Priyam Trading & Investment Pvt.Ltd.,, Ahmedabad v. The Income tax Officer,Ward-5(2),, Ahmedabad

ITA 4360/AHD/2007 | 1997-1998
Pronouncement Date: 30-07-2010 | Result: Allowed

Appeal Details

RSA Number 436020514 RSA 2007
Assessee PAN AAACP8851F
Bench Ahmedabad
Appeal Number ITA 4360/AHD/2007
Duration Of Justice 2 year(s) 7 month(s) 20 day(s)
Appellant Priyam Trading & Investment Pvt.Ltd.,, Ahmedabad
Respondent The Income tax Officer,Ward-5(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 30-07-2010
Date Of Final Hearing 28-07-2010
Next Hearing Date 28-07-2010
Assessment Year 1997-1998
Appeal Filed On 10-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING :29-7-10 DRAFTED ON: 29-7-10 ITA NO. 4360 /AHD/ 2007 ASSESSMENT YEAR :1997-98 PRIYAM TRADING & INVESTMENTS PVT.LTD. DEVASHISH 39 SARDAR PATEL NAGAR ELLISBRIDGE AHMEDABAD. VS. INCOME TAX OFFICER WARD 5(2) C.U.SHAH BUILDING ASHRAM ROAD AHMEDABAD. PAN/GIR NO. : AAACP 8851F (A PPELLANT ) .. ( RESPONDENT ) ITA NO . 4413 /AHD/ 2007 ASSESSMENT YEAR :1997-98 INCOME TAX OFFICER WARD 5(2) C.U.SHAH BUILDING ASHRAM ROAD AHMEDABAD. VS. PRIYAM TRADING & INVESTMENTS PVT.LTD. DEVASHISH 39 SARDAR PATEL NAGAR ELLISBRIDGE AHMEDABAD. PAN/GIR NO. : AAACP 8851F (A PPELLANT ) .. ( RESPONDENT ) C.O. NO.33/AHD/2008 IN ITA NO.4360/AHD/2007 ASSESSMENT YEAR :1997-98 PRIYAM TRADING & INVESTMENTS PVT.LTD. DEVASHISH 39 SARDAR PATEL NAGAR ELLISBRIDGE AHMEDABAD. VS. INCOME TAX OFFICER WARD 5(2) C.U.SHAH BUILDING ASHRAM ROAD AHMEDABAD. PAN/GIR NO. : AAACP 8851F (A PPELLANT ) .. ( RESPONDENT ) BY A SSESSEE : SHRI S.N.DIVATIA. B Y DEPARTMENT : SHRI SUDHANSHU S. JHA D.R. - 2 - O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THESE ARE THE CROSS APPEALS FILED BY T HE ASSESSEE AND THE DEPARTMENT AND CROSS OBJECTION FILED BY THE ASSESSE E AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-XI AHMEDABAD DATED 3-10-2007. 2. THE GROUNDS OF APPEAL RAISED BY THE ASS ESSEE ARE AS UNDER :- 1.1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN LAW AND/OR FACTS IN CONFIRMING THE PEN ALTY TO THE EXTENT OF 100% ON THE GROUND THAT THE APPELL ANT HAD SUPPRESSED SALES AND THEREBY CONCEALED THE INCOME. 1.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT NOT TO HAVE UPHELD THE APPELLANT HAD CONCEALED INCOME BY WAY OF SUPPRESSION OF SALES. 1.3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS FAILED TO APPRECIATE THAT WHEN ACCOMMODATION BILLS WERE ISSUED SO AS TO AVAIL B/D FACILITY THER E WERE NO ACTUAL SALES MUCH LESS SUPPRESSION OF SALES SO THAT THERE WAS NO QUESTION OF CONCEALING OF THE SAME. 3. GROUND RAISED BY THE REVENUE IS AS UNDER: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) XI AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN REDUCING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE I.T. ACT 1961 FROM `.8 96 950/- TO `.2 98 983/- 4. THE GROUNDS OF CROSS OBJECTION ARE AS UNDE R :- 1.1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND/OR ON FACTS IN UPHOLDING PENALTY U NDER SECTION 271(1)(C) TO THE EXTENT OF RS.2 98 983/-. 5. SINCE THE FACTS AND ISSUE INVOLVED IN ALL T HE GROUNDS OF APPEAL AND CROSS OBJECTION ARE COMMON THEY ARE BEING CONSI DERED AND DECIDED TOGETHER AS UNDER. - 3 - 6. WE HAVE HEARD THE VIRAL PARTIES AND PERUSED TH E MATERIAL PLACED ON RECORD. IN THE INSTANT CASE THE ASSESSE E HAS SHOWN BANK LIABILITY OF `.16 13 432/- UNDER THE HEAD BILL DISCOUNTING IN THE BALANCE SHEET AS AT 31-3-1997. ON VERIFICATION THE LEARNED ASSESSING OFFICER FOUND THAT THE ABOVE AMOUNT WAS R ECEIVED BY THE ASSESSEE ON DISCOUNTING OF TWO BILLS TOTALLING TO ` .16 13 432/- IN THE NAME OF ACHAL TEXTILE INDUSTRIES PVT. LTD. ON VERIF ICATION OF SALE REGISTER OF THE ASSESSEE THE LEARNED ASSESSING OFFI CER FOUND THAT THESE TWO BILLS WERE NOT ENTERED THEREIN AND IN PLA CE OF THESE TWO BILLS BILLS WERE RAISED IN THE NAME OF ASHOK SPINT EX FOR `.9 18 163/- ON THE BASIS OF THE ABOVE THE LEARNED ASSESSING OFF ICER MADE ADDITION OF `.6 95 310/- AS SUPPRESSED SALES WHICH WAS THOUGH DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) BUT WAS REVERSED BY THE TRIBUNAL IN THE REVENUES APPEA L. THUS THE TRIBUNAL CONFIRMED THE ADDITION OF `.6.95 310/- IN THE HANDS OF THE ASSESSEE. 7. ON THE ABOVE BACKGROUND PENALTY PROCEEDINGS U /S. 271(1)(C) WAS INITIATED BY THE LEARNED ASSESSING OFFICER AND THE LEARNED ASSESSING OFFICER LEVIED PENALTY @ 300% OF THE TAX SOUGHT TO BE EVADED WHICH WORKED OUT TO `.8 96 950/- . 8. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THOUGH CONFIRMED THE LEVY OF PENALTY UNDER SECTION 271(1)(C) BUT REDUCED THE SAME TO 100% OF THE TAX SOUGHT TO BE EV ADED WHICH WORKED OUT TO `.2 98 983/-. 9. AGAINST THIS ORDER OF THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) BOTH THE PARTIES ARE IN APPEAL BEFORE US. 10. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE POINTED OUT FROM THE ORDER OF ASSESSMENT DATED 7-3- 2000 PASSED BY THE A.O. THAT IT WAS EXPLAINED TO THE LEARNED AS SESSING OFFICER THAT THE BILLS RAISED IN THE NAME OF ACHAL TEXTILES INDUSTRIES PVT. LTD. WERE ONLY ACCOMMODATION BILLS FOR ARRANGING WO RKING CAPITAL - 4 - FROM BANK AND IT WAS NOT ACTUAL SALE TRANSACTION. T HE RELEVANT OBSERVATION IN THE ORDER OF ASSESSMENT IS AS BELOW: - 3.3. THE ASSESSEE REPLIED AS UNDER VIDE LETTER DT.24-1- 2000 AND 28-1-2000. THE MAIN EXTRACTS ARE BEING REPRODUCED BELOW :- THE MODUS OPERANDI OF THE SAID BILL DISCOUNTING OPERATION WAS THAT WE ARE ENJOYING B.D. FACILITY OF `.20 LAKHS FROM BANK OF BARODA GANDHI ROAD BRANCH AHMEDABAD. THIS FACILITY HAS BEEN ALLOWED TO DISCOU NT DOCUMENTARY BILLS OF USANCE AND IT HAS TO BE ACCOMP ANIED BY INVOICES ETC. SINCE WE WERE SHORT OF WORKING FUN D WE DECIDED TO AVAIL THIS FACILITY BY ISSUING BILLS IN THE NAME OF M/S. ACHAL TEXTILE INDUSTRIES PVT. LTD. THOUGH THE SAME WAS NOT BACKED BY ACTUAL DELIVERY OF GOODS NOW AS SOON AS THE BILLS OF EXCHANGE DRAWN BY US ON ACHAL TEXTILE INDUSTRIES PVT. LTD. IS ACCEPTED BY ACHAL TEXTILE INDUSTRIES PVT. LTD. AND IT IS PRESENTED I N THE BANK WITH THE COPY OF THE SALES BILL THE BANK MAKES THE DISBURSEMENT UNDER THE SAID FACILITY. THEREAFTER W HEN THE DATE OF MATURITY OF BILL OF EXCHANGE ARRIVES THE S AID ACHAL TEXTILE INDUSTRIES PVT. LTD. ISSUES CHE QUES FAVOUR ING THE BANK AND THUS THE B.D. LOAN ACCOUNT GETS SQUARED UP .---- IT WOULD BE NOTICED THE BILLS AS SALES. UNDER THE CIRCUMSTANCES WE HOPE YOU WILL BE PLEASED TO APPRE CIATE THAT THE AFORESAID TWO BILLS ARE NOTHING BUT FOR UT ILIZING B.D. FACILITY.. 11. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE FURTHER POINTED OUT THAT LEARNED ASSESSING OFFICER COULD NOT BRING ANY MATERIAL ON RECORD TO CONTROVERT THE ABOVE EXPL ANATION OF THE ASSESSEE AND WHETHER THE EXPLANATION OF THE ASSESSE E WAS CONFIRMED BY M/S. ASHOK SPINTEX VIDE LETTER DATED 1-11-1999 TO THE LEARNED ASSESSING OFFICER WHETHER THEY CONFIRME D THAT THEIR PURCHASE VIDE BILLS IN QUESTION WAS `.9 18 163/- ON LY. IN THE ABOVE FACTS AS NO MISTAKE IN THE EXPLANATION OF THE ASSES SEE WAS FOUND PENALTY UNDER SECTION 271(1)(C) WAS NOT JUSTIFIED. 12. ON THE OTHER HAND THE LEARNED DEPARTMEN TAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AU THORITIES AND SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS) - 5 - OUGHT TO HAVE CONFIRMED THE LEVY OF PENALTY @ 300% OF THE TAX SOUGHT TO BE EVADED. 13. IN THE INSTANT CASE IT IS OBSERVE D THAT THE ASSESSEE HAS DULY RECORDED THE AMOUNT RECEIVED AGAINST BILLS OF `.16 13 432/- IN QUESTION IN ITS REGULAR BOOKS OF ACCOUNT. THE ONLY ISSUE WAS THAT THE ASSESSEE HAS NOT RECORDED THE SAME AS ITS SALES OR TRADING RECEIPT BUT HAS RECORDED THE SAME AS A LIABILITY IN ITS BALANCE SHEET. THE ASSESSEES EXPLANATION FOR THE ABOVE PRE SENTATION WAS THAT THE BILLS WERE NOT FOR ACTUAL SALES BUT WERE M ERELY ACCOMMODATION BILLS WHICH WERE RAISED FOR AVAILING WORKING CAPITAL FACILITY. WE FIND THAT THE LEARNED ASSESSING OFFICE R HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE GOODS WERE ACTU ALLY DELIVERED AGAINST THE ABOVE BILLS OF `.16 13 432/-. IT IS ALS O OBSERVED THAT THE LEARNED ASSESSING OFFICER HAS NOT VERIFIED THE TRAN SACTIONS WITH ACHAL TEXTILE INDUSTRIES PVT. LTD. TO ASCERTAIN TH E ACTUAL TRUTH OF THE TRANSACTION. FURTHER IT IS ALSO OBSERVED THAT THE ASSESSEE HAS SUBMITTED THAT M/S. ACHAL TEXTILE INDUSTRIES PVT. L TD. ISSUED CHEQ UE TO THE BANK ON THE DATE OF MATURITY OF BILLS IN QUE STION. HOWEVER THE ASSESSEE HAS NOT EXPLAINED FURTHER HOW THE ACCO UNTS OF ACHAL TEXTILE INDUSTRIES PVT. LTD. WAS SUBSEQUENTLY SQUA RED OFF AND/OR SHOWN IN ITS BOOKS OF ACCOUNTS. NO EVIDENCE WAS BR OUGHT BEFORE US BY THE ASSESSEE ALSO TO SHOW THAT `.16 13 432/- REC EIVED FROM THE BANK BY THE ASSESSEE WAS SUBSEQUENTLY REPAID BY THE ASSESSEE TO M/S. ACHAL TEXTILE INDUSTRIES PVT. LTD. IN ABSENCE OF ABOVE MATERIAL WE ARE NOT IN A POSITION TO ADJUDICATE THE ISSUE FI NALLY. IN THE CIRCUMSTANCES IN OUR CONSIDERED OPINION IT SHALL BE IN THE INTEREST OF THE JUSTICE TO RESTORE THE ISSUE BACK TO THE FILE O F THE LEARNED ASSESSING OFFICER FOR PROPER VERIFICATION IN THE LI GHT OF THE OBSERVATIONS MADE HEREINABOVE AND THEREAFTER TO DEC IDE THE ISSUE AFRESH AFTER ALLOWING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. WE ORDER ACCORDINGLY. THUS THE APPEAL OF THE ASSESSEE AND OF THE REVENUE BOTH ARE ALLOWED FOR STATISTICAL PURPOSES. - 6 - 14. IN THE CROSS OBJECTION FILED BY THE ASSESSEE ON 30-1- 2008 THE ASSESSEE HAS RAISED EXACTLY THE SAME GROUN DS OF CROSS OBJECTION WHICH WAS ALSO RAISED BY HIM IN HIS APPEA L FILED ON 10-12- 2007. AS THE APPEAL OF THE ASSESSEE WAS ADMITTED BY THE TRIBUNAL AND THE SAME WAS ALSO HEARD AND DECIDED HEREINABOVE THE CROSS OBJECTION OF THE ASSESSEE RAISING NO NEW GROUND OF CROSS OBJECTION IS FOUND TO BE INFRUCTUOUS AND HENCE DISMISSED. 15. IN THE RESULT THE APPEAL OF THE ASSESSE E AND OF THE REVENUE BOTH ARE ALLOWED FOR STATISTICAL PURPOSES A ND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 30TH JULY 2010 SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD; ON THIS 30TH DAY OF JULY 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RES PONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS)-XI ABAD. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD DATE INITIAL 1. DRAFT DICTATED ON 29-7-2010 -------------- 2. DRAFT PLACED BEFORE AUTHORITY 29-7-2010 -------------- 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29-7-2010 --------------JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 30-7-20 10 --------------- JM 5. APPROVED DRAFT COMES TO P.S 30-7-2010 --------------- 6. KEPT FOR PRONOUNCEMENT ON 30-7-2010 --------------- 7. FILE SENT TO THE BENCH CLERK 30-7-201 0 --------------- 8. DATE ON WHICH FILE GOES TO THE ----------- ----- --------------- 9. DATE OF DISPATCH OF ORDER ------ ---------- ---------------