Kailash Chaudhury, Bhubaneswar V. ITO, Ward-2(3), Bhubaneswar

ITA 386/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7182 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.386 /CTK/2016 ASSESSMENT YEAR : 2009 - 2010 SRI KAILASH CHAUDHURY, M - 139, BARAMUNDA HOUSING BOARD COLONY, BHUBANESWAR. VS. ITO, WARD - 2(3), BHUBANESWAR. PAN/GIR NO. AAJPC 7905 R (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 07 /03 / 2017 DATE OF PRONOUNCEMENT : 07/03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 20.6.2016 , FOR THE ASSESSMENT YEAR 2009 - 10 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE ASSESSMENT AS WELL AS THE FIRST APPEAL ORDER IN QUESTION IS WRONG AND ARBITRARY. 2. FOR THAT THE LEARNED FIRST APPELLATE AUTHORITY NOT CONSIDERED THE ADDITION OF INCOME AS MENTIONED IN THE ORIGINAL ASSESSMENT FRAMED BY THE LEARNED ASSESSING OFFICER REGARDING CREDIT GIVEN BY INDO ASIAN FUSE GEAR LTD. AMOUNTING TO RS.1,55,994.18 EVEN THOUGH RELEVANT DOCUMENTS SUBMITTED AT THE TIME OF ASSESSMENT AS WELL AS AT THE TIME OF HEARING OF FIST APPEAL. 2 ITA NO.386/CTK/2016 ASSESSMENT YEAR :2009 - 2010 3. FOR THAT THE LEARNED FIRST APPELLATE AUTHORITY NOT CONSIDERED THE ADVERTISEMENT EXPENSES WITH TH E COMMENT THAT NO SUCH ADDITION HAS BEEN MADE BY THE AO IN THE FRESH ASSESSMENT IS ARBITRARY AS THE SAID ADDITION WAS MADE IN THE ORIGINAL ASSESSMENT AND REASSESSMENT WAS MADE KEEPING THE DISALLOWANCE OF EXPENSES MADE DURING THE ORIGINAL ASSESSMENT. 4. FOR THAT THE ADDITION OF RS.16,63,418/ - MADE BY THE LEARNED ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AUTHORITY ON THE GROUND OF EXCESS LIABILITIES OVER ASSETS IS NOTHING BUT MISCONCEPTION OF FACTS WHICH IS LIABLE TO BE QUASHED. 3. NOTICE OF HEARI NG WAS SENT TO THE ASSESSEE ON 10.2.2017 BY SPEED POST, WHICH WAS SERVED ON THE ASSESSEE ON 11.2.2017 AS EVIDENCED BY THE ACKNOWLEDGEMENT CARD OF THE INDIAN POST PLACED ON RECORD. 4. WHEN THE CASE WAS CALLED FOR HEARING, N ONE APPEARED ON BEHALF OF THE ASSE SSEE AND NEITHER ANY ADJOURNMENT PETITION WAS FILED. THEREFORE , THE BENCH PROCEEDED TO HEAR AND DISPOSE OF THE APPEAL EXPARTE QUA THE ASSESSEE CONSIDERING THE SUBMISSION OF LD DEPARTMENTAL REPRESENTATIVE AND MATERIALS AVAILABLE ON RECORD. 5. THE BRIEF FAC TS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT WHILE VERIFYING ADVANCES FROM CUSTOMERS THAT ONE CUSTOMER OTDC VIDE ITS LETTER NO.9525/ACCTS - OTDC DTD.22.12.11 STATED THAT IT HAD ISSUED A CHEQUE WORTH RS.16,63,418/ - BEARING NO.572932 ON 30.03.09 AGAINST PURCHASE OF VEHICLE IN THE YEAR 2008 - 09. THE SAID PARTY ALSO INFORMED THAT THE RE WAS NO AMOUNT PAYABLE TO THE ASSESSEE AS ON 31.03.09. THEREFORE, THE ASSESSING OFFICER INFERRED THAT THERE WAS EXCESS LIABILITIES OVER ASSETS TO THE TUNE OF RS. 16,63 ,418/ - LIABLE TO BE ADDED TO THE TOTAL INCOME OF THE 3 ITA NO.386/CTK/2016 ASSESSMENT YEAR :2009 - 2010 ASSESSEE. THE ASSESSEE EXPLAINED THAT THE ADVANCE PAYMENT FROM OTDC OF RS.16,63,418/ - WAS RECEIVED AND SUBSEQUENTLY THE VEHICLE WAS SUPPLIED IN THE NEXT FINANCIAL YEAR AND SALE INVOICE WAS ISSUED. 6. O N APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER OBSERVING THAT THE CONTENTION OF THE ASSESSEE THAT THE SALE WAS EFFECTED AFTER 31.3.2009, THEREFORE, THE AMOUNT PAID BY THE OTDC WAS SHOWN AS A LIABILITY IN THE BALANCE SHEET WAS NOT CORREC T SINCE HAD THE VEHICLE BEEN SOLD TO THE OTDC DURING THE NEXT FINANCIAL YEAR IN THE BOOKS OF THE OTDC, THE ASSESSEE WOULD HAVE BEEN SHOWN AS A DEBTOR AS THE CHEQUE WAS GIVEN BY THE OTDC BEFORE THE END OF THE FINANCIAL YEAR 2008 - 09. 7. LD DEPARTMENTAL REPR ESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 8. AFTER CONSIDERING THE SUBMISSION OF LD DEPARTMENTAL REPRESENTATIVE AND PERUSING THE MATERIALS ON RECORD, I FIND THAT THE ASSESSEE RECEIVED A CHEQUE DATED 30.3.2009 FROM ONE OTDC TOWARDS SALE OF VEHICLE OF RS.16,63,418/ - . THE ASSESSEE HAS SHOWN THIS AMOUNT AS AN ADVANCE RECEIPT FROM OTDC ON THE LIABILITY S IDE OF THE BALANCE SHEET. THE A SSESSING OFFICER CALLED FOR CONFIRMATION FROM OTDC REGARDING THIS AMOUNT, WHO REPLIED THAT NO AMOUNT WAS PAYAB LE TO THE ASSESSEE AS ON 31.3.2009. FROM THIS, THE ASSESSING OFFICER INFERRED THAT THERE WAS EXCESS LIABILITY OF 4 ITA NO.386/CTK/2016 ASSESSMENT YEAR :2009 - 2010 RS.16,63,418/ - SHOWN BY THE ASSESSEE IN ITS BALANCE SHEET. THE CONTENTION OF THE ASSESSEE IS THAT THE VEHICLE WAS SUPPLIED TO OTDC IN THE SUBS EQUENT FINANCIAL YEAR WHEN THE SALE BILL WAS RAISED AND THE SAID ADVANCE WAS ADJUSTED AGAINST THE SAME. THIS CONTENTION OF THE ASSESSEE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. I FIND THAT THE REPLY OF OTDC TO THE DEPARTMENTAL ENQUIRY WAS THAT NO AMOUNT WAS PAYABLE TO THE ASSESSEE AS ON 31.3.2009 MEANING THEREBY THE ENTIRE AMOUNT FOR PURCHASE OF VEHICLE WAS PAID TO THE ASSESSEE. IT IS NOT STATED BY THE OTDC THAT SUM OF RS.16,63,418/ - WAS NOT PAID TO THE ASSESSEE DURING THE FINANCIAL YEAR. THUS, THE SOUR CE OF D EPOSIT OF RS.16,63,418/ - HAS BEEN EXPLAINED BY THE ASSESSEE. FURTHER, NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER OR CIT(A) BY FURTHER INVESTIGATING THE MATTER TO SHOW THAT THE ASSESSEE HAD SUPPLIED THE VEHICLE TO OTDC DURING T HE YEAR 2008 - 09 AND, THEREFORE, THE LIABILITY OF RS.16,63,418/ - WAS BOGUS OR EXCESSIVE. THE LOWER AUTHORITIES HAVE BRUSHED ASIDE THE PLAUSIBLE EXPLANATION OF THE ASSESSEE WITHOUT BRINGING ANY MATERIAL ON RECORD OR INVESTIGATING ANY FURTHER WHICH THEY COUL D HAVE DONE AS PER LAW. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE ADDITION MADE FOR RS.16,63,418/ - ON ACCOUNT OF EXCESS LIABILITY IS NOT SUSTAINABLE AND HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.16,63,418/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 9. THE OTHER ISSUE IS REGARDING REJECTION OF CREDIT GIVEN BY INDO ASIAN FUSE GEAR LTD., FOR RS.1,55,994.18. 5 ITA NO.386/CTK/2016 ASSESSMENT YEAR :2009 - 2010 10. I FI ND THAT THIS ISSUE IS NOT ARISING FROM THE ORDER OF THE ASSESSING OFFICER OR FROM THE CIT (A). THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 07/03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07/03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI KAILASH CHAUDHURY, M - 139, BARAMUNDA HOUSING BOARD COLONY, BHUBANESWAR 2. ITO, WARD - 2(3), BHUBANESWAR. 3. THE CIT(A) - 1, BHUBANESWAR. 4. PR.CIT - 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//