ITO, Panchkula V. M/s C. Max Healthcare, Panchkula

ITA 286/CHANDI/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1625 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSHIL KUMR
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Assessment record
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 286/CHD/2014 ASSESSMENT YEAR: 2009-10 THE ITO, VS. M/S C. MAX HEALTHCARE, WARD-2, PANCHKULA PANCHKULA PAN NO. AAEFC7294R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUSHIL KUMR RESPONDENT BY : SH. ANIL BATRA DATE OF HEARING : 20.10.2015 DATE OF PRONOUNCEMENT : 10.12.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF LD. CIT(A), PANCHKULA DATED 24.01.2014 RELATING TO ASS ESSMENT YEAR 2009-10.. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLL OWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. C1T(A) HAS ERRED IN DELETING THE ADDITION OF RS.15, 30,700/- MADE BY THE A.O. ON ACCOUNT OF NON CONFIRMATION OF ADVANCES BY THE PARTIES, IGNORING THE FACT THAT THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATION EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.3,63,750/- MADE BY THE A.O. ON ACCOUNT OF NON CONFIRMATION OF CASH CREDITS , IGNORING 2 THE FACT THAT THE ASSESSEE FAILED TO PRODUCE ANY CO NFIRMATION EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT, 1961 ( IN SHORT 'THE ACT') AT AN INCOME OF RS. 3,11,714/- AFTER MAKING ADDITIONS OF RS. 24, 453/- AND RS. 8,100/- ON ACCOUNT OF NON CONFIRMATION OF ACCOUNTS WITH VARIOUS PARTIE S AND DONATIONS RESPECTIVELY. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). GROUND NO.2 OF THE APPEAL RAISED BY THE ASSESSEE BEFORE CIT(A) WAS THAT THE ADDITION OF RS. 20,36,703/- WAS NOT JUSTIFIED. THE ASSESSEE DID NOT FURNISH THE CONFIRMATION OF THE ADVANCE OF RS. 20,36,703/- ON FOLLOWING ACCOUNT:- A) M/S PANDHI SCAN CENTRE, BARNALA RS. 5 LAKHS B) ADVANCE FROM CUSTOMERS - RS. 11,76,703/- C) ADVANCE FOR SPARES - RS. 3,60,000/- TOTAL - RS. 20,36,703/- IN THE ABSENCE OF THE CONFIRMATION OF THE PARTIES F ROM WHOM ADVANCES AND ADVANCES FOR SPARES WERE SHOWN, THE ASSESSING OFFIC ER TREATED THE SAME AS UNEXPLAINED CASH CREDITS AND ADDED TO THE INCOME OF THE ASSESSEE. THE CIT(A) OBSERVED THAT THE ASSESSEE SUBMITTED WRITTEN SUBMI SSIONS ALONG WITH CONFIRMATIONS OF PANDHI SCAN CENTRE, BARNALA AND RE CONCILIATION OF ACCOUNTS WITH SUNSHINE HEALTHCARE, HYDERABAD AND CT SCAN & RESEAR CH CENTRE, JAMMU. . THE ASSESSEE ALSO MOVED AN APPLICATION U/S 46A OF THE I .T. RULES, 1962 FOR ADMISSION OF ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE F URNISHED WAS CONFIRMATION OF PANDHI SCAN CENTRE, BARNALA AND RECONCILIATION OF A CCOUNTS WITH SUNSHINE HEALTHCARE, HYDERABAD AND C.T. SCAN RESEARCH CENTRE , JAMMU. THE LD. CIT(A) OBSERVED THAT THE WRITTEN SUBMISSIONS AND ADDITIONA L EVIDENCE SUBMITTED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER FO R EXAMINATION AND REPORT. THE ASSESSING OFFICER SUBMITTED REMAND REPORT DATED 29. 10.2013 AND A COPY OF THE 3 SAME WAS GIVEN TO THE ASSESSEE TO FURNISH ITS COMME NTS. THE ASSESSEE SUBMITTED HIS REJOINDER VIDE ITS LETTER DATED 22.11.2013. 4. THE LD. CIT(A) ALLOWED A RELIEF OF RS. 15,30,703 /- TO THE ASSESSEE AND CONFIRMED THE ADDITION OF RS. 5,06,003/-. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI SUSHIL KUMAR, LD. DR SUBM ITTED THAT THE LD. CIT(A) HAS NOT CORRECTLY APPRECIATED THE REMAND REPORT SUBMITT ED BY THE ITO, WARD-2, PANCHKULA DATED 14.8.2013. IN ITS REPORT, THE ASSES SING OFFICER HAS CATEGORICALLY STATED IN PARA 2 OF THE REPORT THAT ASSESSEE HAS NO T FURNISHED THE CONFIRMATIONS FROM THE PARTIES NAMELY M/S PANDHI SCAN CENTRE AND OTHERS FROM WHOM ADVANCES HAVE BEEN CLAIMED BY THE ASSESSEE IN SPITE OF REPE ATED REQUESTS. IT IS OBSERVED THAT THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE ASSESSEE HAS ONLY FILED COPY OF ACCOUNT ON THE LETTER HEAD GIVEN BY M/S PUNJAB SCANNING CENTRE, PHAGWARA AND M/S VISHVNAGAR CITY SCAN CENTRE, GUJARAT BUT NO PAN HAS BEEN MENTIONED ON THE LETTER HEAD OF THE PARTIES. SHRI SUSHIL KUMAR LD. D R POINTED OUT THAT ON THE CONTRARY THE LD. CIT(A) HAS OBSERVED THAT ASSESSING OFFICER IN ITS REPORT HAS ACKNOWLEDGED THE CONFIRMATION OF ACCOUNT WITH M/S P ANDHI SCAN CENTRE, BARNALA AND FOR OTHER CUSTOMERS THE ASSESSING OFFICER HAS S TATED THAT CONFIRMATION ON THE LETTERS ISSUED TO THE CUSTOMERS HAVE NOT BEEN RECEI VED BACK. ACCORDING TO LD. DR, THE ABOVE OBSERVATION OF THE CIT(A) IS NOT CORRECT. THE REMAND REPORT AS SUBMITTED BY THE ASSESSING OFFICER READS AS UNDER:- NO. ITO/WARD-2/PANCHKULA/2013-14/5133 OFFICE OF THE INCOME TAX OFFICER, WARD-2, PANCHKULA DATED: 14.08.2013 TO 4 THE COMMISSIONER OF INCOME TAX (APPEAL). PANCHKULA. SIR, SUB: SUBMISSION OF REMAND REPORT IN THE CASE OF M/S C. MAX HEALTHCARE, H. NO. 13, SEC 16, PANCHKULA FOR THE ASSESSMENT YEA R 2009-10 (AAEFC7249R) REGARDING KINDLY REFER TO THE ABOVE NOTED SUBJECT. 2. THE ASSESSMENT RECORD OF THE ABOVE SAID AS SESSES WAS RECEIVED ON TRANSFER FROM ITO, WARD-1, PANCHKULA, ON 02.08.2013. THE BRI EF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME THROUGH ELECTRONICA LLY DECLARING INCOME OF RS. 708587/- VIDE NO, 99917300291009 ON 29.10.2009 IN T HE STATUS OF FIRM. THE NOTICE U/S 143(2|/142(1) OF THE ACT, ISSUED ON THE SAME DAY AND DULY SERVED UPON THE ASSESSEE ON 16.7,2011. IN RESPONSE THERETO SH. MUNISH MAHENDROO, C.A. ATTENDED THE ASSESSMENT PROCEEDINGS ON DIFFERENT DA TES AND FILED WRITTEN SUBMISSION. BOOKS OF ACCOUNTS COMPRISING CASH BOOK, LEDGER, STOCK REGISTER, VOUCHER OF PURCHASES AND SALES & EXPENSES WERE PROD UCED WHICH HAVE BEEN EXAMINED ON TEST CHECKED BASIS. THE CASE WAS DISCUS SED IN DETAIL. THE ASSESSEE HAS NOT FURNISHED THE CONFIRMATION OF THE FOLLOWING PARTIES FROM WHOM ADVANCE HAS BEEN CLAIMED BY THE ASSESSEE IN SPITE OF REPEAT ED REQUESTS- I. M/S PANDHI SCAN CENTRE RS. 5,00,000 II. ADVANCE FROM CUSTOMERS RS. 11,76,703 III. ADVANCE FOR SPARES RS. 3,60,000 TOTAL RS. 20,36,703/- THE ASSESSEE HAS ALSO NOT FURNISHED THE CONFIRMATIO N OF THE FOLLOWING PARTIES FROM WHOM ADVANCES HAVE BEEN CLAIMED BY THE ASSESSE E INSPITE OF REPEATED REQUESTS. HOWEVER, THE ASSESSEE HAS ONLY FILED COPY OF ACCOUNT ON THE LETTER HEAD GIVEN BY THE FOLLOWING PARTIES BUT NO PAN HAS BEEN MENTIONED ON THE LETTER HEAD OF THE PARTY: I. M/S PUNJAB SCANNING CENTRE, PHAGWARA RS. 1,95,000 II. M/S VISHVNAGAR CITY SCAN CENTRE, GUJARAT RS. 1,68,750/- TOTAL RS. 3,63,750 /- MY SUBMISSION IS AS UNDER:- 5 GROUND OF APPEAL NOS. 1 AND 2: THE CONTENTIONS RAISED BY THE COUNSEL OF THE ASSESS EE BEFORE YOUR GOOD-SELF HAS ALREADY BEEN CONSIDERED BY MY PREDECESSOR IN ASSESS MENT ORDER DATED 30.12.2011 IN PARA 2 AND ARRIVED AT THE CONCLUSION THAT THOUGH THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF THE CUSTOMERS FROM WHO M ADVANCES WERE TAKEN AND FOR SPARES AS CLAIMED BY THE ASSESSEE. THE ASSESSEE FAILED TO PRODUCE ANY CONFIRMATION OF THE PARTIES FROM WHOM ADVANCES AND SPARES HAVE BEEN TAKEN. IN THE ABSENCE OF THESE DETAILS, THE AO WAS RIGHT TO T REAT THE SAME AS UNEXPLAINED CASH CREDIT AMOUNTING TO RS. 2036703/- AND ADDED IT BACK TO THE INCOME OF THE ASSESSEE. GROUND OF APPEAL NO. 3: THIS CONTENTION OF THE ASSESSEE HAS BEEN DEALT BY M Y PREDECESSOR IN PARA 3 OF THE ASSESSMENT ORDER, AFTER REPEATED REQUESTS, THE ASSE SSEE HAS GIVEN CONFIRMATION OF SOME OF THE PARTIES BUT NO PAN HAS BEEN MENTIONED O N THE LETTER HEAD OF THE PARTY. IN THE ABSENCE OF PAN THE AO WAS RIGHT TO AD D BACK THE CASH CREDIT AMOUNTING TO RS. 363750/- AS UNEXPLAINED. THE ASSESSMENT RECORD OF M/S. C MAX HEALTHCARE, #. 13, SEC-16, PANCHKULA FOR THE AY 2009-10 IS ALSO ENCLOSED HEREWITH IN ONE VOL UME FOR NECESSARY ACTION. YOURS FAITHFULLY SD/- (ANITA SHARMA) INCOME TAX OFFICER WARD-2, PANCHKULA END: AS ABOVE 6. FROM THE ABOVE REPORT, IT IS CLEAR THAT THE ASSE SSEE DID NOT FURNISH THE CONFIRMATION LETTERS FROM THE CONCERNED PARTIES. IT APPEARS THAT ASSESSEE DID NOT COOPERATE WITH THE ASSESSING OFFICER AND THE LD. CI T(A) HAS ADMITTED THE ALLEGED ADDITIONAL EVIDENCE IN VIOLATION OF PROVISIONS OF R ULE 46A OF THE I.T. RULES, 1962. 6 SUB RULE (2) PROVIDES THAT THE CIT(A) WHILE ADMITTI NG SUCH EVIDENCE MUST RECORD ITS REASONING IN WRITING. SUB RULE (3) OF RULE 46A PROVIDES THAT COMMISSIONER OF INCOME TAX (APPEALS) COULD NOT ACCEPT SUCH EVIDENCE UNLESS THE ASSESSING OFFICER HAS BEEN GIVEN REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE SO PRODUCED. IN THE INSTANT CASE, THE LD. CIT(A) HAS NOT RECORDED THE REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE. SIMILARLY, NO OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSING OFFICER TO EXAMINE THE ADDITIONAL EVIDENCE, IF ANY, SUBMITTED BY THE ASSESSEE BECAUSE NO CONFIRMATION WAS SUBMITTED WITH RESPECT TO THE AMOUNT FOR RS. 20,36,703/-. 7. AS REGARDS THE DELETION OF ADDITION OF RS. 3,63, 750/-, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD FURNISHED THE CONFIRMA TION OF TWO PARTIES WITHOUT PAN FROM WHOM ADVANCES WERE SHOWN BY THE ASSESSEE. IT IS STATED THAT ASSESSEE SUBMITTED ONLY COPY OF THE ACCOUNT GIVEN BY THE PAR TEIS BUT NO PAN WAS MENTIONED ON THE LETTER HEAD OF THE PARTIES. THEREFORE, IN TH E ABSENCE OF PROPER CONFIRMATIONS, THE ASSESSING OFFICER TREATED THE AMOUNT OF RS. 3,6 3,750/- AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO THE TOTAL INCOME OFF T HE ASSESSEE. IT IS TRUE THAT IN THE ABSENCE OF PROPER CONFIRMATIONS, THE ASSESSING OFFI CER WAS JUSTIFIED IN TREATING THE AMOUNT IN QUESTION AS UNEXPLAINED CASH CREDITS. THE ONUS WAS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. WITHOUT PAN., IT WAS NOT POSSIBLE TO VERIFY THE TRANSACTIONS PARTICULARLY WHEN ONE OF TH E PARTIES IS STATED TO BE FROM STATE OF GUJARAT. THE LD. CIT(A) HIMSELF HAS OBSERV ED THAT THE ASSESSING OFFICER HAS REPORTED THAT IN CASE OF M/S VISHVNAGAR CT SCAN CENTRE, GUJARAT, THE LETTERS HAVE BEEN RECEIVED BACK UN-SERVED. THUS, THE VERY E XISTENCE OF THE PARTY IS DOUBTFUL. 8. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES O F THE PRESENT CASE, WE THINK IT APPROPRIATE TO SET ASIDE THE ORDER OF THE CIT(A) ON BOTH THE ISSUES AND THE MATTER 7 NEEDS TO BE EXAMINED AT THE LEVEL OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) ON THE ABOVE ISSUES AND R EMAND THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE IS SUES AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS MADE CLEAR THAT THE ASSESSEE IS FREE TO ADDUC E THE EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. WE ALSO DIRECT THE ASSESSING OFFICE R TO CONSIDER THE ADDITIONAL EVIDENCE WHICH WERE SUBMITTED BY THE ASSESSEE BEFOR E THE CIT(A). 9. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.2015 SD/- SD/- (ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 10 TH DEC, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR