ACIT, Bangalore V. M/s Quantum Power systems, Bangalore

ITA 804/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95236 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 18-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: CYRUS JAL BHARUCHA

Judgement Text

ITA.804/BANG/2014 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER I.T.A NO.804/BANG/2014 (ASSESSMENT YEAR : 2005-06) ASST. COMMISSIONER OF INCOME TAX, CIRCLE -7 (1), BANGALORE .. APPELLANT V. M/S. QUANTUM POWER SYSTEMS, NO.408, I FLOOR, 3 RD CROSS, SINGAYANAPALYA, MAHADEVAPURA POST, BANGALORE 560 048 .. RESPONDENT PAN : AAAFQ0307Q ASSESSEE BY : SHRI. CYRUS JAL BHARUCHA, CA REVENUE BY : SHRI. SUNIL KUMAR AGARWALA, JCIT HEARD ON : 27.08.2015 PRONOUNCED ON : 04.09.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY REVENUE, ITS GRIEVANCE IS THAT CIT (A) ALLOWED RELIEF OF RS.1,03,60,961/- TO THE ASSESSEE CONSIDE RING FRESH EVIDENCE FILED BY ASSESSEE BEFORE HIM, THEREBY VIOLATING RULE 46A OF THE IT RULES, 1962 (THE RULES IN SHORT). 02. ASSESSEE A MANUFACTURER OF HHC POWER PRODUCTS, FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING I NCOME OF 40,72,940/-. ITA.804/BANG/2014 PAGE - 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT ASSESSE HAD SHOWN SUNDRY CREDITORS OF RS.90,84,970/ - AND UNSECURED LOAN OF RS.15,50,000/- IN ITS BALANCE SHEET. ASSESSEE WAS REQUIRED TO GIVE DETAILS OF THESE. HOWEVER IT SEEMS THOUGH ASSESSEE PRODUCED L ETTERS OF THE SUNDRY PARTIES IT DID NOT GIVE THEIR ADDRESS. AS PER THE AO THE A SSESSEE HAD FAILED TO GIVE FULL ADDRESS OF THE PARTIES, AND THERE WAS NO WAY HE COU LD VERIFY THE GENUINENESS OF THE CLAIM. AO HELD THAT ASSESSEE HAD FAILED TO DIS CHARGE THE ONUS RESTING ON HIM TO PROVE THE GENUINENESS OF THE CREDITORS. AN ADDI TION OF RS.90,84,970/- WAS MADE. ASSESSEES APPEAL BEFORE THE CIT (A) WAS SUC CESSFUL. 03. AFTER CONSIDERING THE LETTERS FROM THE CREDITOR S WHICH AS PER THE CIT (A) PROVED SUBSEQUENT PAYMENTS MADE TO THE CREDITORS BY THE ASSESSEE, HE ALLOWED ASSESSEES APPEAL. 04. NOW BEFORE US, LD. DR STRONGLY ASSAILING THE OR DER OF CIT (A) SUBMITTED THAT RECORDS FILED BY THE ASSESSEE BEFORE THE CIT ( A) WERE NEVER FILED BEFORE THE AO. ACCORDING TO HIM THERE WAS VIOLATION OF RULE 46A OF THE ACT. 05. PER CONTRA, LD. AR SUPPORTED THE ORDER OF CIT ( A). 06. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. ON A PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSEE HAD FAILED TO PRODUCE THE DETAILS CALLED BY THE AO WITH REGARD TO THE SUNDRY CREDITORS, BUT FOR GIVING THEIR NAMES. THEREFORE THE AO WAS JUSTIFIED IN TAKING A VIEW THAT ASSESSEE WAS UNABLE TO SHOW THE GENUINENESS OF THE BALANCES. CIT (A) HAD TAKEN COGNISANCE OF THE LETTERS AND ADDRESSES OF THE CREDITORS SUBMI TTED BEFORE HIM BY THE ITA.804/BANG/2014 PAGE - 3 ASSESSEE, AND ALSO THOSE DETAILS WHICH WERE SUBMITT ED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS FOR A. Y. 2009-10 FOR COMING TO A CONCLUSION THAT THE ADDITION WAS NOT WARRANTED. WE ARE OF THE OPINION THAT AO WAS NOT GIVEN A FAIR OPPORTUNITY TO VERIFY THE MATERIALS PRODUCED BY THE ASSESSEE BEFORE THE CIT (A). CIT (A) WAS BOUND BY RULE 46A TO CALL FOR A REPORT FROM THE AO BEFORE ACCEPTING THE FRESH RECORDS FILED BY THE ASSESSEE. WE ARE THEREFORE OF THE OPINION THAT THE MATTER REQUIRES A FRESH LOOK BY TH E AO. WE SET ASIDE THE ORDER OF CIT (A) AND REMIT THE ISSUE BACK TO THE FILE OF AO FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 07. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH DAY OF SE PTEMBER, 2015. SD/- SD/- (VIJAYPAL RAO) (ABRAH AM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER MCN COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR