE FOREGOING DISCUSSION, NO INTERFER ENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY LEARNED CIT(A) , BATHINDA, DATED 15.02.2010. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORD ER DATED 15.02.2010 AND DISMISSED THE APPEAL FILED BY THE RE VENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JANUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. RAMESH KUMAR, PROP. M/S RAM DAYAL BUDH RAM, GIDDERBAHA 2. INCOME TAX OFFICER, WARD-2(1), BATHINDA 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 7 I.T.A. NO. 203(ASR)/2010 ASSESSMENT YEAR: 1993-94 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.