ITO, New Delhi V. Sh. Vinod Puri, New Delhi

ITA 327/DEL/2013

• Counselvise Citation: 32720114 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 01-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Additional evidence
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI J.S. REDDY ITA NO . 3 2 7 /DEL/201 3 ASSESSMENT YEAR: 2007 - 08, INCOME - TAX OFFICER, VS. VINOD PURI, PROP. WARD 31(2), M/S. SATPAL & CO. NEW DELHI. 75 - JANPATH, NEW DELHI. (APPELLANT) (RESPONDENT) (PAN: AHAPP4653K) ASSESSEE BY: S H RI SATISH AGARWAL, CA REVENUE BY: SHRI SAMEER SHARMA, SR.DR ORDER PER I.C. SUDHIR : JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS THAT THE LEARNED CIT(APPEALS) HAS ERRED IN; I) DELETING THE ADDITION OF RS.36,88,895 ON ACCOUNT OF BOGUS SUNDRY CREDITORS, GENUINENESS OF WHICH WAS NOT PROVED DURING THE ASSESSMENT PROCEEDINGS; & II) ADMITTING ADDITIONAL EVIDENCE IN GROSS VIOLATION OF RULE 46 OF INCOME - TAX RULES, 1962 AS NONE OF THE CONDITIONS FOR ADMITTING NEW EVIDENCES IS MET BY THE ASSESSEE. 2 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE FACTS IN BRIEF ARE THAT THE AS SESSEE, AN INDIVIDUAL AND PROPRIETOR OF M/S. SATPAL & CO. IS ENGAGED IN THE BUSINESS OF TRADING OF SHAWLS, FERANS AND OTHER EMBROIDE RE D CLOTHES. THE ASSESSING OFFICER HAD MADE ADDITION OF RS.80,20,486 IN RESPECT OF CLOSING BALANCES OF 28 SUNDRY CREDITORS O N THE GROUND THAT THE ASSESSEE FAILED TO FURNISH CONFIRMATION/PAN DETAILS AND SOME OF THE PARTIES DID NOT RESPOND TO NOTICES ISSUED UNDER SEC. 133(6) DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AGAINST THAT ADDITION, THE ASSESSEE WENT IN FIRST APPEAL WHIC H WAS DECIDED EX PARTE ON 20.9.2010. LEARNED CIT(APPEALS) IN THE SAID EX PARTE ORDER HAD GIVEN RELIEF OF RS.44,10,499 ON THE BASIS OF DETAILS AVAILABLE ON RECORD IN RESPECT OF FOUR PARTIES WHO WERE BINDU ENTERPRISES (RS.28,432), GULAM NAVI NAQSH (RS.39,14, 497), SHRI DURGA TEXTILES (RS.75,560) AND SUBHANA SHAWLS & MLS GEE EMM SHAL INDUSTRIES (RS.3,92,010). THEREAFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE ITAT AND THE ITAT VIDE ITS ORDER DATED 18.11.2011 3 RESTORED THE MATTER TO THE FILE OF THE LEARNED CIT(A PPEALS) FOR ADJUDICATION OF BALANCE, SUNDRY CREDITORS ADDITIONS. 4. IN COMPLIANCE, THE ASSESSEE APPEARED BEFORE THE LEARNED CIT(APPEALS) AND FILED HIS SUBMISSIONS TIME TO TIME AS REQUIRED BY THE LEARNED CIT(APPEALS). IN THE COURSE OF APPELLATE PROCEEDING S, THE ASSESSEE ALSO MOVED AN APPLICATION UNDER RULE 46A AND SOUGHT PERMISSION FOR ADMISSION OF ADDITIONAL EVIDENCE TO SUPPORT THE GROUNDS OF APPEAL. LEARNED CIT(APPEALS) SOUGHT COMMENTS OF THE ASSESSING OFFICER ON THE SAID APPLICATION AND AGAIN CALLED FOR THE REJOINDER OF THE ASSESSEE TO THE REMAND REPORT FILED BY THE ASSESSING OFFICER. CONSIDERING AND DISCUSSING ALL THESE IN DETAILS, LEARNED CIT(APPEALS) HAS DELETED THE ADDITION OF RS.36,88,895 BY ALLOWING THE APPEAL PARTLY. THIS ACTION OF THE LEARNED CIT (APPEALS) HAS BEEN QUESTIONED BY THE REVENUE BEFORE US. 5. IN SUPPORT OF THE GROUNDS, THE LEARNED DR HAS BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED FURTHER THAT THE LEARNED CIT(APPEALS) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCES WHICH IS GROSS VIOLATION OF RULE 46 OF THE INCOME - TAX RULES, 1962. 4 6. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER. 7. ON HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE LEARNED CIT(APPEALS) WHIL E ALLOWING THE APPLICATION UNDER RULE 46A OF THE INCOME - TAX RULES SEEKING PERMISSION FOR ADMISSION OF ADDITIONAL EVIDENCE HAD CONSIDERED THE REASON FOR NOT FURNISHING THESE EVIDENCE ON EARLIER OCCASION BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT HEAR ING IN THE CASE WAS FIXED BY THE ASSESSING OFFICER BARELY FOUR DAYS AFTER THE ISSUE OF SHOW - CAUSE NOTICE. SINCE PARTIES WERE SCATTERED AND WERE IN AN UNORGANIZED SECTOR, THE ASSESSEE COULD NOT GATHER THE REQUIRED DETAILS WITHIN THE TIME GRANTED BY THE ASSE SSING OFFICER. THE ASSESSEE HAD FILED DETAILS OF SEVEN PARTIES IN THE FORM OF CONFIRMATIONS, THEIR PAN, THEIR ACCOUNTS SHOWING THE CLOSING BALANCE AS ON 31.3.2007 AT RS.16,97,109. THE ASSESSEE HAD ALSO FILED DETAILS PERTAINING TO 12 PARTIES TOTALING TO RS. 5,26,813 AND HAD ALSO FURNISHED THE SUBSEQUENT SALES OF PAYMENT CONSUMED TO THEM TO WHICH THE ADDITION WAS MADE BY THE ASSESSING OFFICER DUE TO NON - RECEIPT OF REPLY OR NON - SERVICING OF NOTICE UNDER SEC. 133(6) OF THE ACT. THE ASSESSEE HAD ALSO SUBMITTED TH E AFFIDAVITS FROM TWO PARTIES FROM WHOM THE LOANS WERE 5 TAKEN IN EARLIER YEARS BY THE ASSESSEE AND WHOSE CLOSING BALANCES APPEARED IN THE LIST OF 28 SUNDRY CREDITORS. THE COPY OF THE ADDITIONAL EVIDENCE WAS SENT TO THE ASSESSING OFFICER FOR HER COMMENTS. TH E ASSESSING OFFICER COMPLIED THEREWITH AND FURNISHED A DETAILED REMAND REPORT GIVING PARTY - WISE BREAK UP OF SUM OF RS.39,69,987 FOR WHICH ADDITION HAD BEEN SUSTAINED BY THE LEARNED CIT(APPEALS) IN HER EARLIER ORDER. THE LEARNED CIT(APPEALS) THEREAFTER CAL LED FOR REJOINDER OF THE ASSESSEE TO THE REMAND REPORT AND DISCUSSED IT IN DETAIL WHILE REPRODUCING THEM IN THE FIRST APPELLATE ORDER. WE THUS DO NOT FIND SUBSTANCE IN THE OBJECTION OF THE LEARNED DR RAISED IN GROUND NO. 2 THAT THE LEARNED CIT(APPEALS) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME - TAX RULES, 1962. THE GROUND NO.2 IS ACCORDINGLY REJECTED. 8. SO FAR AS MERIT OF THE ADDITION QUESTIONED BEFORE THE LEARNED CIT(APPEALS) IS CONCERNED, WE FIND THAT IN THE REMAND REPORT DATED 04.10.2012, THE ASSESSING OFFICER HAD SUBMITTED THAT THE ASSESSEE WAS ABLE TO PROVE THE EXISTENCE OF SEVEN SUNDRY CREDITORS SHOWING THE BALANCES AT RS.16,97,109. THE ASSESSING OFFICER REPORTED FURTHER THAT THE EXISTENCE OF 23 PARTIES IN CLUDING FOUR PARTIES WHO WERE FOUND GENUINE BY THE LEARNED 6 CIT(APPEALS) IN EX PARTE ORDER WERE IN EXISTENCE. THE ASSESSING OFFICER IN RESPECT OF FIVE PARTIES GIVING THEIR DETAILS REPORTED THAT THE ASSESSEE WAS UNABLE TO PROVIDE DETAIL OR PARTICULARS OF SUB SEQUENT PAYMENT MADE TO THEM AMOUNTING TO RS.2,81,452 IN TOTAL. THE ASSESSING OFFICER DID NOT QUESTION THE VERACITY OF PURCHASE S, SALES MADE BY THE ASSESSEE, THE SUNDRY CREDITORS WERE NOT CASH CREDITORS AND THE CREDIT APPEARED ON ACCOUNT OF PURCHASES MADE FROM THEM. THE ASSESSEE SOLD THE GOODS PURCHASED FROM THESE PARTIES AND THE CORRESPONDING SALES WERE TAKEN INTO ACCOUNT. THIS FACT WAS NOT DISPUTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO STATED IN THE REMAND REPORT THAT ASSESSEE HAD FURNISHED PAN OF M/S. LIBERAL EXPORTS WHOSE CLOSING BALANCE WAS SHOWN AT RS.2,54,300 AND ADDITION WAS MADE ON ACCOUNT OF NON - FURNISHING OF PANS. IN VIEW OF FURNISHING DETAILS LIKE CONFIRMATION, PAYMENT PARTICULARS, NOT BEING SUNDRY CREDITORS (AS PER CHART TABULATED AT PAGE NOS. 14 AND 15 OF THE FIRST APPELLATE ORDER), ADDITION OF RS.37,28,895 HAS BEEN DELETED BY THE LEARNED CIT(APPEALS) . H E HAS HOWEVER SUSTAINED THE AMOUNT OF RS.2,81,452 IN RESPECT OF FIVE PARTIES I.E. HAZI ISMAIL HAZI YUNUSH, R.P. KHANNA & CO., RAJ PAL SURINDER KUMAR, SHIVAM OIL MILLS AND TAJ INTERNATIONAL AS THE ASSESSEE COULD NOT FURNISH ANY DETAILS OR PARTICULARS OF SUBSEQUENT PAYMENTS MADE TO THESE PARTIES. THE 7 LEARNED CIT(APPEALS) HAS THUS GIVEN PART RELIEF TO THE ASSESSEE. AS DISCUSSED ABOVE, W E FIND THAT THE FIRST APPELLATE ORDER IS COMPREHENSIVE AND REASONED ONE, HENCE, WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. THE GROUND NO.1 IS ACCORDINGLY REJECTED. 9 . IN RESULT , THE APP EAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN C OURT ON 30 . 1 2 .2014 SD/ - SD/ - ( J.S. REDDY ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 / 1 2 /201 4 MOHAN LAL COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR