M/s.Shree Shyama Industries,, Kala Amb v. CIT,, Shimla

ITA 412/CHANDI/2010 | 2005-2006
Pronouncement Date: 28-05-2010 | Result: Dismissed

Appeal Details

RSA Number 41221514 RSA 2010
Bench Chandigarh
Appeal Number ITA 412/CHANDI/2010
Duration Of Justice 1 month(s) 7 day(s)
Appellant M/s.Shree Shyama Industries,, Kala Amb
Respondent CIT,, Shimla
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-05-2010
Assessment Year 2005-2006
Appeal Filed On 21-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES (A) BEFORE SHRI G.S.PANNU ACCOUNTANT MEMBER AND MS.SUSHMA CHOWLA JUDICIAL MEMBER ITA 412/CHD/2010 ASSESSMENT YEAR : 2005-06 M/S SHREE SHYAMA INDUSTRIES V C.I.T. KALA AMB. SHIMLA. PAN : ABAFS-8026R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIKRANT KACKRIA RESPONDENT BY: SMT.JAI SHREE SHARMA ORDER PER G.S.PANNU AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX SHIMLA ( IN SHOR T THE COMMISSIONER) DATED 29.03.2010 FOR THE ASSESSMENT Y EAR 2005-06. BY WAY OF THE IMPUGNED ORDER THE COMMISS IONER HAS HELD THE ASSESSMENT ORDER PASSED BY THE ASSESSING O FFICER U/S 143(3) OF THE INCOME TAX ACT 1961 ( IN SHORT 'THE ACT') ON 28.12.2007 AS ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE AC T IN RELATION TO THE UNEXPLAINED CREDIT BALANCES SHOWN BY THE ASS ESSEE AGAINST TWO PARTIES AMOUNTING TO RS.5 32 263/-. 2. BRIEFLY PUT FACTS RELEVANT TO THE AFORESAID ISS UE ARE AS FOLLOWS. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE ENQUIRIES IN RESPECT OF SOME OF THE SU NDRY CREDITORS WHICH INCLUDED THE TWO CREDITORS NAMELY M/S TONY TR ADING CO. & M/S DIWAKAR TRADERS AGAINST WHOM CREDIT BALANCES O F 2 RS.3 32 262/- AND RS.2 00 000/- RESPECTIVELY WERE S HOWN IN THE BALANCE SHEET AS AT THE END OF THE YEAR UNDER CONSI DERATION. BOTH THE PARTIES SENT REPLIES TO THE ENQUIRIES MADE BY THE ASSESSING OFFICER. SUCH REPLIES SHOWED THAT AS PER THE BOOKS OF ACCOUNT MAINTAINED BY THE CREDITORS THERE WAS NO C LOSING BALANCE IN THE ASSESSEE'S ACCOUNT AS AT THE END OF THE YEAR UNDER CONSIDERATION. THE COMMISSIONER HAS OBSERVED THAT THE ABOVE INFORMATION RECEIVED FROM THE TWO CREDITORS WAS AVA ILABLE ON THE FILE AT THE TIME OF PASSING OF ASSESSMENT ORDER ON 28.12.2007. HOWEVER THE ASSESSING OFFICER FAILED TO NOTE THE I NFORMATION FURNISHED BY THE PARTIES WHICH WAS CONTRARY TO THE CREDIT BALANCES SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. THE COMMISSIONER FURTHER NOTES THAT NO QUERY ON THIS PO INT WAS RAISED BY THE ASSESSING OFFICER AND NO ADDITION WAS MADE W ITH RESPECT TO THE CREDIT BALANCES SHOWN AMOUNTING TO RS.5 32 2 62/- WHICH WERE OSTENSIBLY RENDERED UNEXPLAINED. ON THE BASIS OF THE AFORESAID THE COMMISSIONER SHOW CAUSED THE ASSESSE E U/S 263 OF THE ACT AS TO WHY THE ASSESSMENT ORDER SHOULD NO T BE CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO THE I NTERESTS OF THE REVENUE. 3. BEFORE THE COMMISSIONER ASSESSEE CONTENDED THAT ITS OWN ACCOUNTS WERE CORRECT IN PREFERENCE TO THE REPLIES FURNISHED BY THE TWO CREDITORS. THE COMMISSIONER EXAMINED THE R EPLY AND FOUND THAT THERE IS NO EVIDENCE TO SUPPORT THE ASSE RTION OF THE ASSESSEE THAT ITS OWN ACCOUNTS ARE CORRECT IN PREFE RENCE TO THOSE OF THE TWO CREDITORS. FOR THE REASON THAT THE ASSE SSING OFFICER HAVING MADE ENQUIRIES AND RECEIVED THE INFORMATION FROM THE PARTIES BUT DID NOT BOTHER TO VERIFY THIS INFORMAT ION WITH REFERENCE TO THE BOOKS OF ACCOUNT OF THE ASSESSEE THE 3 ASSESSMENT WAS HELD AS COMPLETED WITH NO APPLICATIO N OF MIND AS FAR AS THE ISSUE OF THE CREDIT BALANCE OF TWO PARTI ES WAS CONCERNED. AS A RESULT THEREOF THE FOLLOWING DIRE CTION HAS BEEN GIVEN BY THE COMMISSIONER IN PARA 6 OF HIS ORDER : IN VIEW OF THE ABOVE I HAVE NO HESITATION IN HOLDING THAT THE ASSESSMENT ORDER DATED 28.12.2007 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE ISSUE OF UNEXPLAINED CREDIT BALANCE S SHOWN BY THE ASSESSEE AGAINST THE TWO TRADING PARTIES. THE ORDER IS HEREBY SET ASIDE U/S 263 AND THE ASSESSING OFFICER IS DIRECTED TO MAKE A FRESH ASSESSMENT AFTER EXAMINING THE ABOVE FACTS AND AFTER CONSIDERING THE LEGITIMATE ADDITION OF RS.5 32 262/- U/S 68 IN RESPECT OF THE UNEXPLAINED CREDIT BALANCES SHOWN IN THE ACCOUNTS OF M/S TONY TRADING CO. AND M/S DIWAKAR TRADERS. THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY OF BEING HEARD. 4. AGAINST THE AFORESAID THE ASSESSEE IS IN APPEA L BEFORE US. BEFORE US LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ORDER OF THE COMMISSIONER WAS NOT CORRECT. AS PER THE LEARNED COUNSEL THE IMPUGNED ORDER PASSED BY THE COMMISSIO NER IS BASED ON PRESUMPTIVE INFORMATION AND ON SUSPICION CONJECTURES AND SURMISES AND WAS THEREFORE BAD IN LAW. 5. WE HAVE CAREFULLY EXAMINED THE CONTENTIONS RAISE D BY THE APPELLANT AND FIND NO FORCE IN THE SAME. THERE IS NO DENYING THE FACT THAT THE INFORMATION FROM THE TWO CREDITORS WA S AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF PASSING OF ASS ESSMENT ORDER ON 28.12.2007 AND SUCH INFORMATION WAS CONTRARY TO THE CREDIT BALANCES SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCO UNT. IT IS ALSO NOT DISPUTED THAT AS A CONSEQUENCE TO SUCH ADV ERSE INFORMATION THE ASSESSING OFFICER DID NOT MAKE ANY FURTHER ENQUIRIES FROM THE ASSESSEE. HE HAS PROCEEDED TO AC CEPT THE VERSION DEPICTED IN THE ASSESSEE'S BOOKS OF ACCOUNT WITH RESPECT TO TWO PARTIES WITHOUT PROPER APPLICATION OF MIND. THUS IN OUR 4 VIEW SUCH AN ASSESSMENT ORDER SUFFERS FROM VICES O F BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT IN SO FAR AS IT RELATES TO THE CREDIT BALANCE OF RS.5 32 262/- IN RESPECT OF THE T WO PARTIES. WE FIND AMPLE JUSTIFICATION FOR THE COMMISSIONER TO IN VOKE HIS SUPERVISORY JURISDICTION AS PROVIDED IN SECTION 263 OF THE ACT. 6. AN ALTERNATIVE PLEA HAS BEEN RAISED BY THE LEARN ED COUNSEL FOR THE APPELLANT TO SAY THAT THOUGH THE CO MMISSIONER HAS MERELY SET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT BUT AFTER GIVING A FIRM DIRECTION TO MAKE THE ADDITION OF RS.5 32 263/- AS UNEXPLAINED BALANCE U/S 68 OF THE ACT. AS PER THE COUNSEL IN THIS LIGHT THE DIRECTION BY THE COMMISSIONER TO ALLOW THE ASSESSEE AN OPPORTUNITY OF BEING HEARD BY THE ASSESSING OFFICER WOULD BE AN EMPTY FORMALITY. HE THEREFORE SUBMITTED THAT THE A SSESSEE BE ALLOWED AN APPROPRIATE OPPORTUNITY OF BEING HEARD A ND THE ASSESSING OFFICER BE DIRECTED TO TAKE INTO CONSIDER ATION THE SUBMISSIONS OF THE ASSESSEE AND THEREAFTER PASS AN ORDER. THE LEARNED DR APPEARING FOR THE REVENUE DID NOT SERIO USLY DISPUTE THE ALTERNATIVE PLEA SET UP BY THE ASSESSEE. 7. WE HAVE EXAMINED THE ALTERNATIVE PLEA SET UP BY THE ASSESSEE. WE ARE CONVINCED THAT THE APPREHENSION OF THE APPELLANT HAS FORCE. IN PARA 6 OF THE IMPUGNED ORD ER THE COMMISSIONER DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT AFTER CONSIDERING THE LEGITIMATE ADDITION OF RS.5 32 262/- U/S 68 PERTAINING TO THE TWO CREDITORS IN QUESTION. FURTHER THE COMMISSIONER HAS DIRECTED T HAT THE ASSESSEE MAYBE GIVEN AN OPPORTUNITY OF BEING HEARD. QUITE 5 CLEARLY THE OBSERVATION OF THE COMMISSIONER THAT A DDITION OF RS.5 32 263/- IS LEGITIMATE WOULD OPERATE AS A COMPULSIVE OPINION QUA THE ASSESSING OFFICER SINCE THE COMMISS IONER IS AN AUTHORITY HIGHER THAN THE ASSESSING OFFICER. THUS ALLOWING OF AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD WOULD B E AN EMPTY FORMALITY AS RIGHTLY POINTED OUT BY THE ASSESSEE. THEREFORE WE MODIFY THE IMPUGNED ORDER OF THE COMMISSIONER. WHI LE THE ACTION OF THE COMMISSIONER IN SETTING ASIDE THE ASS ESSMENT QUA THE TWO CREDITORS IN QUESTION IS UPHELD THE ASSESS ING OFFICER IS DIRECTED TO EXAMINE THE ENTIRE MATERIAL ON RECORD I NCLUDING OTHER MATERIAL AS THE ASSESSEE MAY CHOSE TO FILE IN SUPPO RT OF HIS RETURN OF INCOME AND THEREAFTER PASS AN ORDER AFRE SH IN ACCORDANCE WITH LAW. 8. SUBJECT TO THE AFORESAID OBSERVATIONS THE APPEA L OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.05.2010. SD/- SD/- (SUSHMA CHOWLA) ( G.S.PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH MAY 2010. POONAM COPY TO : THE APPELLANT/THE RESPONDENT/THE CIT (A)/ THE CIT/THE DR.