M/s. Pisco Plastic Industries, Baroda V. The Income tax Officer,Ward-2(3), Baroda

ITA 2985/AHD/2011

• Counselvise Citation: 298520514 RSA 2011
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2013
• Assessment Year: 1988-1989
• Appeal Filed On: 30-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHUBHRATA VERMA JDIT
• Assessee Lawyers: VIJAY RANJAN

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2985/AHD/2011 [ASSTT.YEAR : 1998-1989] M/S.PISCO PLASTIC INDUSTRIES 106, RAJ LAXMI COMPLEX OLD PADRA ROAD BARODA 390 015. PAN : AACFP 0299 A /VS. ITO, WARD-2(3) BARODA. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : SHRI VIJAY RANJAN . + , #/ REVENUE BY : SHUBHRATA VERMA, JDIT / + *01/ DATE OF HEARING : 15 TH OCTOBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 02.12.2013 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1998- 1989 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-II I, BARODA DATED 16.9.2011. 2. THE GROUND NO.1 OF THE ASSESSEES APPEAL IS AS U NDER: 1) THE ORDER U/S.143(3) R.W.S. 254 OF IT ACT PASSED BY AO AND CONFIRMED BY FIRST APPELLATE AUTHORITY IS BAD I N LAW AND DESERVED TO BE UNCALLED FOR AS IT IS BARRED BY LIMI TATION. ITA NO.2985/AHD/2011 -2- 3. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRE SSED THIS GROUND OF THE APPEAL OF THE ASSESSEE, WHICH IS ACCORDINGLY DISMISSED. 4. THE GROUND NO.2 OF THE ASSESSEES APPEAL IS AS U NDER: 2. THE AO AND FIRST APPELLATE AUTHORITY HAS ERRED IN LAW AND ON FACTS IN MAKING AND CONFIRMING RESPECTIVELY ADDI TION OF RS.1,64,000/-. THE SAME DESERVES TO BE DELETED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS IN SECOND ROUND OF LITIGATION BEFORE THE TRIBUNA L. THE ASSESSEE HAS PAID COMMISSION TO ONE SHRI R.S. MAHAJAN AND SAME W AS DISALLOWED BY THE AO. HE SUBMITTED THAT IN THE FIRST ROUND OF LITIGATION, THE ISSUE WAS RESTORED TO THE FILE OF THE AO WITH DIRECTION T O PROVIDE NECESSARY OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE PA YEE OF THE COMMISSION, SHRI R.S.MAHAJAN. HE SUBMITTED THAT IN THE FIRST ASSESSMENT FRAMED BY THE AO, THE STATEMENT OF SHRI R.S.MAHAJAN WAS RECORDED BY HIM, AND NO OPPORTUNITY FOR CROSS-EXAMI NATION WAS ALLOWED TO THE ASSESSEE. HE SUBMITTED THAT THE COM MISSION WAS PAID PER ACCOUNT PAYEE CHEQUES AND WERE GENUINE PAYMENTS MADE BY THE ASSESSEE DURING THE NORMAL COURSE OF BUSINESS. HE SUBMITTED THAT THE SAID WITNESS, SHRI R.S.MAHAJAN UNFORTUNATELY EXPIRE D ON 13.3.1995, AND THE TRIBUNAL IN THE FIRST ROUND OF LITIGATION W AS NOT AWARE OF THE FACT OF DEATH OF SHRI R.S.MAHAJAN WHILE PASSING APP ELLATE ORDER ON 7.12.2000. IN THESE CIRCUMSTANCES, HE SUBMITTED TH AT NO ADDITION SHOULD BE SUSTAINED ON ACCOUNT OF DISALLOWANCE OF C OMMISSION. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND T HE CIT(A). SHE SUBMITTED THAT AT THE TIME OF PASSING OF APPELLATE ORDER BY THE TRIBUNAL ON 7.12.2000, THE WITNESS SHRI R.S.MAHAJAN HAD ALRE ADY EXPIRED ON ITA NO.2985/AHD/2011 -3- 13.3.1995, AND HENCE THE DIRECTION OF THE TRIBUNAL TO PROVIDE OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE WI TNESS, COULD NOT POSSIBLY BE COMPLIED WITH BY THE AO. SHE SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE GENUINENESS OF THE COM MISSION PAYMENT WHICH THE ASSESSEE HAS FAILED TO PROVE. 6. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). I FIND THAT DURING THE COUR SE OF FIRST ASSESSMENT OF THE ASSESSEE, AS PER THE STATEMENT OF SHRI R.S.MAHAJAN, HE HAS DENIED HAVING RECEIVED THE COMMISSION INCOME FROM THE ASSESSEE. HOWEVER, IT IS WELL SETTLED THAT THE DEP ARTMENT SHOULD HAVE PROVIDED THE ASSESSEE WITH AN OPPORTUNITY TO CROSS- EXAMINE THE SAID WITNESS SHRI R.S.MAHAJAN AT TIME OF RECORDING OF TH E STATEMENT MADE BY HIM AND MAKE ADDITION/DISALLOWANCE OF COMMISSION PAYMENT TO HIM. ADMITTEDLY, THE AO DID NOT PROVIDE SUCH OPPOR TUNITY OF CROSS- EXAMINATION TO THE ASSESSEE. THIS TRIBUNAL HAD RES TORED THE ISSUE TO THE AO WITH DIRECTION TO CROSS-EXAMINE THE SAID SHR I R.S.MAHAJAN. HOWEVER, SHRI R.S.MAHAJAN HAD ALREADY EXPIRED MUCH PRIOR TO PASSING OF THE APPELLATE ORDER BY THE TRIBUNAL. AP PARENTLY, THE TRIBUNAL MIGHT NOT BE AWARE OF THE FACT OF DEATH OF SAID WITNESS SHRI R.S.MAHAJAN WHILE PASSING THE APPELLATE ORDER IN T HIS CASE. IN THESE CIRCUMSTANCES, THE DIRECTION OF THE TRIBUNAL TO PRO VIDE CROSS- EXAMINATION OF SHRI R.S.MAHAJAN TO THE ASSESSEE COU LD NOT BE COMPLIED WITH BY THE AO. THE ASSESSEE HAS MADE THE COMMISSION PAYMENT PER CHEQUES, AND THE STATEMENT OF SHRI R.S. MAHAJAN RECORDED AT THE TIME OF FIRST ASSESSMENT PROCEEDING S, WITHOUT PROVIDING OPPORTUNITY TO CROSS-EXAMINE HIM, COULD N OT BE VALID AND MADE THE BASIS FOR THE IMPUGNED ADDITION. THERE IS NO OTHER MATERIAL ITA NO.2985/AHD/2011 -4- BEFORE ME TO JUSTIFY THE DISALLOWANCE OF THE COMMIS SION PAYMENT BY THE DEPARTMENT. IN THE PECULIAR FACTS AND CIRCUMST ANCES OF THE CASE, WHERE OPPORTUNITY OF CROSS-EXAMINATION WAS NOT ALLO WED TO THE ASSESSEE IN THE FIRST ROUND OF THE ASSESSMENT AND P RIOR TO THE SECOND ASSESSMENT PROCEEDINGS, ON BEING SET ASIDE TO THE F ILE OF THE AO BY THE ORDER OF THE TRIBUNAL, THE WITNESS HAVING ALREADY E XPIRED, I AM OF THE VIEW THAT DISALLOWANCE CANNOT BE SUSTAINED AND IS D ELETED ACCORDINGLY, AND THE GROUND OF THE APPEAL NO.2 OF THE ASSESSEE I S ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD