Sri.S.Sunil Kumar, Cochin V. The ACIT, Cochin

ITA 88/COCH/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96789 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 19-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 03-02-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: DAVIS CHAKKALAKKAL
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO.88 /COCH/2015 ASSESSMENT YEAR : 2010-11 S. SUNIL KUMAR, PROP. YESKEY CONSTRUCTION, P.C. ROAD, KALOOR, KOCHI-682 018. [PAN: ADKPS 8238H] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(2), RANGE-2, KOCHI. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI DAVIS CHAKKALAKKAL, ADV. REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 19/11/2015 DATE OF PRONOUNCEMENT 23/11/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER PASSED BY THE LD. CIT(A)-II, KOCHI DATED 23/10/2014 FOR THE ASSESSMEN T YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER PASSED BY THE COMMISSIONER OF APPEAL IS OPPOSED TO LAW AND FACTS OF MY CASE TO THE EXTENT WHICH IS PREJUDI CIAL TO THE APPELLANT. 2. THE COMMISSIONER OF APPEAL WENT WRONG IN NOT ADV ERTING TO THE EVIDENCES, FILED BEFORE HER AT THE APPOINTED TIME B EFORE DISPOSING OF THE APPEAL. S I.T.A. NO.88/COCH/2015 2 3. FOR PRODUCTION OF DETAILS/DOCUMENTS BEFORE THE COMMISSIONER OF APPEAL, THERE IS AMPLE OR UNCONTROVERTIBLE EVIDENCE IN THE FORM OF ACKNOWLEDGMENT OF THE SAME BY HER OFFICE. 4. EVEN OTHERWISE, IN THE ABSENCE OF REMISSION OR C ESSATION OF THE TRADING LIABILITY, NO ADDITION COULD HAVE BEEN SUST AINED ESPECIALLY IN THE CONTEXT OF CONFIRMATION OF THE LIABILITY BY THE CRE DITORS AND ALSO THE OTHER PARTICULARS, HAVING BEEN GIVEN TO THE COMMISS IONER OF APPEAL. 5. SUCH OTHER GROUNDS AS MAY BE RAISED AT THE TIM E OF HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE IS ENGAGED IN THE CONSTRUCTION OF BUILDINGS AND FLATS UNDER THE STYLE YESKAY CONSTRUCTION. THE ASSESSING OFFICER HAS MADE THE ADDITION AND HIS OBSERVATION IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: AS THE ASSESSEE FAILED TO SUBMIT THE CONFIRMATION OF SUNDRY CREDITORS IN THE FOLLOWING CASES WHICH ARE GIVEN BELOW: SL. NO. SUNDRY CREDITORS AMOUNT OUTSTANDING AS ON 31.03.2010 1. ABDUL RASHEED 166177.50 2. BACKER (JCB) 256836.50 3. HOHNY (WOOD SUPPLY) 161124.98 4. PAPPPACHAN 400700.45 5. SADIQUE 216508.50 6. SHAMEER (RIVER SAND) 152053 7. STAR ASSOCIATES 151040.50 8. SUBRAMANYAN 138898 9. YOONUS K.M. (JCB) 129937.62 TOTAL 17,73,280.05 I.T.A. NO.88/COCH/2015 3 THUS ASSESSEE FAILED TO FURNISH THE CONFIRMATION IN RESPECT OF ABOVE SUNDRY CREDITORS AMOUNTING TO RS.17,73,280.05/- WHI CH WERE OUTSTANDING ON 31.03.2010 EVEN THOUGH SUFFICIENT OPPORTUNITIES WERE GIVEN. AS THIS TRADING LIABILITY INCURRED BY THE ASSES SEE DURING THE PREVIOUS YEARS 2009-10 AND AS THERE IS A CESSATION OF SUCH A TRADING LIABILITY AMOUNTING TO RS.17,73,280.05/- FOR WHICH THE ASSESS EE FAILED TO PRODUCE EITHER THE CONFIRMATION LETTER OR THE CORRESPONDING LEDGE ACCOUNT FOR SUCH AMOUNT AS MENTIONED ABOVE. THE ABOVE TRADING LIABI LITY OF RS.17,73,280.05/- SHALL BE DEEMED TO BE PROFITS AND GAINS OF THE BUSINESS OR PROFESSION WHICH IS CHARGEABLE TO INCOME TAX AS THE INCOME OF THAT PREVIOUS YEAR 2009-10. THUS THE ABOVE AMOUNT OF RS.17,73,280.05/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE ACCORDING TO SECTION 4 1(1) OF THE INCOME TAX ACT, 1961 AS INCOME FOR THE FINANCIAL YEAR 2009-10. 3. BEFORE THE LD. CIT(A), THE ASSESSEE FILED MO RE CONFIRMATIONS AND DETAILS OF THE CREDITORS AS ADDITIONAL EVIDENCE WHI CH IN FACT WERE NOT ADMITTED BY THE LD. CIT(A). THE RELEVANT FINDINGS O F THE LD. CIT(A) ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 5.2 THE ASSESSEE DURING THE COURSE OF APPELLATE PR OCEEDINGS AGAIN FURNISHED FEW CONFIRMATIONS AND SOME HAND WRITTEN W ORKING SHEETS AND REQUESTED THAT THE SAME SHOULD BE ADMITTED AS ADDIT IONAL EVIDENCE. HOWEVER, THE KIND OF DOCUMENTS THAT WERE FILED FOR BEING ADMITTED AS ADDITIONAL EVIDENCE WERE SELF CERTIFIED DETAILS AND THE BALANCE CONFIRMATION BY SOME CREDITORS WITHOUT ANY LETTERHE AD, ADDRESS DETAIL AND DATE OF TRANSACTIONS. PAN DETAILS OF CREDITORS ETC. SOME HAND WRITTEN WORKING SHEETS WERE ALSO FURNISHED SHOWING DATE, VE HICLE NO., LOAD, RATE AND AMOUNTS. PAYMENT DETAILS OF FEW CREDITORS WERE ALSO FURNISHED, BUT THEY WERE ONLY IN THE NATURE AND SELF CERTIFICATION BY THE ASSESSEE. 5.2.1 SINCE THESE DOCUMENTS WHICH WERE REQUESTED TO BE ADMITTED AS ADDITIONAL EVIDENCE DID NOT HAVE MUCH EVIDENTIARY V ALUE HENCE DID NOT FORM ANY CLINCHING EVIDENCE IN SUPPORT OF ASSESSEE S CONTENTION. IT WAS DISCUSSED WITH THE AR OF THE ASSESSEE THAT THESE CO NFIRMATIONS WHICH I.T.A. NO.88/COCH/2015 4 ARE NOT CONFIRMED COPY OF ACCOUNTS ARE NOT IN THE N ATURE OF ANY ADDITIONAL EVIDENCE IN SUPPORT OF THE GROUNDS OF AP PEAL OF THE ASSESSEE AND ACCORDINGLY VIDE ORDER SHEET ENTRY DATED 30-09- 2014, THE ASSESSEE WAS ASKED TO FILE THE CONFIRMED COPY OF ACCOUNT OF THE SUNDRY CREDITORS. ALL THE BANK STATEMENTS INCLUDING PAN OF THESE PERS ONS TO REFLECT THE TRANSACTIONS MADE BY THE ASSESSEE ARE GENUINE. THE CASE WAS ADJOURNED TO 21.10.2014 WITH A VIEW THAT ONLY IF TH E ASSESSEE FILES PROPER DOCUMENTARY EVIDENCE INCLUDING CONFIRMED COP Y OF ACCOUNT OF SUNDRY CREDITORS, THEN ONLY IT CAN BE TREATED AS AD DITIONAL EVIDENCE AS THE GENERAL HAND WRITTEN CONFIRMATIONS OF BALANCE W ERE ALREADY FILED BEFORE THE ASSESSING OFFICER WITHOUT FILING THE CON FIRMED COPY OF ACCOUNTS. ON 21/10/2014 NEITHER THE ASSESSEE ATTEND ED THIS OFFICE NOR ANY DOCUMENTS INCLUDING CONFIRMED COPY OF ACCOUNTS OF SUNDRY CREDITORS IN SUPPORT OF THE GROUNDS OF APPEAL WERE FILED. SIN CE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS ALSO GIVEN AS MANY AS FOUR OPPORTUNITIES TO THE ASSESSEE FOR FILI NG THESE DETAILS, IT IS PRESUMED THAT THE ASSESSEE HAS NO DOCUMENTARY EVIDE NCE TO PROVE THESE TRANSACTIONS AND HENCE REQUEST OF THE ASSESSE E TO ADMIT THE HANDWRITTEN CONFIRMATION AND WORKING SHEETS AS ADDI TIONAL EVIDENCE IS NOT ACCEPTED AS THEY DO NOT FORM ANY CLINCHING EVID ENCE IN SUPPORT OF GROUNDS OF APPEAL TAKEN. SINCE ASSESSEE HAS NOT BE EN ABLE TO SHOW EITHER BEFORE ASSESSING OFFICER OR DURING THE APPEL LATE PROCEEDING THAT THESE SUNDRY CREDITORS ARE GENUINE AND STILL EXIST, THEREFORE ASSESSING OFFICER IS CORRECT IN HOLDING THAT THERE IS CESSATI ON OF TRADING LIABILITY AND MAKING THIS ADDITION U/S.41(1). ACCORDINGLY, THE A DDITION OF RS.17,73,280.05 MADE BY THE ASSESSING OFFICER IS HE REBY CONFIRMED. 4. THE LD. COUNSEL FOR THE ASSESSEE ARGUED TH AT EACH AND EVERY CONFIRMATION WAS SUBMITTED BEFORE THE LD. CIT(A) B UT THE LD. CIT(A) HAS NOT POINTED OUT EXCEPT THE OBSERVATION THAT THE CON FIRMATIONS ARE HANDWRITTEN AND DID NOT HAVE EVIDENTIARY VALUE. TH E LD. CIT(A) REQUIRED MORE DETAILS FROM THE ASSESSEE AND THE CASE WAS AD JOURNED TO 21/10/2014 ON WHICH DATE THE ASSESSEE COULD NOT APPEAR AND THE LD. CIT(A) PASSED THE ORDER ON 23/10/2014 WITHOUT GIVING SUFFICIENT OPPOR TUNITY OF BEING HEARD TO I.T.A. NO.88/COCH/2015 5 THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE PRA YED TO SEND THE MATTER TO THE FILE OF THE LD. CIT(A) TO ENABLE HIM TO PROD UCE ALL THE DETAILS WHICH IN FACT ARE NOW AVAILABLE AND CAN BE PRODUCED IN THE C OURT. 5. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. UNDISPUTEDLY, THE FACTS IN THE PRESENT CASE ARE THA T THE ASSESSEE COULD NOT PRODUCE THE CONFIRMATIONS FOR CERTAIN SUNDRY CREDIT ORS WHICH WERE TREATED AS INCOME BY THE ASSESSING OFFICER. HOWEVER, THE A SSESSEE PRODUCED THE CONFIRMATIONS BEFORE THE LD. CIT(A) AS ADDITIONAL E VIDENCE WHICH, ACCORDING TO THE LD. CIT(A) DID NOT HAVE MUCH EVIDENTIARY VAL UE SINCE THE SAME WERE WITHOUT LETTERHEAD AND OTHER DETAILS ETC. THE LD. CIT(A) ASKED FOR INCOME STATEMENTS AND FEW OTHER DETAILS FROM THE ASSESSEE AND THE CASE WAS ADJOURNED TO 21/10/2014 ON WHICH DATE NONE ATTENDED ON BEHALF OF THE ASSESSEE AND THE ORDER WAS PASSED BY THE LD. CIT(A) ON 23/10/2014. WE ARE OF THE VIEW THAT SUFFICIENT OPPORTUNITY OF BEIN G HEARD HAS NOT BEEN AFFORDED TO THE ASSESSEE TO REPRESENT HIS CASE AND THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO THE FILE OF THE LD. CIT(A) TO PRODUCE ALL THE DETAILS REQUIRED BY THE LD. CIT(A) BY AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE MATT ER IS SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE DE NOVO IN VI EW OF OUR DIRECTIONS I.T.A. NO.88/COCH/2015 6 HEREINABOVE AND THE ASSESSEE IS ALSO DIRECTED TO CO -OPERATE IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). THUS ALL THE GR OUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A. NO.88/COCH/2015 IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COU RT ON 23-11-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 23RD NOVEMBER, 2015 GJ COPY TO: 1. S. SUNIL KUMAR, PROP. YESKEY CONSTRUCTION, P.C. ROAD, KALOOR, KOCHI-682 018. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(2), RANGE-2, KOCHI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN