The ITO, Ward 3(4), Surat v. Shri Tarachand Narandas Bajaj, Surat

ITA 1419/AHD/2013 | 2009-2010
Pronouncement Date: 27-09-2016 | Result: Dismissed

Appeal Details

RSA Number 141920514 RSA 2013
Assessee PAN AFGPB1502B
Bench Ahmedabad
Appeal Number ITA 1419/AHD/2013
Duration Of Justice 3 year(s) 4 month(s) 13 day(s)
Appellant The ITO, Ward 3(4), Surat
Respondent Shri Tarachand Narandas Bajaj, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 27-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 27-09-2016
Date Of Final Hearing 05-09-2016
Next Hearing Date 05-09-2016
Assessment Year 2009-2010
Appeal Filed On 14-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI S. S. GODARA JUDICIAL MEMBER AND SHRI MANISH BORAD ACCOUNTANT MEMBER. ITA. NO. 1419/AHD/2013 (ASSESSMENT YEAR:2009-10) INCOME TAX OFFICER WARD 3(4) SURAT APPELLAN T VS. SHRI TARACHAND NARANDAS BAJAJ PROP. OF MAA SHAKTI TRADING CO. 4/4094 ZAMPA BAZAR SURAT-395003 RESPONDENT & C.O. NO.180/AHD/2013 (ASSESSMENT YEAR:2009-10) SHRI TARACHAND NARANDAS BAJAJ PROP. OF MAA SHAKTI TRADING CO. 4/4094 ZAMPA BAZAR SURAT-395003 APPELL ANT VS. INCOME TAX OFFICER WARD 3(4) SURAT RESPONDEN T PAN NO. AFGPB1502B ITA NO.1419/AHD/2013 & C.O. NO.180/AHD/13 (ITO VS. SHRI TARACHAND NARANDAS BAJAJ) A.Y. 2009-10 - 2 - / BY REVENUE : SHRI K. MADHUSUDAN SR. D.R. / BY ASSESSEE : NONE /DATE OF HEARING : 15.09.2016 /DATE OF PRONOUNCEMENT : 27.09.2016 ORDER PER S. S. GODARA JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTIO N ARISE FROM ORDER DATED 28.02.2013 PASSED BY THE CIT (A)-IV SURAT IN CASE NO. CAS-IV/II-290/11-12 INTER ALIA DE LETING DISALLOWANCES/ADDITION U/S.41(1)OF THE ACT OF RS.18 89 323/- AND UNDER THE HEAD BOGUS PURCHASES OF RS.30 31 17 8/-; RESPECTIVELY AS MADE BY THE ASSESSING OFFICER IN AS SESSMENT ORDER DATED 30.12.2011 IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT. 2. CASE CALLED TWICE. NONE APPEARED AT ASSESSEES BEHEST DESPITE SERVICE OF NOTICE. HE IS ACCORDINGLY PROCE EDED EX PARTE. 3. WE COME TO THE FIRST ISSUE OF SECTION 41(1) CESS ATION OF LIABILITY ADDITION OF RS.18 89 323/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SALE PURCHASE OF FOOD GRAINS ON WHOLESALE BASIS. HE FILED RETURN ON 30.09.2009 STATING INCOM E OF RS.1 73 315/-. THE ASSESSING OFFICER TOOK UP SCRUT INY. HE ITA NO.1419/AHD/2013 & C.O. NO.180/AHD/13 (ITO VS. SHRI TARACHAND NARANDAS BAJAJ) A.Y. 2009-10 - 3 - NOTICED SUNDRY CREDIT AMOUNTS OF RS.76 66 245/- IN BALANCE SHEET. HE NOTICED THE ASSESSEE TO HAVE FURNISHED CONFIRMATIONS IN CASES OF ONLY FEW CREDITORS. THESE CONFIRMATIONS ALLEGEDLY SUFFERED FROM VARIOUS DISCR EPANCIES. THE ASSESSING OFFICER ISSUES A SHOW CAUSE NOTICE SE EKING TO VERIFY ALL THESE CREDITS. HE OBSERVED IN ASSESSMEN T ORDER DATED 30.12.2011 THAT THE ASSESSEE HAD FAILED IN PROVING GENUINENESS OF CREDIT. THE ASSESSING OFFICER FURTH ER OBSERVED THAT ONCE THERE WAS FAILURE IN PROVING GENUINENESS OF THESE CREDITS FOLLOWED BY THE PRESENCE OF VERY ELEMENT IN PURCHASES MADE FROM ABOVE CREDITORS SPREAD OVER MANY OUTSIDE LOCATIONS SECTION 41(1) WOULD SQUARELY APPLY IN ABSENCE OF PR OOF OF ACTUAL OUTSTANDING LIABILITIES. HE ACCORDINGLY ADD ED THE IMPUGNED OUTSTANDING LIABILITY SUM OF RS.18 89 323/ - IN ASSESSEES HANDS. 4. THE ASSESSEE PREFERRED APPEAL. HE WOULD FILE AD DITIONAL EVIDENCE AS WELL BY PLEADING THAT THE ASSESSING AUT HORITY HAD NOT AFFORDED HIM SUFFICIENT TIME TO PROVE GENUINENE SS OF CREDITS IN QUESTION. THE CIT(A) SOUGHT FOR A REMAND REPORT . THE ASSESSING OFFICER SUBMITTED THE SAME ON 01.02.2013 INTER ALIA STATING THAT HE HAD CALLED FOR NECESSARY INFORMATIO N U/S.133(6) OF THE ACT FROM 48 PURCHASE PARTIES AND 51 TRADE CR EDITORS. OUT OF WHICH 43 AND 45 PARTIES RESPECTIVELY SUBMIT TED CONFIRMATIONS. WE NOTICED FROM CIT(A)S ORDER UNDE R CHALLENGE THAT THE ASSESSING OFFICER FURTHER CLARIFIED LACK O F TIME TO BE THE MAIN REASON RESULTING IN THE IMPUGNED ADDITION IN THE COURSE OF ADDITION. ITA NO.1419/AHD/2013 & C.O. NO.180/AHD/13 (ITO VS. SHRI TARACHAND NARANDAS BAJAJ) A.Y. 2009-10 - 4 - 5. THE CIT(A) CONFRONTED THE ASSESSEE WITH CONTENTS OF REMAND REPORT. THE ASSESSEE SUBMITTED THAT HE STAR TED HIS BUSINESS ONLY IN LATTER HALF OF F.Y.2007-08 AND HEN CE THERE WAS NO CESSATION OF ANY LIABILITY. HE FURTHER CONT ENDED THAT THE ASSESSING OFFICER HAD HIMSELF VERIFIED PAYMENTS TO SUNDRY CREDITORS IN SUCCEEDING YEARS BANK STATEMENTS WHE REIN IT WAS FOUND THAT NOT A SINGLE LIABILITY CEASED TO EXIST. THE CIT(A) ACCEPTS THE SAME BY OBSERVING AS UNDER: 8. I HAVE GONE THROUGH THE ASSESSMENT ORDER THE S UBMISSIONS OF THE APPELLANT THE REMAND REPORT AND THE APPELLANT' S COMMENTS TO THE REMAND REPORT. IN THE ASSESSMENT ORDER IT IS MENTIO NED THAT OUT OF THE TOTAL OUTSTANDING TRADE CREDITORS OF RS.76 66 2 45/- THE CREDITORS OF RS.11 89 323/- PERTAINED TO EARLIER YEARS AND NO TRANSACTION HAD BEEN CARRIED OUT WITH THEM DURING THE YEAR UNDER CO NSIDERATION. THE AO ADDED THE SUM OF RS.11 89 323/- U/S. 41(1) OF TH E IT ACT AS THE APPELLANT FAILED TO PROVE THE GENUINENESS OF THE TR ANSACTIONS BY FILING CONFIRMATIONS FROM THE TRADE CREDITORS. HOWEVER FR OM PAGE NO.2 TO 6 OF THE ASSESSMENT ORDER THE AO HAS GIVEN THE LIST O F TRADE CREDITORS AMOUNTING TO RS.76 66 245/- BUT IN THE ASSESSMENT ORDER AO HAS NOT CLARIFIED THE NAME OF THE PARTIES WHOSE LIABILI TY OF RS.11 89 323/- HE FELT HAD CEASED . MORE IMPORTANT LY THE APPELLANT HAS SUBMITTED THAT HE HAD STARTED TRADING IN FOOD G RAINS DURING THE SECOND HALF OF THE FY 2008-09 AND HENCE THE AO'S OB SERVATION THAT THE CREDITORS OF RS.11 89 323/- PERTAINED TO EARLIE R YEARS IS ALSO ERRONEOUS. IN HIS REMAND REPORT THE AO HAS ADMITTED THAT ADDITION U/S. 41(1) WAS MADE DUE TO LACK OF TIME. CONSIDERIN G THESE FACTS AND THE FACT THAT THE AO HAS RECEIVED CONFIRMATION FROM ALL THE TRADE CREDITORS DURING THE COURSE OF REMAND PROCEEDINGS THE ADDITION OF RS.18 89 323/-MADE U/S. 41(1) OF THE IT ACT IS DELE TED. THE GROUNDS NO.2 & 3 ARE ALLOWED. 6. WE HAVE HEARD THE REVENUE. CASE FILE PERUSED. RELEVANT FACTS NARRATED IN PRECEDING PARAGRAPHS ARE NOT REPE ATED FOR THE SAKE OF BREVITY. IT HAS COME ON RECORD THAT THE AS SESSING OFFICERS REMAND REPORT HAS ALREADY OBTAINED CONFIR MATIONS FROM ALMOST ALL CREDITORS RELEVANT TO THE ISSUE AND ALSO THAT THE ASSESSEES BUSINESS HAD STARTED ONLY IN LATTER HALF OF F.Y.2008- 09 LEAVING NO SCOPE OF APPLICATION OF SECTION 41(1) OF THE ACT. ITA NO.1419/AHD/2013 & C.O. NO.180/AHD/13 (ITO VS. SHRI TARACHAND NARANDAS BAJAJ) A.Y. 2009-10 - 5 - THE CIT(A) TAKES NOTE OF ASSESSING OFFICERS CLARIF ICATION THAT THE IMPUGNED ADDITION HAD BEEN MADE DUE TO LACK OF TIME IN THE COURSE OF SCRUTINY. THE REVENUE FAILS TO REBUT ANY OF THESE CLINCHING FINDINGS IN THE COURSE OF HEARING BEFORE US. WE ACCORDINGLY FIND NO REASON TO INTERFERE THEREIN. T HIS FIRST SUBSTANTIVE GROUND IS THUS DECLINED. 7. WE NOW COME TO THE LATTER ISSUE OF BOGUS PURCHAS ES ADDITION OF RS.30 31 178/-. THE ASSESSING OFFICER QUOTED A CATENA OF CASE LAW TO DISALLOW 12.5% OF ASSESSEES GROSS PURCHASES AMOUNTING TO RS.2 42 49 452/- IN QUESTION . THE CIT(A) RELIES UPON THE CONTENTS OF THE REMAND REPOR T STATING MOST OF THE PURCHASE PARTIES (SUPRA) TO HAVE CONFIR MED THE ASSESSEES CASE. REVENUE DOES NOT EVEN PLACED ON R ECORD THE CONTENTS OF THE REMAND REPORT SO AS TO REBUT THE FA CT THAT THE ASSESSING OFFICER HAD ACCEPTED ASSESSEES CASE DURI NG REMAND PROCEEDINGS. WE INFER IN THIS BACKDROP THAT THE AS SESSEE HAS BEEN ABLE TO MAKE OUT THE CASE IN PROVING GENUINENE SS OF THE PURCHASES IN QUESTION AS ADDED IN THE COURSE OF ASS ESSMENT. WE AFFIRM CIT(A)S FINDINGS UNDER CHALLENGE ACCORDI NGLY. REVENUES APPEAL ITA NO. 1419/AHD/2013 FAILS. 8. WE COME TO ASSESSEES CROSS OBJECTION NOW. WE F IND THAT THE SAME ONLY SUPPORTS THE FINDING OF THE CIT(A) FO RMING SUBJECT MATTER OF ADJUDICATION IN REVENUES APPEAL HEREINABOVE. THE SAME ALREADY STANDS REJECTED. WE THUS ORDER THAT THIS CROSS OBJECTION HAS BEEN RENDERED I NFRUCTUOUS. ITA NO.1419/AHD/2013 & C.O. NO.180/AHD/13 (ITO VS. SHRI TARACHAND NARANDAS BAJAJ) A.Y. 2009-10 - 6 - 9. THE REVENUES APPEAL ITA NO.1419/AHD/2013 IS DISMISSED . ASSESSEES CO. NO.180/AHD/2013 IS DISM ISSED SINCE RENDERED INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF SEPTEMBER 2016. SD/- SD/- (MANISH BORAD) (S. S. GO DARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 27/10/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ --. . /0 / DR ITAT AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0