ITO, Chandigarh V. M/s Anmol Pulp & Paper Pvt. Ltd., Chandigarh

ITA 541/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63868 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 541/CHD/2012 ASSESSMENT YEAR: 2008-09 I.T.O. V ANMOL PULP & PAPER PVT LTD. WARD 1(3) SCO 18-19, 2 ND FLOOR CHANDIGARH SECTOR 8-C, CHANDIGARH AADCA 7676 C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT BY: SHRI VINEET KRISHAN DATE OF HEARING: 9.8.2012 DATE OF PRONOUNCEMENT: 9.8.2012 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF C IT(A), CHANDIGARH DATED 29.2.2012 RELATING TO ASSESSMENT Y EAR 2008-09 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND IN THIS APPEAL:- THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 29,65,495/- ON THE BASIS OF ADDITIONAL EVIDENCE OF THIRD PARTIES THOUGH THE SAME HAS NOT PRODUCED DURING THE ASSESSM ENT AND HAD THUS NEVER BEEN VERIFIED AT ANY STAGE. 3. THE REVENUE IN THE PRESENT APPEAL IS AGGRIEVED B Y THE DELETION OF ADDITION OF RS. 29,65,495/- MADE IN THE HANDS OF TH E ASSESSEE BY THE ASSESSING OFFICER. THE GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) HAD ERRED IN DELETING THE SAID ADDITION ON THE BASIS OF ADDITIONAL EVIDENCE OF THIRD PARTIES WHICH WAS NOT PRODUCED IN THE ASSESSM ENT PROCEEDINGS AND WAS THUS NEVER VERIFIED AT ANY STAGE. 2 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HAD SHOWN JOB WORK RECEIPT FROM M/S ABC PAP ER LTD., TO THE TUNE OF RS. 59,68,360/-. HOWEVER, AS PER THE TDS CERTIF ICATES ISSUED BY M/S ABC PAPER LTD., TOTAL PAYMENTS WORKED OUT TO RS. 89 ,33,855/- ON WHICH TAX WAS DEDUCTED AT SOURCE. THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE BETWEEN THE TWO. THE EXPLANATION OF THE ASSESSEE WAS THAT BECAUSE OF THE DEFICIENCY IN THE QUALITY OF PAPER S UPPLIED BY THE ASSESSEE, CERTAIN DEBITS WERE MADE BY M/S ABC PAPER LTD., FOR WHICH DEBIT NOTES WERE ISSUED AND ACCOUNTED FOR BY THE ASSESSEE IN HI S BOOKS OF ACCOUNT. IN THE ABSENCE OF HAVING FAILED TO FURNISH CERTAIN DOC UMENTS REQUISITIONED BY THE ASSESSING OFFICER I.E. THIRD PARTY EVIDENCE, TH E DIFFERENCE OF RS. 29,65,495/- WAS TREATED AS INCOME OF THE ASSESSEE. 5 BEFORE THE CIT(A), THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS EXPLAINING THAT THE DIFFERENCE IN THE RECEIPTS SHOW N BY THE ASSESSEE AND AS PER TDS CERTIFICATE WAS ATTRIBUTABLE TO THE REJECTI ON OF PAPER MANUFACTURED BY THE ASSESSEE ON JOB WORK BASIS AND CONSEQUENT DEDUCTION OF JOB CHARGES AMOUNTING TO RS. 20,50,000/- ON ACCO UNT OF POOR QUALITY OF PAPER. THE BALANCE WAS ON ACCOUNT OF OTHER DEBI T NOTES ISSUED BY M/S ABC PAPER LTD. FURTHER IT WAS EXPLAINED THAT THE T AX WAS DEDUCTED AT SOURCE OUT OF GROSS JOB WORK RECEIPTS. THE ASSESSEE FURTHER CLAIMED BEFORE THE CIT(A) THAT IT HAD PRODUCED THE EVIDENCE TO THE EXTENT THAT THIRD PARTY TO WHOM THE COMPANY M/S ABC PAPER LTD. HAD SUPPLIED PAPER, HAD REJECTED THE SAME. FURTHER EVIDENCE WAS ALSO FILED BEFORE THE CIT(A). 6 THE CIT(A) VIDE PARA 3.3 OBSERVED AS UNDER:- I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSE L OF THE APPELLANT. THE MATTER WAS DISCUSSED IN DETAIL WITH THE ASSESSING OFFICER. I HAVE ALSO GONE THROUGH THE VARIOUS DOCU MENTS FILED BY THE APPELLANT ALONGWITH THE WRITTEN SUBMISSIONS. A PERUSAL OF THESE DOCUMENTS REVEALS THAT AS AND WHEN THE COMPLAIN REG ARDING QUALITY OF PAPER WAS RECEIVED BY M/S ABC PAPER LTD., THE SA ME WAS DULY VERIFIED AND APPROPRIATE COMPENSATION WAS AWARDED T O THE BUYER, IF THE COMPLAINT OF THE BUYER WAS FOUND CORRECT AFTER VERIFICATION. AS 3 THE APPELLANT WAS DOING THE JOB WORK, DEDUCTION HAD BEEN MADE FROM THE AMOUNTS CREDITED TO THE APPELLANT ON ACCOU NT OF JOB WORK CHARGES. IN VIEW THEREOF THE CIT(A) DELETED THE ADDITION OF RS. 29,65,495/-. 7 THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER O F THE CIT(A) AND THE ONLY GRIEVANCE OF THE REVENUE IS NON-CONSIDERAT ION OF THE SAID ADDITIONAL EVIDENCE BY THE ASSESSING OFFICER. 8 THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER AND POINTED OUT THAT THE ASSESSEE HAD FAILED TO PRODUCE THE SAID EVIDENCE DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. 9 THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THOU GH CERTAIN DOCUMENTS WERE PRODUCED BEFORE THE ASSESSING OFFICE R BUT COMPLETE DOCUMENTS WERE FURNISHED BEFORE THE CIT(A) WHO CONF RONTED TO THE SAME TO THE ASSESSING OFFICER, WHO IN TURN FURNISHED THE REMAND REPORT, WHICH IS PLACED A T PAGE 38 OF THE PAPER BOOK. IT WAS FU RTHER POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THE COMPLETE EVIDENCE OF COMPLAINTS RECORDING POOR QUALITY OF PAPER ARE ANNEXED AT PAGE S 39 TO 124 OF THE PAPER BOOK. 10 THE LD. DR FOR THE REVENUE OBJECTED TO THE SAME AND WAS DIRECTED TO PRODUCE THE ASSESSMENT RECORD. ON THE NEXT DATE OF HEARING, THE LD. DR FOR THE REVENUE FAIRLY ADMITTED THAT THE SAID EVIDE NCE IS AVAILABLE ON THE FILE OF BOTH THE ASSESSING OFFICER AND THE CIT(A). 11 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SH OWN TOTAL JOB WORK RECEIPTS OF RS. 59,68,362/- ON ACCOUNT OF JOB CHAR GES RECEIPT FROM M/S ABC PAPER LTD. HOWEVER, IN THE TDS CERTIFICATE ISS UED BY M/S ABC PAPER LTD. THE TOTAL JOB WORK RECEIPTS WERE RS. 89, 33,855/-. THE ASSESSEE EXPLAINED THAT THERE WAS A DEDUCTION OF PAYMENT TOT ALING RS. 29,65,495/- 4 ON ACCOUNT OF POOR QUALITY OF PAPER SUPPLIED BY TH E ASSESSEE, AGAINST WHICH M/S ABC PAPER LTD. RECEIVED COMPLAINTS FROM T HE RESPECTIVE PARTIES TO WHOM THE SAID PAPER WAS SUPPLIED AND CON SEQUENTLY DEBIT NOTES WERE RAISED TO THE EFFECT, WHICH WERE DEBITED/CREDI TED BOTH IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND M/S ABC PAPER LTD. HOWE VER, THE TAX WAS DEDUCTED AT SOURCE FROM THE GROSS PAYMENT AND NOT O N FROM NET PAYMENT AND HENCE VARIATION IN THE RECEIPTS AS REFLECTED IN THE BOOKS OF ACCOUNT AS SHOWN BY THE ASSESSEE IN ITS RETURN OF INCOME AND A S REFLECTED IN THE TDS CERTIFICATES. THERE WAS SOME DISCREPANCY IN THE DA TE OF ENTRIES OF THE SAID DEDUCTION IN THE BOOKS OF ACCOUNT OF THE ASSESSEE V IS-A-VIS M/S ABC PAPER LTD. CONSEQUENT TO WHICH THE CLAIM OF THE AS SESSEE WAS REJECTED BY THE ASSESSING OFFICER. FURTHER THE ASSESSEE HAD FAI LED TO PRODUCE THE THIRD PARTY EVIDENCES BEFORE THE ASSESSING OFFICER. HOWE VER, THE ASSESSEE FURNISHED COMPLETE EVIDENCE BEFORE THE CIT(A) WHO IN TURN CONFRONTED THE SAME TO THE ASSESSING OFFICER. THE ASSESSING O FFICER VIDE LETTER DATED 2.2.2012 IN COMMUNICATION TO THE CIT(A), CHAN DIGARH HAD STATED AS UNDER:- IN CONNECTION WITH ABOVE, IT IS SUBMITTED THAT I H AVE PERUSED THE COPIES OF DOCUMENTS /INFORMATION FURNISHED BEFORE Y OUR OFFICE IN RESPECT OF ABOVE APPEAL. FROM THE PERUSAL OF THES E DOCUMENTS, IT IS NOTICED THAT THE EVIDENCE OF PAPER QUALITY FROM THIRD PARTIES WERE NOT PRODUCED BY THE ASSESSEE DURING THE COURSE OF A SSESSMENT PROCEEDINGS AS IS EVIDENT FROM THE ASSESSMENT ORDER WHERE IT HAS BEEN MENTIONED BY THE ASSESSING OFFICER THAT IN THE ABSENCE OF THIRD PARTY CORROBORATIONS, THE AMOUNTS DEDUCTED BY THE P RINCIPLES CANNOT BE ALLOWED TO BE DEDUCTED FROM THE PAYMENTS MADE TO THE ASSESSEE. HOWEVER, AFTER PERUSAL OF DOCUMENTS NOW FILED BEFOR E YOUR GOOD OFFICE THAT HAVE BEEN FORWARDED TO THIS OFFICE, IT IS SEEN THAT THEY DO APPEAR TO BE GENUINE AND MAY KINDLY BE CONSIDERED O N MERITS WHILE ALLOWING CLAIM OF THE ASSESSEE. 12 THE ASSESSING OFFICER HAD VERIFIED THE DOCUMENTS FILED AND HAD CONFIRMED THE SAME TO BE GENUINE AND CONSEQUENTLY THE CLAIM OF THE ASSESSEE WAS FOUND TO BE GENUINE BY THE CIT(A). TH E LD. DR FOR THE REVENUE WAS SPECIFICALLY ASKED TO PRODUCE THE ASSES SMENT RECORD AND FROM 5 THE PERUSAL OF THE SAID ASSESSMENT RECORD, THE LD. DR FOR THE REVENUE STATED THAT THIRD PARTY EVIDENCE WAS AVAILABLE ON T HE FILE OF THE ASSESSING OFFICER AND ALSO CIT(A). IN VIEW THEREOF WHERE THE EVIDENCE HAS BEEN CONFRONTED TO THE ASSESSING OFFICER AND THE REMAND REPORT RECEIVED FROM THE ASSESSING OFFICER WHO HAD VERIFIED ALL THE DOCU MENTS AND FOUND THE SAME TO BE GENUINE, WE FIND NO MERIT IN THE PLEA OF THE REVENUE ON ACCOUNT OF SO-CALLED ADDITIONAL EVIDENCE. THUS UPHOLDING THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF RS. 29,65,495/-, WE DIS MISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 13 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF AUGUST, 2012. SD/- SD/- (T.R. SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9TH AUGUST, 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR