The ITO, Ward-8(2),, Ahmedabad v. Sonar Construction Pvt. Ltd.,, Ahmedabad

ITA 1838/AHD/2009 | 2003-2004
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 183820514 RSA 2009
Assessee PAN AAFCS3679B
Bench Ahmedabad
Appeal Number ITA 1838/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 19 day(s)
Appellant The ITO, Ward-8(2),, Ahmedabad
Respondent Sonar Construction Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 21-01-2011
Date Of Final Hearing 20-01-2011
Next Hearing Date 20-01-2011
Assessment Year 2003-2004
Appeal Filed On 02-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI BHAVNESH SAINI JUDICIAL MEMBER AND A.N. PAHUJA ACCOUNTANT MEMBER) ITA NO.1838 AND 1839/AHD/2009 WITH CO NO.136/AHD/2009 IN ITA NO.1838/AHD/2009 [ASSTT. YEAR : 2003-2004] DICTATED ON: 20-01-2011 ITO WARD-8(2) AHMEDABAD. VS. SONAR CONSTRUCTION PVT. LTD. 405 SUYOJAN TOWER NR.HOTEL PRESIDENT SWASTIK CHAR RASTA C.G. ROAD AHMEDABAD. PAN : AAFCS 3679 B (APPELLANT) (RESPONDENT) REVENUE BY : MS.ANURAG SHARMA ASSESSEE BY : SHRI S.N. DIVETIA O R D E R PER BHAVNESH SAINI JUDICIAL MEMBER : BOTH DEPARTMENTS APPEALS AND THE CO BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERE NT ORDERS OF THE LEARNED CIT(A)- XIV AHMEDABAD DATED 18.03.2009 FOR THE ASSESSMENT YEAR 2003-2004. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE PARTIES A ND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE APPEALS ARE DISPOSED OF AS UNDER: ITA NO.1838/AHD/2009 WITH CO NO.136/AHD/2009 2. GROUND NO.1 IN THE DEPARTMENTS APPEAL CHALLENGE S THE DELETION OF ADDITION OF RS.6 48 000/- OUT OF DISALLOWANCE OF RS .7 20 000/- ON ACCOUNT OF PURCHASES FROM NIRAV TRADERS (NT FOR SHORT). THE ASSESSEE IN THE CO CHALLENGED CONFIRMATION OF ADDITION OF 10% OF THE P URCHASE FROM THE SAME PARTY. IT IS STATED EARLIER THAT THE ADDITION WAS MADE ON THE SAME COUNT BUT THE APPEAL WAS PREFERRED BEFORE THE TRIBUNAL AND THE TR IBUNAL VIDE ORDER DATED 9-1- 2009 SET ASIDE THE ORDER PASSED BY THE LEARNED CIT( A) WITH DIRECTION TO CONSIDER ALL THE SUBMISSIONS OF THE ASSESSEE AND PA SS SPEAKING ORDER AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE A ND THE AO. IT IS NOTICED THAT THE AO ASKED THE ASSESSEE TO PRODUCE DETAILS OF VAR IOUS MATERIAL PURCHASED BY ITA NO.1838 AND 1839/AHD/2009 WITH CO NO.136/AHD/2009 -2- IT AND ON THE BASIS OF THE DETAILS FURNISHED THE A O ISSUED LETTERS UNDER SECTION 133(6) IN SEVERAL CASES INCLUDING THE NT FROM WHO M THE ASSESSEE MADE PURCHASE OF CEMENT FOR RS.7 20 000/-. THE LETTER I SSUED TO THE ABOVE PARTY HOWEVER RETURNED UNSERVED. THE ASSESSEE EXPLAINED GENUINENESS OF THE PURCHASE SO MADE AND THE PAYMENT WAS MADE THROUGH A CCOUNT PAYEE CHEQUE BUT THE ASSESSEE CANNOT PRODUCE THE ABOVE PARTY BEC AUSE IT HAD CLOSED DOWN ITS BUSINESS. THE AO HOWEVER DID NOT ACCEPT THE CONTEN TION OF THE ASSESSEE AND OBSERVED THAT TELEPHONE NUMBER GIVEN IN THE BILL WA S OF SOME PRAJAPATI WHO WAS NOT DEALING IN CEMENT ACCORDINGLY ADDITION WAS MADE. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT COMPLETE DETAILS ALO NG WITH COPY OF THE ACCOUNT OF THE ABOVE PARTY WAS FURNISHED AND IT WAS ALSO EX PLAINED THAT THE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUE AND COPY OF T HE BANK ACCOUNT WAS ALSO FURNISHED. IT WAS FURTHER SUBMITTED THAT THE ONUS UPON THE ASSESSEE WAS DISCHARGED. THE PRICE RATE OF PURCHASE WAS ALSO FU RNISHED TO SHOW THAT EVEN IN COMPARABLE CASES THE PURCHASE PRICE WAS THE SAME. THE ASSESSEE SUBMITTED THAT SINCE THE PAYMENTS HAVE BEEN MADE THROUGH BANK ING CHANNEL THEREFORE NOTHING IS BROUGHT ON RECORD THAT THE AMOUNT GIVEN THROUGH BANKING CHANNEL RETURNED TO THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS. ADINATH INDUSTRIES 252 ITR 476 AND M.K. TRADERS 163 ITR 249. IT WAS SUBMITTED T HAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED AND THE GP RATE OF 15.31% WA S NOT CONSIDERED AS LOW. THEREFORE THE ADDITION IS UNJUSTIFIED. THE LEARNE D CIT(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND NOTED THAT THE PURC HASE RATE OF CEMENT FROM THE ABOVE PARTY IS REASONABLE AS COMPARED TO THE RATES OF OTHER PARTIES. FURTHER THERE WERE NO DISPUTE REGARDING GENUINENESS OF THE CONSUMPTION OF THE CEMENT AND THAT ENTIRE PAYMENT WAS MADE THROUGH ACCOUNT PA YEE CHEQUES. THE ASSESSEE HAS MADE BEST EFFORTS TO PRODUCE THE SAID PARTY BUT THE PARTY WAS NOT AVAILABLE. THE LEARNED CIT(A) THEREFORE NOTED THAT NO EVIDENCE BROUGHT ON RECORD THAT PAYMENTS GIVEN TO THE ABOVE PARTY HAVE RETURN TO THE ASSESSEE THEREFORE THE DECISION OF THE HONBLE GUJARAT HIGH COURT APPLIED TO THE CASES ITA NO.1838 AND 1839/AHD/2009 WITH CO NO.136/AHD/2009 -3- OF THE ASSESSEE. THE LEARNED CIT(A) HOWEVER IN THE ABSENCE OF CROSS- VERIFICATION MADE DISALLOWANCE OF 10% OUT OF THE PU RCHASE AND RESTRICTED THE DISALLOWANCE TO RS.72 000/-. THE LEARNED DR RELIE D UPON ORDER OF THE AO ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE RE ITERATED SUBMISSIONS MADE BEFORE THE PARTIES BELOW AND SUBMITTED THAT DUE TO SMALLNESS OF THE TAX EFFECT HE WOULD NOT BE PRESSING THE CROSS-OBJECTION. 3. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF T HE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LEAR NED CIT(A). THE LEARNED CIT(A) FOUND THAT THE RATES OF THE CEMENT PURCHASED FROM NT IS ALMOST THE SAME AS COMPARED TO BE PURCHASE RATES OF OTHER TRAD ERS. THE PURCHASE BILLS WERE PRODUCED AND ALL THE PAYMENTS HAVE BEEN MADE T HROUGH ACCOUNT PAYEE CHEQUES. NO EVIDENCE IS BROUGHT ON RECORD THAT THE PURCHASE PRICE PAID TO THE ABOVE PARTIES RETURNED TO THE ASSESSEE. THE LEARNE D CIT(A) WAS THEREFORE JUSTIFIED IN DELETING THE SUBSTANTIAL ADDITION ON THE ABOVE ISSUE. WE THEREFORE DO NOT FIND ANY MERIT IN THE DEPARTMENTS APPEAL T HE SAME IS ACCORDINGLY DISMISSED. 4. THE CO OF THE ASSESSEE IS ALSO ACCORDINGLY DISMI SSED WHICH IS ALSO NOT PRESSED BY THE LEARNED COUNSEL OF THE ASSESSEE. A CCORDINGLY GROUND NO.1 OF THE DEPARTMENTS APPEAL AND THE CO OF THE ASSESSEE ARE DISMISSED. 5. ON GROUND NO.2 IN THE DEPARTMENTS APPEAL DELET ION OF ADDITION OF RS.6 80 030/- IS AGITATED. THE AO DISALLOWED THE A BOVE LABOUR PAYMENTS. IN RESPONSE TO THE LETTERS ISSUED UNDER SECTION 133(6) TO VARIOUS PERSONS JAGDISH SATHWARA AND RAMANBHAI PRAJAPATI DID NOT COMPLY WIT H THE LETTER AND THE LETTER ISSUED TO RAMESH PRAJAPATI CAME BACK UNSERVED. TH E ASSESSEE WAS GIVEN OPPORTUNITY TO PROVE THE GENUINENESS OF THE TRANSAC TION. THE ASSESSEE COULD FILE ONLY COPY OF THE ACCOUNT THE AO ACCORDINGLY D ISALLOWED THE ABOVE PAYMENT. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A ) THAT COPY OF THE ACCOUNT ALONG WITH CONFIRMATION OF THE PARTIES AND COMPLETE DETAILS OF THE PAYMENT AND ITA NO.1838 AND 1839/AHD/2009 WITH CO NO.136/AHD/2009 -4- TAX DEDUCTED FROM PAYMENTS MADE TO THEM HAVE BEEN F IELD. COPY OF THE BANK ACCOUNT SHOWING THE DETAILS OF THE PAYMENTS THROUGH BANKING CHANNEL WAS FILED TO SHOW GENUINENESS OF THE PAYMENTS BEING MADE. IT WAS FURTHER SUBMITTED THAT COPY OF ELECTION CARD BILLS FOR PURCHASE OF BRICKS SITE REPORT OF DELIVERY OF BRICKS VOUCHERS LEDGER ACCOUNT ETC. WERE FILED TO PROVE IDENTITY OF THE ABOVE PERSONS ALONG WITH THEIR ADDRESSES PHONE NUMBERS E TC. AND THE PAYMENTS WERE MADE THROUGH DEMAND DRAFT AND REGARDING IDENTITY OF JAGDISH SATHWARA COMPLETE DETAILS WERE FILED AND PAYMENTS WERE MADE BY CHEQUES FROM GLOBAL TRUST BANK ON WHICH TDS WAS ALSO DEDUCTED. THE LEA RNED CIT(A) ON EXAMINING THE ABOVE DETAILS FOUND THAT THE ASSESSEE MADE GENUINE TRANSACTIONS WITH THESE THREE PARTIES AND ALL THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL. THUS THE ASSESSEE PROVED GENUINENESS OF THE PAYMENT WHICH HAVE BEEN SUPPORTED BY THE DETAILS. THE ADDITION WAS AC CORDINGLY DELETED. 6. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. THE LEARNED CIT(A) ON EXAMI NATION OF THE EVIDENCES AND DETAILS ON RECORD FOUND THAT THE ASSESSEE PROVED TH E IDENTITY AND EXISTENCE OF THE PARTIES FROM WHOM THE ASSESSEE MADE PURCHASES A ND THAT PAYMENTS HAVE BEEN MADE TO THEM THROUGH BANKING CHANNEL. THESE W ERE SUFFICIENT TO HOLD THE VIEW OF THE LEARNED CIT(A) IN DELETING THE ADDITION . IN THE ABSENCE OF ANY MATERIAL ADVERSE IN NATURE AGAINST THE ASSESSEE ON RECORD WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. GROUND NO.2 OF THE RE VENUES APPEAL IS DISMISSED. 7. IN THE RESULT DEPARTMENTS APPEAL AND THE CO WI TH THE ASSESSEE ARE DISMISSED. ITA NO.1839/AHD/2009 8. IN THIS DEPARTMENTS APPEAL THE REVENUE CHALLEN GED THE DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE A DDITIONS DISCUSSED ABOVE. THE LEARNED CIT(A) FOLLOWING HIS APPELLATE ORDER IN QUANTUM CANCELLED THE PENALTY. ON CONSIDERATION OF THE ABOVE FACTS WE D O NOT FIND ANY MERIT IN THE ITA NO.1838 AND 1839/AHD/2009 WITH CO NO.136/AHD/2009 -5- DEPARTMENTS APPEAL. ON THE ISSUE OF PURCHASE MADE FROM NT WE HAVE CONFIRMED THE ORDER OF THE CIT(A) IN DELETING THE S UBSTANTIAL ADDITION. ON OTHER ISSUES THE CIT(A) DELETED THE ENTIRE ADDITIO N AND WE HAVE CONFIRMED THE VIEW OF THE LEARNED CIT(A). THEREFORE MERELY BECA USE 10% ADDITION IS SUSTAINED ON ACCOUNT OF UNEXPLAINED PURCHASE WE DO NOT FIND IT TO BE A FIT CASE FOR HOLDING THAT THE ASSESSEE HAS CONCEALED HIS INC OME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME. WE THEREFORE CONFIRM THE FI NDINGS OF THE LEARNED CIT(A) IN CANCELLING THE PENALTY ON SUCH MATTER. 9. IN RESULT THE DEPARTMENTS APPEALS AND THE ASSE SSEES CO ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21 ST JANUARY 2011 SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 21-01-2011 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD