THE DY CIT 14(2), MUMBAI V. M/S. BEE PEE TEXTILES, MUMBAI

ITA 2394/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2632 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2009
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 07-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VANDANA SAGAR
• Assessee Lawyers: MUKESH B ADVANI
• Keywords: Bad and doubtful debts; Corroborative evidences; Set aside
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B ,MUMBAI BEFORE SHRI T.R.SOOD(A.M) AND SMT. ASHA VIJAYARAGH AVAN (J.M) ITA NO.851/MUM/08(A.Y.2003-04) BEE-PEE TEXTILES, 384-F DHABHOLAKARWADI, KALBADEVI ROAD, MUMBAI 400 002. PA NO.AAFFB 3061R (APPELLANT) VS. THE ADDL. CIT, RANGE 14(2), EARNEST HOUSE, 3 RD FLOOR, NARIMAN POINT, MUMBAI 02. (RESPONDENT) ITA NO.2394/MUM/08(A.Y. 2003-04) THE ADDL. CIT, RANGE 14(2), EARNEST HOUSE, 3 RD FLOOR, NARIMAN POINT, MUMBAI 02. (APPELLANT) VS. BEE-PEE TEXTILES, 384-F DHABHOLAKARWADI, KALBADEVI ROAD, MUMBAI 400 002. PA NO.AAFFB 3061R (RESPONDENT) REVENUE BY : SMT. VANDANA SAGAR ASSESSEE BY : SHRI MUKESH B.ADVANI ORDER PER ASHA VIJAYARAGHAVAN, JM THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS W ELL AS THE REVENUE AGAINST THE ORDER OF LD.CIT(A) XIV, MUMBAI DATED 1/1/2008 P ASSED FOR THE ASSESSMENT YEAR 2003-04. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE IN IT A NO.2394/MUM/04. THE FIRST GROUND OF APPEAL OF THE REVENUE READS AS UNDER:- THE CIT(A) ERRED IN RESTRICTING THE ADHOC DISALLOW ANCE MADE ON ACCOUNT OF POLISHING AND FINISHING CHARGES TO 25% WITHOUT APPR ECIATING THE FACT THAT THE ASSESSEES SUBMISSION THAT CHEQUES WERE ISSUED AS P ER THE BILLS ON DIFFERENT DATES WAS WITHOUT ANY BASIS/SUPPORTING EVIDENCE. ITA NO.851&2394/MUM/08(A.Y.2003-04) 2 3. THE LD. D.R, SMT. VANDANA SAGAR POINTED OUT CERT AIN DISCREPANCIES IN THE DOCUMENTS FILED BY THE LD. A.R OF THE ASSESSEE. BY WRITTEN SUBMISSION SHE SUBMITTED THE SYNOPSIS OF THE ARGUMENTS, WHEREIN SHE HAD BROU GHT OUT THE DISCREPANCIES IN DETAIL. WE HAVE PERUSED THE SAME AND WE FIND THAT THE DISCR EPANCIES NEED TO BE VERIFIED BY THE A.O . THE LD. COUNSEL FOR THE ASSESSEE, SHRI M UKESH B. ADVANI DID NOT OBJECT THE MATTER BEING REMITTED BACK TO THE FILE OF THE A.O TO ENABLE HIM TO GET THE STATEMENT FROM THE PARTIES TO WHOM PAYMENTS HAVE BEEN MADE BY ISSU ING NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961. IN THESE CIRCUMSTAN CES THE MATTER SHALL GO BACK TO THE FILE OF THE AO AND THE ASSESSEE SHALL GET AN OPPOR TUNITY TO PRODUCE THE PARTIES BEFORE HIM. THE LD. COUNSEL FOR THE ASSESSEE ALSO POINTED OUT THAT ONE OF THE PARTIES HAD EXPIRED AND THE A.O MAY EXAMINE THE BROTHER OF THE PARTY WHO HAD EXPIRED. WE HEREBY DIRECT THE A.O TO TAKE APPROPRIATE MEASURES TO GI VE AN EFFECTIVE AND REASONABLE HEARING TO THE ASSESSEE AND DISPOSE OF THE CASE AC CORDING TO LAW. 4. THE NEXT GROUND OF APPEAL RAISED BY THE REVENUE IS AS UNDER:- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.4, 02,482/- ON ACCOUNT OF PACKING MATERIAL WITHOUT APPRECIATING THE FACT THAT THE GEN UINENESS OF THE BILL OF M/S. UMA PACKAGING HAS NOT BEEN PROVIDED BY THE ASSESSEE. 5. THE LD. D.R POINTED OUT THE DISCREPANCY, WHICH I S AS FOLLOWS:- AT PAGE 97 OF THE PAPER BOOK BY LETTER DATED 22/6 /06 ORIENTAL BANK OF COMMERCE HAS CERTIFIED THAT PAYMENTS WERE PAID IN C ASH TO THE BEARER OF THE CHEQUES. WHEREAS IN THE ORDER OF THE LD. CIT(A) AT PAGE 16 I T HAS BEEN OBSERVED AS FOLLOWS:- THE JCIT HAS POINTED OUT THE DISCREPANCY THAT THER E WERE NO INTERMITTENT BILLS ISSUED BY UMA PACKAGING WHICH CREATES DOUBT REGARDI NG THE GENUINENESS OF THESE BILLS. ON THE OTHER HAND THE AR HAS TAKEN A STAND THAT SINCE THE PAYMENTS MADE TO THAT PART STOOD CONFIRMED AND THE SAME STOO D MADE BY ACCOUNT PAYEE CHEQUES, THERE WAS NO JUSTIFICATION TO MAKE ANY ADD ITION OUT OF THE PACKING MATERIAL. HAVING CONSIDERED THE FACTS I AM OF THE VIEW THAT ALTHOUGH THE FACT THAT NO INTERMITTENT BILLS WERE ISSUED BY THAT PARTY CRE ATES SOME DOUBT ON THE GENUINENESS OF THE PAYMENT, THE AO/JCIT SHOULD HAVE MADE FURTHER INVESTIGATION BY CALLING THAT PARTY AND RECORDING T HE STATEMENT TO ASCERTAIN THE TRUTH BUT NOTHING FURTHER HAS BEEN DONE. ITA NO.851&2394/MUM/08(A.Y.2003-04) 3 THEREFORE, THE LD.D.R POINTED OUT THAT THE MATTER NEEDS VERIFICATION AND SHOULD BE SENT BACK TO THE A.O FOR FURTHER ENQUIRY. IN THESE CIRC UMSTANCES WE REMIT THIS ISSUE TO THE FILE OF THE A.O TO ASCERTAIN THE SAME AFTER GIVING REASO NABLE OPPORTUNITY TO THE ASSESSEE. 6. THE NEXT GROUND OF APPEAL OF THE REVENUE IS AS U NDER:- THE CIT(A) ERRED IN REDUCING THE DISALLOWANCE OF BAD DEBTS TO RS. 1,80,510/- WITHOUT APPRECIATING THE FACT THAT NO DETAILS IN RE SPECT OF THE SAME WERE FURNISHED BY THE ASSESSEE. 7. SINCE LD. D.R POINTED OUT THAT NO DETAILS IN RES PECT OF THE BAD DEBTS WERE FURNISHED BY THE ASSESSEE WE ONCE AGAIN REMIT THIS ISSUE TO THE FILE OF THE A.O. 8. GROUND NO.4 OF THE REVENUES APPEAL READS AS UND ER:- THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.90 00/- IN RESPECT OF UNSECURED LOANS WITHOUT APPRECIATING THE FACT THAT NO PARTICU LARS IN RESPECT OF THE SAME WERE FURNISHED BY THE ASSESSEE. 9. HERE AGAIN THE DETAILS WITH RESPECT TO UNSECURED LOANS ARE TO BE VERIFIED BY THE A.O AND THE SAME IS REMITTED BACK TO HIS FILE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. ITA NO.851/MUM/08-ASSESSEES APPEAL 11. SINCE THE ISSUES RAISED IN THE APPEAL BY THE AS SESSEE HAVE BEEN CONSIDERED IN THE DEPARTMENTAL APPEAL AND THE MATTER HAS BEEN SET ASIDE TO THE FILE OF THE A.O THE ASSESSEES APPEAL BECOMES REDUNDANT. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED AS REDUNDANT. ORDER PRONOUNCED ON THE 2 ND DAY OF DEC. 2009 SD/- SD/- (T.R.SOOD) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT. 2 ND DEC, 2009. ITA NO.851&2394/MUM/08(A.Y.2003-04) 4 COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT -XIV,MUMBAI 4. THE CIT(A)- XIV,MUMBAI 5. THE D.R B BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.851&2394/MUM/08(A.Y.2003-04) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 2/12/09 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 2/12/09 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER