ITO, Haveri V. M/s Sri Ram Oil Mill, Ranebennur

ITA 218/BANG/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5097 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR AJEET JT
• Assessee Lawyers: P G GHALI
• Keywords: Opportunity of being heard
• Section: 143(3); 143(1); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 218/BANG/2010 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, WARD-1, HAVERI. : APPELLANT VS. M/S. SRI RAM OIL MILL, HALAGERI ROAD, RANEBENNUR. : RESPONDENT APPELLANT BY : SHRI KUMAR AJEET, JT. CIT(DR) RESPONDENT BY : SHRI P.G. GHALI, C.A. O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF LD. CIT(APPEALS), HUBLI IN ITA NO.62/CIT(A) HBL/08-09 F OR THE A.Y. 2005-06 DATED 11.12.2009. 2. THE REVENUE HAS RAISED FIVE GROUNDS IN ITS APPEA L. GROUND NO.1 & 5 ARE GENERAL AND THEREFORE NOT CONSIDERED. THE OT HER GROUNDS ARE LISTED OUT AS FOLLOWS:- (1) LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS .7,16,937 WHICH WAS SHOWN AS CREDIT BALANCE IN THE NAME OF M/ S. THIPPESWAMY TRADERS, CHALLEKERE. (2) LD. CIT(A) ERRED IN DELETING ADDITION OF RS.1,6 4,885 WHICH WAS SHOWN AS CREDIT BALANCE IN THE NAME OF M/ S. DINESH TRADING COMPANY, SANGLI. ITA NO.218/BANG/10 PAGE 2 OF 5 (3) LD. CIT(A) ERRED IN DELETING THE ADDITION OF R S.1,66,018 WHICH WAS SHOWN AS CREDIT BALANCE IN THE NAME OF SH RI N.N. NYAMATTI. 3. THE ASSESSEE IS A FIRM DOING BUSINESS IN THE FIE LD OF S.F. STEELS, S.F. OIL MILLS AND S.F. CAKES. INITIALLY ASSESSME NT WAS COMPLETED U/S. 143(1) OF THE ACT AND LATER TAKEN UP FOR SCRUTINY A SSESSMENT U/S. 143(3) OF THE ACT. IN THE ORDER PASSED U/S. 143(3), THE LD. AO MADE THE FOLLOWING ADDITIONS, WHICH IS UNDER DISPUTE:- (1) NON-FURNISHING OF CONFIRMATION LETTER FROM M/S. THIPPESWAMY TRADERS (SUNDRY CREDITORS) RS.7,16,937.50 (2) NON-FURNISHING OF CONFIRMATION LETTER FROM DINESH TRADING COMPANY RS.1,64,885.99 (3) AMOUNT STANDING TO THE CREDIT OF ONE EX-PARTNER RS.1,66,017.34 HOWEVER, AFTER AN ELABORATE AND DETAILED EXAMINATIO N OF THE FACTS, AND AFTER OBTAINING A REMAND REPORT FROM THE LD. AO, TH E LD. CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE IN ITS FAVOUR. THE FINDINGS OF THE LD. CIT(APPEALS) ARE HEREBY EXTRACTED WITH RESPECT TO E VERY DISALLOWANCE MADE BY THE AO. (1) NON-FURNISHING OF CONFIRMATION LETTER FROM M/S. THIPPESWAMY TRADERS (SUNDRY CREDITORS) - RS.7,16,93 7.50 THE AO IN HIS REMAND REPORT HAS ENCLOSED THE COPY OF LETTER DT: 26.05.2009, GIVING OPPORTUNITY OF BEING HEARD T O THE APPELLANT, INSPECTORS REPORT WITH 2 ENCLOSURES IN THE CASE OF M/S. THIPPESWAMY TRADERS, STATEMENT OF SRI K.C. THIPPESWAMY, PROP: M/S. THIPPESWAMY TRADERS, RECOR DED U/S. 131 ON 08.06.2009 AND ACCOUNT EXTRACT OF M/S. THIPPESWAMY TRADERS FOR F.Y. 04-05 & 05-06 FILED BY THE ITA NO.218/BANG/10 PAGE 3 OF 5 PARTNER OF THE ASSESSEE FIRM DURING THE HEARING. T HE AO HAS NOT POINTED OUT ANY INFIRMITY IN RESPECT OF THE DOC UMENTS SUBMITTED BY THE M/S. THIPPESWAMY TRADERS, THE CRED ITOR. HOWEVER, THE APPELLANT IN THE COURSE OF APPELLATE P ROCEEDINGS WAS REQUESTED TO FURNISH THE COPIES OF THE LEDGER A CCOUNTS OF M/S. THIPPESWAMY TRADERS, IN HIS BOOKS ALONG WITH T HE BILLS AND VOUCHERS FOR PURCHASE TRANSACTIONS CLAIMING IT AS TRADE CREDITOR. THE AR OF THE APPELLANT IN THE COURSE OF APPELLATE PROCEEDINGS HAS FILED THE COPIES OF THE LEDGER ACCO UNTS OF M/S. THIPPESWAMY TRADERS AS APPEARING IN THE BOOKS OF M /S. SRI RAM OIL MILLS AND ALSO FURNISHED THE COPIES OF THE BILLS AND VOUCHERS FOR PURCHASE OF S.F. SEEDS, S.F. OIL MILL AND S.F. CAKE FROM M/S. THIPPESWAMY TRADERS. THE ORIGINAL B ILLS WERE PRODUCED FOR VERIFICATION. IT IS PERUSED FROM THE COPIES OF LEDGER EXTRACT OF THE APPELLANT IN THE BOOKS OF M/S. THIPPESWAMY TRADERS THAT THESE CREDIT BALANCE OF RS.7,16,937/- HAS BEEN REPAID DURING THE F.Y. 04-05 ITSELF. IN THE LIGHT OF THESE FACTS, IT CLEARLY TRANSPIRES THA T THE IDENTITY OF THE CREDITOR, THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ARE EXPLAINED. THEREFORE, THE ADDITION OF RS.7,16,937/- IN RESPECT OF M/S. THIPPESWAMY TRADER S IS DIRECTED TO BE DELETED. (2) NON-FURNISHING OF CONFIRMATION LETTER FROM DINESH T RADING COMPANY - RS.1,64,885.99 THE AO HAS NOT POINTED OUT ANY INFIRMITY IN THE AC COUNT EXTRACT AND CONFIRMATION FILED IN RESPECT OF THE M/ S. DINESH TRADING CO., SANGLI. IN THE COURSE OF APPELLATE PR OCEEDINGS, THE AR WAS REQUESTED TO EXPLAIN THE TRANSACTION W.R . TO ITS BOOKS. THE AR HAS FURNISHED A COPY OF ACCOUNT EXTR ACT OF M/S. DINESH TRADING CO., IN ITS BOOKS SHOWING BALAN CE OF RS.1,64,885/- DURING THE RELEVANT PERIOD WHICH IS F OUND IN CONFORMITY TO THE ACCOUNT EXTRACT OF THE APPELLANT IN THE BOOKS OF THE SAID M/.S DINESH TRADING CO. IN VIEW THEREO F, THE TRANSACTION APPEARS TO BE GENUINE, HENCE THE ADDITI ON OF RS.1,64,885/- IS DIRECTED TO BE DELETED. (4) AMOUNT STANDING TO THE CREDIT OF ONE EX-PARTNER - RS.1,66,017.34 THE AO IN HIS REMAND REPORT HAS STATED THAT THE AP PELLANT APPEARED ON 26.05.2009 AND FURNISHED A LETTER OF CONFIRMATION DATED: 26.05.2009 OF SMT. JAYASHREE W/ O. LATE SRI N.M. NYAMATTI, FOR HAVING RECEIVED THE BALANCE OF RS.1,66,018/- WHICH WAS RECEIVABLE BY HER LATE HUSB AND AS ON ITA NO.218/BANG/10 PAGE 4 OF 5 31.03.2005 FROM M/S. SRI RAM OIL MILLS, THE APPELLA NT. THE WIFE OF THE LATE PARTNER HAS ALSO FURNISHED A COPY OF DEATH CERTIFICATE OF SRI N.M. NYAMATTI, THE EX-PARTNER. THE CONFIRMATION LETTER FURNISHED BY THE WIFE OF THE EX -PARTNER WHO HAS EXPIRED IS FOUND IN CONFIRMATION WITH THE CONTE NTION OF THE PARTNER OF THE FIRM WHO SUBMITTED BEFORE THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE DIVISION OF THE PROPERTIES OF THE FIRM IS DONE ORALLY AND THE SUM OF RS.1,66,0 18/- IS SHOWN AS PAYABLE TO SRI N.M. NYAMATTI, ONE OF THE P ARTNERS. IN VIEW OF THESE FACTS, THE ADDITION OF RS.1,66,018 /- IS DIRECTED TO BE DELETED. 4. LD. DR HAS NOT BROUGHT OUT ANY ADDITIONAL MATERI ALS TO SUBSTANTIATE THE GROUNDS RAISED BY THE REVENUE. THE ASSESSEE HA S FURNISHED ORIGINAL BILLS AND ALSO THE LEDGER EXTRACT OF THE APPELLANT S ACCOUNT IN THE BOOKS OF THE CREDITORS. THE IDENTITY AND CREDITWORTHINESS O F THE CREDITORS WERE ESTABLISHED. CONFIRMATION STATEMENTS FROM THE CRED ITORS WERE ALSO PRODUCED. IN THE CASE OF THE EX-PARTNER DEATH CERT IFICATE WAS PRODUCED AND IT WAS CONFIRMED BY THE OTHER PARTNERS THAT ON DIVISION OF PROPERTIES OF THE FIRM, THE AFORESAID AMOUNT WAS DUE TO HIM. WE ALSO FIND THAT THE LD. CIT(APPEALS) HAS EXAMINED THE CASE WITH UTMOST CARE AND AFTER OBTAINING A REMAND REPORT FROM THE LD. AO, HAS ARRIVED AT THIS CONCLUSION. LD. DR COULD NOT PRODUCE ANY EVIDENCE TO SUPPORT THE CLAIM OF TH E REVENUE. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FIN DINGS OF LD. CIT(APPEALS). 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ITA NO.218/BANG/10 PAGE 5 OF 5 PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JULY, 2010. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 30 TH JULY, 2010. DS/- COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.