ITO - 13(2)(4), MUMBAI V. M/s. AJAY KUMAR JINDAL (HUF), MUMBAI

ITA 3397/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0959 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 29-07-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 03-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S SRIVASTAVA
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI A.L. GEHLO T ,(AM) ITA NO.3397/MUM/2007 ASSESSMENT YEAR : 2003-04 INCOME TAX OFFICER-13(2)(4) ROOM NO.477, 4 TH FLOOR AAYAKAR BHAVAN MUMBAI-20. ..( APPELLANT ) VS. M/S. AJAY KUMAR JINDAL (HUF) PROP. M/S. SUJANI INTERNATIONAL 512, ASHIRWAD, AHMEDABAD STREET MUMBAI-400 009. ..( RESPONDENT ) P.A. NO. (AADHM 5918 C) APPELLANT BY : SHRI R.S. SRIVASTAVA RESPONDENT BY : SHRI S ATISH MODY O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 28.2.2007 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2003-04. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE A N HUF IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL. THE RETURN WAS FILED DECLARING TOTAL INCOME OF ` 1,11,823/-. DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSING OFFICER ISSUED NOTICES U/S. 133(6) OF THE INCOME TAX ACT, 1961(THE ACT) TO SOME OF THE PARTIES TO VERIFY THE GENUINENESS OF TRANSACTIONS MADE BY THE ASSESSE E. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE CONFIRMATIONS FROM FO UR ITA NO.3397/M/07 A.Y:03-04 2 PARTIES NAMELY M/S. BHARMAL STEEL TRADERS; M/S. SHAILE SH KUMAR & BROTHERS; M/S. HYMECH ENGINEERS PVT. LTD. AND M/S. VISHAL ENTERPRISES ALONGWITH RECONCILIATION STATEMENT. THE ASSESSING OFFICER WHILE EXAMINING THE DETAILS FILED BY M/S. BHARMAL STEEL TRA DERS NOTICED THAT THE CREDIT BALANCE SHOWN BY THE ASSESSEE WAS AT ` 10,12,782/- COMPARED TO THE PARTYS LEDGER AT ` 2,87,782/-. THE DIFFERENCE OF ` 7,25,000/- WAS ADDED ON THE GROUND THAT NO EXPLANATI ON WAS FURNISHED AND NO DOCUMENTARY EVIDENCE WAS FILED. SIMIL ARLY WHILE EXAMINING THE DETAILS FILED BY M/S. SHAILESH KUMAR & BROTHERS THE ASSESSING OFFICER FOUND DIFFERENCE IN THE CREDIT AND DEBIT BALANCE IN THE BOOKS OF THE ASSESSEE AND THE PARTY AND ACCORDINGLY THE A SSESSING OFFICER MADE THE ADDITION OF THE SAID DIFFERENCE OF ` 17,74,014/-, TREATED THE SAME AS UNEXPLAINED CREDIT BALANCE. IN TH E DETAILS FILED BY M/S. HYMECH ENGINEERS PVT. LTD. THE ASSESSING OFFICER FOUND THAT NO PAYMENTS HAVE BEEN MADE BY THE SAID PARTY DURING THE YEAR AND THE ENTIRE AMOUNT WAS SHOWN AS OUTSTANDING IN THEIR BOOKS. COMPARED TO THIS THE ASSESSEE HAD SHOWN ONLY ` 1,65,933/- AS OUTSTANDING, HENCE, THE ASSESSING OFFICER ADDED THE DIFFERENCE OF ` 34,24,736/- AS UNEXPLAINED CREDIT BY OBSERVING THAT THE ASSESSEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE. THE TOTAL ADDITION THUS MADE CAM E TO ` 59,23,750/-. THE ASSESSING OFFICER AFTER MAKING SOME OTHE R DISALLOWANCES COMPLETED THE ASSESSMENT AT AN INCOME OF ` 61,32,210/- VIDE ORDER DATED 30.3.2006 PASSED U/S.143( 3) OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT THE A SSESSING OFFICER DID NOT FIND ANY DISCREPANCY EITHER IN PURCHASES OR SALES MADE BY THE ASSESSEE, THE PARTIES ACCOUNT TALLIED WITH THAT OF THE APP ELLANT, IN THIS SITUATION IT WAS FOR THE ASSESSING OFFICER TO ACCEPT THE BOO K RESULT OF THE APPELLANT AND IN THIS SITUATION THERE IS NO WAY AN Y ADDITION OR DISALLOWANCE CAN BE MADE AND EVEN IF THE DIFFERENCE IN BALANCES IS NOT ITA NO.3397/M/07 A.Y:03-04 3 RECONCILED BY THE APPELLANT THE SAME CANNOT BE A BASIS FOR MAKING THE ADDITION, DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE DELETION OF ADDITION OF ` 59,23,750/- MADE BY THE ASSESSING OFFICER . 4. AT THE TIME OF HEARING BOTH PARTIES HAVE AGREED T HAT SINCE THE RECONCILIATION OF THE DIFFERENCE IN BALANCES OF THE ABOV E PARTIES IS REQUIRED TO BE EXAMINED AT THE STAGE OF THE ASSESSING OF FICER, THEREFORE, IN THE INTEREST OF JUSTICE THE ISSUE MAY BE R ESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 5. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND MER IT IN THE PLEA OF THE PARTIES THAT AT NO STAGE THE DIFFERENCE IN THE BAL ANCES IS NEITHER RECONCILED BY THE ASSESSEE NOR EXAMINED BY THE ASSESSING OFF ICER INASMUCH HAS IT HAS BEEN OBSERVED BY THE LD. CIT(A) THAT EVEN IF THE DIFFERENCE IN BALANCES IS NOT RECONCILED BY THE APPELLANT , THE SAME CANNOT BE A BASIS FOR MAKING THE ADDITION. ACCORDING TO LAW THE ONUS IS ON THE ASSESSEE TO RECONCILE THE DIFFERENCES IN THE BALAN CES IN THE PARTIES ACCOUNT OR TO GIVE SATISFACTORY EXPLANATION. SI NCE IT HAS NOT BEEN DONE AT ANY STAGE WE ARE OF THE VIEW THAT IN TH E INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FILE OF THE A SSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE REVE NUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK THE MATTER TO T HE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SAME AFRESH IN THE LI GHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDING TO LAW AFTER PRO VIDING ITA NO.3397/M/07 A.Y:03-04 4 REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. T HE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT REVENUES APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29.7.2010. SD/- SD/- (A.L. GEHLOT) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED: 29.7.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.