M/s. Piyush Ambalal Shroff,HUF, Ahmedabad V. The DY.CIT., Cent.Circle-1, Baroda

ITA 2113/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9919 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-05-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Keywords: TDS
• Section: 142(1); 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI T K SHARMA,JM & SHRI A N PAHUJA,AM ITA NO.2113/AHD/2007 (ASSESSMENT YEAR:-2003-04) PIYUSH AMBALAL SHROFF (HUF) 205-206, SWASTIK CHAMBERS, BHAJIWALI POLE, BARANPURI BHAGOL, SURAT [PAN: AACHP 9491 E] V/S DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 1, BARODA [APPELLANT] [RESPONDENT] ASSESSEE BY :- WRITTEN SUBMISSIONS REVENUE BY:- SHRI R K DHANESTA, DR O R D E R A N PAHUJA: THIS APPEAL BY ASSESSEE AGAINST AN ORDER DATED 13 - 02-2007 OF THE LD. CIT(APPEALS)-IV, AHMEDABAD, RAI SES THE FOLLOWING GROUNDS:- THE LEARNED CIT(A) HAS ERRED (I) IN NOT APPRECIATING THE FACTS THAT, THE ADDITIO N MADE AS PER AO'S ORDER PAGE 2, PARA 2, WORTH OF RS.5,03,098/- IS NOT WARRA NTED. IT IS FURTHER SUBMITTED THAT THE CIT (A) HAS ALSO ERRED IN CONFIR MING THE AFORESAID ADDITION AS PER HIS ORDER PAGE 2, PARA 3.1. IT IS R ESPECTFULLY PRAYED THAT THE AO HAS NOT CONSIDERED THE REPLY FILED BY THE ASSESS EE DATED 11/02/2006 FILED IN TAPAL ON 13/02/06 WHEREIN, THE ORDER IS DA TED 3/2/06, BUT SERVED TO ASSESSEE ONLY ON 21/2/06. THUS, IT IS RESPECTFUL LY PRAYED THAT THE ISSUE MAY PLEASE BE SENT BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH A DIRECTION TO GIVE A REASONABLE HEARING TO THE ASSES SEE. (II) IN NOT APPRECIATING THE FACTS THAT, THE ADDITI ON MADE WORTH OF RS.4,29,978/- AS PER AO'S ORDER PAGE 3, PARA 3 AND WHICH HAS BEEN CONFIRMED BY THE CIT (A) AS PER HIS ORDER PAGE 3, PARA 4.1 IS ALSO N OT JUSTIFIED BECAUSE THE ASSESSEE IS READY TO PROVE THAT THE ASSESSEE HAS IN CLUDED THE TOTAL AMOUNT AS PER TDS CERTIFICATE IN THE INCOME SHOWN O F RS.15,58,508/- AS PER WRITTEN SUBMISSION MADE TO THE AO DATED 28/11/0 5 WHICH HAS NOT BEEN CONSIDERED ALONGWITH THE VARIOUS BOOKS OF ACCOUNTS LIKE LEDGER ETC. PRODUCED BEFORE HIM. IT IS PRAYED THAT THIS ISSUE A LSO MAY PLEASE BE SENT BACK TO THE FILE OF THE AO WITH A DIRECTION TO VERI FY THE BOOKS OF ACCOUNTS AS TO WHETHER THE AMOUNT OF RS.15,58,508/- INCLUDES TH E FIGURE O9,09,882/- IN ITA NO.2113/AHD/2007 FOR AY 2003-04 SHRI PIYUSH A SHROFF (HUF) 2 TOTAL OR NOT. SINCE NO REASONABLE HEARING WAS GIVEN , THIS ISSUE ALSO MAY PLEASE BE SENT BACK TO THE AO. 2 ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL, FAC TS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT THE RETURN DECLARING I NCOME OF RS.8,08,800/- FILED ON 27-11-2003 BY THE ASSESSEE, HAVING INCOME FROM INTEREST, COMMISSION AND DISCOUNT, AFTER BEING PROCESSED ON 31-03-2004 U/S 143(1) OF THE INCOME-TAX ACT, 1961 [ HEREINAFTER REFERRED TO AS THE ACT], WAS SELECTED FOR SCRUTIN Y WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 23-06-2004.DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] NOTICED THAT THE ASSESSEE EARNED GROSS INTEREST ON FDRS TO THE TUNE OF RS.8,14,513/- IN ACCORDANCE WITH MERCANTILE METHOD OF ACCOUNTING REGULARLY FOLLOWED BY THE ASSSESSEE. HOWEVER, THE ASSESSEE REVERSED ENTRIES OF RS.1,60,486/-, RS.1,77,169/- AN D RS.1,65,443/- TOTALLING TO RS.5,03,098/- AND THUS, RETURNED REDUC ED AMOUNT OF INTEREST. TO A QUERY BY THE AO, THE ASSESSEE EXPLAI NED THAT EXCESS AMOUNT OF INTEREST WAS CREDITED IN THE BOOKS OF ACC OUNT. SINCE THE ASSESSEE WAS NOT IN POSSESSION OF THE RELEVANT TDS CERTIFICATES, THE ASSESSEE ASSURED TO SUBMIT RECONCILIATION WITH IN A SHORT PERIOD . EVEN THOUGH FURTHER OPPORTUNITY WAS PROVIDED TO THE ASSESSEE VIDE NOTICE U/S 142(1) OF THE ACT DATED 5-1-2006, THE AS SESSEE DID NOT SUBMIT ANY RECONCILIATION. ACCORDINGLY, THE AO ADDE D THE AMOUNT OF RS.5,03,098/- ON THE GROUND THAT THE ACCRUED INTERE ST ON FDRS INITIALLY ACCOUNTED FOR BY THE ASSESSEE CAN NOT BE REDUCED WITHOUT ANY BASIS. 3. AS REGARDS ISSUE IN GROUND NO.2, THE AO MADE AN ADDITION OF RS.4,29,978/- SINCE THE ASSESSEE REFLECTED INCOME ON ACCOUNT OF COMMISSION FROM SHRI AMBESHWAR PAPER MILLS LTD. R S.2,18,492/- AND FROM SHREE SWAMI HARIGIRI PAPER MILLS LTD. RS .2,61,412/- ONLY ITA NO.2113/AHD/2007 FOR AY 2003-04 SHRI PIYUSH A SHROFF (HUF) 3 AS AGAINST THE AMOUNT OF RS.9,09,882/- REFLECTED IN THE TDS CERTIFICATES. 4 ON APPEAL, THE ASSESSEE CONTENDED IN RESPECT OF ISSUE IN GROUND NO.1 THAT SINCE THEY HAD FILED REPLY DATED 1 1-02-2006 ON 13- 02-2006 AFTER CONCLUSION OF THE ASSESSMENT PROCEEDI NGS, THEREFORE, THE AO HAD NO OCCASION TO CONSIDER THE SAID REPLY. AFTER CONSIDERING THE SAID REPLY OF THE ASSESSEE, THE LEARNED CIT(A) CONCLUDED AS UNDER:- 3.1 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS AS WELL GONE THROUGH THE RECORDS. ON PERUSAL OF REPLY DATED 11.02.2006 FILED ON 13.02.2006 IN TAPAL/DAK IN THE OFFICE OF THE ASSESSING OFFICER IN RESPONSE TO THE NOTICE ISSUED U/S 142(1), IT HAS BEEN NOTICED THAT THE APP ELLANT HAD ALLEGEDLY OFFERED EXTRA INCOME IN FINANCIAL YEAR 2001-02 RELE VANT TO ASSESSMENT YEAR 2002-03 BUT THE APPELLANT FAILED TO SUBMIT COP Y OF BANK STATEMENT AS REQUIRED BY THE ASSESSING OFFICER IN NOTICE ISSUED U/S 142(1). SIMILARLY, NO TDS CERTIFICATE ISSUED BY THE BANK ON THIS AMOUNT H AS BEEN FURNISHED FOR ASSESSMENT YEAR 2003-04. THE APPELLANT IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AS ADMITTED IN THE PLEADINGS T HAT INTEREST WAS CREDITED ON THE BASIS OF MERCANTILE SYSTEM AS WELL AS MENTIONED IN THE ASSESSMENT ORDER ON THE BASIS OF RETURN FILED BY TH E APPELLANT. HENCE, IF AT ALL, THE REVERSAL OF ENTRY IS REQUIRED, THEN THE AP PELLANT SHOULD HAVE REVISED THE RELEVANT ASSESSMENT YEAR IN WHICH EXTRA INCOME WAS OFFERED FOR TAXATION SINCE EVERY YEAR IS AN INDEPENDENT YEAR. F URTHER, PROCEEDINGS BEFORE THE ASSESSING OFFICER ARE QUASI-JUDICIAL, TH EREFORE, THE APPELLANT SHOULD HAVE APPEARED IN PERSON BEFORE ASSESSING OFF ICER ON THE APPOINTED DAY AND TIME FOR SUBSTANTIATING THE CASE BEFORE CONCLUSION OF ASSESSMENT PROCEEDINGS. KEEPING IN VIEW OF ABOVE FA CTS AND CIRCUMSTANCES OF THE CASE, THE CONTENTIONS OF LD. C OUNSEL ARE HEREBY REJECTED AND SECOND GROUND OF APPEAL IS DISMISSED. 5. AS REGARDS THE ADDITION OF RS.4,29,978/-, THE LEARNED CIT(A) HELD AS UNDER:- 4.1 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS AS WELL GONE THROUGH THE RECORDS. ON PERUSAL OF TDS CERTIFICATE NO.BCOM/017/ 02-03, DATED 31.03.2003, ISSUED BY M/S SHREE SWAMI HARIGIRI PAPE R MILLS LTD, MUMBAI, FOR MAKING PAYMENT OF RS.1,22,2687- AND DEDUCTING T DS OF RS.7,5707/- IT HAS BEEN NOTICED THAT THIS CERTIFICATE HAS BEEN ISS UED ONLY IN RESPECT OF THE ITA NO.2113/AHD/2007 FOR AY 2003-04 SHRI PIYUSH A SHROFF (HUF) 4 BROKERAGE & COMMISSION ONLY. THERE IS NO PAYMENT ON ACCOUNT OF ANY INTEREST AS CLAIMED BY LD. COUNSEL IN HIS PLEADINGS . SIMILARLY, ON PERUSAL OF TDS CERTIFICATE NO.BCOM/018/02-03, DATED 31.03. 2003, ISSUED BY M/S SHREE SWAMI HARIGIRI PAPER MILLS LTD, MUMBAI, FOR M AKING PAYMENT OF RS.2,43,980/- AND DEDUCTING TDS OF RS.12,810/- IT H AS BEEN NOTICED THAT THIS CERTIFICATE HAS BEEN ISSUED ONLY IN RESPECT OF THE BROKERAGE & COMMISSION ONLY. THERE IS NO PAYMENT ON ACCOUNT OF ANY INTEREST AS CLAIMED BY LD. COUNSEL IN HIS PLEADINGS. SIMILARLY, ON PERUSAL OF TDS CERTIFICATE NO.00003, DATED 31.05.2003, ISSUED BY M /S SHREE AMBESHWAR PAPER MILLS LTD, ANKLESHWAR, FOR MAKING PAYMENT OF RS.5,43,634.77 AND DEDUCTING TDS OF RS.28,541/- IT HAS BEEN NOTICED TH AT THIS CERTIFICATE HAS BEEN ISSUED ONLY IN RESPECT OF THE COMMISSION ONLY. THERE IS NO PAYMENT ON ACCOUNT OF ANY INTEREST AS CLAIMED BY LD. COUNSE L IN HIS PLEADINGS. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE CONTENTIONS OF LD. COUNSEL ARE HEREBY REJECTED AND THIRD GROUND OF APPEAL IS DISMISSED. 6 THE ASSESSEE IS NOW IN APPEAL AGAINST THE AFORES AID FINDINGS OF THE LEARNED CIT(A). NONE APPEARED BEFORE US ON B EHALF OF THE ASSESSEE. INSTEAD, WRITTEN SUBMISSIONS DATED 22-03- 2010 HAVE BEEN FILED, IN WHICH SHRI KETAN H SHAH, THE LEARNED AR O N BEHALF OF THE ASSESSEE CONTENDED THAT THE DIFFERENCE OF RS.5,03,0 98/- ON ACCOUNT OF INTEREST ON FDRS AROSE BECAUSE CERTAIN FDRS HAD PRE-MATURED. AS REGARDS THE AMOUNT OF RS.4,29,978/-, IT WAS SUBM ITTED, WHILE INVITING OUR ATTENTION TO PAGES 10 TO 13 OF THE PAP ER BOOK, THAT THE AMOUNT OF RS.15,58,508/- INCLUDED BROKERAGE, COMMIS SION AND INTEREST WHEREAS THE AO SIMPLY RELIED ON TDS CERTIF ICATES. IN THESE CIRCUMSTANCES, THE LEARNED AR SUBMITTED THAT THE MA TTER MAY BE SENT BACK TO THE AO WITH THE DIRECTIONS TO ALLOW TH E ASSESSEE AN OPPORTUNITY TO MAKE RECONCILIATION AS TO WHETHER OR NOT THE AMOUNT OF TDS CLAIMED IS INCLUDED IN THE FIGURE OF RS.15 ,58,508/-. IN THEIR FURTHER REPLY DATED 06-09-2010 THE LEARNED AR PLEAD ED THAT SINCE THEIR REPLY DATED 11-02-2006 HAS NOT BEEN CONSIDERE D BY THE AO, THE MATTER MAY BE SENT BACK TO HIS FILE FOR A FRESH ORD ER AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. ON THE OTHE R HAND, THE LEARNED DR WHILE INVITING OUR ATTENTION TO THE IMPU GNED ORDERS SUBMITTED THAT SUFFICIENT OPPORTUNITY HAD BEEN ALLO WED BY THE AO ITA NO.2113/AHD/2007 FOR AY 2003-04 SHRI PIYUSH A SHROFF (HUF) 5 AND THE ASSESSEE WENT ON SEEKING ADJOURNMENTS ON ON E PRETEXT OR THE OTHER. SINCE THE LEARNED CIT(A) HAVE ALREADY CONSIDERED THE REPLY DATED 11.2.2006 FILED AFTER COMPLETION OF THE ASSESSMENT PROCEEDINGS WHILE THE ASSESSEE DID NOT FURNISH EITH ER COPY OF BANK STATEMENT AS REQUIRED BY THE AO OR EVEN THE TDS CER TIFICATES ISSUED BY THE BANK FOR THE YEAR UNDER CONSIDERATION, THE L EARNED CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDITIONS, THE LEARN ED DR ARGUED. 7. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE W RITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE. AS REG ARDS THE ADDITION OF RS.5,03,098/-, THE IMPUGNED ORDER REVEALS THAT I N THEIR REPLY DATED 11-02-2006 FILED AFTER COMPLETION OF ASSESSMENT, TH E ASSESSEE HAD STATED THAT SINCE THE FDRS HAD PRE-MATURED, THE D IFFERENCE IN INTEREST ACCOUNT WAS REVERSED. HOWEVER, THE LEARNED CIT(A) AFTER CONSIDERING THE SAID REPLY, CONCLUDED THAT THE ASSE SSEE FAILED TO SUBMIT EITHER COPY OF THE RELEVANT BANK STATEMENT O R EVEN THE RELEVANT TDS CERTIFICATES ISSUED BY THE BANK FOR TH E AMOUNT OF INTEREST. ADMITTEDLY, THE ASSESSEE HAD BEEN FOLLOWI NG MERCANTILE SYSTEM OF ACCOUNTING. SINCE NEITHER BEFORE THE LOWE R AUTHORITIES NOR EVEN BEFORE US, THE ASSESSEE PLACED ANY MATERIAL, JUSTIFYING REVERSAL OF ENTRIES OF RS.5,03,098/- ON ACCOUNT OF INTEREST ACCRUED ON FDRS, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). THEREFORE, GROUND NO.1 IN THE APPEA L IS DISMISSED. 8. AS REGARDS GROUND NO.2, THE LEARNED CIT(A) AFTER GOING THROUGH THE RELEVANT TDS CERTIFICATES CONCLUDED THAT THE AM OUNT REFLECTED IN THESE CERTIFICATES DID NOT INCLUDE ANY INTEREST AS CLAIMED BY THE ASSESSEE AND REFLECTED TDS DEDUCTED FROM BROKERAGE AND COMMISSION ONLY. EVEN DOCUMENTS PLACED AT PAGES 12 AND 13 OF THE PAPER BOOK DO NOT REVEAL THAT THE SAID AMOUNT INCLU DED THE INTEREST AS WELL. SINCE SUFFICIENT OPPORTUNITY HAS BEEN ALLO WED BY THE AO AND THE LD. CIT(A) WHILE THERE IS NO MATERIAL BEFORE U S TO INTERFERE WITH ITA NO.2113/AHD/2007 FOR AY 2003-04 SHRI PIYUSH A SHROFF (HUF) 6 THE FINDINGS OF THE LEARNED CIT(A), WE ARE NOT INCL INED TO ACCEPT THE PLEA OF THE ASSESSEE THAT THE MATTER NEEDS RE-CONSI DERATION. THEREFORE, GROUND NO.2 IN THE APPEAL IS ALSO DISMIS SED. 9. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 9 -09-2010 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 9-09-2010 COPY OF THE ORDER FORWARDED TO: 1. SHRI PIYUSH AMBALAL SHROFF (HUF) 205-206, SWASTI K CHAMBERS, BHAJIWALI POLE, BARANPURI BHAGOL, SURAT 2. DCIT, CENTRAL CIRCLE-1, BARODA 3. CIT CONCERNED 4. CIT(A)-IV, AHMEDABAD 5. DR, ITAT,A BENCH AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD