The ITO, Ward-8(3), Surat V. Shri Mukesh V. Shah, HUF, Surat

ITA 3061/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5905 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Corroborative evidences; Third party statement; Reassessment proceedings
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , AHMEDABAD , SURAT CAMP BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ./ ITA.NO. 3061 / AHD /201 4 / ASSTT. YEAR: 2008 - 2009 INCOME TAX OFFICER , WARD - 8(3) SURAT - 395001. VS . SHRI MUKESH V. SHAH - HUF, 401 - 402/A, ANJALI APARTMENT, PATEL FALIYA, KATARGAM, SURAT - 395004. PAN NO.AAHJS8180G (APPLICANT) (RESPONENT) REVENUE BY : SHRI ASHISH POPHARE , SR.DR ASSESSEE BY : SHRI RAJESH UPADHYAY , AR / DATE OF HEARING : 28 / 04 / 201 7 / DATE OF PRONOUNCEMENT: 15 / 05 /201 7 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER : PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE L D.CIT(A) - V, SURAT DATED 19.09.2014 PASSED FOR THE ASSTT.YEAR 2008 - 09 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (I) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A), SURAT HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 33,61,149/ - MADE BY THE A,O, ON ACCOUNT OF DIFFERENCE IN SUNDRY CREDITORS BALANCE BY HOLDING THAT THE AO HAS NOT GIVEN THE NAME OF T HE PARTIES WHOSE RETURN OF INCOME WAS VERIFIED, WHERE AS IT IS ON RECORD THAT THE AO HAS MADE ADDITION AFTER VERIFYING THE RETURN OF INCOME OF THE MAJORITY OF THE SUNDRY CREDITORS. (II) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A), SURA T HAS ERRED IN LAW IN HOLDING THAT THE EVIDENCES COLLECTED BY THE AO HAVE NOT BEEN CONFRONTED TO THE ASSESSEE AND NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR REFUTING THE ALLEGATIONS, WHERE AS IT IS ON ITA NO. 3061 /AHD/201 4 ASSTT. YEAR2008 - 09 2 RECORD THAT THE AO ISSUED FINAL SHOW CAUSE NOTICE ON 14/03/2013, PROVIDING THE ASSESSEE AN OPPORTUNITY TO EXPLAIN THE DISCREPANCIES DETECTED BY HIM. (III) THEREFORE, IT IS PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. IN THIS CASE RETURN O F INCOME DECLARING RS.11,36,600/ - WAS FILED ON 30/03/2009 . THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 22/12/2010. SUBSEQUENTLY CASE OF THE ASSESSEE WAS RE - OPENED U/S.147 OF THE ACT BY ISSUING NOTICE U/S.148 OF THE ACT ON 05/03/2012. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSE E TO FURNISH DETAILS OF SUNDRY CREDITORS AND THE ASSESSEE HAS SUBMITTED CONFIRMATION OF SUNDRY CREDITORS AMOUNTING TO RS.37,15,373/ - . SUBSEQUENTLY , THE ASSESSING OFFICER NOTICED THAT THE AMOUNT OF SUNDRY CREDITORS APPEARING IN THE BALANCE SHEET WAS RS.3,54,224/ - THEREFORE, HE OBSERVED THAT THERE WAS A DIFFERENCE OF RS.33,611,49/ - IN THE SUNDRY CREDITORS. THEREAFTER, THE ASSESSING OFFICER MADE AN ADDITION OF SUNDRY CREDITORS OF RS.33,661,49/ - BY TREATING IT AS INCOME FROM OTHER SOURCES AND ADDED TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED AGAINST THE DECISION OF ASSESSING OFFICER THE ASSESSEE FILED IN APPEAL BEFORE LD.CIT(A). THE LD.CIT(A) ALLOWED THE APPEAL OF ASSESEE BY OBSERVING AS UNDER: 6.1 .1 I HAVE CONSIDERED THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. THE GROUNDS OF APPEAL - GROUND NO.1 PERTAINS TO MAKING ADDITION OF RS.33,61,149/ - AS INCOME FROM OTHER SOURCES AS PER PARA 5 OF THE ASSESSMENT ORDER. THE AO MADE THE ADDITI ON ON THE GROUND THAT THE DIFFERENCE OF RS.33,61,149/ - FOUND IN SUNDRY CREDITORS WAS NOT GENUINE. THE APPELLANT DURING THE APPELLATE PROCEEDINGS SUBMITTED THAT DURING THE REASSESSMENT PROCEEDINGS, IT WAS EXPLAINED THAT THE CONFIRMATIONS W ERE ONLY IN RESPECT OF JOB CHARGES AND NOT COMPLETE LEDGER ACCOUNT WAS FILED. IN THE REASSESSMENT PROCEEDINGS, THE COMPLETE LEDGER ACCOUNT SHOWING JOB CHARGES ON ONE HAND AND PAYMENT ON OTHER HAND WERE FILED AND ACCORDINGLY, THE NET BALANCE GOT TALLIED WIT H THE BALANCE SHEET. THE APPELLANT CONTENDED ITA NO. 3061 /AHD/201 4 ASSTT. YEAR2008 - 09 3 THAT HE HAD NOT FILED THE DETAILS OF PAYMENT SIDE OF RS. 33,61,149/ - AND, THEREFORE, THE AC) ASSUMED CREDITOR AT RS. 37,15,373/ - AS OUTSTANDING BALANCE WHICH WAS IN FACT FOR RS. 3,54,224/ - ONLY. THE DETAILS AS P ER THE CHART BELOW CLARIFIES THE POSITION. NAME OF THE CREDITORS TRANSACTIONS OF LABOUR DURING THE YEAR PAYMENTS BALANCE MASUKH J. SAKHARIA 3,94,220 3,56,694 34,526 KALPESH I. PRAJAPATI 3,21,991 2,96,918 25,073 ISHWAR R. LUHAR 4,03,692 3,71,408 ?,2,284 DEVUBHAI B. CHAUHAN 5,29,983 4,04,879 1,25,104 BABULAL S. THAKOR 5,59,573 5,35,473 24,100 ASHWIN 1 GANDHI 4,55,860 4,20,093 35,767 PRAVIN V. PRAJAPTI 2,27,651 1,81,955 45,696 MANSUKH C. CHAUHAN 3,87,860 3,56,186 31,674 BHARAT G. PATEL 2,48,626 2,48,626 0 VIYAY PRAJAPTI 1,85,970 . 1,85,970 0 37,15,373 33,61,149 3,54,224 6.1.2 ON THE PERUSAL OF THE DETAILS, IT IS OBSERVED THAT THE AO HAS MADE THE ADDITION OF RS.33,61,149 / - ON ACCOUNT OF DIFFERENCE FOUND IN SUNDRY CREDITORS. IN THE ASSESSMENT ORDER THE AO HAS MENTIONED ON PAGE 4 (THOUGH THE ASSESSMENT ORDER IS NEITHER PAGE NUMBERED NOR PARAGRAPH NUMBERED) THAT 'DURING THE ASSESSMENT PROCEEDINGS, THE UNDERSIGNED HAS ALSO ISSUED NOTICE U/S 133(6) OF THE IT ACT TO THE RESPECTIVE PARTIES CONCERNED. THE PARTIES CONCERNED ALSO SUBMITTED THE CONTRA CONFIRMATION ACCOUNT WHICH ALMOST GOT TALLIED. BUT ON VERIFICATION OF THE RETURN OF INCOME FILED BY THE PARTIES CONCERNED FROM TH EIR JURISDICTION OFFICERS, THERE ARE DIFFERENCES IN THEIR CONTRA CONFIRMATION ACCOUNT. HENCE, IT IS QUITE THAT THE CONTRA ITA NO. 3061 /AHD/201 4 ASSTT. YEAR2008 - 09 4 CONFIRMATION ACCOUNTS SUBMITTED BY THE PARTIES CONCERNED DURING THE ASSESSMENT PROCEEDINGS ARE INCORRECT' IN THE ASSESSMENT ORDER THE AO HAS NOT PROVIDED ANY DETAILS REGARDING THE NAME OF THE SUNDRY CREDITORS FROM WHOM THE INQUIRIES HAVE BEEN MADE BY ISSUANCE OF NOTICE U/S 133(6) OF THE ACT. THE AO HAS NOT GIVEN THE NAME OF THE PARTIES WHOSE RETURN OF INCOME WAS VERIFIED AND THE JURISDIC TIONAL AO WHO HAVE REPORTED THAT THERE IS A DIFFERENCE IN THE CONTRA CONFIRMATIONS FILED BY THE VARIOUS PARTIES AND THEIR RETURN OF INCOME. THE AO HAS NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNTS AND NO INSTANCE OF ANY DISCREPANCIES HAS BEEN HIGHLI GHTED. THE EVIDENCES WHICH HAVE BEEN COLLECTED HAVE NOT BEEN CONFRONTED TO THE AP PELLANT AND NO OPPORTUNITY WAS GIVEN TO HIM FOR REFUTING THE ALLEGATIONS. THE AO HAS NOT GIVEN ANY DETAILS IN THE ASSESSMENT ORDER REGARDING THE DETAILS PERTAINING TO DISCREPA NCIES IN THE CONTRA CONFIRMATIONS IN THE REPORT OF THE JURISDICTIONAL AO'S. THE ASSESSMENT ORDER HAS BEEN MADE IN A SLIP SHOT AND CASUAL MANNER WITHOUT EVEN FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. ON ONE HAND THE AO MENTIONS THAT THE CONTRA CONFIRMA TIONS FILED BY THE APPELLANT GOT TALLIED WHILE ON THE OTHER HAND IT IS MENTIONED THAT THE DIFFERENCE IN THE CONTRA CONFIRMATION VIS - A - VIS RETURN OF INCOME HAS BEEN FOUND. THE SUBMISSION MADE BY THE APPELLANT REGARDING THE DIFFERENCE IN THE SUNDRY CREDITOR S ON ACCOUNT OF PAYMENTS MADE OF RS.33,61,149/ - AND THE OUTSTANDING BALANCE OF RS. 3,54,224/ - IS FOUND TO BE SATISFACTORY. 6.1.3 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT THE AO HAS NOT POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNTS, NO DETAILS OF NAME, AMOUNT, ETC. OF THE VARIOUS PARTIES (SUNDRY CREDITORS) WHOSE RETURN OF INCOME HAVE BEEN VERIFIED, DETA ILS OF THE JURISDICTIONAL AO'S OF THE SUNDRY CREDITORS REPORTS HAVE BEEN GIVEN BY THE AO IN HIS ASSESSMENT ORDER. THE EVIDENCES HAVE BEEN COLLECTED BUT NOT CONFRONTED TO THE APPELLANT. THE EXPLANATION MADE BY THE APPELLANT IS FOUND TO BE SATISFACTORY AND T HEREFORE THE ADDITION MADE BY THE: AO OF RS. 33,61,149/ - IS DELETED AND THE GROUND OF APPEAL IS ALLOWED. 4 . WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE R ECORDS PLACED BEFORE US. WE NOTICED THAT THERE WAS TOTAL OUTSTANDING CREDITORS OF LABOUR TRANSACTIONS TO THE AMOUNT OF RS.37,15,373/ - OUT OF WHICH THE ASSESSEE HAD MADE PAYMENT OF RS.33,61,149/ - AND REMAINING BALANCE OF SUNDRY CREDITORS OF RS.3,54,224/ - WAS CORRECTLY REFLECTED IN THE BALAN CE SH EET OF THE ASSESSEE. WE FURTHER NOTICE D THAT ASSESSEE HAS NO T FILE D DETAILS OF PAYMENTS SIDE OF RS.33,61,149/ - BECAUSE OF WHICH THE ASSESSING O FFICER HAS WRONGLY ASSUMED THAT THE ITA NO. 3061 /AHD/201 4 ASSTT. YEAR2008 - 09 5 OUTSTANDING SUNDRY CREDITORS WAS AT RS.3 7,15,373/ - AS AGAINST THE ACTUAL OUTSTANDING SUNDRY CREDITORS OF RS.3,54,224/ - . A FTER EXAMINATION OF SUPPORTING EVIDENCES AND MATERIAL , WE CONSIDERED THAT LD.CIT(A) HAS CORRECTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER , T HEREFORE WE FIND NO REASON TO INTERFERE IN THE DECISION OF LD.CIT(A). 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 15 TH MAY , 2017 AT AHMEDABAD. SD/ - SD/ - ( RAJPAL YADAV ) JUDICIAL MEMBER ( AMARJIT SINGH ) ACCOUNTANT MEMBER TRUE COPY AHMEDABAD; DATED 15 / 05 /2017 MANISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD