The ACIT, Circle-1,, Bhavnagar v. Nirmalaben P.Raimagiya, Bhavnagar

ITA 296/AHD/2008 | 2004-2005
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 29620514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 296/AHD/2008
Duration Of Justice 2 year(s) 11 month(s) 24 day(s)
Appellant The ACIT, Circle-1,, Bhavnagar
Respondent Nirmalaben P.Raimagiya, Bhavnagar
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 21-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2004-2005
Appeal Filed On 27-01-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.296/AHD/2008 ASSESSMENT YEAR :2001-02 DATE OF HEARING:19.1.11 DRAFTED:24..1.11 INCOME TAX OFFICER WARD-2(2) AAYKAR BHAVAN NAKUBAUG JASHONATH CHOWK BHAVNAGAR 364 001 V/S . SMT. NIRMALABAEN P RAIMAGIYA PROP OF M/S. R.K. TRADING RUTURAJ COMPLEX OPP. A.V. SCHOOL GROUND BHAVNAGAR PAN NO. NOT FOUND (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI K.K. VYAWAHARE CIT-DR RESPONDENT BY:- SHRI S.N. SOPARKAR SR-AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XX AHMEDABAD IN APPEAL NO. CIT(A)-XX/162/2006- 07 DATED 15-10-2007. THE ASSESSMENT WAS FRAMED BY I TO WARD-2(2) BHAVNAGAR U/S143(3) R.W.S 254 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30- 11-2006 FOR ASSESSMENT YEAR 2001-02. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE BY ASSESSING OFFICER U/S 68 OF THE ACT. FOR THIS REVENUE HAS RAISED THE FOLLOWING GROUND NO.1 :- 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITIONS OF RS.1 04 85 332/- MADE BY THE A.O U/S.6 8 OF THE I.T. ACT. ITA NO.296/AHD/2008 A.Y.2001-0 2 ITO WD 2(2) BHAVNAGAR V. SMT. NIRMALABEN P RAIMAGIYA PAGE 2 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSEE FILED RETURN OF INCOME ON 29-10-2001 AND ASSESSMENT WAS FINALIZE D U/S.144 OF THE ACT VIDE ORDER DATED 29-3-2004 WHICH WAS CONTESTED BY ASSESSEE BEFORE CIT(A) AND TRIBUNAL. THE TRIBUNAL SET ASIDE THE ASSESSMENT TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO FRAME THE ASSESSMENT DE NOVO VIDE ORDER DATED 04- 10-2005. THE ASSESSING OFFICER APART FROM OTHER ADD ITIONS IN THE ASSESSMENT ORDER FRAMED IN RESPONSE TO DIRECTION OF TRIBUNAL M ADE ADDITION ON TRADE CREDITORS OF M/S. ELECTROLUX KELVINATOR LTD. OF RS. 99 46 931/- AND M/S. MARUTI ENTERPRISES OF RS.5 38 401/-. AGGRIEVED ASSESSEE P REFERRED APPEAL BEFORE CIT(A). THE CIT(A) DELETED THE ADDITION BY GIVING F OLLOWING FINDINGS IN PARA-6 6.1 & 6.2 OF HIS APPELLATE ORDER:- 6. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF T HE AUTHORIZED REPRESENTATIVE AND PERUSED THE FACTS BROUGHT ON REC ORD IN THE ASSESSMENT ORDER BY THE ASSESSING OFFICER. FROM THE FACTS ON RECORD IT IS NOTICED THAT DURING DENOVO ASSESSMENT PROCEEDING S THE APPELLANT SUBMITTED BEFORE THE ASSESSING OFFICER CONFIRMATION S OF BOTH THE CREDITORS AND ALSO PRODUCED THE COPIES OF PURCHASE INVOICE AND TRANSPORT RECEIPTS ETC. FURTHER IN SUPPORT OF THE C REDIT BALANCE OF RS.99 46 931/- IN THE ACCOUNT OF ELECTROLUX KELVINA TOR LTD. TOWARDS SUPPLY OF GOODS THE APPELLANT FILED COPY OF ACCOUN T BEING BALANCE CONFIRMATION AS ON 31.03.2001 ALONG WITH THE COPY O F CUSTOMER LEDGER ACCOUNT RECEIVED FROM THE SAID PARTY AND FURNISHED DETAILS AS TO THE NAME OF THE AUTHORIZED SIGNATORY AND PERMANENT ACCO UNT NUMBER OF THE SAID COMPANY. SIMILARLY IN RESPECT OF MARUTI EN TERPRISES THE APPELLANT FILED ALL THE DETAILS INCLUDING THE COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME. THE AO HAS NOT MADE ANY INQUIRY. 6.1 UNDER SECTION 68 IF ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OF FERED BY HIM IS NOT IN THE OPINION OF THE AO SATISFACTORY THE SUM SO CRE DITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THEREFORE WHAT HAS TO BE ENQUIRED INTO BY THE ASSE SSING AUTHORITY IS ABOUT THE NATURE AND SOURCE OF THE DEPOSIT. IF THE EXPLANATION WITH REGARD TO NATURE AND SOURCE IS FOUND UNSATISFACTORY ONLY THEN THE AMOUNT SO CREDITED MAY BE TREATED AS INCOME. APPELL ANT WAS REQUIRED TO PROVE THREE CONDITIONS: (1) IDENTITY OF THE CREDITOR; (2) CAPACITY OF SUCH CREDITOR TO ADVANCE MONEY; AND (3) GENUINENESS OF THE TRANSACTIONS. IF ALL THE AFORESAID THREE CONDITIONS ARE PROVED T HE ADDITION CANNOT BE MADE. IN THE CASE OF THE APPELLA NT SHE HAS OFFERED EXPLANATION THAT THE TRANSACTIONS WITH THE CREDITOR S ARE RELATED TO ITA NO.296/AHD/2008 A.Y.2001-0 2 ITO WD 2(2) BHAVNAGAR V. SMT. NIRMALABEN P RAIMAGIYA PAGE 3 PURCHASE AND IN SUPPORT OF SUCH PURCHASES FROM ELEC TROLUX KELVINATOR LTD. SHE FILED COPIES OF BILLS TRANSPORT RECEIPTS AND COPY OF ACCOUNT BALANCE CONFIRMATION AS ON 31.03.2001 PERMANENT AC COUNT NUMBER AND COPY OF CUSTOMER LEDGER ACCOUNT RECEIVED FROM T HE SAID PARTY. SIMILARLY IN THE CASE OF MARUTI ENTERPRISES SHE HAS FURNISHED ALL THE DETAILS INCLUDING THE COPY OF ACKNOWLEDGEMENT OF RE TURN OF INCOME FILED AT BHAVNAGAR. THE ASSESSING OFFICER HAS NOT MADE AN Y INQUIRY. SINCE BOTH THE CREDITORS WERE INCOME-TAX ASSESSEES ASSESS ED TO TAX AND THEIR IDENTITY GENUINENESS OF THE TRANSACTION ADDI TION THEIR CREDITWORTHINESS WERE ESTABLISHED. IN THE CASE OF CIT VS. ORISSA CORPORATION 159 ITR 78 (SC) HONBLE APEX COURT HAS HELD THAT: THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE T HAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX NU MBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE APART FROM ISSUING NOTICES SUNDER S. 131 OF THE INSTANCE OF THE ASSESS EE DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXAM INE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO F IND OUT WHETHER THEY WERE CREDITWORTHY OR WERE SUCH WHO COULD ADVAN CE THE ALLEGED LOANS. THERE WAS NO EFFORT MADE TO PURSUE T HE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES THE ASSE SSEE COULD NOT DO ANYTHING FURTHER. IN THE PREMISES IF THE TRIBUN AL CAME TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHARGED THE BUR DEN THAT LAY ON HIM THEN IT COULD NOT BE SAID THAT SUCH A CONCL USION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. I F THE CONCLUSION IS BASED ON SOME EVIDENCE ON WHICH A CON CLUSION COULD BE ARRIVED AT NO QUESTION OF LAW AS SUCH ARI SES. 6.2 I FIND THAT THE APPELLANT HAS FILED ALL NECESSA RY AND POSITIVE PARTICULARS AS ABOVE AND THUS SHE HAS DISCHARGED HE R PRIMARY ONUS BY FILING RELEVANT EVIDENCES AS CONTRA ACCOUNT/CONFIRM ATIONS COPIES OF PURCHASE INVOICES TRANSPORT RECEIPTS AND PAN NO./A SSESSMENT DETAILS OF CREDITORS. I THEREFORE HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND PROPER. THE ASSESSING OFFICE IS DIRECTED TO DELETE THE SAME. AGGRIEVED NOW REVENUE CAME IN APPEAL BEFORE TRIBUN AL. 4. BEFORE US LD. CIT-DR SHRI K.K. VYAWAHARE RELIED ON THE ASSESSMENT ORDER AND STATED THAT THE ASSESSING OFFICER HAS NOT ED THAT THE ASSESSEE HAS NOT SUBMITTED THE DETAILS AND NO CONFIRMATION OF CR EDITORS WERE SUBMITTED. IN SUCH CIRCUMSTANCES THE ASSESSING OFFICER HAS NO AL TERNATIVE EXCEPT TO ADD ITA NO.296/AHD/2008 A.Y.2001-0 2 ITO WD 2(2) BHAVNAGAR V. SMT. NIRMALABEN P RAIMAGIYA PAGE 4 THESE. HE URGED THE BENCH TO CONFIRM THE ADDITION. ON THE OTHER HAND LD. SR- COUNSEL FOR THE ASSESSEE SHRI S.N.SOPARKAR TAKEN U S TO ASSESSEES PAPER BOOK WHEREBY HE DRAWN OUR ATTENTION TO THE CONFIRM ATION OF LEDGER ACCOUNT OF ASSESSEE IN THE BOOKS ELECTROLUX KELVINATOR LTD. AN D M/S. MARUTI ENTERPRISES INCLUDING PERMANENT ACCOUNT NUMBER OF THESE TWO CON CERNS WERE FILED BEFORE THE ASSESSING OFFICER AND EVEN BEFORE CIT(A). LD. C OUNSEL FOR ASSESSEE FURTHER STATED THAT THESE ARE ONLY TRADE TRANSACTIO N AND HE TAKEN US TO ASSESSEES PAPER BOOK AT PAGES 9 TO 16 WHERE COMPLETE DETAILS OF TRANSACTIONS ARE ENCLOSED I.E. TRADE TRANSACTIONS O F ELECTROLUX KELVINATOR LTD. AND M/S. MARUTI ENTERPRISES. HE ALSO DRAWN OUR ATTE NTION TO ASSESSEES PAPER BOOK AND DOCUMENTS FILED BEFORE ASSESSING OFFICER. ACCORDINGLY HE STATED THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AN D SAME BE AFFIRMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT DURING THE COURSE OF DE NOVO ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED BEFOR E THE ASSESSING OFFICER CONFIRMATIONS AND ALSO PRODUCED THE COPIES OF PURCH ASE INVOICES AND TRANSPORT RECEIPTS ETC. WHICH ARE BEING REPRODUCED IN ASSESSMENT ORDER AT PAGE-3. THE COPY OF THE CONFIRMATION FIELD DURING T HE COURSE OF ORIGINAL APPELLATE PROCEEDINGS BEFORE THE CIT(A) AND ALSO TR IBUNAL WERE ALSO FURNISHED. THE ASSESSEE ONCE AGAIN REITERATE THAT O UT OF THE TOTAL AMOUNT OF RS.99 46 931/- WERE PAYABLE TO ELECTROLUX KELVINATO R LTD. TOWARDS SUPPLY OF GOODS AND COPY OF ACCOUNT OF SAID PARTY FROM THE BO OKS OF ASSESSEE FOR THE YEAR UNDER CONSIDERATION AS ALSO SUBSEQUENT YEAR AR E ATTACHED. THE COPY OF ACCOUNT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THAT THERE WAS OPENING OUTSTANDING LIABILITY OF RS.65 14 023/- AND THERE W ERE PURCHASES AND PAYMENTS AND LIABILITY AT THE YEAR END WAS RS.99 46 931/-. THEREFORE ALSO THE ASSESSING OFFICER COULD NOT HAVE ADDED THE ENTIRE A MOUNT OUTSTANDING AT THE YEAR END IGNORING THE OPENING LIABILITY. FURTHER FR OM THE COPIES OF ACCOUNT OF SUBSEQUENT FINANCIAL YEARS 2001-02 TO 2003-04 IT MA Y BE SEEN THAT THE ASSESSEE HAS REPAID THE ENTIRE LIABILITY. SIMILARL Y AN AMOUNT OF RS.5 38 401/- ITA NO.296/AHD/2008 A.Y.2001-0 2 ITO WD 2(2) BHAVNAGAR V. SMT. NIRMALABEN P RAIMAGIYA PAGE 5 WAS DUE TO BE PAID TO MARUTI ENTERPRISES AS NOTED F ROM COPY OF ACCOUNT OF MARUTI ENTERPRISES FROM HER BOOKS OF ACCOUNT AND AL SO CONTRA ACCOUNT FROM THE BOOKS OF MARUTI ENTERPRISES. THE SAID CONCERN I S ASSESSED TO TAX AND HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2001-02 ON 02-10-2001 BEFORE DEPARTMENT. THUS WHILE MAKING THE ADDITION EVEN DI D NOT CARE TO VERIFY THE DEPARTMENTAL RECORD WHICH WERE AVAILABLE IN OFFICE . FROM THE FACTS AS ABOVE IT IS CLEAR THAT THE ASSESSEE DISCHARGED ONUS BY FU RNISHING COPIES OF ACCOUNTS AND CONFIRMATIONS AND OUT OF THE TWO SUPPLIER ONE I S VERY WELL KNOWN COMPANY WHO HAS GIVEN CONFIRMATION AT THE RELEVANT TIME AND THE OTHER IS ALSO ASSESSED TO TAX AT BHAVNAGAR ONLY. HOWEVER THE ASSESSING OF FICER MECHANICALLY WITHOUT IN RESPECT OF SUNDRY CREDITORS OF RS.1 04 8 5 332/- THERE IS NO DISCREPANCY AS ALLEGED AND THE ADDITION IS UNJUSTIF IED. ACCORDINGLY WE ARE OF THE VIEW THAT THE CIT(A) HAD RIGHTLY DELETED THE A DDITION AND CONFIRM THE SAME. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21/01/2011 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SIN GH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 21/01/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-XX AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD