ITO, New Delhi V. M/s Rupa Mittal, Prop;, New Delhi

ITA 3006/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52470 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Keywords: Income from undisclosed sources; Additional evidence

Judgement Text

ITA NO. 3006/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3006/DEL/2011 A.Y. : 2007-08 ITO, WARD - 19(1), ROOM NO. D-216, VIKAS BHAVAN, NEW DELHI VS. MS. RUPA MITTAL, PROP. M/S RISHU ELECTRIC CO. HU-9, PITAMPURA, DELHI 110 085 (PAN/GIR NO. : AAUPM8310P) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. VED JAIN, CA DEPARTMENT BY : SMT. PRATIMA KAUSHIK, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM PER SHAMIM PER SHAMIM PER SHAMIM YAHYA: AM YAHYA: AM YAHYA: AM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 14.3.2 011 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS AND CIRCUMS TANCES OF THE CASE IN DELETING THE DISALLOWANCE OF ` 41,47,977/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS SUNDRY CREDITORS WITHO UT FURNISHING EVIDENCES BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND IN VIOLATION OF PROVISIONS OF RULE 46A(3) OF THE INCOME TAX RULES, 1962 AND WITHOUT COGENT REASONS. 3. IN THIS CASE ASSESSEE IS ENGAGED IN THE BUSINES S OF TRADING IN ELECTRICAL WIRES AND CABLES. ASSESSING OFFICER IN THIS CASE MADE ITA NO. 3006/DEL/2011 2 ADDITION OF ` 41,47,977/- ON ACCOUNT OF BOGUS SUND RY CREDITORS. IN THIS REGARD, ASSESSING OFFICER HELD AS UNDER:- AS PER BALANCE SHEET SUNDRY CREDITORS HAVE BEEN S HOWN TO THE TUNE OF ` 79,14,019/-. ASSESSEE WAS REQUIRED TO SUBSTANTIATE THE GENUINENESS OF THE CREDITORS BY PR OVIDING COMPLETE DETAILS, NAMES, ADDRESS OF THE PARTIES ALONG WITH THE CONFIRMED COPY OF ACCOUNT WITH PAN. ASSESSEE FA ILED TO FURNISH ANY DOCUMENTARY EVIDENCE, SUBSTANTIATING TH E GENUINENESS OF THE CREDITORS MENTIONED HEREUNDER. THEREFORE, IN ORDER TO VERIFY THE GENUINENESS OF TH E CREDITORS AND TRANSACTION MADE, INFORMATION WAS CAL LED FOR BY ISSUING NOTICE U/S 136 OF THE ACT, THE FOLLOWING PARTIES / STATED CREDITORS: NAME OF THE PARTY CLOSING CREDIT BALANCE I) NUMERO INTERNATIONAL ` 4,84,475/- II) PRIME INDUSTRIES ` 13,33,655/- III) SAI TRADERS ` 10,76,550/- IV) RAJ SALES ` 12,53,297/- TOTAL TOTAL TOTAL TOTAL ` 41,47,977/ ` 41,47,977/ ` 41,47,977/ ` 41,47,977/- -- - NOTICES ISSUED RECEIVED UNDELIVERED. SINCE THE T RANSACTION MADE WITH THESE PARTIES REMAINED UNVERIFIED, VIDE ORD ER SHEET ENTRY DATED 30.11.2009 IT WAS REQUIRED TO SHO W CAUSE WHY THE LIABILITY SHOWN AGAINST THESE PARTIES SHOUL D NOT BE ITA NO. 3006/DEL/2011 3 TREATED AS INCOME FROM UNDISCLOSED SOURCES. CASE WAS ADJOURNED TO 07.12.2009. ON THE DATE NONE APPEARED NOR ANY WRITTEN REPLY WAS FILED. IN THE CIRCUMSTANCES AN AMOUNT OF ` 41,47,977/- WHICH REMAINED UNCONFIRMED AND UNVE RIFIED IS TREATED AS INCOME FROM UNDISCLOSED SOURCES AND AD DED BACK TO THE DECLARED INCOME OF THE ASSESSEE. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE SUBMITTED ADDITION EVIDENCES. IT WAS SUBMITTED THA T ASSESSEE WAS UNABLE TO PRODUCE THE CONFIRMATIONS OF THE CREDITOR S DUE TO INSUFFICIENT TIME ALLOWED BY THE ASSESSING OFFICER. IT WAS FURT HER CLAIMED THAT THE EVIDENCES FURNISHED ARE OF MATERIAL IMPORTANCE TO T HE ISSUE OF THE GENUINENESS OF THE CREDITORS. LD. COMMISSIONER OF INCOME TAX (APPEALS) ADMITTED THE AFORESAID EVIDENCES AND REMITT ED THE SAME TO THE ASSESSING OFFICER FOR REMAND REPORT. THE ASS ESSING OFFICER REITERATED THE FINDING GIVEN IN THE ASSESSMENT ORDE R AND STATED THAT THE ADDITIONAL EVIDENCES SHOULD NOT BE ADMITTED. LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE ADDITIONAL E VIDENCES AND HELD AS UNDER:- THE ADDITION OF CREDITORS HAS BEEN MADE ON ACCOUN T OF 4 PARTIES. IN THE CASE OF ` 4,48,475/- OUTSTANDING IN THE NAME OF M/S NUMERO INTERNATIONAL, THE APPELLANT HAS PROD UCED THE CONFORMATION OF THE PARTY AND COPY OF ACCOUNT FROM IT S BOOKS AND ITS BANK STATEMENT SHOWING PURCHASES OF THE SAID AMOUNT IN DECEMBER, 2006 AND PAYMENT BY CHEQUE NO. ON 09.6.2008. THE RELEVANT BILLS OF PURCHASE, COPY OF CERTIFICATE OF REGISTRATION UNDER DELHI VAT ACT, AND PAN CARD OF THE CREDITOR ARE FILED. ITA NO. 3006/DEL/2011 4 AN AMOUNT OF ` 13,33,655/- IS DUE IN THE NAME OF M/S PRIMA INDUSTRIES. IN SUPPORT OF THIS, THE APPELLANT HAS FILED CONFIRMATION, AND COPY OF LEDGER ACCOUNT SHOWING TOT AL PURCHASES OF ` 15,83,655/-, OF WHICH ` 2,50,000/- W AS PAID UP DURING THE YEAR. THE BALANCE OF ` 13,33,655/- HAS BEEN PAID ON VARIOUS DATES BETWEEN 24.5.2007 AND 28.8.20 07. THE COPIES OF PURCHASE BILLS, COPY OF CERTIFICATE OF VAT REGISTRATION AND PAN CARD OF THE CREDITOR ARE FILE D. THE CREDIT OF ` 10,76,550/- IN THE NAME OF M/S SAI TRADERS RELATES TO PURCHASES OF 31.1.2007 AND 02.2.2007, WH ICH HAVE BEEN PAID BY THE APPELLANT BETWEEN 09.5.2007 AND 13.8.2007. THE APPELLANT HAS FURNISHED THE CONFI RMATION, PURCHASE BILLS, CERTIFICATE OF VAT REGISTRATION AND PAN CARD OF THE CREDITOR. THE AMOUNT OUTSTANDING FROM M/S RAJ SALES CORPORATION OF ` 12,53,297/- RELATES TO PURCHASES OF 17.1.2007, 31.1 .2007 AND 05.2.2007, AND THESE AMOUNTS HAVE BEEN SQUARED U P BY 25.5.2007. THE ACCOUNT IS SUPPORTED BY THE PUR CHASE BILLS, CONFIRMATION, VAT REGISTRATION CERTIFICATE A ND PAN CARD OF THE CREDITOR. AFTER EXAMINING THESE EVIDENCES, I AM OF THE OPINION THAT THE PURCHASES AND PAYMENTS ARE IN NATURE OF REGULAR BUSINESS TRANSACTIONS, AND THE IDENTITY OF THE CRED ITORS HAS BEEN PROVEN. THE CASE LAWS RELIED ON BY THE APPELLA NT ARE ALSO RELEVANT TO ITS CLAIM. THE COURTS HAVE HELD T HAT WHERE THE GENUINENESS OF THE PURCHASES AND SALES HAVE BE EN ACCEPTED, THE CREDITS IN THE ACCOUNTS OF THE SUNDR Y ITA NO. 3006/DEL/2011 5 CREDITORS, WHICH REPRESENT THE SUM TOTAL OF PURCHAS ES THAT REMAINED UNPAID AT THE END OF THE YEAR, STAND FULLY EXPLAINED. THE ADDITION MADE OF THE TOTAL AMOUNT OF ` 41,47,977/- IS FOUND TO BE WITHOUT ANY BASIS, AND I S HEREBY DELETED. 5. AGAINST THIS ORDER, THE REVENUE IS IN APPEAL BE FORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT THE ASSESSEE WAS NOT IN A POSITION TO SUBMIT THE NECESSARY EVIDENCES AND CONFIRMATIONS BEFORE THE ASSESSING OFFICER, AS ADMITTEDLY, ASSESSI NG OFFICER HAD GIVEN INSUFFICIENT TIME TO THE ASSESSEE. THE ADDIT IONAL EVIDENCES WERE SUBMITTED TO THE LD. COMMISSIONER OF INCOME TAX (APP EALS), WHO HAS RIGHTLY ADMITTED THE SAME. THE SAME WERE ALSO SE NT TO THE ASSESSING OFFICER FOR REMAND REPORT AND ASSESSING O FFICER CHOSE NOT TO TAKE COGNIZANCE OF THE SAME. UNDER THE CIRCUMS TANCES, WE FIND THAT THERE WAS NO FAILURE ON THE PART OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) TO CONSIDER THE ADDITIONAL E VIDENCES. WE ALSO FIND THAT ASSESSEE HAS SUBMITTED THE CONFIRMATION OF THE ACCOUNT FROM THE RESPECTIVE CREDITORS. THE AMOUNT DUE HAVE BE EN SUBSEQUENTLY PAID AND ALSO THE NECESSARY EVIDENCES IN THIS REGAR D HAVE ALSO BEEN FURNISHED. THE NECESSARY BILLS OF PURCHASES, COPY OF CERTIFICATE OF REGISTRATION UNDER DELHI VAT AND PAN CARD OF THE CRE DITORS WERE ALSO ITA NO. 3006/DEL/2011 6 SUBMITTED AND THE EVIDENCES WERE ALSO SUBMITTED THRO UGH THE BANK STATEMENT THAT PAYMENTS WERE ALSO SUBSEQUENTLY MADE IN THESE ACCOUNTS. UNDER THE CIRCUMSTANCES, IN OUR CONSIDER ED OPINION, THE IDENTITY OF THE CREDITORS HAVE BEEN PROVED AND THE CREDITS ARE QUITE GENUINE. HENCE, WE UPHOLD THE ORDER OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/8/2011 UPO N CONCLUSION OF HEARING. SD/- SD/- [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 11/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES