M/s Choice Jewellers, Jalandhar V. THE Income Tax Officer, Jalandhar

ITA 291/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8749 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Keywords: Opportunity of being heard; Additional evidence
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDH AR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.291(ASR)/2016 ASSESSMENT YEAR: 2007-08 M/S. CHOICE JEWELLERS, TANDA ROAD, BEGOWAL, PAN:AADFC-9080B VS. INCOME TAX OFFICER, WARD-III(3), JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S.BHASIN (ADV.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR.) DATE OF HEARING: 20.01.2017 DATE OF PRONOUNCEMENT: 21.02.20 17 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), JALANDHAR, DATED 02.03.2016, FOR ASST. YEAR: 2007-0 8. 2. THE EFFECTIVE GROUNDS OF APPEAL TAKEN BY ASSESSE E RELATES TO ONLY ONE ISSUE WITH REGARD TO ADDITION SUSTAINED BY LD. CIT(A), WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF DIFFERENCE IN THE OUTSTANDING BALANCE IN THE BOOKS OF ACCOUNTS OF ASSESSEE WITH B ALANCE APPEARING IN THE BOOKS OF M/S. RAKESH JEWELLERS AND M/S RAMESH JEWELLERS. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THERE W AS A DELAY FOR FILING OF APPEAL BY ONE DAY AND THE DELAY HAD OCCURRED AS PARTNER OF THE FIRM WAS NOT PHYSICALLY WELL AND COULD NOT SEND THE DOCU MENTS IN TIME. IN THIS RESPECT, HE INVITED OUR ATTENTION TO THE AFFID AVIT FILED BY ASSESSEE. ITA NO.29 1(ASR)/2016 ASST. YEAR: 2007-08 2 THE DELAY WAS CONDONED AND ASSESSEE WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS. THE LD. AR INVITED OUR ATTENTION TO ASSESSMENT ORD ER PAGE-1 WHEREIN, IT HAS BEEN MENTIONED THAT THE ORDER HAS B EEN PASSED U/S 143(3). THE LD. AR THEN TOOK US TO LAST PARA OF ASS ESSMENT ORDER WHERE THE ASSESSING OFFICER HAD MENTIONED THAT THE ASSESS MENT IS BEING FINALIZED AS BEST JUDGMENT U/S 144 OF THE ACT. IT WAS SUBMITTED THAT THIS ITSELF SHOWS NON APPLICATION OF MIND. 4. BRIEFLY STATING THAT THE FACTS, THE LD. AR SUBMI TTED THAT ASSESSING OFFICER HAD OBTAINED A COPY OF ACCOUNT OF M/S. RAKE SH JEWELLERS AND M/S. RAMESH JEWELLERS U/S 133(6) OF THE ACT. THE AS SESSING OFFICER OBSERVED THAT ASSESSEE HAD DECLARED AN AMOUNT OF RS .10,30,551/- AS OUTSTANDING TO M/S RAKESH JEWELLERS, JALANDHAR AND AN AMOUNT OF RS.2,60,928/- AS OUTSTANDING TO M/S RAMESH JEWELLER S, JALANDHAR. THE ASSESSING OFFICER FURTHER OBSERVED THAT ON INFORMAT ION CALLED FROM THE ABOVE TWO PARTIES, THE PARTIES HAD INTIMATED THAT T HERE WAS NOTHING RECOVERABLE FROM THE ASSESSEE, THEREFORE, ASSESSING OFFICER MADE THE ADDITION OF THE SAID AMOUNTS. THE LD. AR SUBMITTED THAT THAT ASSESSING OFFICER MADE THE ADDITION IMMEDIATELY AFTER COLLECT ING INFORMATION OF HIS OWN U/S 133(6) WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON 29.12.2009 ITSELF AND THE ORDER SHEET ENTRY DATED 31.12.2009 CALLING FOR THE BOOKS OF ACCOUNTS WAS MERELY A FORMALITY. THE LD. AR FURTHER SUBMITTED THAT LD. ITA NO.29 1(ASR)/2016 ASST. YEAR: 2007-08 3 CIT(A) GROSSLY MISCONSTRUED HIMSELF DECLINING TO A CCEPT THE ASSESSEES EXPLANATION SUPPORTED BY THE DOCUMENTS, WHICH WERE FILED AS ADDITIONAL EVIDENCE AND WHICH WERE VERY MUCH RELEVANT TO THE F ACTS AND CIRCUMSTANCES OF THE CASE, AND IN THIS RESPECT THE LD. AR SUBMITTED THAT DOCUMENTS WERE CURRENT ACCOUNT OF ASSESSEE WITH IND IAN OVERSEAS BANK AND COPY OF SAVING BANK ACCOUNTS OF SH. RAKESH KUMA R AND ALSO COPY OF PURCHASE BILLS. THE LD. AR SUBMITTED THAT IF THE DO CUMENTS WERE CONSIDERED, THERE WAS NO DIFFERENCE IN THE BALANCES AND THEREFORE, IT WAS PRAYED THAT THE BENCH MAY DECIDE THE ISSUE AFTER CO NSIDERING THE ADDITIONAL EVIDENCE FILED WITH THE LD. CIT(A). 5. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED UP ON THE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSI NG OFFICER AFTER OBTAINING INFORMATION U/S 133(6) FROM TWO PARTIES W ANTED THE ASSESSEE TO EXPLAIN THE SAME AND ON 29 TH DEC. 2009 DIRECTED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT AND RELEVANT DOCUMENTS AND THEREAF TER, HE MADE THE ADDITION. BEFORE LD. CIT(A), THE ADDITIONAL EVIDENC ES WERE SUBMITTED, THE LD. CIT(A) FORWARDED THE WRITTEN SUBMISSIONS ALONG WITH ADDITIONAL EVIDENCES TO ASSESSING OFFICER WHO SUBMITTED HIS RE MAND REPORT. IN THE REMAND REPORT, THE ASSESSING OFFICER SUBMITTED THAT DURING REMAND PROCEEDINGS ON VARIOUS DATES THE ASSESSEE WAS ASKED TO PRODUCE ACCOUNTANT WHO HAD COMMITTED THE MISTAKES BUT THE A CCOUNTANT DID NOT ITA NO.29 1(ASR)/2016 ASST. YEAR: 2007-08 4 GIVE HIS STATEMENT AND THEREFORE, THE ASSESSING OFF ICER DID NOT COMMENT ON THE MERITS OF THE CASE. THE LD. CIT(A) HAS NOTED IN HIS ORDER THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER WANTED TO MAKE ENQUIRIES FROM THE ACCOUNTANT ON WHO M THE ASSESSEE HAD PUT ENTIRE BLAME WITH REGARD TO INCORRECT ENTRI ES IN THE BOOKS OF ACCOUNT. THE LD. CIT(A) FURTHER NOTED THAT THE ACCO UNTANT DID NOT APPEAR IN THE PROCEEDINGS, THEREFORE, LD. CIT(A) HELD THAT THE DOCUMENTS PRODUCED BY ASSESSEE WERE JUST AN AFTER THOUGHT. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE WAS DISMISSED WHEREAS, W E FEEL THAT IN THE INTEREST OF JUSTICE, THE ASSESSEE SHOULD BE GIVEN O NE MORE OPPORTUNITY TO EXPLAIN THE DIFFERENCE IN THE OUTSTANDING BALANCES, AS THE DOCUMENTS BEING FILED WERE IMPORTANT PIECE OF INFORMATION AND SIMPLY NOT CONSIDERING THEM ON THE BASIS THAT ACCOUNTANT OF AS SESSEE DID NOT MAKE STATEMENT IS NOT JUSTIFIED. THE ASSESSING OFFICER S HOULD EXAMINE THE DOCUMENTS RELIED ON BY ASSESSEE AND IF THE DOCUMENT S EXPLAIN THE DIFFERENCE THEN IN THE INTEREST OF SUBSTANTIAL JUST ICE SHOULD BE CONSIDERED. IN VIEW OF THE ABOVE, WE DEEM IT APPROPRIATE TO REM IT THE ISSUE BACK TO THE OFFICE OF ASSESSING OFFICER, WHO SHOULD EXAMINE THE ADDITIONAL DOCUMENTS TO VERIFY THE CLAIM OF ASSESSEE, THAT THE RE WAS IN FACT NO MISMATCH. THE ASSESSING OFFICER SHOULD ALSO EXAMINE THE RECONCILIATION OF THE BALANCES AND DECIDE AFRESH IN ACCORDANCE WIT H LAW. ITA NO.29 1(ASR)/2016 ASST. YEAR: 2007-08 5 NEEDLESS TO SAY THAT ASSESSEE WILL BE PROVIDED SUFF ICIENT OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.02. 2017 . SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:21.02.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER