Jalaram Khandsari Works, Navsari V. The Income tax Officer,Ward-2, Navsari

ITA 2809/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50993 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 14-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R N VEPARI
• Keywords: Principle of natural justice; Condonation of delay

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , . .!'#$, % & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.2809/AHD/2009 ( ( ) ( ) ( ) ( ) / / / / ASSESSMENT YEAR : 2005-06) JALARAM KHANDSARI WORKS AT & POST TANKAL, RAL.CHIKHLI DIST. NAVSARI ( ( ( ( / VS. THE INCOME TAX OFFICER WARD-2 NAVSARI * % ./+, ./ PAN/GIR NO. : AACFJ0156E ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI R.N.VEPARI ./*- 1 0 / RESPONDENT BY : SHRI VINOD TANWANI (2 1 3% / / / / DATE OF HEARING : 17/11/2011 4') 1 3% / DATE OF PRONOUNCEMENT : 30/11/2011 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-I, SURAT DATED 05/06/2009 PASSED FOR A.Y. 2005-06. 2. AT THE OUTSET, IT WAS NOTICED THAT THIS APPEAL W AS BELATEDLY FILED BY 32 DAYS. IN THIS REGARD, IT WAS PLEADED THAT A REC TIFICATION APPLICATION WAS MOVED BEFORE LD.CIT(A) AGAINST THE IMPUGNED ORDER A ND DURING THE PENDENCY OF THE SAID RECTIFICATION APPLICATION UNDE R SOME WRONG ADVICE ITA NO.2809/AHD /2009 JALARAM KHANDSARI WORKS VS. ITO ASST.YEAR - 2005-06 - 2 - NO APPEAL WAS FILED BEFORE THE TRIBUNAL. IT HAS AL SO BEEN INFORMED THAT DURING THAT PERIOD THE PERSON WHO LOOKS AFTER THE T AX MATTER HAD GONE OUT OF STATION, THEREFORE, THE FILING OF APPEAL COULD N OT BE ATTENDED. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT CONSIDERING THE CIRCUMSTANCES PLEADED BEFORE US, TH IS APPELLANT DESERVES CONDONATION OF DELAY IN FILING OF THIS APPEAL. THE DELAY IS HEREBY CONDONED AND APPEAL IS ADMITTED FOR ADJUDICATION. 2.1. THE ONLY GROUND WHICH IS ARGUED BEFORE US IS R EPRODUCED BELOW:- (I) ADDITION OF OUTSTANDING LIABILITY :- (I) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN CONFIRMING ADDITION OF RS.1,82,592/- IN RESPECT OF AMOUNT PAYABLE TO MOSSA IBRAHIM HAFEZI WHEN THE LIABILITY WAS GENUINE AND AMOUNT PAID IN SUBSEQUENT YEAR. (2) THE APPELLANT SUBMITS THAT THE APPELLANT HAS BEEN D ENIED NATURAL JUSTICE; THE ASSESSING OFFICER NOT GIVING C OPY OF THE STATEMENT OF MOOSA IBRAHIM HAFEZI TAKING BY HIM AND THEREAFTER BY NOT PERMITTING HIS CROSS EXAMINATION. 3. IN RESPECT OF THE ISSUE RAISED THROUGH THE GROUN D VIDE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATE D 24/12/2007 WAS THAT THE ASSESSEE-FIRM IS IN THE BUSINESS OF MANUFACTURI NG OF KANDSARI. A LIABILITY OF RS.1,82,592/- IN THE NAME OF ONE MR.MO OSA IBRAHIM WAS SHOWN AS AN OUTSTANDING LIABILITY HIS STATEMENT WAS RECORDED ON OATH BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS M ENTIONED IN THE SHOW-CAUSE NOTICE THAT THE SAID PERSON HAD ADMITTED THAT HE HAD RECEIVED THE WHOLE MONEY AND THERE WAS NO AMOUNT WAS OUTSTAN DING AS ON ITA NO.2809/AHD /2009 JALARAM KHANDSARI WORKS VS. ITO ASST.YEAR - 2005-06 - 3 - 31.3.2005. IN REPLY TO THE SAID NOTICE, IT WAS EXP LAINED THAT AS PER THE ACCOUNTING SYSTEM WHEN THE FARMERS BRING THEIR SUGA R-CANE TO THE FACTORY A RECEIPT IS ISSUED IN RESPECT OF THE WEIGHT. AS P ER THE SEASONAL RATES, THE PAYMENTS ARE MADE. WHEN THE ACTUAL PAYMENT IS MADE , THEN A DULY STAMPED RECEIPT IS ISSUED. AS PER THE SAID RECEIPT THE AMOUNT WAS PAID ON 16/6/2005. AN AFFIDAVIT OF MR.MOOSA IBRAHIM HAFEZI WAS FILED BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFI CER WAS NOT CONVINCED AND THE ADDITION WAS MADE. 4. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY, WHICH IN A CRYPTIC MANNER AFFIRMED THE ACTION OF THE ASS ESSING OFFICER AS IS EVIDENT FROM THE CONCLUDING PARAGRAPH REPRODUCED B ELOW:- 5.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. THE AFFIDAVIT OF MR.MU SA IBRAHIM HAFEJI IS DATED 20.12.2007 WHICH THE APPELLANT SHOU LD HAVE CORROBORATED BY PRODUCING THE DEPONENT. IN ABSENCE OF THE SAME THE A.O. HAS TAKEN THE STATEMENT DURING THE ASSESSM ENT PROCEEDINGS AND HENCE THE AFFIDAVIT STANDS NULLIFIE D. THEREFORE, THE ADDITION MADE BY THE A.O. IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 5. WE HAVE HEARD BOTH THE SIDES. A COMPILATION HAS BEEN FILED BEFORE US CONTAINING DETAILS OF THE PAYMENT AND THE AFFIDA VIT OF THE SAID PERSON. BEFORE THE LOWER AUTHORITIES, THE EXPLANATION OF TH E ASSESSEE WAS AS UNDER: (15) THAT TAKES US TO THE LAST ADDITION OF RS.1,8 2,592/- AS OUTSTANDING LIABILITY IN CASE OF MR.MUSA IBRAHIM HA FEJI AS ITA NO.2809/AHD /2009 JALARAM KHANDSARI WORKS VS. ITO ASST.YEAR - 2005-06 - 4 - DISCUSSED IN PARA 7.2 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER STATES THAT MR.HAFEJI IN REPLY TO QUESTION NO.10 HAS STATED THAT THERE WAS NO OUTSTANDING ON 31.03.2005 AND THE ASSESSEE HAS WRONGLY SHOWN HIS OUTSTANDING LIABILITY AND DISALLO WED. NOW OUTSTANDING LIABILITY IS NOT AN EXPENDITURE WHICH C AN BE DISALLOWED. THE ASSESSEE HAD OBTAINED AFFIDAVIT OF MR.HAFEJI TO POINT OUT THAT HE HAD RECEIVED THIS AMOUNT ON 16.06 .2005 IN RESPECT OF SUGARCANE SOLD TO APPELLANT . COPY OF THE AFFIDAVIT WITH ENGLISH TRANSLATION IS ENCLOSED. (P.27-30). FULL C OPY OF ACCOUNT WITH QUANTITY TALLY IS ENCLOSED (P.31-32). IN FACT IN THIS CASE THERE IS DENIAL OF NATURAL JUSTICE ON TWO COUNTS. (I) FIRSTLY THE ASSESSING OFFICER HAS NOT GIVEN COP Y OF THE STATEMENT OF MR.HAFEJI RECORDED BY HIM AND THEN THE MATTER COULD HAVE BEEN CLARIFIED. (II) SECONDLY WHEN AN AFFIDAVIT IS FILED BY THE SUPPLIER OF HAVING RECEIVED PAYMENT ON A PARTICULAR DATE THEN T HE SUPPLIER SHOULD HAVE BEEN EXAMINED BY THE ASSESSING OFFICER AS PER THE SUPREME COURT JUDGEMENT IN CASE OF MEHTA PARIKH & CO. [30-ITR-181] AND GUJARAT HIGH COURT JUDGEMENT IN CASE OF GLASS LINE EQUIPMENTS CO. LTD. [253-ITR-454]. THAT WAS ALSO NOT DONE. IN FACT, IF THE DEPONENT IS NOT EXAMINED WHAT IS MENTIONED IN THE AFORESAID AFFIDAVIT SHOULD BE ACCEPTED. THE AFFIDAVIT CLEARLY MENTIONS THE SALE MADE BY MR.HAFEJI AND THE VOUCHER ON WHICH HE HAS RECEIVED THE MONEY ON 16.06.2005. THEREFORE, THIS AMOUNT WAS OUTSTANDING ON 31.3.05 . MR. HAFEJI IS AN UNEDUCATED AGRICULTURIST AND WHAT HE HAS MENTIONED BEFORE THE A.O. COULD BE UNDER SOME WRONG IMPRESSION BUT THIS CAN BE DETERMINED ONLY ON RECEI PT OF THE STATEMENT. THE PROCEDURE FOLLOWED FOR PURCHASE OF SUGAR CANE IS THAT WHENEVER SUGARCANE I S BROUGHT BY FARMERS THEN IT IS WEIGHED ON THE WEIGHI NG MACHINE OF THE FACTORY AND ON THE BASIS OF THE SLIP PREPARED VALUE IS CALCULATED AND BILL IS GIVEN. THEREAFTER PAYMENT IS MADE. MR.MUSA IBRAHIM ITA NO.2809/AHD /2009 JALARAM KHANDSARI WORKS VS. ITO ASST.YEAR - 2005-06 - 5 - HAFEJI IS A FARMER AT KACHOLI AND WHENEVER HE HAS BROUGHT SUGARCANE IT IS NOTED ON WEIGHING MACHINE AND PAID AS IT HAS BEEN PAID TO OTHER FARMERS. WHENEVER IT WAS POSSIBLE THE ASSESSEE MADE3 THE PAYMENT AND ACCORDINGLY THE PAYMENT HAS BEEN MADE. HE IS NOT A MERCHANT BUT AN AGRICULTURIST. UNDER THE CIRCUMSTANCES EVEN THIS ADDITION IS ALSO WRONG AND MAY BE DELETED. 6. IN THE LIGHT OF THE EVIDENCES FILED AND THE EXPL ANATION OFFERED, WE HAVE NOTICED THAT THE ASSESSING OFFICER HAD RECORDE D THE STATEMENT OF THE SAID PERSON AT THE BACK OF THE ASSESSEE AND THE AS SESSEE WAS NOT GRANTED AN OPPORTUNITY TO CONFRONT WITH THE SAID STATEMENT. LATER ON, THE ASSESSEE HAD OBTAINED AN AFFIDAVIT OF THE SAID PERSON AND PL ACED BEFORE THE ASSESSING OFFICER THROUGH WHICH THE ALLEGED DATE OF RECEIPT OF PAYMENT WAS NEGATED. UNDISPUTEDLY, THIS IS THE CASE OF MA NUFACTURER OF KANDSARI AND FOR THAT PURPOSE SUGAR-CANE IS BROUG HT TO THE FACTORY BY THE FARMERS. THE SAID FARMER WAS PRESENT BEFORE TH E ASSESSING OFFICER AND ACCEPTED THE RECEIPT OF PAYMENT BUT THERE WAS S OME CONFUSION IN RESPECT OF THE EXACT DATE WHEN THE PAYMENT WAS RECE IVED BY HIM. NEVERTHELESS, FROM THE SIDE OF THE ASSESSEE, SEVERA L OTHER EVIDENCES, ACCOUNTS AND THE PAYMENT RECEIPT WAS PLACED BEFORE THE LOWER AUTHORITIES. IN THE LIGHT OF THE TOTALITY OF THE CIRCUMSTANCES O F THE CASE AND THE COGENT EVIDENCES ON RECORD, WE ARE OF THE CONSIDERED VIEW THAT THE ALLEGATION OF THE ASSESSING OFFICER WAS ILL-FOUNDED, HENCE THE AD DITION DESERVES TO BE DELETED. THUS, THE GROUND IS ALLOWED. ITA NO.2809/AHD /2009 JALARAM KHANDSARI WORKS VS. ITO ASST.YEAR - 2005-06 - 6 - 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED . SD/- SD/- ( A.K. GARODIA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD; DATED 30/ 11 /2011 63..(, .(../ T.C. NAIR, SR. PS 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-I, SURAT 5. 7 >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION.. 25.11.11. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.11.11 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 30.11.11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.11.11 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