The ITO, Ward-4(2), Ahmedabad V. Kamal Fats and Refoils Pvt.Ltd., Ahmedabad

ITA 2518/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1767 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-12-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 24-11-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: S N DIVATIA
• Keywords: Set aside
• Section: 68

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH CAHMEDABAD BEFORE S/SHRI N. S. SAINI, A.M. AND MAHAVIR SINGH, J.M. ITA NO.2518/AHD/2006 ASST. YEAR:2003-04 INCOME-TAX OFFICER, WD 4(2), AHMEDABAD. V/S . KAMAL FATS AND REFOILS (P) LTD., PLOT NO.25/10, PHASE-III, GIDC, NARODA, AHMEDABAD. PAN NO.AABCK 3066 E (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI M. C. PANDIT, SR. DR RESPONDENT BY:- SHRI S. N. DIVATIA, AR O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 14/09/2006. 2. THE FIRST ISSUE OF REVENUES APPEAL IS AGAINST T HE ORDER OF CIT(A) DELETING THE ADDITION OF RS.10,493/- MADE BY THE ASSESSING OFFIC ER U/S 68 OF THE ACT, ON ACCOUNT OF DIFFERENCE IN THE OPENING BALANCE BETWEEN THE CR EDITORS ACCOUNT AND THE ACCOUNT KEPT BY THE ASSESSEE. FOR THIS, THE REVENUE HAS RAI SED THE FOLLOWING GROUND NO.1: 1. THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.10,493/- MADE BY THE ASSESSING OFFIC ER U/S 68 OF THE ACT, ON ACCOUNT OF DIFFERENCE IN THE ACCOUNT BALANCE BETWEEN THE CR EDITORS ACCOUNT AND THE ACCOUNT KEPT IN THE ASSESSEES BOOKS OF ACCOUNTS TREATING T HE SAME AS PURE ARITHMETICAL DIFFERENCE WITHOUT VERIFYING CORRECTNESS OF THE REL EVANT ENTRY OR RECONCILIATION. 2 3. WE FIND THAT THIS ADDITION OF RS.10,493/- WAS MA DE BEING THE DIFFERENCE IN ACCOUNT BALANCE OF BALDEVBHAI G. PATEL AND ACCOUNT KEPT BY THE ASSESSEE. IT WAS CLAIMED THAT THE DIFFERENCE WAS DUE TO THE ERROR IN THE ACCOUNT KEPT BY CREDITOR. AFTER HEARING THE RIVAL CONTENTIONS AND GOING THROUGH THE MATERIAL ON RECORD, WE FIND THAT THE CIT(A) HAS NOT DISCUSSED HOW THE DIFFERENCE HAS BEEN RECONCILED. IN VIEW OF THIS, WE FEEL THAT THIS ISSUE NEEDS RE-EXAMINATION AT THE LEVEL OF CIT(A) AND CIT(A) AFTER DISCUSSING THE RECONCILIATION WILL PASS A SPEAKING ORDER. ACCORDINGLY THIS ISSUE OF THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S. 4. THE NEXT ISSUE IN REVENUES APPEAL IS REGARDING DELETION OF ADDITION OF RS.60,71,833/- ON ACCOUNT OF DISALLOWANCE OF CONSIG NMENT EXPENSES, COMMISSION ON CONSIGNMENT SALE AND PURCHASES, BEING UNPROVED CONS IGNMENT EXPENSES/PURCHASE EXPENSES. FOR THIS THE REVENUE HAS RAISED THE FOLLO WING GROUND :- 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FAC TS OF THE CASE IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.60,7 1,833/- CONSISTING OF CONSIGNMENT EXPENSES RS.23,53,809/-, COMMISSION ON CONSIGNMENT SALE RS.3,86,866/- AND PURCHASES OF RS.33,31,158/- FROM MANISHKUMAR RAMANL AL PATEL BEING UNPROVED CONSIGNMENT/PURCHASE EXPENSES. 2.1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ACCEPTING FRESH EVIDENCES IN VIOLATION OF RULE 46A OF THE IT RULES, WITHOUT GIVING THE ASSESSING OFFICER ANY OPPORTUNITY TO EXAMINE THE SAID FRESH E VIDENCES AND REBUT THE SAME. NOR THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO CA RRY OUT ANY FURTHER EXAMINATION BY WAY OF REMAND PROCEEDINGS BUT CHOSE TO DELETE THE S AID ADDITION. 5. AT THE OUTSET THE LD. SR. DEPARTMENTAL REPRESENT ATIVE STATED THAT IT IS SEEN FROM THE APPELLATE ORDER THAT THE ASSESSEE WAS ASKED BY THE CIT(A) TO PREPARE A CHART OF QUANTITATIVE TALLY OF MATERIAL BOUGHT, PROCESSED AN D SOLD THROUGH CONSIGNEE. THE ASSESSEE PREPARED THE SAME AND ALSO PRODUCED STOCK REGISTER FOR THE FIRST TIME. THESE DOCUMENTS WERE PRODUCED BY THE ASSESSEE FOR THE FIR ST TIME TO RECONCILE THE STOCK DIFFERENCE OF EXPENSES. THE CIT(A) BASED ON THIS CH ART AND STOCK REGISTER, STATED THAT THE QUANTITATIVE TALLY WAS NOT DISPUTED. LD. SR. DE PARTMENTAL REPRESENTATIVE STATED 3 THAT THIS HAS NEVER BEEN CONFRONTED TO THE ASSESSIN G OFFICER AND THERE IS NO FINDING THAT HOW THE STOCK IS RECONCILED. IN VIEW OF THESE FACTS, THE LD. SR. DEPARTMENTAL REPRESENTATIVE URGED THE BENCH TO RESTORE THE MATTE R BACK TO THE FILE OF CIT(A). ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE SHRI S . N. DIVATIA HAS NOT OBJECTED TO REMITTING THE MATTER BACK TO THE FILE OF CIT(A). 6. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FEEL THAT THESE DOCUMENTS SHOULD BE ALLOWED TO BE EXAMINED BY THE ASSESSING O FFICER AND AFTER THAT CIT(A) SHOULD DECIDE AFTER SEEKING A REMAND REPORT FROM TH E ASSESSING OFFICER. ACCORDINGLY THIS ISSUE IS ALSO SET ASIDE TO THE FILE OF CIT(A) AND ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 11 /12 /2009 SD/- SD/- (N. S. SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 11/12/2009 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD