Vichoor Bitu Chemicals , CHENNAI V. ACIT Non Corporate Circle 6 , CHENNAI

ITA 2204/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5731 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K G RAGHUNATH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , ! . , ! & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.2204/MDS/2017 /ASSESSMENT YEAR: 2013-14 M/S.VICHOOR BITU CHEMICALS, DP NO.30, 31, SIDCO INDL. ESTATE, MANALI NEW TOWN, CHENNAI-600 103. [PAN: AAEFV 6547 R] VS. THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI-600 034. ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.K.G.RAGHUNATH, ADV. )*( + /RESPONDENT BY : DR.S.PANDIAN, JCIT + /DATE OF HEARING : 04.12.2017 + /DATE OF PRONOUNCEMENT : 05.12.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.2204/MDS/2017 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5 , CHENNAI, IN ITA NO.13/CIT(A)-5/2016-17 DATED 03.07.2017 FOR THE AY 2013-14. 2. DR.S.PANDIAN, JCIT, REPRESENTED ON BEHALF OF THE RESPONDENT AND MR.K.G.RAGHUNATH, ADV., REPRESENTED ON BEHALF OF TH E APPELLANT. ITA NO.2204/MDS/2017 :- 2 -: 3. IT IS SUBMITTED BY THE LD.AR THAT THE ONLY ISSUE IN THE ASSESSEES APPEAL WAS AGAINST THE ACTION OF THE LD.CIT(A) IN C ONFIRMING THE DISALLOWANCE OF THE TRADE ADVANCES RECEIVED BY THE ASSESSEE TO AN EXTENT OF RS.2,61,90,000/-. IT WAS A SUBMISSION THAT THE ASSESSEE IS IN THE BUSINESS OF BITUMEN, IRON AND STEEL. IT WAS A SUBM ISSION THAT THE ASSESSEE HAD APPOINTED 16 TRADE AGENTS FROM WHOM TH E ASSESSEE HAD RECEIVED TRADE ADVANCES IN CASH. IT WAS A SUBMISSI ON THAT THE BITUMEN IS SUPPLIED TO THE ASSESSEE FROM VARIOUS REFINERIES ON THE BIDDING AND THE SAME IS SOLD TO THE TRADERS. IT WAS A SUBMISSION T HAT FOR THE PURPOSE OF BIDDING, THE ADVANCES WERE GIVEN. THE LD.AR DREW O UR ATTENTION TO PAGE NO.56 OF THE PAPER BOOK TO SUBMIT THAT THE TOTAL SA LES DURING THE YEAR WERE MORE THAN RS.124.00 CRS. AS COMPARED TO RS.99. 00 CRS. IN THE PREVIOUS YEAR. IT WAS A SUBMISSION THAT THE ASSESS EE HAD RECEIVED THE TRADE ADVANCES FROM THE VARIOUS AGENTS. IT WAS A S UBMISSION THAT AS ON 31.03.2013, THE ASSESSEE HAD ALSO SUPPLIED NEARLY R S.1,35,30,996/- WORTH OF MATERIALS ALSO. THE LD.AR DREW OUR ATTENTION TO PAGE NO.22 OF THE PAPER BOOK TO SHOW THE DETAILS OF THE ADVANCES RECE IVED AND DISPATCHES MADE. IT WAS A SUBMISSION THAT OUT OF THE ADVANCES RECEIVED, DISPATCHES WERE PENDING ONLY TO AN EXTANT OF RS.1,26,59,004/- WHICH HAS ALSO BEEN MADE IN THE SUBSEQUENT YEAR. THE LD.AR SUBMITTED T HAT IN THE COURSE OF THE ASSESSMENT, THE AO HAD QUESTIONED THE TRADE CRE DITORS AND THE ASSESSEE HAD PROVIDED THE CONFIRMATION LETTERS ALON G WITH THE PANS. IT WAS A SUBMISSION THAT THE ADDITION MADE BY THE AO A ND AS CONFIRMED BY THE LD.CIT(A) WAS LIABLE TO BE DELETED. ITA NO.2204/MDS/2017 :- 3 -: 4. IN REPLY, THE LD.DR SUBMITTED THAT ONLY THE IDEN TITY OF THE TRADE CREDITORS HAD BEEN PROVED. IT WAS A SUBMISSION THA T THE GENUINENESS OF THE TRANSACTION WAS DOUBTED BY THE AO AND THIS WAS ALSO CONFIRMED BY THE LD.CIT(A). IT WAS A SUBMISSION THAT HE HAD NO OBJE CTION, IF THE ISSUE IS RESTORED TO FILE OF THE AO FOR RE-ADJUDICATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE AO, IN THE PRESENT CASE SHOWS THAT THE ISSUE OF THE TRADE CREDITORS HAD BEEN BROUGHT UP BY THE AO FOR THE FIRST TIME ON 25.02.2016 AND THE ASSESSMENT ORDER HAS BEEN PASSED ON 09.03.2016. TH E ASSESSEE HAD SUBMITTED THAT THE 16 TRADE AGENTS WHO ARE HAVING B USINESS INCOME AND HAD THE SOURCE OF ADVANCE AMOUNT AND HAD ALSO PROVI DED THE PANS, THE NAME AND ADDRESS ALONG WITH THE AGENCY AGREEMENTS. THE AO ON THE GROUND THAT THE MERE FILING OF THE PANS AND CONFIRM ATION OF THE PERSONS, ON WHOSE NAMES THE CASH CREDITS APPEARED DOES NOT P ROVE THE GENUINENESS OF THE TRANSACTION, DISALLOWED THE ENTI RE TRADE CREDITORS. NOTHING CONTRARY WAS AVAILABLE WITH THE AO. THE LD .CIT(A) HAS CONFIRMED THE ORDER OF THE AO. CONSIDERING THE FACT THAT THE AO HAD NOT EXAMINED THE VERACITY OF THE CONFIRMATIONS PROVIDED BY THE A SSESSEE, THE ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION. THE AO IS TO VERIFY AS TO WHETHER THE AMOUNT SHOWN AS ADVA NCES GIVEN TO THE ASSESSEE, HAVE BEEN DISCLOSED BY THE CREDITORS IN T HEIR BOOKS AND WHETHER IT IS ACTUALLY A TRADE TRANSACTION. IF THE CREDITOR S HAVE DISCLOSED THE ITA NO.2204/MDS/2017 :- 4 -: AMOUNTS IN THEIR ACCOUNTS AND THESE ARE ACTUALLY TR ADE TRANSACTIONS, THEN THE ADDITION MADE BY THE AO IS TO BE DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 05, 2017, AT CHENNAI. SD/- SD/- ( . ) ( S. JAYARAMAN ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 2 /DATED: DECEMBER 05, 2017. TLN + )34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 ) /DR 3. 6 ( ) /CIT(A) 6. /GF