THE ITO, Vijayawada V. Gopi Naga Hanuman Prasad, Vijayawada

ITA 61/VIZ/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6759 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 16-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 133A; 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 35 /VIZ/ 201 6 ( / ASSESSMENT YEAR: 20 11 - 1 2 ) G.NAGA HANUMAN PRASAD PROP. SAI SURYA TYRES D.NO.54 - 3 - 38, PLOT NO.23 BLOCK NO.A - 1,2 ND CROSS ROAD AUTONAGAR, VIJAYAWADA 520 007 [PAN :AHOPG7434K] INCOME TAX OFFICER WARD - 2(3) VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) ./ I.T.A.NO. 61 /VIZ/201 6 ( / ASSESSMENT YEAR: 20 11 - 12 ) INCOME TAX OFFICER WARD - 3 ( 4 ) VIJAYAWADA G.NAGA HANUMAN PRASAD PROP. SAI SURYA TYRES D.NO.54 - 3 - 38, PLOT NO.23 BLOCK NO.A - 1, 2 ND CROSS ROAD, AUTONAGAR, VIJAYAWADA 520 007 [PAN :AHOPG7434K] ( / APPELLANT) ( / RESPONDENT) / A SSESSEE BY : SHRI C.SUBRAHMANYAM, AR / R EVENUE BY : SHRI M.N.MURTHY NAIK, DR / DATE OF H EARING : 21 .0 8 .2017 / DATE OF P RONOUNCEMENT : 23 . 08. 2017 2 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : I.T.A.NO. 6 1 /VIZ/201 6, A.Y.2011 - 12 TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE C OMMISSIONER OF INCOME TAX ( APPEALS ), [CIT(A)], VIJAYAWADA VIDE ITA NO. 64 /CIT(A)/VJA/ 2014 - 1 5 DATED 2 0 . 1 1 .201 5 . 2. ALL THE GROUNDS OF THE APPEAL ARE RELATED TO THE ADDITION OF RS.1,44,71,262/ - REPRESENTING THE SUNDRY CREDITORS. IN THIS CASE, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT ON 14.03.2014. THE ASSESSING OFFICER HAS MADE THE ADDITION OF OUTSTANDING SUNDRY CREDITORS AS FOLLOWS : M/S APPOLLO TYRES LTD. RS.27,13,225 M/S BIRLA TYRES RS. 3,08,931 M/S CEAT LTD. RS. 3,08,629 M/S JK TYRES AND INDUSTRIES LTD. RS.95,83,687 M/S KAIZEN TYRES LTD. RS.12,52,350 M/S MODI TYRES RS. 2,43,483 M/S RAVI KIRAN TYRES RS. 60,957 TOTAL RS.1,44,71,262 3 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD 2.1. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS ASKED FOR THE CONFIRMATION OF THE BALANCES FROM THE SUNDRY CREDITORS AND THE ASSESSEEE FAILED TO FURNISH THE CONFIRMATIONS. THEREFORE, THE ASSESSING OFFICER TREATED THE OUTSTANDING BALANCES AS BO GUS LIABILITIES AND ACCORDINGLY MADE THE ADDITION. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A) AND FILED THE RECONCILIATION ST ATEMENT OF OUTSTANDING LIABILITIES AND THE LD.CIT(A) CALLED FOR THE REMAND REPORT AND THE ASSESSING OFFICER SUBMITTED THE REMAND REPORT ARRIVING THE DIFFERENCE AS UNDER: SL.NO. NAME OF THE TRADE CREDITOR BALANCE AS PER ASSESSEES BOOKS RS. BALANCE AS PER ACCOUNT COPY OF CREDITOR RS. DIFFERENCE RS. 1. J.K.TYRES 58,84,174 58,61,583 22,591 2. MODI TYRES 1,81,283 1,81,194 89 3. CEAT TYRES 3,08,629 3,11,428 2,799 HOWEVER, THE ASSESSING OFFICER IN THE REMAND REPORT STATED THAT THE ASSESSEE FILED CONFIRMATION S DURING THE REMAND STAGE BUT THE CONFIRMATIONS WERE UNSIGNED AND ACCORDING TO THE ASSESSING OFFICER THE Y 4 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD WERE UN AUTHENTICATED, HENCE, THE ASSESSING OFFICER SUGGESTED FOR SUSTAINING THE ADDITION. LD.CIT(A) STATED IN THE APPELLATE ORDER THAT THE CASE WAS REMANDED TO ASSESSING OFFICER FOR MAKING INQUIRIES AND COLLECTING THE INFORMATION AND TO SUBMIT THE FACTUAL REPORT. BUT THE ASSESSING OFFICER FAILED TO DISCHARGE HIS DUTIES IN COMPLETING THE E NQUIR IES AND PUSHED THE BURDEN ON THE ASSESSEE TO FURNISH CONFIRMATIONS . LD.CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER SHOULD HAVE CONDUCTED THE E NQUIRIES WITH THE SUNDRY CREDITORS INSTEAD OF DIRECTING THE ASSESSEE TO FURNISH THE CONFIRMATION FROM THE SUNDRY CREDITORS. SINCE THE ASSESSING OFFICER FAILED TO AVAIL THE OPPORTUNITY, AND THE ASSESSEE SUBMITTED THE CONFIRMATION LETTERS THERE IS NO CASE FOR THE AO TO AGITATE. LD.CIT(A) WAS OF THE VIEW THAT THE IN THE CONFIRMATIONS CONTAIN THE FULL PARTICULARS OF THE YEAR WHICH WAS RECONCILED BY THE AO WITH THE ACCOUNTS OF T HE SUNDRY CREDITORS IN ITS BOOKS AND A RRIVED AT THE MARGINAL DIFFERENCE IN THREE ACCOUNTS . H ENCE THE ARGUMENT OF THE AO TO REJECT THE CONFIRMATIONS AS UN AUTHENTICATED IS NOT COMPREHENSIBLE AND ACCORDINGLY SUSTAINED THE ADDITION OF RS.22,680/ - AND THE BAL ANCE AMOUNT WAS DELETED. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD 4. APPEARING FOR THE REVENUE, LD.DR ARGUED THAT THERE WAS OUTSTANDING BALANCE OF SUNDRY CREDITORS TO THE TUNE OF RS.1,44,71,262/ - AS ON 31.03.2011 AND TH E ASSESSING OFFICER CALLED FOR THE CONFIRMATION LETTERS FROM THE SUNDRY CREDITORS BUT THE ASSESSEE FAILED TO FURNISH THE CONFIRMATIONS, THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION. DURING THE REMAND PROCEEDINGS ALSO, THE ASSESSING OFFICER HAS GIVE N ONE MORE OPPORTUNITY TO THE ASSESSEE TO FURNISH THE CONFIRMATION LETTERS, BUT THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION LETTERS DULY AUTHENTICATED BY THE CREDITORS. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD.CIT(A) IN THE REMAND REPORT. THEREFOR E, ACCORDING TO THE LD.DR ONUS WAS NOT DISCHARGED BY THE ASSESSEE REGARDING THE CORRECTNESS OF OUTSTANDING BALANCES, HENCE, THE LD.CIT(A) COMMITTED AN ERROR BY DELETING THE ADDITION. THE LD.DR REQUESTED FOR SETTING ASIDE THE ORDER OF THE LD.CIT(A) AND RES TORE THE ORDER OF THE AO. 5. ON THE OTHER HAND, LD.AR RELIED ON THE ORDER OF THE LD.CIT(A). 6 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, ASSESSMENT WAS COMPLETED U/S 143(3) AND DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THE DETAILS CALLED FOR BY THE ASSESSING OFFICER INCLUDING PRODUCTION OF BOOKS OF ACCOUNT EXCEPT CONFIRMATIONS FROM THE SUNDRY CREDITORS. THE ASSESSEE IS A SMALL BUSINESS MAN AND THE SUNDRY CREDITORS ARE HIGHLY REP UTED LEADING TYRE MANUFACTURING COMPANIES. THE ASSESSING OFFICER MADE THE ADDITION OF OUTSTANDING SUNDRY CREDITORS. THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT AND THE LD.CIT CALLED FOR THE REMAND REPORT. IN THE REMAND REPORT, THE ASSESSEE SUBMITTED THE CONFIRMATION COPIES SUPPLIED TO HIM BY THE CREDITORS WHICH WERE UNSIGNED. THE CONFIR MATIONS WERE COMPUTER GENERATED AND THE ASSESSEE STATED THAT THE COMPUTER GENERATED REPORTS ARE GENERALLY NOT SIGNED. NOWADAYS IT HAS BECOME A COMMON PRACTICE TO SEND CO MPUTER GENERATED REPORT WITHOUT THE SIGNATURE OF THE AUTHOR OF THE LETTER . AS PER THE CONFIRMATION LETTERS SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER AND THE LD.CIT(A) HAS RECONCILED THE BALANCES AND AFTER RECONCILIATION , THE F OLLOWING DIFFERENCE WAS ARRIVED AT IN THE BALANCE OF SUNDRY CREDITORS. 7 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD 1. J.K.TYRES : RS.22,591/ - 2. MODI TYRES : RS. 89/ - 3. CEAT TYRES : RS. 2,799/ - T HE LD.CIT(A) CONFIRMED THE AD DITION WHICH WAS NOT RECONCILED . THE MAIN THRUST OF ARGUMENT OF LD.DR WAS THAT THE CONFIRMATION LETTERS WERE NOT SIGNED. A S DISCUSSED ABOVE, NOWADAYS, THE COMPUTER GENERATED REP OR TS ARE GENERALLY UNSIGNED. THOUGH IT IS UNAUTHENTICATED, THE ASSESSING OFFICER HAS NOT CONDUCTED THE E NQUI RIES AT THE TIME OF ASSESSMENT AND AT THE REMAND REPORT STAGE . THE ASSESSING OFFICER IS VESTED WIT H THE POWERS OF 131, 133(6) AND 133A FOR COLLECTING THE INFORMATION BUT THE ASSESSING OFFICER FAILED TO COLLECT THE INFORMATION BY EXERCISING POWERS VESTED I N HIM, INSTEAD HE PUSHED THE BURDEN ON THE ASSESSEE WHICH WE CANNOT APPRECIATE . IF THE ASSESSING OFFICER IS SUSPECTING THE CONFIRMATION LETTERS SUBMITTED BY THE ASSESSEE, HE SHOULD HAVE CONDUCTED THE ENQUIRIES AND BROUGHT THE FACTS TO THE NOTICE OF THE LD .CIT(A) INSTEAD OF OBJECTING IN ROUTINE FASHION. THE LD.CIT(A) OBSERVED THAT THOUGH THE CONFIRMATIONS WERE UNSIGNED IT CONTAIN FULL INFORMATION AND THE AO HAS RECONCILED AND ARRIVED THE DIFFERENCE S ON THE BASIS OF CONFIRMATIONS SUBMITTED BY THE ASSESSEE, HENCE THERE IS NO 8 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD REASON TO DISBELIEVE THE CONFIRMATIONS SUBMITTED BY THE ASSESSEE. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE LD.CIT(A) AND ACCORDINGLY W E UPHOLD THE ORDER OF THE LD.CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. I.T.A.NO. 35 /VIZ/201 6, A.Y.2011 - 12 7. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), [CIT(A)], VIJAYAWADA VIDE ITA NO.64/CIT(A)/VJA/2014 - 15 DATED 20.11.2015. 8 . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSIN G OFFICER FOUND THAT THERE W ERE CREDITS IN THE CAPITAL ACCOUNT TO THE EXTENT OF RS.10,19,847/ - . THE ASSESSING OFFICER HAS ASKED FOR THE SOURCES AND THE ASSESSEE FAILED TO SUBMIT THE SOURCES FOR THE CREDITS IN THE CAPITAL ACCOUNT. THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION OF RS.10,19,847/ - . 9 . AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT ON APPEAL BEFORE THE LD.CIT(A) AND THE LD. CIT(A) CONFIRMED THE 9 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD ADDITION . THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE REGARDING SOURCE, GENUINENESS OF THE CAPITAL INTRODUCED DURING THE YEAR . DURING THE APPEAL HEARING ALSO, THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE WITH REGARD TO SOURCE OF CAPITAL INTRODUCED DURING THE YEAR IN HIS CAPITAL ACCOUNT. IT IS OBLIGATION ON THE PART OF THE ASSESSEE EXPLAIN THE SOU R CES FOR INTRODUCTION OF CAPITAL DURING THE YEAR. SINCE THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE DURING THE APPEAL HEARING ALSO, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE L D.CIT(A) AND THE SAME IS UPHELD AND AP PEAL OF THE ASSESSEE IS DISMISSED. 1 0 . IN THE RESULT, THE APPEAL S OF THE REVENUE AND OF THE ASSESSEE ARE DISMISSED. T HE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23 RD AUG 20 17 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 23 . 0 8 .2017 L. RAMA, SPS 10 ITA NO S . 35 /VIZ/201 6 AND 61/VIZ/2016 SRI G.NAGA HANUMAN PRASAD / COPY OF THE ORDER FORWARDED TO : - 1 / THE A SSESSEE G.NAGA HANUMAN PRASAD, PROP. SAI SURYA TYRES, D.NO.54 - 3 - 38, PLOT NO.23, BLOCK NO.A - 1,2 ND CROSS ROAD, AUTONAGAR, VIJAYAWADA 520 007 2 . / THE RE VENUE THE ITO, WARD - 2(3) AND WARD - 3(4), VIJAYAWADA 3 . THE CHIEF COMMISSIONER OF INCOME TAX, VIJAYAWADA 4. ( ) / THE CIT (APPEALS), VIJAYAWADA 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM