DCIT CIR 23(2), MUMBAI V. DIPTI TRADING CO., MUMBAI

ITA 3375/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9216 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE SHRI B. R. BASKARAN , A CCOUNTANT MEMBER AND SHRI SANJAY GARG , J UDIC IAL MEMBER ./ I.T.A. NO. 3375/MUM/2013 ( / ASSESSMENT YEAR: 2009 - 10 ) DY. CIT - CIRCLE 23(2), BUILDING C - 10, 2 ND FLOOR, ROOM NO. 207, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400 051 / VS. DIPTI TRA DING CO. 227, UDYOG SHETRA INDL. ESTATE MULUND GOREGAON LINK ROAD, MULUND (W), MUMBAI - 400 080 ./ ./ PAN/GIR NO. AAAFD 0597 K ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI LOVE KU MAR / RESPONDENT BY : SHRI MEHUL SHAH / DATE OF HEARING : 05.03.2015 / DATE OF PRONOUNCEMENT : 25 .03.2015 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER : TH E PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD COMMISSIONER OF IN COME TAX (APPEALS) (CIT(A) FOR SHORT) DATED 18.02.2013. THE REVENUE HAS AGITATED THE ACTION OF THE L D. CIT(A) IN DELETING THE ADDITION OF RS.17,83,862/ - MADE BY THE A SSESSING OFFICER (A.O.) ON A CCOUNT OF NON - RECONCILIATION OF THE PAYMENTS TO TWO PARTIES. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTED THAT THE ASSESSEE INTER ALIA HAD DEBITED FREIGHT CHARGES OF RS.1,88,55,603/ - . I N ORDER TO CARRY OUT CROS S - VERIFICATION, REQUISITION S U/S.133(6) OF THE INCOME TAX ACT, 1961 (THE 2 ITA NO. 3375/MUM/2013 (A.Y. 2009 - DY. CIT VS. DIPTI TRADING CO. ACT HEREINAFTER) WERE ISSUED TO ELEVEN PARTIES . NO REPLY IN RESPONSE WAS RECEIVED FROM THE TWO PARTIES NAMELY M/S. NAMAKKAL ROADLINES AND M/S. SHIV SHIVANI TRANSPORT . WHEN THE MATTE R WAS DISCUSSED WITH THE ASSESSEE, THE ASSESSEES REPRESENTATIVE EXPRESSED ITS INABILITY STATING THAT IT WAS BEYOND THE CONTROL OF THE ASSESSEE TO PRODUCE THE SAID PARTIES WHO WERE LOCATED AT FAR OFF PLACES. VIDE LETTER DATED 23.12.2011, THE ASSESSEE REQUE STED THE A.O. TO ISSUE SUMMONS U/S.131 OF THE ACT TO THE SAID TWO PARTIES WHO HAD NOT RESPONDED TO THE NOTICES U/S.133(6) OF THE ACT. THE A.O., HOWEVER, OBSERVED THAT THE ASSESSMENT WAS GOING TO GET TIME BARRED AND THAT IT WAS NOT POSSIBLE AND PRACTICABL E ISSUE SUMMONS TO THE SAID PARTIES. HE, FURTHER , OBSERVED THAT THE SAID PARTIES WERE ASSESSEES W ITNESSES AND THE BURDEN WAS UPON THE ASSESSEE TO PRODUCE THEM. HE, THEREFORE, TREATED THE PAYMENTS MADE TO THE ABOVE SAID PARTIES TOTALING TO RS.17,83,862/ AS NON - GENUINE AND ADDED BACK THE SAME IN THE INCOME OF THE ASSESSEE. 3. IN FIRST APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE FILED APPLICATION FOR ADDITIONAL EVIDENCE IN RESPECT OF FREIGHT CHARGES PAID TO THE SAID TWO PARTIES. THE LD. CIT(A) RE MANDED THE SAID EVIDENCE TO THE A.O. FOR HIS REPORT. THE A.O. I N THE REMAND REPORT REPORTED ABOUT THE TRANSACTIONS/EVIDENCES SUBMITTED IN RELATION TO SHIV SHIVANI TRANSPORT. HE, HOWEVER, DID NOT GIVE ANY COMMENT IN RELATION TO M/S. NAMAKKAL ROADLINES. THE LD. CIT(A) AFTER GOING THROUGH THE REMAND REPORT AND CONSIDERING THE OBJECTIONS OF THE ASSESSEE TO THE SAID REMAND REPORT MADE THE FOLLOWING OBSERVATIONS: 4.4 THE APPELLANT HAS RELIED UPON LEDGER ACCOUNT OF THESE TWO PARTIES AS THEY APPEAR IN HIS BOOKS WHILE PRESS ING THE POINT THAT ALL THE PAYMENTS HAVE BEEN MADE BY CHEQUES AGAINST THE BILLS ISSUED BY THESE PARTIES, COPIES OF WHICH WERE ALREADY PROVIDED AS ADDITIONAL EVIDENCE. I HAVE GONE THROUGH THESE BILLS AS WELL AS LEDGER ACCOUNT OF THESE TWO PARTIES. THE A.O. HAS IN THE REMAND REPORT THOUGH DOUBTED THAT THE TRANSACTIONS WITH THE PARTIES CANNOT BE HELD GENUINE OR BEYOND DOUBT, HOWEVER HE CHOSE NOT TO MAKE ANY ENQUIRY TO ASCERTAIN THE FACTS. FURTHER, THIS FACT HAS ALSO NOT BEEN NEGATED BY THE A.O. THAT PAYMENTS H AVE BEEN MADE TO THESE TWO PARTIES BY CHEQUES AND TDS ALSO WERE DEDUCTED IN CASE OF NAMAKKAL ROADLINES AGAINST THEIR BILLS. MERELY DOUBTING GENUINENESS OF TRANSACTIONS CANNOT BE TAKEN AGAINST THE APPELLANT IN ABSENCE OF FINDING TO THAT EFFECT. IN VIEW OF T HIS DISALLOWANCE MADE IN CASE OF THESE TWO PARTIES BY A.O. ARE NOT SUSTAINABLE. THIS VIEW IS SUPPORTED BY DECISION GIVEN BY HONBLE GUJARAT HIGH COURT IN THE CASE OF 3 ITA NO. 3375/MUM/2013 (A.Y. 2009 - DY. CIT VS. DIPTI TRADING CO. COMMISSIONER OF INCOME TAX VS. RANCHHOD JIVABHAI NAKHAVA [2012] 21 TAXMANN.COM 159 (GUJ.), ALREADY CITED BY THE APPELLANT. ACCORDINGLY ADDITIONS MADE OF RS.17,83,862/ - BY WAY OF DISALLOWANCES OF FREIGHT CHARGES PAID TO THESE TWO PARTIES ARE DELETED HEREWITH. GROUND NO. 3 IS ALLOWED. 4. A PERUSAL OF THE ABOVE FINDINGS OF THE LD. CIT(A) REVEAL S THAT ALL THE NECESSARY EVIDENCES SUCH AS LEDGER ACCOUNT OF THE SAID TWO PARTIES , T HE EVIDENCE OF MAKING THE PAYMENT THROUGH BANKIN G CHANNEL, THE COPY OF INVOICE AND FURTHER THAT THE TDS WAS DULY DEDUCTED IN CASE OF NAMAKKAL ROADLINES, ETC., WERE DULY PROD UCED BY THE ASSESSEE. THE A.O. INSTEAD OF VERIFYING THE SAME THROUGH PROPER ENQUIRIES , HAS JUST GIVEN HIS OPINION DOUBTING THE GENUINENESS OF THE TRANSACTION. THE LD. CIT(A) CONSIDERING THE SAID EVIDENCES DELETED THE ADDITIONS MADE BY THE A.O. OBSERVING TH AT THE A.O. HAS NOT GIVEN ANY FINDING THAT THE SAID TRANSACTIONS WERE NOT GENUINE. 5. WE FIND FURTHER THA T THE ASSESSEE NOT ONLY DURING THE ASSESSMENT PROCEEDINGS HAD REQUESTED THE A.O. TO SUMMON THE ABOVE SAID PARTIES, BUT H A D ALSO GIVEN THE NECESSARY E VIDENCES WHICH HE WAS SUPPOSED TO FURNISH AND THEREAFTER THE BURDEN WAS UPON THE A.O. TO MAKE PROPER ENQUIRIES AND CONTRADICT THE SAID EVIDENCES. THE A.O. HAS NOT DONE SAID EXERCISE EITHER DURING THE ASSESSMENT PROCEEDINGS , OR DURING THE REMAND PROCEED INGS. UNDER SUCH CIRCUMSTANCES , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE IMPUGNED ADDITIONS WHILE RELYING UPON THE EVIDENCE BY THE ASSESSEE IN THIS RESPECT. THE ORDER OF THE LD. CIT(A) IS, THEREFORE, UPHELD. 6. IN THE R ESULT, THE APPEAL OF THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 25 , 201 5 SD/ - SD/ - ( B. R. BASKARAN ) (S ANJAY GARG) / A CCOUNTANT MEMBER / J UDICIAL MEMBER MUMBAI ; DATED : 25 . 0 3 .201 5 4 ITA NO. 3375/MUM/2013 (A.Y. 2009 - DY. CIT VS. DIPTI TRADING CO. . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI