ANANT ASHOK BAHETI, MUMBAI V. ITO 24(3)(1), MUMBAI

ITA 3047/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8959 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEERAJ PRADHAN
• Keywords: Additional evidence
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI B.RAMAKOTAIAH (ACCOUNTANT MEMBER) ITA NO.2046/MUM/2011: ASSESSMENT YEAR: 2007-08 I.T.O. 24(3)(1), C-11, 7 TH FLOOR, PRATYAKHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-51 ANANT ASHOK BAHETI, C-11, KAVERIMAHIMA BANGUR NAGAR, GOREGAON(W), MUMBAI-62 PA NO.AFXPB 5797 D (APPELLANT) VS. (RESPONDENT) ITA NO.3047/MUM/2011: ASSESSMENT YEAR: 2007-08 ANANT ASHOK BAHETI, C-11, KAVERIMAHIMA BANGUR NAGAR, GOREGAON(W), MUMBAI-62 PA NO.AFXPB 5797 D I.T.O. 24(3)(1), C-11, 7 TH FLOOR, PRATYAKHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-51 (APPELLANT) VS. (RESPONDENT) ASSESSEE BY : SHRI VIJAY BAHETI REVENUE BY: SHRI NEERAJ PRADHAN DATE OF HEARING: 22.8.2012 DATE OF PRONOUNCEMENT: 5 . 9.2012 ORDER PER B.R.MITTAL, JM: THESE CROSS APPEALS HAVE BEEN FILED BY THE DEPARTM ENT AS WELL AS ASSESSEE FOR ASSESSMENT YEAR 2007-08 AGAINST ORDER DATED 12.1.20 11 OF LD CIT(A). 2. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS.32,03,4 32 MADE BY THE AO AS BOGUS JOB WORK CHARGES/PURCHASES WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, GENUINENESS THE FACTS THAT THE ASSESSEE FAILED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES TO SATISFACTION OF THE AO. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 2 1. THE LD CIT(A) ERRED IN CONFIRMING DISALLOWANCE MADE MERELY ON THE BASIS OF NON-AVAILABILITY OF CONFIRMATION FROM A PA RTY FOR PAYMENT OF JOB WORK CHARGES OF RS.2,57,785. 2. THE LD CIT(A) ERRED IN GROSSLY IGNORING SUPPORTI NG AND EVIDENCES PRODUCED DURING THE COURSE OF APPELLATE PROCEEDINGS IN RESPECT OF PAYMENT OF JOB WORK CHARGES OF RS.2,57,785 AND AT T HE SAME TIME FAILED TO APPRECIATE FACTS OF THE CASE PROPERLY. 4. THE RELEVANT FACTS GIVING RISE TO THESE APPEALS ARE THAT ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN PROPRIETARY BUSINESS OF MANUFACTURIN G OF POWER LOOM CLOTHES IN THE NAME AND STYLE OF M/S. SARAL UDYOG AT ICHALKARARJI NEAR KOLHAPUR IN MAHARASHTRA. THE ASSESSEE HAS SHOWN TOTAL TURNOVER TO THE TUNE OF RS .2,96,06,691. AFTER DEBITING PURCHASES AND OTHER EXPENSES, THE NET INCOME SHOWN IN THE PROFIT AND LOSS ACCOUNT IS RS.1,70,912. ASSESSEE PURCHASED THE YARN AND SAME GAVE FOR WEAVING ON JOB WORK BASIS FOR MANUFACTURE OF CLOTHES. THE AO HAS STATE D THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE PRODUCED NECESSARY DETAILS OF INCOME, BANK STATEMENT, BILLS/VOUCHERS FOR EXPENSES AND BOOKS OF ACCOUNT. AO ASKED THE ASSESSEE TO FILE DETAILS, VIZ; SALE PURCHASES EXPENSES, SUNDRY DEBTORS AND CREDITORS. FOR VERIFICATION OF THE DETAILS FILED BY ASSESSEE, AO ISSUED NOTICE U/S.133(6) OF THE ACT TO VARIOUS PARTIES. IN RESPONSE THERETO, THE PARTIES HAD SUBMITTED CONF IRMATION OF ACCOUNTS REFLECTED IN THEIR BOOKS. HE HAS STATED THAT SOME OF THE PARTIE S COULD NOT SUBMIT CONFIRMATION AND ASSESSEE WAS ASKED TO PRODUCE PARTIES ALONGWITH THE IR BOOKS FOR VERIFICATION. AO STATED AT PAGE 8 OF THE ASSESSMENT ORDER THAT ASSESSEE HAS FAILED TO PROVE THE TRANSACTIONS WITH THE FOLLOWING PARTIES: SR.NO. NAME OF THE PARTY NATURE OF TRANSACTION AMOUNT 1. NANDKUMAR JADHAV JOB WORK CHARGES 2,74,324 2. SHRIKANT KAVTEKAR JOB WORK CHARGES 2,46,586 3. DEWEKAR DEEPAK MADHUKAR JOB WORK CHARGES 7,00,25 2 4. MALI GAMI APPA JOB WORK CHARGES 2,36,362 5. HARIOM TEXTILES JOB WORK CHARGES 2,49,468 6. MADHUKAR V BAVANE JOB WORK CHARGES 2,17,792 7. HARVANDA TEXTILES JOB WORK CHARGES 2,57,785 ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 3 8. RAGHAV INDUSTRIES PURCHASE 1,36,680 9. MANTRI BOUBLING WORK PURCHASE 2,22,716 10. TIRUPATI FABRICS PURCHASE 4,43,000 11. KAMDHENU TEXTILES PURCHASE 4,76,252 TOTAL: 34,61,217 5. THE AO HAS STATED THAT IN THE COURSE OF ASSESSME NT PROCEEDINGS, NOTICES ISSUED TO SUCH JOB WORK/PURCHASES HAVE BEEN RETURNED UNSER VED INDICATE THE FACT THAT THE JOB WORK/PURCHASES SHOWN TO HAVE BEEN MADE BY ASSESSEE AND CLAIMED AS EXPENDITURE CANNOT BE ACCEPTED TO BE GENUINE IN ABSENCE OF PROP ER NEW ADDRESSES OF SUCH PARTIES, THEIR INCOME TAX RETURNS AND BANK STATEMENTS. IN V IEW OF ABOVE, AO TREATED THE ABOVE PURCHASES/JOB WORK TOTALING TO RS.34,61,217 AS BOGU S AND STATED THAT ASSESSEE HAS INFLATED THE EXPENSES TO REDUCE TAXABLE INCOME. AC CORDINGLY, AO DISALLOWED THE SUM OF RS.34,61,217 AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6. LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF A SSESSEE VIDE PARA 2.3 HAS ACCEPTED THE GENUINENESS OF JOB WORK/PURCHASES AGGR EGATING TO RS.32,03,432. HOWEVER, LD CIT(A) HAS STATED THAT ASSESSEE COULD N OT PROVE WITH SUPPORTING MATERIALS THE JOB WORK CHARGES OF RS.2,57,785 PERTAINING TO H ARVANDE TEXTILE. LD CIT(A) HAS FURTHER STATED THAT ASSESSEE WANTED TO OFFER ADDITI ONAL EVIDENCE BEFORE HIM BUT HE REJECTED THE SAME. HENCE, HE UPHELD THE ORDER OF A O FOR DISALLOWING RS.2,57,785. PARAS 2.3 AND 2.4 OF THE IMPUGNED ARE AS UNDER: 2.3 I HAVE GONE THROUGH THE CONTENTS OF THE IMPUGN ED ASSESSMENT ORDER, GROUNDS OF APPEAL, STATEMENT OF FACTS, ARGUMENTS AN D SUBMISSIONS OF LD. AUTHORIZED REPRESENTATIVE. I FIND THAT THE ASSESSIN G OFFICER IS NOT JUSTIFIED IN TREATING THAT THE APPELLANT HAD FAILED TO PROVE THE TRANSACTIONS THAT 11 PARTIES MENTIONED IN PARA 5.1 OF THE IMPUGNED ASSESSMENT OR DER. THE PARTY AT NO.1, 2, 5, 6, 8, 9, 10 & 11 HAVE CONFIRMED THE IMPUGNED TRA NSACTIONS ON WHICH THE NOTICES U/S 133(6) WERE SERVED, WHERE AS PARTY AT N O.3 AND 4 HAVE CONFIRMED THROUGH REPLY ON REQUEST OF THE APPELLANT THAT ARE AVAILABLE ON RECORD THOUGH NOTICE COULD NOT BE SERVED ON THE SAME. THE PARTY A T NO. 7 I.E. HARVANDE TEXTILES IS THE ONLY PARTY ON WHICH THE NOTICE WAS SERVED BUT NO REPLY WAS RECEIVED BY THE ASSESSING OFFICER FOR THE REASONS T HAT THE APPELLANT HAD SERIOUS DISPUTES WITH THE SAID PARTIES. THESE FACTS ARE SUM MARIZED AS BELOW: ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 4 SARAL UDYOG ASSESSMENT YEAR 2007-08 PARTY WISE ANALYSIS OF DISALLOWANCE AND SUPPORTING DOCUMENTS SUBMITTED: A: PARTICULARS SR NO. NAME OF THE PARTY AMOUNT DISALLOWED BY AO AMOUNT AS PER DETAILS FILED BY ASSESSEE STATUS OF NOTICE U/S.133(6) STATUS OF REPLY BY PARTY REMARKS 1. RAGHAV INDUSTRIES RS. 1,36,680/- RS. 1,36,680/- NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DATED 08/12/2009. ACCOUNT WAS ALSO RECONCILED BY ASSESSEE ON REQUEST BY AO AS PER ASSESSEES LETTER DATED 2/12/2009. 1. CONFIRMATION OF ACCOUNT FROM PARTY IS ENCLOSED (1). 2. COPIES OF INVOICES ARE ENCLOSED(2-5). 3. COPIES OF BANK STATEMENT OF PARTY ARE ENCLOSED SHOWING PAYMENT RECEIVED BY THEM (6-10). 4. COPIES OF BANK STATEMENT OF ASSESSEE SHOWING PAYMENT TO PARTY ENCLOSED(L1.12) 2. MANTRI DOUBLING WORK RS. 2,22,716/- RS. 1,82,790/- TAKEN BY AO RS. 2,22,716/. FROM LEDGER ACCOUNT FILED BY PARTY WITHOUT DEDUCTING THE OPENING BALANCE OF RS. 39,926/- NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DATED 08/1212009. ACCOUNT WAS ALSO RECONCILED BY ASSESSEE ON REQUEST BY AO AS PER ASSESSEES LETTER DATED 22/12/2009. L. CONFIRMATION ACCOUNT FROM PARTY ENCLOSED(13). 2. COPIES OF INVOICES ARE ENCLOSED(14-32). 3.COPIES OF BANK STATEMENT OF PARTY ARE ENCLOSED SHOWING PAYMENT RECEIVED BY THEM(33-42). 4.COPIES OF BANK STATEMENT OF ASSESSEE SHOWING PAYMENT TO PARTY ARE ENCLOSED(43-50). 5. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY PARTY IS ENCLOSED(51). 3. TIRUPATI FABRICS RS. 4,43,000/. RS. 3,69,500/- TAKEN BY AO RS. 4,43,000/- FROM LEDGER ACCOUNT FILED BY PARTY WITHOUT DEDUCTING THE OPENING BALANCE OF RS. 73,000/- AND INTEREST OF RS. 500/-. NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DATED 08/12/2009. ACCOUNT WAS ALSO RECONCILED BY ASSESSEE ON REQUEST BY AO AS PER ASSESSEES LETTER DATED 22/12/2009. 1. COPY OF COVERING LETTER SENT BY PARTY TO AO ON 03/12/2009 IS ENCLOSED. THIS LETTER IS SELF EXPLANATORY CLEARLY SHOWING THAT PARTY GAS SUBMITTED LEDGERS ACCOUNT, INVOICES, BANK STATEMENT, ACKNOWLEDGEMENT OF RETURN OF INCOME ETC,(52) 2. CONFIRMED COPY OF LEDGER ACCOUNT IN THE BOOKS OF PARTY IS ENCLOSED.(53- 55) 4. KAMDHENU TEXTILES RS. 4,76,252/- RS. 4,73,350/- TAKEN BY AO RS. 4,43,000/- FROM LEDGER ACCOUNT FILED BY PARTY WITHOUT NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DATED 08/12/2009. ACCOUNT WAS ALSO RECONCILED BY COPY OF COVERING LETTER SENT BY PARTY TO AO ON 03/12/2009 IS ENCLOSED. THIS LETTER IS SELF EXPLANATORY CLEARLY SHOWING THAT PARTY GAS SUBMITTED LEDGERS ACCOUNT, INVOICES, BANK ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 5 DEDUCTING INTEREST OF RS. 292/-. DATED 08/12/2009 ASSESSEE ON REQUEST BY AO AS PER ASSESSEES LETTER DATED 22/12/2009. STATEMENT, ACKNOWLEDGEMENT OF RETURN OF INCOME ETC,(56). CONFIRMED COPY OF LEDGER ACCOUNT IN THE BOOKS OF PARTY IS ENCLOSED. (57-58) B: JOB WORK CHARGES: SR NO. NAME OF THE PARTY AMOUNT DISALLOWED BY AO AMOUNT AS PER DETAILS FILED BY ASSESSEE STATUS OF NOTICE U/S.133(6) STATUS OF REPLY BY PARTY REMARKS 1. NANDKUMAR JADHAV RS.2,74,324 RS.2,74,324 NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DTD.8.12.2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DT.8.12.2009. LETTER DATED 23.11.2009 WAS ALSO RECEIVED BY PARTY CONFIRMING RECEIPT OF REPLY TO THE SHOW CAUSE NOTICE. 1. AFFIDAVIT DT. 03/02/2010 ENCLOSED.(59-67) 2. JOB WORK CHARGES AND RECEIPT DETAIL ENCLOSED.(61- 63) 3. NOTARIZED COPY OF VOTER ID CARD IS ENCLOSED.(64) 4. ZEROX COPIES OF ACCOUNT PAYEE PAID CHEQUES TO MSED BY ASSESSEE TOWARDS ELECTRICITY BILLS OF PARTY ENCLOSED.(68.70) 5. BANK CERTIFICATES / STATEMENT CONFIRMING PAYMENT IN FAVOR OF MSED IS ENCLOSED.(71-72) 6. COPIES OF RECEIPT AND ELECTRIC BILL ENCLOSED OF WHICH PAYMENTS WERE MADE BY THE ASSESSEE ON BEHALF OF PARTY.(73-84) 7. COPY OF NOTICES ISSUED BY AC AND RECEIVED BY PARTY IS ENCLOSED.(85-86) 2. SHRIKANT KAVTEKAR RS.2,46,586 RS.2,46,586 NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DTD.8.12.2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DT.8.12.2009. LETTER DATED 23.11.2009 WAS ALSO RECEIVED BY PARTY CONFIRMING RECEIPT OF REPLY TO THE SHOW CAUSE NOTICE. 1 . AFFIDAVIT DATED 03/02/2010 ENCLOSED.(87- 95) 2. JOB WORK CHARGES AND RECEIPT DETAIL ENCLOSED,(89. 91) 3. NOTARIZED COPY OF VOTER ID CARD IS ENCLOSED.(92) 4. ZEROX COPIES OF ACCOUNT PAYEE PAID CHEQUES TO MSED BY ASSESSEE TOWARDS ELECTRICITY BILLS OF PARTY ENCLOSED.(96-99) 5. BANK CERTIFICATES STATEMENT CONFIRMING PAYMENT IN FAVOR OF MSED IS ENCLOSED.(100- ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 6 101) 6. COPIES OF RECEIPT FOR ELECTRICITY BILL IS ENCLOSED OF WHICH PAYMENTS WERE MADE BY THE ASSESSEE ON BEHALF OF PARTY (102-107) 7. COPY OF NOTICES ISSUED BY AO AND RECEIVED BY PARTY IS ENCLOSED,(L06.L07) 3. M/S. DWEWALKER DEEPAK MADHUKAR (PROP. NITIN MADHUKAR DEWALEKAR) RS.7,00,252 RS.7,00,252 NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DTD.8.12.2009 ON REQUEST BY ASSESSEE, CONFIRMATION SENT BY MANAGER OF PARTY ON 10.12.2009 1. AFFIDAVIT 01/02/2010 ENCLOSED.( 108-116) 2. WAGES AND RECEIPT DETAIL ENCLOSED.(110-112) 3. NOTARIZED COPY VOTER ID CARD ENCLOSED.(113) 4. ZEEROX COPIES OF ACCOUNT PAYEE PAID CHEQUES TO MSED BY ASSESSEE TOWARDS ELECTRICITY BILLS OF PARTY ENCLOSED (117-118). 5. BANK CERTIFICATES/BANK STATEMENT CONFIRMING PAYMENT IN FAVOUR OF MSED IS ENCLOSED (119-121) 4. MALI GAMA APPA RS. 2,36,362/. RS, 2,36,362/. NOT SERVED AS ADDRESS WAS INCOMPLETE AND IS KNOWN IN THE AREA KERUMALI AND NOT MALI AS PER ADDRESS PROVIDED BY ASSESSEE. ADDRESS GIVEN BY HIM IS AS AFFIDAVIT ENCLOSED. ON REQUEST BY ASSESSEE, CONFIRMATION SENT PARTY ON 04/12/2009 1. AFFIDAVIT DTD 23/01/2010 IS ENCLOSED.(122-132) 2. WAGES AND RECEIPT DETAIL ENCLOSED. (124-126) 3. NOTARIZED COPY OF DRIVING LICENSE IS ENCLOSED(127) 4. ZEROX COPIES OF ACCOUNT PAYEE PAID CHEQUES TO MSED BY ASSESSEE TOWARDS ELECTRICITY BILLS OF PARTY ENCLOSED.(130-132) 5. BANK CERTIFICATES CONFIRMING PAYMENT IN FAVOR OF MSED IS ENCLOSED. (133-134) COPIES OF RECEIPT OF ELECTRICITY BILL ARE ENCLOSED OF WHICH PAYMENTS WERE MADE BY THE ASSESSEE ON BEHALF OF PARTY.(135-149) 5. HARIOM TEXTILES (PROPRIETOR RAJENDRA R PARIKH) RS. 2,49,568/. RS. 2,49,468/- NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009. ON REQUEST BY ASSESSEE, CONFIRMATION SENT PARTY ON 17/11/2009. 1. AFFIDAVIT DTD 02/02/10 ENCLOSED. (150-154) 2. STATEMENT OF WAGES IS ENCLOSED.( 152-I 53) 3. NOTARIZED COPY OF VOTER ID CARD IS ENCLOSED.(L 54) 4. BANK CERTIFICATES / STATEMENT CONFIRMING PAYMENT IN FAVOR OF MSED IS ENCLOSED. (155- ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 7 157) 5. COPY OF NOTICES ISSUED BY AO REED BY PARTY IS ENCL.(158) 6. MADHUKAR V BAVANE RS. 2,17,792/. RS.2,21,915/-. IT APPEARS THAT AO HAS TAKEN THE FIGURE FROM REPLY RECEIVED NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009 REPLY RECEIVED BY DEPARTMENT. REPLY IS ACKNOWLEDGED BY AO AS MENTIONED IN SHOW CAUSE NOTICE DATED 08/12/2009. ACCOUNT WAS ALSO RECONCILED. I. AFFIDAVIT DATED 23/01/2010 ENCLOSED.(PAGEL59-166) 2. DETAILS OF WAGES AND PAYMENT RECEIPT ENCLOSED.(161-L63) 3. NOTARIZED COPY OF VOTER ID CARD IS ENCLOSED.(164) 4. ZEROX COPIES OF ACCOUNT PAYEE PAID CHEQUES TO MSED BY ASSESSEE TOWARDS ELECTRICITY BILLS OF PARTY ENCLOSED ( 167) 5. BANK CERTIFICATES / STATEMENT CONFIRMING PAYMENT IN FAVOR OF MSED IS ENCL.(L68-171L) 6. COPY OF NOTICES ISSUED BY AO RECEIVED BY PARTY IS ENCL(172) 7. HARVANDE TEXTILES RS. 2,57,785/. RS. 2,16,223/- IT APPEARS THAT AO HAS TAKEN THE FIGURE FROM REPLY RECEIVED FROM PARTY. NOTICE SERVED TO PARTY AS PER SHOW CAUSE NOTICE TO ASSESSEE DATED 08/12/2009 NOT AWARE OF COMPLIANCE AS PARTY IS IN LEGAL DISPUTE WITH THE ASSESSEE AND THEREFORE NOT CO-OPERATING. 1. STATEMENT OF ACCOUNT IN THE BOOKS OF ASSESSEE IS ENCLOSED.(L73-1 74) 2 DETAILS OF QUALITY WISE MANUFACTURING AND WAGES PAID BY ASSESSEE TO PARTY IS ENCLOSED (175) 3 COPIES OF BILLS FROM PARTY ARE ENCL.(176-19L) 4 COPIES OF RECEIPTS BY PARTY ARE ENCL(192-214). 5. ZEROX COPIES OF ACCOUNT PAYEE PAID CHQS TO MSED BY ASSESSEE TOWARDS ELECT. BILLS OF PARTY ENCL(215). 6. BANK CERTIFICATES/ STATE CONFIRMING PAYMENT IN FAVOUR OF MSED IS ENCL(216-217) . 7. COPIES OF COMPLAINTS DTD.20.1.2007 REGARDING RECOVERY FROM PARTY FILED WITH THE POWER LOOM CLOTH AND YARN MERCHANT ASSOCIATION IS ENCLOSED (218-19) . 8. ADV. CE.RTI. REG SUIT FILED BY FATHER OF ASSESSEE AGAINST PARTY IS ENCL ALONGWITH DOCUMENT IN THIS CONNECTION (220-28) ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 8 2.4 IN VIEW OF THE ABOVE, I FIND THAT NO ADDITION C OULD HAVE BEEN MADE BY THE ASSESSING OFFICER AT LEAST FOR THE PARTIES AT SR. N OS. 1, 2, 3, 4, 5, 6, 8, 9, 10 & 11 WHO HAVE CONFIRMED THE TRANSACTIONS. ACCORDINGLY TH E IMPUGNED ADDITION WITH RESPECT TO THESE 10 PARTIES IS DELETED. AS FAR AS T HE ADDITION WITH RESPECT TO PARTY NO. 7 IS CONCERNED, I FIND THAT NO EVIDENCE WAS PRO DUCED BEFORE THE ASSESSING OFFICER REGARDING THE FACT OF HAVING ANY DISPUTE WI TH THE SAID PARTY AND THIS PLEA IS BEING TAKEN ONLY BEFORE ME DURING THE APPELLATE PROCEEDINGS. I DO NOT SEE ANY REASON AS TO WHY THE APPELLANT COULD NOT PLEAD ALON G WITH SUPPORTING MATERIALS BEFORE THE ASSESSING OFFICER AS TO WHY PARTY AT SR. NO. 7 IS NOT RESPONDING TO THE DEPARTMENT AND THE REASON IS SAME, I.E. DISPUTE BET WEEN THE APPELLANT AND THE PARTY. THEREFORE, THE ADDITIONAL EVIDENCE IN THIS R ESPECT IS REJECTED AND THE ADDITION WITH RESPECT TO THE IMPUGNED PARTY AT NO.7 TO THE TUNE OF 2,57,785/- IS UPHELD IN THE FACTS AND CIRCUMSTANCES OF THE INSTAN T CASE. HENCE, DEPARTMENT AS WELL AS ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. DURING THE COURSE OF HEARING, LD D.R. SUPPORTED THE ACTION OF AO IN MAKING THE DISALLOWANCE AGGREGATING TO RS.34,61,217. ON THE O THER HAND, LD A.R. SUPPORTED THE ACTION OF LD CIT(A) TO DELETE THE DISALLOWANCE OF R S.32,03,432. FURTHER, HE SUBMITTED THAT THE JOB CHARGES TO THE PARTY NAMELY, HARVANDE TEXTILES AT RS.2,16,223 IS GENUINE AND REFERRED PAGE 18 OF PB-I. HE SUBMITTED THAT TH ERE WAS A DISPUTE WITH THE SAID PARTY AND, THEREFORE, SAID PARTY DID NOT GIVE CORRECT CON FIRMATION OF ACTUAL PAYMENT MADE TO IT OF RS.2,16,233. HE SUBMITTED THAT THE DISALLOWANCE SUSTAINED BY LD CIT(A) IS NOT JUSTIFIED. 8. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. WE ARE OF THE CONSIDERED VIEW T HAT LD CIT(A) HAS GIVEN DETAILS OF DOCUMENTS FILED BY THE ASSESSEE WITH SUPPORTING DOC UMENTS, WHICH ARE MENTIONED BY HIM IN THE COLUMN REMARKS OF THE TABLE AS REPRODU CED HEREINABOVE AND THE SAID FACTS HAVE NOT BEEN DISPUTED BY LD D.R. IN HIS SUBMISSION . THEREFORE, WE HOLD THAT ACTION OF LD CIT(A) TO DELETE THE DISALLOWANCE OF RS.32,03,43 2 IS JUSTIFIED AND DOES NOT CALL FOR ANY INTERFERENCE AT OUR END. HOWEVER, IN RESPECT OF CO NFIRMATION OF ADDITION OF RS.2,57,785, LD A.R. COULD NOT DISPUTE THE ORDER OF LD CIT(A) TH AT ASSESSEE COULD NOT FURNISH REQUISITE DETAILS WITH SUPPORTING MATERIALS BEFORE THE AO. W E ALSO OBSERVE THAT ASSESSEE WANTED TO FILE ADDITIONAL DOCUMENTS BEFORE LD CIT(A) BUT L D CIT(A) DID NOT ADMIT THE SAME. ITA NO.2046/MUM/2011: A.Y: 2007-08 ITA NO.3047/MUM/2011: A.Y: 2007-08 9 FURTHER, ASSESSEE HAS NOT ALSO MADE ANY PLEA OR APP LICATION BEFORE US FOR ADMISSION OF ADDITIONAL DOCUMENTS AND ACCORDINGLY, WE REFRAIN TO CONSIDER THE SAME. IN VIEW OF ABOVE FACTS AND THE REASONS AS GIVEN BY LD CIT(A), WE HOLD THAT LD CIT(A) IS JUSTIFIED TO UPHOLD THE DISALLOWANCE OF RS.2,57,785. HENCE, WE REJECT THE GROUNDS TAKEN BY THE DEPARTMENT AS WELL AS ASSESSEE IN THEIR RESPECTIVE APPEALS. 9. IN THE RESULT, APPEALS FILED BY DEPARTMENT AND A SSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 5 TH SEPTEMBER, 2012 SD/- (B.RAMAKOTAIAH ) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 5 TH SEPTEMBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),34, MUMBAI 4. COMMISSIONER OF INCOME TAX, 24 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI