RATAN IMPEX, Jaipur V. ITO, Jaipur

ITA 21/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2106 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DR DHK
• Keywords: Question of law; Retraction
• Section: 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 21 & 22/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2010-11 & 2011-12 M/S. RATAN IMPEX 50-54, RAMANUJ COLONY, SANGANER JAIPUR CUKE VS. THE ITO WARD- 7 (2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAHFR 3477 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MANISH AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY:SMT. NEENA JEPH, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19/02/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /02/2018 VKNS'K@ ORDER PER BHAGCHAND, AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD. CIT(A)-III, JAIPUR DATED 28-10-20 16 FOR THE ASSESSMENT YEAR 2010-11 AND 2011-12 RESPECTIVELY RAISING THER EIN FOLLOWING GROUNDS OF APPEAL. ITA NO. 21/JP/2017 A.Y. 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE ADDIT ION OF RS. 23,17,944/- MADE BY AO BY SOLELY RELYING UPON THE CONCLUSION DRAWN BY THE LD. CIT(A) IN THE CASE OF M /S. RATAN ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 2 TEXTILES (P) LTD. WITHOUT INDEPENDENT APPLICATION O F MIND AND FURTHER WITHOUT APPRECIATION OF THE FACTS OF TH E CASE OF ASSESSEE, THUS THE ACTION OF THE LD. CIT(A) IN UPHO LDING THE ADDITION BEING BASED ON BORROWED FINDINGS DESERVES TO BE HELD BAD IN LAW AND THE CONSEQUENT ADDITION OF RS. 23,17,944/- DESERVES TO BE DELETED. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN RELYI NG UPON THE STATEMENT OF SHRI NARESH JAIN (KARTA OF M/S. NA RESH JAIN, HUF, PARTNER) WHICH STOOD RETRACTED THROUGHAN AFFID AVIT, THUS HAVING NO EVIDENTIARY VALUE THEREFORE, THE ACT ION OF LD. CIT(A) IN RELYING UPON SUCH RETRACTED STATEMENT FOR CONFIRMING THE ADDITION DESERVES TO BE HELD BAD IN LAW AND THUS THE ADDITION MADE DESERVES TO BE DELETED. 1.2 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFI RMING THE ADDITIONS MADE BY AO WITHOUT ANY BASIS AND WITH THE SOLE PURPOSE TO MAKE ADDITIONS WITHOUT BRINGING ON RECOR D ANY CORROBORATIVE MATERIAL FOUND DURING THE COURSE OF S URVEY OR DURING THE COURSE OF ASSESSMENT PROCEEDING, AND ALS O BY COMPLETELY IGNORING THE WELL ESTABLISHED LAW THAT N O ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEMENT RECORD ED ON OATH DURING THE COURSE OF SURVEY CONDUCTED U/S 133A OF THE ACT WHEN THE ASSESSEE EXTENDED FULL COOPERATION MOR E PARTICULARLY WHEN SUCH STATEMENTS STOOD RETRACTED, THUS THE ASSESSMENT ORDER DESERVES TO BE HELD BAD IN LAW AND THE ADDITIONS MADE THEREUNDER DESERVS TO BE DELETED. ITA NO. 22/JP/2017 A.Y. 2011-12 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE ADDIT ION OF RS. 32,03,797/- MADE BY AO BY SOLELY RELYING UPON THE CONCLUSION DRAWN BY THE LD. CIT(A) IN THE CASE OF M /S. RATAN TEXTILES (P) LTD. WITHOUT INDEPENDENT APPLICATION O F MIND AND FURTHER WITHOUT APPRECIATION OF THE FACTS OF TH E CASE OF ASSESSEE, THUS THE ACTION OF THE LD. CIT(A) IN UPHO LDING THE ADDITION BEING BASED ON BORROWED FINDINGS DESERVES TO BE ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 3 HELD BAD IN LAW AND THE CONSEQUENT ADDITION OF RS. 32,03,797/- DESERVES TO BE DELETED. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN RELYI NG UPON THE STATEMENT OF SHRI NARESH JAIN (KARTA OF M/S. NA RESH JAIN, HUF, PARTNER) WHICH STOOD RETRACTED THROUGHAN AFFID AVIT, THUS HAVING NO EVIDENTIARY VALUE THEREFORE, THE ACT ION OF LD. CIT(A) IN RELYING UPON SUCH RETRACTED STATEMENT FOR CONFIRMING THE ADDITION DESERVES TO BE HELD BAD IN LAW AND THUS THE ADDITION MADE DESERVES TO BE DELETED. 1.2 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFI RMING THE ADDITIONS MADE BY AO WITHOUT ANY BASIS AND WITH THE SOLE PURPOSE TO MAKE ADDITIONS WITHOUT BRINGING ON RECOR D ANY CORROBORATIVE MATERIAL FOUND DURING THE COURSE OF S URVEY OR DURING THE COURSE OF ASSESSMENT PROCEEDING, AND ALS O BY COMPLETELY IGNORING THE WELL ESTABLISHED LAW THAT N O ADDITION CAN BE MADE SOLELY ON THE BASIS OF STATEMENT RECORD ED ON OATH DURING THE COURSE OF SURVEY CONDUCTED U/S 133A OF THE ACT WHEN THE ASSESSEE EXTENDED FULL COOPERATION MOR E PARTICULARLY WHEN SUCH STATEMENTS STOOD RETRACTED, THUS THE ASSESSMENT ORDER DESERVES TO BE HELD BAD IN LAW AND THE ADDITIONS MADE THEREUNDER DESERVS TO BE DELETED. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PARTNERSHIP FIRM ENGAGED IN JOB WORK OF WASHING, DYING, BLEACHING, P EROXIDE, HAND BLOCK PRINTING, SCREEN PRINTING, STITCHING OF FABRIC MAIN LY FOR ITS GROUP CONCERNS. A SURVEY U/S 133A OF THE INCOME TAX ACT, 1961 WAS C ONDUCTED AT THE PREMISES OF THE ASSESSEE FIRM AND OTHER ASSOCIATE B USINESS CONCERNS ON 04/08/2011. DURING THE COURSE OF SURVEY OPERATIONS, STATEMENTS OF SH. NARESH KUMAR JAIN, KARTA OF M/S NARESH JAIN (HUF) O NE OF THE PARTNERS ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 4 OF ASSESSEE FIRM AND VARIOUS OTHER EMPLOYEES WERE R ECORDED, WHEREIN ON THE INSISTENCE OF DEPARTMENTAL AUTHORITIES, A SURRE NDER OF INCOME FOR WAS OBTAINED FROM HIM FOR VARIOUS ASSESSMENT YEARS. THE RETRACTION WAS MADE THROUGH AFFIDAVIT FILED ON 18.10.2011 AND ACCORDING LY NO ADDITIONAL INCOME WAS OFFERED IN THE RETURN OF INCOME FILED. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, VARIOUS DETAILS AND EXPLANA TIONS ALONGWITH BOOKS OF ACCOUNTS, AS SOUGHT BY AO WERE FURNISHED. ASSESSMENT WAS COMPLETED BY AO WHERE JOB WORK CHARGES PAID BY ASS ESSEE TO M/S KALPANA HANDICRAFTS WERE DISALLOWED, DETAILS OF WHI CH ARE AS UNDER: ASSESSMENT YEAR JOB WORK CHARGES 2010-11 23,17,944/- 2011-12 32,03,797/- 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE A CTION OF THE AO IN THE BOTH THE APPEALS OF THE ASSESSEE HAVING SIMI LAR FACTUAL MATRIX OF THE CASE. 2.3 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF BOTH THE ADDITIONS CONFIRMED BY THE LD. CIT(A) AND FURTHER SUBMITTED THAT THE ISSUE IN QUESTION IS COVERED BY THE ITAT JAIPUR BENCH ORDER DATED 21-04-2017 IN THE CASE OF RATAN TEXTILE S P. LTD VS DCIT (FOR A.Y. 2007-08 TO 2010-11). ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 5 2.4 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER O F THE LOWER AUTHORITIES . 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET OF THE HEARING T HE LD.AR OF THE ASSESSEE INVITED OUR ATTENTION TO THE FACT THAT THE JOB CH ARGES PAYMENT TO M/S. KALPANA HANDICRAFTS WERE DOUBTED AND DISALLOWED IN THE CASE OF ASSESSEE. IDENTICAL SERVICES WERE ALSO PROVIDED BY M/S KALPAN A HANDICRAFTS TO M/S RATAN TEXTILES (P) LTD., A GROUP CONCERN, WHERE THE DISALLOWANCE OF SIMILAR NATURE ON THE BASIS OF STATEMENTS RECORDED DURING SURVEY WERE ALSO MADE. IN THE CASE OF THE ASSESSEE WHILE UPHOLDING THE DISALLOWANCE MADE IN PRESENT APPEALS, LD. CIT(A) SOLELY RELIED UPON T HE CONCLUSION DRAWN BY THE LD. CIT(A) ON LD. CIT(A)S ORDER IN THE CASE OF M/S RATAN TEXTILES (P) LTD. . THIS FACT HAS BEEN OBSERVED AT PAGE 17 OF THE LD. CIT(A)S ORDER IN ASSESSEE'S CASE AS UNDER:- SINCE FACTS OF THE PRESENT CASE ARE EXACTLY SIMILAR TO THE ABOVE CASE, THE DISALLOWANCE MADE BY LD.AO IN THE PRESENT CASE IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. IT IS NOTED THAT IN CASE OF M/S RATAN TEXTILES(P) LTD., AGAINST THE LD. CIT(A) ORDER, ON THE BASIS OF WHICH DISALLOWANCE WA S CONFIRMED IN PRESENT APPEALS, THE ITAT JAIPUR BENCH HAD DELETED THE SAME VIDE ORDER ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 6 DATED 21.04.2017 FOR A.Y.2007-08 TO 2011-12 (APB 1 50-178). THE RELEVANT OBSERVATION OF THE BENCH ARE AS UNDER :- 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THERE IS NO DISPUTE WITH REGARD TO PROPOSITION THAT STATEMENTS RECORDED DURING THE COURSE OF SURVEY HAV E NO EVIDENTIARY VALUE. SUCH STATEMENTS IF RETRACTED BY THE ASSESSEE WOULD SHIFT THE ONUS ON THE ASSESSING OFFICER TO PROVE THE CONTENTS OF THE STATEMENT AS CORRECT B Y PLACING MATERIAL CORROBORATING THE CORRECTNESS OF SUCH STATEMENTS ON RECORD. IN THE PRESENT CASE, THE ASSESSING OFFICER BASED HIS FINDINGS SOLELY ON THE BASIS OF T HE CONTENTS OF THE STATEMENT RECORDED DURING THE COURSE OF SURVEY. NO OTHER MATERIAL IS G ATHERED SUGGESTING THAT THE STATEMENTS WERE NOT CORRECT. AS PER THE ASSESSEE, O NE OF THE FIRM M/S KALPANA IMPEX IS REGISTERED WITH ESI AND DEDUCTING CONTRIBUTION A ND DEPOSITING THE SAME TO THE CONCERNED AUTHORITY. THE ASSESSING OFFICER WAS REQU IRED TO MAKE INQUIRY ON THESE CONTENTS SINCE THE STATEMENT WAS RECORDED DURING TH E COURSE OF SURVEY AND SUCH STATEMENTS STATED A FACT WHICH WAS REQUIRED TO BE F URTHER CORROBORATED WITH A PLAUSIBLE EVIDENCE. WE FIND THAT THE ASSESSEE HAD ENCLOSED DETAILS OF C ONTRACTORS FROM WHOM IT HAD GOT THE WORK DONE AT PAGE 9 OF THE PAPER BOOK. A LE TTER ADDRESSED TO THE REGISTERING AUTHORITY UNDER THE CONTRACT LABOUR ACT IS ENCLOSED, WHICH WAS RECEIVED BY THE CONCERNED DEPARTMENT ON 26/1/2011. AT PAGE NO. 7 OF PAPER BOOK, A REGISTRATION CERTIFICATE DATED 09/9/2005 IS ENCLOSED, WHICH INCLUDES NAME OF SMT. KALPANA JAIN. THESE DETAILS DEMONSTRATE THA T PROPRIETOR OF M/S KALPANA IMPEX WAS REGISTERED WITH CONCERNED AUTHORITY OF LA BOUR DEPARTMENT FOR THE PURPOSE OF STITCHING. FROM THE RECORDS, AS MADE AVA ILABLE, IT IS TRANSPIRED THAT THE ASSESSEE WAS ENGAGING PERSONS ON CONTRACT FOR I TS WORK. ON THIS ASPECT, NO INQUIRY WAS MADE BY THE ASSESSING OFFICER. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER OUGHT NOT TO HAVE BASED THE ASSES SMENT SOLELY ON THE STATEMENTS RECORDED DURING THE COURSE OF SURVEY, HE SHOULD HAVE BROUGHT MATERIAL SUGGESTING THAT NO JOB WORK WAS DONE BY TH E SAID FIRMS . THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT, UDAIPUR VS. SHRI ROSHAN LAL LODHA IN I.T. APPEAL NO. 185/2014 ORDER DATED 03/11/2015 HAS HELD AS UNDER:- IN THE CASE AFORESAID, HON'BLE APEX COURT HELD THA T SECTION 133-A OF THE INCOME TAX ACT DOES NOT EMPOWER INCOME TAX OFFICER TO EXAMINE ANY PERSON ON OATH; HENCE, THE STATEMENT RECORDED UNDER SECTION 133-A HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUC H STATEMENT CANNOT BE MADE BASIS OF ADDITION. THE APPEAL PREFERRED BY THE REVENUE BEFORE THE INCOME TAX APPELLATE TRIBUNAL CAME TO BE DISMISSED BY THE JUDGMENT IMPUGNED. LEARNED COUNSEL APPEARING ON BEHALF OF TH E APPELLANT SUBMITS THAT THE ASSESSEE IN THE INSTANT MATTER DID NOT RET RACT FROM HIS STATEMENT, THEREFORE, THE LAW LAID DOWN IN THE CASE OF S. KHAD ER KHAN SON (SUPRA) IS ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 7 NOT APPLICABLE. WE DO NOT FIND ANY MERIT IN THE ARG UMENT ADVANCED. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER, I NCOME TAX (APPEALS), WITH SPECIFIC ASSERTION THAT THE STATEMENT MADE BY HIM WOULD HAVE NOT BEEN ACCEPTED TO MAKE ANY ADDITION AND THEREFORE, H IS DENIAL IS APPARENT. IN VIEW OF IT, THE ORDERS PASSED BY THE COMMISSIONE R, INCOME TAX (APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL DO NOT SUFFER FROM ANY WRONG. THE APPEAL IS HAVING NO SUBSTANTIAL QUESTION OF LAW. HENCE, THE SAME IS DISMISSED. IF WE APPLY THE RATIO OF THE JUDGMENT OF THE HONBL E APEX COURT RENDERED IN THE CASE OF CIT VS. S.KHADER KHAN SON (SUPRA) ON THE FACTS OF THE PRESENT CASE, THE AUTHORITIES BELOW WERE NO JUSTIFIED IN MAKING THE A DDITION ON THE BASIS OF THE STATEMENT RECORDED DURING THE COURSE OF SURVEY. NO OTHER MATERIAL SUGGESTING THAT THE CLAIM OF THE ASSESSEE WAS FALSE, IS BROUGH T ON RECORD BY THE REVENUE. UNDER THESE FACTS AND IN VIEW OF THE BINDING PRECED ENT, WE ARE UNABLE TO CONFIRM THE FINDING OF THE LD. CIT(A). THEREFORE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE TRADING ADDITION OF RS. 25.00 LACS. GROUNDS NO. 1 TO 3.1 OF THE ASSESSEES APPEAL ARE DISPOSED OFF IN INDICATED HEREINBEFORE. IT IS FURTHER SUBMITTED BY THE LD.AR OF THE ASSESSE E THAT THE DISALLOWANCES OF SIMILAR NATURE WERE ALSO MADE IN OTHER ASSESSMEN T YEARS IN THE CASE OF ASSESSEE WHERE BY FOLLOWING THE AFORESAID ORDER OF ITAT JAIPUR, THE LD. CIT(A) HAD DELETED THE DISALLOWANCE SO MADE AND NO FURTHER APPEAL WAS FILED BY THE REVENUE. IT IS THUS NOTED THAT THE DI SALLOWANCE MADE AND UPHELD IN THE PRESENT APPEALS ARE BASED ON THE IDEN TICAL FACTS AND RETRACTED STATEMENTS AND CASE OF ASSESSEE IS SQUARELY COVERED BY THE DECISION OF ITAT, JAIPUR BENCH (SUPRA). IN VIEW OF THE ABOVE F ACTS, CIRCUMSTANCES OF THE CASE AND THE DECISION OF ITAT JAIPUR BENCH DATE D 21-04-2017 IN THE CASE OF RATAN TEXTILES PVT. LTD (SUPRA), THE DISALL OWANCES MADE TO THE ITA NO.21/JP/2017 M/S. RATAN IMPEX VS ITO, WARD- 7(2), JAIPUR 8 TUNE OF RS.23,17,944/- (A.Y.2010-11) AND RS.32,03,7 97/- (A.Y.2011-12) ARE DIRECTED TO BE DELETED AND WE DO NOT CONCUR WIT H THE FINDINGS OF THE LD. CIT(A) IN BOTH THE ASSESSMENT YEARS . THUS BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 3.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-02-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /02/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. RATAN IMPEX, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 7(2), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.21/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR