The ACIT, Circle-4(1), Visakhapatnam V. M/s Vijaya Lakshmi Steel Wires P Ltd, Visakhapatnam

ITA 383/VIZ/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2766 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 16-08-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: K T D SRINIVAS
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

ITA NO.383 OF 2007 VIJAYALAKSHMI STEEL WIRES (P) LT D., VISAKHAPATNAM PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 383 /VIZAG/20 07 ASSESSMENT YEAR: 2004 - 05 ASSISTANT COMMISSION ER OF INCOME TAX, CIRCLE-4(1) VISAKHAPATNAM VS. VIJAYA LAKSHMI STEEL WIRES (P) LTD., VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO:AABCV 2661 C APPELLANT BY: SHRI D.S.SUNDER SINGH, DR RESPONDENT BY: SHRI K.T.D. SRINIVAS, CA ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 13.6.2007 PASSED BY LEARNED CIT(A)-II, VISAKHAPATNA M AND IT RELATES TO THE ASSESSMENT YEAR 2004-05. THE REVENUE IS CHAL LENGING THE DECISION OF THE LEARNED CIT (A) IN DELETING THE ADD ITION TO THE EXTENT OF RS.10.00 LAKHS OUT OF CREDIT BALANCE STANDING IN THE NAME OF M/S HIRA STEELS LTD. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE A ND SALE OF MS/HS WIRES. THE ASSESSEES CASE FOR ASSESSMENT YEA R 2004-05 WAS TAKEN UP FOR SCRUTINY AND FOR DEFICIENCIES IN THE B OOKS OF ACCOUNT THE ASSESSEE AGREED FOR AN ADDITION OF RS.10.00 LAKHS. BESIDES THE ABOVE, THE ASSESSING OFFICER CALLED FOR CONFIRMATION LETTE RS FROM THE SUNDRY CREDITORS FOR THE BALANCES SHOWN AGAINST THEIR RESP ECTIVE NAMES IN THE BALANCE SHEET. THE ASSESSEE COULD PRODUCE CONFIRMAT ION LETTERS FROM CERTAIN CREDITORS. OUT OF THE REMAINING CREDITORS, A SUM OF ITA NO.383 OF 2007 VIJAYALAKSHMI STEEL WIRES (P) LT D., VISAKHAPATNAM PAGE 2 OF 4 RS.11,47,135/- WAS STANDING IN THE NAME OF M/S HIRA STEELS LTD., RAIPUR AND IN THE ABSENCE OF A CONFIRMATION LETTER FROM THAT PARTY, THE ASSESSING OFFICER ADDED THE SAME TO THE TOTAL I NCOME OF THE ASSESSEE. BEFORE LEARNED CIT (A) THE ASSESSEE PRODU CED ACCOUNT COPY OBTAINED FROM M/S HIRA STEELS LTD., AND ALSO A RECO NCILIATION STATEMENT RECONCILING THE BALANCES BETWEEN THE ASSESSEES BOO K AND CREDITORS BOOK. FOR THE SAKE OF CONVENIENCE, THE SAID RECONCI LIATION STATEMENT IS EXTRACTED BELOW: BALANCE AS PER THE ASSESSEE COMPANYS BOOKS OF ACCO UNT 1,147,135 ADD: CHEQUES ISSUED TO THE HIRA STEEL LTD ON 31-3- 04 VIDE CH NO.317 BUT NOT ENTERED BY THE PARTY 268,323 ADD: 31-1- 2004 DISCOUNT AMOUNT DEBITED TO PARTY A/C BUT NOT ENTERED IN M/S HIRA STEELS LTD 2,023 TOTAL 1,417,481 LESS: PAYMENT PAI D TO M/S HIRA STEELS LTD BY M/S VIJAYA STEEL CORPORATION VIDE CH NO.982853 ENTERED AS THOU GH RECEIVED FROM THE COMPANY. SINCE THERE WAS NO ADVIS E FROM M/S VIJAYA STEEL CORPORATION BEFORE 31-3- 2004 THE COMPANY COULD NOT GIVE EFFECT TO THE SAME BEFORE TH AT D ATE. HOWEVER, ON RECEIPT OF THE ADVISE EFFECT WAS G IVEN DURING 2004-05 F Y. 1,000,000 BALANCE AS PER THE BOOKS OF M/S HIRA STEELS LTD 417,481 THE LEARNED CIT (A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THE ADDITIONAL EVIDENCES FILED BY THE AS SESSEE. THE ASSESSING OFFICER EXPRESSED OPINION THAT THE SUM OF RS.10.00 LAKHS ADJUSTED BY M/S HIRA STEELS LTD. WOULD BE ASSESSABL E IN THE HANDS OF THE ASSESSEE AS INVESTMENT FROM UNEXPLAINED SOURCES . HOWEVER, THE LEARNED CIT (A) DELETED THE IMPUGNED ADDITION OF RS .11,47,135/-. IN THE APPEAL FILED BEFORE US, THE REVENUE IS CONTESTI NG THAT THE SUM OF RS.10.00 LAKHS RECEIVED FROM M/S VIJAYA STEELS CORP ORATION BY M/S HIRA STEELS LTD., IS TAXABLE IN THE HANDS OF THE AS SESSEE. ITA NO.383 OF 2007 VIJAYALAKSHMI STEEL WIRES (P) LT D., VISAKHAPATNAM PAGE 3 OF 4 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. THE SUBMISSION OF THE LEARNED AUTHORISED RE PRESENTATIVE WAS THAT THERE WAS A DEBIT BALANCE OF RS.12.03 LAKHS IN THE NAME OF M/S VIJAYA STEELS CORPORATION AND A CREDIT BALANCE OF R S.11.47 LAKHS IN THE NAME OF M/S HIRA STEELS LTD., IN ITS BOOKS AS ON 31 -3-2004. THE DEBTOR M/S VIJAYA STEEL CORPORATION EFFECTED A PAYM ENT OF RS.10.00 LAKHS ON BEHALF OF THE ASSESSEE TO M/S HIRA STEELS LTD., A CREDITOR OF THE ASSESSEE. THE ENTRIES OF THE SAID PAYMENT WERE GIVEN EFFECT TO IN THE SUCCEEDING FINANCIAL YEAR. ACCORDING TO THE LEA RNED AUTHORISED REPRESENTATIVE SUCH KIND OF ADJUSTMENTS ARE VERY MU CH IN VOGUE IN TRADING CIRCLES AND IT WILL NOT GIVE RISE TO ANY UN DISCLOSED INCOME. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE FI LED A COPY OF LETTER DATED 10-11-2009 GIVEN BY M/S VIJAYA STEELS CORPORA TION TO THE ASSESSEE CONFIRMING PAYMENT OF RS.10.00 LAKHS TO M/ S HIRA STEELS LTD., ON BEHALF OF THE ASSESSEE. 4. ON THE OTHER HAND THE LEARNED DEPARTMENTAL R EPRESENTATIVE SUBMITTED THAT THE ASSESSEE DID NOT FILE THE DETAIL S CALLED FOR BY THE ASSESSING OFFICER DESPITE GIVING SEVERAL OPPORTUNIT IES. ACCORDINGLY HE SUBMITTED THAT THE ENTIRE ISSUE NEEDS TO BE REEXAMI NED BY THE ASSESSING OFFICER. 5. ON PERUSAL OF RECORD, WE NOTICE THAT THE ASS ESSEE HAS FILED THE RECONCILIATION STATEMENT BEFORE THE LEARNED CIT (A) AND IN THE REMAND REPORT THE ASSESSING OFFICER EXPRESSED HIS OPINION ABOUT THE TAXABILITY OF RS.10.00 LAKHS. HOWEVER, THE SUBMISSION MADE BY THE LEARNED AUTHORISED REPRESENTATIVE AND THE DETAILS FURNISHED BY HIM BEFORE US FOR THE FIRST TIME ARE AGAINST THE OPINION EXPRESSE D BY THE ASSESSING OFFICER IN THE REMAND REPORT. IN VIEW OF THE ABOVE , WE FIND FORCE IN THE SUBMISSIONS OF LEARNED DEPARTMENTAL REPRESENTAT IVE THAT THE IMPUGNED ISSUE NEEDS TO BE EXAMINED AFRESH AT THE E ND OF THE ITA NO.383 OF 2007 VIJAYALAKSHMI STEEL WIRES (P) LT D., VISAKHAPATNAM PAGE 4 OF 4 ASSESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORD ER OF THE LEARNED CIT (A) AND REMIT THE MATTER BACK TO THE FILE OF TH E ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ISSUE AFRESH IN AC CORDANCE WITH THE LAW, AFTER TAKING INTO ACCOUNT ALL THE MATERIALS TH AT WERE/MAY BE FILED BY THE ASSESSEE. THE ASSESSEE MAY BE GIVEN NECESSAR Y OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 8 TH OCTOBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN ) JUDICIAL MEMBER ACCOUNTANT M EMBER PVV/SPS VISAKHAPATNAM, DATE:08-10-2010 COPY TO 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 4(1), VISAKHAPATNAM 2 M/S VIJAYALAKSHMI STEEL WIRES (P) LTD., PLOT NO.6 9 & 70 D BLOCK AUTONAGAR, VISAKHAPATNAM 3 4. THE CIT II, VISAKHAPATNAM THE CIT(A)-II, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM