Krishan Kumar, Kurukshetra V. ACIT, Kurukshetra

ITA 816/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77013 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-03-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 18-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: AJAY K JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 816/CHD/2011 ASSESSMENT YEARS : 2003-04 KRISHAN KUMAR VS. A.C.I.T. KURUKSHETRA KURUKSHETRA (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AJAY K. JAIN RESPONDENT BY: SHRI J.S. NAGAR DATE OF HEARING 25.3.2014 DATE OF PRONOUNCEMENT 21.4 .2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 13. 5.2011 OF THE LD CIT(A), KARNAL. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 577091/- MADE BY THE ACIT WITHO UT APPRECIATING THE CHAIN OF WHOLE TRANSACTION. 2 THE LD. CIT(A) AND ACIT BOTH HAVE ERRED IN FACTS IN RELYING ON ONE STATEMENT AND IGNORING THE OTHERS MAKING THE HALF TRUST AS THE BASIS FOR MAKING ADDITION U/S 69C. 3 THE LD. CIT(A) HAS FURTHER ERRED IN OBSERVING TH AT SINCE THE APPELLANT IS STATIONED AT ISMAILABAD, KURUKSHETRA A ND BROKER IS STATIONED AT NAYA BAZAR, DELHI, IT IS DIFFIULT THAT HOW THE PAYMENT COULD BE MADE DAILY. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE ASSESS ING OFFICER THAT THE ASSESSEE HAS PURCHASED RICE VIDE BILL NOS 8981 DATED 14.6.2002, 9073 DARTED 19.6.2002 AND 8987 DATED 18. 6.2002 FROM INDIAN RICE TRADERS, NAYA BAZAR, DELHI THROUGH A BROKER, JAGDISH MITTAL PROP. RAMA ENTERPRISES, NAYA BAZAR, DELHI. IT 2 WAS NOTICED FROM COPY OF ACCOUNT THAT PAYMENT IN CA SH HAS BEEN MADE ON 5.7.2002. WHEREAS THE ASSESSEE HAD SH OWN THE PAYMENT IN CASH OF RS. 20,000 OR LESS THAN THAT AND ULTIMATELY ACCOUNT WAS REDUCED TO NIL ON 10.8.2002. THE ASSES SING OFFICER TREATED THE ABOVE PAYMENT OUT OF UNDISCLOSE D SOURCES AND THE MATTER TRAVELED TO THE TRIBUNAL. THE TRIBU NAL IN ITA NO. 276/CHD/2008 SET ASIDE THE ORDER OF THE LD. CIT (A) AND REMITTED THE MATTER BACK TO THE FILE OF ASSESSING O FFICER VIDE PARA 7 WHICH IS AS UNDER: WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PART IES AND CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. IN THE INSTANT CASE THE ASSESSING OFFICER NEVER INQUIRED FROM THE BROKE R JAGDISH MITTAL ABOUT THE VERACITY OF THE AFFIDAVIT AND THE COPY OF ACCOUNT OF THE ASSESSEE IN HIS BOOKS VIS-VIS THE ENTRIES MADE BY T HE INDIAN RICE TRADER, DELHI IN ITS BOOKS OF ACCOUNTS IN THE ACCOU NT OF THE ASSESSEE THOUGH THE BROKER. IT IS ALSO NOTICED THA T THE ASSESSING OFFICER DID NOT DOUBT THE CLAIM OF THE ASSESSEE THA T THE PAYMENTS WERE MADE THROUGH THE BROKER. IT APPEARS THAT THE ASSESSING OFFICER DID NOT APPRECIATE THE FACTS IN RIGHT PROSP ECTIVE WHILE MAKING THE ADDITION AND THE LD. CIT(A) ALSO CONFIRM THE ACTION OF THE ASSESSING OFFICER WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE HAD FURNISHED THE AFFIDAVIT, ADDRESS AND P AN ACCOUNT NO. OF THE BROKER JAGDISH MITTAL AND THE ASSESSING OFFI CER GAVE JUST TWO DAYS TO HE ASSESSEE TO PRODUCE THE BROKER WHICH CAN NOT BE SAID TO BE A PROPER OPPORTUNITY. WE THEREFORE CONSI DERING THE TOTALITY OF THE FACTS DEEM IT PROPER TO SET ASIDE T HIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATI ON IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. IN THE SECOND ROUND OF PROCEEDINGS, THE ASSESSEE PR ODUCED JAGDISH MITTAL BEFORE THE ASSESSING OFFICER AND JAG DISH MITTAL CATEGORICALLY ADMITTED HAVING MADE THE PAYMENT TO I NDIAN RICE TRADERS ON HIS OWN AND THE CIRCUMSTANCES UNDER WHIC H HE HAS TO MAKE SUCH PAYMENT. HE FURTHER ADMITTED HAVING R ECEIVED THE PAYMENT FROM THE ASSESSEE ON DIFFERENT DATES FO R WHICH HE HAD ISSUED THE RECEIPTS. EVEN THE SIGNATURES ON TH E VOUCHERS ORIGINALLY PRODUCED AT THE TIME OF ASSESSMENT, WERE CONFIRMED BY HIM. JAGDISH MITTAL GAVE HIS PAN AND ADDRESS OF THE ITO. HOWEVER, JAGDISH MITTAL DID NOT PRODUCED THE BOOKS OF 3 ACCOUNTS AND IN THE ABSENCE OF SUCH BOOKS OF ACCOUN TS THE ASSESSING OFFICER WAS OF THE OPINION THAT STATEMENT OF SHRI JAGDISH MITTAL COULD NOT BE RELIED AND SINE THE ASS ESSEE HAS FAILED TO PROVE THE SOURCES OF THE PAYMENT MADE TO INDIAN RICE TRADERS AND THEREFORE THE ADDITION OF RS. 657091 WA S REPEATED. 4 ON APPEAL THE SUBMISSIONS MADE BEFORE THE ASSESSI NG OFFICER WERE REITERATED BUT THE LD. CIT(A) DID NOT FIND FORCE IN THE SAME AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT JAGDISH MITTAL HAD CATEGORICALLY ADMITTED BEFO RE THE ASSESSING OFFICER THAT HE HAS MADE PAYMENT TO INDIA N RICE TRADERS AND HAD RECEIVED THE SAME IN INSTALLMENTS F ROM THE ASSESSEE. HE POINTED OUT THAT JAGDISH MITTAL HAD A LSO FURNISHED HIS PAN, ADDRESS OF HIS ITO AND HAD SHOWN INABILITY TO PRODUCE THE BOOKS OF ACCOUNTS BECAUSE THE SAME W ERE OLDER THAN SIX YEARS. HE FURTHER POINTED OUT THAT THE A SSESSING OFFICER HAS HIMSELF ACCEPTED THE SOURCE OF RS. 1 LA KH. MOREOVER, ADDITION HAS NOT BEEN MADE U/S 40A(3), TH EREFORE PERHAPS ASSESSING OFFICER WAS OF THE OPINION THAT T HE ASSESSEE DID NOT HAVE SUFFICIENT CASH BUT THAT IS NOT THE SI TUATION AND IN THIS REGARD HE REFERRED TO PAGE NO. 14 TO 23 OF THE PAPER BOOK WHICH IS COPY OF THE CASH BOOK AND INVITED OUR ATTE NTION TO PAGE 19 TO 23 WHICH RELATE TO RELEVANT PERIOD. HE POINTED OUT THAT DURING THIS PERIOD CASH WAS ALWAYS MORE THAN R S. 10 LAKHS THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE DID N OT HAVE SUFFICIENT SOURCES AVAILABLE FOR MAKING ABOVE PAYME NT. 6 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE STRONGLY RELIED ON THE ORDER OF THE LD. CIT(A). 4 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT JAGDISH MITTAL HAS BEEN PRODUCED BEFORE THE ASSESSI NG OFFICER WHO HAS CATEGORICALLY ADMITTED HAVING MADE THE PAYM ENT TO INDIAN RICE TRADERS. HE HAS ALSO CLARIFIED HIS SIG NATURES ON THE VOUCHERS WHICH WERE DOUBTED IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS. JAGDISH MITTAL HAD ALSO FUR NISHED HIS PAN AS WELL AS ADDRESS OF HIS ITO AND IN CASE HE WA S NOT ABLE TO PRODUCE THE BOOKS OF ACCOUNTS, THE ASSESSING OFF ICER COULD HAVE EASILY MADE FURTHER ENQUIRY FROM THE ASSESSING OFFICER OF JAGDISH MITTAL IF HIS STATEMENT WAS DOUBTED. WE AL SO FIND SUFFICIENT CASH IS AVAILABLE IN THE BOOKS OF ACCOUN TS DURING THE RELEVANT PERIOD THEREFORE IT CANNOT BE SAID THAT TH E ASSESSEE DID NOT HAVE SUFFICIENT RESOURCES. THE ASSESSEE CO ULD HAVE EASILY SHOWN THE PAYMENT OUT OF HIS OWN CASH IN HAN D IF ACTUAL PAYMENT WAS MADE. ALL THE CIRCUMSTANCES CLEARLY SH OW THAT PAYMENT HAS BEEN MADE THROUGH AGENT WHICH HAS BEEN PROVED BY PRODUCING JAGDISH MITTAL WHO HAS CLEARLY ADMITTE D THE FACT OF RECEIVING THE PAYMENT FROM THE ASSESSEE AND HAVI NG MADE THE PAYMENT DIRECTLY FROM HIS OWN SOURCES TO INDIAN RICE TRADERS. THEREFORE WE SET ASIDE THE ORDER OF THE L D. CIT(A) AND DELETE THE ADDITION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21.4.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.4.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 5