ACIT Corporate Circle 6(1), CHENNAI V. Sabari TMT King Pvt. Ltd., CHENNAI

MA 21/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6382 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 31-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E PAVUNA SUNDARIJCIT
• Keywords: Depreciation; Rectification of order; Unabsorbed depreciation
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER MISCELLANEOUS PETITION NO.21/CHNY/2019 IN I.T.A.NO.3135/CHNY/2017& C.O.NO.34/CHNY/2018 ( / ASSESSMENT YEAR :2013-14) THE ASST. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1), CHENNAI. VS M/S. SABARI TMT KING PVT. LTD., 312/31&32, 5-C/D/E, 5 TH FLOOR, GEE GEE EMERALD, NUNGAMBAKKAM, CHENNAI -34. PAN: AALCS7695H ( / APPLICANT) ( / RESPONDENT) / APPLICANT BY : MS. E. PAVUNA SUNDARI,JCIT /RESPONDENT BY : SHRI RAGHAV RAJEEV MENON, ADVOCATE /DATE OF HEARING : 26.04.2019 /DATE OF PRONOUNCEMENT : 30 .04.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE MISCELLANEOUS PETITION IS FILED BY THE REVENUE PRAYING FOR RECTIFICATION OF MISTAKE APPARENT ON RECORD BY RECALLING THE ORDER OF THE TRIBUNAL PASSED IN I.T.A. NO.3135/CHNY/2017 AND C.O. NO.34/CHNY/2018 DATED 03.07.2018 FOR THE ASSESSMENT YEAR 2013-14. 2. THE LD.DR SUBMITTED BEFORE US THAT THE TRIBUNALS DECISION IN ITS ORDER DATED 03.07.2018 FOR THE ASSESSMENT YEAR 2013-14 WAS NOT BASED ON FACTUAL BASIS WITH RESPECT TO THE ISSUE OF ADDITIONS U/S.68 OF THE ACT. IT WAS SUBMITTED 2 MP NO.21/CHNY/2019 THAT THE TRIBUNAL HAD HELD THAT THE SUNDRY CREDITORS PERTAIN TO THE EARLIER YEARS WHICH WAS YET TO BE PAID WHEN THE FACT WAS THAT ALL THE SUNDRY CREDITORS AS ON 31.03.2013 PERTAINED ONLY TO THE RELEVANT PREVIOUS YEAR. IT WAS FURTHER SUBMITTED THAT THE TRIBUNAL BASED ON THE ABOVE ERRONEOUS FINDING CAME TO THE CONCLUSION THAT THE GENUINENESS OF THE SUNDRY CREDITORS CANNOT BE DOUBTED WHEN ALL THE DETAILS PERTAINING TO THE SUNDRY CREDITORS WERE PROVIDED TO THE REVENUE AND THE REVENUE HAD FAILED TO CONDUCT ANY FURTHER ENQUIRIES TO PROVE THAT THE SUNDRY CREDITORS WERE BOGUS. IT WAS THEREFORE PLEADED THAT THE ORDER OF THE TRIBUNAL MAY BE RECALLED. 3. THE LD.AR ON THE OTHER HAND ARGUED BY STATING THAT THE REASONS FOR THE TRIBUNAL TO DISBELIEVE THE SUNDRY CREDITORS TO BE BOGUS IS EXPLICITLY AND VIVIDLY STATED IN THE ORDER OF THE TRIBUNAL AND DOES NOT HAVE ANY RELEVANCE TO THE AGE OF THE SUNDRY CREDITORS. IT WAS THEREFORE PLEADED THAT RECALLING OF THE ORDER OF THE TRIBUNAL WOULD AMOUNT TO REVIEW WHICH IS NOT PERMISSIBLE AS PER THE PROVISIONS OF THE ACT. IT WAS THEREFORE PLEADED THAT THE MISCELLANEOUS PETITION FILED BY THE REVENUE MAY BE DISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. THE REASONS FOR DELETING THE ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT HAVE BEEN CLEARLY DISCUSSED IN THE TRIBUNAL ORDER. THE GIST OF THE ORDER IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 3 MP NO.21/CHNY/2019 7.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS APPARENT THAT THE ASSESSEE HAS RUN OUT OF ITS BUSINESS ACTIVITY FOR QUITE SOME TIME. THE SUNDRY CREDITORS PERTAIN TO EARLIER YEARS WHICH YET REMAIN UNPAID. THE ASSESSEE HAS ALSO OBTAINED CONFIRMATION STATEMENTS FROM MOST OF THE SUNDRY CREDITORS AND IT IS NOT IN DISPUTE. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE NOTICES SENT TO THE SUNDRY CREDITORS HAVE BEEN RETURNED MARKED AS LEFT. SINCE THE NOTICE ISSUED BY THE LD.REVENUE AUTHORITIES HAVE BEEN RETURNED MARKED AS LEFT, IT IS OBVIOUS THAT THOSE SUNDRY CREDITORS WERE HOUSED EARLIER IN THE SAME ADDRESS AND THEIR EXISTENCE CANNOT BE DOUBTED. FURTHER SINCE THE ASSESSEE HAD OBTAINED CONFIRMATION STATEMENT FROM MOST OF THE SUNDRY CREDITORS THE ONUS HAS NOW SHIFTED ON THE REVENUE TO DISPROVE THEIR EXISTENCE. IT APPEARS FROM THE FACTS OF THE CASE THAT THE LD.REVENUE AUTHORITIES HAVE FAILED TO INVESTIGATE THE MATTER FURTHER BUT HURRIEDLY JUMPED TO THE CONCLUSION THAT THE SUNDRY CREDITORS ARE NOT GENUINE WHICH IS NOT APPRECIABLE. MOREOVER DURING THE EARLIER ASSESSMENT YEARS THE GENUINENESS OF SUNDRY CREDITORS WAS NOT DOUBTED THOUGH IT IS ALSO THE DUTY OF THE ASSESSEE TO PROVE THAT AS ON DATE THE SUNDRY CREDITORS REMAINED UNPAID. BUT AS IT APPEARS FROM THE FACTS OF THE CASE, THAT THE ASSESSEES BUSINESS HAS ALMOST CLOSED DOWN AND THERE ARE NO BUSINESS TRANSACTIONS BETWEEN THE ASSESSEE AND ITS SUNDRY CREDITORS FOR QUITE SOME PERIOD OF TIME. IN THIS SITUATION, SINCE THE ASSESSEE HAS PREDOMINANTLY SUBMITTED THE CONFIRMATION STATEMENT FROM MOST OF ITS CREDITORS, IT IS THE PRELIMINARY DUTY OF THE REVENUE TO ESTABLISH TO A CERTAIN EXTENT THAT THE SUNDRY CREDITORS ARE NOT GENUINE BY INITIATING SOME ENQUIRY WHICH THEY HAVE FAILED. IT IS PERTINENT TO MENTION THAT THE REVENUE HAS THE REQUISITE MACHINERY TO TRACE THE SUNDRY CREDITORS THROUGH THEIR BANK ACCOUNTS AND IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAD NOT CO-OPERATED IN THE ASSESSMENT PROCEEDINGS BY FAILING TO PRODUCE THE REQUISITE DOCUMENTS SUCH AS THE BANK STATEMENT OF THE ASSESSEE IN ORDER TO ESTABLISH LINK TO THE SUNDRY CREDITORS BANK ACCOUNTS ETC.. HOWEVER IN THE CASE OF THE ASSESSEE, NO EFFORT HAS BEEN CARRIED OUT BY THE REVENUE TO PURSUE THE MATTER. IN THIS SITUATION, WE DO NOT FIND ANY MERIT ON THE PART OF THE REVENUE FOR MAKING ADDITIONS IN THE HANDS OF THE ASSESSEE BY TREATING THE SUNDRY CREDITORS TO BE BOGUS. HENCE WE HEREBY DIRECT THE LD.AO TO DELETE THE ADDITIONS MADE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT WHICH IS IN APPEAL BEFORE US. SINCE WE HAVE DELETED THE ADDITIONS ON ACCOUNT OF SUNDRY CREDITORS WHICH IS IN APPEAL BEFORE US THE ISSUE WITH RESPECT TO ADJUST THE UNABSORBED DEPRECIATION AND CARRIED FORWARD OF LOSSES FROM THE ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS DOES NOT ARISE. IN THIS SITUATION WE ARE OF THE VIEW THAT THOUGH CERTAIN MISTAKES WHICH MIGHT HAVE OCCURRED IN THE ORDER OF THE TRIBUNAL WITH RESPECT TO THE FINDING REGARDING THE AGE OF THE SUNDRY CREDITORS, IT HAS NO BEARING ON THE FINAL DECISION OF THE 4 MP NO.21/CHNY/2019 TRIBUNAL VIZ., FOR DELETING THE ADDITION MADE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. THE TRIBUNAL HAD DELETED THE ADDITION BECAUSE THE ASSESSEE HAD PRODUCED CONFIRMATION STATEMENT FROM MOST OF THE SUNDRY CREDITORS, AND HAD ALSO FURNISHED THE PARTICULARS OF ALL THE SUNDRY CREDITORS. HOWEVER THE REVENUE HAD FAILED TO VERIFY OR CONDUCT ANY ENQUIRY ON THEIR PART TO FIND OUT AS TO WHETHER THE ADDRESSES OF THE SUNDRY CREDITORS DISCLOSED BY THE ASSESSEE ARE BOGUS. JUST BECAUSE SOME OF THE SUNDRY CREDITORS HAVE LEFT THE PREMISES CANNOT BE CONSTRUED THAT THOSE SUNDRY CREDITORS ARE BOGUS. THUS WHEN THE ONUS HAD SHIFTED ON THE REVENUE THEY HAD FAILED TO EXERCISE THEIR RESPONSIBLY CAST ON THEM. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT RECALLING THE ORDER OF THE TRIBUNAL IS NOT WARRANTED AND IF DONE SO IT WOULD AMOUNT TO REVIEW WHICH IS NOT PERMISSIBLE AS PER THE ACT. 5. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 30 TH APRIL, 2019 RSR . /COPY TO: 1. /APPLICANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF. ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER