Jayna Chemicals P.Ltd., Pune V. ACIT, Cent. Cir.2(1), Pune

ITA 645/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1985 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-10-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 18-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Search and seizure; Loose papers; Opportunity of being heard; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 645/PN/2011 (ASSESSMENT YEAR 2003-04) JAYNA CHEMICALS PVT. LTD., SHAH KHANDELWAL JAIN & ASSOCIATES, C.A. LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE. .. APPELLANT PAN NO.AAACJ 4652 VS. ACIT, CENTRAL CIRCLE 2(1), PUNE .. RESPONDENT APPELLANT BY : SRI NILESH KHANDELWAL RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 21-03-2013 DATE OF PRONOUNCEMENT : 22 -03-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 28-02-2011 OF THE CIT(A) CENTRAL, PUNE RELATING TO ASSESSMENT YEAR 2003-04. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER : ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, THE ADDITIONS OF RS.4,55,491/- MAD E BY THE ASSESSING OFFICER AND THAT CONFIRMED BY THE IST APPELLATE AUTHORITY PERTA INING TO ALLEGED AMOUNT PAID IN RESPECT OF ACCOMMODATION ENTRIES IS UNWARRANTED, UNJUSTIFIED AND CONTRARY TO THE FACTS PREVAILING IN THE CASE AND PROVISIONS OF LAW. THE ADDITION MADE BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING IN CHEMICALS. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE ASSESSEES GROUP OF CASES ON 17-03 -2006. IN RESPONSE TO NOTICE U/S.153A THE ASSESSEE STATED THAT THE REGULAR RETUR N FILED BY IT DECLARING INCOME OF RS.6,76,380/- MAY BE TREATED AS RETURN FILED IN COM PLIANCE TO NOTICE U/S.153A OF THE INCOME TAX ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT PAGE 51 AND 52 SEIZED FROM THE PREMISES REVEALED TH AT THE SALE CONSIDERATIONS ARE 2 RECEIVED BY CHEQUE AND CASH EXCLUDING THE TAX PORTI ON IS RETURNED BACK. THE ASSESSEE WAS UNABLE TO SATISFACTORILY EXPLAIN THE ABOVE PAGE S. THE TOTAL AMOUNT INVOLVED ON THESE PAGES IS RS.1,96,214/-. SIMILARLY, PAGES 10 6 TO 110 ALSO CONTAIN TRANSACTIONS OF SIMILAR NATURE AND THE TOTAL AMOUNT INVOLVED IS RS. 2,59,277/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ABOVE A MOUNTS BEING ACCOMMODATION ENTRIES SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSE SSEE. IN ABSENCE OF ANY PROPER CLARIFICATION TO HIS SATISFACTION THE ASSESSING OFF ICER MADE ADDITION OF RS.4,55,491/- TO THE TOTAL INCOME OF THE ASSESSEE. 5. IN APPEAL THE LEARNED CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT ALTHOUGH THE ASSESSEE EXPLAINED THAT THE AMOUNTS MENTIONED IN THESE PAGES ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS , HOWEVER, THE ASSESSEE COULD NOT GIVE AN EXPLANATION IN RESPECT OF CASH WHICH WAS RE TURNED TO THE RESPECTIVE PARTIES. 5.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING SUBMITTED THAT ALL THE ENTRIES FOUND IN THE LOOSE PAPERS ARE DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND HE SUBMITTED THAT NO SUCH CASH AS ALLEGED BY THE RE VENUE HAS BEEN RETURNED BACK TO THE PARTIES. HE SUBMITTED THAT GIVEN AN OPPORTUNITY HE CAN EXPLAIN BEFORE THE ASSESSING OFFICER THAT NOTHING IS UNACCOUNTED FOR AND THESE ARE GENUINE ENTRIES. HE ACCORDINGLY SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FI LE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE REGULAR BOOKS OF ACCOUNTS A ND PASS APPROPRIATE ORDER. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT SHE HAS NO OBJEC TION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE VERACIT Y OF THE DOCUMENTS, VIS-A-VIS THE REFUND OF CASH TO THE PARTIES. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS THE CASE OF THE REVENUE THAT THESE ARE ACCOMMODATION ENTRIES AND THE ASSESSEE HAS RETURNED THE SALE PROCEEDS AFTER DEDUCTING THE TAX PORTION. IT IS THE SUBMISSION OF THE LEARN ED COUNSEL FOR THE ASSESSEE THAT ALL THE ENTRIES ARE DULY RECORDED IN THE REGULAR BOOKS OF T HE ASSESSEE AND ARE NOT 3 ACCOMMODATION ENTRIES AS ALLEGED BY THE REVENUE AUT HORITIES AND NO CASH AS ALLEGED HAS BEEN RETURNED TO THE PARTIES. CONSIDERING THE TOTA LITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO G IVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND PROVE TO HIS SATISFACTION T HAT ALL THE ENTRIES ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND NO PART OF THE SAME HA S BEEN TRANSFERRED TO THE PARTIES. THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWE D FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS, THE 22 ND DAY OF MARCH 2013. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED THE 22 ND MARCH 2013 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-CENTRAL, PUNE 4. CIT-CENTRAL, PUNE 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENI OR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE