SHRI SATYANARAYAN AGRAWAL THROUGH L. H. NAVAL AGRAWAL, JANJGIR CHAMPA V. ITO, WARD- 2(2), BILASPUR(CG)

ITA 86/BIL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8923 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 28-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P CHOUDHARY
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH , RAIPUR BEFORE : SHRI N.S.SAINI, A M & SHRI PAV AN KUMAR GADALE, J M ITA NO. 86 / RPR /20 1 4 (ASSESSMENT YEAR : 20 07 - 20 08 ) SHRI SATYANARAYAN AGRAWAL, THROUGH L.H NAVAL AGRAWAL, SHANKAR RICE MILL COMPOUND, NAILA, DISTRICT :JANJGIR - CHAMPA (C.G) - 4 V S ITO, WARD - 2(2), BILASPUR P AN NO. : A DNTA 1227 B (APPELLANT ) .. T N E D N O P S E R ASSESSEE BY : SHRI R.B.DOSHI, AR REVENUE BY : SHRI O.P.CHOUDHARY , DR DATE OF HEARING : 1 5 / 01 /201 8 DATE OF PRONOUNCEMENT 3 1 / 01 /201 8 / O R D E R PER SHRI N.S.SAINI , A M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A ), BILASPUR , DATED 30.03.2012 FOR THE ASSESSMENT YEAR 20 07 - 2008 . 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY LIMITATION OF 785 D AYS. THE ASSESSEE FILED CONDONATION PETITION EXPLAINING THE REASON FOR DELAY. 3. THE DR HAD NO OBJECTION TO CODONATION OF DELAY AND HEARING THE APPEAL ON MERITS. 4. WE FIND THAT THE REASON GIVEN FOR DELAY IN FILING THE APPEAL AS PLAUSIBLE ONE AND, HENCE, W E CONDONE THE DELAY IN FILING THE APPEAL AND ADMIT THE SAME FOR HEARING. 5. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF SUNDRY CREDITORS OF RS.47,25,340/ - MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT. 6 . BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF RICE. IT PURCHASED PADDY FROM THE AGRICULTUR ISTS. THE ASSESSEE HAD SHOWN THE AMOUNT OF RS.47,25,340/ - DUE ITA NO. 86 /RPR/201 4 2 AND PAYABLE BY IT UNDER THE HEAD SUNDRY CR EDITORS FOR PURCHASE OF PADDY. HE REQUIRED THE ASSESSEE TO PRODUCE THE AGRICULTURISTS FOR VERIFICATION. THE ASSESSEE FAILED TO DO SO. THE AO ISSUED NOTICE TO 22 CREDITORS OUT OF WHICH 16 PERSONS FILED THE AFFIDAVITS. THE AO DID NOT BELIEVE THE AFFIDAVITS O N THE GROUND THAT THEY HAD STATED THAT THEY HAD LEFT THE AMOUNT WITH THE ASSESSEE TOWARDS PURCHASE OF LAND AND NO AGREEMENT FOR THE SAME COULD BE PRODUCED BY THE ASSESSEE. 7. ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE AO FOR THE VERY SAME REASONS. 8. BEFORE US, THE AR OF THE ASSESSEE RELIED ON THE DECISION OF A LLAHABAD BENCH OF THE TRIBUNAL IN THE CASE OF JCIT VS. MATHURA DAS ASHOK KUMAR (2006) 101 TTJ 810 , WHERE IT WAS HELD THAT WHEN PURCHASES ARE ACCEPTED TO BE GENUINE, BALANCE REMAINING OUTSTANDING AT THE END OF THE YEAR AGAINST SUCH PURCHASES CANNOT BE TREATED AS BOGUS LIABILITY AND ADDITION MADE ON THAT BASIS CANNOT BE SUSTAINED. HE ALSO RELIED ON THE DECISION OF VISHAKAPATNAM BENCH OF THE TRIBUNAL IN CASE OF ITO VS. JAYANAGA ANITHA, (2016) 46 CCH 407 (VISHAKAPATNAMTRIB) , WHERE IT WAS HELD THAT THE CIT(A) DELETED THE ADDITION MADE TOWARDS SUNDRY CREDITORS U/S.68 OF THE ACT AND HELD THAT WHEN TRADING RESULTS I.E. SALES AND PURCHASES HAD BEEN ACCEPTED AS GENUINE, NO ADDITION U/S.68 C O ULD BE MADE FO R UNEXPLAINED SUNDRY CREDITORS AND ACCORDINGLY UPHELD THE ORDER OF CIT(A). 9. ON THE OTHER HAND, THE DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. ITA NO. 86 /RPR/201 4 3 10. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS ON RECORD. THE U NDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF RICE. IT MADE PURCHASES OF PADDY DURING THE YEAR OUT OF WHICH A SUM OF RS.47,25,340/ - REMAINED OUTSTANDING AND PAYABLE BY THE ASSESSEE AND WAS SHOWN IN THE BALANCE SHEET AS UNDER THE HEAD SUNDRY CREDITORS. THE AO FOR VERIFYING THE SAME ISSUED NOTICE TO 22 SUNDRY CREDITORS, OUT OF WHICH 16 PERSONS CONFIRMED THE SAME BY FILING AFFIDAVITS. THE AO DISBELIEVED THE AFFIDAVITS AND M ADE ADDITION OF RS.47,25,340/ - U/S.68 OF THE ACT TREATING THE SUNDRY CREDITORS AS UNEXPLAINED CREDIT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 11. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION. 12. WE FIND THAT ALLAHABAD BENCH OF THE TRIBUNAL IN THE CASE O F MATHURA DAS ASHOK KUMAR (SUPRA), HAS HELD THAT WHEN PURCHASES ARE ACCEPTED TO BE GENUINE, BALANCE REMAINING OUTSTANDING AT THE END OF THE YEAR AGAINST SUCH PURCHASES CANNOT BE TREATED AS BOGUS LIABILITY AND ADDITION MADE ON THAT BASIS CANNOT BE SUSTAINED . SIMILARLY THE VISHAKAPATNAM BENCH OF THE TRIBUNAL IN CASE OF JAYANAGA ANITHA (SUPRA) , HAS HELD THAT NO ADDITION COULD BE MADE OF TRADE CREDITORS WHEN PURCHASES HAD BEEN ACCEPTED AS GENUINE . WE FIND THAT IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE PURCHASE OF PADDY BY THE ASSESSEE HAS BEEN ACCEPTED AS GENUINE BY THE AO AND, THEREFORE, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION S OF ALLAHABAD BENCH OF THE TRIBUNAL IN THE CASE OF MATHURA DAS ASHOK KUMAR (SUPRA) AND VISHAKAPATNAM BENCH OF THE TRIBUNAL IN CASE OF JAYANAGA ANITHA (SUPRA) . NO CONTRARY DECISION COULD BE CITED BY THE ITA NO. 86 /RPR/201 4 4 DR OF THE REVENUE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.47,25,340/ - MADE U/S.6 8 OF THE ACT UNDER THE HEAD SUNDRY CREDITORS AND ALLOW THE APPEAL OF THE ASSESSEE. 6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON WEDNESDAY , THE 31 ST DAY OF JANUARY, 2018 AT RAIPUR. SD/ - ( PAVAN KUMAR GADALE ) SD/ - (N. S. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER RAIPUR ; DATED 31 /01/2018 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) INCOME TAX APPELLATE TRIBUNAL, RAIPUR 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , RAIPUR / DR, ITAT, RAIPUR 6. / GUARD FILE. //TRUE COPY//