M/s. Prithvi Hitex Creations Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-5(2), Ahmedabad

ITA 2804/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0421 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.2804/AHD/2012 ( % & '& / ASSESSMENT YEAR : 2009-10) M/S.PRITHVI HITEX CREATIONS PVT.LTD. PLOT NO.36 & 35, GIDC APPAREL PAK, SEZ GIDC, KHOKHRA AHMEDABAD % / VS. THE INCOME TAX OFFICER WARD-5(2) AHMEDABAD ./ ./ PAN/GIR NO. : AABCK 7617 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANJAY R.SHAH / RESPONDENT BY : SHRI A.K. PANDEY, SR.D.R. / DATE OF HEARING : 13/03/2013 !'# / DATE OF PRONOUNCEMENT : 22/03/2013 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING F ROM THE ORDER OF LD.CIT(A)-XI, AHMEDABAD DATED 14/09/2012 PASSED FOR A.Y. 2009-10 AND THE EFFECTIVE GROUND ARGUED BEFORE US IS REPROD UCED BELOW:- 1. (I) THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN CONFIRMING DISALLOWANCE OF RS.24,78,499/- AS BROKER AGE EXPENSES TO THE THREE PARTIES PAID FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. YOUR APPELLANT SUBMITS THAT IT HAD ITA NO.2804/AHD /2012 M/S.PRITHVI HITEX CREATIONS PVT.LTD. VS. ITO ASST.YEAR - 2009-10 - 2 - PROVIDED ALL THE NECESSARY EVIDENCES FOR THE PURPOS E OF CORROBORATING THE GENUINENESS OF THE ABOVE EXPENSES AND HENCE THE SAME SHOULD HAVE BEEN ALLOWED TO THE APPE LLANT. IT IS SUBMITTED THAT IT BE SO HELD NOW. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE IT ACT DATED 07/12/2011 W ERE THAT THE ASSESSEE- COMPANY IS IN THE BUSINESS OF TRADING AND TEXTILE. THE ASSESSEE HAD CLAIMED BROKERAGE EXPENSES OF RS.35,69,591/-. OUT OF THE TOTAL BROKERAGE, THE AO HAS EXAMINED THE DETAILS OF THE P AYMENT OF BROKERAGE IN RESPECT OF THE FOLLOWING THREE PARTIES:- S.NO. NAME OF PARTY AMOUNT OF COMMISSION AMOUNT REFLECTED AS CREDITORS 1. OM DEVELOPERS 8,30,377/- 828235/- 2. JAY CONSTRUCTION 7,75,854/- 773852/- 3. N.M.SHAH 8,72,268/- 870017/- TOTAL 24,78,499/- 2.1. NOTICES U/S.133(6)/131 WERE ISSUED AND STATEME NTS HAVE BEEN RECORDED. HOWEVER, BEING UNSATISFIED, AO HAS HELD THAT THE CLAIM OF PAYMENT WAS NOTHING BUT A BOGUS COMMISSION EXPENSE S. SINCE AN ADDITION OF RS.24,78,499/- WAS MADE, HENCE THE MATT ER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. LD.CIT(A) HAS HELD THAT THE ASSESSEE HAD PLACED HEAVY RELIANCE ON THE FACT THAT THE COMMISSION PAYMENT WAS MADE THROU GH BANKING CHANNEL AND TAX HAD BEEN DEDUCTED AT SOURCE. HOWEVER, HE H AS TAKEN NOTE OF THE FACT THAT DURING THE COURSE OF RECORDING OF STATEME NT, THOSE PARTIES HAVE DENIED THE RECEIPT OF THE SAID PAYMENT. ON ACCOUNT OF THE SAID STATEMENT, THE ACTION OF THE AO WAS CONFIRMED. NOW BEFORE US, THE VEHEMENT ITA NO.2804/AHD /2012 M/S.PRITHVI HITEX CREATIONS PVT.LTD. VS. ITO ASST.YEAR - 2009-10 - 3 - CONTENTION OF THE LD.AR IS THAT THE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSEE WITHOUT PROVIDING A COPY OF THE STA TEMENT AS ALSO THE OPPORTUNITY TO CROSS-EXAMINE THOSE PERSONS. THE LD .AR HAS DRAWN OUR ATTENTION ON A LETTER WHICH WAS WRITTEN TO THE AO I N WHICH IT WAS DEMANDED THAT A COPY OF THE SAID STATEMENT RECORDED BE PROVIDED TO THE ASSESSEE. LD.AR HAS ALSO MENTIONED THAT IN RESPECT OF THESE PARTIES, THE ASSESSEE IS IN POSSESSION OF THE FOLLOWING DOCUMENT S/EVIDENCES:- M/S.JAY CONSTRUCTION : A. OUR CREDIT NOTE NO.KHCPL/COMMI/002/0809 DATED 9.3.2009. B. COPY OF M/S.JAY CONSTRUCTIONS DEBIT NOTE NO.0 03/0809 DATED 12.3.2009 C. PAN CARD OF SMT.BHANUBEN K.LODHA D. CERTIFICATE UNDER SECTION 197 OF THE INCOME TA X ACT, 1961 FOR LOWER DEDUCTION OF 0.25% ISSUED BY SRI URJIT SHAH, ITO, TDS-4, AHMEDABAD. THIS CERTIFICATE IS FOR COMMISSION UPTO RS.10.00 LACS.\ E. COPY OF OUR BANK STATEMENT OF STATE BANK OF IN DIA FOR THE PERIOD 1.6.2009 TO 20.6.2009. IN T HIS STATEMENT OUR CHEQUE NO. 429538 ISSUED TO JAY CONSTRUCTIONS HAS BEEN DEBITED TO OUR ACCOUNT ON 9.6.2009. M/S.OM DEVELOPERS : A. OUR CREDIT NOTE NO.KHCPL/COMM1/001/0809 DATED 9 .3.2009. B. COPY OF THEIR DEBIT NOTE NO.OM/001/0809 DATED 7 .3.2009 OF M/S.OM DEVELOPERS. C. PAN CARD OF SRI DINESHBHAI GOVINDBHAI LODHA, D. CERTIFICATE UNDER SECTION 197 OF THE I NCOME TAX ACT, 1961 FOR LOWER DEDUCTION OF 0.25% ISSUED BY S RI URJIT SHAH, ITO, TDS-4 AHMEDABAD. THIS CERTIFICATE IS FOR COMMISSION UPTO RS.10.00 LACS. E.COPY OF OUR BANK STATEMENT OF STATE BANK OF INDIA FOR THE PERIOD 1.6.2009 TO 20.6.2009. IN THI S STATEMENT OUR CHEQUE NO.429536 ISSUED TO OM DEVELOPERS HAS BEEN DEBITED TO OUR ACCOUNT ON 9.6.2009. ITA NO.2804/AHD /2012 M/S.PRITHVI HITEX CREATIONS PVT.LTD. VS. ITO ASST.YEAR - 2009-10 - 4 - M/S.N.M.SHAH : A. OUR CREDIT NOTE NO.KHCPL/COMM1/003/0809 DATED 12.3.2009. B. COPY OF THEIR DEBIT NOTE NO.005/0809 DATED 16.3. 2009 ISSUED BY M/S.N.M.SHAH. C. PAN CARD OF SRI NARENDRA MUKTILAL SHAH D. CERTIFICATE UNDER SECTION 197 OF THE INCOME TAX ACT, 1961 FOR LOWER DEDUCTION OF 0.25% ISSUED BY SRI URJIT SH AH, ITO, TDS-4, AHMEDABAD. THIS CERTIFICATE IS FOR COMMISSI ON UPTO RS.10.00 LACS. E. COPY OF OUR BANK STATEMENT OF STATE BANK OF INDI A FOR THE PERIOD 1.6.2009 TO 20.6.2009. IN THIS STATEMENT OU R CHEQUE NO.429539 ISSUED TO N.M.SHAH HAS BEEN DEBITED TO OU R ACCOUNT. F. ACCOUNT CONFIRMATION. 4. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.A.K.PA NDEY HAS SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT IN SPITE OF FEW LETTERS WRI TTEN BY THE ASSESSEE TO AO TO PROVIDE THE COPY OF THE STATEMENT RECORDED; T HOSE WERE NOT GIVEN TO THE ASSESSEE. BY SUCH DENIAL OR NON-ACCEPTANCE O F THE REQUEST, THE ASSESSEE WAS DENIED THE NATURAL JUSTICE. EVEN DUR ING THE COURSE OF HEARING BEFORE US, LD.AR HAS SUGGESTED, ALTHOUGH IN SUBTLE MANNER, THAT IF AN OPPORTUNITY BE GRANTED NOW, THEN THE GENUINEN ESS OF THE CLAIM SHALL BE ESTABLISHED. IT IS A FUNDAMENTAL RIGHT OF A LIT IGANT TO PROVIDE HIM ALL SUCH MATERIAL WHICH IS BEING USED AGAINST HIM. IN THE PRESENT CASE, THE STATEMENTS OF THOSE PARTIES WERE RECORDED BUT NEITH ER THE ASSESSEE WAS HANDED OVER THE COPIES OF THOSE STATEMENTS NOR HE W AS ALLOWED TO CROSS- ITA NO.2804/AHD /2012 M/S.PRITHVI HITEX CREATIONS PVT.LTD. VS. ITO ASST.YEAR - 2009-10 - 5 - EXAMINE THOSE PARTIES. INDEED, THIS IS AN INFRING EMENT OF THE PRINCIPLES OF NATURAL JUSTICE. THE JUDICIAL PROCESS WHICH IS FOLLOWED BY THIS TRIBUNAL IS NOT MEANT TO BE USED AS AN IMPEDIMENT I NTO INVESTIGATION OF FACTS TO ARRIVE AT THE TRUTH. EVEN THE APPELLATE P ROCEDURE ARE NOT TO BE USED TO SCUTTLE A GENUINE OPPORTUNITY OF CROSS-EXAM INATION. THE ASSESSEE IS PRESSING HARD TO PLACE ON RECORD THE EVIDENCES I N SUPPORT OF THE CLAIM OF GENUINENESS OF THE PAYMENT TO THOSE PARTIES. TH EREFORE, WE DEEM IT JUSTIFIABLE TO RESTORE THIS ISSUE BACK TO THE FILE OF AO WITH THE DIRECTION TO PROVIDE A COPY OF THE STATEMENT RECORDED AND ALSO F IX A SUITABLE DATE FOR THE CROSS-EXAMINATION OF THOSE PARTIES. ON THE OTH ER HAND, WE ALSO INSTRUCT THIS ASSESSEE TO FULLY CO-OPERATE WITH THE ASSESSMENT PROCEEDINGS TO GET IT FINALIZED AT AN EARLY DATE. THE ASSESSEE SHALL CONTACT THE AO WITHIN 30 DAYS ON RECEIPT OF THIS ORDER OF THE TRIB UNAL WITHOUT WAITING FOR ANY NOTICE FROM THE REVENUE DEPARTMENT ALONG WITH A LL THE EVIDENCES IN SUPPORT OF THE CLAIM. SINCE THE MATTER HAS NOW BEE N REMANDED BACK TO THE FILE OF AO, THEREFORE REST OF THE GROUNDS RAISE D BY THE ASSESSEE MAY BE TREATED AS ALLOWED ONLY FOR STATISTICAL PURPOSES. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.2013 SD/- SD/- ( &..'# ) ( ' ' ( ) $ )* $ ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER &.., .*../ T.C. NAIR, SR. PS ITA NO.2804/AHD /2012 M/S.PRITHVI HITEX CREATIONS PVT.LTD. VS. ITO ASST.YEAR - 2009-10 - 6 - ') * +,- .'-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. /() / THE CIT(A)-XI, AHMEDABAD 5. 234 **-., -.#, 5'$,$ / DR, ITAT, AHMEDABAD 6. 467 8 / GUARD FILE. ')% / BY ORDER, 2 * //TRUE COPY// // 0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION DATED 14.3.13 (DICTATION-PAD 9 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.3.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 22.3.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.3.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER