M/s. Varun Beverages Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 3596/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97446 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 08-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR
• Assessee Lawyers: V K JAIN
• Keywords: Bogus purchase; Additional evidence
• Section: 133(6); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SH. G.C.GUPTA, V.P. AND SH. PRASHAN T MAHARISHI, AM ITA NO. 3596/DEL/20 13: ASSTT. YEAR: 2009-10 VARUN BEVERAGES LTD., F-2/7, OKHLA INDUSTRIAL AREA; PHASE-I NEW DELHI VS ADDL. CIT RANGE-17 NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAACV2678L ASSESSEE BY : SH. V.K.JAIN, CA REVENUE BY : J.P.CHANDREKAR, SR. DR DATE OF HEARING : 08.09.2015 DATE OF PRONOUNCEMENT : 08/10/2015 ORDER PER PRASHANT MAHARISHI, AM: 01. THIS APPEAL IS PREFERRED BY ASSESSEE AGAINST THE OR DER OF CIT(A)-XIX, NEW DELHI DATED 22 ND MARCH, 2013 CONFIRMING THE ADDITION OF RS. 8,41,25 7/- MADE BY THE ASSESSING OFFICER REPRESENTING CREDIT B ALANCE OF M/S. BAJAJ ELECTRICALS U/S 41(1) OF THE INCOME TAX ACT AND NOT ALLOWING CREDIT OF TDS OF RS 26,188/-. 02. THE BRIEF GROUNDS OF THE APPEAL WITH RESPECT TO TH E ADDITION U/S 41(1) OF THE ACT OF RS. 8,41,257/- IS THAT THOUGH THERE IS NO REMISSION OR CESSATION OF ANY TRADING LIABILITY AND FURTHER THE GOODS PURC HASED FROM THE CREDITOR IS CAPITALIZED IN THE BOOKS OF ACCOUNT AND NOT DEBITED TO PROFIT & LOSS ACCOUNT, THEREFORE, THE APPLICABILITY OF SECTION 41 (1) DOES NOT ARISE. FURTHER THERE WAS A GRIEVANCE FOR NOT ALLOWING CRED IT FOR TDS TO THE EXTENT OF RS. 26188/-. ITA NO.3596/DEL/2013 VARUN BEVERAGES LTD. A Y 2009-10 2 03. THE BRIEF FACT OF THE CASE IS THAT ASSESSEE IS ENGA GED IN THE BUSINESS OF MANUFACTURING AND TRADING OF SOFT DRINKS, PLASTIC S HELLS & LUG CAPS. RETURN OF INCOME FOR AY 2009-10 WAS FILED ON 30 TH SEPTEMBER, 2009 SHOWING INCOME OF RS. 13,60,27,806/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF SOFT DRINK S, PLASTIC SHELLS & LUG CAPS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A O NOTICED THAT ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS. 84,36,39 ,323/- AND 133(6) NOTICES WERE ISSUED TO 12 PARTIES OUT OF WHICH 11 PARTIES CONFIRMED THE ACCOUNTS , HOWEVER CONFIRMATION OF M/S BAJAJ ELECT RICALS PVT. LTD. FOR RS. 8,41,257/- WAS NOT RECEIVED. THEREFORE, AO MADE AN ADDITION OF RS. 8,41,257/- U/S 41(1) OF THE ACT. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND BEFORE THE CIT(A) ASSESSEE FILED CONFIRM ATION OF BAJAJ ELECTRICALS PVT. LTD. ASSESSEE SUBMITTED THAT BEF ORE THE ASSESSING OFFICER DUE TO ERROR THE CREDIT BALANCE OF RS. 8,41,257/- W AS STATED IN THE NAME OF M/S BAJAJ ELECTRICALS LTD. HOWEVER, THE ACTUAL BALA NCE WAS RS. 7,08,477/-. FURTHER ADDRESS OF M/S BHATINDA GAS INDUSTRIAL PVT. LTD. WAS GIVEN TO THE ASSESSING OFFICER AND THEREFORE 133(6) NOTICES INTE NDED TO BE SERVED TO THE BAJAJ ELECTRICALS LTD. COULD NOT BE SERVED. ASSESS EE SUBMITTED ADDITIONAL EVIDENCE IN THE FORM OF THE ACCOUNT OF THE BOTH THE PARTIES TO SHOW THE ERROR AND ALSO CONFIRMATION OF THE PARTIES WITH CORRECT A DDRESS. THE CIT(A) DID NOT ADMIT ADDITIONAL EVIDENCE SUBMITTED BY THE ASSE SSEE HOLDING THAT PROVISIONS OF RULE 46A ARE NOT SATISFIED AND THEREF ORE IN ABSENCE OF CONFIRMATION IN RESPONSE TO NOTICE U/S 133(6) HE C ONFIRMED THE ADDITION U/S 41(1) OF THE ACT. HE FURTHER, HELD THAT ALTERNATIVE LY THIS AMOUNT IS REQUIRED TO BE ADDED U/S 37(1) AS BOGUS PURCHASE. AGAINST TH E ORDER OF THE CIT(A), THE ASSESSEE IS BEFORE US. 04. BEFORE US, LD. AR OF THE ASSESSEE REFERRED PARA N O. 2 OF THE ASSESSMENT ORDER STATING THAT IN ABSENCE OF 133(6) CONFIRMATIO N THE ADDITION IN THE HANDS OF THE ASSESSEE U/S 41(1) CANNOT BE MADE. HE FURTHER, SUBMITTED THAT THE CIT(A) HAS ERRED NOT ADMITTING ADDITIONAL EVIDE NCES FILED AND ITA NO.3596/DEL/2013 VARUN BEVERAGES LTD. A Y 2009-10 3 CONFIRMING THE ACTION OF AO. THEREFORE, HE SUBMITTE D THAT THE CIT(A) SHOULD HAVE CONSIDERED ADDITIONAL EVIDENCE AND DECI DED THE ISSUE ON MERITS. 05. LD. DR FOR THE REVENUE RELIED UPON THE ORDERS OF LO WER AUTHORITIES AND SUBMITTED THAT ADDITION HAS BEEN RIGHTLY MADE. 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND THE FACTS N ARRATED BY THE LOWER AUTHORITIES ON ADDITION U/S 41(1) OF THE ACT WITH RESPECT TO THE CREDIT BALANCES OF BAJAJ ELECTRICALS LTD. FIRSTLY AS STATE D BEFORE CIT (A) THE ASSESSEE DID NOT GIVE THE CORRECT ADDRESS OF THE PA RTY AND SECONDLY THE AMOUNT GIVEN AS OUTSTANDING OF THE PARTY OF RS. 8,4 1,257/- WAS ALSO INCORRECTLY MENTIONED. ACCORDING TO THE ASSESSEE, ASSESSEE GAVE ADDRESS OF BHATINDA INDUSTRIAL GAS PVT. LTD. INSTEAD OF BAJAJ ELECTRICALS LTD. AND FURTHER THE AMOUNT OF ALSO STATED TO BE RS. 8,41,25 7/- INSTEAD OF CORRECT BALANCE OF RS. 7,08,477/-. IT IS NOT THE CASE OF TH E ASSESSEE THAT CORRECT ADDRESS WAS GIVEN OF THE SUNDRY CREDITORS AND AT TH AT ADDRESS INQUIRY LETTER U/S 133(6) IS RECEIVED AND NO RESPONSE WAS RECEIVED FROM CREDITOR. THEREFORE, THE ARGUMENTS OF THE AR FOR DELETION OF ADDITION CANNOT BE ACCEDED TO. THE CIT(A) HAS ALSO ERRED IN NOT ADMITT ING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. BEFORE THE ASSESSIN G OFFICER, IT IS A FACT THAT 133(6) NOTICES WERE ISSUED TO 12 PARTIES AND OUT OF THOSE 11 PARTIES PRESUMABLY SATISFACTORILY EXPLAINED BY THE ASSESSEE . THERE MAY BE SOME REASON OR CLERICAL ERROR BECAUSE OF WHICH ASSESSEE COULD NOT GIVE THE CORRECT DETAILS. IN THESE CIRCUMSTANCES AS SUBSTANT IALLY THE CLAIM OF THE ASSESSEE IS CORRECT IN CASE OF 11 PARTIES IT WOULD BE IN THE INTEREST OF JUSTICE THAT ONE MORE OPPORTUNITY IS AFFORDED TO ASSESSEE TO SUBSTANTIATE ITS CLAIM FOR CREDITOR OUTSTANDING IN CASE OF BAJAJ ELECTRICA L LTD. THEREFORE, WE RESTORE THE MATTER BACK TO THE FILE OF THE CIT(A) W ITH DIRECTION TO ADMIT ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE AND AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE AS WELL AS T HE ASSESSING OFFICER AS PROVIDED UNDER RULE 46A OF THE INCOME TAX RULES, 1 962, DECIDE THE ISSUE ITA NO.3596/DEL/2013 VARUN BEVERAGES LTD. A Y 2009-10 4 ON MERIT ABOUT THE APPLICABILITY OF SECTION 41(1) OR 37(1) OF THE ACT. IN THE RESULT THE GROUND NOS. 2 AND 3 OF APPEAL OF THE ASS ESSEE WITH RESPECT TO ADDITION OF CREDIT BALANCE OF BAJAJ ELECTRICALS LTD . OF RS 8,41,257/ ARE ALLOWED FOR STATISTICAL PURPOSES. 07. GROUND NO. 4 OF THE APPEAL RELATES TO NOT GRANTING CREDIT OF RS. 26,188/- BEING TDS AMOUNT. BEFORE THE CIT(A), THE ASSESSEE D OES NOT FILE DETAILS OF CREDIT CLAIM AND THEREFORE THE CIT(A) HAS DISMISSED THIS APPEAL STATING THAT ASSESSEE HAS FAILED TO ESTABLISH HIS CLAIM. REGARDI NG THIS, WE DIRECT THE CIT(A) TO CONSIDER THE CLAIM OF THE ASSESSEE PROVI DED THE CLAIM OF THE ASSESSEE IS PROPERLY SUPPORTED ALONG WITH CERTIFICA TES OF TDS ISSUED BY VARIOUS DEDUCTORS IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, THAT THE ISSUE MAY BE DECIDED AFTER PROPER VERIFICATION AND GIVING APPROPRIATE OPPORTUNITY TO BOTH THE PARTIES AND THEN DECIDE THE ISSUE ON ME RITS. THEREFORE, GROUND NO. 4 OF THE APPEAL IS ALLOWED. 08. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 08/10/ 2015) SD/- SD/- (G.C.GUPTA) (PRASHANT MAHARISHI) VICE PRESIDENT ACCOUNTANT ME MBER DATED: 08/10/2015 *B. RUKHAIYAR* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR ITA NO.3596/DEL/2013 VARUN BEVERAGES LTD. A Y 2009-10 5 DATE INITIAL 1. DRAFT DICTATED ON 15/09/2015 2. DRAFT PLACED BEFORE AUTHOR 15/09/2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.