Himanshu Engg. Works, Ahmedabad V. The ACIT., Circle-6, Ahmedabad

MA 147/AHD/2010

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7927 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 23-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AN D SHRI A. K. GARODIA, ACCOUNTANT MEMBER M.A. NO.147/AHD/2010 IN I.T.A. NO.365 / AHD/2004 (ASSESSMENT YEAR 1996-97) HIMANSHU ENGINEERING WORKS, 620, PHASE IV, GIDC, VATVA, AHMEDABAD VS. ACIT, CIRCLE 6, AHMEDABAD PAN/GIR NO. :AABHF2716F (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI P F JAIN, AR RESPONDENT BY: SHRI SAMIR TEKRIWAL, SR. DR DATE OF HEARING: 02.03.2012 DATE OF PRONOUNCEMENT: 13.04.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE AND IT HAS BEEN POINTED OUT IN THE MISCELLANEOUS APPLICATION T HAT CERTAIN CONTENTIONS OF THE ASSESSEE WERE NOT CONSIDERED BY THE TRIBUNAL . AS PER MISCELLANEOUS APPLICATION, FOLLOWING 5 CONTENTIONS WERE NOT CONSIDERED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER: DURING COURSE OF HEARING IT WAS POINTED OUT THAT THE ASSESSEE HAS PURCHASED GOODS WORTH RS .25,64,967/- DURING THE YEAR AND AMOUNT OF RS.4, 60, 973/- WAS O UTSTANDING AS ON 31.03.1996 AND THE ASSESSEE WAS NOT INFORMED BY THE CREDITOR WITH REGARD TO JOURNAL ENTRY OF RS.4,60,973/-MADE B Y IT BY M.A.NO.147 /AHD/2010 2 NARRATING AS CDR NO.4726997.(REFER TO PAGE NO.17 OF THE PAPER BOOK.) 2. THE ASSESSEE HAS NOT MADE ANY PAYMENT OF RS. 4, 60, 973/-ON 28.10.1995 AS OBSERVED BY THE I.T.A.T. IN PARA 8 OF THE ORDER AND IN THE LETTER DATED 08/02/2003 REFERRED TO IN PARA 8 THERE IS NO MENTION OF PAYMENT OF RS.4,60,973/-. 3. THE CONTENTION OF THE ASSESSEE THAT IT WILL INQU IRE AND IF FOUND THAT THE AMOUNT IS NOT PAYABLE THE SAID AMOUNT WILL BE WRITTEN OFF FOR THE YEAR ENDED 31.03.2003 AND WILL BE OFFERED T O TAX IN THE A. Y. 2003-04 (SO OFFERED IN A.Y.2003-04). THIS HAS BE EN MENTIONED BY THE ITAT IN PARA 4 OF THE ORDER BUT IT HAS NOT B EEN CONSIDERED BY THE ITAT. ' 4. THE FINDINGS OF THE CIT (A) NARRATED IN PARA 5 O F THE ORDER OF THE ITAT FOR DELETING THE ADDITION OF RS.4,60,973/- HAV E NOT BEEN CONSIDERED BY THE ITAT. 5. IT HAS BEEN WRONGLY OBSERVED IN PARA 8 OF THE OR DER THAT THE ASSESSEE NEITHER BEFORE THE LD. CIT(A) NOR BEFORE U S COULD FILE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE SUM OF RS.4,60,973/- WAS OUTSTANDING PAYABLE TO D.M.ENG.LTD. AS ON 31.03 .1996 IN AS MUCH AS THAT THE CIT(A) HAS DELETED ADDITION ON THE BASIS OF SUBMISSION OF THE ASSESSEE AND THE HON'BLE ITAT HAS NOT CALLED FOR ANY EVIDENCE AS MENTIONED AND ON THE CONTRARY IT WA S OBSERVED BY BENCH THAT SIMPLY ON THE BASIS OF ENTRY IN THE BO OKS OF CREDITOR NO ADVERSE INFERENCE CAN BE DRAWN IN THE CASE OF ASSES SEE W HEN IT HAS NOT MADE ANY PAYMENT. 2. IT IS THE SUBMISSIONS OF THE ASSESSEE IN THE MIS CELLANEOUS APPLICATION THAT NON CONSIDERATION OF ABOVE FACTS/C ONTENTIONS IS APPARENT MISTAKE AND IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED I N THE CASE OF LAXMI ELECTRIC CORPORATION LTD. AS REPORTED IN 188 ITR 398 AND ON A JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. AS REPORTED IN 262 ITR 142. IN THE COURSE OF HEARING BEFORE US, THE SAME CONTENTIONS W ERE REITERATED BY THE LD. A.R. OF THE ASSESSEE. M.A.NO.147 /AHD/2010 3 3. LD. D.R. OF THE REVENUE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE JUDGEMENTS CITED BY THE ASSESSEE IN THE MISCELL ANEOUS APPLICATION. THE ISSUE REGARDING ADDITION OF RS.4,60,973/- WAS D ECIDED BY THE TRIBUNAL AS PER PARA 8 OF THE TRIBUNAL ORDER, WHICH IS REPRO DUCED BELOW: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. WE FIND THAT DURING THE YEAR THE ASSESSEE HAS SHOWN OUTSTAN DING LIABILITY PAYABLE TO M/S. D M ENGINEERING PVT. LTD. OF RS.4,6 0,973/-. THE A O MADE ENQUIRY FROM THE SAID D M ENGINEERING PVT. L TD. WHO INFORMED VIDE LETTER DATED 8-2-2003 TO THE A O THAT THEY HAD TRANSACTIONS WITH THE ASSESSEE DURING THE PERIOD 3- 6-1995 TO 28-10- 1995 AND THE AMOUNT OF RS.4,60,973/- WAS PAID ON 28 -10-1995. FROM THIS, THE A O INFERRED THAT THERE WAS NO AMOUN T OUTSTANDING PAYABLE TO DM ENGINEERING PVT. LTD, AND THE OUTSTAN DING LIABILITY PAYABLE TO DM ENGINEERING PVT. LTD. SHOWN BY THE AS SESSEE IN ITS BOOKS OF ACCOUNT WAS A BOGUS LIABILITY. THE ASSESSE E CONTENDED THAT THE LEARNED CIT(A) HAS CALLED FOR REMAND REPOR T FROM THE A O AND THE A O HAS ENCLOSED COPY OF ACCOUNT OF THE ASS ESSEE IN THE BOOKS OF D M ENGINEERING PVT. LTD. FROM WHICH IT IS SEEN THAT DM ENGINEERING PVT. LTD. HAS RETURNED RS.4,60,973/- ON 28-10-1995 BY STATING THAT IN THE ACCOUNT 'CDR 472 6007 JOURNAL'. ON THE BASIS OF THIS NARRATION THE ASSESSEE CONTENDED THAT THIS ENT RY DOES NOT SUGGEST THAT THE ASSESSEE HAS MADE PAYMENT TO DM EN GINEERING PVT. LTD. IT SUGGESTS THAT THE AMOUNT HAS BEEN WRIT TEN OFF BY THE SAID DM ENGINEERING PVT. LTD, AND THAT UNILATERAL W RITING OFF CANNOT BE TREATED AS INCOME U/S 41 (1) OF THE ACT. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE NEITHER BEFORE THE LEARNE D CIT(A) NOR BEFORE US COULD FILE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE SUM OF RS.4,60,973/- WAS OUTSTANDING PAYABLE TO D M ENGINEERING PVT. LTD. AS ON 31.3.1996 WHEREAS THE A O HAS RECEIVED CONFIRMATION FROM D M ENGINEERING PVT. LTD . VIDE THEIR LETTER DATED 8-2-2003 CONFIRMING THAT NO AMOUNT WAS OUTSTANDING PAYABLE TO THEM BY THE ASSESSEE. IN ABSENCE OF ANY EVIDENCE TO THE CONTRARY BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT RS.4,60,973/- SHOWN IN THE BOOKS OF ACCOUNT WAS PAY ABLE TO THE M.A.NO.147 /AHD/2010 4 SAID D M ENGINEERING PVT. LTD., WE FIND NO MISTAKE IN THE ORDER OF THE LEARNED AO IN MAKING ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF BOGUS LIABILITY SHOWN IN THE NAME OF D M ENGINEERING PVT. LTD. FOR RS.4,60,973/-. HENCE, WE SET ASIDE TH E ORDER OF THE LEARNED CIT(A) AND RESTORE BACK TO RESTORE THE ORDE R OF THE A O. THIS PART OF GROUND OF APPEAL OF THE REVENUE IS ALL OWED. 5. WE HAVE GONE THROUGH THE ORDER OF LD. CIT(A) ALS O ON THIS ISSUE AND IT IS NOTED BY LD. CIT(A) IN PARA 4.2 OF HIS OR DER THAT THIS AMOUNT OF RS.4,60,973/- WAS WRITTEN OFF BY M/S. D M ENGINEERI NG PVT. LTD. AND ON THE BASIS OF UNILATERAL ENTRY PASSED BY THIS PARTY, NO ADDITION CAN BE MADE IN THE HANDS OF THE PRESENT ASSESSEE. THE TRIBUNAL ORDER IS IN FACT SILENT ON THIS ASPECT. AS PER THE PROVISIONS O SECTION 41(1 ) OF THE INCOME TAX ACT, 1961, UNILATERAL ENTRY PASSED BY THE ASSESSEE HAVIN G OUTSTANDING CREDIT BALANCE CAN BE ADDED IN THE HANDS OF THE ASSESSEE U /S 41(1) BY DEEMING THAT THIS LIABILITY HAS CEASED TO EXIST BUT IN THE PRESENT CASE, THE PRESENT ASSESSEE IN WHOSE BOOKS, THE LIABILITY IS APPEARING HAS NOT PASSED ANY ENTRY FOR THE WRITE OFF OF LIABILITY BUT OTHER PART Y M/S. D M ENGINEERING PVT. LTD., HAS WRITTEN OFF THE DEBIT BALANCE IN THE IR BOOKS AND ON THE BASIS OF SUCH ENTRY IN THE BOOKS OF M/S. D M ENGINEERING PVT. LTD., INCOME CANNOT BE ADDED IN THE HANDS OF THE PRESENT ASSESSE E U/S 41(1) BY HOLDING THAT LIABILITY HAS CEASED TO EXIST. HENCE, WE ARE SATISFIED THAT THERE IS MISTAKE IN THE TRIBUNAL ORDER AS HAS BEEN SUBMITTED BY THE ASSESSEE IN THE MISCELLANEOUS APPLICATION BECAUSE THE TRIBUNAL HAS PROCEEDED ON A DIFFERENT BASIS ALTOGETHER. THE BASIS OF THE A.O. WAS THAT AS PER THE PARTY, THE AMOUNT WAS PAID BY THE ASSESSEE. IT IS NOTED B Y THE TRIBUNAL THAT THIS ENTRY OF THIS AMOUNT IN QUESTION IS NOT FOR PAYMENT BUT FOR WRITE OFF. IF THAT BE SO, IT CANNOT BE SAID THAT THE CREDIT BALAN CE IS BOGUS, WHICH IS NOT EVEN ALLEGED BY THE A.O. IN ASSESSMENT ORDER. THER EFORE, WE RECTIFY THE SAME AND HOLD THAT ON THIS ISSUE, THERE IS AN APPAR ENT MISTAKE IN THE M.A.NO.147 /AHD/2010 5 TRIBUNAL ORDER. WE, THEREFORE, RECALL THIS TRIBUNA L ORDER TO DECIDE THIS ISSUE AFRESH AFTER HEARING BOTH THE SIDES. 6. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 9/4 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11/4.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 13/4 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.13/4 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13/4/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .