ITO, New Delhi V. Shri Satish Gupta, New Delhi

ITA 5983/DEL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77596 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: ARUN MEHTA
• Section: 142(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI T.S.KAPOOR , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 5 983 /DEL /2010 (ASSESSMENT YEAR: 2007 - 08 ) ITO WARD 24(1), ROOM NO. 186, C. R. BUILDING, NEW DELHI VS. SATISH GUPTA, G - 37, GREEN PARK NEW DELHI PAN: ABGPG9555P (APPELLANT) (RESPONDENT) APPELLANT BY : S. N. BHATIA, DR RESPONDENT BY : ARUN MEHTA, FCA O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD C IT(A) , XX III , NEW DELHI DATED 11.10.2010 FOR THE ASSESSMENT YEAR 2007 - 08 . 2. THE GROUND OF APPEAL PREFERRED BY THE REVENUE IS AS FOLLOWS: - 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 37,41,771/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF GENUINENESS OF SUNDRY CREDITORS. 3. APROPOS THE SOLE GROUND OF APPEA L IS THAT DELETION OF ADDITION OF RS. 37,41,771/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF GENUINENESS OF SUNDRY CREDITORS.. 4. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE FILED A RETURN DECLARING AN INCOME OF RS. 9,78,460/ - ON 31.10.2007, WHICH WAS PR OCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) WAS ISSUED ON 26.09.2008 AND CONSEQUENTLY AN ASSESSMENT WAS PASSED. THE ASSESSEE IS A PROPRIETOR OF M/S AUDIO VISUAL AIDS AND CARRYING THE BUSINESS OF TRADING OF HEARING AIDS, OPTICAL AND ALLIED ACTIVITIES. THE ASSESSING OFFICER SERV ED NOTICE U/S 142(1) AND ASKED THE ASSESSEE TO FILE DETAILS OF SUNDR Y CREDITORS AND ASKED HIM TO SUBMIT CONFIRMATION LETTERS FROM THE CREDITORS WHICH ARE EXCEEDING BALANCE OF RS. 50,000/ - . THE ASSESSING OFFICER STATES THAT SINCE THE ASSESSEE HAS NOT FILED PAGE NO. 2 CONFIRMATION FROM THE FOLLOWING SUNDRY CREDITORS HAVING BALANCE OVER RS. 50,000/ - AS ON 31.03.2007 TILL DATE O F THE ORDER, H E MADE AN ADDITION OF RS. 37,41,771/ - TO THE TOTAL INCOME OF THE ASSESSEE AS UNDER: - SL. NO. NAME OF CREDITORS AMOUNT 1. M/S. ELKON PVT. LTD. RS. 2,65,866/ - 2. M/S. G. N. RESOUND INDIA PVT. LTD. RS. 34,75,905/ - TOTAL RS. 37,41,771/ - 5. AGGRIEVED BY THE SAID ORDER OF THE ASSESSING OFFICER , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A), WHO WAS PLEASE D TO DELETE THE SAID ADDITION. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A), THE REVENUE PREFERRED AN APPEAL AND IS BEFORE US. 6. THE LD DR CONTENDED THAT THE ASSESSING OFFICER HAD GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSEE TO FILE CONFIRMATION LETTERS IN RESPECT TO THE SUNDRY CREDITORS. HOWEVER, THE ASSESS EE FAILED TO PRODUCE ANY CONFIRMATION, SO, THE ASSESSING OFFICER WAS JUSTIFIED TO ADD THE SAID ADDITION , S INCE THE GENUINENESS OF THE SUNDRY CREDITORS COULD NOT BE ESTABLISHED. THEREFORE ACCORDING TO THE LD DR, THE LD CIT(A) HAVE ERRED IN LAW BY DELET ING T HE SAME. AND THEREFORE , THE ORDER OF THE LD CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. ON THE OTHER HAND , THE LD AR SUBMITTED THAT THE COPIES OF ACCOUNTS OF THESE PARTIES APPEARING IN THE BOOKS OF THE ASSESSEE WERE DULY FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING GIVING COMPLETE POSTAL ADDRESS AND THEIR ASSESSMENT PARTICULARS AND IN FACT, THE SUNDRY CREDITORS WHERE COMPANIES REGISTERED WITH REGISTRAR OF COMPANIES, MUMBAI. ACCORDING TO LD AR, N OWHERE DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS CONFRONTED WITH ANYTHING ADVERSE FOR THE ASSESSING OFFICER TO COME TO THE CONCLUSION THAT THE SUNDRY CREDITS WERE NOT GENUINE AND IS MERELY BASED ON SUSPICION, SURMISES AND CONJECTURES. THEREFORE, A CCORDING TO THE LD AR THE LD CIT(A) HAS RIGHTLY APPRECIATED THE FACT S IN THE CORRECT PER SPECTIVE AND HAS DELETED THE SAID ADDITION. THEREFORE THE LD AR DOES NOT WANT US TO DISTURB THE SAID ORDER OF THE LD CIT(A). 7. WE HAVE HEA R D BOTH THE PARTIES AND HAV E CAREFULLY PERUSED THE RECORD, WE FIND THAT THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS NEITHER REJECTED NOR HAS MADE ANY ADVERSE FINDING IN RESPECT TO THE BOOKS OF ACCOUNT. THE ASSESSING OFFIC ER HAS NOWHERE DOUBTED THE GENUINENESS OF THE PURCHASE MADE AND THE RESULTING SALE THEREOF AND PAGE NO. 3 THUS HIS CONCLUSION IN TREATING THE CLOSING BALANCE IN END OF THE YEAR AS A N ADDITION IS INVALID IN THE EYES OF LAW. THE LD CIT(A) HAS RIGHTLY TAKEN NOTE THAT TH E ASSESSING OFFICER HAS NEITHER CONFRONTED THE ISSUE ABOUT THE GENUINENESS OF THE SUNDRY CREDITORS NOR ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE SUNDRY CREDITORS. IT MAY BE NOTED THAT THE SUNDRY CREDITORS WERE ASSESSED TO INCOME TAX AND THE PAN NOS OF THE PARTIES WERE GIVEN ON THE CONFIRMATION FILED WITH THE LETTER DATED 25.11.2009 DURING THE ASSESSMENT PROCEEDINGS AND THE SUN DRY CREDITORS WERE COMPANIES WHICH WERE REGISTERED WITH THE REGISTRAR OF COMPANIES, MUMBAI. IF THE ASSESSING OFFICER HAD A NY SUSPICION ABOUT THE GENUINENESS OF THE SUNDRY CREDITORS HE SHOULD HAVE RESORTED TO PROVISIONS U/S 133(6/131 TO BRING ON RECORDS ANY EVIDENCE TO THAT EFFECT . HOWEVER, WE FIND THAT THERE WAS NO SUCH EXERCISE UNDER TAKEN BY THE ASSESSING OFFICER AND HE HAS MADE THIS ADDITION SIMPLY ON THE BASIS OF ASSUMPTIONS AND SUSPICI ON . THE ONUS ON THE ASSESSEE WAS DISCHARGED BY THE ASSESSEE, SO THE ADDITION WAS MERELY BASED ON SUSPICION , SURMISES AND CONJECTURES, SO WE CONCUR WITH THE FINDING OF THE LD CIT(A) AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD CIT(A). THEREFORE WE UPHOLD THE ORDER OF THE LD CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT THE APPEAL PREFERRED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 . 04 .2014. - SD/ - - SD/ - ( T.S.KAPOOR ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:04 / 04 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI