M/s. Dubey Wine & General Store, Jammu V. Sh. Income Tax Officer, Jammu

ITA 41/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2480 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR KANCHAN GARG
• Assessee Lawyers: P N ARORA
• Keywords: Additional evidence
• Section: 40A(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NOS.41 & 42(ASR)/2014 ASSESSMENT YEARS:2006-07 & 2007-08 PAN:AAAFD7063L M/S. DUBEY WINE & GENERAL STORE, VS. INCOME TAX OFF ICER, AKHNOOR. ( J & K). WARD-2(1), JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. P.N.ARORA, ADVOCATE RESPONDENT BY: DR. KANCHAN GARG, DR DATE OF HEARING: 18/11/2015 DATE OF PRONOUNCEMENT: 12/01/2016 ORDER THESE ARE THE ASSESSEES APPEALS FOR THE ASSESSMENT YEARS 2006-07 & 2007-08. IN BOTH THESE APPEALS, SINGLE COMMON ISS UE IS INVOLVED. THE LD. CIT(A) DECIDED BOTH THESE APPEALS BY A COMMON ORDER DATED 11.12.2013 UPHOLDING THE ADDITIONS OF RS.5,50,383/- FOR THE ASSESSMENT YEAR 2006-07 AND RS.5,93,573/- FOR THE ASSESSMENT Y EAR 2007-08, MADE UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961 (I N SHORT, THE ACT). 2. THE GROUNDS TAKEN COMMON IN BOTH THE APPEALS ARE AS FOLLOWS: 1. THAT THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE LD. CIT(A), ARE BOTH AGAINST THE FACTS OF THE CASE AND UNTENABLE IN LAW. 2. THAT THE AO HAS GROSSLY ERRED IN INVOKING THE PR OVISIONS OF SECTION 40A(3) OF THE ACT AND THEREBY MAKING AN ADD ITION OF RS.5,50,383/- (BEING 20% OF RS.2751917), AND THE LD . CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE SAME. ITA NOS. 41 & 42(ASR)/2014 ASSESSMENT YEARS: 2006-07 & 2007-08 2 3. THAT THE AUTHORITIES BELOW DID NOT APPRECIATE TH AT THERE WERE EXCEPTIONAL AND UNAVOIDABLE CIRCUMSTANCES AND AS SU CH THERE WAS NO JUSTIFICATION FOR MAKING THE DISALLOWA NCE BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE AC T. SIMILARLY, THE LD. CIT(A) HAS GROSSLY ERRED IN CONF IRMING THE ORDER OF THE AO. 4. THAT THE AUTHORITIES BELOW DID NOT APPRECIATE TH AT THE CASH PAYMENT WAS GENUINE AND IT WAS MADE OUT OF THE INCO ME FROM DISCLOSED SOURCES, AND THE AUTHORITIES BELOW F AILED TO APPRECIATE THAT THE OBJECT OF SECTION 40A(3) WAS TO CHECK THE EVASION OF TAX AND NOT TO DISALLOW THE LEGITIMATE E XPENDITURE WHERE THE AMOUNT WAS PAID IN CASH OR RECEIVED IN CA SH, ESPECIALLY WHEN THE TRANSACTIONS ARE GENUINE. SIMIL ARLY, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ORD ER OF THE AO AND THE ADDITION CONFIRMED BY THE LD. CIT(A) IS NOT AT ALL CALLED FOR AND THE ADDITION CONFIRMED MAY BE DELETE D. 5. THAT THE INTEREST CHARGED U/S 234B OF THE ACT AT RS.1,01,892/- IS NOT CALLED FOR AND THE AUTHORITIES BELOW MAY BE DIRECTED TO CANCEL THE INTEREST CHARGED U/S 234B OF THE I.T. ACT, 1961. 3. GROUND NO.1 IS GENERAL. 4. APROPOS GROUND NOS. 2 TO 4, THE LD. CIT(A) HAS C ONFIRMED THE ADDITIONS BY OBSERVING AS FOLLOWS: I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIND TH AT THE APPELLANT DOES NOT HAVE A CASE BECAUSE PURCHASER AND SELLER A RE FROM JAMMU & AKHNOOR RESPECTIVELY. THESE PLACES ARE HAVING BAN KING FACILITIES. THE APPELLANT COULD NOT ESTABLISH WITH EVIDENCE THE UNFAIR DEMAND OF THE SELLER REGARDING ONLY MODE OF ACCEPTANCE OF PAYMENT IN CASH. THE APPELLANT COULD NOT ESTABLISH AS TO WHAT WAS TH E BUSINESS EXPEDIENCY WHICH COMPELLED THEM TO VIOLATE THE SECT ION 40A(3). I DO NOT FIND ANY MERIT IN THE CASE OF THE APPELLANT AND THUS THE GROUNDS OF APPEAL OF THE APPELLANT ARE REJECTED. THE ADDIT ION MADE BY THE AO IS CONFIRMED. 5. BEFORE THIS BENCH, THE LD. COUNSEL FOR THE ASSES SEE HAS FILED AN APPLICATION FOR ADDITIONAL EVIDENCE, SEEKING TO PRO DUCE A BANK CERTIFICATE ISSUED ON 13.11.2014, WHEREIN, IT HAS BEEN CERTIFIE D THAT DURING THE YEAR 2005 TO 2007, THERE WAS NO ON-LINE SYSTEM OF THE C ITIZENS COOPERATIVE ITA NOS. 41 & 42(ASR)/2014 ASSESSMENT YEARS: 2006-07 & 2007-08 3 BANK LTD., JAMMU AND IT WAS NOT COMUTERISED AND CRO SS CHEQUES USED TO TAKE 7 TO 15 DAYS; AND THAT THE CHEQUES ISSUED B Y THE ASSESSEE TO M/S. TRISHUL TRADERS, JAMMU DURING THE SAID PERIOD, WERE ENCASHED ON THE DUE THROUGH THE CASH COUNTER OF THE BANK. 6. IN THE APPLICATION FOR ADDITIONAL EVIDENCE, IT H AS BEEN SUBMITTED THAT IN THE IMPUGNED ORDER, THE LD. CIT(A) HAS OBSE RVED THAT THE ASSESSEE DID NOT HAVE ANY CASE BECAUSE THE PURCHASER AND THE SELLER WERE FROM JAMMU & AKHNOOR RESPECTIVELY; THAT THESE PLACES WER E HAVING BANKING FACILITIES; THAT THE ASSESSEE COULD NOT ESTABLISH W ITH EVIDENCE THE UNFAIR DEMAND OF THE SELLER, REGARDING ONLY MODE OF ACCEPT ANCE OF PAYMENT IN CASH; AND THAT THE ASSESSEE COULD NOT ESTABLISH AS TO WHAT WAS THE BUSINESS EXPEDIENCY WHICH COMPELLED IT TO VIOLATE THE SECTION 40A(3) OF THE ACT. IT HAS FURTHER BEEN SUBMITTED THAT IT HAD BEEN MADE CLEAR TO THE TAXING AUTHORITIES THAT AKHNOOR IS A VILLAGE AND NO T A DEVELOPED DISTRICT LIKE JAMMU & SRINAGAR; THAT AREA WAS DISTURBED AND WAS ALWAYS THREATENED BY TERRORIST AND WAS ALSO SURROUNDED BY MILITANTS, DUE TO WHICH, THE AREA HITHERTO REMAINED UNDEVELOPED; THAT IT WAS ALSO MADE CLEAR THAT THE ASSESSEE HAD PAYMENT TO M/S. TRISHUL TRADERS BY BEARER CHEQUES; THAT THE ASSESSEE WAS HAVING BANK ACCOUNT IN CITIZEN CO- OPERATIVE BANK LTD., AKHNOOR, WHEREAS M/S. TRISHUL TRADERS WAS HAVING BANK ACCOUNT WITH SOME OTHER BANK; THAT SINCE THERE WAS NO ON-LINE SYSTEM AND THE BANKS WERE NOT COMPUTERIZED, THE CR OSS CHEQUES TOOK ABOUT 5-7 DAYS FOR CLEARING. IT HAS ALSO BEEN SUBMI TTED THAT THE BANK CERTIFICATE WAS OBTAINED BY THE ASSESSEE ONLY AFTER PASSING OF THE IMPUGNED ORDER, BECAUSE OF THE AFORESAID OBSERVATIO NS MADE THEREIN AND THAT IT WAS, THEREFORE, THAT THE SAID CERTIFICATE C OULD NOT BE PRODUCED BEFORE EITHER OF THE AUTHORITIES BELOW. 7. THE LD. DR HAS OPPOSED THE ADMISSION OF THE ADDI TIONAL EVIDENCE, SUBMITTING THAT THE SAME COULD HAVE AND OUGHT TO HA VE BEEN PRODUCED ITA NOS. 41 & 42(ASR)/2014 ASSESSMENT YEARS: 2006-07 & 2007-08 4 BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS AND THA T SINCE THIS WAS NOT DONE, THE ADDITIONAL EVIDENCE CANNOT BE ALLOWED TO BE PRODUCED NOW. 8. HAVING HEARD THE PARTIES ON THIS MATTER, IT IS S EEN THAT THE LD. CIT(A)S ORDER IS DATED 11.12.2013, THEREIN, THE L D. CIT(A) STATED THAT THE AO, IN THE ASSESSMENT ORDER HAD OBSERVED THAT AKHNO OR WHERE THE ASSESSEE IS SITUATED DID HAVE BANKING FACILITIES AN D THE ASSESSEE COULD NOT ESTABLISH WITH EVIDENCE THE UNFAIR DEMAND OF TH E SELLER REGARDING ONLY MODE OF ACCEPTANCE, THE PAYMENT IN CASH. IT WA S DUE TO THIS OBSERVATION OF THE LD. CIT(A), THAT THE ASSESSEE SO UGHT THE CITIZENS CO- OPERATIVE BANK LTD., BRANCH OFFICE AKHNOOR TO ISSUE THE AFORESAID CERTIFICATE. THIS CERTIFICATE CERTIFIES AS FOLLOWS: REF. NO./CERT/14 DATED 13.11.2014 TO WHOM IT MAY CONCERN THIS IS TO CERTIFY THAT M/S. DUBEY WINE & GENERAL S TORE, NEAR BUS STAND AKHNOOR HAS APPROACHED THIS OFFICE REGARDING INFORMATION OF TRANSACTION MADE DURING THE ACCOUNTING 2005 TO 2007 . DURING THE YEAR 2005-2007 THERE WAS NO ONLINE SYSTEM OF OUR BA NK AND ALSO WAS NOT COMPUTERIZED AND CROSSED CHEQUES WERE USED TO TAKE AT LEAST 7 TO 15 DAYS. IT IS FURTHER SUBMITTED THAT CH EQUES ISSUED TO M/S. TRISHUL TRADERS, JAMMU DURING THE SAID PERIOD WERE ENCASHED ON THE DUE DATE THROUGH THIS OFFICE CASH C OUNTER. 9. THE AFORESAID CERTIFICATE IS DATED 13.11.2014, I .E., PASSED, POST THE PASSING OF THE IMPUGNED ORDER. OBVIOUSLY, THEREFOR E, THE SAME COULD NOT BE PRODUCED BEFORE THE AUTHORITIES BELOW. IN ANY CA SE, THIS CERTIFICATE GOES TO THE ROOT OF THE MATTER AND HENCE, IT IS REQ UIRED TO BE ADMITTED AS ADDITIONAL EVIDENCE. 10. IN THE ABOVE FACTS AND CIRCUMSTANCES, IN THE IN TEREST OF JUSTICE, THE ADDITIONAL EVIDENCE IN THE SHAPE OF THE BANK CERTIF ICATE DATED 13.11.2014 IS ADMITTED AND THE MATTER IS REMITTED TO THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON DULY TAKEN INTO CONSIDERATIO N THE AFORESAID CERTIFICATE. THE ASSESSEE SHALL BE AFFORDED OPPORTU NITY OF HEARING TO ITA NOS. 41 & 42(ASR)/2014 ASSESSMENT YEARS: 2006-07 & 2007-08 5 SUPPORT ITS CASE AND THE ASSESSEE SHALL COOPERATE I N THE FRESH PROCEEDINGS BEFORE THE AO. 11. AS STATED IN THE BEGINNING OF THIS ORDER, THE I SSUE IN BOTH THESE CASES IS COMMON AND THEREFORE, THE ABOVE OBSERVATIO NS SHALL APPLY EQUALLY MUTATIS-MUTANDIS TO BOTH THE CASES. 12. GROUND NO.5 IS CONSEQUENTIAL. 13. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH T HE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/01/2016 SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 12/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. DUBEY WINE & GENERAL STORE, AK HNOOR ( J & K) 2. THE ITO, WARD 2(1), JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.