Shri Kishor Nandlal Bhattad, Khamgaon V. Income Tax Officer ,Khamgaon, Khamgaon

ITA 40/NAG/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4528 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Keywords: Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

1 ITA NO. 40/NAG/2013. , INCOME TAX APPELLATE TRIBUNAL,NAGPUR BENCH . . , BEFORE S/SH. D T GARASIYA,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER ./ ITA/40/NAG/2013 , / ASSESSMENT YEAR:2009 - 10. SHRI KISHORE NANDLAL BHATTAD, SRADDHA SALES, KHAMGAON - 444303. PAN AFRPB1114L. VS. THE INCOME - TAX OFFICER, KHAMGAON. ( / APPELLANT) ( / RESPONDENT ) ASSESSEE BY: SHRI K.P. DEWANI. REVENUE BY: SMT. AGNES P. THOMAS. / DATE OF HEARING: 30.08.2016 / DATE OF PRONOUNCEMENT: 30.08.2016 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 29/11/2012 OF THE CIT (A) - I, NAGPUR, THE ASSESSEE HAS FILED THE PRESENT APPEAL.ASSESSEE, AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF TRADING OF HERO HONDA MOTORCYCLE, SCOOTERS AND SPARE PARTS , IN THE NAME OF PROPRIETARY CONCERN M/S.SHRADDHA AUTOMOTIVES,FILED HIS RETURN OF INCOME ON 09/03/2010,DECLARING TOTAL INCOME AT RS. 4.74 LAKHS. THE ASSESSING OFFICER(AO)COMPLETED THE ASSESSMENT, UNDER SECTION 143 (3) OF THE ACT, ON 20/12/ 2011,DETERMINING HIS INCOME AT RS. 37.74 LAKHS. 2. THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 29 OF THE ITAT RULES, 1963.IN HIS APPLICATION HE HAS STATED THAT THE AO HAD MADE ADDITION IN RESPECT OF CREDITS, BEING AMOUNT RECEIVED FROM CUSTOMERS FOR BOOKING OF VEHICLES WHICH EVENTUALLY HAD BEEN REPAID ON CANCELLATION OF BOOKING BY THE CUSTOMERS,THAT THE ASSESSMENT PROCEEDINGS WERE TAKEN UP FOR MORE THAN TWO YEARS AFTER THE C LOSE OF THE ACCOUNTING YEAR,THAT VARIOUS CUSTOMERS COULD NOT BE PRODUCED BEFORE THE AO FOR VERIFICATION OF THE AMOUNTS RECEIVED TOWARDS BOOKING OF THE VEHICLES, THAT THE ASSESSEE HAD MADE THE PAYMENT OF SUCH DEPOSITS THROUGH THE CHEQUES,THAT HE WAS ABLE TO LOCATE THE CUSTOMERS FROM WHOM HE HAD RECEIVED ADVANCES, THAT THE CUSTOMER HAD 2 ITA NO. 40/NAG/2013. CONFIRMED THAT ADVANCES WERE GIVEN TO THE ASSESSEE FOR PURCHASING THE VEHICLES, THAT THE AFORESAID AFFIDAVITS WERE NECESSARY EVIDENCE TO ADJUDICATE THE ISSUE, THAT SAME COULD N OT BE PRODUCED EARLIER THE APPLICATION IS ACCOMPANIED BY AFFIDAVITS OF CERTAIN CUSTOMERS. 3. DURING THE COURSE OF HEARING BEFORE US, THE AUTHORISED REPRESENTATIVE(AR) ARGUED THAT THE ASSESSEE HAD MADE AN ADDITION OF RS. 20 LAKHS,THAT AT THE TIME OF ASSESSM ENT/APPELLATE PROCEED - INGS HE WAS NOT IN A POSITION TO PRODUCE ALL THE RELEVANT DOCUMENTS INCLUDING THE AFFIDAVITS OF THE CUSTOMERS WHO HAD BOOKED THE VEHICLES AND PAID ADVANCES TO HIM, THAT ASSESSEE HAD RETURNED THE MONEY TO THE CUSTOMERS THROUGH BANKING CHANNELS, THAT THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION, THAT THE DOCUMENTS SUBMITTED AS ADDITIONAL EVIDENCES WERE VITAL TO DECIDE THE ISSUE. THE DEPARTMENTAL REPRESENTATIVE (DR) STATED THAT THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCES COULD B E DECIDED BY THE TRIBUNAL ON MERITS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL AVAILABLE. IT IS FOUND THAT DURING THE ASSESSMENT PROCEEDINGS THE AO HAD MADE AN ADDITION OF RS. 20 LAKHS UNDER SECTION 68 OF THE ACT, AS THE ASSESSEE HAD NOT PRODUCED CERTAIN PARTIES WHO WERE SHOWN AS THE CUSTOMERS IN HIS BOOKS OF ACCOUNTS,THAT THE ASSESSEE HAD CLAIMED THAT AMOUNT IN QUESTION WAS RECEIVED AS ADVANCE FOR BOOKING THE VEHICLES,THAT HE HAD ALSO CLAIMED THAT MONEY RECEIVED FROM THE CUSTOMERS WAS RETURNED BACK,THAT AO MADE CERTAIN ENQUIRIES WITH THE BANKS AND HAD ARRIVED AT THE CONCLUSION THAT SUB - DEALERS HAD NOT RECEIVED ANY MONEY FROM THE ASSESSEE, THAT THE AO HAD RECORDED THE STATEMENT OF ONE OF THE PERSONS WHO WAS PAID SOME OF THE ADVANCES , THAT THE SAID PERSON HAD DENIED TO HAVE RECEIVED ANY MONEY FROM THE ASSESSEE, THAT THE AO HAD NOT ALLOWED THE ASSESSEE TO CROSS - EXAMINE THAT PERSON AND HAD USED HIS STATEMENT AGAINST THE ASSESSEE FOR MAKING THE ADDITION, THAT THE ASSESSEE HAS NOW FILED T HE AFFIDAVITS OF THE ALLEGED PURCHASERS OF THE VEHICLES. 3 ITA NO. 40/NAG/2013. CONSIDERING THE PARTICULAR FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE SHOULD BE ADMITTED AS ENVISAGED BY THE PROVISIONS OF RULE 29 O F THE ITAT RULES. THE AO HAD COLLECTED THE EVIDENCES AGAINST THE ASSESSEE BEHIND HIS BACK AND HAD USED THE SAME FOR MAKING THE ADDITION.THE ASSESSEE WAS NOT ALLOWED TO CROSS - EXAMINE THE PERSON BEFORE AN ADVERSE INFERENCE WAS DRAWN. IT WAS A CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE FIRST APPELLATE AUTHORITY (FAA) HAD CONFIRMED THE ADDITIONS MADE BY THE AO. IN THE INTEREST OF JUSTICE, WE ARE COMMITTING THAT THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE WILL DECIDE THE ISSUE AFTER CONS IDERING THE ADDITIONAL EVIDENCES FILED BEFORE US AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.IF HE WANTS TO USE STATEMENT OF ANY PERSON AGAINST THE ASSESSEE,HE SHOULD ALLOW CROSS - EXAMINATION OF SUCH PERSON TO THE ASSESSEE. EFFEC TIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, IN PART. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH , AUGUST, 2016. 30 , 2016 SD / - SD / - ( . . / D T GARASIYA ) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; DATED :30 . 0 8 . 2016. / COPY OF THE ORDER FORWARDED TO : 1.APPELLANT / 2. RESPONDENT / 3.THE CONCERNED CIT(A)/ , 4.THE CONCERNED CIT / 5.DR NAGPUR BENCH, ITAT, / , , . . . 6.GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT,NAGPUR.