Trimurti Coal Trading Company, Pune V. Deputy Commissioner of Income tax,

ITA 2947/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7678 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 27-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Reopening of assessment; Unexplained cash credit; Additional evidence; Reassessment proceedings
• Section: 143(3); 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2947 /P U N/201 6 / ASSESSMENT YEAR : 20 0 8 - 09 TRIMURTI COAL TRADING COMPANY, SHAH KHANDELWAL JAIN AND ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 PAN : AAFFT1442A ....... / APPELLANT / V/S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE / RESPONDENT . / ITA NO . 1182/PUN/2015 / ASSESSMENT YEAR : 2010 - 11 TRIMURTI COAL TRADING COMPANY, MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 PAN : AAFFT1442A ....... / APPELLANT / V/S. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE / RESPONDENT ASSESSEE BY : S HRI NEELESH KHANDELWAL REVENUE BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 21 - 0 8 - 2017 / DATE OF PRONOUNCEMENT : 24 - 0 8 - 2017 2 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 / ORDER PER VIKAS AWASTHY, JM : TH ESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE . IN ITA NO. 2947/PUN/2016 THE ASSESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 6, PUNE DATED 25 - 09 - 2016 FOR THE ASSESSMENT YEAR 2008 - 09. IN ITA NO. 1182/PUN/2015 THE ASSESSEE HAS IMPUGNED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPE ALS) - 6, PUNE DATED 12 - 06 - 2015 FOR THE ASSESSMENT YEAR 2010 - 11. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS BY THE ASSESSEE ARE SIMILAR, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMMON ORDER. ITA NO. 2947/PUN/2016 (A.Y. 2008 - 09) 2. FOR THE SAKE OF CONVE NIENCE IN DECIDING THE ISSUES RAISED IN THE APPEAL S , ITA NO. 2947/PUN/2016 FOR ASSESSMENT YEAR 2008 - 09 IS TAKEN UP FIRST. THE FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: TH E ASSESSEE IS A PARTNERSHIP FIRM AND I S ENGAGED IN TRADING OF COAL, COKE, SLAG , IRON ORE, ETC. THE ASSESSEE IN ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 FILED ON 05 - 09 - 2008 DECLARED TOTAL INCOME OF RS.84,69,250/ - . RE - ASSESSMENT PROCEEDINGS WERE INITIATED UNDER THE PROVISIONS OF SE CTION 148 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). IN RE - ASSESSMENT PROCEEDINGS ADDITION OF RS.42,15,280/ - WAS MADE ON ACCOUNT OF UNSECURED LOAN RS.40,00,000/ - ALLEGEDLY TAKEN BY ASSESSEE FROM SHRI DINKAR SHANKAR KUMBHA , PROPRIETOR SHRI SWAMI BRICK S , MOGALWADI, RAIGAD AND INTEREST ACCRUED THEREON RS.2,15,280/ - . THE ASSESSING OFFICER HELD THAT AMOUNT OF RS.40,00,000/ - IS A UNEXPLAINED CASH CREDIT APPEARING IN THE BOOKS OF ACCOUNT AND ACCORDINGLY INTEREST EXPENDITURE OF RS .2,15,280/ - WAS ALSO DISALLOWED. 3 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 AGGRIEVED BY THE ASSESSMENT ORDER DATED 28 - 02 - 2014 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS , AS WELL AS CHALLENGING THE ADDITIONS ON MERIT. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE . THE FIRST APPELLATE AUTHORITY UPHELD THE THE VALIDITY OF REOPENING AND CONFIRMED THE ADDITIONS. NOW, THE ASSESSEE IN APPEAL HAS ASSAILED : I . REOPENING OF ASSESSMENT U/S. 147 OF THE ACT; II . ADDITION OF RS.40,00,000/ - MADE U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT; AND III . ADDITION OF RS.2,15,280/ - RELATING TO DISALLOWANCE OF INTEREST EXPENDITURE. 3. SHRI NEELESH KHANDELW AL APPEARING ON BEHALF OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NO. 1 WITH RESPECT TO CHALLENGING THE VALIDITY OF REOPENING. AS REGARDS OTHER GROUNDS OF APPEAL, THE LD. AR SUBMITTED THAT THE ASSESSEE HAS TAKEN LOAN FROM SHRI DINKAR SHANKAR KUMBHA , PROPRIETOR SHRI SWAMI BRICKS. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD FILED LEDGER ACCOUNT OF SHRI SWAMI BRICKS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE SAME IS AT PAGES 15 TO 17 OF THE PAPER BOOK. THE LEDGER ACCOUNTS CLEARLY INDICATES T HAT THE ASSESSEE HAD TAKEN LOAN FROM SHRI SWAMI BRICKS THROUGH BANKING CHANNEL. THE LD. AR FURTHER REFERRED TO THE BANK STATEMENTS OF SHRI SWAMI BRICKS AT PAGES 97 TO 100 OF THE PAPER BOOK TO SUBSTANTIATE THAT THE CREDITOR HAD SUFFICIENT BALANCE IN THE BA NK TO ADVANCE LOAN. THE LD. AR SUBMITTED THAT THE BANK STATEMENTS WERE FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE FIRST TIME. THE DOCUMENTS I.E. THE COPY OF THE LEDGER ACCOUNT OF SHRI 4 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 SWAMI BRICKS IN THE BOOKS OF ASSESSEE AND BANK STAT EMENTS OF SHRI SWAMI BRICKS WERE NOT FURNISHED BEFORE THE ASSESSING OFFICER. DURING THE FIRST APPELLATE PROCEEDINGS NO REMAND REPORT WAS SOUGHT BY THE COMMISSIONER OF INCOME TAX (APPEALS) FROM THE ASSESSING OFFICER ON FRESH EVIDENCE SUBMITTED BY THE ASSES SEE. THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THE FRESH EVIDENCE S FILED BY THE ASSESSEE AND HAS UPHELD THE FINDINGS OF ASSESSING OFFICER IN A MECHANICAL MANNER. THE LD. AR PRAYED THAT THE MATTER MAY BE REMITTE D BACK TO THE FILE OF ASSESSING OFFICER TO CONSIDER THE DOCUMENTS FILED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 4. SHRI VIVEK AGGARWAL REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (A PPEALS) IN CONFIRMING THE ADDITIONS. HOWEVER, THE LD. DR SUBMITTED THAT SINCE, THE ASSESSEE HAS FILED FRESH EVIDENCE S THAT PROBABLY HAVE NOT BEEN CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS), THE MATTER CAN BE REMANDED TO ASSESSING OFFICER FOR V ERIFICATION AND CONSIDERATION. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. IN REASSESSMENT PROCEEDINGS THE ADDITION OF RS.42,15,280/ - HAS BEEN MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT S . THE CASE OF THE ASSESSEE IS THAT THE ASSESSE E HAD TAKEN UNSECURED LOAN OF RS.40,00,000/ - FROM SHRI DINKAR SHANKAR KUMBHA , PROPRIETOR SHRI SWAMI BRICKS DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2008 - 09. THE ASSESSEE HAS FILED CERTAIN DOCUMENTS IN SUPPORT OF HIS CONTENTIONS FOR THE FIRST TIME BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NEITHER CONSIDERED THE SAID DOCUMENTS WHILE DECIDING THE APPEAL OF THE ASSESSEE NOR HAS SOUGHT REMAND REPORT FROM THE ASSESSING 5 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 OFFICER ON THE SAID DOCUMENTS. IN OUR CONSIDERED OPINION ISSUE NEEDS A REVISIT TO THE FILE OF ASSESSING OFFICER AS THE DOCUMENTS FURNISHED BY THE ASSESSEE WERE NOT AVAILABLE ON RECORD BEFORE THE ASSESSING OFFICER AND THE SAME WERE NOT CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEAL S). BOTH THE SIDES HAVE AGREED IN PRINCIPLE THAT THE ISSUE CAN BE REMITTED BACK TO THE ASSESSING OFFICER FOR CONSIDERATION AND VERIFICATION OF THE DOCUMENTS. THUS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE QUA ADDITION MADE IN APPEAL IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER TO CONSIDER THE DOCUMENTS FILED BY THE ASSESSING OFFICER IN SUPPORT OF ITS CLAIM . THE ASSESSING OFFICER AFTER VERIFICATION OF THE DOCUMENTS FILED AND AFTER GRANTING OPPORTUNITY OF HEARING TO THE ASSESSEE S HALL PASS FRESH ASSESSMENT ORDER , ACCORDANCE WITH LAW. ACCORDINGLY, GROUND NOS. 2 AND 3 OF THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 6. THE LD. AR OF THE ASSESSEE HAS STATED AT THE BAR, THAT HE IS NOT PRESSING GROUND NO. 1. ACCORDINGLY, GROUND N O. 1 IS DISMISSED AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 1182/PUN/2015 (A.Y. 2010 - 11) 8 . IN APPEAL FOR ASSESSMENT YEAR 2010 - 11, THE ASSESSEE HAS RAISED TWO GROUNDS OF APPEAL , THE SAME ARE AS UNDER : 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT, IT BE HELD THAT THE ADDITION OF RS. 12,59,635/ - MADE BY THE ASSESSING OFFICER DISALLOWING PART OF THE COMMISSION PAID BY THE APPELLANT TO VARIOUS PERSONS, AND THAT CONFIRMED BY THE FIRST APPELLATE AUTHORITY IS IMPROPER, UNJUSTIFIED, IMAGINARY, NOT IN ACCORDANCE TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE CLAIM PERTAINING TO THE COMMISSION SHOULD BE ALLOWED IN FULL AS P ER PROVISIONS OF LAW AND FACTS PREVAILING IN THE 6 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 CASE. THE ADDITION MADE BE DELETED. APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT, IT BE HELD TH AT THE ADDITION OF RS.5,04,254/ - PERTAINING TO DISALLOWANCE OF INTEREST MADE BY THE A O ON ALLEGED UNEXPLAINED CASH CREDIT APPEARING IN THE BOOKS OF ACCOUNTS, AND THAT CONFIRMED BY THE FIRST APPELLATE AUTHORITY IS IMPROPER, UNJUSTIFIED, IMAGINARY, NOT IN A CCORDANCE TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE ADDITION MADE BE DELETED. APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 9. THE LD. AR HAS FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE . THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE INCLUDED : 1 . TELEPHONE BILLS OF PARTNER OF THE APPELLANT. 2 . COPY OF AFFIDAVITS OF COMMISSION AGENTS. 3 . COPY OF PROFIT AND LOSS ACCOUNT OF THE APPELLANT FOR AY 2008 - 09. 4 . LEDGER ACCOUNT OF COMMISSION EXPENSES IN THE BOOKS OF APPELLANT FOR AY 2008 - 09. THE LD. AR POINTED THAT THE ASSESSEE COULD NOT OBTAIN CONFIRMATIONS FROM ALL THE PARTIES AS THEY WERE LOCATED IN REMOTE AREAS. THE ASSESSEE HAS NOW OBTAINED AFFIDAVITS FROM ALL THE PARTIES THEREFORE, THE SAME MAY BE TAKEN INTO ACCOUNT. THE LD. AR STATED THAT THE OTHER DOCUMENTS VIZ. PROFIT AND LOSS ACCOUNT FOR FINANCIAL YEAR 2007 - 08, LEDGER ACCOUNT OF COMMISSION EXPENSES IN RESPECT OF FINANCIAL YEAR 2007 - 08 ARE ALSO ESSENTIA L FOR DECIDING THE ISSUE ON MERITS, THEREFORE, THEY ARE ESSENTIAL FOR PROPER ADJUDICATION OF THE APPEAL. 10. IN VIEW OF THE FACT THAT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE ARE ESSENTIAL DOCUMENTS TO BE CONSIDERED BEFORE ANY ADDITION IS MADE, THEREFORE, WE ARE OF CONSIDERED OPINION THAT TH E ISSUE S RAISED IN APPEAL NEEDS REVISIT TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER AFTER 7 ITA NO S. 2947/PUN/2016 & 1182/PUN/2015 CONSIDERING THE ADDITIONAL EVIDENCES FI LED BY THE ASSESSEE SHALL DECIDE THE ISSUE AFRESH. NEEDLESS TO SAY THAT THE ASSESSING OFFICER WHILE DECIDING THE ISSUE S DE NOVO SHALL GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 2947/PUN/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND ITA NO. 1182/PUN/2015 IS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 24 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 24 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 6, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 5, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE