M/s. Prakash Liquors, Karad V. ACIT, Satara Circle, Satara

ITA 537/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8505 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: HARSHVARDHAN DATAR
• Keywords: Additional evidence
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 537/PN/2013 (ASSESSMENT YEAR 2008-09) M/S. PRAKASH LIQUORS, .. APPELLANT C/O CA SHIRISH GODHOLE SSS & ASSOCIATES CHARTERED ACCOUNTANTS, D/1, BLDG NO.2 PRAKASH NAGAR, KARAD - 415110 PAN NO. AADFP4332R VS. ACIT, SATARA CIRCLE, SATARA .. RESPONDENT ASSESSEE BY : SHRI HARSHVARDHAN DATAR REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 29-09-2014 DATE OF PRONOUNCEMENT : 30-09-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 20/11/2012 PASSED BY THE CIT(A)-III PUNE RELA TING TO THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND JU DICIAL PROPOSITION LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY LD. ASSESSING O FFICER UNDER SECTION 40A(3) AS THE ASSESSEE COULD NOT PRODUCE TH E CONFIRMATIONS FROM VENDOR DUE TO ILL ADVICE AND THIS ISSUE IS LIAB LE TO BE SET ASIDE TO THE FILE OF LD. ASSESSING OFFICER. 2. WITHOUT PREJUDICE TO THE GROUND NO.1, ON THE F ACTS AND CIRCUMSTANCES OF THE CASE AND JUDICIAL PROPOSITION LD. COMMISSIONER 2 OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DIS ALLOWANCE MADE BY LD. ASSESSING OFFICER UNDER SECTION 40A(3), SUCH DISALLOWANCE IS ERRONEOUS ON FACTS AND BAD IN LAW AND LIABLE TO BE D ELETED. 3. WITHOUT PREJUDICE TO THE GROUND NO.1 AND GROUND NO.2, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND JUDIC IAL PROPOSITION LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE DISALLOWANCE MADE BY LD. ASSESSING OFFICER UNDER SE CTION 40A(3), SUCH DISALLOWANCE IS EXTREMELY EXCESSIVE LIABLE TO BE RE DUCED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ALL OR ANY OF THE PREVIOUSLY MENTIONED GROUNDS OF APPEAL. 3. AFTER HEARING BOTH THE SIDES WE FIND THE ASSESSI NG OFFICER DISALLOWED AN AMOUNT OF RS.33,55,209/- U/S.40A(3) O N THE GROUND THAT THE ASSESSEE HAS MADE PAYMENTS TO CREDITORS AN D SUPPLIERS OTHERWISE THAN BY CROSSED ACCOUNT PAYEE CHEQUES O R BANK DRAFTS. IN APPEAL, THE LD.CIT(A) RESTRICTED SUCH DISALLOWANCE TO RS.30,25,215/- AGGRIEVED WITH SUCH ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE US. 3.1 THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTS ET, FILED CERTAIN LETTERS FROM THE SUPPLIER AT WHOSE INSISTENCE AND T HREAT TO STOP SUPPLY OF THE GOODS, THE ASSESSEE PAID FOR THE PURCHASES O THER THAN BY ACCOUNT PAYEE CHEQUES OR BANK DRAFTS. HE SUBMITTE D THAT THESE DOCUMENTS ARE ADDITIONAL EVIDENCES AND WERE NOT AVA ILABLE WITH THE ASSESSEE TILL THE COMPLETION OF THE ASSESSMENT OR A PPEAL PROCEEDINGS AS RESPECTIVE SUPPLIERS WERE NOT READY TO GIVE SUCH CONFIRMATIONS IN WRITING. NOW THAT THESE LETTERS ARE AVAILABLE, T HEREFORE, IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE PRABHAVATI SHAH REPORTED IN 231 ITR 1 THESE ADDITIONAL EVIDENC ES, WHICH GO TO THE ROOT OF THE FACTUAL MATTER SHOULD BE ADMITTED. REFERRING TO THE 3 DECISION OF THE PUNE BENCH TRIBUNAL IN THE CASE OF THE SHRI SHANKAR KRISHNA PANASKAR VIDE ITA NO.376/PN/2013 ORDER DATE D 25/08/2014 FOR THE ASSESSMENT YEAR 2009-10, HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANCES THE TRIBUNAL HAS DELETED THE ADDITION MADE U/S. 40A(3) OF THE I.T. ACT. HE ACCORDINGLY SUBMITTED THAT TH E ADDITION MADE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) SHOU LD BE DELETED. IN HIS ALTERNATE PLEA, HE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENC ES AND IN THE LIGHT OF THE DECISION OF THE TRIBUNAL. 3.2 THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTH ER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT H E HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 4. AFTER HEARING BOTH THE SIDES WE FIND THE ASSESSI NG OFFICER MADE ADDITION OF RS.33,55,209/- U/S.40A(3) SINCE TH E ASSESSEE INSTEAD OF PAYING THE AMOUNT BY CROSS ACCOUNT PAYEE CHEQUES OR DEMAND DRAFTS HAS PAID THE MONEY TO THE SUPPLIERS/C REDITORS BY BEARER CHEQUES. WE FIND THE LD.CIT(A) SUSTAINED A N AMOUNT OF RS.30,25,215/- OUT OF THE ABOVE ADDITION AND GAVE P ART RELIEF TO THE ASSESSEE. THE SUBMISSIONS OF THE ASSESSEE THAT DUE TO COMPULSION BY THE SUPPLIERS, HE HAS MADE THE PAYMENT BY BEARER CHEQUES WAS NOT PROVED BEFORE THE ASSESSING OFFICER OR CIT(A). SI NCE THE ASSESSEE HAS FILED CERTAIN LETTERS FROM THE SUPPLIERS IN SHA PE OF ADDITIONAL EVIDENCES WHICH WERE NOT BEFORE THE ASSESSING OFFIC ER OR CIT(A), THEREFORE, WE IN THE INTEREST OF JUSTICE DEEM IT P ROPER TO RESTORE THE 4 ISSUE TO FILE OF THE ASSESSING OFFICER WITH A DIREC TION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE ADDITIONAL EVI DENCES FILED BEFORE THE TRIBUNAL AND IN ACCORDANCE WITH LAW. WHILE DO ING SO THE ASSESSING OFFICER SHALL ALSO KEEP IN MIND THE DECIS ION OF THE TRIBUNAL IN THE CASE OF SHRI SHANKAR KRISHNA PANASK AR CITED (SUPRA). 376/PN/2013. WE HOLD AND DIRECT ACCORDINGLY. GR OUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICA L PURPOSES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. PRONOUNCED IN THE OPEN COURT ON 30-09-2014. SD/- SD/ - (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE DATED: 30 TH SEPTEMBER, 2014 ASHWINI COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. DY.CIT.III PUNE 4. ADDL.CIT,SATARA RANGE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE