ACIT, New Delhi v. Sh. Sant Kumar Arora, New Delhi

ITA 3329/DEL/2009 | 2005-2006
Pronouncement Date: 13-01-2010 | Result: Dismissed

Appeal Details

RSA Number 332920114 RSA 2009
Bench Delhi
Appeal Number ITA 3329/DEL/2009
Duration Of Justice 5 month(s) 20 day(s)
Appellant ACIT, New Delhi
Respondent Sh. Sant Kumar Arora, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 13-01-2010
Date Of Final Hearing 13-01-2010
Next Hearing Date 13-01-2010
Assessment Year 2005-2006
Appeal Filed On 24-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO. 3329(DEL)2009] ASSESSMENT YEAR: 2005-06 ASSTT.COMMISSIONER OF INCOME TAX SHRI SANT KU MAR ARORA CIRCLE 35(1) NEW DELHI. V. PROP . M/S. SAHIB GARMENTS C-65 B EAST KRISHNA NAGAR DELHI-110051. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI MUKESH VERMA SR. DR RESPONDENT BY: NONE ORDER PER A.D. JAIN J.M. THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2005-06 TAKING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 13 72 866/- M ADE BY THE AO ON ACCOUNT OF CASH CREDIT U/S 68 OF THE I.T. ACT 1961 . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 29 667/- MADE BY THE AO ON ACCOUNT OF SALES TAX PAYABLE U/S 43 B OF THE I.T. A CT 1961. ITA 3329(DEL)09 2 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE SERVICE OF NOTICE. FINDING THAT THE MATTER CAN BE PROCEEDED IN THE ABS ENCE OF THE ASSESSEE WE ARE DOING SO. 3. APROPOS GROUND NO.1 THE AO OBSERVED THAT THE AS SESSEE WAS ENGAGED IN THE BUSINESS OF TRADING IN READY-MADE GARMENTS A ND CLOTHES. THE ASSESSEE HAS SHOWN G.P. RATE OF 17.69% ON THE TURN OVER OF RS. 2 56 12 878/-. IT HAD SHOWN SUNDRY CREDITORS OF RS. 1 30 56 841/- IN THE BALANCE SHEET. INFORMATION U/S 133(6) OF THE ACT WAS CALLED FOR. THE FOLLOWING PARTIES DID NOT FURNISH THE DESIRED INFORMATION:- RS. 1. M/S. JMD SALES 2 13 427/- 2. M/S. ISHAN APPLIANCES 2 13 963/- 3. M/S. KAY CLASSIC KNITWEAR 2 67 845/- 4. M/S. MOLLYS CLOTHING PVT.LTD. 2 13 075/- 5. M/S. KAY STYLE KNITWEAR 2 29 556/- 6. SH. SANTOSH RANA 13 72 866/- 4. THE AO COULD NOT FURNISH THE CONFIRMATIONS REQUI RED REGARDING THE ACCOUNTS OF THE PARTIES NOR HAD THE PARTIES BEEN P RODUCED. NONE ATTENDED ON BEHALF OF THE ASSESSEE DESPITE SHOW CAUSE NOTICE. NOT EVEN A REPLY WAS SENT. IN THESE FACTS FINDING THAT NO EXPLANATION HAD BEE N OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF THE AMOUNT THE AMOU NT OF RS. 13 72 866/- WAS ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF T HE ACT. THE LEARNED ITA 3329(DEL)09 3 CIT(A) HAVING DELETED THIS ADDITION BY VIRTUE OF TH E IMPUGNED ORDER GROUND NO.1 HAS BEEN RAISED. 5. CHALLENGING THE IMPUGNED ORDER THE LEARNED DR H AS ARGUED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 13 72 866/- CORRECTLY MADE ON ACCOUNT OF THE CASH CREDIT U/S 68 OF THE AC T THAT DESPITE SEVERAL OPPORTUNITIES THE ASSESSEE DID NOT FURNISH ANY EXP LANATION WHATSOEVER WITH REGARD TO THE SOURCE OF THESE FUNDS; THAT NONE OF T HE SIX PARTIES FURNISHED THE DESIRED INFORMATION BEFORE THE AO; AND THAT IN THES E CIRCUMSTANCES THE ADDITION MADE WAS CORRECTLY MADE. 6. HAVING CONSIDERED THE ARGUMENTS ON BEHALF OF THE DEPARTMENT IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD WE DO NO T FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A). DURING THE YEAR THE ASS ESSEE WAS ENGAGED IN THE BUSINESS OF TRADING OF READY MADE GARMENTS. THIS BUSINESS WAS THEREAFTER CLOSED AS SUBMITTED BEFORE THE LD. CIT(A). THE A SSESSEE CLOSED ITS BUSINESS AND SOLD OUT ITS SHOW ROOM AFTER THE SEARCH WAS CON DUCTED ON HIM ON 30.11.2004. THE ASSESSEE HAD SHOWN SUNDRY CREDITO RS OF RS. 1 30 56 841/- IN HIS BALANCE SHEET FOR THE YEAR. THE AO CALLED FOR CONFIRMATION OF EVIDENCE FROM MORE THAN 50 PARTIES . SIX PARTIES CONCERNING THE AMOUNT OF RS. 13 72 866/- DID NOT FURNISH THE INFORMATION. THE ASSESSEE WAS SHOW CAUSED . THE SAID TIME OF ONLY ABOUT A FORTNIGHT W AS AFFORDED TO HIM TO ITA 3329(DEL)09 4 FURNISH THE CONFIRMATIONS . THE PARTIES AS PER T HE ASSESSEE WERE NOT PAID THEIR DUES IN TIME DUE TO THE CLOSURE OF THE ASSESS EES BUSINESS AND AS SUCH THEY DID NOT GIVE THEIR CONFIRMATIONS AT THAT RELEV ANT TIME. THE ASSESSEE HAD FURNISHED BEFORE THE AO THE LEDGER COPY OF THESE CR EDITORS ALONG WITH COPY OF BANK ACCOUNT REFLECTING PAYMENT MADE. THIS HO WEVER WAS NOT ACCEPTED BY THE AO. BEFORE THE LEARNED CIT(A) THE ASSESSE E DULY FURNISHED THE CONFIRMATIONS OF EVIDENCE ALONG WITH LEDGER COPY OF THE NEXT YEAR WITH THE COPY OF THE BANK STATEMENTS. THE AO IT IS SEEN MADE THE ADDITION DUE TO ABSENCE OF CONFIRMATIONS FROM THE PARTIES. NO OTH ER REASON WAS ACCORDED FOR MAKING THE ADDITION. PERTINENTLY THE ASSESSE E WAS AFFORDED ONLY TIME OF A FORTNIGHT FOR PRESENTING THE CONFIRMATIONS. THE ASSESSEE HOWEVER COULD NOT DO SO SINCE THE PARTIES DID NOT TENDER THEIR C ONFIRMATIONS THEY HAVING NOT BEEN PAID THEIR DUES IN TIME DUE TO THE CLOSUR E OF THE ASSESSEES BUSINESS. THIS INFORMATION WAS HOWEVER DULY FUR NISHED BEFORE THE LD. CIT(A). MOREOVER THE ASSESSEE HAD SUBMITTED THE L EDGER COPIES OF THESE CREDITORS ALONG WITH COPY OF BANK ACCOUNT SHOWING T HE PAYMENTS MADE. CONFIRMATIONS OF EVIDENCE WERE FILED ALONG WITH COP IES OF LEDGER ACCOUNT OF THE PARTIES FOR THE NEXT YEAR AND THE COPY OF BANK ACCOUNT SHOWING THE PAYMENTS MADE TO THEM. THE LD. CIT(A) FOUND THE C REDITS TO BE ON ACCOUNT ITA 3329(DEL)09 5 OF TRADE CREDITORS/SUPPLIERS. THE AMOUNTS WERE T HEREFORE NOT CASH CREDITS AS SUCH. 7. IN VIEW OF THE ABOVE THE LEARNED CIT(A) CORRECT LY DELETED THE ADDITION MADE. AS SUCH FINDING NO FORCE THEREIN GROUND NO.1 IS REJECTED. 8. THE ONLY OTHER ISSUE RAISED IS AGAINST THE DELET ION BY THE LD. CIT(A) OF THE ADDITION OF RS. 29 667/- MADE BY THE AO ON ACCO UNT OF SALES TAX PAYABLE. 9. RS. 29 667/- HAD BEEN SHOWN BY THE ASSESSEE IN H IS BALANCE SHEET ON ACCOUNT OF SALES TAX PAYABLE. THE PROOF THEREOF W AS HOWEVER NOT FURNISHED BY THE ASSESSEE ALONG WITH THE RETURN. HOLDING THA T THE DEDUCTION WAS NOT ALLOWABLE U/S 43 B OF THE ACT THE AMOUNT SO ADDED BY THE AO TO THE INCOME OF THE ASSESSEE. THE LD. CIT(A) DELETED THIS ADDI TION. THEREFORE GROUND NO. 2 . 10. THE LEARNED DR HAS ARGUED THAT THE LD. CIT(A) H AS ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE AO; THAT THE AS SESSEE DID NOT FURNISH ANY PROOF OF THE AMOUNT OF RS. 29 667/- SHOWN IN THE AS SESSEES BALANCE SHEET AS SALES TAX PAYABLE; AND THAT THEREFORE THE ASSESSEE WAS JUSTIFIED IN MAKING THE ADDITION. 11. IN THIS REGARD THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE SALES TAX PAYABLE OF RS. 29 667/- WAS PAID ON 25.7. 2005. THE ASSESSEE FILED BEFORE THE LD. CIT(A) COPIES OF SALES TAX CHALLANS SUPPORTING THE SAID ITA 3329(DEL)09 6 PAYMENT. SALES TAX WAS THUS FOUND TO HAVE BEEN PA ID BEFORE THE DUE DATE FOR FURNISHING THE RETURN OF INCOME U/S 139(1) OF T HE ACT. THE PROVISIONS OF SECTION 43 B OF THE ACT WERE HENCE CORRECTLY HELD T O BE INAPPLICABLE AS PER THE FIRST PROVISO TO THE SAID SECTION. 12. IN VIEW OF THE ABOVE GROUND NO.2 RAISED HAS NO FORCE AND IS REJECTED AS SUCH. 13. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.01.2010. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13.01.2010. *RM COPY FORWARDED TO: 1. ASSTT.COMMISSIONER OF INCOME TAX CIRCLE 35(1) NEW DELHI. 2. SHRI SANT KUMAR ARORA PROP. M/S. SAHIB GARMENTS C-65 B EAST KRISHNA NAGAR DELHI-110051. 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR