M/S Kalrav Exim, RAJKOT-GUJARAT v. The Assistant Commissioner of Income Tax, GANDHIDHAM

ITA 1164/RJT/2010 | 2006-2007
Pronouncement Date: 28-09-2011 | Result: Allowed

Appeal Details

RSA Number 116424914 RSA 2010
Assessee PAN AAGFK7078J
Bench Rajkot
Appeal Number ITA 1164/RJT/2010
Duration Of Justice 1 year(s) 13 day(s)
Appellant M/S Kalrav Exim, RAJKOT-GUJARAT
Respondent The Assistant Commissioner of Income Tax, GANDHIDHAM
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-09-2011
Date Of Final Hearing 28-09-2011
Next Hearing Date 28-09-2011
Assessment Year 2006-2007
Appeal Filed On 14-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI D.K. TYAGI (JUDICIAL MEMBER) AND SHRI A .L. GEHLOT (AM) I.T.A. NO1164/RJT/2010 (ASSESSMENT YEAR 2006-07) M/S KALRAV EXIM VS ACIT GANDHIDHAM CIRCLE C/O KALPESH S DOSHI & CO CAS GANDHIDHAM 411 COSMO COMPLEX MAHILA COLLEGE CIRCLE RAJKOT-360 001 PAN : AAGFK7078J (APPELLANT) (RESPONDENT) DATE OF HEARING : 28-09-2011 DATE OF PRONOUNCEMENT : 28-09-2011 APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY: SHRI MK SINGH O R D E R PER BENCH THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II RAJKOT DATED 14-07-2010 FOR THE ASSESSMENT YEAR 200 6-07. 2. THE FOLLOWING EFFECTIVE GROUNDS ARE RAISED IN TH E APPEAL: 1. THAT THE LEANED CIT(A) HAS WRONGLY CONFIRMED TH E ADDITION OF RS.5 00 000/- U/S 68 OF THE I.T. ACT 1961. 2. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED T HE ADDITION OF RS.1 20 000/- U/S 40A(3) OF THE I.T. ACT 1961. 3. THE FACTS RELATING TO THE FIRST GROUND ARE THAT THE ASSESSEE ACCEPTED UNSECURED LOAN OF RS.5 LAKHS FROM M/S M.A. STEEL TU BES LTD BHAVNAGAR. THE ITA NO.1164/RJT/2010 2 ASSESSING OFFICER DID NOT SATISFY WITH THE SUBMISSI ONS OF THE ASSESSEE. THEREFORE HE MADE THE ADDITION OF RS.5 LAKHS U/S 6 8. THE ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE CIT(A) WITHOUT ADMITTING CERTAIN EVIDENCE AND DOCUMENTS FILED BY THE ASSESSEE OBSERV ING THAT THE ASSESSEE FURNISHED LOAN CONFIRMATION WHICH IS APPEARING AT P AGE 48 OF ITS PAPER BOOK WHICH PRIMA FACIE IS A NEW EVIDENCE. THE CIT(A) IS NOT BOUND TO ENTERTAIN SUCH EVIDENCE AT THAT POINT OF TIME. THE CIT(A) HELD TH AT THE ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF CREDITOR CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTION. 4. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE PART IES RECORD PERUSED. WE FIND THAT THE ASSESSEE HAS SUFFICIENT EVIDENCE AND DOCUMENTS WHICH REQUIRE VERIFICATION. THE CIT(A) OUGHT TO HAVE ADMITTED TH OSE DETAILS IN THE INTEREST OF JUSTICE AND EITHER HE SHOULD VERIFY THOSE DOCUMENTS OR CALL FOR THE REMAND REPORT FROM THE ASSESSING OFFICER. THE CIT(A) DID NOT FOL LOW SUCH PROCEDURE. SOME FACTS ARE REQUIRED VERIFICATION FROM ORIGINAL RECOR D . WE THEREFORE IN THE INTEREST OF JUSTICE THINK IT PROPER TO SEND BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER C ONSIDERING THE ASSESSEES SUBMISSION IN ACCORDANCE WITH LAW AND AFTER PROVIDI NG OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. THE BRIEF FACTS OF THE SECOND GROUND ARE THAT DU RING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD PAID EXPENSES ITA NO.1164/RJT/2010 3 IN CASH FOR PURCHASE OF TEAK WOOD WHICH IS NOT ALLO WABLE U/S 40A(3) OF THE ACT. THE ASSESSING OFFICER AFTER CONSIDERING ASSESSEES SUBMISSION FOUND THAT THE ASSESSEE HAS FAILED TO SATISFY THE CONDITIONS OF EX CEPTIONAL CIRCUMSTANCES TO SECTION 40A(3) AS CONTAINED IN RULE 6DD(J) OF IT RU LES. THE ASSESSING OFFICER ACCORDINGLY MADE ADDITION OF 20% OF RS.6 LAKHS OF W HICH CALCULATION COMES TO RS.1 20 000. THE CIT(A) CONFIRMED THE ORDER OF ASS ESSING OFFICER. THE LD.AR REITERATED TH SUBMISSIONS POINTING OUT THAT THE FAC TS OF THIS CASE ARE PECULIAR. HE SUBMITTED THAT THE PAYMENT WA TO BE MADE FOR PURCHA SE OF TEAK WOOD AND AS A SUCCESSFUL BIDDER HAD TO PAY IN DEMAND DRAFT OR CAS H 25% OF THE BID MONEY IN CASE OF CONFIRMED ACCEPTANCE AND 10% IN CASE OF SUB JECT TO CONFIRMATION. THE ASSESSEE WAS SUCCESSFUL BIDDER IN THE AUCTION HELD ON SATURDAY AND THE BANK WAS WORKING ONLY FOR HALF DAY. THEREFORE IT WAS N OT POSSIBLE FOR THE ASSESSEE TO MAKE THE PAYMENT THROUGH BANKING CHANNEL. THE LD.A R ALSO DREW SUPPORT FROM PROVISO TO SECTION 40A(3) OF THE ACT WHEREIN NO DIS ALLOWANCE U/S 40A(3) WOULD BE MADE EVEN WHERE PAYMENTS COULD NOT BE MADE BY WAY O F CROSSED CHEQUE OR DRAFT. THE LD.AR IN SUPPORT OF HIS CONTENTION RELI ED UPON A DECISION OF ALLAHABAD ITAT BENCH IN THE CASE OF SAPNA TRADERS VS ACIT 41 TTJ (LUCK) 77. THE LD.AR HAS ALSO RELIED UPON THE JUDGMENT OF DELHI HIGH COU RT IN THE CASE OF CIT VS RHYDBURG PHARMAC3EUTICALS 269 ITR 561 (DEL). 6. THE LD.DR ON THE OTHER HAND RELIED UPON THE OR DER OF CIT(A). ITA NO.1164/RJT/2010 4 7. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE PART IES RECORD PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSEE WA S SUCCESSFUL BIDDER FOR PURCHASE OF TEAK WOOD AND ON CONCLUSION OF BID THE ASSESSEE WAS BOUND TO DEPOSIT 25% OF THE BID MONEY EITHER BY DEMAND DRAFT OR IN CASH. THE ASSESSEE COULD NOT ARRANGE THE DEMAND DRAFT AS BID WAS ON SA TURDAY AND BANKING HOURS WERE OVER. CONSIDERING THE PECULIAR CIRCUMSTANCES OF THE CASE IN THE LIGHT OF PROVISO TO SECTION 40A(3A) WE NOTICE THAT SECTION 4 0A(3) IS NOT APPLICABLE IF THE CASE FALLS UNDER SUCH CIRCUMSTANCES AS MAY BE PRESC RIBED HAVING REGARD TO THE NATURE AND EXTENT OF THE BANKING FACILITIES AVAILAB LE CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. THE FACTS O F THE CASE UNDER CONSIDERATION IS CLEARLY FALL UNDER THE EXCEPTIONAL CIRCUMSTANCES AS IN THE CASE UNDER CONSIDERATION WHEN THE ASSESSEEE WAS TO PAY 25% OF THE BID MONEY THE BANKING HOUR WERE OVER AND AS PER THE BID TERMS THE ASSESSEE WAS BOUND TO DEPOSIT AS PER THE TERMS AND CONDITIONS OF THE BID THE AMOUNT IN CASH. EVEN OTHERWISE ALSO THE CASE COVERS UNDER THE BUSINESS E XPEDIENCY AND OTHER RELEVANT FACTORS. WE ARE THEREFORE OF THE CONSIDER ED VIEW THAT NO DISALLOWANCE IS WARRANTED. THEREFORE ADDITION OF RS.1 20 0-00 MAD E U/S 40A(3) IS DELETED. 8. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28-09-2011. SD/- SD/- (D.K. TYAGI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : 28 TH SEPTEMBER 2011 PK/- ITA NO.1164/RJT/2010 5 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II RAJKOT 4. THE CIT-I RAJKOT 5. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT