PIRI SYSTEM P. LTD, MUMBAI V. ITO 7(1)(2), MUMBAI

ITA 7134/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5207 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 18-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SRI H.L. KARWA, PRESIDENT, AND SHRI N.K.BILL AIYA, AM ./ I.T.A. NO. 7134/MUM/2010 ( / ASSESSMENT YEAR : 2007-08) PIRI SYSTEM P. LTD. A-34, ROYAL INDUSTRIAL ESTATE, NAIGAON CROSS ROAD, WADALA, MUMBAI-400031 / VS. I.T.O. RANGE-7(1)(2), AAYKAR BHAVAN, MUMBAI. !' $ ./ PAN :AABCP7124Q ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( ) / APPELLANT BY : SRI VIPUL JOSHI &''% ( ) / RESPONDENT BY : SHRI SANJEEV JAIN ( *$ / DATE OF HEARING : 03/10/2013 +, ( *$ / DATE OF PRONOUNCEMENT : 03/10/2013 -. / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-13, MUMBAI, DATED 28/05/2010 PERTAINING TO A .Y.2007-08 2. ASSESSEE HAS RAISED THREE SUBSTANTIVE GROUNDS OF APPEAL. WITH GROUND NO. 1 AND 2, ASSESSEE HAS CLAIMED THAT THERE WAS A DENIAL OF NATURAL JUSTICE IN AS MUCH AS THE CIT(A) HAS NOT CO NSIDERED REQUEST FOR THE ADMISSIONS OF ADDITIONAL EVIDENCES. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT AN AMOUNT OF RS.1,24,41,038/- WAS SHOWN AS PAYABLE TO M/S GRETAG IMAGING A.G. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF 2 ITA NO.7134/MUM/2010 PIRI SYSTEM P.LTD. TRANSACTIONS WITH THIS FIRM. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN WHY THE AMOUNT IS OUTSTANDING SINCE YEAR 2000 AND WHY I T SHOULD NOT BE TREATED AS CESSATION OF LIABILITY U/S. 41(1) OF THE ACT. THE ASSESSEE EXPLAINED THAT THE AMOUNT IS PAYABLE ON ACCOUNT OF MATERIAL IMPORTED FROM THE SAID FIRM IN THE PAST. THEREFORE, THE LI ABILITY IS SHOWN IN THE BOOKS OF ACCOUNTS AND IS PAYABLE. THE ASSESSEE STR ONGLY OBJECTED TO THE INVOCATION OF SECTION 41(1) OF THE ACT STATING THAT THERE IS NO CESSATION OF LIABILITY. AFTER CONSIDERING THE REPLY OF THE ASSE SSEE, THE AO WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS FAILED TO PRODUCE BASIC DOCUMENTS SUCH AS PURCHASE, IMPORT DOCUMENTS ALONG WITH TRANSPORT BILLS ETC. THE AO WAS ALSO OF THE FIRM BELIEF THAT THE UNPAID LIABILI TY WHICH IS MORE THAN THREE YEARS OLD AND NOT YET PAID IS TO BE CONSIDERE D AS CESSATION OF LIABILITY. THE AO ADDED BACK THE TOTAL AMOUNT OF R S.1,24,41,038/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 41(1) OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A), A ND VIDE LETTER DATED 12/05/2010 FILED ON 13/05/2010 , THE ASSESSEE SOUG HT PERMISSION FROM THE CIT(A) FOR THE ADMISSION OF ADDITIONAL EVIDENC ES. THE ASSESSEE FILED ALL THE DETAILS WHICH WERE SOUGHT BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CIT(A) COMPLETELY IGNORED THE REQ UEST OF THE ASSESSEE. AT THE SAME TIME, THE CIT(A) HELD THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS AND OBSERVED THAT THE LIABILITY OF THE RS. 1,24,41,038/- IN THE NAME OF M/S GRETAG IMAGING A.G. HAS CEASED TO EXIST AND THE SAME IS LIABLE TO BE TAXED U/S 41(1) OF THE ACT AND CONFIR MED THE ADDITION MADE BY THE AO. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 6. THE COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED T HAT THE CIT(A) HAS COMPLETELY IGNORED THE DOCUMENTS WHICH WERE FILED D URING THE COURSE OF THE APPELLATE PROCEEDINGS UNDER RULE 46A. THE COUN SEL FURTHER STATED THAT ALL THE NECESSARY SUPPORTING EVIDENCES/DOCUMEN TS RELATING TO THE 3 ITA NO.7134/MUM/2010 PIRI SYSTEM P.LTD. SAID CREDITORS WERE BROUGHT ON RECORD BEFORE THE CI T(A). BUT THE CIT(A) HAS NOT TAKEN ANY COGNIZANCE OF THE SAID DOCUMENTS, THEREBY THE CIT(A) HAS VIOLATED THE PRINCIPAL OF NATURAL JUSTICE. PER CONTRA, THE LD. DR RELIED UPON THE FINDING OF THE AO. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOT IN DISP UTE THAT THE ASSESSEE DID NOT FILE ANY EVIDENCE IN RELATION TO THE TRANSACTIO N WITH M/S GRETAG IMAGING A.G DURING THE COURSE OF THE ASSESSMENT PRO CEEDINGS. A PERUSAL OF THE PAPER-BOOK FILED BEFORE US SHOWS THAT VIDE L ETTER DATED 12/05/2010 WHICH IS PART OF THE PAPER BOOK AND IS EXHIBITED AT PAGE 185 , THE ASSESSEE HAS FILED ALL THE RELATED DOCUMENTS WITH A PRAYER FOR THEIR ADMISSION UNDER RULE 46A. HOWEVER, WE FIND THAT TH ERE IS NO MENTION OF ALL THESE DOCUMENTS/EVIDENCES IN THE ORDER OF THE C IT(A). WE FIND FORCE IN THE CONTENTION OF THE COUNSEL THAT THERE IS DENIAL OF NATURAL JUSTICE. 8. CONSIDERING THE NATURE OF EVIDENCE BROUGHT BEFOR E US IN THE FORM OF PAPER-BOOK. IN OUR HUMBLE OPINION, THIS ISSUE NEED S TO BE RE-ADJUDICATED BY THE CIT(A) AFTER CONSIDERING THE EVIDENCES BROUG HT ON RECORD BY THE ASSESSEE IN SUPPORT OF ITS CLAIM. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILES OF THE CIT( A), THE CIT(A) IS DIRECTED TO CONSIDER ALL THE EVIDENCES WHICH WERE BROUGHT BE FORE HIM DURING THE COURSE OF APPELLATE PROCEEDINGS IN THE FORM OF ADDI TIONAL EVIDENCE AFTER GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE NECESSA RY DETAILS BEFORE THE CIT(A) IN SUPPORT OF ITS CLAIM. GROUND NO.1 AND 2 ARE ALLOWED FOR STATISTICAL PURPOSES. 9. GROUND NO.3 RELATES TO THE MERITS OF THE CASE AS WE HAVE RESTORED THE ENTIRE ISSUE BACK TO THE FILES OF THE CIT(A) TO BE DECIDED AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCES FILED DURING THE COURSE OF APPELLATE PROCEEDINGS, WE DO NOT FIND IT NECESSARY TO DECIDE THIS ISSUE. 4 ITA NO.7134/MUM/2010 PIRI SYSTEM P.LTD. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/10/2013 -. ( +, $ /- 03/10/2013 , , ( 0 SD/- (H.L.KARWA) SD/- (N.K.BILLAIYA) HONBLE PRESIDENT ACCOUNTA NT MEMBER MUMBAI; /- /DATED : 3 RD OCTOBER, 2013. SHEKHAR. P.S. -. -. -. -. ( (( ( &*12 &*12 &*12 &*12 32 * 32 * 32 * 32 * / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 4 ( ) / THE CIT- , MUMBAI. 4. 4 / CIT(A)- , MUMBAI 5. 250 &* , , / DR, ITAT, MUMBAI 6. 06 7 / GUARD FILE. -. -. -. -. / BY ORDER, '2* &* //TRUE COPY// 8 88 8 / 9 9 9 9 : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI