The ITO, Ward-5(2), Baroda V. Shri Rashmin K.Patel, Baroda

ITA 2760/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62985 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Principle of natural justice

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) )* + ) )* + ) )* + ) ' ' ' ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.2760/AHD/2009 WITH CO NO.281/AHD/2009 [ASSTT.YEAR : 2006-2007] ITO, WARD-5(2) BARODA. /VS. SHRI RASHMIN K. PATEL PROP: M/S.FIXO FITWELL MATRUCHHAYA KHODIYAR MATA LANE NAGARWADA, BARODA. PAN : ACFPP 2978 M ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) + 2 3 )/ REVENUE BY : SHRI B.L YADAV 5 2 &(*/ DATE OF HEARING : 13 TH SEPTEMBER, 2012 678 2 &(*/ DATE OF PRONOUNCEMENT : 5-10-2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND THE CO BY THE ASSESSEE FOR THE ASSESSME NT YEAR 2006- ITA NO.2760/AHD/2009 WITH CO NO.281/AHD/2009 -2- 2007 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-V, BARODA DATED 16.07.2009. THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NO.2760/AHD/2009 (REVENUES APPEAL) 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE AND ACCORDINGLY, THE APPEAL OF THE REVENUE IS BEING DECIDED EXPARTE QUA THE ASSESSEE-RESPONDENT ON MERIT AFTER HEARING THE LEARNED DR. 3. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 22,00,476/- MADE ON ACCOUNT OF BOGUS CREDITORS. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE ASSESSEE DID NOT COMPLY THE SHOW CAUSE NOTICE ISSUE D BY THE AO IN THIS RESPECT. THUS, THE ASSESSEE WAS GIVEN AN O PPORTUNITY TO PROVE THE GENUINENESS OF THE CREDITORS, BUT THE ASS ESSEE FAILED TO DO SO. 4. THE LEARNED DR SUBMITTED THAT AMPLE OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE CRE DITORS BY THE AO BUT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS. THE LEARNED DR REFERRED TO PARA-5 OF THE ASSESSMENT ORDER AND SUBMITTED THA T THE AO HAS OBSERVED THAT THE ASSESSEE HAS SHOWN CREDITORS OF R S.22 LAKHS AS PER THE SCHEDULE ATTACHED WITH THE BALANCE SHEET AND TH E ASSESSEE HAS NOT FURNISHED DETAILS CALLED FOR BY THE AO. HE SUBMITTE D THAT THE ASSESSEE WAS TOTALLY NON-COOPERATIVE AND REFERRED TO THE CON CLUSION THAT IN THE PRESENT CASE, THE CIRCUMSTANTIAL EVIDENCE IS TOTALL Y AGAINST THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE CIT(A) HAS DELETED THE ADDITION IN A SUMMARY MANNER BY OBSERVING THAT THE AO WAS NOT ITA NO.2760/AHD/2009 WITH CO NO.281/AHD/2009 -3- JUSTIFIED IN MAKING THE ADDITION WITHOUT PROVING TH EM TO BE EITHER NON-EXISTENT OR ATTRIBUTING THEM TO BE OF BOGUS NAT URE. 5. WE HAVE CONSIDERED SUBMISSIONS OF THE LEARNED DR AND HAVE PERUSED THE ORDER OF THE AO AND THE CIT(A). WE FIN D THAT THE CREDITORS SHOWN IN THE SCHEDULE ATTACHED WITH THE B ALANCE SHEET FOR THE RELEVANT PERIOD WERE ON ACCOUNT OF GOODS PURCHASED BY THE ASSESSEE AND WERE ON ACCOUNT OF TRADE CREDITORS. WE FIND TH AT THESE BALANCES OF SUNDRY CREDITORS APPEARING IN THE BALANCE SHEET COU LD NOT HAVE BEEN ASSESSED AS INCOME IN THE HANDS OF THE ASSESSEE WIT HOUT PROVING THEM TO BE NON-GENUINE. THERE IS NO FINDING OF THE AO T HAT THE ASSESSEE HAS PAID THESE CREDITORS OUT OF UNACCOUNTED MONEY OR TH E BALANCE SHOWN IN THE BALANCE SHEET AS SUNDRY CREDITORS WERE FICTI TIOUS ENTRIES. THE ASSESSEE HAS SUBMITTED BEFORE THE CIT(A)THAT THESE BALANCES CONSISTED OF EARLIER YEARS BALANCES ALSO. WE FIND THAT THE A O HAS NOT MADE FURTHER INQUIRIES IN THE MATTER BY ISSUING SUMMONS ETC. TO THE CREDITOR PARTIES TO VERIFY THE GENUINENESS OR OTHERWISE OF B ALANCES IN THE TRADE ACCOUNTS. THE CIT(A) HAS CONCLUDED THAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO THAT ANY CREDITORS WERE FOUND BOGU S SUBSEQUENT ON MATERIAL GATHERED. THE CIT(A) HAS HELD THAT THE A O WAS NOT JUSTIFIED IN MAKING THE ADDITION WITHOUT PROVING THEM TO BE E ITHER NON-EXISTENT OR ATTRIBUTING THEM TO BE OF BOGUS NATURE. THE CIT (A) HAS FURTHER OBSERVED THAT THE AO HAS TO ADHERE TO THE PRINCIPLE OF NATURAL JUSTICE BEFORE ADDING SUNDRY CREDITORS TO THE INCOME OF THE ASSESSEE, WHICH IS LACKING IN THIS CASE. IN THESE FACTS OF THE CASE AN D IN VIEW OF THE FACT THAT THESE BALANCES OF CREDITORS RELATE TO THE TRAD ING ACTIVITIES OF THE ASSESSEE AND NO FURTHER INQUIRY BY ISSUING SUMMONS ETC. TO THE CREDITORS WERE MADE BY THE AO TO ESTABLISH THAT THE BALANCE SHOWN IN ITA NO.2760/AHD/2009 WITH CO NO.281/AHD/2009 -4- THE ACCOUNT OF THE SUNDRY CREDITORS ARE FICTITIOUS OR NON-EXISTENT, WE HOLD THAT THE ADDITION MADE WAS RIGHTLY DELETED BY THE CIT(A) AND THE ORDER OF THE CIT(A) IS ACCORDINGLY CONFIRMED AND TH E GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. CO NO.281/AHD/2009 (ASSESSEES CO) 6. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE. IN EARLIER OCCASIONS ALSO THE ASSESSEE WAS GIVEN NU MBER OF OPPORTUNITIES, HOWEVER, DID NOT APPEAR AND THE ASSE SSEE SOUGHT ADJOURNMENT FROM TIME TO TIME. THE ASSESSEE HAS NOT FILED ANY APPLICATION FOR ADJOURNMENT OF THE CASE OR INTIMATE D REASON FOR THE NON-APPEARANCE IN THE MATTER. IN THE CIRCUMSTANCES , IT IS INFERRED THAT THE ASSESSEE IS NOT INTERESTED IN PURSING ITS CO. THEREFORE, FOLLOWING THE DECISION OF DELHI BENCH IN THE CASE OF MULTIPLAN (INDIA) LTD. 38 ITD 320 , WE DISMISS THE CO OF THE ASSESSEE IN LIMINE FOR WANT OF PROSECUTION. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT.