Muthurajan Padmavathi, CHENNAI V. ITO, CHENNAI

ITA 435/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8727 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 17-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 29-02-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Section: 131

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : CHENNAI . . . , [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ] ./ I.T.A.NO.435/MDS/2016 / ASSESSMENT YEAR : 2011-12 SMT. MUTHURAJAN PADMAVATHI NO.12, KAMARAJ PARK STREET ROYAPURAM CHENNAI 600 013 VS. THE INCOME TAX OFFICER BUSINESS WARD XI(1) CHENNAI [PAN AALPP 1234 G] ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT / DATE OF HEARING : 17 - 0 6 - 2016 / DATE OF PRONOUNCEMENT : 22 - 0 7 - 2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHENNA I, DATED 11.1.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI S. SRIDHAR, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISALLO WANCE OF ` 31,99,380/- BEING TRADE CREDITS. 3. THE ASSESSEE CLAIMED AN AMOUNT OF ` 1,62,07,228/- IN RESPECT OF SUNDRY CREDITORS. THE ASSESSING OFFICER AFTER EXAMINING THE ITA NO.435/16 :- 2 -: MATERIAL FILED BY THE ASSESSEE, FOUND THAT NO CONF IRMATION LETTER WAS FILED FROM THE RESPECTIVE CREDITORS EVEN THOUGH SUF FICIENT OPPORTUNITY WAS GIVEN. ACCORDING TO THE LD. COUNSEL, ONE SHRI GOPI WAS SAID TO BE EXAMINED U/S 131 OF THE ACT. HOWEVER, NO OPPORTUN ITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAMINE HIM. AFTER EXAMININ G THE SAID SHRI GOPI, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE ASSESSEE DID NOT PURCHASE OR HAD ANY TRANSACTION WITH M/S LA VANYA DHALL MILLS. THE ASSESSING OFFICER HAS NOT TAKEN ANY STEP WHEN T HE POSTAL AUTHORITIES RETURNED THE NOTICES ISSUED BY THE ASSE SSING OFFICER. ACCORDING TO THE LD. COUNSEL, WHEN THE NOTICES WERE RETURNED BY THE POSTAL AUTHORITIES, THE ASSESSING OFFICER OUGHT TO HAVE TAKEN FURTHER STEPS TO ENFORCE THE ATTENDANCE OF THE TRADE CREDIT ORS. REFERRING TO THE COPIES OF THE BOOKS OF ACCOUNT, THE LD. COUNSEL SUBMITTED THAT THE TRADE CREDITORS ARE GENUINE, THEREFORE, THERE CANNO T BE ANY DISALLOWANCE. REFERRING TO THE JUDGMENT OF THE APE X COURT IN M/S ANDAMAN TIMBER INDUSTRIES VS COMMISSIONER OF CENTRA L EXCISE, IN CIVIL APPEAL NO.4228 OF 2006, DATED 2.9.2015, THE LD. COU NSEL SUBMITTED THAT WHEN THE WITNESS WAS NOT SUBJECTED TO CROSS EX AMINATION, IT CANNOT BE RELIED UPON. IN VIEW OF THIS JUDGMENT OF THE APEX COURT, ACCORDING TO THE LD. COUNSEL, THE STATEMENT SAID TO BE RECORDED U/S 131 OF THE ACT FROM SHRI GOPI, CANNOT BE BASIS FOR MAKING ANY ADDITION. ACCORDING TO THE LD. COUNSEL, ONE MORE O PPORTUNITY MAY BE ITA NO.435/16 :- 3 -: GIVEN TO THE ASSESSEE TO CROSS EXAMINE THE SAID SH RI GOPI AND PRODUCE NECESSARY MATERIAL BEFORE THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI SUPRIYO PAL, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS PROVIDED SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE ALL THE TRADE CREDITORS. MOREOVER, THE SUMMONS ISSUED BY THE ASS ESSING OFFICER WERE RETURNED WITH POSTAL ENDORSEMENT NO SUCH ADD RESS. THE ASSESSING OFFICER IN FACT EXTRACTED ALL THE FACTS I N THE IMPUGNED ASSESSMENT ORDER. SOME OF THE ADDRESSES GIVEN BY T HE ASSESSEE WERE INSUFFICIENT AND THE POSTAL AUTHORITIES COULD NOT S ERVE THE NOTICE. WHEN SHRI GOPI, OWNER OF M.G.N. DHALL MILL AND LAVA NYA DHALL MILL APPEARED BEFORE THE ASSESSING OFFICER AND A STATEME NT WAS RECORDED U/S 131 OF THE ACT, THE SAID SRI GOPI CATEGORICALLY STATED THAT HE DO NOT KNOW THE ASSESSEE OR HIS PARTNERSHIP CONCERN. THE REFORE, IT IS OBVIOUS THAT THE ASSESSEE HAS NO TRANSACTION WITH THE SAID SHRI GOPI. INSPITE OF PROVIDING SUFFICIENT OPPORTUNITY, THE A SSESSEE HAS NOT PRODUCED ANY MATERIAL, THEREFORE, THE ASSESSING OFF ICER HAS RIGHTLY DISALLOWED THE SUNDRY CREDITS TO THE EXTENT OF ` 31,99,380/-. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER S IDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER AFTER EXAMINING THE BOOKS OF ACCOUNT AS ON 31.3.20 11 FOUND THAT THE ITA NO.435/16 :- 4 -: ASSESSEE HAS CLAIMED SUNDRY CREDITORS. THE ASSESS EE HAS FURNISHED THE DETAILS OF THE SUNDRY CREDITORS FROM WHOM THE O UTSTANDING AMOUNT WAS MORE THAN ` 20,000/-. THE ASSESSING OFFICER APPEARS TO HAVE ISSUED NOTICES TO THE CREDITORS. HOWEVER, THE SAME WERE RETURNED BY THE POSTAL AUTHORITIES UNSERVED. IN RESPECT OF M.G .N. DHALL MILL AND LAVANYA DHALL MILL, THE OWNER SHRI GOPI APPEARED BE FORE THE ASSESSING OFFICER AND CLARIFIED THAT HE HAS NO TRANSACTION W ITH THE ASSESSEE. THE OTHER CREDITORS COULD NOT BE EXAMINED SINCE THE POSTAL AUTHORITIES RETURNED THE NOTICES. AFTER RETURNING THE NOTICES, THE ASSESSING OFFICER HAS NOT TAKEN ANY FURTHER STEPS TO ENDORSE ATTENDAN CE OF THE CREDITORS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE N THE POSTAL AUTHORITIES RETURNED THE NOTICES ISSUED BY THE ASSE SSING OFFICER UNSERVED, THE ASSESSING OFFICER OUGHT TO HAVE BROUG HT THE SAME TO THE NOTICE OF THE ASSESSEE. A OPPORTUNITY SHALL BE GI VEN TO THE ASSESSEE TO PRODUCE THE CORRECT ADDRESS OF THE CREDITORS. M OREOVER, WHEN SHRI GOPI WAS EXAMINED U/S 131 OF THE ACT, AN OPPORTUNI TY SHALL BE GIVEN TO THE ASSESSEE TO CROSS EXAMINE HIM. UNFORTUNATE LY, SUCH AN OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE. THEREF ORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE DISALLOWAN CE OF TRADE CREDITORS IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFIC ER. THE ASSESSING ITA NO.435/16 :- 5 -: OFFICER SHALL REEXAMINE THE ISSUE AFRESH IN THE LIG HT OF THE MATERIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. IT IS NEEDLESS TO MENTION THAT THE ASSES SING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY FOR CROSS EXAMINATION I N CASE ANY WITNESS/CREDITOR WAS EXAMINED. 6. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISALLOW ANCE U/S 40(A)(IA) OF THE ACT. 7. THE ASSESSING OFFICER DISALLOWED ` 25,663/- FOR NON- DEDUCTION OF TAX. FROM THE ASSESSMENT ORDER IT APP EARS THAT THE ASSESSEE HAS PAID BROKERAGE AND COMMISSION TO M/S V ENKATKRISHNA & CO. SINCE THE MAIN ISSUE OF TRADE CREDITORS IS REM ITTED BACK TO THE FILE OF THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DISALLOWANCE OF ` 25,663/- U/S 40(A)(IA) OF THE ACT ALSO NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDING LY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL REEXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE MATE RIAL THAT MAY BE FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE A SSESSEE. ITA NO.435/16 :- 6 -: 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2016, AT CHENNAI. SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 22 ND JULY, 2016 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF