Shree Suvidhi Traders, Palanpur V. The Income tax Officer,Ward-1, Palanpur

ITA 998/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60235 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S K KABRA
• Section: 133(6)

Judgement Text

ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH , AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T.A. NO. 998 /AHD/2011 (ASSESSMENT YEAR: 2007- 08 ) SHREE SUVIDHI TRADERS, PLOT NO.G-3, NEW MARKET YARD, PALANPUR. (APPELLANT) VS. INCOME TAX OFFICER, WARD-1, 1 ST FLOOR, SHREE HARI COMPLEX, ABU HIGHWAY, PALANPUR (BK). (RESPONDENT) PAN: AAHFS 7527D APPELLANT BY : SHRI S. K. KABRA RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. ( )/ ORDER DATE OF HEARING : 26-3-2012. DATE OF PRONOUNCEMENT : 13-4-2012 PER: SHRI ANIL CHATURVEDI,A.M. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF LD. C IT (A)-XX, AHMEDABAD DATED 28-1-2011 FOR THE ASSESSMENT YEAR 2 007-08. 2. GROUND NO.1 READS AS UNDER: - ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 2 1. THE LD. CIT (A) HAD ERRED IN LAW AN ON THE FACTS OF THE CASE IN UPHOLDING THE ADDITION MADE BY THE LD. A.O. IN T HE CASE OF 2 (TWO) UNSECURED LOANS OF RS.2,42,948/- DESPITE SUBM ISSION OF ALL THE DETAILS. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CASTOR AND ISABGOL SEEDS AS GENERAL MER CHANT AND COMMISSION AGENT IN THE AGRICULTURE MARKET PRODUCE COMMITTEE AT PALANPUR. IT FILED ITS RETURN OF INCOME ON 12-10-20 07 DECLARING TOTAL INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTI NY AND ASSESSMENT WAS COMPLETED U/S. 143(3). DURING THE COURSE OF ASS ESSMENT, WHILE SCRUTINIZING THE BALANCE SHEET, ASSESSING OFFICER ( A.O.) OBSERVED THAT ASSESSEE HAS OBTAINED LOANS FROM VARIOUS PARTIES. I T INCLUDED A LOAN OF RS.2,19,197/- FROM MR. PRADIP MODH AND RS 23,751 /- FROM VIJAYKUMAR AND CO. THE A.O. DISALLOWED THE SAME ON THE GROUND THAT ASSESSEE COULD NOT ESTABLISH THE IDENTITY, CAPACITY OF THE LENDERS AND THE GENUINENESS OF TRANSACTION. 4. AGGRIEVED BY ORDER OF A.O., THE ASSESSEE PREFERR ED APPEAL BEFORE THE CIT (A). CIT (A) CALLED FOR THE REMAND R EPORT FROM A.O. AND GRANTED PARTIAL RELIEF. CIT(A) DID NOT GRANT RELIE F FOR LOAN RECEIVED FROM PRADIP MODH AND VIJAYKUMAR & CO., FOR THE FOLLOWING REASONS:- 5.1. AS FAR AS THE CASE OF SHRI PRADIP H. MODH IS CONCERNED THE AR OF THE APPELLANT CONTENDED THAT SH RI PRADEEP H. MODH IS ASSESSED TO TAX BY THE SAME A.O. AND EVE N IF THE ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 3 CONFIRMATION WAS NOT SIGNED, THE A.O. COULD HAVE VE RIFIED THE DETAILS FROM THE RECORDS AVAILABLE IN HIS OFFICE BE CAUSE ALL THE NECESSARY DETAILS WERE FURNISHED IN THE CONFIRMATIO N. THIS CONTENTION OF THE A.R. IS NOT CORRECT. IT IS SEEN T HAT THE PARTICULARS IN THE FORM, OF PAN OR ASSESSMENT DETAI LS OF SHRI PRADEEP H. MODH WAS NOT MENTIONED IN THE CONFIRMATI ON. HENCE THE A.O. COULD NOT HAVE MADE ANY VERIFICATION. IN VIEW OF THE ABOVE THE ADDITION MADE BY THE A.O. ON THIS COUNT IS JUSTIFIED. 5. AGGRIEVED BY ABOVE ORDER OF THE LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. A.R. FURNISHED COPIES OF LEDG ER ACCOUNT AS APPEARING IN ITS BOOKS, COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN FOR A.Y. 2007-08 OF SHRI PRADEEP MODH AND VI JAYKUMAR & CO. HE ALSO PLACED BEFORE US THE COPY OF REMAND REPORT DAT ED 7-1-2011 OF ACIT SENT TO CIT(A) WHEREIN IT WAS STATED THAT UNSI GNED CONFIRMATION WAS RECEIVED FROM PRADIP MODH FOR F.Y. 2005-06 AND 2006-07. IT ALSO STATED THAT LEDGER ACCOUNT OF VIJAYKUMAR & CO., FOR F.Y. 2005-06 REVEALED THAT THE ACCOUNT WAS SQUARED OFF DURING TH E YEAR. THE LD. A.R. THUS CONTENDED THAT NO ADDITION IS CALLED FOR AS THE ASSESSEE HAS BEEN ABLE TO COMPLY WITH THE REQUIREMENTS OF SECTIO N 68. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE A.O. A ND THE FINDINGS OF CIT(A). WE HAVE HEARD THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT MR. PRADIP MODH AND M /S. VIJAYKUMAR & ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 4 CO. HAD GIVEN LOANS TO THE ASSESSEE BOTH THE PARTIE S HAVE FILED THEIR RETURNS OF INCOME AND ARE ASSESSED TO TAX AT PALANP UR, GUJARAT. IT IS ALSO A FACT THAT MR. PRADIP MODH IS ASSESSED TO TAX BY THE SAME A.O. AS THAT OF ASSESSEE. THESE FACTS HAVE NOT BEEN CONT ROVERTED BY THE LD. D.R. THUS, IT IS AN UNDISPUTED FACT THAT THE ID ENTITY OF THE DEPOSITOR AND THE GENIUNITY IS PROVED AND IS NOT DO UBTED. IT IS ALSO ESTABLISHED THAT THE DEPOSITORS ARE ASSESSED TO TAX . IN VIEW OF THE TOTALITY OF THE FACTS, WE ARE THEREFORE OF THE VIEW THAT NO ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE IN CASE OF UNSECUR ED LOANS. WE THEREFORE DELETE THE ADDITION OF RS.2,42,948/- MADE AND ALLOW THE FIRST GROUND. 7. THE SECOND GROUND OF APPEAL IS AS UNDER:- 2. THE LD. CIT (A) HAD ERRED IN LAW AND ON THE FAC TS OF THE CASE IN UPHOLDING THE ADDITION MADE BY THE LD. A.O. IN THE CASE OF (TWO) SUNDRY CREDITORS) OF RS.22,33,228/- DESPIT E SUBMISSION OF ALL THE DETAILS AND PAYMENTS SQUARED UP IN THE N EXT YEAR THROUGH BANKING CHANNEL. 8. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. CALLED FOR THE DETAILS OF SUNDRY CREDITORS. THE DETAILS OF SUNDRY CREDITORS FURNISHED BY THE ASSESSEE REVEALED THAT THE LIST IN CLUDED 2 CREDITORS NAMELY BABULAL SHAH (RS.16,96,219/-) AND YOGESHWAR TRADING CO. (RS.5,37,017/-). INQUIRIES U/S. 133(6) WERE CARRIE D OUT BY CALLING CONFIRMATION FROM THEM. SINCE NEITHER ANY REPLY WAS RECEIVED FROM THE PARTIES NOR ASSESSEE COULD PRODUCE ANY CONFIRMA TION OF THESE ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 5 PARTIES, THE AMOUNT OF RS.22,33,236/- WAS ADDED AS UNEXPLAINED SUNDRY CREDITORS AND ADDED TO INCOME. 9. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT (A). CIT (A) DID NOT GRAN T ANY RELIEF. HE HELD AS UNDER:- 5.1(II) AS FAR AS THE ADDITION ON ACCOUNT OF UNEXP LAINED SUNDRY CREDITORS OF RS.22,33,236/- IS CONCERNED, TH E A.R. HAS ONLY STATED THAT NON RECEIPT OF REPLY CANNOT RESULT IN ADDITION. THIS CONTENTION OF THE A.R. IS NOT CORRECT. THE FAC T THAT NO REPLY WAS RECEIVED FROM THESE PERSONS HAD BEEN BROUGHT TO THE NOTICE OF THE APPELLANT. IT WAS ALSO POINTED OUT THAT THEY DID NOT EXIST. IN THE REMAND PROCEEDING ANOTHER OPPORTUNITY WAS PROVI DED TO THE APPELLANT TO PROVE THE EXISTENCE OF THESE PARTIES A ND ALSO TO SUBSTANTIATE THE CLAIM THAT THEY WERE INDEED SUNDRY CREDITORS. NO DETAIL WAS FILED IN RESPECT OF THESE PARTIES BY THE A.R. IN THE REMAND PROCEEDINGS ALSO. THUS THE A.O. HAD NO OPTIO N BUT TO TREAT THESE SUNDRY CREDITORS AS BOGUS. IN VIEW OF T HE ABOVE THE ADDITION MADE BY THE A.O. OF RS.22,33,236/- IS CONF IRMED. 10. AGAINST THE ABOVE CONFIRMATION OF ADDITION, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD. A,.R. BEFORE US HAS FILED COPY OF L EDGER ACCOUNT OF ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 6 BOTH THE PERSONS NAMELY YOGESHWAR TRADING & SHRI BA BULAL SHAH, THEIR CONFIRMATIONS AND COPY OF BILL. IT APPEARS TH AT THESE DOCUMENTS WERE NOT PRODUCED BEFORE THE LOWER AUTHORITIES BUT THE COPY OF THE SAME HAS BEEN PRODUCED BEFORE US. WE FIND THAT THE MATERIAL PRODUCED BEFORE US NEEDS VERIFICATION. WE ARE OF TH E VIEW THAT IT WOULD BE IN THE INTEREST OF JUSTICE TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, IT WILL BE IN FITNESS OF THINGS AND JUSTICE THAT THIS ISSUE BE REMANDED BACK TO THE FILE OF A.O . FOR VERIFICATION. WE ACCORDINGLY RESTORE THIS ISSUE TO THE FILE OF THE A .O. WITH DIRECTION TO VERIFY AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. THE A.O. SHALL ALLOW ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESS EE. THIS GROUND OF APPEAL IS THUS ALLOWED FOR STATISTICAL PURPOSE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13- 4 - 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA NO.9 98/AHD/2011 ASSESSME NT YEAR 2007- 08 . 7 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) XX, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 27 - 3 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 2 / 4` / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 9 - 4 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 13 - 4 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 13 - 4 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 3 - 4 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..