ITO-5(2), Firozabad v. M/s Technical Glass Industries, Firozabad

1 ITA 688-08 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA. ( BEFORE SHRI R.K. GUPTA AND SHRI P.K. BANSAL ) ITA NO. 688/AG./2008 ASSTT. YEAR : 2005-06. THE INCOME-TAX OFFICER VS. M/S. TECHNICAL GLASS INDUSTRIES WARD 5(2) FIROZABAD. AGRA ROAD FIROZABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. SHARMA JR. D/R RESPONDENT BY : SHRI SAHIB P. SATSANGE E CA ORDER PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE ADDI TION OF RS. 11 39 905/- MADE BY THE ASSESSING OFFICER. 3. THE BRIEFLY STATED FACTS OF THE CASE ARE THAT AS SESSEE FIRM OWNS A GLASS BANGLES MANUFACTURING UNIT. DURING THE FINANCIAL YEAR RELE VANT TO ASSESSMENT YEAR 2005-06 THE ASSESSEE CLAIMED EXPENSES OF RS. 11 39 905/- AS REP AIRS TO THE FURNACE WHICH ACCORDING TO THE ASSESSEE WAS MAJOR REPAIRS. IN SUPPORT OF THIS CLAIM THE ASSESSEE PRODUCED THE RELEVANT PURCHASE BILLS OF FURNACE MATERIALS PROCUR ED FROM THE SUPPLIER OF THE MATERIAL ALONG WITH THE ACCOUNT STATEMENT FROM THE SUPPLIERS . THE ASSESSING OFFICER ON THE OTHER 2 HAND MADE ENQUIRY FROM THE SUPPLIER M/S. NANNUMAL G LASS WORKS ABOUT THE GENUINENESS OF THE BILLS WHICH WERE CONFIRMED BY THE SAID FIRM. ON FURTHER ENQUIRY BY THE ASSESSING OFFICER IT WAS FOUND THAT THE SUPPLIER M/S. NANNUM AL GLASS WORKS WAS NOT A DEALER IN FURNACE MATERIAL BUT WAS HAVING A GLASS MANUFACTURI NG UNIT AND HENCE THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF THE BILL ISSUED BY THE SUPPLIER. THE ASSESSEE WAS REQUIRED TO FILE FURTHER EVIDENCE TO PROVE THE GENU INENESS OF THE CLAIM. AS PER ORDER OF THE ASSESSING OFFICER THE ASSESSEE FAILED TO FILE THE REQUIRED DETAIL. ACCORDINGLY THE EXPENSES OF RS. 11 39 905/- WERE TREATED AS NON GEN UINE AND THEY WERE DISALLOWED. BEFORE THE LD. CIT (A) IT WAS SUBMITTED THAT ASSES SEE HAS FURNISHED COMPLETE DETAILS INCLUDING PURCHASE BILLS OF THE MATERIAL OF THE MAT ERIALS USED FOR REPAIR OF FURNACE. THE REASONS FOR HIGHER EXPENSES WERE ALSO EXPLAINED. I T WAS FURTHER SUBMITTED THAT THE EXPENSES CLAIMED BY HIM ON ACCOUNT OF FURNACE REPAI R WERE SUPPORTED BY THE BILLS OF PURCHASE OF FURNACE MATERIAL WHICH WERE PRODUCED B EFORE THE ASSESSING OFFICER. CERTIFICATES OF OTHER PARTIES FROM WHOM THE MATERIA LS WERE PURCHASED WERE ALSO FILED AND THEY HAVE CONFIRMED HAVING SUPPLIED THE MATERIAL TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT COPY OF ACCOUNT OF THE ASSESSEE FIRM COPIES OF THE TRADE TAX ASSESSMENT ORDERS OF THE PARTY FROM WHOM THE MATERIAL WAS PURC HASED AND COPY OF FORM NO. 31 USED BY THE FIRM M/S. NANNUMAL GLASS WORKS AND COPY OF S TATEMENT OF ACCOUNT OF STOCK OF THE PARTY WERE ALSO FILED. IT WAS FURTHER SUBMITTED TH AT ALL THE PAYMENTS FOR PURCHASES WERE MADE THROUGH ACCOUNT PAYEE CHEQUE. IT WAS FURTHER S UBMITTED THAT THERE IS NO MATERIAL AVAILABLE TO THE ASSESSEE TO PROVE THAT THE EXPENSE S CLAIMED BY ASSESSEE WERE GENUINE. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES AN D PERUSING THE MATERIAL AVAILABLE ON RECORD ALONG WITH VARIOUS CASE LAWS RELIED UPON BEF ORE HIM THE LD. CIT (A) HELD THE 3 EXPENSES CLAIMED BY ASSESSEE WERE GENUINE. ACCORDIN GLY THE ADDITION WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNA L. 4. THE LD. D/R PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESSEE PLACED RELIAN CE ON THE ORDER OF THE LD. CIT (A). ATTENTION OF THE BENCH WAS ALSO DRAWN AT PAGE 12 OF THE ORDER OF THE LD. CIT (A) WHERE SPECIFIC FINDING WAS GIVEN THAT THE REMAND REPORT W AS SOUGHT FROM THE ASSESSING OFFICER AND DURING THE REMAND REPORT THE PART WAS EXAMINED AGAIN BY THE ASSESSING OFFICER. THE PARTY HAS CONFIRMED HAVING SUPPLIED THE MATERIAL TO THE ASSESSEE. IN THE REMAND REPORT THE ASSESSING OFFICER HAS MENTIONED THAT M/S. NANNU MAL GLASS WORKS COULD NOT PRODUCE THE BOOKS OF ACCOUNT. IN THIS CONNECTION IT WAS SU BMITTED BY LD. A/R THAT BOOKS OF ACCOUNT WERE NOT PRODUCED BY THAT PARTY BECAUSE THE RE WAS A SEARCH IN THE PREMISES OF M/S. NANNUMAL GLASS WORKS AND BOOKS WERE IMPOUNDED BY THE INCOME-TAX DEPARTMENT. THEREFORE FOR THIS REASON THE BOOKS WERE NOT PRODU CED BEFORE THE ASSESSING OFFICER. HOWEVER THE PARTY HAS DULY CONFIRMED THAT THEY HAV E SUPPLIED THE MATERIAL. 5. AFTER CONSIDERING THE SUBMISSIONS AND THE ORDERS OF THE AUTHORITIES BELOW WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (A). THE CIT (A) HAS EXPLAINED THE FACTUAL POSITION AFTER EXAMINING THE VARIOUS DETAILS AND RE MAND REPORT SENT BY THE ASSESSING OFFICER. THERE WAS NO MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO DRAW INFERENCE THAT THE EXPENSES CLAIMED BY THE ASSESSEE WERE NOT GENUINE. MERELY ON SUSPICION THE REJECTION OF THE ASSESSEES CLAIM IN OUR CONSIDERE D VIEW WAS NOT JUSTIFIED AT THE END OF THE ASSESSING OFFICER. THE LD. CIT (A) WAS JUSTIFIE D IN ACCEPTING THE CLAIM OF THE ASSESSEE WHICH WAS SUPPORTED WITH PROPER EVIDENCES. IN VIEW OF THE ABOVE FACTS AND 4 CIRCUMSTANCES WE CONFIRM THE FINDINGS OF THE LD. C IT (A) WHICH REMAINED UNCONTROVERTED. WE CONFIRM THE ORDER OF THE LD. CIT (A). 6. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS D ISMISSED. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21. 04.2010 SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA DATED : 23/04/2010. D/- COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A) CONCERNED. THE D/R ITAT AGRA. GUARD FILE (ITA 688/AG/2008) BY ORDER AR ITAT AGRA.