ITO, Alwar V. SHRI ANIL VASUDEV, Alwar

MA 154/JPR/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5242 (ITAT-JAIPUR)
• Duration Of Justice: 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Keywords: Bogus purchase; Depreciation; Question of law; Corroborative evidences; Retraction; Reassessment proceedings
• Section: 142(1); 260A; 148; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;I QJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ MA NO. 154/JP/16 ( ARISING OUT OF ITA NO.900/JP/012) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, WARD 1(1), ALWAR CUKE VS. SHRI ANIL VASUDEV PROP. D.D. METALS COPPER TUBE INDUSTRIES, E-63, RIICO INDUSTRIAL AREA, KHAIRTHAL, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACIPV 2157 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (J CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02.12.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/01/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE AGAINST THE ORDER PASSED BY THE CO-ORDINATE BENCH I N ITA NO. 900/JP/12 DATED 15.05.2015. 2. IN ITS APPLICATION, THE ASSESSEE HAS SUBMITTED T HAT CERTAIN FACTUAL ERRORS WHICH ARE MISTAKES APPARENT FROM THE RECORDS AND WHICH ARE GERMANE TO THE ULTIMATE DECISION TAKEN BY THE ITAT AND THUS CALL FOR RECALL OF ORDER OF THE ITAT. IN THIS REGARD, REFER ENCE WAS DRAWN TO THE CONCLUDING PART OF THE ORDER OF ITAT WHICH IS REPRO DUCED AS BELOW:- WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T BEFORE THE LD. CIT MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 2 (A), THE ASSESSEE DID NOT RAISE ANY GROUND IN APPEA L MEMO FOR THE SHORTAGE OF TIME OR REFUSAL OF ADEQUATE OPPORTUNITY . THIS IS BORN OUT FROM THE RECORD THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE. CONSEQUENTLY, ANY ADVERSE FINDINGS GIVEN BY THE LD. CIT(A) IN THIS BEHALF IS UNFOUNDED AND CANNOT BE SUSTAINED. BESIDES IN THE E NTIRETY OF THE ORDER OF THE LD. CIT(A), THERE IS NO PLEADING OF THE ASSE SSEE THAT STATEMENT OF SHRI ANIL VASUDEV WAS SUBSEQUENTLY RETRACTED OR UNR ELIABLE. ONCE THE ASSESSEE ADMITS THAT IN STATEMENTS WHICH IS UN-CONT ROVERTED, IT BECOMES BINDING PIECE OF EVIDENCE WHOSE IMPACT CANNOT BE DI LUTED OR DISMISSED ON THE BASIS OF SOME INFERENCE AND PRESUMPTION BY L D. CIT(A) WITHOUT JUSTIFIABLE AND CONVINCING REASONS. THUS ASSESSEES STATEMENT REMAINS UNDISPUTED, UNCONTROVERTED AND UN-RETRACTED ON RECO RD. APROPOS ASSESSEES OBJECTION THAT IN VIEW OF RE ASS ESSMENT FOR AY 2007- 08, EXISTENCE OF THE ALLEGED PARTIES ARE HELD TO BE GENUINE CANNOT DETRACT THE ADMISSION OF ASSESSEE. IN THESE FACTS AND CIRCU MSTANCES, WE FIND MERIT IN ARGUMENTS OF THE LD. DR. THE RELIEF GIVEN BY THE LD. CIT(A) IS WITHOUT PROPER CONSIDERATION OF FACTS AND RECORD AN D IS BASED ON MIS-REPRESENTATION OF THE FACTS ENACTED BY THE ASSE SSEE. THUS, WE UPHOLD THE ORDER OF THE LD. AO AND REVERSE THE ORDER OF TH E LD. CIT(A). THEREFORE, THE APPEAL OF THE REVENUE IS ALLOWED. 2.1 IT WAS SUBMITTED THAT THE ITAT ALLOWED THE APP EAL OF THE REVENUE ON THE SOLE REASON THAT THE ASSESSEE HIMSELF HAD ST ATED IN THE STATEMENTS RECORDED, BY THE LD. AO THAT THE PARTIES TO WHOM PAYMENT WAS TO BE MADE WERE BOGUS. 2.2 IT WAS SUBMITTED THAT THE ITAT IGNORED THE FOLL OWING FACTS, EMERGING OUT OF THE ORDER OF THE LD. AO, LD. CIT(A) AND PAPER BOOK FILED BEFORE HONBLE ITAT, WHICH WERE RELEVANT FOR DECIDI NG THE CASE:- 1. THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, L D. AO MADE ADDITIONS UNDER SECTION 41(1), OF THE OUTSTANDING L IABILITY OF RS 19,83,494 DETAILS OF WHICH ARE AS UNDER:- MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 3 2. THE ABOVE ADDITIONS WERE MADE BY THE LD. AO ON T HE PREMISE THAT THESE WERE OUTSTANDING FOR THREE OR MORE YEARS AND THE ASSESSEE DID NOT FILE CONFIRMATION OF ANY OF THE PARTIES. RELEVANT P ARAS OF THE ORDER, PASSED BY THE LD. AO, HAVE BEEN SET OUT AS UNDER:- AO ORDER PG 7: .AS THE LIABILITY IN ALL THE ABOVE MENTIONED CASE IS OUTSTANDING FOR THREE OR MORE YEARS IS EVIDENT FROM THE ABOVE CHART AND THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE LIABILI TY IN THE ABOVE CASES, THE ASSESSEE WAS REQUIRED TO SHOW CAUSE THAT WHY TH E LIABILITY OF RS. 19,83,494 IN THE NAMES OF THE ABOVE 7 PARTIES AS AP PEARING IN THE ACCOUNT BOOKS OF THE ASSESSEE MAY NOT BE TREATED AS NO-GENUINE. AND EVEN IF THEY ARE PRESUMED TO BE GENUINE, THEY HAVE CEASED TO EXIST IN TERMS OF PROVISIONS OF SECTION 41(1) OF THE INCOME TAX ACT, 1961 AND WHY THE AMOUNT OF RS. 19,38,494/- MAY NOT BE ADDED TO T HE INCOME OF THE ASSESSEE AO ORDER PG 8:I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE. AS IS EVIDENT FROM ABO VE, THE LIABILITY OF RS. 19,83,494 IN THE NAME OF SAID 7 PARTIES IS EITHER NOT GENUINE OR NON EXISTING. THE ASSESSEE HAS NOT FILED CONFIRMATION O F EVEN A SINGLE PARTY AND HAS REQUESTED TO COMPLETE THE ASSESSMENT IN AB SENCE OF SUCH CONFIRMATIONS, ON THE BASIS OF THE DETAILS AVAILABL E ON RECORD, WHICH ITSELF PROVES THAT THE SAID LIABILITY IS NOT PROVED AND IS NOT GENUINE AND DOES NOT EXIST AS ON 31 ST MARCH, 2008. THEREFORE, THE AMOUNT OF RS. 19,83,49 4 WILL BE ADDED TO INCOME OF THE ASSESSEE U/S 41(1) O F THE INCOME TAX ACT, 1961. 3. THE LD. CIT(A) DELETED THE ADDITIONS BY OBSERVIN G THAT THE ASSESSEE NOWHERE INTENDED NOT TO PAY THE AMOUNT OF RS 19,83, 494. FURTHER, LD. AMOUNT (RS.) 1 A.S ENTERPRISES, DARIYAGANJ, NEW DEHI 74,225 2 ARCHANA ENTERPRISES,DARIYAGANJ, NEW DEHI 1,05,213 3 HIMALAYA REFRIGERATION, DARIYAGANJ, NEW DEHI 78,000 4 MAHAVEER METAL INDUSTRIES 4,83,886 5 SHRI PARASNATH ENTERPRISES 4,93,622 6 SHREE VEER TRADING, WOGHODIA, VADODARA 6,67,903 7 METAL TUBES 80,645 19,83,494 S.NO. NAME OF THE CREDITOR TOTAL MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 4 CIT(A) HELD THAT SINCE THE ASSESSEE HAS NOT WRITTEN OFF SUCH LIABILITIES IN HIS BOOKS, NO ADDITIONS CAN BE MADE U/S 41(1). RELE VANT PARA OF THE ORDER OF THE LD. CIT(A) IS AS UNDER:- CIT(A) ORDER PG 18 PARA 2THE AO ALSO HELD THAT TH E LIABILITIES IN THE NAME OF SAID 7 PARTIES DID NOT EXIST AS ON 31.03.20 08 IN TERMS OF PROVISIONS OF SECTION 41(1) OF THE I. T ACT, 1961 A ND HAS INFACT MADE THE ADDITIONS U/S 41(1) OF THE I.T CT, 1961. IN THIS RE GARD THE A/R OF THE APPELLANT HAS MADE DETAILED SUBMISSION AND CITED CA SE LAWS AS REPRODUCED IN PARA 4.2 ABOVE. IT HAS BEEN SUBMITTED THAT EVEN THE BASIC CONDITION FOR INVOKING THE PROVISIONS OF SECTION 41 (1) BY THE AO HAS NOT BEEN FULFILLED. THE APPELLANT HAS NOWHERE DEMONSTRA TED ANY INTENTION OF NOT PAYING THE AMOUNT OF RS 19,83,494 WHICH IS APPE ARING IN THE BOOKS OF ACCOUNTS OF APPELLANT AND THE SAME HAS NOT BEEN WRITTEN OFF. CIT(A) ORDER PG 18 PARA 5.I FIND THAT DURING THE ASSESSMENT YEAR 2008- 09 THE APPELLANT HAS NEITHER RECEIVED ANY BENEFIT I N RESPECT OF TRADING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF NOR THE APPELLANT HAS WRITTEN OFF SUCH LIABILITY IN HIS ACCOUNTS. THEREFO RE, THE ADDITION OF RS. 19,83,494 U/S 41(1) OF THE IT ACT IN NOT CORRECT. I N VIEW OF ABOVE DISCUSSION THE ADDITION OF RS 1983494 IS DELETED... 4. IN THE STATEMENT MADE BY THE ASSESSEE BEFORE TH E LD. AO ON 13.12.2010, THE ASSESSEE MENTIONED THAT PURCHASES D ONE THROUGH M/S SHIVA ENTERPRISES WERE BOGUS. IN SUCH STATEMENT, TH E ASSESSEE ALSO CONTENDED THAT THE PURCHASES MADE FROM AADHAR TECHN OLOGY PRIVATE LIMITED WERE GENUINE. THE FACT IS APPEARING AT AO O RDER PG 4. THE HONBLE ITAT RELYING SOLELY ON THE ADMISSIONS CONTA INED IN THE SAID STATEMENTS MADE BY THE ASSESSEE BEFORE THE LD. AO S USTAINED THE ADDITIONS UNDER SECTION 41(1). 5. THE HONBLE ITAT TOTALLY IGNORED THE FACT THAT T HE PARTY MENTIONED IN THE STATEMENT (SHIVA ENTERPRISES) WAS DIFFERENT FROM THE PARTIES WITH RESPECT TO WHOM ADDITIONS UNDER SECTION 41(1) WERE MADE. 2.3 OUR ATTENTION WAS DRAWN TO JUDGMENT OF AMZEL LT D. (MA NO 583/MUM/2012 DT 5-11-2013) OF THE ITAT MUMBAI BENCH IN WHICH IT WAS HELD THAT IF A FACTUAL ASPECT WHICH IS OF IMMENSE I MPORTANCE ON THE ULTIMATE DECISION HAS NOT BEEN UNDERSTOOD CORRECTLY , IT IS LIKELY TO PREJUDICE THE ULTIMATE DECISION OF THE BENCH. IN SU CH A SITUATION, IT IS A MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 5 DUTY, RATHER THAN PREROGATIVE OF THE BENCH TO RECAL L ITS ORDER BASED ON SUCH INCORRECT ASSUMPTION OF FACT AND THEREAFTER OR DER FRESH HEARING SO THAT A CORRECT DECISION CAN BE ARRIVED AT. 2.4 FURTHER, OUR REFERENCE WAS TO THE DECISION OF H ONBLE RAJASTHAN HIGH COURT IN THE CASE OF CHAMPA LAL CHOPRA [2003] 131 TAXMAN 417 (RAJ.) HELD THAT IN A GIVEN CASE WHERE THE FACTUA L MISTAKE IS SO APPARENT THAT IT BECOMES NECESSARY TO CORRECT THE S AME, THE TRIBUNAL WOULD BE JUSTIFIED IN NOT ONLY CORRECTING THE SAID MISTAKE BY WAY OF RECTIFICATION BUT IF THE JUDGMENT HAS PROCEEDED ON THE BASIS OF THAT FACT, IT WOULD BE JUSTIFIED IN RECALLING SUCH ORDER AND P OSTING FOR HEARING. 2.5 IT WAS FURTHER SUBMITTED THAT THE CREDITORS, WI TH RESPECT TO WHOM ADDITIONS UNDER SECTION 41(1) WERE MADE, WERE SUBSE QUENTLY PAID BY WAY OF ACCOUNT PAYEE CHEQUES OR BY WAY OF ADJUSTMEN T AGAINST SALES MADE TO THOSE PARTIES. THE COPY OF ACCOUNT STATEMEN TS, OF EACH OF THE SAID PARTIES WERE PLACED BEFORE HONBLE ITAT IN THE PAPER BOOK FROM PAGE 20-26. THE ABOVE FACT PUT FORTH BEFORE HONBLE ITAT AT POI NT 3, PAGE 2 OF THE WRITTEN SUBMISSIONS WERE TOTALLY IGNO RED BY THE HONBLE ITAT. RELEVANT PARA IS OF THE WRITTEN SUBMISSION IS SET OUT FOR THE SAKE OF CONVENIENCE:- THE ASSESSEE IN SUBSEQUENT YEAR HAS PAID THE SAID AMOUNT TO THE CREDITORS. IN SOME CASES THE OUTSTANDING CREDIT BAL ANCE HAS BEEN ADJUSTED AGAINST SALES MADE TO THESE PARTIES. THUS, BALANCE IN ALL THE ACCOUNTS WHICH HAVE BEEN ADDED BY THE AO HAVE BEEN SUBSEQUENTLY SQUARED OFF. COPY OF THE LEDGER ACCOUNTS OF THE CRE DITORS EVIDENCING THE PAYMENT IS AT PB 20-26. THUS, THE ADDITION MADE BY THE AO IN THE YEAR UNDER CONSIDERATION U/S 41(1) IS INCORRECT AS THE A SSESSEE HAS NOT DEMONSTRATED THAT THE SAID LIABILITIES HAS NOT CEAS ED TO EXIST AND THE AO HAS NOT BROUGHT ANY MATERIAL TO DEMONSTRATE THAT TH E LIABILITIES HAS CEASED TO EXIST IN THE YEAR UNDER CONSIDERATION. 2.6 IT WAS FURTHER SUBMITTED THAT THE STATEMENT MAD E BY THE ASSESSEE ON 13.12.2010, ADMITTING THE TRANSACTION DONE WITH SHIVA ENTERPRISES, IN THE PREVIOUS YEAR RELEVANT TO THE AY 2007-08, TO BE BOGUS, THE SAID YEAR WAS SUBSEQUENTLY REOPENED UNDER SECTION 148 (AO ORD ER PAGE 5). THAT IN THE SAID REASSESSMENT PROCEEDINGS, THE TRANSACTI ONS DONE WITH SHIVA ENTERPRISES WERE FOUND TO BE GENUINE AND NO ADDITIO NS WERE MADE, ON THIS ACCOUNT, IN THE REASSESSMENT PROCEEDING. THAT COPY OF SUCH MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 6 ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/147 DA TED 30.12.2011,FORMED PART OF PAPER BOOK PLACED BEFORE HONBLE ITAT IN THE APPELLATE PROCEEDINGS. 2.7 FROM THE ABOVE MENTIONED POINTS, IT WAS SUBMITT ED THAT HONBLE ITAT WHILE PASSING THE ORDER IN FAVOUR OF THE REVEN UE DID NOT CONSIDER VITAL FACTS EMERGING OUT OF THE ORDER OF THE LD. AO AND LD. CIT(A) ALONG WITH THE PAPER BOOK FILED. IT IS SUBMITTED THAT POW ER OF RECTIFICATION U/S 254 CAN EXTEND TO MATTERS ON RECORD, WHICH WERE NOT CONSIDERED OR WHICH WERE MISREAD. IT WAS THE VIEW TAKEN IN HONBL E KARNATAKA HIGH COURT IN THE CASE OF C.N. ANANTHARAM [2004] 266 ITR 470 (KARN) AFTER REVIEW OF THE CASE LAW ON THE SUBJECT 2.8 THUS THE ABOVE FACTUAL ERRORS HAVE LED TO MISTA KES, WHICH ARE APPARENT ON RECORD, IN THE ORDER OF HONBLE ITAT. T HAT FROM THE ABOVE IT CAN BE SEEN THAT THE HONBLE ITAT HAS COMMITTED MIS TAKES WHICH ARE APPARENT FROM RECORDS AND HENCE ARE COVERED BY SECT ION 254(2) OF THE IT ACT, 1961. THAT THIS MISCELLANEOUS APPLICATION HAS ACCORDINGLY BEEN FILED U/S 254(2) BEFORE THE HONBLE ITAT TO RECALL THE ENTIRE ORDER IN VIEW OF THE APPARENT MISTAKES AND DECIDE THE ENTIRE ISSUE A FRE SH AFTER GIVING DUE OPPORTUNITY TO BOTH THE PARTIES. 2.9 THAT IN THE CASE OF HONDO SIEL POWER PRODUCTS L TD. V/S CIT (2007) 295 ITR 466, THE HONBLE APEX COURT, WHILE DESCRIBING THE SCOPE OF POWER OF RECTIFICATION OBSERVED AS UNDER:- AS STATED ABOVE, IN THIS CASE WE ARE CONCERNED WI TH THE APPLICATION UNDER SECTION 254(2) OF THE 1961 ACT. AS STATED ABO VE, THE EXPRESSION 'RECTIFICATION OF MISTAKE FROM THE RECORD' OCCURS I N SECTION 154. IT ALSO FINDS PLACE IN SECTION 254(2). THE PURPOSE BEHIND E NACTMENT OF SECTION 254(2) IS BASED ON THE FUNDAMENTAL PRINCIPLE THAT N O PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPAR TMENT, SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL . THIS FUNDAMENTAL PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWER S OF THE TRIBUNAL. IN THE PRESENT CASE, THE TRIBUNAL IN ITS ORDER DATED 1 0-9-2003 ALLOWING THE RECTIFICATION APPLICATION HAS GIVEN A FINDING THAT SAMTEL COLOR LTD.S CASE (SUPRA) WAS CITED BEFORE IT BY THE ASSESSEE BUT THR OUGH OVERSIGHT IT HAD MISSED OUT THE SAID JUDGMENT WHILE DISMISSING THE A PPEAL FILED BY THE MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 7 ASSESSEE ON THE QUESTION OF ADMISSIBILITY/ALLOWABIL ITY OF THE CLAIM OF THE ASSESSEE FOR ENHANCED DEPRECIATION UNDER SECTION 43 A. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER OF RECTIFICA TION TO THE TRIBUNAL IS TO SEE THAT NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT BY ITS DECISION BASED ON A MISTAKE APPARE NT FROM THE RECORD. 2.10 IT WAS FURTHER SUBMITTED THAT AGAINST THE SAID ORDER OF HONBLE ITAT, JAIPUR BENCH, ASSESSEE PREFERRED AN APPEAL BE FORE THE HONBLE RAJASTHAN HIGH COURT. THE HONBLE RAJASTHAN HIGH CO URT VIDE ITS ORDER, DATED 6.11.2015, ADMITTED THE APPEAL OF THE ASSESSE E AND THE SAME IS PENDING FOR HEARING BEFORE THE HONBLE JURISDICTION AL HIGH COURT. THE QUESTION OF LAW ADMITTED BY HONBLE HIGH COURT IS R EPRODUCED AS UNDER: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE BASIC INGREDIENTS TO INVOKE SECTION 41(1) OF THE ACT ARE FULFILLED WHEN THE AMOUNT OF RS 19,83,494/- DUE TO THE CREDITORS WAS A PPEARING AS LIABILITIES IN THE BOOKS OF THE APPELLANT AND WERE NOT WRITTEN OFF. IT IS SUBMITTED THAT PENDENCY OF AN APPEAL FILED IN THE HIGH COURT IS NO BAR TO THE MAINTAINABILITY OF A RECTIFICATION APPLI CATION BEFORE THE TRIBUNAL. THE SAID RATIO WAS LAID DOWN BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF R. W. PROMOTIONS (P.) LTD. [20 15] 376 ITR 126 (BOMBAY), IN WHICH IT WAS HELD THAT .MERELY BECAUSE THE ASSESSEE HAS CHALLENGED THE ORDER OF THE TRIBUNAL IN AN APPEAL U NDER SECTION 260A BEFORE THE HIGH COURT, IT DOES NOT MEAN THAT THE PO WER UNDER SECTION (2) OF SECTION 254 CANNOT BE INVOKED EITHER BY THE ASSE SSEE OR BY THE REVENUE/ASSESSING OFFICER. SUCH A POWER ENABLES THE TRIBUNAL TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND MAKE AMEND MENTS. THAT IN A GIVEN CASE WOULD NOT ONLY SAVE PRECIOUS JUDICIAL TI ME OF THE TRIBUNAL BUT EVEN OF THE HIGHER COURT. ONLY WHEN THE ASSESSEE OR THE ASSESSING OFFICER CALLS UPON THE TRIBUNAL TO UNDERTAKE AN EXERCISE WH ICH IS NOT PERMISSIBLE WITHIN THE MEANING OF SECTION (2) OF SECTION 254 TH AT THE TRIBUNAL CAN RELY ON THE PRINCIPLE OF JUDICIAL PROPRIETY OR ITS RELUCTANCE OR REFUSAL TO TAKE UPON ITSELF THE POWERS OF THE HIGHER COURT OF APPEAL. IF THE TRIBUNAL HAD PASSED AN ORDER AFTER CONSIDERING THE APPLICATI ON MADE BY THE PETITIONER- ASSESSEE ON ITS MERITS AND IN ACCORDANC E WITH LAW. HOWEVER, THE REFUSAL OF THE TRIBUNAL TO GO AHEAD AND REJECT THE APPLICATION ONLY ON THE GROUND THAT THE PETITIONER-ASSESSEE HAS INVOKED THE APPELLATE POWERS OF HIGHER COURT CANNOT BE SUSTAINED. THAT IS CONTRARY TO THE PLAIN LANGUAGE OF THE TWO STATUTORY PROVISIONS AND WHICH HAVE BEEN BROUGHT MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 8 TO OUR NOTICE. NOTHING CONTRARY HAVING BEEN POINTED OUT AND SUCH A VIEW OF THE TRIBUNAL MAY AFFECT AND PREJUDICIALLY THE IN TEREST OF THE REVENUE THAT ALL THE MORE THE COURT CANNOT SUSTAIN THE IMPU GNED ORDER. THUS, THE WRIT PETITION IS ALLOWED. THE PETITIONERS MISC. APP LICATION SEEKING TO INVOKE THE POWERS UNDER SUBSECTION (2) OF SECTION 2 54 OF THE INCOME TAX ACT, 1961 BEING MISC. APPLICATION SHALL BE HEARD BY THE TRIBUNAL AND IT SHALL BE DECIDED IN ACCORDANCE WITH LAW 3. THE LD DR IS HEARD WHO HAS SUBMITTED THAT THE OR DER PASSED BY THE COORDINATE BENCH HAS BEEN PASSED AFTER TAKING I NTO CONSIDERATIONS ALL THE RELEVANT FACTS AND THE SUBJECT PETITION IS THEREFORE NOT MAINTAINABLE. 4. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS, IT WOULD BE RELEVANT TO GO THROUGH THE ORDER OF THE COORDINATE BENCH AND RELATED RECORDS WHICH IS THE SUBJECT MATTER OF PRESENT MISCELLANEOU S PETITION. 4.1 THE ISSUE BEFORE CO-ORDINATE BENCH WAS WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 19,84 ,494/- MADE BY THE AO ON ACCOUNT OF UNPROVED/NON-EXISTING LIABILITIES. 4.2 BEFORE WE GO THROUGH THE ORDER OF THE COORDINAT E BENCH, IT WOULD BE RELEVANT TO EXAMINE THE ASSESSMENT ORDER. ON PE RUSAL OF ASSESSMENT ORDER, IT IS NOTED THAT THE STATEMENT OF SHRI ANIL VASUDEV WAS RECORDED ON 13.12.2010. IN HIS STATEMENT, HE ADMITTED THAT N O ACTUAL PURCHASES WERE MADE FROM M/S SHIVA ENTERPRISES AND ONLY BOGUS BILLS WERE GOT MADE IN THE NAME OF SAID PARTY DURING THE F.Y. 200 6-07 RELEVANT TO ASSESSMENT YEAR 2007-08 AND HE HAS NOTHING TO PAY T O THE SAID PARTY. REGARDING CASH PAYMENT OF RS. 3,35,000/- ON VARIOUS DATES TO M/S SHIVA ENTERPRISES DURING THE FINANCIAL YEAR 2007-08 RELEV ANT TO ASSESSMENT YEAR 2008-09, HE ADMITTED THAT NO SUCH AMOUNTS WERE ACTUALLY PAID AND ONLY ENTRIES WERE MADE IN THE ACCOUNT BOOKS. HE AC CORDINGLY ADMITTED THAT THE LIABILITY OF RS.19,37,422/- ON 31.03.2007 WHICH WAS REDUCED TO RS. 16,02,422/- AS ON 31.3.2008 IN THE NAME OF M/S SHIVA ENTERPRISES WAS BOGUS. BASED ON THE SAID STATEMENT, THE AO IN HIS ASSESSMENT ORDER NOTED THAT NECESSARY ACTION WILL BE TAKEN IN THE CASE OF THE ASSESSEE FOR A.Y. 2007-08, IN VIEW OF HIS STATEMENT ADMITTING BOGUS PURCHASES OF RS. 19,37,422/- IN THE NAME OF M/S SHI VA ENTERPRISES AND TO VERIFY THE GENUINENESS OF PURCHASES FROM M/S AA DHAR TECHNOLOGY (P) LTD. DELHI. MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 9 4.3 BASIS SUCH ADMISSION BY THE ASSESSEE IN RESPECT OF M/S SHIVA ENTERPRISES, THE AO WAS OF THE VIEW THAT IT IS QUIT E LIKELY THAT LIABILITY SHOWN OUTSTANDING BY THE ASSESSEE IN THE NAME OF SO ME OTHER PARTIES ARE ALSO NOT GENUINE. THE ASSESSEE WAS ACCORDINGLY REQUIRED TO PROVE LIABILITY SHOWN AGAINST EACH OF THE SEVEN PARTIES B Y FILING NECESSARY DOCUMENTARY EVIDENCES AND CONFIRMED COPY OF ACCOUNT S ALONGWITH PHOTO COPIES OF RELEVANT VOUCHERS. THE LD. AO THE REAFTER HELD THAT AN AMOUNT OF RS 19,83,494/- WAS OUTSTANDING IN RESPECT OF 7 PARTIES IN RESPECT OF WHOM THE ASSESSEE HAS NOT FILED ANY CONF IRMATIONS AND IT WAS ACCORDINGLY HELD THAT THE LIABILITY IN RESPECT OF T HESE 7 PARTIES DOES NOT EXISTS AS ON 31.3.2008 AND WHICH WAS FINALLY THE SU BJECT MATTER OF DISALLOWANCE U/S 41(1) AND WHICH CAME UP FOR ADJUDI CATION BEFORE THE CO-ORDINATE BENCH. 4.4 IT IS THUS CLEAR THAT IN HIS STATEMENT, THE ASS ESSEE MENTIONED ABOUT THE BOGUS PURCHASES MADE FROM M/S SHIVA ENTER PRISES AND BASIS SUCH ADMISSION, THE SUSPICION OF THE AO INCREASED AND HE CALLED FOR THE CONFIRMATIONS AND SUPPORTING EVIDENCES IN RESPECT O F OTHER 7 PARTIES AND FINALLY MADE THE ADDITIONS U/S 41(1) OF THE ACT. 4.5 NOW, COMING TO THE ORDER PASSED BY THE COORDINA TE BENCH. IT IS NOTED THAT IN CONTRAST TO THE ASSESSMENT ORDER, THE PLEADINGS OF THE LD DR BEFORE THE CO-ORDINATE BENCH WHICH HAVE BEEN REC ORDED AT PARA 2.9 OF THE ORDER WERE AS UNDER: (2.9) APROPOS LD. CIT(A) OBSERVATION THAT ADEQUATE OPPORTUNITY WAS NOT GIVEN. THE ASSESSMENT ORDER REVEALS THAT FIRST NOTI CE U/S 143(2) WAS ISSUED ON 27-03-2009. THEREAFTER ON 22-10-2009, 5-01-2010, 19-01-2010 AND 29-01-2010 A DETAILED QUESTIONNAIRE WAS ISSUED ON 24-02-2010. THEREAFTER THE CASE WAS TRANSFERRED TO THE AO TO PASS THE ASSESSMENT ORDER ON 11-11-2010 TO ISSUE A NOTICE U/S 142(1) ON SAME DAY SEEKING INFORMATION FROM THE ASS ESSEE WHICH INCLUDES THE ENQUIRY REGARDING FURNISHING THE DETAI LS IN RESPECT OF SUNDRY DEBTORS. THUS THE ASSESSEE HAD PRIOR TO NOTI CE AS WELL AS SUBSEQUENT NOTICE ABOUT THE AOS ENQUIRY IN RESPECT OF CREDITORS. THE ASSESSEE WAS FULLY AWARE OF THE REQUIREMENTS AN D SHORTCOMINGS IN HIS RECORDS. SINCE THE ASSESSEE WEN T ON GIVING COMPLIANCE IN PIECEMEAL. THE AO PROCEEDED TO CONDU CT PROPER ENQUIRIES IN RESPONSE TO NOTICE U/S 11-1-2010, THE ASSESSEE FILED MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 10 DETAILS ON 19-1-2010 IN WHICH THERE IS NO WHISPER O F GIVING SHORT TIME TO THE ASSESSEE. THIS INDICATES THAT RELEVANT INFORMATION WAS READILY AVAILABLE WITH THE ASSESSEE. ON AOS ENQUIR IES, THE ASSESSEE SURRENDERED AND CAME FORWARD ON 13-12-2010 AND OFFERED THE STATEMENT TO BE RECORDED ACCEPTING THAT THESE LIABILITIES WERE BOGUS. EVERY YEAR IS DISTINCT AND SEPARATE ENTITY AND THE PRINCIPLE OF RES JUDICATA DO NOT APPLY, WH AT HAPPENED IN SUBSEQUENT ASSESSMENT YEARS AFTER A PERIOD OF 3/ 4 YEAR CANNOT CONSTITUTE A BAR ON INDEPENDENT FINDINGS OF FACTS I N THE IMPUGNED YEAR. SUBSEQUENT REASSESSMENT PROCEEDINGS WILL NOT IMPINGE ON AOS INDEPENDENT FINDINGS IN ASSESSMENT YEAR 2008-0 9 WHICH ARE RENDERED IN PREVALENT FACTS AND CIRCUMSTANCES OF TH E CASE. THE ENTIRE EDIFICE OF LD. CIT(A)S FINDING THAT THE ASS ESSEE WAS GIVEN SHORT TIME IS BASELESS, UNFOUNDED AND MAKES HIS ORD ER HIGHLY QUESTIONABLE DUE TO NON-APPRECIATION OF RECORD AND RELEVANT FACTS OF THE CASE. ONCE THE ASSESSEE HAS ACCEPTED THE LIA BILITY TO BE BOGUS, IT AUTOMATICALLY LEADS TO A CONCLUSION THAT LIABILITIES HAVE CEASED TO EXIST CONSEQUENTLY SEC. 41(1) IS SQUARELY APPLICABLE WITHOUT ANY FURTHER QUESTION. ONCE THE TRADE LIABIL ITY ARE ADMITTED TO BE BOGUS, THEY HAVE CEASED TO EXIST SECTION 41(1 ) AUTOMATICALLY COME INTO PICTURE AND THE ADDITION IS TO BE MADE IN THE YEAR WHEN FACTUAL FINDINGS OF CESSATION OF LIABILITY IS CRYST ALLIZED. NO REASON HAS WHATSOEVER HAS BEEN GIVEN BY THE LD. CIT(A) AS TO WHY THE STATEMENT OF SHRI ANIL VASUDEV RECORDED ON 13-12-20 10 ADMITTING THE LIABILITIES TO BE BOGUS SHOULD NOT BE RELIED ON . MORE SO, WHEN THERE IS NEITHER ANY RETRACTION NOR REFERENCE OF AN Y VARIATION OF THE STATEMENT. WHEN THE ASSESSEE HIMSELF ADMITS TO BE T HE LIABILITY AS BOGUS, THERE IS NOTHING LEFT FOR LD. AO TO PROVE AN Y FURTHER. THEREFORE, LD. CIT(A) WAS UNJUSTIFIED IN GETTING SW AYED BY MIS- REPRESENTATION OF FACTS MADE BY SHRI ANIL VASUDEV, TO DELETE THE ADDITION. IT IS VERY INTERESTING THAT NO GROUND WAS RAISED BY ASSESSEE BEFORE CIT(A) THAT SHORT OR INADEQUATE TIM E WAS GIVEN BY AO. THUS THE LD. CIT(A) WITHOUT ESTABLISHING ANY JU STIFIABLE REASON HAS HELD THAT INADEQUATE OPPORTUNITY WAS GIVEN; WIT HOUT APPRECIATING THAT ASSESSEE WAS BOUND BY HIS OWN STA TEMENT HAS AWARDED UNDUE RELIEF. 4.6 IT THEREFORE APPEARS THAT THE COORDINATE BENCH HAS BEEN SWAYED BY THE PLEADINGS OF THE LD. DR THAT THE ADMISSIONS OF BOGUS PURCHASES HAS BEEN MADE BY SHRI ANIL VASUDEV IN RESPECT OF AL L THESE LIABILITIES IN MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 11 RESPECT OF SEVEN PARTIES WHEREAS THE ADMISSION WAS RESTRICTED TO PURCHASE MADE FROM M/S SHIVA ENTERPRISES AS PER THE STATEMENT RECORDED ON 13.12.2010 AS APPARENT FROM THE ASSESSM ENT ORDER. IN OUR VIEW, THIS FACTUAL ASPECT OF ADMISSION BY THE ASSES SEE HAS BEEN MISUNDERSTOOD BY THE COORDINATE BENCH AND THUS NOT BEEN APPRECIATED IN RIGHT RESPECTIVE. FURTHER, SUCH ADMISSION HAS FO RMED THE BASIS OF THE DECISION OF THE COORDINATE BENCH. IN SUCH A SITUAT ION, IN OUR VIEW, IT WOULD BE JUSTIFIED THAT THE DECISION OF THE COORDIN ATE BENCH IS RECALLED AND THE MATTER SHOULD BE HEARD A FRESH. 4.7 FURTHER, REGARDING THE APPEAL ALREADY BEEN ADMI TTED BEFORE THE HONBLE RAJASTHAN HIGH COURT AGAINST THE SAID ORDER OF THE COORDINATE BENCH COURT, THE LD AR SUBMITTED THAT PENDENCY OF A N APPEAL BEFORE THE HONBLE HIGH COURT IS NO BAR TO THE MAINTAINABILITY OF THE SUBJECT PETITION FILED U/S 254(2) OF THE ACT AND SUPPORT WA S DRAWN OF HONBLE BOMBAY HIGH COURT DECISION IN CASE OF R.W. PROMOTI ONS (P) LTD. (SUPRA). FURTHER, THE LD. AR ALSO SUBMITTED THAT WHERE THE B ENCH FINALLY DECIDE TO EXERCISE ITS POWERS U/S 254(2) OF THE ACT AS IT DEE MS FIT, THE ASSESSEE SHALL FILE THE NECESSARY MISCELLANEOUS PETITION BEF ORE THE HONBLE RAJASTHAN HIGH COURT INFORMING ABOUT THE DECISION O F THIS BENCH U/S 254(2) OF THE ACT. 4.8 IN LIGHT OF ABOVE, WE DEEM IT FIT TO RECALL THE ORDER PASSED BY THE COORDINATE BENCH DATED 15.05.2015 AND DIRECT THE RE GISTRY TO FIX THE MATTER AFRESH FOR HEARING IN DUE COURSE. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/01 /2017. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 16/01/2017 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD 1(1), ALWAR. 2. IZR;FKHZ@ THE RESPONDENT- SHRI ANIL VASUDEV, ALWAR MA NO. 154/JP/16 SHRI ANIL VASUDEV VS. ITO, WARD 1(1), ALWAR. 12 3. VK;DJ VK;QDR@ CIT ALWAR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-ALWAR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (MA NO.154/JP/2016) VKNS'KKUQLKJ@ BY ORDER, K;D IATHDKJ@ ASSISTANT. REGISTRAR.