M/s. Navkar Agro Industries, Sabarkantha V. The Income Tax Officer, Ward-3, Sabarkantha

ITA 2469/AHD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9382 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-01-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 30-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Assessee Lawyers: A C SHAH
• Keywords: Opportunity of being heard
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2469/AHD/2016 (ASSESSMENT YEAR: 2013-14) M/S. NAVKAR AGRO INDUSTRIES, NR. SABAR OIL MILL, HIMATNAGAR-IDAR HIGHWAY, POST: DHANADHA, HITATNAGAR DIST: SABARKANTHA V/S INCOME TAX OFFICER, WARD- 3, SABARKANTHA (APPELLANT) (RESPONDENT) PAN: AAIFN8548M APPELLANT BY : SHRI A.C. SHAH, AR RESPONDENT BY : SHRI OM PRAKASH MEENA, SR. D .R. ( )/ ORDER DATE OF HEARING : 23 -01-201 7 DATE OF PRONOUNCEMENT : 24 -01-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- 2, AHMEDABAD DATED 01.09.2016 PERTAINING TO A.Y. 20 13-14. ITA NO. 2469 /AHD/2016 . A.Y. 2013-1 4 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE A DDITION OF RS. 21,53,744/- MADE BY THE A.O. U/S. 40A(3) OF THE ACT. 3. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF PRO CESSING AND CLEANING OF WHEAT. THE RETURN OF INCOME WAS ELECTRONICALLY FILE D ON 27.09.2017 DECLARING TOTAL INCOME AT RS. NIL. THE RETURN WAS S ELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS MADE PAYMENT IN CASH TO THE F OLLOWING PARTNERS AGAINST PURCHASES: SR. NO. NAME OF THE PARTNER CASH PAYMENT RS. 1 JAYESHBHAI A. PATEL 10,82,755 2 PANKAJBHAI PATEL 4,42,729 3 UMESHKUMAR PATEL 1,18,260 4 YOGESHBHAI R. PATEL 5,10,000 5. THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY THE AFOREM ENTIONED CASH PAYMENTS SHOULD NOT BE DISALLOWED U/S. 40A(3) OF TH E ACT. 6. IN ITS REPLY DATED 23,03,2016, THE ASSESSEE STATED THAT THE PAYMENTS MADE TO PARTNERS OF THE FIRM WERE FOR PURCHASES OF AGRIC ULTURE ITEMS AND, THEREFORE, PROVISIONS OF SECTION 40A(3) DO NOT APPL Y IN THE LIGHT OF THE EXEMPTION GIVEN IN RULE 6DD(E). ITA NO. 2469 /AHD/2016 . A.Y. 2013-1 4 3 7. THE CONTENTION OF THE ASSESSEE DID NOT FIND ANY FAV OUR WITH THE A.O. WHO WAS OF THE OPINION THAT SINCE THE PARTNERS OF THE F IRM ARE NOT PURELY AGRICULTURIST, THE EXCEPTIONAL CLAUSES OF RULE 6DD( E) DO NOT APPLY. THE A.O. DISALLOWED THE CASH PURCHASES AMOUNTING TO RS. 21,5 3,744/-. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. THE FIRST APPELLATE AUTHORITY OBSERVED THAT THE ASS ESSEE HAS NOT GIVEN ANY DETAILS AND EVIDENCES IN SUPPORT OF THE PLEA THAT T HE SAID WHEAT PURCHASED BY THE APPELLANT HAD BEEN GROWN/CULTIVATED ON AGRIC ULTURAL LAND OF THE PARTNERS. 9. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THE DETAILS OF AGRICULTURAL PRODUCE AND THE AGRICULTURAL HOLDINGS BY THE PARTNERS. IT IS THE SAY OF THE LD. COUNSEL THAT THESE DETAILS WERE SUBM ITTED BEFORE THE A.O. BUT HAVE NOT BEEN CONSIDERED BY HIM. PER CONTRA, THE LD . D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT WHEAT WAS PURCHASE D FROM THE PARTNERS AND THE PAYMENTS HAVE BEEN MADE IN CASH. IT IS ALSO NOT IN DISPUTE THAT THE PARTNERS WERE HOLDING AGRICULTURAL LAND AS EVIDENT FROM THE DOCUMENTS PLACED BEFORE US. THOUGH THE LD. COUNSEL HAS STATED THAT THESE DOCUMENTS WERE BEFORE THE A.O. BUT THERE IS NO REFLECTION OF THESE DOCUMENTS IN THE ASSESSMENT ORDER. ITA NO. 2469 /AHD/2016 . A.Y. 2013-1 4 4 11. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTOR E THIS ISSUE TO THE FILES OF THE A.O. THE ASSESSEE IS DIRECTED TO SUBMIT THE DOC UMENTS WHICH ARE SUBMITTED BEFORE US AND THE A.O. IS DIRECTED TO VER IFY THE SAME AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. THE A.O. IS DIRECTED TO EXAMINE THE CLAIM UNDER RULE 6DD(E) OF THE I.T. RULES WITHOUT GIVING MUCH EMPHASIS TO PURELY AGRICULTURIST TO T HE PARTNERS. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 24 - 01- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 24 /01/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD