ACIT, Sawai Madhopur V. GHANSHYAM DAS MANOHAR LAL, Sawai Madhopur

ITA 941/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4838 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Section: 143(3); 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 941/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 THE ACIT CIRCLE- SAWAI MADHOPUR SAWAI MADHOPUR CUKE VS. M/S. GHANSHYAM DAS MANOHAR LAL NEW MANDI, GANGAPUR CITY, SAWAI MADHOPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AADFG 9436 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL. CIT- DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29/12/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/12/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 02-08-2016 FOR THE ASSESSMENT Y EAR 2006-07 RAISING THEREIN FOLLOWING GROUNDS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) DELETING THE ADDITION OF RS. 5,33,989/- MADE ON ACCOUNT OF UNDISCLOSED COMMISSION INCOME; ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 2 (II) DELETING THE ADDITION OF RS. 24,17,780/- MADE ON ACCOUNT OF SUPPRESSION OF SALE. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF THE SERVICE OF NOTICE OF THIS HEARING. CONSEQUENTLY, THE BENCH IS LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MERITS, EX PARTE QUA TH E ASSESSEE, AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 3.1 APROPOS GROUND NO. 1 AND 2 OF THE REVENUE, THE FACTS OF THE CASE AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS U NDER:- IT IS SEEN THAT THE ORIGINAL ORDER IN THE CASE WAS PASSED U/S 143(3) ON 22-09-08 AND SUBSEQUENTLY IT WAS REOPENED U/S 148 AFTER TAKING DUE APPROVAL FROM CIT KOTA ON THE ISSUES OF SHOWING LESSER COMMISSION INCOME A ND SALES TURNOVER . THE AO ON THE OBJECTIONS RAISED BY THE ASSESSEE, DISPOSED THEM IN THE ASSESSMENT ORDER DAT ED 31-01- 2014 PASSED U/S 143(3)/147 WHICH IS PRESENTLY UNDER APPEAL. ON ISSUE OF FRESH NOTICE THE ASSESSEE REPLIED AGAIN RAISING OBJECTION ON THE VALIDITY OF REOPENIN G PROCEEDINGS U/S 148 ALONGWITH OTHER SUBMISSIONS IN HIS REPLY. THE AO HAS DEALT WITH THESE REPLIES IN THE P RESENT ORDER AS WELL. IN THE ASSESSMENT ORDER, THE AO HAS MENTIONED THAT SINCE THE ASSESSEE WAS NOT ABLE TO SUBSTANTIAT E THE EXPLANATIONS GIVEN BY PROVIDING BOOKS OF ACCOUNT, B ILLS VOUCHERS AND LEDGER ACCOUNTS COPIES FOR COMMISSION RELATED CLAIMED NOT RECEIPTS, HE MADE AN ADDITION OF RS. 5,33,989/- ON ACCOUNT OF SUPPRESSED INCOME TO THAT EXTENT ON THIS ISSUE. ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 3 SECONDLY, HE MADE AN ADDITION TO THE GROSS RECEIPTS FROM SALES ON THE BASIS OF COMMERCIAL TAXE S RETURN RECEIVED FROM THE RELEVANT DEPARTMENT WITHOUT CONSI DERING THE ASSESSEE'S EXPLANATION IN THIS REGARD ON THE BA SIS OF ABSENCE OF BOOKS OF ACCOUNTS, BILLS, VOUCHERS ETC. IN THE COURSE OF APPELLATE PROCEEDINGS, MY PREDECESSOR CIT (A) HAD REMANDED THE MATTER TO THE CONCERNED AO FOR RE-EXAMINATION OF THE ISSUES INVOL VED AFTER CONSIDERING THE BOOKS OF ACCOUNT WHICH ARE AVAILAB LE WITH THE ASSESSEE (AS PER THE NOTE SHEET ENTRY OF CIT (A ) FOLDER DATED 8-10-2014). ON REMAND, THE MATTER WAS CONSIDERED BY THE AO AFRESH AND REPORT DATED 2-12-2015, THE AO MENTIO NED THAT:- (1) PARA 5.2 OUT OF COMMISSION / ADAT RECEIVED OF RS. 12,96,901/- THE ASSESSEE HAS SHOWN COMMISSION / ADAPT PAYMENT OF RS. 5,34,3000/- AND C REDITED IN THE PROFIT & LOSS ACCOUNT RS. 7,62,913/- HOWEVER HE POINTED OUT THAT THERE IS A VIOLATION OF SECTION 19 4H ON SOME PAYMENTS OF COMMISSION TO OTHERS. THUS HE HAS VERIFIED & ACKNOWLEDGED THAT THE NET RECEIPT FROM COMMISSION/ ADAPT WAS ONLY RS. 7,6 2,913/- AND NO SUPPRESSION HAS BEEN RECORDED OR CONFIRMED B Y HIM IN THE REMAND REPORT. AS REGARDS THE VIOLATION OF PROVISIONS U/S 194H REPORTED BY HIM, SINCE THE ISSUE IS FRESH AND NOT S UBJECT MATTER OF THIS APPEAL, IT IS NOT BEING CONSIDERED H ERE. THE AO IS FREE TO TAKE ACTION IN THIS REGARD AS DEEM FIT P ER LAW. (2) AS REGARDS THE ISSUE RELATED TO SUPPRESSION OF THE SALES TURNOVER OF RS. 24,17,780 /-, AFTER EXAMINATION OF THE ISSUE AT LENGTH, THE AO IN HIS R EMAND REPORT HAS MENTIONED THAT THE DIFFERENCE IN TURNOVE R DECLARED BEFORE THE COMMERCIAL TAXES DEPARTMENT AND IN STATU TORY ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 4 AUDIT REPORT IS ON ACCOUNT OF DIRECT SALE TO TWO C ONCERNS ON WHICH COMMISSION/ ADAT HAS BEEN RECEIVED AND ACCOUN TED FOR BY THE ASSESSEE. IN THE LIGHT OF THE FINDINGS ON THE ABOVE TWO ISSUES EVEN AS PER THE REMAND REPORT AND THE DETAIL S SUBMITTED BY THE ASSESSEE, THE BASIS FOR THE PROCEE DINGS U/S 148 COMES UNFOUNDED. HOWEVER, THIS BECAME CLEAR ONCE THE BOOKS WHICH WERE NOT PRODUCED BEFORE THE AO IN THE ORIGIN AL PROCEEDINGS WERE PRODUCED IN THE REMAND PROCEEDINGS ALONGWITH OTHER RELEVANT SUPPORTING DOCUMENTS. THUS IN VIEW OF THE FACTS AS CLARIFIED ABOVE, THE ADDITIONS MADE IN THESE TWO GROUNDS OF APPEAL NAMEL Y RS. 5,3,989/- ON ACCOUNT OF SUPPRESSED COMMISSION INCO ME AND RS. 24,17,780/- ON ACCOUNT OF SUPPRESSION OF THE S ALES TURNOVER CANNOT BE UPHELD AND ARE DIRECTED TO BE D ELETED. THUS THE GROUND OF APPEAL NO. 3 & 4 ARE TREATED AS ALLOWED. 3.2 THE LD. DR DURING THE COURSE OF HEARING RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN D ELETING THE ADDITION OF RS. 5,33,989/- MADE ON ACCOUNT OF UNDISCLOSED COMM ISSION AND ALSO ERRED IN DELETING THE ADDITION OF RS. 24,17,780/- M ADE ON ACCOUNT OF SUPPRESSION OF SALE. 3.3 I HAVE HEARD THE LD. DR AND PERUSED THE MATERI ALS AVAILABLE ON RECORD. IT IS NOTED FROM THE ASSESSMENT ORDER WHERE IN THE AO MENTIONED ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 5 THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE ITS CLAIM ON ACCOUNT OF COMMISSION INCOME. THUS THE AO MADE AN ADDITION OF RS. 5,33,989/- ON ACCOUNT OF SUPPRESSED INCOME TO THAT EXTENT ON THI S ISSUE. IN THE COURSE OF APPELLATE PROCEEDINGS THE THEN LD. CIT(A) HAD REMAN DED THE MATTER TO THE CONCERNED AO FOR EXAMINATION OF THE ISSUE IN QUESTI ON AFRESH. THE AO IN THE REMAND PROCEEDINGS OBSERVED VIDE HIS REPORT DAT ED 2-12-2015 AS UNDER:- (1) PARA 5.2 OUT OF COMMISSION / ADAT RECEIVED OF RS. 12,96,901/- THE ASSESSEE HAS SHOWN COMMISSION / ADA PT PAYMENT OF RS. 5,34,3000/- AND CREDITED IN THE PROF IT & LOSS ACCOUNT RS. 7,62,913/- HOWEVER HE POINTED OUT THAT THERE IS A VIOLATION OF SECTION 194H ON SOME PAYMENTS OF COMMI SSION TO OTHERS. IN FIRST APPELLATE PROCEEDINGS, THE LD. CIT(A) OBS ERVED THAT THE AO HAD VERIFIED AND ACKNOWLEDGED THAT THE NET RECEIPT FROM COMMISSION/ ADAT WAS ONLY RS. 7,62,913/- AND NO SUPPRESSION HAD BEEN RECORDED OR CONFIRMED BY THE AO IN THE REMAND REPORT. AS REGARD S THE VIOLATION OF PROVISIONS U/S 194H REPORTED BY THE AO, THE LD. CIT (A) OBSERVED THAT SINCE THE ISSUE IS FRESH AND NOT SUBJECT MATTER OF THIS APPEAL AND IT IS NOT BEING CONSIDERED HERE AND THE AO IS ALSO FREE TO TA KE ACTION IN THIS REGARDS AS PER LAW. TAKING INTO CONSIDERATION THE F ACTS AND CIRCUMSTANCES ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 6 OF THE CASE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. THUS GROUND NO. 1 OF THE REVENUE IS DISMISSED. 3.4 AS REGARDS THE ISSUE RELATED TO SUPPRESSION OF SALES TURNOVER OF RS. 24,17,780/-, IT IS NOTED FROM THE ORDER OF THE LD. CIT(A) THAT THE AO IN HIS REMAND REPORT HAD MENTIONED THAT THE DIFFERENCE IN THE TURNOVER DECLARED BEFORE THE COMMERCIAL TAXES DEPARTMENT AND IN STATUTORY AUDIT REPORT WAS ON ACCOUNT OF DIRECT SALE TO TWO CONCER NS ON WHICH COMMISSION /ADAPT HAD BEEN RECEIVED AND ACCOUNTED F OR BY THE ASSESSEE. THE LD. CIT(A) TAKING INTO CONSIDERATION THE REMAND REPORT OF THE AO AND THE DETAILS SUBMITTED BY THE ASSESSEE DELETED THE A DDITION BY OBSERVING AS UNDER:- IN THE LIGHT OF THE FINDINGS ON THE ABOVE TWO ISS UES EVEN AS PER THE REMAND REPORT AND THE DETAILS SUBMI TTED BY THE ASSESSEE, THE BASIS FOR THE PROCEEDINGS U/S 148 COMES UNFOUNDED. HOWEVER, THIS BECAME CLEAR ONCE THE BOOKS WHICH WERE NOT PRODUCED BEFORE THE AO IN THE ORIGIN AL PROCEEDINGS WERE PRODUCED IN THE REMAND PROCEEDINGS ALONGWITH OTHER RELEVANT SUPPORTING DOCUMENTS. THUS IN VIEW OF THE FACTS AS CLARIFIED ABOVE, THE ADDITIONS MADE IN THESE TWO GROUNDS OF APPEAL NAMEL Y RS. 5,3,989/- ON ACCOUNT OF SUPPRESSED COMMISSION INCO ME AND RS. 24,17,780/- ON ACCOUNT OF SUPPRESSION OF THE S ALES TURNOVER CANNOT BE UPHELD AND ARE DIRECTED TO BE D ELETED. ' ITA NO. 241/JP/2016 ACIT, CIRCLE- SAWAI MADHOPUR VS. M/S. GHANSYAM DAS MANOHR LAL, SAWAI MADHOPUR . 7 IN VIEW OF THE ABOVE DELIBERATIONS AND THE MATERIAL AVAILABLE BEFORE THIS BENCH, I CONCUR WITH THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /12 /2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /12/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- SAWAI MADHOPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. GHANSHYAM DAS MANOHAR LAL, SAWAI MADHOPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 241/JP/2016 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR