M/s Pretty Exports Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5946/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52453 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 09-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: SANJAY MISHRA
• Section: 40A(3)

Judgement Text

ITA NO. 5946/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 5946/DEL/2010 A.Y. : 2007-08 M/S PRETTY EXPORTS PVT. LTD., B-7/10, 2 ND FLOOR, (D.S.), RAMESH NAGAR, NEW DELHI 110 015 VS. INCOME TAX OFFICER, WARD 14(4), ITO BUILDING, AYAKAR BHAVAN, NEW DELHI (PAN/GIR NO. : AACCP 1022G) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSEESSEE BY : SH. SANJAY MISHRA, ADV. DEPARTMENT BY : SMT. ANUSHA KHURANA, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 07.10. 2010 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN LAW AND ON FACTS BY UPHOLDING T HE ADDITION U/S 40A(3) OF ` 46,82,237/-. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS O F MANUFACTURING OF HANDMADE WOOLEN CARPETS AND DRUGGE TS. ASSESSING OFFICER NOTED THAT ASSESSEE COMPANY HAD PURCHASED CARPETS OF ` 2,34,11,237/- IN CASH AS SHOWN IN THE DETAILS OF SU NDRY PARTIES. ITA NO. 5946/DEL/2010 2 ASSESSING OFFICER FOUND THAT ASSESSEE HAD MADE CASH PURCHASE FROM 158 PARTIES AGGREGATING TO ` 2,24,11,186/-. ASSESS ING OFFICER WAS OF THE VIEW THAT PROVISION OF SECTION 40A(3) ARE APPLI CABLE AND THEREFORE, HE MADE THE DISALLOWANCE OF ` 46,82,237/- (BEING 20% OF CASH PURCHASE U/S. 40A(3) OF THE IT ACT. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , ASSESSEE HAS SUBMITTED THAT PURCHASES OF ` 83,80,096/- WERE M ADE IN CASH, PURCHASES OF ` 86,41,090/- WAS MADE ON CREDIT AND P URCHASE OF ` 63,90,000/- WAS MADE BY CHEQUE. FURTHER, LD. COMMIS SIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSEE HAS NOT SU BSTANTIATED THESE CLAIMS. LD. COMMISSIONER OF INCOME TAX (APPEALS) FU RTHER NOTED THAT ASSESSEE HAS NOT FURNISHED THE CONFIRMATION OF ACCO UNTS FROM THE PARTIES ALSO. HENCE, LD. COMMISSIONER OF INCOME TA X (APPEALS) PROCEEDED TO CONFIRM THE ACTION OF THE ASSESSING OF FICER. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL B EFORE USE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT IN THIS CASE THE ASSESSEE HAD MADE THE PURCHASES OF CARPETS AMOUNTIN G TO ` 2,34,11,237/-. ASSESSEES CLAIM IN THIS REGARD IS THAT HE HAS MADE THE PAYMENT IN CASH AS WELL AS IN CREDIT AND THE SAME P AYMENTS HAVE ALSO BEEN MADE BY CHEQUE. IT IS ALSO THE CLAIM OF THE A SSESSEE THAT NO SINGLE PAYMENT OF MORE THAN ` 20,000/- WAS MADE AT A TIME. IT HAS ALSO BEEN CLAIMED THAT THE PAYMENTS MADE ARE COVERE D BY EXCEPTIONS AS MENTIONED IN RULE 6DD(F). WE HAVE CAREFULLY CON SIDERED THE SUBMISSIONS. WE FIND THAT AUTHORITIES BELOW HAVE N OT PROPERLY APPRECIATED THE SUBMISSIONS OF THE ASSESSEE. ASSESS EE HAS ALSO NOT PRODUCED THE NECESSARY EVIDENCE IN THIS REGARD TO P ROVE THE CLAIM. IN ITA NO. 5946/DEL/2010 3 OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILES OF THE ASSESSING OFFICER T O CONSIDER THE ISSUE AFRESH. THE ASSESSEE IS DIRECTED TO PRODUCE THE N ECESSARY EVIDENCES BEFORE THE ASSESSING OFFICER IN SUPPORT OF ITS CLAI M. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUN ITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/8/2011 UPO N CONCLUSION OF HEARING. SD/- SD/- [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 09/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES