ACIT CIR 4(2), MUMBAI V. HEMA DYEING & PRINTING WILLS P.LTD, MUMBAI

ITA 4308/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88236 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 03-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: D B SANGHVI
• Keywords: Additional evidence

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI , ,, , BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 4308/MUM/2013 (ASSESSMENT YEAR: 2009-10) ACIT- CIR -4(2), R. NO. 6425, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI -400 020 VS HEMA DYEING & PRINTING WILLS P LTD., 313, MAYABAI CHOWK, SWADESI MARKET, KALBADEVI ROAD, MUMBAI -400 002 .: PAN: AAACH 2581 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LOVE KUMAR RESPONDENT BY : SHRI D B SANGHVI !' # $% /DATE OF HEARING : 07-01-2015 &'( # $% / DATE OF PRONOUNCEMENT : 06-01-2015 ORDER , , , , : :: : PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER O F CIT(A) 8, MUMBAI, DATED 14.03.2013, WHEREIN THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED IN DELETING THE PROCESS CH ARGES OF RS. 96,93,445/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE 011(A) ERRED IN NOT ADMITTING THE FACT THAT DURING REMAND PROCEEDINGS: A) SHREE SIDDHIVINAYAK ENTERPRISES HAS NOT SUBMITTE D ANY DOCUMENTS SUPPORTING THE ALLEGED TRANSACTION EX CEPT BANK STATEMENT AND FORM 26AS AS A PROOF OF TDS DEDUCTION. B) THE ASSESSEE HAS NOT SUBMITTED THE COPY OF LEDGE R A/C OF M/S KARMAYOGI DYING PVT. LTD. MAINTAINED BY THE ASSESSEE ITSELF EVEN THOUGH IT WAS CALLED FOR FROM THE HEMA DYEING & PRINTING WILLS P LTD. ITA 4308/M/2013 2 ASSESSEE DURING THE REMAND PROCEEDING. C) REGARDING M/S AMAR ARTS NO SUPPORT WAS 'CALLED F OR DURING THE REMAND PROCEEDINGS.3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A ) ERRED IN ADMITTING ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE, THOUGH IT IS REQUESTED BY A0 TO REJECT IT AS IT IS OBSERVED THAT THE ASSESSEE DOESN'T FULFILL ANY OF T HE CONDITIONS GIVEN IN RULE 46A.4 ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF TH E LD.CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY MERIT S TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 2. THE FACTS ARE THAT THE ASSESSEE IS IN THE BUSINESS OF TRADING AND MANUFACTURING OF TEXTILES. THE ASSESSEE PURCHA SES YARN FROM MARKET AND MANUFACTURES GREY FABRIC FROM ITS UN IT AT NAVI MUMBAI. IT ALSO GETS HIS WORK DONE THROUGH JOB WORK. 3. THE AO WHILE PROCEEDING TO FRAME THE ASSESSMENT FOUND THAT THE ASSESSEE HAD MADE PAYMENTS TO NAME OF PARTY NATURE OF EXP. AMT. (IN RS.) KARAMYOJI DYING PVT LTD. PROCESS CHARGES 63,20,734 SHREE SIDHIVINAYAK ENTERPRISES EMBROIDERY 13,44,58 6 AMAR ARTS EMBROIDERY 20,28,125 TOTAL 96,93,445 4. THE AO HELD THESE EXPENSES TO BE BOGUS AND ADDED THE AMOUNT TO ITS RETURN FIGURE. 5. THE ASSESSEE APPROACHED THE CIT(A), WHO AT FIRST SOUG HT ATTENDANCE OF THE AO, BUT THE AO CHOSE NOT TO BE PART Y TO THE APPELLANT PROCEEDINGS AS MENTIONED BY THE CIT(A). THE CIT(A ) THEN NOTED THAT HE PROCEEDED WITH THE APPEAL PROCEEDIN GS WITHOUT THE ASSISTANCE OF THE AO. 6. THE AR AT THE TIME OF HEARING, GAVE COMPLETE DETAILS WIT H HIS SUBMISSIONS, WHICH WERE FORWARDED TO THE AO, CALLING FOR H IS COMMENTS IN THE REMAND PROCEEDINGS. 7. AFTER CONSIDERING THE REPLIES AND COUNTER REPLIES, THE CIT(A) HELD, HEMA DYEING & PRINTING WILLS P LTD. ITA 4308/M/2013 3 I HAVE CONSIDERED THE FACTS OF THE CASE. THE APPELLANT PAID .PROCESSING PARTIES VIZ. M/S. KARMAYOGI DYEING PVT. LTD., M/S. SHRI SIDDHIVINAYK ENTERPRISES AND M/S AMAR ARTS. IN THE ABOVE DISCUSSION, IT HAS BEEN MENTIONED THAT THE INSPECTO R REPORTED THE NON EXISTENCE OF THE ABOVE PARTIES ON THEIR ADDRESSES, FURNISHING ADDRESS BY THE APPELLAN T TO THE AO, FURTHER ENQUIRIES AND INVESTIGATIONS, DISCONTINUATION OF BUSINESS BY THE ABOVE SAID 3 PARTIES FROM THEIR OLD PREMISE ETC. ETC. DURING APPELLATE PROCEEDINGS, THE APPELLANT HAS FILED COPI ES OF BILLS, INVOICES, BANK STATEMENT, PAN, INCOME TAX RETURN AND OTHER DETAILS INCLUDING NEW ADDRESSES OF THE ABOVE SAID 3 PARTIES. THE APPELLANT ALSO SUBMITTED THAT THE AO ISSUED SUMMONS/LETTERS ON INCORRECT ADDRESSES AND THEREFORE, NO RESPONSE WERE RECEIVED FROM THE PARTIES. THE AO HAS DISALLOWED PROCESSING CHARGES PAID TO M/S. KARMAYOGI LTD. AND M/S. SHRI SIDDHIVINAYAK ENTERPRISES. DURING APPELLATE PROCEEDINGS, THE APPELLANT HAS FILED SUFFICIENT DETAILS/EVIDENCES IN SUPPORT OF ITS CLAIM OF EXISTENCE OF THESE PARTIES, IDENTIFIES OF THESE PARTIES, GENUINENESS OF THE TRANSACTIONS ETC. IN THE REMAND REPORT, THE AO HAS MADE ENQUIRIES FROM THESE PARTIES AND HAVE RECORDED THEIR STATEMENT OF THE PRINCIPAL OFFICERS OF THESE TWO PARTIES. IN THE FACTS AND CIRCUMSTANCES, THE IDENTI TY OF THESE TWO PARTIES WAS PROVED, THE GENUINENESS OF TRANSACTIONS BY WAY OF LEDGER ACCOUNT, BANK STATEMENT, INCOME TAX DETAILS, PAN, ETC: WERE PROVED. IN THE FACTS AND CIRCUMSTANCES, THE DISALLOWANCES MADE ON ACCOUNT OF PROCESSING CHARGES PAID .TO. THESE TWO PARTIES ARE DELETED. THE AO ALSO DISALLOWED PROCESSING CHARGES OF RS. 13,44,.586/- PAID TO M./S. AMAR ARTS ON THE GROUND THAT THE PARTY WAS NOT EXISTED ON THE ADDRESS GIVEN . HOWEVER, DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT FURNISHED THE NEW AND CORRECT ADDRESS OF M/S. AMAR ARTS TO THE AO. THE APPELLANT ALSO PRODUCED CONFIRMATIONS OF M/S. AMAR ARTS WHICH WAS SIGNED BY CHARTERED, ACCOUNTANTS. SINCE THE CONFIRMATION WAS NOT SIGNED BY THE PROPRIETOR OF M/ S. AMAR ARTS, THE AO DOUBTED THE GENUINENESS OF SUCH CONFIRMATION WHICH LED TO DISALLOWANCE. HOWEVER, TH E APPELLANT HAS ARGUED THAT IT HAD REQUESTED THE PRINCIPAL OFFICER OF THE PARTY TO PRESENT HIMSELF B EFORE THE AO. ENFORCING THE ATTENDANCE OF THE PARTY, WAS NOT IN THE HANDS OF THE APPELLANT. 1-LOWEVER, THE INCOME TAX AUTHORITIES HAS ALL. THE POWERS TO ENFORCE THE ATTENDANCE OF THE SAID PARTY FOR ENQUI RY AND INVESTIGATION. THE APPELLANT HAS EXPLAINED THAT THE AO HAD NOT ENFORCED THE ATTENDANCE OF THE PROPRIETOR/ PRINCIPAL OFFICER OF M/S. AMAR ARTS WHI CH THE AO COULD HAVE DONE FOR VERIFYING THE, IDENTITY AND GENUINENESS OF THE TRANSACTIONS. THE APPELLANT HAS EXPLAINED THAT IT HAD FILED ALL THE, DETAILS I.E. B ILLS, HEMA DYEING & PRINTING WILLS P LTD. ITA 4308/M/2013 4 VOUCHERS, BANK STATEMENTS, LEDGER ACCOUNT OF THE TI ES TO PROVE THE GENUINENESS OF THE TRANSACTIONS. 1 HAV E CONSIDERED THE APPELLANT'S ARGUMENTS. IN RESPECT OF OTHER TWO PARTIES, THE APPELLANT HAD PRODUCED ALL T HE DETAILS TO PROVE THE GENUINENESS OF THE TRANSACTION . EVEN THE PROPRIETORS OF OTHER 2 PARTIES., APPEARED BEFORE THE AO FOR CONFIRMING TRANSACTIONS. IN THE C ASE OF M/ S. AMAR ARTS, THE APPELLANT COULD NOT ENFORCE THE ATTENDANCE OF THE SAID PARTY BEFORE THE AO. ON THE OTHER HAND, THE AO HAS ALSO NOT TRIED TO ENFORC E THE ATTENDANCE OF THE PROPRIETOR OF M/S. AMAR ARTS. THEREFORE, FOR THE NON APPEARANCE OF THE SAID PARTY BEFORE THE AO, THE APPELLANT CANNOT BE PENALIZED. APART FROM THE APPEARANCE OF PROPRIETOR OF M/S. AMA R ARTS, THE APPELLANT HAS FILED SUFFICIENT DETAILS AN D DOCUMENTS TO PROVE THE-IDENTITY OF THE SAID PARTY A ND GENUINENESS OF THE TRANSACTION BY FILING THE COPY O F RETURN OF INCOME OF THE PROPRIETARY OF THE SAID PAR TY, COPY OF APPELLANTS LEDGER ACCOUNT IN THE KOOKS OF SAID PARTY, TDS CERTIFICATE ISSUED TO THE SAID PART Y AND VARIOUS OTHER DETAILS. THUS, FROM THE APPELLANT S SIDE, IT HAD SUFFICIENTLY EXPLAINED THE GENUINENESS OF THE TRANSACTION. THE DISALLOWANCE MADE BY THE AO IS , THEREFORE, DELETED. 8. AGAINST THESE FINDINGS OF THE CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 9. BEFORE US, THE AR REITERATED THE FACTS AND SUBMITTED THAT THE CIT(A) HAS GIVEN A WELL REASONED AND CORRECT FACTS ORDER. 10. ON THE OTHER HAND THE DR RELIED ON THE ORDER OF THE AO. 11. AFTER HEARING THE CONTENTIONS FROM BOTH SIDES AND AFT ER GOING THROUGH THE ORDERS AND DOCUMENTS SUBMITTED, WE FIN D THAT THE ORDER OF THE CIT(A) IS NOT MARRED WITH ANY INFIRMITY. HE GAVE NOTICE TO THE AO, WHO DID NOT PARTICIPATE IN THE PROCEEDIN GS. ADDITIONAL EVIDENCE WAS ADMITTED ONLY AFTER RECEIVING COMME NTS OF THE AO AND BASED ON THOSE SUBMISSIONS ON FACTS, THE C IT(A) HAS GIVEN A RELIEF. 12. WE, THEREFORE, ARE OF THE VIEW THAT THE IMPUGNED ORD ER OF THE CIT(A) DESERVED TO BE SUSTAINED, WHICH WE DO. CONSEQUENTIALLY, THE APPEAL AS FILED BY THE DEPARTMENT IS REJECTED. HEMA DYEING & PRINTING WILLS P LTD. ITA 4308/M/2013 5 13. IN THE RESULT, THE APPEAL AS FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH FEBRUARY, 2015. ( ) ( ) (R C SHARMA) (VIVEK VARMA) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 6 TH FEBRUARY, 2015 $/ COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT(A) -8, MUMBAI. 4) THE CIT-4, MUMBAI/CIT -4, MUMBAI. 5) ,'-. $! H , , / THE D.R. H BENCH, MUMBAI. 6) ./0 1 COPY TO GUARD FILE. 23! / BY ORDER 4 / 5 6 / / TRUE COPY / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS