Laxmi Enterprise, Ahmedabad V. The Dy.CIT.,Circle-2, Ahmedabad

ITA 2646/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94221 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 31-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIPKUMAR MAJMUDAR
• Keywords: Additional evidence
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND S.S. GODARA JUDICIAL MEMBER I.T.A. NO.2646/AHD/2011 (ASS TT. YEAR 2008-09) LAXMI ENTERPRISERS, C/O. M.C. MASHRUWALA & CO., CHARTERED ACCOUNTANT, 301-303 AKIK, OPP. LIONS HALL, MITHAKHALI, AHMEDABAD-380006. PAN AABFL 2613 D VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11, AHMEDAAD. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SOHAM U.MASHRUWALA. REVENUE BY SHRI PRADIPKUMAR MAJMUDAR, SR. D.R. / DATE OF HEARING : 31-07-2015 / DATE OF PRONOUNCEMENT: 7/8/2015 / O R D E R PER ANIL CHATURVEDI ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT (A)- XVI, AHMEDABAD DATED 25-08-2011 FOR ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. 3. THE ASSESSEE IS A PARTNERSHIP FIRM WHO ELECTRONI CALLY FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 6-9 -2008 DECLARING TOTAL INCOME OF RS.12,70,320/-. THE CASE WAS SELECT ED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ITA NO. 2646/AHD/2011 ASSESSMENT YEAR 2008-09 LAXMI ENTERPRISERS 2 ACT,1961 VIDE ORDER DATED 24-12-2010 AND THE TOTAL INCOME WAS DETERMINED AT RS.16,30,100/-. AGGRIEVED BY THE ORDE R OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT (A) WHO VIDE ORDER DATED 25-8-2011 DISMISSED THE APPEAL OF THE A SSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT (A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS: 1. THE LD. CIT (A) HAS ERRED IN DISMISSING THE APPE AL AND CONFIRMING THE ASSESSMENT ORDER MAKING ADDITION OF RS.3,58,777/- BEING AMOUNT OF DEBTORS. 2. THE DETAILS OF DEBTORS ARE : SR. NO. NAME OF DEBTOR BALANCE AS PER BOOKS OF ACCOUNTS OF APPELLANT (RS.) 1. GUJARAT ENERGY RESEARCH & MANAGEMENT INSTITUTE (GERMI) 2,72,181 2. HARD CASTLE RESTAURANT PVT. LTD. 87,596 TOTAL. 3,59,777 3. THE LD. CIT (A) HAS WRONGLY ALLEGED THAT NO LEDG ER ACCOUNTS ARE FURNISHED AND MERELY BALANCE CONFIRMATION IS FI LED. HOWEVER, AT THE TIME OF ASSESSMENT ALL LEDGER ACCOU NTS WERE FILED AND DUE TO PAUCITY OF TIME, THE APPELLAN T COULD NOT GET BALANCE CONFIRMATIONS. AT THE TIME OF APPEA L, THE APPELLANT HAD FURNISHED BALANCE CONFIRMATION, BUT T HE LD. CIT (A) HAS WRONGLY DISMISSED THE APPEAL. 4. THAT THE LD. CIT (A) HAS WRONGLY HELD THAT NO EX PLANATION IS PROVIDED FOR THE DIFFERENCE IN THE BALANCE OF DEBTO RS AS PER THE BOOKS OF ACCOUNT OF THE APPELLANT AND THE AMOUN T STATED IN THE BALANCE CONFIRMATION. IT WAS EXPLAINED AT LE NGTH TO THE LD. CIT (A) TAT DIFFERENCE PERTAINED TO DISCOUN T, AMOUNT OF TDS DEDUCTED BY DEBTOR, CHEQUE ISSUED BY THE DEB TOR BUT RECEIVED BY THE APPELLANT IN SUCCEEDING FINANCIAL Y EAR. HOWEVER, THE LD. CIT (A) HAS NOT CONSIDERED THESE F ACTS AND DISMISSED THE APPEAL. THUS, THE APPELLANT HAD JUSTI FIED THE DIFFERENCE, AND SO THE ADDITIONS BE DELETED. 5. THAT THE LD. CIT (A) HAS WRONGLY REJECTED THE AD DITIONAL EVIDENCE. ITA NO. 2646/AHD/2011 ASSESSMENT YEAR 2008-09 LAXMI ENTERPRISERS 3 4. AT THE OUTSET THE LD. A.R. SUBMITTED THAT THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE ISSUE IS ONLY WITH R ESPECT TO THE ADDITION OF RS.3,59,777/-. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASS ESSEE WAS ASKED TO FILE CONFIRMATION OF SUNDRY CREDITORS AND DEBTORS WHERE THE TRANSACTIONS WERE IN EXCESS OF RS.1 LAC OR THE BALA NCE WAS IN EXCESS OF RS.50,000/-. ON THE BASIS OF THE DETAILS FURNISHED BY ASSESSEE, ASSESSING OFFICER ISSUED LETTERS U/S. 133(6) OF THE ACT TO 13 PARTIES CALLING FOR THE DETAILS AND CONTRA ACCOUNTS WITH CO NFIRMATIONS. IN THE CASE OF 2 PARTIES NAMELY GERMI (RS.2,72,181/-) AND HARD CASTLE RESTAURANT PVT. LTD.,(RS.87,596/), ASSESSING OFFICE R NOTICED THAT THE INFORMATION WAS NOT RECEIVED. THE COPY OF THE ACCOU NT OF THE AFORESAID 2 PARTIES AS APPEARING IN THE BOOKS OF THE ASSESSEE THAT WAS SUBMITTED BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE ASS ESSING OFFICER AS IT DID NOT BEAR THE SIGNATURE. ASSESSING OFFICER THERE FORE IN THE ABSENCE OF CONFIRMATION AND COPY OF THE ACCOUNTS, TREATED THE BALANCE AS SHOWN BY THE ASSESSEE AS NON GENUINE AND ACCORDINGLY ADDITIO N OF RS.3,59,777/- WAS MADE BY HIM. AGGRIEVED BY THE ORDER OF ASSESSIN G OFFICER, ASSESSEE CARRIED THE MATTER BEFORE THE COMMISSIONER OF INCOM E TAX (APPEALS) WHO UPHELD THE ORDER OF ASSESSING OFFICER AND DISMI SSED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER :- 2.2. HOWEVER, THE ADDITIONAL EVIDENCES SO FURNISHE D ARE NOT THE CONFIRMATION OF THE TRANSACTIONS AND NO ANY COPIES CONTRA ACCOUNTS WERE FILED. IN THE CASE OF GERMI, A LETTER WAS ISSUED REGARDING CREDIT OF RS.2,66,181/- AND WHICH IS NOT EVEN TALLYING WITH THE BALANCES SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE ASSESSEE COULD NOT JUSTIFY THE DIFFERENCE. IN ABSENCE OF THE CONFIRMATION AND CONTRA ACCOUNTS, THE BALANCE I S NOT SUBJECT TO VERIFICATION AD THEREFORE, THE ADDITION MADE FOR RS.2,72,181/-IS SUSTAINED. SAME IS THE CASE OF ANOTHER PARTY IN WHI CH CERTAIN COPIES OF COMPUTERIZED STATEMENTS WERE FILED WHICH DO NOT SPEAK ANYTHING . IN SOME OF THE PAGES, THE PARTICULARS AR E MISSING. THERE ARE NO ANY SIGNATURES ON THE STATEMENT. IT DO ES NOT SPEAK ITA NO. 2646/AHD/2011 ASSESSMENT YEAR 2008-09 LAXMI ENTERPRISERS 4 AS TO FROM WHERE IT WAS ISSUED AND FOR WHOM IT WAS ISSUED. SUCH TYPE OF PAPERS CANNOT BE ADMITTED AS EVIDENCES AND THE SAME ARE REJECTED. THE ADDITION SO MADE IS THUS SUSTAINED. THUS, THE ADDITION OF RS.3,59,777/- IS SUSTAINED AND THE GROU ND OF APPEAL IS DISMISSED. 6. AGGRIEVED BY THE ORDER OF CIT (A), ASSESSEE IS N OW IN APPEAL BEFORE US. 7. BEFORE US THE LD. A.R. SUBMITTED THAT GUJARAT EN ERGY RESEARCH & MANAGEMENT INSTITUTE (GERMI) IS AN UNDERTAKING PROM OTED BY THE GOVERNMENT OF GUJARAT. HE PLACED ON RECORD COPY OF THE CONFIRMATION OF BALANCE AT PAGE 6 OF THE PAPER BOOK AND SUBMITTED T HAT THE DIFFERENCE IN THE BALANCE AS APPEARING IN THE ASSESSEES BOOKS AND THAT WHICH IS CONFIRMED BY GERMI WAS ON ACCOUNT OF DISCOUNT THAT WAS DEDUCTED FROM THE PAYMENTS MADE BY GERMI AND WHICH WAS ACCOU NTED BY ASSESSEE AND GERMI IN DIFFERENT FINANCIAL YEARS. HE SUBMITTED THAT THIS DISCOUNT HAS BEEN ACCOUNTED FOR BY THE ASSESSEE IN SUBSEQUENT YEARS AND IN SUPPORT OF WHICH HE POINTED TO THE COPY OF L EDGER ACCOUNT WHICH IS PLACED AT PAGE-3 OF THE PAPER BOOK AND FURTHER P OINTED THAT THE DIFFERENCE OF RS.6,000/- BETWEEN THE BALANCE AS APP EARING IN THE BOOKS OF THE ASSESSEE AND THAT OF THE PARTY HAS BEEN ACCO UNTED FOR BY THE ASSESSEE ON 6-5-2008. HE FURTHER SUBMITTED THAT THE DIFFERENCE BEING GENUINE DIFFERENCE ON ACCOUNT OF DISCOUNT AND MORE SO, WHEN THE TRANSACTION BY THE ASSESSEE WITH AN UNDERTAKING WHI CH IS PROMOTED BY THE GOVT., UNDERTAKING THERE WAS NO REASON TO TREAT THE BALANCE BEING NON GENUINE. WITH RESPECT TO THE DIFFERENCE IN BALA NCE AS APPEARING IN THE BOOKS OF THE ASSESSEE AND HARD CASTLE RESTAURAN T PVT. LTD., HE PLACED ON RECORD COPY OF THE RECONCILIATION AND POI NTED OUT THAT THE SUBSTANTIAL AMOUNT HAS BEEN RECONCILED AND THEREFOR E NO ADDITION WAS CALLED FOR. THE LD. D.R. ON THE OTHER HAND, SUPPORT ED THE ORDER OF A.O. AND THE CIT (A). ITA NO. 2646/AHD/2011 ASSESSMENT YEAR 2008-09 LAXMI ENTERPRISERS 5 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE THE ADDITION HAS BEEN M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN BALAN CES AS APPEARING IN THE BOOKS OF THE ASSESSEE AND THAT OF 2 PARTIES VIZ . GERMI AND HARD CASTLE RESTAURANT PVT. LTD. BEFORE US THE ASSESSEE HAS PLACED ON RECORD THE COPY OF THE CONFIRMATION RECEIVED FROM G ERMI AND ITS LEDGER ACCOUNT AND HAS ALSO EXPLAINED THE DIFFERENCE TO BE ON ACCOUNT OF DISCOUNT WHICH HAS BEEN ACCOUNTED BY THE ASSESSEE I N SUBSEQUENT YEARS. WITH RESPECT TO THE HARD CASTLE RESTAURANT P VT. LTD., ASSESSEE HAS PLACED ON RECORD THE RECONCILIATION AND HAS BEE N ABLE TO RECONCILE THE SUBSTANTIAL PORTION LEAVING A DIFFERENCE OF RS. 7,846/- WHICH ACCORDING TO THE ASSESSEE IS ON ACCOUNT OF ROUNDING OFF AND DISCOUNTS DEDUCTED FROM THE PAYMENT MADE BY HARD CASTLE RESTA URANT PVT. LTD., TO THE ASSESSEE. BEFORE US THE REVENUE HAS NOT PLAC ED ANY MATERIAL ON RECORD TO CONTROVERT THE SUBMISSIONS OF THE LD. A.R . FURTHER THE REVENUE HAS NOT DOUBTED THE TRANSACTIONS ENTERED IN TO BY THE ASSESSEE WITH THOSE 2 PARTIES. IN VIEW OF THE AFORESAID FACT S AND WHEN THE DIFFERENCE OF BALANCE HAS BEEN SUBSTANTIALLY EXPLAI NED, WE ARE OF THE VIEW THAT NO ADDITION ON ACCOUNT OF DIFFERENCE IN B ALANCES IS CALLED FOR IN THE PRESENT CASE. WE THEREFORE, DIRECT THE DELETION OF ADDITION MADE BY THE A.O. THUS THIS GROUND OF THE ASSESSEE IS ALLOW ED. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 7 TH AUGUST, 2015 AT AHMEDABAD. SD/- SD/- (S.S. GODARA) (AN IL CHATURVEDI JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATED 7 / 08 /2015 ITA NO. 2646/AHD/2011 ASSESSMENT YEAR 2008-09 LAXMI ENTERPRISERS 6 PATKI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A), AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) ! '#$, &' / ITAT, AHMEDABAD 1. DATE OF DICTATION- 31-7-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER :3-8-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P .S./P.S. 3-8-2015/5-8-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT : 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER