THE ACIT-5(1), Indore V. M/S. TURAKHIYA METALS PVT. LTD., Indore

ITA 75/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5674 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 18-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: SHRI
• Keywords: Opportunity of being heard

Judgement Text

M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 75/IND/2016 ASSESSMENT YEAR: 2010-11 ACIT 5(1) INDORE :: APPELLANT VS M/S TURAKHIYA METALS PVT. LTD. INDORE PAN AACCT 7686C :: RESPONDENT I.T.A. NO. 749/IND/2016 ASSESSMENT YEAR: 2010-11 M/S TURAKHIYA METALS PVT. LTD. INDORE :: APPELLANT VS ACIT 5(1) INDORE :: RESPONDENT REVENUE BY SHRI MOHD. JAVED ASSESSEE BY SHRI PANKAJ SHAH ! ' #$ DATE OF HEARING 21.9.2016 %&'( #$ DATE OF PRONOUNCEMENT 28.10.2016 M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 2 * O R D E R PER SHRI D.T. GARASIA, JM THE REVENUE AND THE ASSESSEE HAVE FILED THESE APPEALS AGAINST THE ORDER OF THE LEARNED CIT(A)-II, INDORE, D ATED 16.10.2015. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 30.9.2010. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE IS A PRIVATE LIMI TED COMPANY CARRYING ON BUSINESS OF TRADING IN IRON AND STE EL. AUDIT REPORT IN FORM 3CB/CD WAS FILED. THE ASSESSEE I S FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. IT HAS BEEN NOTICED THAT THE ASSESSEE HAS CLAIMED COMMISSION OF RS.3702347, THEREFORE, THE ASSESSEE WAS REQUIRED TO G IVE REPLY. THE ASSESSEE WAS ASKED TO PRODUCED THE FILE OF CONFIRMATION FROM THE BROKER, COPY OF AGREEMENT AND JUSTIFICATION REGARDING PAYMENT OF BROKERAGE IN VIEW O F THE SERVICES RENDERED BY THE COMMISSION AGENT. THE ASSESS EE M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 3 HAS NOT FILED CONFIRMATION LETTER FROM THE BROKER. TH E ASSESSEE HAS NOT FILED THE AGREEMENT, THEREFORE, THE ASSESSING OFFICER HAS MADE THE ADDITION. THE MATTER CARRIED TO THE LEARNED CIT(A). DURING THE APPELLATE PROCEEDINGS THE ASSESSEE HAS FILED ALL THE EVIDENCE. THEREAFTER, THE COPY OF REMAND WAS FORWARDED TO THE ASSESSING OFFICER AND AFTER GETTING THE REPORT OF THE ASSESSING OFFICER, THE ASSESSEE WAS GIVEN OPPORTUNITY . THE LEARNED CIT(A) AFTER CONSIDERING THE ISSUE, DELETED T HE ADDITION. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT DURING THE COURSE OF APPELLATE PROCEEDING S THE LEARNED CIT(A) HAS CALLED FOR REMAND REPORT. THE LEARNED CIT(A) HELD THAT THE BROKER HAS PROVIDES THE SERVICES AND PLACING THE ORDER ON BEHALF OF BUYERS. FURTHER, THE B ROKERS ARE INSTRUMENTAL IN MAKING THE TIMELY RECOVERY FROM TH E M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 4 DEBTORS. THE COMMISSION IS PAID IN THE RANGE 0.75% T O 1.25% OF SALES. THE ASSESSEE HAS ALSO FILED PAN OF BROK ERS AND DETAILS OF TDS MADE ON COMMISSION. THEREFORE, ONL Y AFTER MAKING DETAILED INQUIRY, THE LEARNED CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, OUR INTERFERENCE IS NOT CALLED FOR. WE, THEREFORE, UPHOL D THE ORDER OF THE LEARNED CIT(A). 4. SO FAR AS THE ASSESSEES APPEAL IS CONCERNED, THE ONLY GROUND TAKEN BEFORE US IS THAT THE LEARNED CIT( A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.5,57, 369/- ON ACCOUNT OF DIFFERENCE IN BALANCE OF THE ACCOUNT OF DEB TOR M/S STEEL EXPORT INDUSTRIES. 5. DURING THE ASSESSMENT PROCEEDINGS IT WAS FOUND THAT BOOKS OF ACCOUNTS SHOWED THE BALANCE AT NIL IN THE ACCOUNT OF M/S STEEL EXPORT INDUSTRIES, INDORE. HOW EVER, IN THE BOOKS OF M/S STEEL EXPORT INDUSTRIES BALANCE O F RS.557369/- IS PAYABLE TO THE ASSESSEE. THE ASSESSEE WAS M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 5 ASKED TO EXPLAIN THE DIFFERENCE. IN REPLY RECONCILIATI ON WAS SUBMITTED AND IT WAS CONFIRMED THAT THE BALANCE IS RECEIVABLE FROM M/S STEEL EXPORT INDUSTRIES. THE CHE QUE RECEIVED FROM M/S STEEL EXPORT INDUSTRIES HAS BEEN WRONGLY CREDITED IN THE ACCOUNT OF M/S STEEL EXPORT INDUSTRIES DUE TO WHICH BALANCE WAS WRONGLY SHOWN AS N IL BUT THE ASSESSING OFFICER DID NOT ACCEPT THE ACCEPT THE CONTENTION AND MADE THE ADDITION. ON APPEAL THE LEARNED CIT(A) CONFIRMED THE SAME. 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED THE EVIDENCE AS UNDER :- ON MERITS THE ISSUE IS EXPLAINED HEREUNDER :- NAME OF CREDITOR BALANCE AS PER APPELLANT BALANCE AS PER DEBTOR DIFFERENCE STEEL EXPERTS P. LTD. 0 5,57,369* (5,57,369) STEEL PIPES DISTRIBUTORS 16,06,609 10,49,240 5,57,369 NET DIFFERENCE 0 *BALANCE CONFIRMED BY PARTY TO DEPARTMENT M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 6 THE ABOVE DIFFERENCE APPEARED SINCE 3 CHEQUES RECEI VED FROM STEEL PIPES P. LTD. WERE INADVERTENTLY RECORDE D IN ACCOUNT OF STEEL EXPERTS P. LTD. DETAILS OF THOSE C HEQUES ARE GIVEN BELOW :- DATE CHEQUE NO. AMOUNT 9.9.09 602786 8731 8.1.10 749090 282309 8.1.10 749085 266329 TOTAL 557369 COPY OF LEDGER ACCOUNTS AND BANK STATEMENTS ARE ENCLOSED HEREWITH. 7. WE FIND THAT THE ABOVE EVIDENCE WAS NOT FILED BEFORE THE ASSESSING OFFICER. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIO N TO VERIFY THE ABOVE EVIDENCE AND DECIDE THE ISSUE AS PER LAW AFTE R AFFORDING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF THE REVENUE FAILS AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS ES. M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 7 THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 28 OCTOBER, 2016. SD/- SD/- ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 28 OCTOBER, 2016. DN/ M/S TURKHIA METALS PVT. LTD. ITA 749/IND/15 &75/IND/2016 8