Pon Sanku Enterprises, Salem V. ITO, Salem

ITA 854/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96255 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 25-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-04-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Additional evidence
• Section: 68; 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH : CHENNAI . . . , [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ] ./ I.T.A.NO.854/MDS/2015 / ASSESSMENT YEAR : 2007-08 M/S PON SANKU ENTERPRISES 104/74, OMALUR MAIN ROAD SWARNAPURI ANNEXE SALEM - 4 VS. THE INCOME TAX OFFICER WARD I(4) SALEM [PAN AAJEP 1335 Q ] ( ! / APPELLANT) ( '# ! /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : SHRI A.B. KOLI, JCIT / DATE OF HEARING : 25 - 09 - 2015 / DATE OF PRONOUNCEMENT : 1 6 - 10 - 2015 / O R D E R THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), SALEM, DATED 29.1.2015 IN I.T.A.NO.106/2009-10, FOR ASSESSMENT YEAR 2007-08, PASSED U/S 143(3) AND SEC. 250 OF THE INCOME-TAX ACT, 1961. 2. AT THE OUTSET, IT WAS NOTICED THAT THE HEARING NO TICE SENT TO THE ASSESSEE BY RPAD POST AT THE ADDRESS PROVIDED IN COLUMN NO.10 OF FORM 36, HAS BEEN RETURNED BY THE POSTAL AUTHORI TIES WITH THE REMARKS NOT KNOWN. IN EARLIER TWO OCCASIONS ALS O THE NOTICES WERE ITA NO.854/15 :- 2 -: RETURNED UNSERVED AND THE ASSESSEE HAS NOT PROVIDE D ANY INFORMATION OF CHANGE OF ADDRESS. 3. THE ONLY ISSUE ARISE AS PER THE GROUNDS OF APPEAL I S NON- CONSIDERATION OF MATERIAL INFORMATION SUBMITTED BEF ORE THE LD. CIT(A) UNDER RULE 46A OF THE INCOME-TAX RULES AND PROVIDIN G OPPORTUNITY AS ASSESSING OFFICER HAS MADE ADDITION BY INVOKING THE PROVISIONS OF SEC. 68 OF THE ACT. 4. THE APPELLANT-ASSESSEE IS A PARTNERSHIP FIRM AND I N ITS FIRST YEAR OF BUSINESS AND FILED RETURN OF INCOME ON 30.7 .2007 WITHIN THE TIME ALLOWED U/S 139(1) OF THE ACT. NOTICE U/S 1 43(2) WAS ISSUED AND IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE IS NO BUSINESS ACTIVITY IN THE FIRST YEAR AND SIX PARTNERS HAVE C ONTRIBUTED CAPITAL FROM THEIR RESPECTIVE SOURCES. IN THE SCRUTINY PROCEEDI NGS THE ASSESSEE-FIRM HAS FILED EXPLANATIONS FOR CAPITAL CONTRIBUTIONS BY THE PARTNERS. THE ASSESSING OFFICER HAS ISSUED VARIOUS LETTERS TO THE PARTNERS WITH THE AVAILABLE ADDRESSES. ASSESSEE-FIRM HAS REQUESTED FURTHER TIME TO FILE CONFIRMATIONS FROM THE PARTNERS WHO HAVE MADE CAPIT AL CONTRIBUTIONS. THE ASSESSING OFFICER, BASED ON THE JUDGMENT OF JU RISDICTIONAL HIGH COURT IN THE CASE OF MANGILAL JAIN VS ITO, [2009]31 5 ITR 105 AND IN SHANKAR INDUSTRIES VS CIT [1978] 114 ITR 689(CAL) C ONCLUDED THAT THE ASSESSEE-FIRM COULD NOT PROVE THE GENUINENESS OF TR ANSACTION AND ITA NO.854/15 :- 3 -: ESTABLISH CREDITWORTHINESS AND IDENTITY OF THE PART NERS FOR THEIR CAPITAL CONTRIBUTIONS AND MADE ADDITION OF ` 7 LAKHS U/S 68 OF THE ACT AND DETERMINED TAX LIABILITY OF ` 3,11,018/-. 5. THE ASSESSEE-FIRM IS GENUINE AND PARTNERS ARE ALSO COMPETENT TO EXPLAIN THE SOURCES. AGGRIEVED WITH T HE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFOR E THE LD. CIT(A). IN THE APPELLATE PROCEEDINGS, THE ASSESSEE-FIRM HAS SU BMITTED DETAILED INFORMATION OF ITS PARTNERS, SOURCES FOR CAPITAL CONTRIBUTION AND ALSO DETAILS ABOUT THEIR EARLIER PARTNERSHIP AND INCOME- TAX ASSESSMENTS. THE ASSESSEE HAS ALSO FILED ADDITIONAL EVIDENCE UND ER RULE 46A OF INCOME-TAX RULES IN RESPECT OF BANK TRANSACTIONS O F THE PARTNERS AND MENTIONED THAT THE ASSESSING OFFICER IS NOT JUSTIFI ED IN MAKING ADDITION IN THE HANDS OF THE FIRM. THE LD. CIT(A) HAVING CO NSIDERED THE INFORMATION AND CONTENTS OF MATERIAL SUPPLIED UNDE R RULE 46A, HAS UNILATERALLY CONCLUDED THAT THE ASSESSEE WAS GIVEN ENOUGH OPPORTUNITIES BEFORE THE ASSESSING OFFICER AND THER E IS A DELIBERATE GROUND NOT TO FURNISH THE INFORMATION AT THAT STAGE AND REJECTED THE ADDITIONAL EVIDENCE AS ADEQUATE OPPORTUNITIES WERE PROVIDED FOR EXPLANATION AND DISMISSED THE APPEAL. 6. THE ASSESSEE-FIRM AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) FILED APPEAL BEFORE THIS TRIBUNAL AND SUBMITTED REL EVANT MATERIAL ITA NO.854/15 :- 4 -: SUPPORTED WITH CASE LAWS. FURTHER, THE LD. CIT(A) HAS REJECTED THE MATERIAL PLACED BEFORE HIM WHICH ARE CRUCIAL IN RE SPECT OF THE CREDITWORTHINESS, GENUINENESS AND IDENTITY OF THE P ARTNERS AND PRAYED FOR DELETING THE ADDITION. 7. THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND ARGUED THAT APPEAL OF THE ASSESSEE MAY BE DISMISSE D. 8. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR AND PERUSING MATERIAL PLACED ON RECORD AND CASE LAW CITED BY THE ASSESSE, THE TRIBUNAL IS OF THE OPINION THAT THE ASSESSEE-FIRM WAS IN FIRST YEAR OF ITS OPERATIONS AND NO BUSINESS ACTIVITY WAS TAKEN UP W HICH WAS WITHIN IN THE KNOWLEDGE OF THE ASSESSING OFFICER. FURTHER, T HE CONTRIBUTIONS MADE BY THE PARTNERS WITH ADEQUATE SOURCES COULD BE PROVED. IT IS ALSO APPARENT FROM THE FACTS OF THE CASE THAT THE A SSESSEE SHOULD BE PROVIDED WITH ONE MORE OPPORTUNITY AS VARIOUS GROUN DS WERE RAISED BEFORE THE LD. CIT(A) AND DISMISSED WITHOUT PROPER ADJUDICATION. THEREFORE, THE ORDER OF THE LD. CIT(A) IS SET ASID E AND THE ENTIRE FILE IS REMITTED BACK TO THE ASSESSING OFFICER. THE ASSESS ING OFFICER SHALL CONSIDER THE EVIDENCES AND DECIDE THE CASE AFRESH AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.854/15 :- 5 -: 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCTOBER, 2015, AT CHENNAI. SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 16 TH OCTOBER, 2015 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 3. ' +',! / CIT(A) 5. )-.' / / DR 2. / RESPONDENT 4. ' + / CIT 6. .0'1 / GF