M/s BOX CORUGATORS AND OFFSET PRINTERS, Bhopal V. THE JCIT, RANGE-3, Bhopal

ITA 249/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5837 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Opportunity of being heard
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.249/IND/2016 A.Y. : 2009-10 M/S.BOX CORRUGATORS AND OFFSET PRINTERS, JCIT, RANGE (3), 14B/15A, SECTOR 1, INDUSTRIAL AREA, VS BHOPAL. BHOPAL APPELLANT RESPONDENT PAN NO. AADFB4211D APPELLANT BY : SHRI JITENDRA JAIN, CA RESPONDENT BY : SHRI MOHD. JAVED, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-2, BHOPAL, DATED 23.12.2015 FOR THE ASSES SMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF RUNNING DATE OF HEARING : 2 0 .0 7. 2016 DATE OF PRONOUNCEMENT : 2 0 .0 7 .2016 M/S. BOX CORRUGATORS AND OFFSET PRINTERS, BHOPAL VS . JT. CIT, RANGE 3, BHOPAL. I.T.A.NO. 249/IND/2016 A.Y. 2009-10 2 2 OFFSET PRINTING PRESS AND ALSO HIRING OF CYLINDERS. THERE WERE VARIOUS TRADE CREDITORS APPEARING IN THE AUDITED AC COUNTS OF THE ASSESSEE AS ON 31.03.2009. NOTICES U/S 133(6) O F THE INCOME-TAX ACT, 1961, WERE ISSUED TO SUCH CREDITORS TO FURNISH THE CONFIRMATIONS. ON LOCAL ENQUIRIES MADE BY THE INSPECTOR, IT WAS FOUND THAT ONE OF THE CREDITORS, NAMELY, M/S. GAYATRI ENTERPRISES, BHOPAL, WAS NOT TRACEABLE AT THE GIVEN ADDRESS. THE BALANCE OF M/S. GAYATRI ENTERPRSIES, BHOPAL, AM OUNTING TO RS. 3,29,603/- WAS OUTSTANDING SINCE 1.4.2006 IN THE BOOKS OF THE ASSESSEE. AS PER INFORMATION FURNISHED BY TH E ASSESSEE, NO TRANSACTIONS WERE MADE WITH THE ABOVE CREDITOR DUR ING THE PERIOD FROM 1.4.2006 TO 31.3.2009. THE AO MADE THE ADDITION OF RS. 3,29,603/- PERTAINED TO TRADE CREDITS AND AD DED TO THE TOTAL INCOME OF THE ASSESSEE IN VIEW OF SECTION 41(1 ) OF THE INCOME-TAX ACT, 1961. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS CONFIRMED THE ADDITION OF RS. 3,29,603/- BY OBS ERVING AS UNDER :- I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF LD. A.R. THE CONFIRMATION OF CREDIT BALANCE FILED FORM M/S GAYATRI ENTERPRISES IS ON THE ASSESSEES LETTER HEA D. M/S. BOX CORRUGATORS AND OFFSET PRINTERS, BHOPAL VS . JT. CIT, RANGE 3, BHOPAL. I.T.A.NO. 249/IND/2016 A.Y. 2009-10 3 3 DURING THE COURSE OF APPELLATE PROCEEDINGS, LD. A.R.WAS ASKED TO FILE A CONFIRMATION ISSUED BY M/S. GAYATRI ETNERPRISES FROM ITS OWN END. HOWEVER, IT HAS BEEN STATED THAT THE PARTY IS NOT TRACEABLE. TH E OPERATION OF THE PROVISIONS OF SECTION 41(1) HAS BE EN DECIDED BY HON'BLE I.T.A.T., INDORE BENCH, IN I.T.A .NO. 38/IND/2012 AA.Y.2005-06 DATED 9.5.2012 IN THE CASE OF M/S. SHAPERS INDUSTRIES LIMITED AS UNDER :- ADDITION MADE BY THE AO U/S 41(1) WAS NOT JUSTIFIED. AS PER OUR CONSIDERED VIEW, IN RESPECT O F ANY TRADE CREDITORS APPEARING IN THE BOOKS OF ACCOUNTS, THE ONUS IS ON THE ASSESSEE TO PROVE THAT THEY GENUINELY EXISTED AS AT THE END OF THE YEAR AN D FOR WHICH THE ASSESSEE IS REQUIRED TO FILE THEIR CONFIRMATIONS. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS GROUND TO THE AO WITH THE DIRECTION TO DECIDE THE ISSUE AFRESH AND THE ASSESSEE IS ALSO DIRECTED TO FILE RESPECTIVE CONFIRMATIONS OF TRADE CREDITORS AT THE END OF THE YEAR. IF THE ASSESSEE I S ABLE TO SHOW THAT SINCE NOW THE TRADE CREDITORS HAV E BEEN PAID OFF, NO ADDITION IS WARRANTED. WE DIRECTL Y ACCORDINGLY. AS PER THE A.O., THE CREDITOR WAS NOT FOUND EXISTIN G AT THE GIVEN ADDRESS UPON LOCAL ENQUIRY. AS THE ASSESSEE HAS FAILED TO FILE THE CONFIRMATION AND ESTABLISH THAT THE AMOUNT REMAINED OUTSTANDING AS ON 31.3.2009, THE ADDITION MADE BY THE AO IS UPHELD. 4. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE AO HAD NOT CONFRONTED THE ASSESS EE WITH M/S. BOX CORRUGATORS AND OFFSET PRINTERS, BHOPAL VS . JT. CIT, RANGE 3, BHOPAL. I.T.A.NO. 249/IND/2016 A.Y. 2009-10 4 4 THE WARD INSPECTORS REPORT THAT M/S. GAYATRI ENTERP RISES WAS NOT TRACEABLE AT THE GIVEN ADDRESS.THE ASSESSEE FIL ED CONFIRMATION FROM M/S. GAYATRI ENTERPRISES CONFIRMI NG THE CREDIT BALANCE OF RS. 3,29,603/-. THE LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE FURTHER CONTENDED TH AT THE ASSESSEE HAS NOT OBTAINED ANY AMOUNT EITHER IN CASH OR IN ANY OTHER MANNER, WHATSOEVER, OR A BENEFIT BY WAY OF REMI SSION OR CESSATION WHICH IS A SINE QUA NON FOR THE APPLICATIO N OF THIS SECTION. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE CONTINUED TO SHOW THE LI ABILITY IN RESPECT OF M/S. GAYATRI ENTERPRISES IN ITS BOOKS OF ACCOUNTS. THE AO FAILED TO PROVE THAT THE SAID LIABILITY CEAS ED TO EXIST DURING THE PREVIOUS YEAR UNDER CONSIDERATION. MEREL Y BECAUSE THE LIABILITY IS CONTINUING FOR A FEW YEARS AND THE PARTY DID NOT RESPOND OR WAS NOT TRACEABLE BY THE INSPECTOR OF TH E DEPARTMENT COULD NOT MEAN THAT THE CREDITOR WAS NOT GENUINE OR NOT IN EXISTENCE OR THE LIABILITY CEASED TO EXIS T. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PRAYED TH AT THE RELIEF CLAIMED MAY PLEASE BE GRANTED. M/S. BOX CORRUGATORS AND OFFSET PRINTERS, BHOPAL VS . JT. CIT, RANGE 3, BHOPAL. I.T.A.NO. 249/IND/2016 A.Y. 2009-10 5 5 5. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS OF THE LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THAT THIS MATTER REQUIRES VERIFICATION. MERELY BECAUSE THE LIABILITY IS CONTINUING FOR A FEW YEARS AND THE PARTY DID NOT RESPOND OR WAS NOT TRACEABLE BY THE INSPECTOR OF THE DEPARTMENT DOES NOT MEAN THAT THE CREDITOR WAS NOT GENUINE OR NOT IN EXISTENC E OR THE LIABILITY CEASE TO EXIST. I FIND THAT THE AO HAD AL SO NOT CONFRONTED THE ASSESSEE WITH THE INSPECTORS REPORT THAT M/S. GAYATRI ENTERPRISES WAS NOT TRACEABLE AT THE GIVEN A DDRESS. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY , I RESTORE THIS MATTER TO THE AO FOR VERIFICATION WITH THE DIRECTION THAT HE SHALL DECIDE THE MATTER AFRESH AFTER AFFORDING REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCOR DANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. M/S. BOX CORRUGATORS AND OFFSET PRINTERS, BHOPAL VS . JT. CIT, RANGE 3, BHOPAL. I.T.A.NO. 249/IND/2016 A.Y. 2009-10 6 6 THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 20 TH JULY, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 20 TH JULY, 2016. CPU*