M/S GANPATI AGRO P. LTD, Jaipur V. ITO, Jaipur

ITA 691/JPR/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2546 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1995-1996
• Appeal Filed On: 04-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 131; 68

Judgement Text

1 ITA 691-08 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR ( BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER ) ITA NO. 691/JP/2008 ASSTT. YEAR : 1995-96. M/S. GANPATI AGRO PVT. LTD., VS. THE INCOME-TAX O FFICER, 264, BARKAT NAGAR, JAIPUR. WARD 6(3), JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHENDRA GARGIEYA RESPONDENT BY : SHRI SANJAY KUMAR ORDER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON SEVERAL GROUNDS. AT THE TIME OF HEARING, THE LD. A/R PRESSED GROUND NO. 3 QUESTI ONING THE ADDITION OF RS. 1,00,049/- ON ACCOUNT OF CASH CREDIT MADE UNDER SECTION 68 AND TH E ADDITION OF RS. 15,325/- ON ACCOUNT OF INTEREST THEREON. 2. THE LD. A/R SUBMITTED THAT WHILE MAKING/CONFIRMI NG THE ABOVE ADDITIONS IN QUESTION, THE LOWER AUTHORITIES HAVE FAILED TO APPR ECIATE THAT THE AO WHILE EXAMINING THE ISSUE HAS FAILED TO COMPLY WITH THE DIRECTION OF TH E TRIBUNAL VIDE ORDER DATED 15.7.2004 IN ITA NO. 308/JP/2004 AS PER WHICH THE AO WAS SUPPOSE D TO EXAMINE AS TO WHETHER THESE CASH CREDITORS WERE ASSESSED TO TAX OR NOT. HE SUBM ITTED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED T HE DETAILS OF ALL THE CASH CREDITORS SUPPORTED WITH THEIR AFFIDAVITS AND THAT EXCEPT ONE OUT OF SEVEN CREDITORS ALL ARE ASSESSED TO TAX. HE POINTED OUT THAT CREDITOR SHRI BHANWARL ALJI EXPIRED IN BETWEEN AND ASSESSEE HAD PRODUCED THE REMAINING SIX CREDITORS BEFORE THE AO ON 15.2.2006. HOWEVER, IT CAME 2 TO KNOW THAT BY THAT TIME THE AO HAD ALREADY PASSED THE ORDER IMPUGNED. HE FURNISHED AFFIDAVITS OF THESE CREDITORS TO THIS EFFECT WITH T HIS PRAYER TO THE BENCH THAT SAME MAY BE ALLOWED AS ADDITIONAL EVIDENCE FOR THE CONSIDERATIO N OF THE BENCH. THE LD. A/R ALSO PLACED RELIANCE ON SEVERAL DECISIONS INCLUDING OF H ONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF CIT VS. FIRST POINT FINANCE LTD., 286 ITR 477 (RAJ.), LABHCHAND BOHRA VS. ITO, 8 DTR 44 (RAJ.) AND KANHAIALAL JANGID VS. ACIT, 8 D TR 38 (RAJ.). 3. THE LD. D/R ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE LOWER AUTHORITIES WITH THE SUBMISSION THAT DESPITE OPPORT UNITIES GIVEN TO THE ASSESSEE, THE ASSESSEE FAILED TO PRODUCE THE CASH CREDITORS BEFOR E THE AO HENCE AO WAS HAVING NO OPTION EVEN DURING SET ASIDE PROCEEDINGS BUT TO UPH OLD THE ADDITIONS. 4. CONSIDERING THE ABOVE SUBMISSIONS, I FIND THAT T HE MATTER WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE AO VIDE FOLLOWING DIREC TIONS IN ITA NO. 308/JP/2004 ORDER DATED 15.7.2004 :- 5. BY CONSIDERING THE TOTALITY OF FACTS AND CIRCU MSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IN THE INSTANT CA SE, THE AO HAS NOT ISSUED SUMMON UNDER SECTION 131 TO THE CASH CREDITO RS. AO HAS NOT EXAMINED WHETHER THESE CASH CREDITORS WERE ASSESSED TO TAX OR NOT. HE SIMPLY MENTIONED THAT THEY ARE NOT ASSESSED TO T AX. IN THESE CIRCUMSTANCES, WE SET ASIDE BOTH THE ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE MATTER TO THE AO TO DECIDE THE ISSU E DENOVO AFTER EXAMINING THE ENTIRE EVIDENCE, BUT BY PROVIDING REA SONABLE OPPORTUNITY TO THE ASSESSEE AS PER LAW. ON PERUSAL OF THE ASSESSMENT ORDER DATED 16.2.2006 IN QUESTION, I FIND THAT THE AO HAS NOT BOTHERED HIMSELF TO EXAMINE THE CORRECTNESS OF INCOME TAX PARTICULARS OF THE SIX 3 CREDITORS FROM WHOM THE ASSESSEE HAD CLAIMED TO HAV E TAKEN LOAN RANGING FROM RS. 6741/- TO RS. 16,000/- AT THE MAXIMUM AS UNDISPUTED LY THE ASSESSEE HAD FURNISHED PERMANENT ACCOUNT NUMBERS OF THESE CREDITORS BEFORE THE AO AT ORIGINAL ASSESSMENT AGAINST WHICH THE TRIBUNAL HAD OBSERVED THAT THE AO HAD NOT EXAMINED AS TO WHETHER THESE CASH CREDITORS WERE ASSESSED TO TAX OR NOT AN D HAD SIMPLY MENTIONED THAT THEY WERE NOT ASSESSED TO TAX. UNDER THESE BACK GROUND THE TR IBUNAL TO MEET THE ENDS OF JUSTICE HAD SET ASIDE BOTH THE ORDERS OF THE LOWER AUTHORITIES AND RESTORED THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE DENOVO AFTER EXAMINING THE E NTIRE EVIDENCE. THOUGH THE AO IN THE SECOND ROUND HAS REPRODUCED THE SAID ORDER OF THE T RIBUNAL IN PARA NO.3 OF THE ASSESSMENT ORDER BUT FAILED TO COMPLY THEREWITH FULLY. THE AO HAS RATHER UPHELD THE ADDITIONS IN SET ASIDE ASSESSMENT ORDER MAINLY ON THE BASIS THAT NEI THER THE ASSESSEE HAS BEEN ABLE TO PRODUCE THE CASH CREDITORS FOR THEIR VERIFICATION N OR ANY BANK ACCOUNT OR ANY OTHER DOCUMENTARY EVIDENCE HAVE BEEN PRODUCED TO ESTABLIS H THE GENUINENESS OF THE CASH CREDITORS. THE LD. CIT (A) HAS ALSO FAILED TO APPRE CIATE THE MATERIAL FACTS AND CIRCUMSTANCES IN VIEW OF THE SAID ORDER DATED 15.7. 2004. UNDER THESE CIRCUMSTANCES I AM OF THE VIEW THAT THE AO WAS NOT JUSTIFIED IN UPHOLD ING THE ADDITIONS IN QUESTION WITHOUT VERIFYING THE INCOME TAX PARTICULARS OF THE SIX CAS H CREDITORS FURNISHED BEFORE HIM AS PER DIRECTION OF THE TRIBUNAL AND FAILED TO APPRECIATE THAT THE AMOUNT STATED TO BE TAKEN FROM THOSE 7 CREDITORS WERE NOT SO HUGE TO DOUBT THE CRE DITWORTHINESS OF THOSE CREDITORS, DETAILS OF WHICH WERE FURNISHED BY THE ASSESSEE BEFORE HIM. MERELY BECAUSE ASSESSEE COULD NOT PRODUCE THOSE CREDITORS DURING THE COURSE OF ASSESS MENT PROCEEDINGS OR THEY DID NOT RESPOND THE SUMMONS ISSUED TO THEM BY THE AO, THE O THER FACTS AND CIRCUMSTANCES CANNOT 4 BE IGNORED WHILE CONSIDERING THE ISSUE. THE ADDITIO NS ARE ACCORDINGLY DELETED. THE GROUND IS ALLOWED. 5. IN THE RESULT, APPEAL IS ALLOWED. 6. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23. 12.2009. SD/- ( I.C. SUDHIR ) JUDICIAL MEMBER JAIPUR, DATED : 23/12/2009. D/- COPY FORWARDED TO :- M/S. GANPATI AGRO PVT. LTD., JAIPUR. THE ITO WARD 6(3), JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 691/JP/2008) BY ORDER, SR. PS ITAT JAIPUR.