Sri. Ayubkhan M Pathan, Hubli V. ITO-Ward-1(1), Hubli

MA 134/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9287 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 14-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G ELAMURUGU
• Assessee Lawyers: C RAMESH
• Keywords: Onus to prove
• Section: 254(2); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M P NO. 134 /BANG/201 9 (IN ITA NO. 1480 /BANG/201 6 ) ASSESSMENT YEAR : 20 08 - 09 AYUBKHAN M PATHAN, PROP: SAGAR TRADERS, APMC YARD AMARGOL H UBLI PAN NO.AODPP1065M VS. THE INCOME - TAX OFFICER , WARD - 1 ( 1 ), HUBLI APPELL ANT RESPONDENT A PPELLANT BY : SHRI C. RAMESH, CA RE SPONDENT BY : SHRI G. ELAMURUGU, J CIT DATE OF HEARING : 1 5 - 1 1 - 2019 DATE OF PRONOUNCEMENT : O R D E R PER SHRI B.R.BASKRAN, AM : THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATION WITH THE PRAYER THAT THERE ARE MISTAKES APPARENT FROM RECORD IN THE ORDER DATED 21 - 06 - 2019 PASSED IN ITA NO.1480 (BANG)/2016. 2. THE LD A.R SUBMITTED THAT THE MISCELLANEOUS PETITION HAS BEEN FILED IN RESPECT OF GROUND NO.3 RAISED BY THE ASSESSEE IN THE ORIGINAL APPEAL, WHICH READS AS UNDER: - 3. THE LEARNED CIT(APPEALS) HAS ERRED IN NOT CONSIDERING THE DETAILS PRODUCED ABOU T THE M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 2 OF 8 SUNDRY CREDITORS AND HAS GIVEN ONLY A PARTIAL RELIEF ON THE UNCONFIRMED CREDITORS, TO THE EXTENT OF 7,12,004/ - WITH RESPECT TO 16 CREDITORS INSTEAD OF THE TOTAL RELIEF AS SOUGHT OF RS.23,44,816/ - , AND THE BALANCE 32 CREDITORS ALSO BEING GENUINE. TH E LD A.R SUBMITTED THAT THE ASSESSEE WAS ASKED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO PRODUCE CONFIRMATION LETTERS FROM OUTSTANDING SUNDRY CREDITORS. THE ASSESSEE IS ACTING AS SELLING COMMISSION AGENT IN ONIONS ON BEHALF OF FARMERS FROM LOCAL AND OUTSIDE STATE AND HENCE IT TOOK SOME TIME FOR THE ASSESSEE TO COLLECT CONFIRMATION LETTERS. HOWEVER, THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT WITHOUT PR OVIDING SUFFICIENT OPPORTUNITY. HOWEVER, THE ASSESSEE FURNISHED CONFIRMATION LETTER S FROM ALL THE 52 CREDITORS BEFORE LD CIT(A) AND HENCE THE LD CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS, THE AO ISSUED SUMMONS TO ALL THE 52 CREDITORS. HOWEVER, ONLY 16 CREDITORS ATTENDED BEFORE THE AO AND CONF IRMED THE ONION SUPPLIED TO THE ASSESSEE AND ALSO CONFIRMED THE BALANCE RECEIVABLE FROM THE ASSESSEE. HENCE THE LD CIT(A) GRANTED RELIEF TO THE EXTENT OF BALANCES CONFIRMED BY THE FARMERS/CREDITORS, I.E., TO THE EXTENT OF RS.7,12,004/ - . ACCORDINGLY, THE LD CIT(A) CONFIRMED THE BALANCE AMOUNT OF ADDITION OF RS.16,32,812/ - RELATING TO REMAINING 36 CREDITORS. M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 3 OF 8 3. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS FURNISHED FOLLOWING DETAILS BEFORE THE LD CIT(A) AS WELL AS BEFORE THE ITAT: - (A) CONFIRMATION LET TERS FROM ALL THE TRADE CREDITORS (B) LEDGER EXTRACTS OF SOME TRADE CREDITORS OF SUBSEQUENT YEAR AY 2009 - 10 (FY 2008 - 09) (C) LIST OF AGENTS HAVING TAKEN LICENCE FROM APMC, HUBLI (D) LICENCE COPY OF AGENTS, CONFIRMATION LETTER AND LEDGER EXTRACTS ALON G WITH SAMPLE BILLS 40A(3). THE LD A.R SUBMITTED THAT THE TRIBUNAL HAS NOT CONSIDERED ABOVE DOCUMENTS AND ALSO WRITTEN SUBMISSIONS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS. HE SUBMITTED THAT THE LEDGER EXTRACTS OF SUBSEQUENT YEAR WOULD SHOW THA T THE ASSESSEE HAS ALREADY PAID THE OUTSTANDING BALANCE IN THE SUCCEEDING YEAR. HENCE THE SAME RESULTS IN A MISTAKE APPARENT FROM RECORD. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE TRIBUNAL HAS TAKEN A CONSCIOUS VIEW AFTER APPRECIATING ALL THE EVIDENCES AND CONTENTIONS OF THE PARTIES. SINCE A PARTICULAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL, THE SAME CANNOT BE CONSIDERED AS MISTAKE APPARENT FROM RECORD. HE FURTHER SUBMITTED THAT THE PRAYER MADE BY THE ASSESSEE IN THE MISCELLANEOUS PETITION WOUL D RESULT IN REVIEW OF THE ORDER PASSED BY THE TRIBUNAL, WHICH IS NOT PERMITTED U/S 254(2) OF THE ACT. M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 4 OF 8 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. THE POWER GIVEN TO THE TRIBUNAL U/S 254(2) OF THE ACT IS TO RECTIFY THE MISTAKES APPARENT ON THE FACE OF RECORD. IT IS ALSO WELL SETTLED PR O POSITION THAT THE TRIBUNAL CANNOT REVIEW ITS ORDER UNDER THE GARB OF RECTIFICATION. 6. FROM THE ORDER PASSED BY THE TRIBUNAL, WE NOTICE THAT THE TRIBUNAL HAS NOTED THE FACT THAT THE ASSESSEE IS A DE ALER AND COMMISSION AGENT IN ONIONS. THE ISSUE URGED IN GROUND NO.3 BY THE ASSESSEE RELATED TO THE ADDITION OF UNPROVED CREDITORS. THE AO NOTICED THAT THE ASSESSEE WAS SHOWING OUTSTANDING CREDITORS BALANCES AGGREGATING TO RS.23.44 LAKHS AGAINST THE NAME O F 52 CREDITORS, WHO ARE ALL FARMERS. SINCE THE ASSESSEE DID NOT FURNISH CONFIRMATION LETTERS CALLED FOR BY THE AO, THE ASSESSING OFFICER ADDED THE ABOVE SAID AMOUNT OF RS.23.44 CRORES TO THE TOTAL INCOME OF THE ASSESSEE. HOWEVER, BEFORE LD CIT(A), THE AS SESSEE FURNISHED CONFIRMATION LETTERS AND HENCE THE LD CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND PROCEEDINGS, THE AO ISSUED SUMMONS TO ALL THE 52 FARMERS, BUT ONLY 16 PERSONS RESPONDED. HENCE THE LD CIT(A) GRANTED RELIEF TO THE TUNE OF RS.7.12 LAKHS, I.E., TO THE EXTENT CONFIRMED BY THE FARMERS BEFORE THE AO. HENCE THE ASSESSEE HAS CHALLENGED THE DECISION OF LD CIT(A) IN PARTIALLY CONFIRMING THE ADDITION. M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 5 OF 8 7. THE TRIBUNAL ADJUDICATED THIS ISSUE AS UNDER: - 7. WE HAVE HEARD THE PARTIES ON THIS ISSUE AND PERUSED THE RECORD. WE NOTICE THAT THE AO HAS MADE THIS ADDITION ONLY FOR THE REASON THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF CREDITS OUTSTANDING IN THE NAME OF FARMERS, SINCE CREDIT SALES BY FARMERS IS NOT AN EXISTING TRADE PRACTICE. EVEN THOUGH, AN OPPORTUNITY WAS PROVIDED TO THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND REMAND PROCEEDINGS TO PROVE THE CREDIT BALANCES, YET THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTS OR CONFIRMATION FROM THE CREDITORS. SINCE SOME OF THE CREDITORS HAVE RESPONDED TO THE NOTICES ISSUED BY THE AO DURING THE REMAND PROCEEDINGS, THE LD CIT(A) HAS GRANTED RELIEF TO THE EXTENT OF 7.12 LAKHS MEANING THEREBY, THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE REMAINING CREDITORS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW, THAT THE LD CIT(A) WAS JUSTIFIED IN PARTIALLY SUSTAINING THE ADDITION MADE BY THE AO ON THIS ISSUE. 8. ACCORDING TO LD A.R, THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS OBTAINED FROM ALL THE CREDITORS BEFORE LD CIT(A). HOWEVER, IT MAY BE NOTICED THAT THE INITIAL ONUS TO PROVE THE CREDITS IS PLACED UPON THE ASSESSEE U/S 68 OF THE ACT. IF THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS PLACED UPON ITS SHOULDERS, THEN THE ONUS TO DISP ROVE THE SAME IS M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 6 OF 8 SHIFTED TO THE SHOULDERS OF THE ASSESSING OFFICER. IT IS AN ADMITTED FACT THAT THE ASSESSEE DID NOT FURNISH CONFIRMATION LETTERS BEFORE THE ASSESSING OFFICER. THE CONFIRMATION LETTERS WERE FILED BEFORE LD CIT(A) AND HENCE THE LD CIT(A) C ALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. ACCORDING TO THE ASSESSEE, IT HAS DISCHARGED THE ONUS BY FURNISHING CONFIRMATION LETTERS. HOWEVER, IN ORDER TO VERIFY THE VERACITY OF THE SAME, THE AO HAS ISSUED SUMMONS TO ALL THE 52 FARMERS, BUT ONL Y 16 FARMERS APPEARED BEFORE HIM. HERE, THE AO HAS NOT REMAINED SILENT AFTER RECEIPT OF CONFIRMATION LETTERS, MEANING THEREBY, THE AO HAS ACTED UPON THE SAME AND CONDUCTED ENQUIRIES THEREON. IN VIEW OF THE ABOVE, THE LD CIT(A) HAS GIVEN RELIEF TO THE EXT ENT CONFIRMED BY THE 16 FARMERS. HENCE , THE AO COULD PROVE THAT THE BALANCES OUTSTANDING IN THE NAME OF 16 FARMERS CAN BE CONSIDERED AS GENUINE. THEREAFTER, THE ASSESSEE DID NOT DO ANYTHING. UNDER THESE SET OF FACTS, THE TRIBUNAL HAS TAKEN THE VIEW THAT THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE CANNOT BE FOUND FAULT WITH. 9. HOWEVER, THE FOLLOWING OBSERVATIONS MADE BY THE TRIBUNAL LACKS CLARITY IN FACTS. EVEN THOUGH, AN OPPORTUNITY WAS PROVIDED TO THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND REMAND PROCEEDINGS TO PROVE THE CREDIT BALANCES, YET M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 7 OF 8 THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTS OR CONFIRMATION FROM THE CREDITORS. HENCE SAME NEEDS TO BE MODIFIED. IT CAN BE NOTICED THAT THE REQUIREMENT OF CALLIN G FOR A REMAND REPORT HAS ARISEN ONLY FOR THE REASON THAT THE ASSESSEE HAS FURNISHED CONFIRMATION LETTERS BEFORE LD CIT(A). THE ABOVE SAID OBSERVATION MADE BY THE TRIBUNAL HAS NOT BROUGHT OUT THE RELEVANT FACTS CORRECTLY AND THE SAME HAS RESULTED IN A MIST AKE APPARENT FROM RECORD. ACCORDINGLY, WE SUBSTITUTE THE ABOVE SENTENCE IN PARAGRAPH 7 OF THE ORDER PASSED BY THE TRIBUNAL WITH THE FOLLOWING SENTENCE. EVEN THOUGH AN OPPORTUNITY WAS PROVIDED TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS TO FILE CONFI RMATION LETTERS AND IN THE REMAND PROCEEDINGS TO PRODUCE THE CREDITORS, YET THE ASSESSEE COULD PRODUCE CONFIRMATION LETTERS ONLY BEFORE LD CIT(A) AND COULD NOT PRODUCE ALL THE CREDITORS DURING REMAND PROCEEDINGS. 10. IT CAN BE NOTICED THAT THE TRIBU NAL HAS TAKEN A VIEW IN THIS MATTER AFTER APPRECIATING THE ORDERS PASSED BY THE TAX AUTHORITIES AND CONSIDERING THE DOCUMENTS FURNISHED BY THE ASSESSEE. HENCE IT CANNOT FALL IN THE CATEGORY OF MISTAKE APPARENT FROM RECORD, AS CONTENDED BY THE ASSESSEE. M. P NO. 134 / BANG/20 1 9 (IN ITA NO.1480(B)/2016 PAGE 8 OF 8 ACCORDINGLY , WE DO NOT FIND ANY MERIT IN THE PETITION FILED BY THE ASSESSEE AND ACCORDINGLY DISMISS THE SAME. 11. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON (PAVAN KUMAR GADALE) JUDICIAL MEMBER 09 - 01 - (B.R BASKARAN ) ) ACCOUNTANT MEMBER BANGALORE DATED : AM* COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR