B. Abdul Azeez Hassan, Mangalore v. DCIT, Mangalore

ITA 356/BANG/2010 | 1998-1999
Pronouncement Date: 17-03-2011 | Result: Allowed

Appeal Details

RSA Number 35621114 RSA 2010
Bench Bangalore
Appeal Number ITA 356/BANG/2010
Duration Of Justice 1 year(s) 7 day(s)
Appellant B. Abdul Azeez Hassan, Mangalore
Respondent DCIT, Mangalore
Appeal Type Income Tax Appeal
Pronouncement Date 17-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 17-03-2011
Date Of Final Hearing 08-02-2011
Next Hearing Date 08-02-2011
Assessment Year 1998-1999
Appeal Filed On 10-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.356/BANG/2010 ASSESSMENT YEAR : 1998-99 B. ABDUL AZEEZ HASSAN NEW INDIA CORPORATION II FLOOR MILLENIUM TOWERS FALNIR ROAD HIGHLANDS MANGALORE. : APPELLANT VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1) ATTHAVARA MANGALORE. : RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SHRI D. PRABHAKAR REDDY ADDL. CIT (DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL AGGRIEVED BY TH E ORDER OF LD. CIT(A) IN ITA RB-VIII/CIT(A) MNG/2008-09 FOR THE A. Y. 1998-99. 2. THE ASSESSEE HAS RAISED SEVERAL ELABORATE GROUND S HOWEVER THE CRUX OF THE ISSUE IS WITH REGARD TO AN ADDITION OF RS.5 LAKHS SUSTAINED BY THE CIT(A) WHICH WAS AN ADVANCE MADE TO THE M/S. KARWAR DOCK AND PORT ITA NO.356/BANG/10 PAGE 2 OF 6 CONTRACT LABOUR CO-OPERATIVE SOCIETY IN THE PRECEDI NG ASSESSMENT YEAR LACKING EVIDENCE. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF SHIPPING AGENT FILED HIS RETURN OF INCOME FOR THE A.Y. 1998- 99 ON 30.10.98 DECLARING A TAXABLE INCOME OF RS.11 00 270. INITIALLY THE RET URN WAS PROCESSED UNDER SECTION 143(1)(A) OF THE ACT ON 22.3.99. HOWEVER THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) AND 143(1) WAS ISSUED AND ASSESSMENT WAS FINALLY CONCLUDED ON 28.3.2001 U/S. 143(3) OF T HE ACT. 4. LD.A.O. HAD MADE AN ADDITION OF RS. 12 25 763/- TOWARDS DIFFERENCE IN CASH BALANCE WITH M/S. KARWAR DOCK AND PORT CON TRACT LABOUR CO- OPERATIVE SOCIETY. ON APPEAL BEFORE THE LD.CIT(A) B Y THE ASSESSEE LD.CIT(A) HELD IN HIS ORDER DATED 08/01/2008 ON THI S ISSUE THAT NO ADVERSE VIEW CAN BE TAKEN AGAINST THE ASSESSEE AFTER EXAMI NING THE BOOKS OF ACCOUNTS VOUCHERS AND STATEMENTS FROM CERTAIN LABO UR CONTRACTORS. HOWEVER ON THE APPEAL BY THE REVENUE BEFORE THE TRI BUNAL THE MATTER WAS SET ASIDE AND RESTORED TO THE FILE OF LD. CIT(A) FO R DE-NOVA CONSIDERATION AS THE BENCH OBSERVED A CLEAR FLAW IN THE FINDINGS OF THE LD.CIT(A)S ORDER. SUBSEQUENTLY THE LD.CIT(A) VIDE HIS ORDER DATED 07/ 01/2010 CONFIRMED THE ADDITION OF RS 5 00 000/- FINDING NO MERIT IN THE A PPELLANTS ARGUMENT. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREIN B ELOW FOR REFERENCE. 10. I HAVE CAREFULLY CONSIDERED THE FACTS AND THE APPELLANTS SUBMISSION. THE MAIN ARGUMENT OF THE APPELLANT IS THAT OUT OF BILLS AGGREGATING TO RS.27 52 048 RAISED BY HIM AGA INST THE SOCIETY DURING THE FINANCIAL YEAR 1997-98 IT HAD P AID RS.20 71 875 AND THE REMAINING RS.6 80 713 REMAINED AS PAYABLE TO THE SOCIETY. THE CIT(A)S OBSERVATION WAS THAT SINCE THE ITA NO.356/BANG/10 PAGE 3 OF 6 APPELLANT HAD PRODUCED COPIES OF THE BILLS FOR RS.2 7 52 048 AND SINCE THE SOCIETY HAD CONFIRMED HAVING RECEIVED RS. 20 71 875 THE CREDIT BALANCE COULD NOT HAVE BEEN DISALLOWED. 11. I FIND THAT THE AMOUNT OF RS.5 00 000 ON WHICH THE CIT(A) ALLOWED RELIEF DID NOT REPRESENT EXPENDITURE BUT A N ADVANCE MADE BY THE APPELLANT TO THE SOCIETY AS THE APPELLANT H IMSELF ADMITS. ON THE OTHER HAND THE DISALLOWANCE MADE BY THE ASS ESSING OFFICER WAS ON ACCOUNT OF A DIFFERENCE IN CREDIT BALANCE AT THE END OF THE YEAR WHICH HAD NOTHING TO DO WITH THE EXPENDITURE OF LIKE AMOUNT DISALLOWED IN THE EARLIER ASSESSMENT YEAR. IT MIGHT BE TRUE THAT THE SOCIETY OWED THE SUM OF RS.5 00 000 T O THE APPELLANT AS ON 31-3-1997 AND THAT THE APPELLANT OWNED A SUM OF RS.1 80 173 TO THE SOCIETY AS ON 31-3-1998 BUT THI S DOES NOT IN ANY WAY ESTABLISH THAT THERE WAS A DOUBLE ADDITION OF THE SAME AMOUNT OR THAT THE AMOUNT OF RS.5 00 000 WAS INCLUD ED IN THE CREDIT BALANCE OF RS.6 80 173 CLAIMED TO HAVE BEEN OUTSTANDING AS ON 31.03.1998 OR IN THE SUM OF RS.12 25 763 DIS ALLOWED. THE DIFFERENCES IN BILLS AND THE SO CALLED ACCOUNTING MISTAKE POINTED OUT IN PARAGRAPH 9 ARE A FURTHER POINTER TO THE UNRELIABILITY OF THE APPELLANTS BOOKS OF ACCOUNT. 12. THE APPELLANTS AVERMENT THAT HE HAD NOT DISPUT ED THE ADDITION OF RS.5 00 000 MADE IN ASSESSMENT YEAR 199 7-98 WHICH WAS CONFIRMED BY CIT(A) DOES NOT PROVE THAT THE SAM E SUM WAS A PART OF THE ADDITION MADE BY THE ASSESSING OFFICE R IN BOTH ASSESSMENT YEARS 1997-98 AND 1998-99. THE APPELLAN T HAS NOT PRODUCED ANY NEW EVIDENCE TO SUPPORT HIS CONTENTION THAT THE SUM OF RS.12 25 763 ADDED BACK BY THE ASSESSING OFF ICER IN THIS ASSESSMENT YEAR INCLUDED THE SUM OF RS.5 00 000 AD VANCED TO THE SOCIETY IN THE PRECEDING ASSESSMENT YEAR. I FIND N O MERIT IN THE APPELLANTS ARGUMENTS AND THEREFORE CONFIRM THE ADD ITION OF RS.5 00 000. THE GROUND OF APPEAL IS DISMISSED. 5. LD. AR SUBMITTED BEFORE US THAT THE SUM OF RS. 5 00 000/- ACTUALLY REPRESENTED AN ADVANCE PAID BY THE APPELLANT TO THE AFORESAID SOCIETY ON 20.3.1997. HOWEVER FOR THE FINANCIAL YEAR 1996-97 THE APPELLANT INSTEAD OF SHOWING THIS AMOUNT AS AN ADVANCE IN HIS BALANCE SHEET CLAIMED IT AS AN EXPENDITURE. IN THE COURSE OF THE ASSESSMENT PR OCEEDINGS FOR THE A.Y. 1996-97 THE LD. AO HAD NOTICED THIS ERROR AND MADE THE ADDITION FOR RS.5 ITA NO.356/BANG/10 PAGE 4 OF 6 LAKHS WHICH HAD BECOME FINAL AS THERE WAS NO APPEA L FILED ON THIS ISSUE FOR THE A.Y. 1996-97. LD. AR FURTHER SUBMITTED THAT IN THE COURSE OF THE PROCEEDINGS BEFORE THE LD. CIT(A) IN THE SECOND ROU ND THE APPELLANT HAD EXPLAINED THESE FACTS AND SAME HAD BEEN TAKEN NOTE OF BY THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDER. HOWEVER THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE APPELLANT THAT THE AFORESAID SUM OF RS.5 LAKHS WHICH WAS WRONGLY CLAIMED AS DEDUCTION IN THE FINANCIAL Y EAR 1996-97 AND DISALLOWED HAS TO BE CONSIDERED AS OPENING BALANCE OF THE SOCIETY ON 1.4.1997 AND IF IT IS FOUND SO THERE WAS NO DIFFER ENCE IN THE BALANCE AT THE END OF THE FINANCIAL YEAR 1997-98. LD. AR EXPLAIN ED THAT THE AFORESAID SUM OF RS.5 LAKHS DOES NOT ACTUALLY REPRESENT DIFFE RENCE IN CREDIT BALANCE IF THIS ASPECT IS TAKEN INTO CONSIDERATION. WITH THE ABOVE SUBMISSION LD. AR PRAYED THAT THE ADDITION ON THIS SCORE MAY BE DELET ED. 6. LD. DR VEHEMENTLY OPPOSED THE SUBMISSION MADE BY THE LD. AR AND RELIED UPON THE ORDER OF THE REVENUE FOR SUSTAINING THE ADDITION OF RS.5 LAKHS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND THE PAPERBOOK SUBMITTED BY THE APPELLANT . THIS IS A CASE WHEREIN THE RECONCILIATION STATEMENT HAS TO BE VERI FIED FROM THE BOOKS OF ACCOUNTS AND THE VOUCHERS. THE LD. CIT(A) IN HIS O RDER HAS CATEGORICALLY MENTIONED THAT THE APPELLANT HAS NOT PRODUCED ANY N EW EVIDENCE TO SUPPORT HIS ASSERTION THAT THE SUM OF RS.12 25 763 ADDED BACK BY THE AO IN THIS ASSESSMENT YEAR INCLUDED THE SUM OF RS.5 LA KHS ADVANCED TO THE SOCIETY IN THE PRECEDING YEAR. AS WE HAVE OBSERVED ABOVE THESE FACTS CAN BE VERIFIED ONLY FROM THE BOOKS OF ACCOUNTS ALONG W ITH THE RELEVANT ITA NO.356/BANG/10 PAGE 5 OF 6 VOUCHERS AND RECONCILIATION STATEMENT. LD. AR HAS SUBMITTED BEFORE US CERTAIN XEROX COPIES OF THE LEDGER ACCOUNT AND THE BALANCE SHEET WHICH CONTAINS THE ENTRY FOR RS.5 LAKHS AND DISCLOSURE OF RS.5LAKHS IN THE BALANCE SHEET UNDER THE HEAD DEPOSITS AND ADVANCE. HOWEVER UNLESS THERE IS AN OVERALL EXAMINATION OF THE BOOKS OF ACCOUNTS AND TH E STATEMENT OF AFFAIRS SUCH FACTS CANNOT BE VERIFIED. IT ALSO APPEARS THA T THE ASSESSEE HAS NOT PRESENTED HIS CASE VIVIDLY BEFORE THE LD. AO AND TH E LD. CIT(A). THEREFORE IN THE INTEREST OF JUSTICE WE REMIT BACK THIS ISSU E TO THE FILE OF THE LD. AO FOR A PROPER EXAMINATION AND VERIFICATION OF THE BOOKS OF ACCOUNTS WITH THE RELEVANT RECORDS AND PASS APPROPRIATE ORDE R ON MERITS. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE REVENUE PROMPTLY IN ITS PROCEEDINGS. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF MARCH 2011. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 17 TH MARCH 2011. DS/- ITA NO.356/BANG/10 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.