Umesh Manohar Sharma., Belgaum V. Asst. Commissioner of Income Tax, Circle-1, Belgaum

ITA 372/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88750 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: U M SHARMA
• Keywords: Principle of natural justice
• Section: 133(6); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BABNSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 372 /PNJ/2014 (ASST. YEAR : 200 8 - 0 9 ) UMESH MANOHAR SHARMA, SHARMA MACHINE TOOLS, D - 83, INDUSTRIAL ESTATE, BELGAUM . VS. A CIT, CIRLCE - 1, BELGAUM. PAN NO. AEFPS 2664 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U . M . SHARMA ASSESSEE. DEPARTMENT BY : SHRI R. DURAI PANDIAN - D.R. DATE OF HEARING : 22 / 0 1 /2015 . DATE OF PRONOUNCEMENT : 1 1 / 0 2 /201 5 . O R D E R PER D.T. GARASIA , J .M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A), BELGAUM DATED 0 3 /0 8 /201 3 FOR THE A.Y. 200 8 - 0 9 . 2. THE FOLLOWING GROUNDS ARE RAISED BY THE ASSESSEE : 1. ON THE FACTS OF CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) , BELGAUM OUGHT TO HAVE ACCEPTED THE EXPLANATION AND EVIDENCES FURNISHED AND DELETED THE ADDITION OF RS. 9,60,302/ - 2 2. THE LD. CIT(A) , BELGAUM OUGHT TO HAVE CONSIDERED THE FACT THE APPELLANT HAS FURN ISHED CONFIRMATION LETTER OBTAINED FROM THE CREDITOR DURING REMAND PROCEEDINGS WHICH IS EXAMINED BY A.O. AND HENCE, ADDITION BE DELETED. 3. FOR THESE AND SUCH OTHER GROUNDS WHICH MAY BE ARGUED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 16,45,670/ - ON 29/09/2008 . THE ASSESSEE IS A PROPRIETOR OF M/S. SHARMA MACHINE TOOLS. THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 9,60,302/ - ON ACCOUNT OF SUNDRY CREDITORS - M/S. LEESA STEELS . THE ASSESSING OFFICER WAS OF THE VIEW THAT M/S. LEESA STEELS LIABILITY DOES NOT EXIST , THEREFORE HE MADE THE ADDITION. 4 . THE MATTER WAS CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER: - 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE APPELLANT, REMAND REPORT OF THE ASSESSING OFFICER, COMMENTS OF THE APPELLANT ON THE REMAND REPORT AND ALSO PERUSED THE ASSESSMENT ORDER. DURING THE REMAND PROCEEDINGS, THE A.O HAS RE EXAMINED ALL THE ISSUES. REGARDING THE ISSUE OF UNSECURED LOAN OF RS. 34,52,580/ - , - THE ASSESSEE HAS FURNISHED PROOF REGARDI NG THE IDENTITY OF SHRI MUKESH SHARMA, THE CREDITOR, HIS CREDITWORTHINESS AND ALSO THE GENUINENESS OF TRANSACTION. THE AO IN HIS AFORESAID REMAND REPORT IS SATISFIED ABOUT THE GENUINENESS OF UNSECURED LOAN FROM SHRI MUKESH SHARMA. THE ASSESSEE HAS FILED TH E COPY OF THE PASSPORT OF MUKESH SHARMA, AN AFFIDAVIT CONFIRMING LOAN AND COPIES OF IT RETURNS FILED BY MUKESH SHARMA I N GERMANY. THE LOAN AMOUNT HAS BEEN ROUTED THROUGH BANKING CHANNELS. I N VIEW OF THE ABOVE, HOLDING THE UNSECURED LOAN FROM SHRI MUKESH S HARMA AS GENUINE, 3 THE ADDITION OF RS. 34,52,580! - MADE UNDER SECTION 68 IS ORDERED TO BE DELETED. 6.1 THE OUTSTANDING LIABILITY OF RS.960,302/ - SHOWN AGAINST THE NAME OF M/S. LEESA STEELS, PUNE HAS NOT BEEN PROVED TO BE GENUINE BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS OR REMAND PROCEEDINGS AND THE APPELLANT PROCEEDINGS. THE SAID M / S. LEESA STEELS HAVE REPORTED THE BALANCE TO BE NIL BEFORE THE AO . IN ITS AFORESAID SUBMISSION DATED 30/10/2013, THE ASSESSEE HAS STATED THAT HE IS FOLLOWING UP THE MATT ER WITH THE SAID PARTY AND SUBSEQUENTLY DID NOT SUBMIT ANY CONFIRMATION OR CORRESPONDENCE IN THIS REGARD IN THE APPELLATE PROCEEDINGS. DURING THE REMAND PROCEEDING BEFORE THE AO, THE ASSESSEE PRODUCED A LETTER DATED 20.02.2014 AND UNSIGNED COMPUTER PRINT O F LEDGER ACCOUNT OF SHARMA MACHINE TOOLS IN THE BOOKS OF M / S LEESA STEELS, PUNE. THE RELEVANT PORTION OF THE LETTER IS RE PR ODUCED HEREINBELOW: WE HEREBY CONFIRMING THAT THE BALANCE RECEIVABLE FROM M/S SHARMA MACHINE TOOLS, AS ON 31.03.2008 IS RS. 9,60,30 2/ - . BY OVERLOOK MY NEW CLERK, EARLIER WE HAD SEND CONFIRMATION LETTER STATING THAT THE BALANCE IN OUR BOOKSS NIL AND NO TRANSACTION. NOW, THAT SHRI UMESH SHARMA HAS APPROACHED AND ASKED US TO RE - VERIFICATION THE BOOKS ON RE VERIFICATION IT IS FOUND THA T THE SAID BALANCE RECEIVABLE FROM MIS SHARMA MACHINE TOOLS, OF RS. 9,60,302,7 - 00 AGAINST OUR OUTSTANDING BALANCE. AS THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE SUNDRY CREDITOR AND M /S LEESA STEELS, PUNE IN RESPONSE TO LETTER U/S 133(6) DATED: 09/12/2010 ISSUED BY THE A.O HAD EARLIER STATED THAT THE BALANCE IS RS. NIL AND THE APPELLANT HAS SUBMITTED NO OTHER PROOF TO PROVE THE GENUINENESS OR DI SCREDIT THE EARLIER LETTER OF M/S LEESA STEELS SHOWING NIL BALANCE, THE ADDITION OF RS. 9,60302/ - MADE BY THE A.O IS CONFIRMED. 6.2 THE ASSESSEE SHRI UMESH SHARMA HAS MADE AN I NVESTMENT OF RS. 67,16OOO/ - TOWARDS HIS 50% SHARES IN THE ALKON RESORT, GOA WHICH HAS BEEN DULY REFLECTED IN HIS BALANCE SHEET. THE A O IN HIS AFORESAID REMAND REPORT IS SATISFIED ABOUT THE INVESTMENT MADE BY THE APPELLANT SHRI. UMESH SHARMA IN ALKON RESORT. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS NOT GI VEN ANY BASIS FOR MAKING AN ADDITION OF RS. 5,05,570/ - . IN 4 VIEW OF THE ABOVE THE ADDITION OF RS. 5,05,570/ - MADE BY THE AD IS ORDERED TO BE DELETED . 6.3 THE ASSESSING OFFICER MADE AN ADDITION OF RS. 3,99,204 / - AS ASSESSEE COULD NOT PRODUCE THE DETAILS OF TO T AL WAGES PAID OF RS.19, 01 ,512/ - BEFORE THE ASSESSING OFFICER. DURING THE COURSE OF REMAND PROCEEDINGS THE ASSESSEE PRODUCED THE REGISTER OF WAGES AND RELEVANT VOUCHERS EVIDENCING PAYMENT OF RS.19, 0 1,512/ - TOWARDS WAGES. THE A O IS SATISFIED ABOUT THE GENUINENESS OF SUCH PAYMENTS. IN THIS VIEW OF THE MATTER, THE ADDITION OF RS.3, 99,204/ - MADE BY ASSESSING OFF ICER IS ORDERED TO BE DELETED. 6.4 IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 5. DURING THE COURSE OF HEARING, LEARNED A R FILED THE WRITTEN SUBMISSIONS WHICH READS AS UNDER: - THIS APPEAL FILED AGAINST THE ADDITION OF RS. 9,60,302.00 MADE TOWARDS UNCONFIRMED SUNDRY CREDITOR M/S. LEESA STEEL. THE FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS. 16,45,670.00. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMEN T PROCEEDINGS A 0 SENT TO ONE OF THE SUNDRY CREDITORS N/S. LEESA STEELS(PARA 5 PAGE 3 OF ASSESSMENT ORDER). THIS SUNDRY CREDITOR IN ITS LETTER MENTIONED BALANCE AS NIL AND THEREFORE AO ADDED THE BALANCE STANDING IN THE NAME OF LEESA STEEL OF RS. 9,60,302.0 0 TO INCOME CONSIDERING THAT THE LIABILITY DOES NOT EXIST. ASSESSEE FILED APPEAL BEFORE THE C I T (A), BELGAUM. DURING THE COURSE DF APPEAL PROCEEDINGS C I T (A) CALLED FOR REMAND REPORT FROM THE A 0. DURING THE REMAND PROCEEDINGS ASSESSEE SUBMITTED COPY O F THE CONFIRMATION LETTER OBTAINED FROM LEESA STEEL ON 2002.2014 (PARA 5 PAGE OF 8 AND 9 OF C I T(A), ORDER). THE C I T (A), BELGAUM CONFIRMED THE ADDITION STATING THAT APPELLANT HAS SUBMITTED NO OTHER PROOF TO PROVE THE GENUINENESS OF CREDITOR. THEREFORE, THIS APPEAL IS FILED FOR YOUR KIND CONSIDERATION. THE ASSESSEE HAS FILED CONFIRMATION LETTER BEFORE A C DURING REMAND PROCEEDINGS. THE A 0 HAS SIMPLY COMMENTED THAT THE LETTER ARID EDGER ACCOUNT APPEARS TO BE AN AFTERTHOUGHT. THE ASSESSING OFFICER OUGH T TO HAVE MADE FRESH ENQUIRES IN ORDER TO FIND OUT CORRECTNESS OF THE BALANCE OF LISA STEEL WITH THE BALANCE APPEARING IN THE BOOKS OF APPELLANT. 5 IT IS THEREFORE, PRAYED THAT THE ADDITION MADE BY A 0 WITHOUT MAKING PROPER ENQUIRES BE DELETED. I HOPE THAT Y OUR HONOUR WILL CONSIDER MY REQUEST IN THE INTEREST ON NATURAL JUSTICE AND EQUITY. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF SUNDRY CREDITORS OF RS. 9,60,302/ - . WE FIND THAT DURING THE COURSE OF HEARING BEFORE ASSESSING OFFICER, THE ASSESSING OFFICER HAS SEN T A LETTER IN THE NAME OF M/S. LEESA STEELS, PU NE AND M/S. LEESA STEELS HAS SENT A LETTER THAT NO LIABILITY EXIST ENT OF M/S. UMESH SHARMA STEELS, BUT BY OVERSIGHT IN THE BOOKS OF ACCOUNTS , THE LIABILITY EXIST ENT OF M/S. SHARMA MACHINE TOOLS , WHOSE OWNER IS OF SHRI UMESH SHARMA - ASSESSEE ONLY. THEREFORE, THEY HAVE GIVEN CONFIRMATION LETTER. WE HAVE GONE THROUGH THE CONFIRMATION LETTER AND M/S. LEESA STEELS HAS ALREADY BEEN ACCEPTED THE LIABILITY, MOREOVER THEY HAVE ALSO DEBITED IN THE P & L ACCOUNT , T HEREFORE WE ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 1 1 T H FEBRUARY , 201 5 ). S D / - S D / - (P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 1 T H FEBRUARY , 201 5 . 6 VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI