ACIT, JODHPUR v. M/s. Jai Steel (India), JODHPUR

ITA 299/JODH/2009 | 2003-2004
Pronouncement Date: 28-07-2011 | Result: Dismissed

Appeal Details

RSA Number 29923314 RSA 2009
Assessee PAN AAAFJ5859L
Bench Jodhpur
Appeal Number ITA 299/JODH/2009
Duration Of Justice 2 year(s) 2 month(s) 1 day(s)
Appellant ACIT, JODHPUR
Respondent M/s. Jai Steel (India), JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 28-07-2011
Date Of Final Hearing 21-07-2011
Next Hearing Date 21-07-2011
Assessment Year 2003-2004
Appeal Filed On 27-05-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH : JODHPUR BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER ITA NOS.299 & 300/JU/2009 ASSESSMENT YEARS : 2003-04 & 2004-05 ACIT CENTRAL CIRCLE-1 JODHPUR. VS. M/S JAI STEEL (INDIA) F-289 (A) M.I.A. IIND PHASE BASNI JODHUR. PAN: AAAFJ5859L ASSESSEE BY : SHRI AMIT KOTHARI AR REVENUE BY : SHRI K.R. MEENA CIT DR O R D E R PER K.D. RANJAN AM: THESE APPEALS BY THE REVENUE FOR ASSESSMENT YEARS 2003-04 AND 2004-05 ARISE OUT OF THE COMMON ORDER OF CIT (APPEALS) CENTRAL JAIP UR. THE ISSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT DIFFERENCE IN FIGURES. FOR THE SAKE OF CONVENIENCE THE GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2003-04 ARE REPRODUCE D AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.2 16 139/- [RS.6 49 620] ON ACCOUNT OF ON- MONEY PAYMENT FOR PURCHASES FROM M/S JINDAL STRIPS LTD. (NOW KNOWN AS M/S JINDAL STAINLESS LTD.) WITHOUT APPRECIATING TH E EVIDENCE I.E. EXHIBIT-4 OF ANNEXURE-A FOUND & SEIZED U/S 132 FROM THE RESID ENCE OF SH. SANDEEP BANSAL BRANCH MANAGER OF M/S JINDAL STRIPS LTD. C ONTAINING DETAILS OF CASH PAYMENT OF RS.10 80 695/- [RS.32 48 100/-] BY THE ASSESSEE AS PREMIUM ON PURCHASES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN IGNORING THE STATEMENT OF SH. SANDEEP BANSAL REC ORDED DURING THE COURSE 2 OF SEARCH ON 17.09.2003 WHO HAS ADMITTED CASH COLL ECTION ON ACCOUNT OF UNDER BILLING/PREMIUM ON SALE OF SS FLATS FROM THE LOCAL BUYERS OF JODHPUR. 3. I CRAVE THE INDULGENCE TO AMEND ALTER ADD OR DELE TE ANY OF THE GROUNDS OF APPEAL MENTIONED HEREINABOVE. 2. THE FIGURES FOR ASSESSMENT YEAR 2004-05 ARE MENT IONED IN BRACKETS. 3. THE ONLY ISSUE FOR CONSIDERATION INVOLVED IN BOT H THE APPEALS RELATES TO DELETING THE ADDITION ON ACCOUNT OF ON-MONEY PAYMENT FOR PURCHAS ES FROM JINDAL STRIPS LTD. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT A SEARCH AND S EIZURE ACTION U/S 132(1) OF INCOME TAX ACT 1961 WAS CONDUCTED ON 20.2.2004 AT THE VARIOUS BUSINESS PREMISES OF SUNCITY ALLOYS GROUP OF CASES JODHPUR TO WHICH THE ASSESSEE FIRM BELONG AND AT THE RESIDENCE OF DIRECTORS /PARTNERS OF VARIOUS FIRMS/COMPANIES. DU RING THE YEAR UNDER CONSIDERATION THE ASSESSEE DERIVED INCOME FROM BUSINESS OF MANUFACTUR ING OF STAINLESS STEEL SHEETS. THE RAW MATERIAL IN THE FORM OF SS FLATS WAS MOSTLY PURCHAS ED FROM M/S JINDAL STRIPS LTD. AND OTHER FLAT MANUFACTURING COMPANIES. IN SEPTEMBER 2003 A SEARCH WAS CARRIED OUT IN THE CASE OF CHOPRA GROUP ENGAGED IN SAME BUSINESS. SI MULTANEOUSLY SEARCH WAS ALSO CARRIED OUT AT THE RESIDENCE/OFFICE OF SHRI SANDEEP BANSAL THE BRANCH MANAGER AT JODHPUR OF M/S JINDAL STRIPS LTD. NOW KNOWN AS M/S JINDAL STAINLE SS LTD. DURING THE COURSE OF SEARCH AT THE PREMISES OF SHRI SANDEEP BANSAL EVIDENCE WITH REGARD TO PAYMENT OF CASH OVER AND ABOVE THE BILLING AMOUNT OF STAINLESS STEEL FLATS P URCHASED WAS DISCOVERED. AS PER THE PANCHNAMA IN THE CASE OF SHRI SANDEEP BANSAL DATE D 17.9.2003 M/S JAI STEEL INDIA THE ASSESSEE AND M/S SUNCITY ALLOYS PVT. LTD. A GROUP CONCERN PAID CASH OF RS.89 44 768/- TO M/S JINDAL STAINLESS LTD. THROUGH SHRI SANDEEP BANS AL DURING THE PERIOD STARTING FROM 1.1.2003. THE STATEMENT OF SHRI SANDEEP BANSAL WAS RECORDED. DURING THE COURSE OF SEARCH HE ADMITTED THAT HE WAS WORKING AS BRANCH M ANAGER OF M/S JINDAL STRIPS LTD. FROM 1.1.2003 AND WAS LOOKING AFTER THE SUPPLY OF STAINL ESS STEEL FLATS BY THE COMPANY TO LOCAL BUYERS OF JODHPUR. HE EXPLAINED THE ENTIRE SYSTEM OF CASH COLLECTION ON ACCOUNT OF UNDER BILLING/PREMIUM ON SALE OF SS FLATS TO ALL THE RE-R OLLING MILLS AT JODHPUR. THE ENTRIES OF CASH COLLECTION CROSS TALLIED WITH THE DATES OF SUP PLY OF RAW MATERIAL THE PAYMENT BY THESE PARTIES TOTAL AMOUNT OF COLLECTION AND OUTSTANDING AMOUNT. THE STATEMENT OF SHRI SANDEEP BANSAL WAS SUPPLIED TO THE ASSESSEE ALONG WITH THE COPIES OF DOCUMENTS MAINTAINED BY 3 HIM ON DAILY BASIS IN CONNECTION WITH CASH COLLECTI ON FROM RE-ROLLING MILLS AT JODHPUR WHICH INCLUDED THE NAME OF THE ASSESSEE AND OTHER G ROUP CONCERN. ON SCRUTINY OF SEIZED MATERIAL IT WAS REVEALED THAT CASH COLLECTION ON A CCOUNT OF UNDER BILLING BY M/S JINDAL STRIPS LTD. WAS BEING MADE @ RS.3 TO 5 PER KG. DURI NG THE YEAR. 4. THE ASSESSEE VIDE LETTER DATED 13.2.2006 DISOWNE D THE PAYMENT IN CASH OVER AND ABOVE THE BILLED AMOUNT NOT ONLY TO M/S JINDAL STRI PS BUT ALSO TO OTHER CONCERNS SUPPLYING THE RAW MATERIAL TO THE ASSESSEE SUCH AS HARYANA ST EEL AND ALLOYS LTD. M/S STAINLESS INDIA LTD. M/S SANJAY SALES LTD. ETC. ETC. IT WAS ALS O SUBMITTED THAT INVOKING OF PROVISIONS OF SECTION 69-C TO COVER SUCH ALLEGED PAYMENT WAS PATE NTLY INVALID AND INAPPLICABLE ON THE FACTS OF THE CASE OF THE ASSESSEE. THE AO HOWEVER REJECTED THE CONTENTION OF THE ASSESSEE. HE NOTED THAT AS PER THE DETAILS AVAILAB LE ON RECORD MAINTAINED BY SHRI SANJAY BANSAL AND COPIES OF WHICH HAD BEEN SUPPLIED TO THE ASSESSEE TOTAL SUM OF RS.10 80 695/- WAS PAID IN CASH TO SHRI SANJAY BANSAL BY THE ASSES SEE FIRM ON DIFFERENT DATES IN THE MONTH OF FEBRUARY AND MARCH 2003 OVER AND ABOVE THE PAYM ENTS RECORDED IN THE REGULAR BOOKS OF ACCOUNT. IN THE ASSESSMENT YEAR 2004-05 THE PA YMENT MADE IN CASH AMOUNTED TO RS.32 48 100/-. THE AO FURTHER NOTED THAT SINCE ON LY REAL INCOME WAS TO BE TAXED HE ESTIMATED THE INCOME @ 20% WHICH MIGHT HAVE BEEN TA KEN BY THE ASSESSEE WHEN THE SALES WERE AFFECTED. HE ACCORDINGLY ADDED THE AMOUNTS OF RS.2 16 139/- IN ASSESSMENT YEAR 2003-04 AND RS.6 49 620/- IN ASSESSMENT YEAR 2004-0 5. 5. BEFORE CIT (A) IT WAS SUBMITTED THAT THE ALLEGA TION MADE IN THE NOTICES ISSUED TO THE ASSESSEE WERE PATENTLY WRONG UNJUSTIFIED AND C ONTRARY TO THE FACTS MATERIAL AND EVIDENCE EXISTING ON RECORD. THE PAYMENTS MADE TO ALL PARTIES FROM WHOM SS FLATS WERE PURCHASED HAD CORRECTLY BEEN RECORDED IN THE BOOKS OF ACCOUNT AND ARE WHOLLY SUPPORTED BY THE PURCHASE INVOICES ISSUED BY THE RESPECTIVE P ARTIES. THE PAYMENT TO ALL THE SUPPLIERS FOR THE ENTIRE PURCHASE HAVE BEEN MADE BY CROSSED/A CCOUNT PAYEE CHEQUES. THE ASSESSEE THEREFORE DENIED THE ALLEGATIONS RAISED IN THE INV OICES ISSUED BY THE AO. IT WAS FURTHER SUBMITTED THAT ACTUAL AND CORRECT AMOUNT OF PURCHAS ES MADE FROM JINDALS AND OTHER SUPPLIERS HAVE BEEN FULLY AND CORRECTLY RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE IS REGISTERED UNDER SALES-TAX AND EXCISE LAWS. THE CO RRECTNESS OF THE DECLARED FIGURES OF 4 PURCHASES AND SALES HAD BEEN ACCEPTED BY RESPECTIVE DEPARTMENTS. THE CORRECTNESS OF DECLARED FIGURES WAS SUPPORTED BY AUDITED STATEMENT OF THE ASSESSEE AS WELL AS ALL THE SUPPLIER CONCERNS. NO INCRIMINATING DOCUMENTS OR M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE WHICH WOU LD HAVE JUSTIFIED ANY SUSPICION ABOUT THE CORRECTNESS OF THE FIGURES OF PURCHASES MADE BY THE ASSESSEE FROM THOSE SUPPLIERS. IT WAS ALSO SUBMITTED THAT STATEMENT OF THIRD PARTIES AND PAPERS FOUND DURING THE SEARCH OF THIRD PARTIES COULD NOT BE VALIDLY RELIED UPON AGAI NST THE ASSESSEE UNLESS THE DEPARTMENT DISCHARGED THE BURDEN OF PROOF WHICH HEAVILY LAID U PON THE REVENUE TO PROVE THAT THE APPARENT WAS NOT REAL AND SUCH BURDEN WAS TO BE DIS CHARGED BY BRINGING ON RECORD IN ACCORDANCE WITH CERTAIN PROVISIONS OF LAW RELATING TO ADMISSIBILITY OF THE EVIDENCE. THE ASSESSEE PLACED RELIANCE ON SEVERAL DECISIONS IN SU PPORT OF ITS CONTENTION. IN VIEW OF ABOVE SUBMISSIONS MADE BY THE ASSESSEE LD. CIT (A) OBSER VED THAT THE AO IN HIS ORDER AT PAGE 4 STATED THAT COPIES OF THE SAID DOCUMENTS WERE SUP PLIED TO THE ASSESSEE. THE DOCUMENTS AS SUCH SUPPOSED TO BE THE ANNEXURE-A EXHIBIT-4 OF PANCHNAMA DRAWN IN THE RESIDENCE OF SHRI RAWAL CHAND CHOPRA DATED 17.9.2003. ON PER USAL OF THE EXHIBIT 4 OF ANNEXURE-A RELATING TO SUNCITY ALLOYS GROUP OF CASES IN NONE O F THE ENTRIES OF LOOSE PAPERS IN EXHIBIT- 4 THE ASSESSEES NAME WAS FOUND MENTIONED. LD. AO SUBSEQUENTLY FURNISHED COPY OF STATEMENT OF SHRI SANDEEP BANSAL RECORDED AT THE TI ME OF SEARCH ON 17.9.2003 WHO IDENTIFIED HIMSELF AS BRANCH MANAGER OF JINDAL STEE L OF JODHPUR BRANCH AND STATED THAT THEY WERE INDULGING IN UNDER BILLING FOR SALE OF SS FLATS TO VARIOUS PARTIES IN JODHPUR AND GENERATED CASH DIFFERENCE IN THEIR RECEIPTS. IN TH E STATEMENT ALSO NO SPECIFIC PARTYS NAME WAS MENTIONED. NO COPY OF STATEMENT OF SHRI B.L. C HOPRA THE MAIN PERSON OF CHOPRA GROUP WHO WAS SUPPOSED TO HAVE ADMITTED THE ENTRIES IN THE SAID EXHIBIT-4 WAS GENUINE AND CORRECT COULD BE FURNISHED BY THE AO ALONG WITH THE COPY OF EXHIBIT-4 OF ANNEXURE- A. IN VIEW OF THESE FACTS LD. CIT (A) CAME TO THE CONCLUSION THAT IT WAS VERY DIFFICULT TO ASCERTAIN HOW THE AO HAD ARRIVED RS. 89 44 768/- AS CASH RECEIPTS AGAINST THE ASSESSEE BY THE JINDAL GROUP. THE EXHIBIT-4 DID NOT INDICATE T HE NAME OF THE ASSESSEE AND NOWHERE THE AMOUNT OF RS.89 44 768/- WAS MENTIONED. THEREFORE THERE WAS NO CORROBORATIVE EVIDENCE THAT JINDAL GROUP RECEIVED FROM ASSESSEE AN AMOUNT OF RS.89 44 768/- IN CASH AS ON-MONEY FOR PURCHASES OF SS FLATS FROM THEM. LD. CIT (A) THEREFORE REJECTED THE FINDING OF AO 5 THAT ON-MONEY WAS PAID BY THE ASSESSEE TO JINDAL ST RIPS. AS REGARDS COMPUTATION OF 20% PROFIT ON SALES OF RS.10 80 695/- FOR ASSESSMENT YE AR 2003-04 AND RS.32 48 100/- FOR ASSESSMENT YEAR 2004-05 LD. CIT (A) NOTED THAT ASS ESSMENT OF JINDAL STAINLESS STEEL TO WHOM THE ASSESSEE HAD ALLEGED TO HAVE PAID MONEY IN CASH FOR PURCHASES OF SS FLATS HAD DENIED TO HAVE RECEIVED SUCH ON-MONEY. THE COMPANY HAD NOT ACCEPTED THE STATEMENT OF ITS BRANCH MANAGER SHRI SANDEEP BANSAL OF JODHPUR B RANCH OF THE COMPANY AS MADE ON BEHALF OF THE COMPANY. THEY HAVE CONFIRMED THAT WHA TEVER RECEIPT IS MADE FOR SALES OF SS FLATS THROUGH THE BILLS OF THE PARTIES ARE ONLY COR RECT RECEIPTS AND REGULARLY ENTERED IN THE BOOKS OF ACCOUNT. EVENTUALLY THE ADDITION FOR SUC H ON-MONEY CASH RECEIPTS IN THE HANDS OF JINDAL STAINLESS LTD. ON THE BASIS OF STATEMENT OF SHRI SANDEEP BANSAL HAD BEEN DELETED BY ITAT DELHI G BENCH IN M/S JINDAL STAINLESS L TD. VS. ACIT 19 DTR (DEL) 345. LD. CIT (A) THEREFORE CAME TO THE CONCLUSION THAT NO SUCH CASH ENTRY OF CASH RECEIPTS IN THE BOOKS OF JINDAL STAINLESS LTD. WAS ADMITTED. THERE FORE THERE WAS NO CONCRETE EVIDENCE THAT SHRI SANDEEP BANSAL HAD COLLECTED CASH BY WAY OF ON-MONEY FROM THE ASSESSEE AND DEPOSITED WITH THE ASSESSEES ACCOUNT. FURTHER IN THE STATEMENT OF SHRI SANDEEP BANSAL NO SPECIFIC ASSESSEES NAME WAS MENTIONED. HIS STA TEMENT THAT ALL THE RAW MATERIAL BUYERS OF JODHPUR CITY FROM JINDAL STAINLESS MADE THE PAYM ENT OF ON-MONEY IN CASH AND THE SAME WAS COLLECTED BY HIM ON BEHALF OF THE COMPANY WAS GENERAL. LD. CIT (A) TREATED THIS GENERAL STATEMENT OF SHRI SANDEEP BANSAL WHICH WAS NOT ACCEPTED BY HIS EMPLOYER COMPANY AS RELIABLE IN THE ABSENCE OF ANY CORROBORA TIVE EVIDENCE. LD. CIT (A) ACCORDINGLY DELETED THE ADDITIONS MADE BY THE AO IN BOTH THE YEARS. 6. BEFORE US LD. CIT DR SUPPORTED THE ORDER OF TH E AO. ON THE OTHER HAND LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE AO HAD MADE THE ADDITIONS ON THE BASIS OF STATE MENT GIVEN BY SHRI SANDEEP BANSAL DURING THE COURSE OF SEARCH. AS MENTIONED BY CIT ( A) NO SPECIFIC NAME WAS MENTIONED BY SHRI SANDEEP BANSAL FROM WHOM THE ON-MONEY WAS R ECEIVED. IN THE STATEMENT RECORDED THE NAME OF THE ASSESSEE IS NOT THERE. T HIS STATEMENT OF SHRI SANDEEP BANSAL HAS NOT BEEN ACCEPTED BY M/S JINDAL STAINLESS LTD. THE ADDITION MADE IN THE CASE OF JINDAL 6 STAINLESS LTD. HAS BEEN DELETED BY ITAT DELHI BENCH G IN THE CASE OF JINDAL STAINLESS LTD. VS. ACIT (SUPRA) WHICH WAS MADE ON THE BASIS OF A STATEMENT OF SHRI SANDEEP BANSAL. IN FACT IN THE STATEMENT OF SHRI SANDEEP BANSAL NO SPECIFIC NAME OF ANY PARTY WAS MENTIONED. THE STATEMENT GIVEN BY SHRI SANDEEP BANSAL WAS GENERAL AND IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE NO ADDITION CAN BE MADE ON THE BASIS OF THIRD PARTY STATEMENT. ACCORDINGLY WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF CIT (A) DELETING THE ADDITION MADE BY THE AO IN BOTH THE YEARS. 8. IN THE RESULT THE APPEALS FILED BY THE REVENUE FOR ASSESSMENT YEARS 2003-04 AND 2004-05 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.2011. SD/- SD/- [RAJPAL YADAV] [K.D. RANJAN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 28 TH JULY 2011 DK COPY FORWARDED TO:- 1. APPELLANT. 2. RESPONDENT 3. INCOME-TAX OFFICER 4. CIT 5. DR 6. GUARD FILE ASSTT. REGISTRAR ITAT JODHPUR