M/s. Atwal Finance Co, P.Ltd, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 490/ASR/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0668 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-03-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 16-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDARSHAN KAPOOR
• Section: 131

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 490 (ASR)/2010 ASSESSMENT YEAR: 1997-98 PAN: AAECA9851C M/S ATWAL FINANCE CO. PVT. LTD., THE INCOMETAX OF FICER, III(1), 918, G.T. ROAD, JALANDHAR JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUDARSHAN KAPOOR, ADVOCATE. RESPONDENT BY: SH. TARSEM LAL, D.R. DATE OF HEARING: 19.03.2013 DATE OF PRONOUNCEMENT: 20.03.2013 ORDER PER BENCH 1) THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 27.09.2010 PASSED BY THE CIT(APPEALS), JALANDHAR, PERTAINING TO ASSESSMENT YEAR 1997-98 ON THE FOLLOW ING GROUNDS:- I. THAT IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), JALANDHAR HAS , GROSSLY ERRED IN LAW AND ON FACTS IN UPHOLDING ADDITION OF RS. 4, 50,000/- WRONGLY MADE BY THE INCOME TAX OFFICER, III(1), JALANDHAR. THE ADDITION OF RS. 4,50,000/- MADE BY THE INCOME TAX OFFICER WAS U NJUST AND UNLAWFUL AND THE SAME HAS BEEN WRONGLY UPHELD. 2 II. THAT THE DIRECTIONS GIVEN BY THE HON'BLE I.T.A.T., AMRITSAR BENCH, AMRITSAR WERE NOT CARRIED OUT IN LETTER AND SPIRIT AND THE ENQUIRES WERE NOT MADE BY THE LEARNED A.O. TO REACH THE CORR ECT DECISION ABOUT THE ADDITION OF RS. 4,50,000/-. III. THAT THE ADDITION OF RS. 4,50,000/- WAS MADE BY THE A.O. AND IT WAS UPHELD BY THE LEARNED CIT(A) IN THE MECHANICAL MANN ER WITHOUT TAKING A REALISTIC VIEW AND WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND WITHOUT APPRECIATING THE COMMON MARKET PRACTICES. IV. THAT THE EXPLANATION GIVEN BY THE APPELLANT WERE WR ONGLY REJECTED AND IGNORED. 2) THE BRIEF FACTS RELATING TO ISSUE IN DISPUTE A RE THAT THE ASSESSING OFFICER COMPLETED THE ORIGINAL ASSESSMENT ON 13.12.1999 AND MADE ADDITION OF RS. 4,50,000/- ON ACCOUNT OF PAYM ENT FOR PURCHASE OF CAR ON 07.06.1996 ON THE GROUND THAT THE ASSESSEE H AVE NOT SUFFICIENT CASH IN HAND FROM KNOWN SOURCES. ASSESSEE HAD WITHDRAWN A SUM OF RS. 4,50,000/- FROM HIS BANK ON 08.06.1996 AND ACTUALL Y MADE THE PAYMENT ON 08.06.1996 BUT THE ASSESSING OFFICER DID NOT ACC EPT THIS CONTENTION OF THE ASSESSEE. LEARNED CIT (A) ALSO UPHELD THE ADDI TION MADE IN THE ASSESSMENT ORDER ON 13.12.1999. BUT IN THE APPEAL B EARING I.T.A. NO. 196(ASR)/2000 PERTAINING TO A.Y. 1997-98 FILED BY T HE ASSESSEE, THE I.T.A.T. RESTORED THE MATTER BACK TO THE ASSESSING OFFICER ON 13.05.2005 WITH A DIRECTION TO ALLOW AN OPPORTUNITY TO THE ASS ESSEE FOR PRODUCING SH. HARMINDER SINGH (THE SELLER) TO VERIFY WHETHER PAYM ENT OF ENTIRE MONEY WAS RECEIVED ON 07.06.1996 OR RS. 4,50,000/- WAS R ECEIVED ON 3 08.06.1996 AND IF SO, WHY HE SIGNED THE RECEIPT FOR ACKNOWLEDGING THE RECEIPT OF ENTIRE AMOUNT OF RS. 5 LAKHS ON 07.06.1 996. IN COMPLIANCE OF THE DIRECTION ISSUED BY THE I.T.A.T., THE ASSESSING OFFICER ASKED THE COUNSEL FOR THE ASSESSEE TO PRODUCE SH. HARMINDER S INGH. THE COUNSEL FOR THE ASSESSEE SUBMITTED A LETTER OF THE ASSESSEE ADD RESSED TO THE ASSESSING OFFICER STATING THEREIN THAT HE WAS UNABLE TO PRODU CE SH. HARMINDER SINGH AND REQUESTED THAT HE MAY BE SUMMONED. AT LAS T, THE ASSESSEE HAS NOT PRODUCED SH. HARMINDER SINGH BEFORE THE ASSESSI NG OFFICER FOR EXAMINATION. THE ASSESSING OFFICER COMPLETED THE AS SESSMENT PROCEEDING AND RETAINED THE ADDITION OF RS. 4,50,00 0/- MADE IN THE ORIGINAL ASSESSMENT ORDER. 3) AGGRIEVED BY THE SAME, ASSESSEE HAS FILED THE APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY WHO VI DE IMPUGNED ORDER DATED 27.09.2010 DISMISSED THE APPEAL AND UPHELD TH E ADDITION OF RS. 4,50,000/- ON PAYMENT TO SH. HARMINDER SINGH ON 7.0 6.1996. 4) AT THE TIME OF HEARING SH. SUDARSHAN KAPOOR, L EARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSING OFFICER HAS NOT COMPLIED WITH THE FULL DIRECTION OF THIS BENCH AND WRONGLY MADE THE ADDITION IN DISPUTE. HE DREW OUR ATTENTION TOWARDS THE ORDER OF THIS BENCH DATED 13.05.2005 AND STATED THAT THIS BENCH HAD ISS UED A DIRECTION TO 4 ALLOW AN OPPORTUNITY TO THE ASSESSEE FOR PRODUCING SH. HARMINDER SINGH TO VERIFY WHETHER PAYMENT OF ENTIRE AMOUNT WAS RECE IVED ON 07.06.1996 OR RS.4,50,000/- WAS RECEIVED ON 08.06.1996. HE FU RTHER STATED THAT THIS BENCH HAS GIVEN A LIBERTY TO THE ASSESSING OFFICER TO MAKE INDEPENDENT INQUIRY ALSO. HE FURTHER DREW OUR ATTENTION TOWARDS PAGE 7 OF SMALL PAPER-BOOK FILED BY HIM WHICH CONTAINS PAGE NOS. 1 TO 18. HE EMPHASIZED THAT ASSESSEE HAS WRITTEN A LETTER DATED 09.09.2006 TO THE ASSESSING OFFICER I.E. INCOME TAX OFFICER, WARD III (1), JALANDHAR, REQUESTING HIM TO SUMMON SH. HARMINDER SINGH AND BR IG. (RETD.) H.S. SANGHA, UNDER SECTION 131 OF INCOME TAX ACT, 1961, AT THE COST OF ASSESSEE. ASSESSEE HAS ALSO GIVEN THE ADDRESS OF TH ESE PERSONS IN THE LETTER DATED 09.09.2006 BUT THE ASSESSING OFFICER H AS NOT TAKEN ANY ACTION ON THE ASSESSEES LETTER AND WRONGLY MADE THE ADDIT ION IN DISPUTE. SIMILARLY, LEARNED FIRST APPELLATE TRIBUNAL HAS ALS O NOT APPRECIATED THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE BEFORE T HE ASSESSING OFFICER AND UPHELD THE ORDER OF THE ASSESSING OFFICER. HE A LSO STATED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY REQUESTING THE ASSESSING OFFICER AND BY SUPPLYING THE LATEST ADDRESS OF SH. HARMINDER SI NGH AND BRIG.(RETD.) H.S. SANGHA WHO WERE THE SELLER OF THE VEHICLE IN D ISPUTE AS WELL AS WITNESSES OF THIS TRANSACTION RESPECTIVELY. HE ALSO DREW OUR ATTENTION 5 TOWARDS PAGE NO. 18 OF THE PAPER BOOK IN WHICH HE H AS ATTACHED AN AFFIDAVIT OF BRIG.(RETD.) H.S. SANGHA WHO IS THE W ITNESS OF THIS TRANSACTION. IN AFORESAID AFFIDAVIT, BRIG.(RETD.) H .S. SANGHA STATED THAT THE ASSESSEE HAD PURCHASES ONE CIELO CAR PB IOU 851 3 FROM SH. HARMINDER SINGH, RESIDENT OF LUDHIANA DURING FINAN CIAL YEAR 1996-97. HE FURTHER STATED IN THE AFFIDAVIT THAT ON 07.06.19 96 A SUM OF RS. 50,000/- WAS GIVEN BY THE ASSESSEE TO SH. HARMINDER SINGH AS ADVANCE AND BALANCE PAYMENT OF RS. 4,50,000/- WAS GIVEN ON 08. 06.1996 AT JALANDHAR AND HE CERTIFIED THAT THE TRANSACTION IN DISPUTE HA S BEEN MADE IN HIS PRESENCE. 5) LEARNED COUNSEL FOR THE ASSESSEE STATED THAT T HESE DOCUMENTARY EVIDENCES HAVE NOT BEEN APPRECIATED BY THE REVENUE AUTHORITY AND HE WRONGLY MADE ADDITION IS DISPUTE W HICH DESERVES TO BE CANCELLED. 6) ON THE CONTRARY, LEARNED D.R. RELIED ON THE OR DER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY AND STATED THAT THE ASSESSEE HAS NOT PROVED THAT THE PAYMENT IN DISPUTE HAS BEEN MAD E ON 07.06.1996 OR 08.06.1996 WITH ANY DOCUMENTARY EVIDENCE. HE FURTHE R STATED THAT IN COMPLIANCE OF THE ORDER OF THIS BENCH, ASSESSEE HAS NOT PRODUCED SH. HARMINDER SINGH BEFORE THE ASSESSING OFFICER FOR WH ICH THE ASSESSEE IS 6 DUTY-BOUND TO PRODUCE SH. HARMINDER SINGH AND BRIG. (RETD.) H.S. SANGHA BEFORE THE ASSESSING OFFICER. THEREFORE, THE ADDITION IN DISPUTE HAS RIGHTLY BEEN MADE BY THE REVENUE AUTHORITY IN T HE CASE OF ASSESSEE. 7) WE HAVE HEARD BOTH THE PARTIES, PERUSED THE REL EVANT RECORD AVAILABLE WITH US ALONG WITH THE ORDERS PASS ED BY THE REVENUE AUTHORITY. 8) AS PER THE DOCUMENTARY EVIDENCE PRODUCED BY TH E ASSESSEE IN THE SHAPE OF PAPER BOOK BEFORE US ALONG WITH A CERTIFICATE THAT ALL THESE DOCUMENTARY EVIDENCE FILED IN THE PAPER B OOK ARE ALREADY ON RECORD BEFORE THE EARLIER AUTHORITIES AND NO NEW DO CUMENTARY EVIDENCE IS INCLUDED IN THE PAPER BOOK. WE HAVE SEEN THE LETTER DATED 09.09.2006 AS WELL AS THE AFFIDAVIT OF BRIG.(RETD.) H.S. SANGHA D ATED 23 RD JULY, 2004 WHICH THE ASSESSEE HAS ATTACHED AT PAGES 7 TO18 OF THE PAPER-BOOK. FOR THE SAKE OF CONVENIENCE, THEY ARE BEING REPRODUCED HEREINBELOW: LETTER DATED :09.09.2006 TO THE INCOME TAX OFFICER, WARD III(1), JALANDHAR. REGD:- ASSESSMENT. YEAR 1997-98 DEAR SIR, 7 WITH REFERENCE TO YOUR QUERIES FOR THE ASSESSMENT YEAR 1997- 98 RELEVANT TO THE ACCOUNTING YEAR ENDED 31.03.1997 AND WE SUBMIT AS UNDER. THIS HAS REFERENCE TO THE I.T.A.T. ORDER PASSED BY THE AMRITSAR BENCH IN I.T.A. NO. (ASR)/2000 FOR A.Y. 1997-98. THE HON'BLE BENCH HAD RESTORED THE MATTER TO THE FI LE OF THE A.O. WITH THE DIRECTION TO VERIFY WHETHER PAYMENT OF ENTIRE AMOUN T WAS MADE ON 07.06.1996 OR RS. 4,50,000/- WAS PAID ON 08.06.1996 . ONE CEILO BEARING REGISTRATION NO. PB-IOU-8513 WAS PURCHASED FROM ON SH. HARMINDER SINGH OF LUDHIANA FOR RS. 5,00,000 /-. RS. 50,000/- WAS GIVEN BY CASE ON DELIVERY ON 07.06.1996. HIS ADDRES S AS PER REGISTRATION CERTIFICATE (RC OF THE VEHICLE) WAS 52-A, MODEL TOW N, LUDHIANA. THE BALANCE AMOUNT OF RS. 4,50,000/- WAS PAID ON 08.06. 1996 IN THE PRESENCE OF BRIG. H.S. SANGHA THEN RESIDENT OF VILLAGE KHURL A KINGRA, TEHSIL & DISTT. JALANDHAR ON 08.06.1996. HIS AFFIDAVIT WAS F ILED ON RECORD AND HE WAS ALSO EXAMINED ON OATH. WITH A VIEW TO FOLLOW UP THE DIRECTIONS OF THE HON' BLE I.T.A.T. AND TO VERIFY THE FACTS YOU ARE REQUESTED TO KINDLY SUMMON THE SAID SH. HARMINDER SINGH AND SAID BRIG. H.S. SANGHA U/S 131 OF THE INCOME TAX ACT AT OUR COST. THE ADDRESS OF SH. HARMINDER SINGH IS GIVEN ABOVE AND THE PRESENT ADDRESS OF SH. H.S. SANGHA IS AS UNDER: - BRIG. H.S. SANGHA, F-3/8, VASANT VIHAR, NEW DELHI. THE ABOVE PERSON SHOULD BE SUMMONED IN OUR PRESENCE TO GIVE US AN OPPORTUNITY TO CROSS-EXAMINATION. IF REQUIRED. THANKING YOU. YOURS FAITHFULLY PLACE: JALANDAHR FOR:- ATWAL FINANCE(P) LTD. DATE: 09.09.2006 SD/./- (CHAIRMAN) 8 AFFIDAVIT OF BRIG.(RETD.) H.S. SANGHA AFFIDAVIT AFFIDAVIT OF BRIG.(RETD) H.S.SANGHA SON OF S. SUCHA SINGH AGED ABOUT 65 YEARS, RESIDENT OF F-3/8 VASANT VIHAR, NEW DEHLI 11 0 057, DO HEREBY SOLEMNLY DECLARE AND AFFIRM AS UNDER:- 1. THAT EARLIER I WAS LIVING AT HOUSE NO.1, OFFICERS C OLONY, KHURLA KINGRA NEAR T.V. TOWER, JALANDHAR. 2. THAT M/S ATWAL FINANCE COMPANY LIMITED, 918 G.T. RO AD, JALANDHAR CITY HAD PURCHASED ONE CIELO CAR PB IOU 8513 FROM S . HARMINDER SINGH, RESIDENT OF LUDHIANA DURING FINANCIAL YEAR 1 996-97. 3. THAT ON 07.06.1996 A SUM OF RS. 50,000/- WAS GIVEN BY THE SAID COMPANY TO S. HARINDER SINGH AS ADVANCE AND BALANCE PAYMENT OF RS. 4,50,000/- WAS GIVEN ON 08.06.1996 AT JALANDHAR. 4. THAT THE SAID PAYMENT OF RS. 4,50,000/- WAS GIVEN B Y M/S ATWAL FINANCE COMPANY LTD. TO S. HARMINDER SINGH AT JALAN DHAR ON 08.06.1996 IN MY PRESENCE AND I HAD ALSO COUNTERSIG NED THE VOUCHER OF PAYMENT AS A WITNESS. 5. THAT I HAD ALSO GIVEN AS AFFIDAVIT DATED 18.11.1999 TO THE SAID COMPANY WITH REGARD TO DEPOSIT GIVEN BY S.RAGHUPREE T SINGH, WHO IS MY RELATIVE. 6. THAT I AM RETIRED BRIG. H.S. SANGHA FROM THE INDIAN ARMY AND PRESENTLY SERVING AS SENIOR VICE PRESIDENT WITH M/S JAIPRAKASH ASSOCIATES LIMITED. SD/- DEPONENT VERIFICATION VERIFIED THAT ALL THE CONTENTS MENTIONED ABOVE ARE CORRECT TO THE BEST OF MY KNOWLEDGE, BELIEF AND INFORMATION AND NOTHING HAS B EEN CONCEALED THEREIN. 9 VERIFIED ON THIS DAY THE 23 RD OF JULY, 2004 SD/- DEPONENT 9) WE HAVE ALSO GONE THROUGH THE ORDER OF THIS BE NCH DT. 13.05.2005 PASSED IN I.T.A. NO. 196(ASR)/2000 IN WHICH THIS BENCH HAS GIVEN A DIRECTION TO THE ASSESSING OFFICER TO A LLOW AN OPPORTUNITY TO THE ASSESSEE FOR PRODUCING SH. HARMINDER SINGH TO V ERIFY WHETHER PAYMENT OF ENTIRE AMOUNT WAS RECEIVED ON 07.06.1996 OR RS. 4,50,000/- WAS RECEIVED ON 08.06.1996. THIS BENCH HAS ALSO GIV EN LIBERTY TO THE ASSESSING OFFICER TO MAKE INDEPENDENT INQUIRY IF HE SO DESIRES. BENCH HAS ALSO GIVEN A DIRECTION TO THE ASSESSING OFFICER THAT IF HE WANT TO RELY UPON ANY DOCUMENTARY EVIDENCE WHICH HE CONFRONTS TH E SAME TO THE ASSESSEE BEFORE RELYING UPON THE SAME. 10) WE HAVE EXAMINED THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE IN THE PAPER BOOK CONTAINING PAGA NOS. 1 TO 18 IN WHICH THE ASSESSEE HAS ATTACHED THE FOLLOWING DOCUMENTS: I. COPY OF I.T.A.T. ORDER DATED 13.05.2005 I.T.A. NO . 