M/s. Hariom Corporation, Ahmedabad V. The Income tax Officer,Ward-1, Bharuch

ITA 867/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57273 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 19-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: NIRAJ A SURTI A R SHRI B L
• Section: 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , .'# '#,$% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A. NO.867/AHD/2009 ( # ( # ( # ( # ( / / / / ASSESSMENT YEAR : 2003-04) M/S.HARIOM CORPORATION G-15, SASWAT COMPLEX DAHEJ BY PASS ROAD BHARUCH # # # # / VS. THE ITO WARD-1 BHARUCH ) $% ./*+ ./ PAN/GIR NO. : AACFH 3650 D ( ), / // / APPELLANT ) .. ( -.),/ RESPONDENT ) ), / $/ APPELLANT BY : SHRI NIRAJ A.SURTI, A.R. -.), 0 / $ / RESPONDENT BY : SHRI B.L.YADAV, SR.D.R. #1 0 %/ // / DATE OF HEARING : 05/03/2012 2'( 0 % / DATE OF PRONOUNCEMENT : 16/03/2012 $3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VI BARODA DATED 22.12.2006 PASSED FOR A.Y. 2003-04. NUMBER OF GROU NDS HAVE BEEN RAISED, REPRODUCED BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN DISMISSING THE APPEAL EXPARTE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE U/S.40A(3) IN A SUM OF RS.10,24,386. ITA NO .867/AHD/2009 M/S.HARIOM CORPORATION VS. ITO ASST.YEAR - 2003-04 - 2 - 3. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE, THE CIT(A) ERRED IN NOT SUBSTANTIALLY REDUCING THE AFORESAID DISALLOWANCE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.14,68,000 PURPORTED LY U/S.68. 5. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE, THE CIT(A) ERRED IN NOT SUBSTANTIALLY REDUCING THE AFORESAID ADDITION. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) SHOULD HAVE REALIZED THAT IT WAS NOT AT ALL A FIT CASE FOR LEVY OF INTEREST U/S.234B. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DU RING THE COURSE OF HEARING OF THE APPEAL. 2. LD.AR MR. NIRAJ A.SURTI HAS MADE A STATEMENT AT THE BAR THAT GROUND NO.2 IS NOT TO BE PRESSED AND GROUND NOS.3 T O 7 ARE GENERAL IN NATURE REQUIRE NO LEGAL ADJUDICATION. HE HAS THERE FORE PRESSED GROUND NO.1 AND GROUND NO.4 ONLY. WE HAVE HEARD BOTH TH E PARTIES AND ACCORDINGLY PROCEED HEREINBELOW. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 30/03/200 6 WERE THAT THE ASSESSEE WAS ASKED TO EXPLAIN THE UNSECURED LOAN IN THE NAME OF M/S.PH SHROFF APPEARING IN THE BALANCE-SHEET. THE ASSESS EE WAS ASKED TO PRODUCE THE CONFIRMATION AND THE GENUINENESS OF THE TRANSACTION. IT WAS MENTIONED BY THE AO THAT THE COPIES OF ACCOUNT FROM THE BOOKS OF M/S.PH SHROFF WAS SUBMITTED ONLY ON 24/03/2006. HO WEVER, THE ITA NO .867/AHD/2009 M/S.HARIOM CORPORATION VS. ITO ASST.YEAR - 2003-04 - 3 - ASSESSMENT WAS COMPLETED ON 30/03/2006. IT IS THE REFORE PLEADED THAT DUE TO INSUFFICIENT TIME AVAILABLE TO THE AO, NECES SARY ENQUIRY COULD NOT BE MADE THOUGH THE PAN AND THE BANK DETAILS WERE FU RNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAS CONCL UDED THAT MERELY DUE TO THE REASON THAT THE PAYMENTS WERE MADE THROU GH A/C. PAYEE CHEQUES WERE NOT THE CONCLUSIVE PROOF FOR GENUINEN ESS OF TRANSACTION. IT WAS CONCLUDED BY THE AO THAT THE ASSESSEE HAS FAILE D TO DISCHARGE THE PRIMARY ONUS, THEREFORE BY INVOKING THE PROVISIONS OF SECTION 68 OF IT ACT, AN ADDITION OF RS.4,68,000/- WAS MADE. BEING AGGRIEVED THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 4. FROM THE ORDER OF LD.CIT(A), IT IS EVIDENT THAT NO ONE WAS PRESENT FROM THE SIDE OF THE APPELLANT. THE LD.CIT(A) HAS THEREFORE CONCLUDED THAT THE DISCREPANCIES RECORDED IN THE ACCOUNTS COU LD NOT BE EXPLAINED. RATHER, DUE TO THE ABSENCE OF ANY SUBMISSION, THE A DDITION WAS CONFIRMED. 5. FROM THE SIDE OF THE APPELLANT, A COMPILATION HA S BEEN FILED CONTAINING THE BANK STATEMENTS AND RECONCILIATION. IT IS WORTH TO MENTION THAT ON PAGE 33 OF THE COMPILATION, THERE WAS AN EX PLANATION ABOUT THE CREDIT AND DEBIT ENTRIES IN THE ACCOUNT OF M/S.PH S HROFF. ON THE DIRECTION OF THE BENCH AN ENGLISH TRANSLATION IS FU RNISHED. AS PER THE ENGLISH TRANSLATION, WE HAVE NOTICED THAT M/S.PH SH ROFF HAS GIVEN THE PAN TO THE REVENUE AUTHORITIES. HOWEVER, NO ENQUIR Y WAS MADE SO AS TO ASCERTAIN THE CORRECTNESS AS WELL AS THE GENUINE NESS OF THE TRANSACTION. ITA NO .867/AHD/2009 M/S.HARIOM CORPORATION VS. ITO ASST.YEAR - 2003-04 - 4 - EVEN IT WAS INCORRECT TO STATE THAT THE PRIMARY ONU S HAS NOT BEEN DISCHARGED BY THE ASSESSEE. 5.1. IT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT WH ILE DISPOSING OF THE LEVY OF PENALTY U/S.271(1)(C). LD.CIT(A)-VI, BARODA ORDER DATED 31/12/2009 HAS APPRECIATED THE EVIDENCES FURNISHED IN THE SHAPE OF BANK STATEMENT, CONFIRMATION LETTER, ETC. AND THEREAFTER DIRECTED TO DELETE THE PENALTY. OUR ATTENTION HAS ALSO BEEN DRAWN THAT WH ILE DELETING THE PENALTY, LD.CIT(A) HAS EXAMINED THE BANK STATEMENTS , ETC. AND THEREAFTER HELD AS UNDER:- 3.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD.A R AND FACTS OF THE CASE. THE BONE OF CONTENTION IS THE SOURCE OF PAYMENT OF THE 6 TRANSACTIONS FOR WHICH AS PER THE ASSESSING OFFICER THERE IS NO ENTRY IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. HO WEVER, AN EXAMINATION OF THE BANK STATEMENTS FURNISHED AS PAR T OF THE PAPER BOOK REVEALED THAT, ALL THE ENTRIES EXCEPT CASH PAY MENT OF RS.15,000/- ARE REFLECTED IN THE BANK STATEMENTS OF CC A/C. NO.10030 & CURRENT A/C NO.3362 OF THE BDCC BRANCH, BHARUCH. NOT ONLY THAT, ALL THE ENTRIES IN BANK STATEMENTS A RE BY WAY OF TRANSFER FROM ONE BANK ACCOUNT TO ANOTHER BANK AC COUNT OF THE SAME BRANCH. AS PER RATIO OF ACIT VS JAG VIJAY AUT O FINANCE (P) LTD. (2008) 68 TTJ (JP) 44, EVEN TRANSFER ENTRIES ARE AS GOOD AS ENTRIES BY WAY OF A/C PAYEE CHEQUES. THE STATEME NTS FURNISHED BY M/S.P.H.SHROFF HAS ITS PAN NO.AADFP1351J IS NOT A CONFIRMATION STATEMENT AS SUCH BUT IT IS BASICALLY A LIST OF TRANSACTION WITH THE APPELLANT. IT HAS ALL THE ENT RIES AS DISPUTED BY THE AO & THEY ARE DULY REFLECTED IN THE BANK STATE MENT OF THE APPELLANT. SINCE ALL THE ENTRIES ARE FULLY ACCOUNT ED FOR BY BOTH THE PARTIES, THERE REMAINS NO DISPUTE AND THE SOURCE IS FULLY EXPLAINED. IN THE CIRCUMSTANCES, THERE IS NO INSTANCE OF UNEXP LAINED TRANSACTIONS AND AS SUCH THE SUBMISSIONS OF THE AR MERITS CONSIDERATION. ITA NO .867/AHD/2009 M/S.HARIOM CORPORATION VS. ITO ASST.YEAR - 2003-04 - 5 - 6. UNDER THESE CIRCUMSTANCES, SPECIALLY WHEN NO ONE WAS PRESENT BEFORE LD.CIT(A), THE PRIMARY ONUS STATED TO HAVE B EEN DISCHARGED, THEN IT IS WORTH TO REFER THIS ISSUE BACK TO THE STAGE O F LD.CIT(A) SO THAT KEEPING IN MIND AN ANOTHER ORDER OF LD.CIT(A) DATED 31.12.2009 PASSED WHILE DECIDING THE CORRECTNESS OF 271(1)(C) PENALTY , THE PRESENT APPEAL CAN ALSO BE DECIDED AS PER LAW. THE IMPUGNED EXPLA NATION OF ENTRIES, NOW ENGLISH TRANSLATION FILED BEFORE US SHOULD ALSO BE PLACED BEFORE LD.CIT(A) WHO CAN EXAMINE THE CORRECTNESS OF THE EN TRIES MADE THEREIN AND THEREAFTER CAN DECIDE AS PER LAW, NEEDLESS TO S AY, AFTER PROVIDING A REASONABLE OPPORTUNITY OF HEARING TO BOTH THE SIDES . WE ORDER ACCORDINGLY. IN THIS MANNER, BOTH THE GROUNDS, I. E. GROUND NO.1 AS WELL AS GROUND NO.4 OF THE ASSESSEE ARE REDRESSED AND TO BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSES ONLY. 7. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED THAT TOO FOR STATISTICAL PURPOSES ONLY. SD/- SD/- ( .'# '# ) ( ) $% ( A. MOHAN ALANKAMONY ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 16 / 03/2012 4..#, .#../ T.C. NAIR, SR. PS ITA NO .867/AHD/2009 M/S.HARIOM CORPORATION VS. ITO ASST.YEAR - 2003-04 - 6 - $3 0 -5 6$5( $3 0 -5 6$5( $3 0 -5 6$5( $3 0 -5 6$5(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-VI, BARODA 5. 5:; -# , , / DR, ITAT, AHMEDABAD 6. ; <1 / GUARD FILE. $3# $3# $3# $3# / BY ORDER, .5 - //TRUE COPY// = == =/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..5.3.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 5.3.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S ..3.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .3.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER