SHRI NAVRATAN MAL BANSAL, Jaipur V. ITO, Kishangarh

ITA 496/JPR/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5373 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Assessee Lawyers: O P AGARWAL
• Keywords: Additional evidence
• Section: 40A(3); 133(6); 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 496/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 SHRI NAVRATAN MAL BANSAL PROP. M/S. DAKSHTA MABLES, NEAR ARA MACHINE, SUMER NAGAR, AJMER ROAD, MADANGANJ, KISHANGARH CUKE VS. THE ITO KISHANGARH LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFJPB 7791 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MANISH AGARWAL, CA & SHRI O.P.AGARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/02/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 4 /03/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), AJMER DATED 09-03-2012 FOR THE ASSESSMENT YEAR 2005-06 WHEREIN FOLLOWING GROUNDS ARE RAISED. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN UPHOLDING THE PROCEEDINGS U/S 1 48 OF THE ACT. ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN SUSTAINING AN ADDITION OF RS. 2 4,271/-MADE U/S 40A(3) OF THE I.T. ACT 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN UPHOLDING AN ADDITION OF RS. 3 ,16,282/- U/S 40(1)(I) OF THE I.T. ACT 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 1 WHICH IS DISMISSED BEING N OT PRESSED. 3.2 APROPOS REMAINING GROUNDS, THE LD. AR OF THE AS SESSEE CONTENDS THAT IN THE CASE OF ONE M/S. A,B. STONEX, THE ORIGI NAL RETURN OF THE ASSESSEE WAS ACCEPTED IN WHICH THE DETAILS OF TRANS ACTIONS WITH M/S. A,B. STONEX. THEREAFTER, IN THE CASE OF M/S. A,B. STONE X, THE AO OBSERVED THAT IT HAS RECEIVED CASH PAYMENTS FROM THE ASSESSE E. CONSEQUENTLY, THE ASSESSMENT WAS REOPENED. THE ASSESSEE SUBMITTED HIS BOOKS OF ACCOUNT DEMONSTRATING THAT NO PAYMENT EXCEEDING RS. 20,000/ - WAS MADE IN CASH. THE FACTS AS REITERATED BEFORE THE LD. CIT(A) WERE PLACED BEFORE THE BENCH AS UNDER:- THE LD. AO HAS NOT FOUND ANY CONTRADICTION IN OUR SUBMISSION THUS THE FACT GIVEN IN OUR LETTER DESERV ES TO BE ACCEPTED WITHOUT ANY FURTHER COMMENT. ALL EVIDENCES ADMITTED TO HAVE BEEN PRODUCED DURING ASSESSMENT ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 3 PROCEEDINGS. NO CONTRAVENTION OF SECTION 40A(3) AS APPARENT FROM COPY OF A/C & BILLS. NO PAYMENT EXCEE DING RS. 20,000/- AT ANY TIME, AS APPEARS FROM PAGE 1 OF THE PAPER BOOK. AS SUCH, THE ADDITION DESERVES TO BE DELETED. IT IS SUBMITTED THAT WITHOUT REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE VERSION OF M/S. A,B. STONEX HAS BEEN ACCEPTED A ND THE ADDITION AMOUNTING TO RS. 24,271/- HAS BEEN MADE U/S 40A(3) OF THE ACT. IT IS FURTHER CONTENDED THAT REMAND REPORT WAS CALLED FOR FROM THE AO WHERE THE ASSESSEE ALSO PRODUCED LEDGER AND ACCOUNT BOOKS OF M/S. A,B. STONEX TO CORROBORATE HIS STAND THAT EACH PAYMENTS WAS BEL OW RS. 20,000/-. IT IS FURTHER SUBMITTED THAT WITHOUT ASSIGNING ANY REASON , THE AO PRESUMED THAT THE ASSESSEE HAS MADE PAYMENTS EXCEEDING RS. 2 0,000/- IN CASH. 3.2 APROPOS GROUND NO. 3 AS TO ADDITION MADE U/S 41 (1) AMOUNTING TO RS. 3,16,282/-, THE LD. AR CONTENDS THAT THE ASSESS EE HAD MADE PURCHASES DURING THE FINANCIAL YEAR 2003-04 FROM M/S. CHITVAN TRADING COMPANY TOTALING TO RS. 5,64,319/- AND PAYMENT OF RS. 2,48, 037/- WAS MADE IN THE SAME YEAR LEAVING THE CLOSING BALANCE OF RS. 3,16,2 82/-. SUBSEQUENTLY, THE ASSESSEE HAD REPAID THE AMOUNT OF RS. 76,000/- ON DIFFERENT DATES BY CHEQUES. DURING THE YEAR UNDER APPEAL, IT HAS NOT B EEN CONTROVERTED BY THE AO THAT REMAINING AMOUNT OF RS. 2,40,282/- WAS ALSO PAID IN THE ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 4 SUBSEQUENT YEAR. THE ASSESSEE EXPLAINED ALL THESE F ACTS TO THE AO. IT HAS BEEN ASSUMED THAT ASSESSEE'S LIABILITY FOR THE AMOU NT OF RS. 3,16,282/- WAS CEASED DURING THE YEAR AS THE NOTICE U/S 133(6) REMAINED UNCOMPLIED WITH. 3.3 IN FIRST APPEAL, THE ASSESSEE FILED THE APPLICA TION FOR ADDITIONAL EVIDENCE UNDER RULE 46A AND FURNISHED THE COPY OF P URCHASES AND SALES AND SALES TAX FORM ST-17 ISSUED AGAINST THE PURCHAS ES. THE REMAND REPORT THEREON WAS CALLED FOR. THE AO REPORTED THAT M/S. CHITVAN TRADING COMPANY HAS DENIED ANY CONFIRMATION ON THE ISSUE IN QUESTION. THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT PURCHASES HA VE BEEN ACCEPTED IN PAST. DURING THE YEAR UNDER CONSIDERATION, THE ASSE SSEE MADE PAYMENTS THROUGH CHEQUES WHICH HAVE BEEN REALIZED BY M/S. CH ITVAN TRADING COMPANY. THE LD. AR SUBMITTED THAT IN SALES TAX ASS ESSMENT, CONCESSIONAL RATE OF SALES TAX IS APPLICABLE ON THE BASIS OF FORM ST 7 ISSUED BY THE ASSESSEE. THE SAID FACTS HAVE BEEN AC CEPTED BY M/S. CHITVAN TRADING COMPANY AND IN CASE SOMETHING IS SAID OTHER WISE BEHIND THE BACK OF ASSESSEE CANNOT BE HELD AS CONCLUSIVE EVIDE NCE THAT ASSESSEE'S VERSION IS NOT CORRECT. THE REFERENCE TO THE STATEM ENT DATED 15-02-2012 MADE BY SHRI SATISH CHAND KABRA OF M/S. CHITVAN TRA DING COMPANY IS TAKEN INTO ACCOUNT WHO HAS NOWHERE DENIED THE ABOUT THE BUSINESS ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 5 RELATION IN THE PAST WITH THE ASSESSEE COMPANY. SHR I SATISH CHAND KABRA STATED THAT ASSESSEE HAD BUSINESS RELATIONS WITH TH E ASSESSEE 7/8 YEARS BACK WHICH DEALS WITH THE YEAR IN QUESTION I.E. FIN ANCIAL YEAR 2003-04. IT IS CONTENDED THAT THE TRADE LIABILITY BEING OUTSTAN DING IN THE BOOKS OF THE ASSESSEE CANNOT BE PRESUMED TO HAVE CEASED AND ADDE D U/S 40(1)(A) MERELY ON SUSPICION AND ASSUMPTION. THE LD. AR RELI ED ON FOLLOWING CASE LAWS. (I) CIT VS. INDIAN RAYON & INDUSTRIES LTD. 38 DTR 313 (BOM.) (II) ACIT VS. GLENMARK PHARMACEUTICALS LTD. (2010) 8 TAXMANN.COM 35 (MUM-ITAT) (III) CIT VS. SHRI VARDHMAN OVERSEAS LTD. 69 DTR 37 9 (DEL.) (IV) DCIT VS. EASTERN MEDIKIT LTD. , 146 TTJ 51 (DE L.B) 3.4 THE LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A ). 3.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. APROPOS GROUND NO. 2 RELATING TO ADDITION OF RS. 24,271/- U/S 40A(3) OF THE ACT, IN MY CONSIDERED VI EW, IT APPEARS FROM THE LEDGER AND COPY OF THE ACCOUNT OF THE PARTY THA T EACH CASH PAYMENT WAS BELOW RS. 20,000/- AND ASSESSEE'S BOOKS OF ACCO UNT HAS NOT BEEN ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 6 REJECTED. IN VIEW OF ABOVE DELIBERATIONS, THE ASSES SEE HAS MADE CASH PAYMENT OVER AND ABOVE RS. 20,000/- IS NOT BORN OUT FROM THE ASSESSEE'S BOOKS OF ACCOUNT AND RECORD. HENCE, THE ADDITION SU STAINED BY THE LD. CIT(A) AMOUNTING TO RS. 24,271/- IS DELETED. 3.6 APROPOS NEXT ADDITION AMOUNTING TO RS. 3,16,282 /- MADE U/S 40(1)(A) OF THE ACT, IT HAS NOT BEEN DISPUTED THAT LIABILITY IS STILL OUTSTANDING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE . SALES TAX HAS BEEN PAID ON THE SALES BILLS ALBEIT AT CONCESSIONAL ON T HE BASIS FOR SALES TAX FORM NO.ST 17 ISSUED BY THE ASSESSEE IN FAVOUR OF M /S. CHITVAN TRADING COMPANY. THE ASSESSEE'S RECORD WHICH IS NOT CONTROV ERED AND IT CANNOT BE BRUSHED ASIDE MERELY ON GENERAL STATEMENT GIVEN BY OTHER PARTY THAT TOO AFTER A PERIOD OF 8 YEARS. ALL THE PAYMENTS HAVE BE EN REALIZED THROUGH BAKING CHANNEL. THUS IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO JUSTIFICATION IN ASSUMING THAT AS SESSEE'S LIABILITY HAS CEASED IN TERMS OF SECTION 40(1)(A) OF THE ACT. THE REFORE, THE ADDITION CONFIRMED BY THE LD. CIT(A) TO THE TUNE OF RS. 3,16 ,282/- IS DELETED AND GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. ITA NO. 496/JP/2012 SHRI NAVRATAN MAL BANSAL VS. ITO , KISHANGARH . 7 4.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 / 03/201 6 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 /03/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI NAVRATAN MAL BANSAL, KISHANGARH 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, KISHANGARH 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 496/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR