Global Chemie, Baroda v. The ACIT, Cir.,2(1), Baroda

ITA 1448/AHD/2013 | 2008-2009
Pronouncement Date: 28-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 144820514 RSA 2013
Assessee PAN AANFM8600M
Bench Ahmedabad
Appeal Number ITA 1448/AHD/2013
Duration Of Justice 3 year(s) 5 month(s) 13 day(s)
Appellant Global Chemie, Baroda
Respondent The ACIT, Cir.,2(1), Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 28-10-2016
Date Of Final Hearing 02-08-2016
Next Hearing Date 02-08-2016
Assessment Year 2008-2009
Appeal Filed On 15-05-2013
Judgment Text
I.T.A. NO . 1 448 /AHD/201 3 A SSESSM ENT Y EAR: 20 0 8 - 09 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 1 448 /A HD/ 20 1 3 ASSESSMENT Y EAR : 20 0 8 - 09 GLOBAL CHEMIE ..... ...... . ... . APPELLANT 707 SAFFRON COMPLEX FATEHGUNJ VADODARA 3 90 002. [ PAN: AA NFM 8600 M ] VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE - 2(1) BARODA. ............... . RESPONDENT APPEARANCES BY: CHANDRA KANT DOSHI FOR THE APPELLANT SATISH SOLANKI FOR THE RESPONDENT D AT E OF CONCLUDING THE HEARING : 0 2 .0 8 .2016 DATE OF PRONOUNCING THE ORDER : 28 .10.2016 O R D E R 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16.01.2013 PASSED BY THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR 2 008 - 09. 2. GRIEVANCE RAISED BY THE APPELLANT ARE AS FOLLOWS : - 1) THE LD. CIT(A) ERRED AT LAW AND ON FACTS IN NOT ADMITTING THE ADDITIONAL EVIDENCES SUBMITTED BEFORE HIM ON THE GROUND THAT THE SAME WERE NOT PRODUCED BEFORE THE AO EVEN THOUGH TIME WAS GRANTED TO THE ASSESSEE. THE LD. CIT(A) AUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE AS REQUESTED BY YOUR APPELLANT AS HAS BEEN HELD IN A NUMBER OF CASES INCLUDING IN KESHAV MILLS CO. LTD. VS. CIT (1965) 56 ITR 365 (SC) AND NOW RECOGNIZED AS RULE 46A THAT THE APPELLATE AUTHORITY HAS A RIGHT TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE. (2) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDING THE ORDER OF THE LD. AO MAKING AN ADDITION OF RS.15 25 000/ - DISALLOWING THE PAYMENTS OF I.T.A. NO . 1 448 /AHD/201 3 A SSESSM ENT Y EAR: 20 0 8 - 09 PAGE 2 OF 5 COMMISSIO N MADE TO SEVERAL PARTIES WITHOUT ASSIGNING ANY JUSTIFIABLE REASONS FOR MAKING SUCH ADDITIONS. THE LD. CIT(A) AUGHT NOT TO HAVE CONFIRMED THE ADDITIONS WITHOUT ASSIGNING ANY JUSTIFIABLE REASONS FOR MAKING SUCH ADDITIONS AND ALSO WITHOUT GOING INTO THE FAC TS OF THE CASE. 3. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IN THIS CASE IN SUPPORT OF CLAIM OF THE ASSESSEE TO JUSTIFY CERTAIN DEDUCTIONS THE ASSESSEE PRODUCED CERTAIN ADDITIONAL EVIDENCES BEFORE THE LEARNED CIT(A). HOWEVER LEARNED CIT(A) DECLINED TO ADMIT THE SAME AND OBSERVED AS FOLLOWS : - I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING O FFICER. FROM THE REMAND REPORT OF THE ASSESSING OFFICER IT IS PROVED BEYOND ANY DOUBT THAT THE ASSESSEE HAS NOT FURNISHED REQUISITE DETAILS IN SPITE OF ASSESSING O FFICER S GRANTING REPEATED OPPORTUNITIES TO THE APPELLANT TO PROVE ITS CASE. DURING THE COURSE OF ASSESSMENT PROCEEDING TH E ASSESSEE WAS ASKED TO FUR NISH BILLS AND CONFIRMATION IN RESPECT OF THE COMMISSION. THE ASSESSEE HAS SUBMITTED THAT CONFIRMATION CANNOT BE FURNISHED AS PARTIES HAVE DENIED. IN VIEW OF THIS THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY THE EXPENDITURE SHOULD NOT BE TREATED AS NON - GENU INE AND ALSO REQUESTED TO FURNISH PROOF OF PAYMENT ALONG WITH LEDGER ACCOUNTS OF THE CONCERNED PARTIES. THE ASSESSEE HAS SUBMITTED BILLS OF COMMISSION EXPENSES HOWEVER NO CONFIRMATION WAS SUBMITTED. VIDE ORDER SHEET ENTRY DATED 24.11.2010 THE AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE ATTENDED AND THE BILLS WHICH WERE SUBMITTED BY THE ASSESSEE WERE SHOWN TO THE AUTHORIZED REPRESENTATIVE. ON 13.09.2010 THE PARTNER SHRIHIMANSHU SHAH ALONG WITH SHRIBIPIN C. PATEL AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED AND VIDE ORDER SHEET ENTRY DATED 13.09.2012 BEFORE THE AUTHORIZED REPRESENTATIVE THE PARTNER WAS ASKED TO FURNISH CONFIRMATIONS OF COMMISSION EXPENSES AND TECHNICAL EXPENSES BILLS ETC. HEARING DATE WAS FIXED ON 24.09.2010. THE ASSESSEE NEITHER ATTENDED NOR ANY SUBMISSIONS WERE MADE. VIDE THIS OFFICE LETTER NO.BRD/ACIT/CIR2(2)/SCR.ASSTT/2009 - 10 DATED 11.11.2010 THE ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH THE CONFIRMATIONS AND ALSO SHOW CAUSED WHY THE EXPENSES SHOULD NOT BE TREATED AS NON - GENU INE. HEARING WAS FIXED ON 19.11.2010. THE ASSESSEE VIDE LETTER DATED 15.11.2010 HAS SOUGHT FOR ADJOURNMENT AND THE REQUEST WAS ACCEPTED AND CASE WAS ADJOURNED TO 24.11.2010. O N 24..11.2010 SHRIBIPIN C. PATEL AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AT TENDED AND AS NARRATED ABOVE ONCE AGAIN THE ASSESSE WAS ASKED TO EXPLAIN AND SHOW CAUSE WHY THE COMMISSION/TECHNICAL EXPENDITURE SHOULD NOT BE DISALLOWED IN ABSENCE OF ANY SUPPORTING EVIDENCES. HEARING WAS FIXED ON 26.11.2010. FROM THE SEQUENCE OF EVENT S IT CAN BE SEEN THE ASSESSEE WAS NEVER DENIED ANY OPPORTUNITY FOR FURNISHING THE NECESSARY DOCUMENTS. I.T.A. NO . 1 448 /AHD/201 3 A SSESSM ENT Y EAR: 20 0 8 - 09 PAGE 3 OF 5 IN VIEW OF APPELLANT FAILING TO DISCHARGE ONUS CASTED UPON HIM BY THE ASSESSING OFFICER AND CONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER I T IS HELD THAT THE ASSESSEE HAD SUFFICIENT OPPORTUNITY TO FURNISH THE DETAILS CALLED FOR BY THE ASSESSING OFFICER AND THAT IT COULD HAVE FURNISHED MEDICAL CERTIFICATE/MARRIAGE INVITATION CARDS BEFORE THE ASSESSING OFFICER HIMSELF AS THESE WERE READILY AVAI LABLE WITH THE APPELLANT AND NOTHING PREVENTED THE ASSESSEE TO FURNISH THESE DOCUMENTS BEFORE THE ASSESSING OFFICER. IN VIEW OF THIS THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT ARE NOT ACCEPTED AS THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITIES BEFOR E COMPLETION OF THE ASSESSMENTS. 4. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE ME. THE SHORT PRAYER OF THE ASSESSEE IS THAT THE LEARNED CIT(A) BE DIRECTED TO ADMIT THESE ADDITIONAL EVIDENCES AND THEN DECIDE THE MATTER AFRESH ON MERITS. 5. I HAV E HEARD THE RIVAL CONTENTIONS PERUSED HE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 6. I FIND THAT A DAVISON BENCH OF THIS TRIBUNAL IN THE CASE OF ELECTRA (JAIPUR) PVT. LTD. VS. IAC [(1988) 26 ITD 236 (DEL)] HAS INTER ALIA OBSERVED AS FOLLOWS : - AFTER GOING THROUGH THE EVIDENCE PLACED BEFORE US CONSIDERING THE FACTS OF THIS CASE AND GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD NOT BE DISQUALIF IED FROM PRODUCING THIS EVIDENCE MERELY ON THE GROUND THAT THE EVIDENCE WAS NOT PLACED BEFORE THE AUTHORITIES BELOW. THE SOLE PURPOSE OF JUDICIARY AS WELL AS OF THE REVENUE IS TO GET AT THE TRUTH. IF THE TRUTH IS THAT THE PAYMENT OF COMMISSION WAS GENUINE AND WAS DICTATED BY THE BUSINESS NEEDS SUCH A PAYMENT SHOULD NOT BE DISALLOWED MERELY ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO LEAD PROPER EVIDENCE OR ON THE GROUND THAT THE EVIDENCE LED WAS OF SUCH A NATURE AS TO CREATE A VERY HIGH DEGREE OF SUSPICI ON. THERE SHOULD BE NO OBJECTION TO CONSIDER ANY EVIDENCE PRODUCED TO TEST ITS AUTHENTICITY RELEVANCE AND THEN TO ACT ON IT. IF THE EVIDENCE IS GENUINE RELIABLE PROVES THE ASSESSEE'S CASE THEN THE ASSESSEE SHOULD NOT BE DENIED THE OPPORTUNITY. BUT ON TH E OTHER HAND IF THE EVIDENCE LED TURNS OUT TO BE SPURIOUS FABRICATED OR OF IRRELEVANT NATURE SUCH CONSEQUENCES AS ARE PROVIDED FOR UNDER THE LAW WILL ENSUE. IT IS THEREFORE INCORRECT TO SHUT OUT AN ASSESSEE IN THE PROCESS OF ADMINISTRATION OF JUSTICE FR OM LEADING EVIDENCE TO PROVE ITS CASE. THE EARLIER INABILITY TO LEAD EVIDENCE SHOULD NOT BE HELD AGAINST THE ASSESSEE UNLESS IT IS KNOWN TO THE COURT OR SUGGESTED TO THE COURT OR I.T.A. NO . 1 448 /AHD/201 3 A SSESSM ENT Y EAR: 20 0 8 - 09 PAGE 4 OF 5 THERE WAS EVIDENCE TO SUSPECT THAT THE EVIDENCE WAS FABRICATED. THERE IS NO S UCH SUGGESTION IN THIS CASE. WE ARE THEREFORE OF THE OPINION THAT THE REQUEST OF THE LEARNED COUNSEL OF THE ASSESSEE IS REASONABLE AND THAT THE REQUEST MADE BY THE DEPARTMENT FOR THE REFUSAL OF ITS ADMISSION IS NOT PROPER. WE THEREFORE ADMIT THE EVIDENCE DIRECT THE COMMISSIONER (A) TO EXAMINE IT THOROUGHLY AND THEN ARRIVE AT THE CONCLUSION AFRESH WHETHER THE PAYMENT OF THE COMMISSION COULD BE ALLOWED OR NOT. AT THIS STAGE WE WISH TO RECORD A SUGGESTION MADE TO US THAT THE TOTAL VALUE OF THE CONTRACTS OBTAI NED FROM PUNJAB STATE ELECTRICITY BOARD WAS OF THE ORDER OF RS. 1.31 CRORES THE HIGHEST EVER ORDER OBTAINED AND ALTHOUGH THE SUPPLIES MADE IN THE YEAR WERE TO THE TUNE OF RS. 29 LAKHS THE BALANCE OF THE ORDERS WERE EXECUTED IN THE SUBSEQUENT YEARS. WITH THE PROCUREMENT OF ORDERS FROM PUNJAB STATE ELECTRICITY BOARD IT WAS POINTED OUT THAT THE SUPPLIES TO RAJASTHAN STATE ELECTRICITY BOARD GOT DIMINISHED. THE COMMISSIONER (A) WILL BEAR THESE FACTS IN MIND AND ASSESS THEIR RELEVANCE IN COMING TO THE FRESH CO NCLUSION AS TO WHETHER THE CLAIM FOR THE DEDUCTION OF THE COMMISSION COULD BE ACCEPTED. 7. I HAVE ALSO NOTICED THAT IN THE INTEREST OF JUSTICE AND FOR DECIDING THE MATTER IN A FAIR AND OBJECTIVE MANNER IT IS INDEED NECESSARY THAT THE EVIDENCES BEING PRO DUCED BY THE ASSESSEE COPIES OF WHICH HAVE BEEN FURNISHED BEFORE ME IN THE PAPER BOOK AS WELL SHOULD BE CONSIDERED ON MERITS. AS HELD BY HON BLE BOMBAY HIGH COURT IN THE CASE OF PRABHAVATI S. SHAH VS. CIT [(1998) 231 ITR 1 (BOM)] RULE 46A DOES NOT FET TER THE POWERS OF THE CIT(A) UNDER SECTION 250(4) OR 250(5) OF THE ACT. IN THIS VIEW OF THE MATTER IF PRIMA FACIE AN INFORMATION OR EVIDENCE IS NECESSARY TO EXAMINE CLAIM OF THE ASSESSEE THE CIT(A) HAS POWERS TO ADMIT SUCH AN INFORMATION OR EVIDENCE. I T IS ALSO ELEMENTARY THAT WHEN A STATUTORY AUTHORITY HAS POWERS TO DO SOMETHING THE AUTHORITY ALSO HAS A DUTY TO EXERCISE THESE POWERS WHEN CIRCUMSTANCES SO JUSTIFY OR WARRANT. VIEWED THUS THE LEARNED CIT(A) OUGHT TO HAVE ADMITTED THESE EVIDENCES AND EX AMINE THE SAME ON MERITS. 8. FOR THE REASONS SET OUT ABOVE I UPHOLD THE PLEA OF THE ASSESSEE AND REMIT THE MATTER TO THE FILE OF THE LEARNED CIT(A) FOR ADJUDICATION DE NOVO IN THE LIGHT OF THE ABOVE OBSERVATION. I.T.A. NO . 1 448 /AHD/201 3 A SSESSM ENT Y EAR: 20 0 8 - 09 PAGE 5 OF 5 9. IN THE RESULT THE APPEAL IS ALLOWED FO R STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 1 0 . IN THE RESULT THE APPEAL IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 28 TH DAY OF OCTOBER 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 28 TH DAY OF OCTOBER 2016. PBN/* COPIES TO: (1) THE APPELLANT ( 2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR I NCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD