M/s. S P M Tools, Kolhapur V. Additional Commissioner of Income-tax,

ITA 907/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 3014 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVE DI, AM . / ITA NO. 907/PUN/2016 / ASSESSMENT YEAR : 2007-08 M/S. S P M TOOLS, B. NO. 7, OLD INDUSTRIAL ESTATE, ICHALKARANJI. NEW ADDRESS : PLOT NO.2-8, SECTOR-A, PARVATI CO. OP. IND. ESTATE, YADRAV, DIST.- KOLHAPUR PIN-416 145 PAN: AAEFS8736K ....... / APPELLANT / V/S. THE ADDL. COMMISSIONER OF INCOME TAX, ICHALKARANJI RANGE, ICHALKARANJI. / RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI AJAY MODI. / DATE OF HEARING : 16.05.2018 / DATE OF PRONOUNCEMENT : 24.05.2018 / ORDER PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLHAPUR DATED 02.03.2016 RE LATING TO ASSESSMENT YEAR 2007-08 AGAINST ORDER PASSED UNDER SECTION 143(3) O F THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2 ITA NO. 907/PUN/2016 A.Y. 2007-08 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL WITHOUT GIVI NG PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ORDER OF THE LD. CIT(A ) BE SET ASIDE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY TH E A.O. WHO HAD MADE ADDITION OF THE AMOUNT OF DIFFERENCES IN BALANCES I N ASSESSEES BOOKS AND THAT OF THE CREDITORS. THE ASSESSEE HAD NO CONTROL OVER THE BOOKS OF THE CREDITORS. THE ADDITION MADE BY THE A.O. AND CONFIR MED BY THE LD. CIT(A) BE DELETED. 3. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAIN ST THE ORDER OF CIT(A) IN CONFIRMING ADDITION ON ACCOUNT OF DIFFERENCES IN BA LANCES IN ASSESSEES BOOKS OF ACCOUNT AND THAT OF THE CREDITORS. THE ASSESSEE HAD ALLEGED THAT THE SAID BALANCES WERE RECONCILED. 4. THE LD. AR FOR THE ASSESSEE BEFORE US, AT THE OU TSET POINTED OUT THAT PROPER OPPORTUNITY WAS NOT GRANTED BY THE AUTHORITIES BELO W TO RECONCILE THE DIFFERENCES IN BALANCES IN BOOKS OF ACCOUNT. HE FURTHER PLEADED T HAT OPPORTUNITY MAY BE ALLOWED TO THE ASSESSEE TO FILE RECONCILIATION AND ISSUE BE DECIDED THEREAFTER. 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE PL ACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY STATED IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN MANUFACTURING AND SALE OF SPECIAL PURPOSE MACHINE, MACHINE TOOLS, MACHINE SPA RE PARTS AND TRADING IN ENGINEERING AND ELECTRICAL GOODS. FOR THE ASSESSMEN T YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INC OME OF RS.3,60,12,280/-. THE ASSESSEE HAD EFFECTED TOTAL TURNOVER OF RS.23,52,88 ,007/- ON WHICH A GROSS PROFIT OF 3 ITA NO. 907/PUN/2016 A.Y. 2007-08 RS.7,65,48,684/- WAS SHOWN. TO VERIFY THE GENUINENE SS OF THE SUNDRY CREDITORS, THE ASSESSING OFFICER SOUGHT INFORMATION FROM VARIOUS P ARTIES UNDER SECTION 133(6) OF THE ACT. IN SOME CASES, REPLIES OF ASSESSEE WERE RE CEIVED AND VERIFIED. IN RESPECT OF M/S.POTDAR ENTERPRISES, THE CLOSING BALANCES AS ON 31.03.2007 AS PER ASSESSEES BOOKS OF ACCOUNTS WAS SEEN TO BE STANDING AT RS.1,9 0,680/- WHEREAS THE CONFIRMATION RECEIVED FROM THE CONCERNED PARTY SHOW S THE SAME BALANCE AT RS.3,980/-. THUS, THERE APPEARED DIFFERENCE OF RS.1 ,86,700/-. SIMILARLY, IN RESPECT OF M/S.SREE ENGINEERS, THE CLOSING BALANCE AS ON 31.03 .2007 WAS SHOWN AT RS.38,11,140/- AS AGAINST WHICH THE PARTY HAD CONFI RMED IT TO THE TUNE OF RS.36,01,917/- LEAVING A DIFFERENCE OF RS.2,09,493/ -. THE ASSESSEE WAS SHOW CAUSED TO RECONCILE THE DIFFERENCES. IN RESPONSE, T HE ASSESSEE FURNISHED ITS SUBMISSION WHICH ARE REPRODUCED IN PARA 6.1 AT PAGE 3 OF THE ASSESSMENT ORDER. HOWEVER, THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSESSEE AND MADE ADDITION OF RS.2,33,352/- ON ACCOUNT OF NON-RECONCI LIATION OF CREDIT BALANCE OF RS.2,37,332/- OF M/S. POTDAR ENTERPRISES AND RS.2, 09,493/- OF M/S. SREE ENGINEERS. 7. THE CIT(A) HAS CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE TRIB UNAL. 8. THE ONLY PLEA RAISED BY ASSESSEE BEFORE US IS TH AT THE SAID BALANCES WERE RECONCILABLE AND OPPORTUNITY MAY BE ALLOWED TO THE ASSESSEE TO RECONCILE THE SAME. WE FIND MERIT IN THE PLEA OF ASSESSEE IN THIS REGAR D. ACCORDINGLY, WE REMIT THE ISSUES BACK TO THE FILE OF ASSESSING OFFICER TO AFFORD REA SONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FURN ISH COMPLETE INFORMATION BEFORE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AFTER CONSIDERING THE DETAILS FURNISHED BY ASSESSEE IN RESPECT OF RECONCILIATION OF BALANCE S TO SUNDRY CREDITORS AND IN ACCORDANCE WITH LAW. ACCORDINGLY, GROUNDS RAISED B Y ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO. 907/PUN/2016 A.Y. 2007-08 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF MAY, 2018. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) /ACCOUNTANT MEMBER /JUDICIAL MEMBER / PUNE; / DATED : 24 TH MAY, 2018 SB !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL)-2, KOLHAPUR. 4. THE CIT-II, KOLHAPUR/ CIT ( CENTRAL), PUNE. 5. !'# $% , & $% , '() , / DR, ITAT, A BENCH, PUNE. 6. #*+ ,- / GUARD FILE. // TRUE COPY // &/ / BY ORDER, 0 $) /PRIVATE SECRETARY & $% , / ITAT, PUNE.