M/s Sheela Nonwoven Industries, Ludhiana V. ITO, Ludhiana

ITA 879/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8960 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: PANKAJ BHALLA
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.879/CHD/2016 (ASSESSMENT YEAR : 2007-08) M/S SHEELA NONWOVEN INDUSTRIES, VS. THE INCOME TAX OFFICER, 38/8/2, VILLAGE BAJRA, RAHON ROAD, WARD-II(3), LUDHIANA. LUDHIANA. PAN: ABDFS3822L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ BHALLA RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 15.09.2016 DATE OF PRONOUNCEMENT : 28.11.2016 O R D E R PER DIVA SINGH, J.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 27.05.2016 OF LEARNE D COMMISSIONER OF INCOME TAX (APPEALS)-1, LUDHIANA PERTAINING TO 2007 -08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A)-I, LUDHIANA HAS WRONGLY PAS SED THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 AGAINST LAW & FACTS OF THE CASE. 2. THAT THE LD. CIT(A)-I, LUDHIANA ERRED IN LAW & F ACTS IN CONFIRMING ARBITRARY AND UNWARRANTED ADDITION OF RS. 2,05,000/ - UNDER THE HEAD 'UNSECURED LOANS' WITHOUT ANY BASE & REASON THEREOF . 2.1 THAT THE LD. CIT(A)-I, LUDHIANA ERRED IN LAW & FACTS BY ARBITRARY REJECTING THE APPLICATION MADE UNDER RULE 46A OF TH E INCOME TAX RULES WITHOUT ANY BASE & REASONS THEREOF. 2.2 THAT THE LD. CIT(A)-I, LUDHIANA ERRED IN LAW & FACTS BY ADJUDICATING THAT NON- PRODUCTION OF UNSECURED LOAN EES SHALL LEAD TO ADDITION U/S 68 OF THE ACT. ITA NO.879/CHD/2016 2 3. THAT THE LD. CIT(A)-I, LUDHIANA ERRED IN LAW & F ACTS BY CONFIRMING ADDITION OF RS. 5,568/- UNDER THE HEAD 'DIFFERENCE IN CREDIT BALANCE OF A CREDITOR M/S. PDJ WOOL TRADERS' WITHOUT ANY BASE AN D REASONS THEREOF. 4. THAT THE APPELLANT CRAVES, LEAVE TO VARY, ALTER OR ADD ANY GROUNDS OF APPEAL. 2. HOWEVER BEFORE ADDRESSING THE GROUNDS THE LD. AR SUBMITTED THAT THE REGISTRY HAS POINTED OUT A DELAY OF ONE DAY IN THE FILING OF THE PRESENT APPEAL. INVITING ATTENTION TO, THE CONDONATION OF D ELAY PETITION FILED ON RECORD SUPPORTED BY AN AFFIDAVIT IT WAS SUBMITTED T HAT THE ASSESSEES COUNSEL FROM LUDHIANA HAD SENT THE APPEAL PAPERS THROUGH HI S OFFICE CLERK TO CHANDIGARH WHO COULD NOT REACH THE REGISTRY WITHIN TIME. ACCORDINGLY, RELYING UPON LANDMARK JUDGMENT OF THE APEX COURT IN COLLECTOR LAND ACQUISITION, ANANTNAG VS. MST KATIJI AND OTHERS, 19 87 AIR 1353 IT WAS HIS PRAYER THAT DUE TO REASONS BEYOND THE CONTROL O F THE ASSESSEE THE DELAY HAS OCCURRED. IN THE CIRCUMSTANCES IT WAS HIS PRAYE R THAT THE DELAY OF ONE DAY MAY BE CONDONED. CONSIDERING THE FACTS SR DR D ID NOT OPPOSE THE REQUEST. ACCORDINGLY, IN THE LIGHT OF THE SUBMISS IONS OF THE PARTIES BEFORE THE BENCH AND CONSIDERING THE AFFIDAVIT AVAILABLE O N RECORD I AM OF THE VIEW THAT THE EXPLANATION OF THE ASSESSEE BEING BON A FIDE AND TRUE DESERVES TO BE ACCEPTED. THE DELAY IS ACCORDINGLY CONDONED A ND THE PARTIES WERE REQUIRED TO ADDRESS THE ISSUE ON MERITS. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER IN THE COURSE OF THE SCRUTINY PROCEEDINGS REQUIRED THE ASS ESSEE TO FURNISH THE CONFIRMATION OF THE SUNDRY CREDITORS OUTSTANDING AS ON 31/03/2007 ALONG WITH THEIR PAN AND COMPLETE ADDRESS. CONSIDERING T HE INFORMATION FILED, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPL AIN THE INTEREST-FREE LOANS TO THE ASSESSEE FROM SMT. DEEPA S. NAIR AND SHRI SU NIL KUMAR AMOUNTING TO RS.1,85,000/- AND RS.20,000/- RESPECTIVELY. IN VIEW OF THE FACT THAT THE NOTICE SENT UNDER SECTION 133(6) RETURNED MARK AS UNSERVED THE ASSESSING ITA NO.879/CHD/2016 3 OFFICER REQUIRED THE ASSESSEE TO PRODUCE THESE PERS ONS. BEFORE HIM, THE ASSESSEE IN REPLY SUBMITTED THAT THE SAID TWO PERSO NS WERE NOT IN LUDHIANA AND THUS COULD NOT BE PRODUCED. AS A RESULT THEREOF ADDITION OF THE SAID AMOUNT WAS MADE IN THE HANDS OF THE ASSESSEE. 3.1 APART FROM THE SAID ADDITION THE ASSESSING OFFI CER ALSO MADE AN ADDITION OF RS.5,568/- SINCE THE CONFIRMATION FILED BY M/S PDG WOOL TRADERS, THE CREDITOR HAD CONFIRMED THE AMOUNT OF R S.4,75,272/- WHEREAS THE ASSESSEE HAD CREDITED RS.4,80,840/-. THE DIFFEREN CE WAS ADDED TO THE INCOME OF THE ASSESSEE. 4. THE ISSUES WERE TAKEN IN APPEAL BEFORE THE CIT ( APPEALS), AND PETITION UNDER RULE 46A WAS FILED FOR ADMISSION AND FRESH EVIDENCES. IN SUPPORT OF ADMISSION OF THE SAME IT WAS SUBMITTED T HAT THE EVIDENCE WHICH IS SOUGHT TO BE RELIED UPON AND PLACED ON RECORD WAS N OT AVAILABLE WITH THE ASSESSEE AT THE TIME OF ASSESSMENT. THESE SUBMISSIO NS ARE FOUND EXTRACTED IN PAGE 3 AND PAGES 6 OF THE IMPUGNED ORDER. THE RELEV ANT EXTRACT DESCRIBING THE EVIDENCES IS EXTRACTED HEREUNDER: KIND PERMISSION MAY BE ACCORDED TO ADDUCE ADDITION AL EVIDENCE IN FORM OF A) COPY OF INCOME TAX RETURN, CORPORATION BANK ACTUAL STATEMENT AND CONFIRMATION COPY OF ACCOUNT OF SMT. DEEPA S NAIR B EING ONE OF THE UNSECURED LOANEE TO PROVE ITS CREDITOR WORTHINESS. B) COPY OF INCOME TAX RETURN, CORPORATION BANK ACTUAL STATEMENT AND CONFIRMATION COPY OF ACCOUNT OF SUNIL KUMAR BEING O NE OF THE UNSECURED LOANEE TO PROVE ITS CREDIT WORTHINESS. 5. IN THE SAID BACKGROUND THE LD. AR REITERATING TH E SUBMISSIONS ADVANCED BEFORE THE CIT(A) SUBMITTED THAT THE EVIDE NCE SOUGHT TO BE FILED IS NOT ONLY RELEVANT AND CRUCIAL FOR DETERMINING THE I SSUE BUT IT HAS ALSO BEEN CONSISTENTLY ARGUED THAT IT WAS NOT AVAILABLE TO TH E ASSESSEE AT THE STAGE OF THE ASSESSMENT PROCEEDINGS. ACCORDINGLY IT WAS HIS PRAYER THAT ADMISSION OF THE SAME MAY BE DIRECTED. IT WAS FURTHER CLARIF IED THAT AS A MATTER OF FACT THE AMOUNTS WHICH WERE RECEIVED HAD ALREADY BEEN RE TURNED BY ACCOUNT ITA NO.879/CHD/2016 4 PAYEE CHEQUE TO THE PERSONS. ADDRESSING THE SUBMIS SIONS BEFORE THE ASSESSING OFFICER IT WAS CLARIFIED THAT THE ASSESSE E EXPRESSED ITS INABILITY TO PRODUCE THE PERSONS AT THE RELEVANT POINT OF TIME A S THEY WERE OUT OF STATION ONLY AS A RESULT THEREOF THE ASSESSEE HAD MADE A SU BMISSION THAT HE COULD NOT PRODUCE THEM. IN THE CIRCUMSTANCES IT WAS HIS LIMIT ED PRAYER THAT THE FRESH EVIDENCES MAY BE ADMITTED AND CONSIDERED RELEVANT F OR GRANTING RELIEF. ASSAILING THE IMPUGNED ORDER, IT WAS SUBMITTED THAT THE CIT(A) HAS DISMISSED THE PETITION WITHOUT EVEN CARING TO ADDRE SS THE REASONABLENESS OF THE ASSESSEES PRAYER. HAVING REPRODUCED THE SUBMI SSIONS ADVANCED ON BEHALF OF THE ASSESSEE IT WAS SUBMITTED THAT IT WAS INCUMBENT UPON THE SAID AUTHORITY TO AT LEAST DISCUSS THE REASONS EXTRACTED BY HIM IN HIS ORDER. IN THE ABSENCE OF ANY DISCUSSION ON THE EXPLANATION OFFERE D IT WAS HIS SUBMISSION THAT THE ORDER IS OPEN TO THE CHALLENGE OF BEING AR BITRARY AND BIASED. 6. THE LD. SR. DR CONSIDERING THE EXPLANATION EXTRA CTED IN PAGE 3 AND PAGE 6 OF THE IMPUGNED ORDER HAD NO OBJECTION IF TH E EVIDENCE IS ADMITTED AND THE MATTER IS REMANDED TO THE ASSESSING OFFICER . HOWEVER IT WAS HIS STRONG PRAYER THAT AT THIS STAGE THE CORRECTNESS OF THE EVIDENCES MAY NOT BE COMMENTED UPON AND THE ISSUE BE LEFT TO THE ASSESSI NG OFFICER TO VERIFY AND CONSIDER. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE OVERALL FACTU AL MATRIX OF THE PRESENT CASE I AM OF THE VIEW THAT IN THE PECULIAR FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE THE FRESH EVIDENCES SOUGHT TO BE ADMIT TED BY THE ASSESSEE BEING RELEVANT AND CRUCIAL OUGHT TO HAVE BEEN ADMITTED BY THE CIT(A). IN THE ABSENCE OF ANY DISCUSSION FOR NOT ADMITTING THE SAM E THE CONCLUSION TO REJECT ITS ADMISSION CANNOT BE UPHELD. CONSIDERING THE PRAYER OF THE LD. SR. DR THE FRESH EVIDENCES ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANC E WITH LAW TAKING INTO ITA NO.879/CHD/2016 5 CONSIDERATION THE EVIDENCES RELIED UPON BY THE ASSE SSEE IN SUPPORT OF ITS CLAIM. WHILE SO DIRECTING IT IS MADE CLEAR THAT THE ASSESSING OFFICER SHALL VERIFY THE EVIDENCES AND PASS A DECISION DE NOVO. W HILE SO DIRECTING IT IS ALSO MADE CLEAR THAT THE ASSESSEE SHALL NOT ABUSE T HE OPPORTUNITY SO PROVIDED AND SHALL PARTICIPATE IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER FULLY AND COMPLETELY AS FAILING WHICH IT IS MADE CLEAR TH AT THE ASSESSING OFFICER WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER IN ACC ORDANCE WITH LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER, 2016. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED : 28 TH NOVEMBER, 2016 *RATI*/SUJEET COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR //TRUE COPY// //TRUE COPY// ASSISTANT REGISTRAR, ITAT, CHANDIGARH ITA NO.879/CHD/2016 6