M/s Heera Moti Agro Industries, Solan V. DCIT, Chandigarh

ITA 739/CHANDI/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9104 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Opportunity of being heard; Retrospective amendment; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 739/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S HEERA MOTI AGRO INDUSTRIES, VS THE DCIT, 204, HPSIDC, INDUSTRIAL AREA, CENTRAL CIRCLE-I, BADDI, DISTRICT SOLAN. CHANDIGARH. PAN: AADFH7463B & ITA NO. 756/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S HEERA MOTI AGRO PRODUCTS, VS THE DCIT, 199, HPSIDC, INDUSTRIAL AREA, CENTRAL CIRCLE-I, BADDI, DISTRICT SOLAN. CHANDIGARH. PAN: AACFH8098M & ITA NO. 568/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S HEERA MOTI SPICES P.LTD., VS THE DCIT, 1054, INDUSTRIAL AREA, PHASE-2, CENTRAL CIRCLE-I , CHANDIGARH. CHANDIGARH. PAN: AABCH4813J & ITA NO. 750/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S HEERA MOTI HEALTH CARE VS THE DCIT, PRODUCTS LTD.,1054,INDUSTRIAL AREA, CENTRAL CIRCL E-I, PHASE-II, CHANDIGARH. CHANDIGARH. PAN: AAACH3744D (APPELLANT) (RESPONDENT) 2 APPELLANT BY : SHRI SUDHIR SEHGAL & SHRI ASHOK GOYAL RESPONDENT BY : SHRI MANJIT SINGH,DR DATE OF HEARING : 24.08.2016 DATE OF PRONOUNCEMENT : 20.09.2016 O R D E R PER BENCH THIS ORDER SHALL DISPOSE OF ALL THE ABOVE FOUR APPEALS FILED BY DIFFERENT ASSESSEES ON COMMON GROU NDS OF APPEAL. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD . REPRESENTATIVES OF BOTH THE PARTIES MAINLY ARGUED I N ITA 739/2013 AND SUBMITTED THAT ISSUE IS SAME IN THE REMAINING APPEALS OF DIFFERENT ASSESSEES. THE APPE ALS ARE, THEREFORE, DECIDED AS UNDER. ITA 739/2013 ( M/S HEERA MOTI AGRO INDUSTRIES INDUSTRIES, SOLAN, A.Y. 2007-08) 3. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINS T THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 18.03.2013 FOR ASSESSMENT YEAR 2007-08. 4. LD. COUNSEL FOR ASSESSEE DID NOT PRESS ADDITIONA L GROUND OF APPEAL AS WELL AS GROUND NOS. 1 AND 2. T HE SAME ARE, THEREFORE, DISMISSED AS NOT PRESSED. 3 5. ON GROUND NOS. 3 TO 6, ASSESSEE CHALLENGED THE ADDITION OF RS. 5,92,647/- IN RESPECT OF SUNDRY CREDITORS/TRADE CREDITORS. IN THIS CASE SEARCH & S EIZURE OPERATION WAS CARRIED OUT AND ASSESSMENT UNDER SECT ION 153A/143(3) OF THE ACT WAS FRAMED. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE CONFIRMATIONS FR OM THE SUNDRY CREDITORS AND TO FURNISH CONFIRMED LEDGER ACCOUNTS. THE ASSESSING OFFICER NOTED THAT ASSESSE E HAS INTRODUCED FRESH CREDITORS AMOUNTING TO RS. 5,92,647/- DURING THE YEAR. IN THE ABSENCE OF CONFIRMATION AND COPY OF THE LEDGER ACCOUNT, ADDITI ON WAS ACCORDINGLY MADE. THE LD. CIT(APPEALS) DECIDED SEVERAL APPEALS OF THE ASSESSEE THROUGH COMMON ORDE R AND NOTED IN THE IMPUGNED ORDER THAT THIS GROUND IS COVERED IN ASSESSMENT YEAR 2003-04. IT IS, THEREFO RE, NECESSARY TO TAKE INTO CONSIDERATION THE FINDINGS O F LD. CIT(APPEALS) IN ASSESSMENT YEAR 2003-04. THE LD. CIT(APPEALS) NOTED THAT ADDITION ON ACCOUNT OF SUND RY CREDITORS AMOUNTING TO RS. 55,05,290/- WAS MADE IN ASSESSMENT YEAR 2003-04. THE ASSESSEE DID NOT FILE CONFIRMATIONS. IT HAS BEEN SUBMITTED BY THE ASSESS EE THAT SUNDRY CREDITORS AS PER BALANCE SHEET DATED 31.03.2003 WAS TO THE TUNE OF RS. 55,05,290/-. 5(I) IT WAS FURTHER EXPLAINED THAT THE ASSESSEE WH O IS ENGAGED IN MANUFACTURING AND TRADING, WOULD HAVE SUNDRY CREDITORS, DEPOSITORS IN NORMAL COURSE OF BUSINESS. REGARDING NON FILING OF THE CONFIRMATION 4 BEFORE ASSESSING OFFICER, IT WAS PLEADED THAT TIME AVAILABLE WAS VERY SHORT FOR COMPLIANCE. IT WAS AR GUED THAT LEDGER ACCOUNT WAS ALREADY IN POSSESSION OF TH E DEPARTMENT, CLEARLY REVEALED THE RECEIPT OF MATERIA L FROM THE SUPPLIERS DULY ACKNOWLEDGED BY THE PURCHASE BIL LS AND PAYMENTS ON THE DEBIT SIDE WHICH WAS EVIDENCED FROM THE BANK STATEMENTS. THESE ARE RUNNING ACCOUN TS IN THE LEDGER. DURING APPEAL PROCEEDINGS, YEAR-WIS E LIST OF SUNDRY CREDITORS FOR FINANCIAL YEARS 2002-03 TO 2008- 09 INDICATING THE AMOUNT OUTSTANDING AT THE END OF EACH YEAR WAS FILED IN THE PAPER BOOK. HOWEVER, ONLY SOM E CONFIRMATIONS WERE FILED AS IT WAS CONTENDED THAT P ERIOD UNDER CONSIDERATION IS AS OLD AS 3-10 YEARS, SO OBTAINING CONFIRMATIONS WAS DIFFICULT. IT WAS ALSO CONTENDED THAT THESE ARE RUNNING BALANCES WHICH HAV E BEEN SQUARED UP IN SUBSEQUENT ASSESSMENT YEARS. THE LD. CIT(APPEALS) ALSO NOTED THAT IN ASSESSMENT YEAR UNDER APPEAL I.E. 2007-08, THE ASSESSING OFFICER MA DE ADDITION OF FRESH SUNDRY CREDITORS FOR NON FURNISHI NG OF CONFIRMATIONS/BILLS. 6. THE LD. CIT(APPEALS) IN HIS FINDINGS OBSERVED TH AT SOME OF THE CONFIRMATIONS FURNISHED NOW HAVE BEEN SOUGHT FOR ADMISSION AS ADDITIONAL EVIDENCE ON THE GROUND OF NON PROVIDING OF REASONABLE OPPORTUNITY. THE LD. CIT(APPEALS) FOUND THAT ASSESSING OFFICER WHILE DISPOSING OFF APPEAL FOR ASSESSMENT YEAR 2009-10 HA D ACCEPTED THE CONFIRMATIONS FILED IN RESPECT OF SIX FRESH 5 CREDITORS AND IN RESPECT OF THOSE CASES NOT FILED, THE SAME HAVE BEEN ADDED BACK. IN RESPECT OF ANOTHER S IX CREDITORS, ASSESSING OFFICER FOUND THAT NO PAN NUMB ER WAS PROVIDED AND CONSEQUENTLY REJECTED THE CONFIRMATIONS. THE REQUEST FOR ADMISSION OF ADDITI ONAL EVIDENCE WAS REJECTED SEPARATELY. 7. THE LD. CIT(APPEALS) FOUND THAT ENTIRE AMOUNT OF SUNDRY CREDITORS OUTSTANDING AS ON 31.03.2003 PERTAINING TO ASSESSMENT YEAR 2003-04 OF RS. 55,05,290/- HAD BEEN ADDED BACK. THE LD. CIT(APPEA LS) NOTED THAT TO HIS MIND, SUCH ADDITION IS NOT TENABL E. TRADING RESULT FOR ASSESSMENT YEAR 2003-04 HAS, OTHERWISE BEEN ACCEPTED BY ASSESSING OFFICER SO IT DEFINES LOGIC TO ADD BACK THE ENTIRE BALANCE IN THE ACCOUNT. IT WAS ALSO NOTED THAT MANY OF THE PARTIE S ARE HAVING RUNNING ACCOUNT FROM PRIOR TO 01.04.2002, THEREFORE, LD. CIT(APPEALS) WAS UNABLE TO CONFIRM T HE ADDITION FOR ASSESSMENT YEAR 2003-04 AS BY DOING SO , THE ENTIRE TRADING RESULTS OF THE ASSESSEE WOULD BE ABNORMAL. THE APPEAL OF THE ASSESSEE FOR ASSESSMEN T YEAR 2003-04 WAS ACCORDINGLY ALLOWED. 7(I) THE LD. CIT(APPEALS), AS REGARDS ASSESSMENT YE AR UNDER APPEAL 2007-08 HELD THAT FRESH CREDIT ADDITIO NS ARE IN ORDER AND ACCORDINGLY, SAME WAS CONFIRMED. 8. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERATE D THE 6 SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT ALL ARE TRADE CREDITORS AS PER REGUL AR BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE AND HAVE BE EN AUDITED. NO EVIDENCE OF PURCHASE OR SALES OUTSIDE THE BOOKS OF ACCOUNT HAS BEEN FOUND. THE PURCHASES ARE DULY RECORDED IN THE BOOKS OF ACCOUNT WHICH HAVE BE EN ACCEPTED BY THE DEPARTMENT. CHART IS FILED IN THE PAPER BOOK TO SHOW BALANCES YEAR AFTER YEAR DUE TO THE PARTIES. NO EVIDENCE WAS FOUND DURING THE COURSE O F SEARCH THAT SUCH BALANCES WERE NOT DUE OR ANY PURCHASES IN RESPECT OF SUCH PARTIES WERE BOGUS. T HE BOOKS OF ACCOUNT HAD BEEN SEIZED DURING THE COURSE OF SEARCH AND ALL THE ACCOUNTS WERE WITH THE DEPARTMEN T INCLUDING LEDGER ACCOUNT. THEREFORE, THERE IS NO QUESTION OF NON PRODUCTION OF THE RECORD. THE ASSE SSING OFFICER DID NOT GIVE ANY OPPORTUNITY TO THE ASSESSE E TO PRODUCE THE MATERIAL BEFORE HIM. 8(I) THE ASSESSING OFFICER IN ASSESSMENT YEAR 2009- 10 ACCEPTED THE CLAIM OF ASSESSEE. ALL ARE RUNNING ACCOUNTS AND PURCHASES FROM THE PARTIES HAVE BEEN ACCEPTED AND OUTSTANDING AMOUNTS HAVE BEEN PAID IN SUBSEQUENT YEAR. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE CHART OF SUNDRY TRADE CREDITORS FRO M 31.03.2003 TO 31.03.2009 IN THE PAPER BOOK WHICH IS FILED AT PAGE 4 TO 7 OF THE PAPER BOOK. HE HAS SUBMITTED THAT IN ASSESSMENT YEAR 2007-08, THE ASSESSEE HAS RUNNING ACCOUNTS OF THE TRADE CREDITOR S 7 AND PAID THE BALANCE AMOUNT IN SUBSEQUENT YEAR. HE HAS, THEREFORE, SUBMITTED THAT ON THE SAME REASONIN G AS ADOPTED BY LD. CIT(APPEALS) FOR ASSESSMENT YEAR 200 3- 04, THE ENTIRE ADDITION SHOULD HAVE BEEN DELETED. IT IS ALSO STATED THAT THE DEPARTMENTAL APPEAL FOR ASSESS MENT YEAR 2003-04 HAVE BEEN DISMISSED BY THE TRIBUNAL IN GROUP CASES. 8(II) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON DECISION OF T HE MADHYA PRADESH HIGH COURT IN THE CASE OF V.I.S.P. ( P) LTD. VS CIT 265 ITR 202 IN WHICH IT WAS HELD THAT I F LIABILITY SHOWN IN THE ACCOUNT IS FOUND BOGUS, THEN AMOUNT CAN BE ADDED TOWARDS THE INCOME OF THE ASSESSEE. 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS A C ASE OF SEARCH AND IT IS NOT INDICATED IF ANY MATERIAL W AS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSES SEE TO PROVE THAT ASSESSEE HAD BOGUS LIABILITY SHOWN IN THE BOOKS OF ACCOUNT ON ACCOUNT OF PURCHASE OF MATERIAL . THE BOOKS OF ACCOUNT INCLUDING THE LEDGER ACCOUNT W ERE ALREADY IN POSSESSION OF THE DEPARTMENT AND ACCORDI NG TO THE ASSESSEE, ALL THE MATERIALS PURCHASED HAVE B EEN SUPPORTED BY PURCHASE BILLS AND PAYMENTS ARE EVIDEN CED BY BANK STATEMENTS. THE ASSESSING OFFICER HAS NOWH ERE MENTIONED IN THE ASSESSMENT ORDER AS TO HOW MANY PARTIES WEE HAVING TRADE BALANCES FOR WHICH ADDITIO N 8 HAS BEEN MADE AND EVEN NO SPECIFIC AMOUNT OF EACH PARTY HAS BEEN MENTIONED. THEREFORE, NO SPECIFIC FINDING OF FACT HAVE BEEN GIVEN AGAINST THE ASSESSE E FOR MAKING THE ADDITION. THE LD. CIT(APPEALS) HELD IN THE IMPUGNED ORDER THAT THE ISSUE IN ASSESSMENT YEAR UN DER APPEAL I.E. 2007-08 IS COVERED BY HIS ORDER FOR ASSESSMENT YEAR 2003-04. THE FACTS ARE IDENTICAL A S HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2003-04. T HE LD. CIT(APPEALS) IN ASSESSMENT YEAR 2003-04 DELETED THE ENTIRE ADDITION BECAUSE ENTIRE SUNDRY CREDITORS OUTSTANDING ON END OF THE FINANCIAL YEAR CANNOT BE ADDEDE. THE LD. CIT(APPEALS) NOTED THAT THE TRADIN G RESULTS FOR ASSESSMENT YEAR 2003-04 HAVE BEEN ACCEP TED BY THE ASSESSING OFFICER THEREFORE, THERE IS NO LOG IC TO MAKE ADDITION OF THE ENTIRE BALANCE IN THIS ACCOUNT . 9(I) THE LD. CIT(APPEALS) ALSO NOTED THAT MANY OF T HE PARTIES ARE HAVING RUNNING ACCOUNTS FROM PRIOR TO 01.04.2002. THE LD. CIT(APPEALS) ALSO HELD THAT IF ADDITION OF THIS NATURE IS CONFIRMED, THE TRADING R ESULTS OF THE ASSESSEE WOULD BE ABNORMAL. THE LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF ARGUMENTS SUBMITT ED THAT THE DEPARTMENTAL APPEAL FOR ASSESSMENT YEAR 20 03- 04 HAD BEEN DISMISSED BY THE TRIBUNAL IN GROUP CASE S. WHEN ACCORDING TO THE LD. CIT(APPEALS), THE ISSUE I S COVERED BY HIS ORDER FOR ASSESSMENT YEAR 2003-04, T HERE SHOULD NOT BE ANY REASON TO CONFIRM THE ADDITION AGAINST THE ASSESSEE IN ASSESSMENT YEAR UNDER APPEA L, 9 BECAUSE THE FACTS ARE IDENTICAL. THE ASSESSEE PLEA DED THAT PURCHASES HAVE BEEN MADE FROM VARIOUS PARTIES AND ASSESSEE HAS RUNNING ACCOUNTS WITH THEM. ALL ENTRI ES ARE SHOWN IN THE BOOKS OF ACCOUNT WHICH HAVE BEEN SEIZED BY THE DEPARTMENT. THE ASSESSEE HAS PRODUCE D THE CHART IN THE PAPER BOOK FROM ASSESSMENT YEAR 20 02- 03 TO 2008-09 TO SHOW THAT THESE ARE RUNNING ACCOUN TS WITH VARIOUS PARTIES SINCE LONG. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE, EVEN IN SOME OF THE CASES OF THE GROUP, WHO WERE TRADE CREDITORS IN ASSESSMENT Y EAR UNDER APPEAL, ARE ASSESSED BY THE SAME ASSESSING OFFICER, THEREFORE, FACTS SHOULD HAVE BEEN VERIFIED FROM THEIR RECORD AVAILABLE WITH THE REVENUE DEPARTMENT. IN ASSESSMENT YEAR UNDER APPEAL ALSO, TRADING RESULTS HAVE BEEN ACCEPTED BY ASSESSING OFFICER, THEREFORE, FOR BALANCE TRADING AMOUNT, THE LD. CIT(APPEALS) SHOULD NOT HAVE CONFIRMED THE ADDITION. THE PARTIES HAVE RUNN ING ACCOUNTS WITH THE ASSESSEE AND IF SIMILAR ADDITION IS MADE, IT WOULD GIVE ENTIRE TRADING RESULTS OF THE ASSESSEE, TO BE ABNORMAL. THEREFORE, THE LD. CIT(APPEALS) SHOULD HAVE FOLLOWED THE ORDER FOR ASSESSMENT YEAR 2003-04 FOR THE PURPOSE OF DELETING THE ADDITION AGAINST THE ASSESSEE. HOWEVER, LD. CIT(APPEALS) NOTED THAT ADDITION IS LIMITED TO FRES H ADDITIONS ONLY. THIS REASON IS ALSO INCORRECT BECA USE LD. COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT EVEN IF THERE ARE SOME FRESH CREDITORS FROM THE SAME PARTIES APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE B UT 10 THESE ARE RUNNING ACCOUNTS FROM THE EARLIER YEARS, THEREFORE, FOR DIFFERENCE OF THE AMOUNT ITSELF, NO SUCH ADDITION SHOULD BE MADE AGAINST THE ASSESSEE. SINC E, NO DETAILS HAVE BEEN GIVEN IN THE ASSESSMENT ORDER AND THE CHART NOW FILED HAVE NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ALSO ACCORDING TO THE ASSESSE E, WHEN NO PROPER OPPORTUNITY HAVE BEEN GIVEN BY THE ASSESSING OFFICER, IT WOULD BE REASONABLE AND APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF AS SESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE BY G IVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9(II) WE, ACCORDINGLY, SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FIL E OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE BY FOLLOWING THE REASONS FOR DECISION GIVEN BY LD. CIT(APPEALS) FOR ASSESSMENT YEAR 2003-04 (SUPRA) WHEREBY ADDITION ON IDENTICAL ISSUE HAVE BEEN DELET ED. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, GROUND NOS. 3 TO 6 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. ON GROUND NO. 7, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 4,62,173/- ON ACCOUNT OF PROVISIONS OF SECTI ON 40(A)(IA) OF THE INCOME TAX ACT. THE LD. CIT(APPEA LS) ALSO NOTED THAT THIS ISSUE IS COVERED BY HIS FINDIN GS 11 GIVEN FOR ASSESSMENT YEAR 2003-04. THE ASSESSING OFFICER NOTED THAT SPECIAL AUDITOR HAS OBSERVED THA T ASSESSEE MADE SOME PAYMENTS ON ACCOUNT OF BRAND CHARGES ON WHICH ASSESSEE COMPANY WAS LIABLE TO DED UCT TDS AS PER PROVISIONS OF INCOME TAX ACT AND SINCE N O TDS HAS BEEN DEDUCTED, THEREFORE, ACCORDING TO PROVISIONS OF SECTION 40(A)(IA), ADDITION WAS MADE. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION. 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BRAND CHARGES WERE PAID TO SISTER CONCERN M/S MEERA MOTI SPICES PVT. LTD. WHO HAVE DECLARED THE AMOUNT IN QUESTION IN THEIR RETURN OF INCOME AND PAID THE TAX ES. THEREFORE, WHEN BY FILING INCOME TAX RETURNS AND OFFERING SUM RECEIVED FOR TAXATION, DISALLOWANCE WO ULD NOT BE JUSTIFIED AND MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR RE-EXAMINATION IN VIEW OF DE CISION OF DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAN D MARK TOWNSHIP P. LTD. REPORTED IN 377 ITR 635, IN WHICH IT WAS HELD AS UNDER : SECTION 40(A)(IA) OF THE INCOME TAX ACT,1961 IS AI MED AT ENSURING THAT AN EXPENDITURE SHOULD NOT BE ALLOWED AS DEDUCT ION IN THE HANDS OF AN ASSESSEE IN A SITUATION IN WHICH INCOME EMBED DED IN SUCH EXPENDITURE HAS REMAINED UNTAXED DUE TO TAX WITHHOL DING LAPSES BY THE ASSESSEE. IT IS NOT A PENALTY FOR TAX WITHHOLDI NG LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RESTRICTION FOR AN I NCOME GOING UNTAXED DUE TO TAX WITHHOLDING LAPSE. THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CUR ATIVE IN NATURE AND IT HAS RETROSPECTIVE EFFECT FROM APRIL 1, 2005, BEI NG THE DATE FROM WHICH SUB-CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FINANCE 12 (NO. 2) ACT, 2004. THE FIRST PROVISO TO SECTION 201 (1) OF THE ACT HAS BEEN INSERTED TO BENEFIT THE ASSESSEE. IT ALSO STAT ES THAT WHERE A PERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAI D TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT, S UCH PERSON SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT O F SUCH TAX IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME UNDER S ECTION 139. WHAT IS COMMON TO BOTH PROVISOS TO SECTIONS 40(A)(IA) AND 2 01(1) OF THE ACT IS THAT AS LONG AS THE PAYEE OR RESIDENT HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT RECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID TAX ON SUCH INCOME , THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAULT. HELD, DISMISSING THE APPEAL, THAT THE PAYEES HAD FI LED RETURNS AND OFFERED THE SUMS RECEIVED TO TAX. NO DISALLOWANCE C OULD BE MADE UNDER SE 40(A)(IA). 12(I). THE LD. DR ALSO STATED THAT MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR VERIFICATION OF THE FACTS. 13. ON CONSIDERATION OF THE SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW MATTER REQUIRES RE- CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER . THE ASSESSING OFFICER SHALL VERIFY THE FACT OF PAYMENT OF TAXES ON FILING THEIR RETURN OF INCOME IN THE LIGHT OF DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS ANSAL LAND MARK TOWNSHIP P. LTD. SUPRA). THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 14. IN THE RESULT, GROUND NO. 7 OF THE APPEAL OF TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA 756/2013 : ( M/S HEERA MOTI AGRO PRODUCTS, CHANDIGARH A.Y. 2007-08 ) 16. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 18.03.2013 FOR ASSESSMENT YEAR 2007-08. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS ADDITIONAL G ROUND OF APPEAL AND GROUND NOS. 1, 2 AND 3, THE SAME ARE DISMISSED AS NOT PRESSED. 17. ON GROUND NOS. 4 TO 7, ASSESSEE CHALLENGED THE ADDITION ON ACCOUNT OF SUNDRY CREDITORS IN A SUM OF RS. 91,549/-. THIS ISSUE IS SAME AS HAVE BEEN CONSIDER ED IN ITA 739/2013 IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES. FOLLOWING THE REASONS FOR DECISION IN THIS CASE, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE SAME TO THE FILE OF ASSESSING OFFICER W ITH DIRECTION TO RE-DECIDE THIS ISSUE AS IS DIRECTED IN ITA 739/2013. THESE GROUNDS ARE ALLOWED FOR STATISTICA L PURPOSES. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D PARTLY FOR STATISTICAL PURPOSES. ITA 568/2013 : ( M/S HEERA MOTI SPICES PVT. LTD., CHANDIGARH A.Y. 2007-08 ) 14 19. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 15.03.2013 FOR ASSESSMENT YEAR 2007-08. 20. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS ADDITIONAL GROUND OF APPEAL AS WELL AS GROUND NOS. 1, 2, 3 AND 6. THESE GROUNDS ARE, ACCORDINGLY, DISMISSED BEING NOT PRESSED. 21. ON GROUND NOS. 4 AND 5, THE ASSESSEE CHALLENGED THE ADDITION OF RS. 20,38,954/- ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS. THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ITA 739/2013 IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES. FOLLOWING THE REAS ONS FOR DECISION IN THIS CASE, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE SAME TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE AS IS DIRECTED IN ITA 739/2013. THESE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA 750/2013 : ( M/S HEERA MOTI HEALTH CARE PRODUCTS LTD., CHANDIGARH A.Y. 2007-08 ) 19. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATE D 18.03.2013 FOR ASSESSMENT YEAR 2007-08. 15 20. THE ASSESSEE DID NOT PRESS ADDITIONAL GROUND OF APPEAL AS WELL AS GROUND NOS. 1 AND 2. SAME ARE, ACCORDINGLY, DISMISSED BEING NOT PRESSED. 21. ON GROUND NOS. 3 TO 6, ASSESSEE CHALLENGED THE ADDITION OF RS. 7,93,331/- ON ACCOUNT OF UNEXPLAINE D SUNDRY CREDITORS. THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ITA 739/2013 IN THE CASE OF M/S HEERA MOTI AGRO INDUSTRIES. FOLLOWING THE REASONS FOR DE CISION IN THIS CASE, WE SET ASIDE THE ORDERS OF AUTHORITIE S BELOW AND RESTORE THE SAME TO THE FILE OF ASSESSING OFFIC ER WITH DIRECTION TO RE-DECIDE THIS ISSUE AS IS DIRECTED IN ITA 739/2013. THESE GROUNDS ARE ALLOWED FOR STATISTICA L PURPOSES. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 23. IN THE RESULT, ALL THE ABOVE FOUR APPEALS BY DIFFERENT ASSESSEES ARE PARTLY ALLOWED FOR STATISTI CAL PURPOSES. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAIN I) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 20 TH SEPT., 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD