Sarang Sureshrao Sadhu, Nagpur V. Income tax Officer Ward 1(4), Nagpur

ITA 348/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1722 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: SARANG S SADHU
• Keywords: Peak credit; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER ITA NO. 348/NAG./2013 ( ASSESSMENT YEAR : 2008-09 ) SARANG SURESHRAO SADHU 19, WARDHA RAOD, HINDUSTAN COLONY NAGPUR 400 015 PAN BAIPS8798A APPELLANT V/S INCOME TAX OFFICER WAD-1(4), MECL BUILDING DR. BABASAHEB AMBEDKAR BHAWAN SEMINARY HILLS, NAGPUR 440 006 .... RESPONDENT ASSESSEE BY : SHRI SARANG S. SADHU REVENUE BY : SHRI NARENDRA KANE DATE OF HEARING 20.07.2015 DATE OF ORDER 21.08.20 15 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS EMANATING FROM THE IMPUGNED ORDER DATED 18 TH JULY 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS), NAGPUR, FOR THE ASSESSMENT YEAR 2008-09. THE GROUNDS RAISED BY THE ASSESSEE ARE DESCRIPTIVE AS WELL AS N OT CONCISED TO DISTINCTLY IDENTIFY THE ISSUES INVOLVED. IN GROUND NO .2, THE ISSUE INVOLVED HAS BEEN MIXED UP BY THE APPELLANT. HOWEVER, AT THE S TART OF THE SARANG SURESHRAO SADHU 2 HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SPEC IFIED THAT THERE WERE TWO ISSUES, ONE WAS IN RESPECT OF DISALLOWANCE O F VALUE ADDED TAX (VAT) WHICH WAS SHOWN AS PAYABLE AMOUNTING TO ` 35,426. THE SECOND ISSUE IS IN RESPECT OF IMPUGNED ADDITION FOR PEAK CRE DIT OF ` 1,34,275. THE LEARNED COUNSEL FOR THE ASSESSEE PLEADED THAT THE SE TWO ISSUES MAY BE ALLOWED TO BE ADDRESSED. CONSIDERING THE TRIFLE NAT URE OF THE ISSUE, THE PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE IS ALLOWED AND THE APPEAL IS HEREBY DECIDED ON MERITS AS HEREUNDER. 2. IN RESPECT OF THE FIRST ISSUE, THE ASSESSING OFFICER HAS MENTIONED IN THE CORRESPONDING ASSESSMENT ORDER DATED 22 ND DECEMBER 2010, PASSED UNDER SECTION 143(3) OF THE ACT THAT THE ASSESSEE, IN INDIVIDUAL CAPACITY, IS IN THE BUSINESS OF TRADING OF PLASTIC DISPOSABLES. THE ASSESSEE HAD SHOWN IN THE ACCOUNTS AN AMOUNT OF ` 35,426, AS PAYABLE. A CHALLAN WAS PRODUCED BUT ACCORDING TO THE ASSESSING OFFICER, IT WAS NOT PAID BEFORE THE DUE DATE, HENCE, BY INVOKING THE PROVISIONS O SECTION 43B, TAXED IN THE HANDS OF THE ASSESSEE. WHEN THE MATTER W AS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE ACTION OF THE ASSE SSING OFFICER WAS CONFIRMED. RATHER, AS PER THE LEARNED CIT(A), THIS GROUND WAS NOT PRESSED. SARANG SURESHRAO SADHU 3 3. AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES, I AM OF THE VIEW THAT EVEN IF THE ASSESSEE MIGHT NOT HAVE CONTESTED A LEGAL ISSUE BUT THE ISSUE IS ULTIMATELY REQUIRED TO BE DECIDED AS PER T HE LAW. AS FAR AS THE INTENTION OF THE ASSESSEE WAS CONCERNED, THIS GROUND WAS RAISED BEFORE THE LEARNED CIT(A). IT IS ALSO NOT IN DISPUTE THAT THE RELEVANT CHALLAN WAS PLACED BEFORE THE ASSESSING OFFICER AND IN THE KNOWLEDG E OF THE AUTHORITIES. A PHOTOCOPY OF THE CHALLAN IS ALSO PLACE BEFORE ME. IT IS EVIDENT THAT THE SAID SUM OF ` 35,426, WAS PAID BY THE ASSESSEE ON 11 TH MAY 2009. THE YEAR UNDER CONSIDERATION IS A.Y. 2008-09 . AS PER THE PROVISIONS OF SECTION 43B, IN RESPECT OF ANYTHING CONTA INED IN ANY OTHER PROVISIONS OF THE ACT, A DEDUCTION ALTHOUGH OTHERWISE ALLOWABLE IN RESPECT OF ANY SUM PAYABLE BY WAY OF TAX SHALL BE ALL OWED IN THAT PREVIOUS YEAR IN WHICH THE SAME IS ACTUALLY PAID. A P ROVISO HAS BEEN ATTACHED TO THIS SECTION ACCORDING TO WHICH ANYTHIN G CONTAINED IN THIS SECTION SHALL NOT APPLY IN RELATION TO ANY SUM WHIC H IS ACTUALLY PAID BY THE ASSESSEE ON / OR BEFORE THE DUE DATE APPLICABLE UNDER SECTION 139(1) OF THE ACT. THAT IN THE ASSESSMENT YEAR 2008-0 9, THE ASSESSEE HAS FILED RETURN OF INCOME ON 26 TH SEPTEMBER 2008. HOWEVER, THE CHALLAN IS DATED 11 TH MAY 2009. NATURALLY, THE REVENUE AUTHORITIES HAVE NOT FAULTED IN DISALLOWING THE SAME FOR THE YEAR UND ER CONSIDERATION. IN MY HUMBLE OPINION, THE ASSESSEE IS AT LIBERTY TO TAK E ANY REMEDIAL SARANG SURESHRAO SADHU 4 RECOURSE AS PER LAW. ON THE BASIS OF REASONS ASSIGNE D HEREIN ABOVE, THIS PART OF THE GROUND IS HEREBY DISMISSED. 4. THE NEXT ISSUE IS IN RESPECT OF THE PEAK CREDIT ASSE SSED BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE. 5. AN INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER TH AT THE ASSESSEE HAD MAINTAINED AN ACCOUNT WITH STATE BANK OF INDIA AND CASH WAS DEPOSITED IN THE SAID ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE DEPOSITS. THE EXPLANATION OF THE ASS ESSEE WAS THAT HE WAS WORKING FOR ANOTHER FIRM AND THE CASH WAS COLLECT ED BY HIM ON BEHALF OF THE SAID FIRM WHICH WAS RETURNED TO THE FIRM. THE ASSESSEE HAS PRODUCED THE BANK STATEMENT TO CORROBORATE THAT THE RE WERE WITHDRAWALS TO MAKE THE PAYMENT TO THE FIRM. HOWEVER , THE ASSESSING OFFICER WAS NOT CONVINCED AND COMPUTED THE PEAK CREDI T WHICH WAS TAXED IN THE HANDS O THE ASSESSEE. 6. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY, THE APPELLANT HAS EXPLAINED THAT HE WAS WORKING FOR M.M. PLOYMERS, AND THE ASSESSEE WAS AUTHORIZED TO COLLECT THE AMOUNT I N CASH ON BEHALF OF THE SAID CONCERN. THE ASSESSEE WANTED TO FURNISH A C ERTIFICATE ISSUED BY M.M. PLOYMERS, AS AN ADDITIONAL EVIDENCE BEFORE THE LEA RNED CIT(A). HOWEVER, THE REQUEST WAS TURNED DOWN AFTER MENTIONING THE PROVISIONS SARANG SURESHRAO SADHU 5 OF RULE 46A OF THE I.T. RULES, 1962. RESULTANTLY, THE ACTION OF THE ASSESSING OFFICER WAS CONFIRMED. 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, I AM OF THE VIEW THAT EVEN IF THERE WAS NO SUFFICIENT REASON ON THE PAR T OF THE ASSESSEE, NOT TO PRODUCE THE SAID EVIDENCE BEFORE THE ASSESSING OFFICER BUT IF AN EVIDENCE IS VITAL IN NATURE TO ARRIVE AT THE JUSTIFIA BLE CONCLUSION, THEN PROVISIONS OF RULE 46A(4), HAS ENSHRINED POWER TO LEAR NED CIT(A), WHICH SAYS THAT NOTHING CONTAINED IN RULE 46A, SHALL EFFECT THE POWER OF LEARNED CIT(A) TO DIRECT THE PRODUCTION OF ANY DOCUMEN TS TO ENABLE THE LEARNED CIT(A) TO DISPOSE OFF THE APPEAL. I, THEREFORE, HOLD THAT IN A SITUATION, AS DESCRIBED BY THE ASSESSEE, THE LEARNED CIT(A) SHOULD HAVE ADMITTED THE ADDITIONAL EVIDENCE SO AS TO DECIDE TH E ISSUE ON MERITS. NEXT, ON MERIT, THE EXPLANATION OF THE ASSESSEE WAS, S INCE BEGINNING IT WAS PLEADED THAT THE AMOUNT DEPOSITED IN THE STATE BA NK OF INDIA DID NOT BELONG TO HIM. A CERTIFICATE ISSUED BY M.M. POLYMERS HAS DECLARED THAT THE ASSESSEE WAS AN AUTHORIZED SALES PROMOTER AND LOOKING AFTER SALES. HE WAS ALSO AUTHORIZED TO COLLECT THE AMOUNT FROM THE DEBTORS. THIS CERTIFICATE IS DATED 15 TH FEBRUARY 2008, I.E., BEFORE THE DATE OF ASSESSMENT ORDER. THE ASSESSING OFFICER COULD HAVE ENQU IRED THE CORRECTNESS OF THE CLAIM BUT FAILED TO DO SO. THE FIRST APPELLATE AUTHORITY HAS NOT ENTERTAINED THE ARGUMENT OF THE ASSESSEE AT ALL. IN MY HUMBLE SARANG SURESHRAO SADHU 6 OPINION, THE ASSESSEE HAS SUBSTANCE IN HIS PLEADINGS THAT IN A SITUATION, WHEN THE AMOUNTS IN QUESTION DID NOT BELONG TO HIM, THEN THERE WAS NO JUSTIFICATION TO TAX AS A PEAK CREDIT IN THE HANDS OF THE ASSESSEE. I, THEREFORE, HOLD THAT IN THE ABSENCE OF ANY CONTRARY MA TERIAL ON RECORD, THE EXPLANATION OF THE ASSESSEE DESERVES TO BE ACCEP TED. I HOLD ACCORDINGLY AND DIRECT TO DELETE THE ADDITION. THIS PART OF THE GROUND IS ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR, DATED: 21 ST AUGUST 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SSISTANT REGISTRAR ITAT, NAGPUR