196/ASR/2000-A.Y. 1997-98. II. COPY OF LETTER DATED 09.09.2006 TO ITO, JALANDHAR. III. COPY OF THE LETTER DATED 12.12.2006 TO ITO, JALANDH AR. IV. PHOTOCOPY OF LETTER DATED 11.12.99 FILED BEFORE ITO , W. 2(5), JALANDHAR. V. PHOTOCOPY OF PAYMENT VOUCHER DATED 07.06.1996 FOR R S.50,000/- VI. PHOTOCOPY OF PAYMENT VOUCHER DATED 08.06.1996 FOR R S. 4,50,000/- 10 VII. PHOTOCOPY OF DELIVERY LETTER DATED 07.06.1996 VIII. PHOTOCOPY OF CERTIFICATE OF REGISTRATION OF THE CAR NO. PB-10U- 8513 IX. PHOTOCOPY OF AFFIDAVIT DATED 23.07.2004. 11) WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHA RGED ITS ONUS BY WRITING A LETTER DATED 09.09.2006 (REPRODUC ED ABOVE) AS WELL AS FILING AN AFFIDAVIT OF BRIG.(RETD.) H.S. SANGHA DAT ED 23 RD JULY, 2004(REPRODUCED ABOVE) TO THE ASSESSING OFFICER. NO W IT IS UPTO THE ASSESSING OFFICER TO SUMMON SH. HARMINDER SINGH, TH E SELLER OF THE VEHICLE, WHO PROVED THE VERACITY OF RECEIPTS OF PAY MENTS MADE BY HIM ON ACCOUNT OF SALE OF CAR BUT WE FOUND THAT THE ASSESS ING OFFICER HAS NOT ISSUED ANY SUMMON UNDER SECTION 131 OF THE I.T. ACT TO SH. HARMINDER SINGH AND BRIG.(RETD.) H.S. SANGHA AS REQUESTED BY THE ASSESSEE IN LETTER DATED 09.09.2006. AS PER THE AFFIDAVIT DATED 23 RD JULY, 2004 FILED BY BRIG. H.S. SANGH IN WHICH HE HAS CONFIRMED THAT THE ASSES SEE HAD PURCHASED THE VEHICLE IN DISPUTE FOR SH. HARMINDER SINGH IN H IS PRESENCE AND MADE THE PAYMENT FOR RS. 50,000/- ON 07.06.1996 AND RS. 4,50,000/- ON 08.06.1996. 12) IN VIEW THE AFORESAID DISCUSSION, WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED ITS ONUS IN COMPLIANCE OF THE ORDER OF THIS BENCH (SUPRA) BUT THE ASSESSING OFFICER HAS FAILED TO APPLY THE ORDER OF 11 THIS BENCH AND WRONGLY MADE THE ADDITION IN DISPUTE AND THE LEARNED FIRST APPELLATE AUTHORITY HAS ALSO, ON THE SAME FOOTING, UPHELD THE SAME WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE DOCUMENTARY EVIDENCE DISCUSSED ABOVE. T HEREFORE, THE ADDITION IN DISPUTE DESERVES TO BE CANCELLED. THUS, WE CANCEL THE IMPUGNED ORDER AND ACCEPT THE APPEAL FILED BY THE A SSESSEE. 13) IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH , 2013 SD/. SD/. (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH MARCH , 2013 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S ATWAL FINANCE CO. PVT. LTD., 918 , G.T. ROAD, JALANDHAR 2. THE INCOME TAX OFFICER, III(1), JALANDHAR. 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR 5. THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.