Allam Bali Reddy, Warangal v. DCIT, Circle I, Warangal

MA 3/HYD/2011 | misc
Pronouncement Date: 04-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 322524 RSA 2011
Assessee PAN ABFPA5464J
Bench Hyderabad
Appeal Number MA 3/HYD/2011
Duration Of Justice 9 month(s) 17 day(s)
Appellant Allam Bali Reddy, Warangal
Respondent DCIT, Circle I, Warangal
Appeal Type Miscellaneous Application
Pronouncement Date 04-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 04-11-2011
Assessment Year misc
Appeal Filed On 18-01-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI CHANDRA POOJARI A.M AND SMT. ASHA VIJAYARAGHAVAN J.M M.A. NO.03/HYD/11 ASST.YEAR 2005-06 (IN ITA NO.1788/H/09 & ITA02/HYD/09 ALLAM BALI REDDY PROP. WARANGAL. ACIT CIR-1 (PAN:ABFPA 5464J) WARANGAL. . (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI. K.V.CHALAMAIAH RESPONDENT BY : SHRI T. DIWAKAR PRASAD DATE OF HEARING: 4-11-2011 DATE OF PRONOUNCEMENT: 4-11-2011. O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: BY THIS MISC. APPLICATION THE ASSESSEE IS S EEKING THE TRIBUNAL TO RECALL THE CONSOLIDATED ORDER OF THE TRIBUNAL P ASSED IN ITA NO.2/HYD/2009 AND ITANO.1788/HYD/08 FOR ASSESSMENT YEAR 2005 AND ITA NO.665/HYD/2010 FOR ASSESSMENT YEAR 2004-05 DAT ED 27-8-2010 WITH REFERENCE TO THE ADDITION IN RESPECT OF M/S.R AMESH GENERAL STORES AT RS.3 LAKHS AND KOORA BUTCHAIAH AT RS. 4 LAKHS ON ACCOUNT OF UNEXPLAINED CREDITS. 2. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT IN RESPECT OF M/S RAMESH GENERAL STORES THE ASSESSING OFFICER M.A.NO.03/HYD/2011 SRI ALLAM BALI REDDY WARANGAL. ============================ 2 FOUND CREDIT OF RS. 3 LAKHS AS HAVING BEEN CONFIRME D BY THE CREDITOR ON THE BASIS OF DOCUMENTARY EVIDENCE SUBMITTED DURING THE COURSE OF REMAND PROCEEDINGS. ACCORDINGLY BASING ON HIS RE MAND REPORT DATED 16-5-2008 THE CIT (A) WAS PLEASED TO DELETE THIS A DDITION. THIS HAS BEEN CLEARLY INDICATED AGAINST SL.NO.7 OF THE CHART EXHIBITED AT PAGE 5 OF THE IMPUGNED ORDER OF ITAT. APPARENTLY THE ASSESSI NG OFFICER RAISED THIS GROUND IN ITA NO.02/HYD/2009 AND HIS ONLY PLEA WAS THAT THE CREDITOR DID NOT FILE HIS RETURN OF INCOME FOR ASSESSMENT YE AR 2005-06. THIS SET ON THE PART OF THE ASSESSING OFFICER IS NOTHING BUT CONDEMNING HIS OWN FINDING IN HIS REMAND REPORT DATED 16-5-2008. TH E ASSESSEE SUBMITS THAT THE TRIBUNAL OUGHT TO HAVE CONSIDERED AND GIVE N A FINDING BY MEANS OF A SPEAKING ORDER AS TO WHETHER THE ASSESSING OFF ICER WAS COMPETENT TO QUESTION THE GENUINENESS OF THE CREDIT WHICH WA S ONCE FOUND TO HAVE BEEN CONFIRMED BEFORE HIM BY THE CREDITOR AND CONSI DERED AS GENUINE ON DETAILED EXAMINATION OF MATERIAL FILED BEFORE HIM D URING THE COURSE OF REMAND PROCEEDINGS AT SECOND APPEAL STAGE BEFORE T HE TRIBUNAL. FURTHER THE TRIBUNAL OUGHT TO HAVE CONSIDER4ED AND GIVEN A FINDING BY MEANS OF A SPEAKING ORDER AS TO WHETHER THE ASSESSI NG OFFICER WAS COMPETENT TO MAKE ADDITION OF A CREDIT WHICH WAS F OUND GENUINE IN THE BOOKS OF ASSESSEE SIMPLY BECAUSE THE CREDITOR DID NOT FILE HIS INCOME- TAX RETURN FOR THAT PARTICULAR YEAR WHICH WOULD TA NTAMOUNT TO CONDEMNING HIS OWN FINDING. IN THE LIGHT OF FACTS SUBMITTED BY THE ASSESSEE THE OBSERVATIONS OF THE TRIBUNAL IN PARA -10 OF THE IMPUGNED ORDER IN RESPECT OF CREDIT OF RS.3 LAKHS IN THE NAM E OF M/S RAMESH GENERAL STORES ARE INCORRECT AND FAR FROM TRUTH. SINCE THIS IS A MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL IT IS PRA YED THAT THE SAID ORDER DATED 27-8-2010 MAY KINDLY BE RECALLED AND A FRESH ORDER PASSED ON THE BASIS OF SUBMISSIONS MADE IN THE PRECEDING PARAGRAP HS ON THIS ISSUE IN THE INTEREST OF NATURAL JUSTICE. THE ASSESSEE FUR THER SUBMITS THAT IN M.A.NO.03/HYD/2011 SRI ALLAM BALI REDDY WARANGAL. ============================ 3 RESPECT OF CREDIT OF RS. 4 LAKHS IN THE NAME OF M/S KOORA BUTCHAIAH MADE SONS THE OBSERVATIONS OF THE TRIBUNAL IN PAR A 10 OF THEIR ORDER TO THE EFFECT HAT THERE IS NO CONFIRMATION LETTER OR ANY OTHER INFORMATION TO PROVE THE IDENTITY GENUINENESS OF THE TRANSACTION AND CAPACITY OF THE CREDITOR ARE FACTUALLY INCORRECT AND FAR FROM TRUT H. THE ASSESSEE FURTHER SUBMIT THAT RELEVANT MATERIAL PAPERS HAVE BEEN FILE D BEFORE THE CIT (A) DURING THE COURSE OF REMAND PROCEEDINGS AND ALSO BE FORE THE TRIBUNAL. THE ASSESSEE DRAW THE ATTENTION OF THE TRIBUNAL T O PARA 4.2 OF THE ASSESSEES WRITTEN ARGUMENTS WHICH READ AS UNDER: - 4.2 THE CIT (A) TOTALLY IGNORED THE SUBMISSIONS AN D DOCUMENTARY EVIDENCE FILED BEFORE HIM TO SHOW THAT THE ABOVE CR EDITS/DEBITS ARE NOTHING BUT GENUINE TRADE TRANSACTIONS THE FIR ST TWO ITEMS BEING ADVANCES RECEIVED FOR SUPPLY OF MATERIAL WHE REAS THE LATTER TWO TRANSACTIONS ARE PAYMENTS DUE TO FOR MATERIALS RECEIVED. THE RELEVANT DOCUMENTS SUCH AS COPIES OF SALE BILLS/ PU RCHASE INVOICES/WAY BILLS LEDGER EXTRACTS TOGETHER WITH R ELEVANT BANK ACCOUNT HAVE BEEN FILED BEFORE THE CIT (A) TO PROVE THE GENUINENESS OF THE ABOVE TRANSACTIONS WHICH WERE T OTALLY IGNORED. THE RELEVANT COPIES OF LEDGER EXTRACTS ARE SUBMITTE D BEFORE THE TRIBUNAL. THE ASSESSEE FURTHER SUBMITS THAT THE BUSINESS OF T RADE CREDITOR KOORAPATI BUTCHAIAH & SONS WAS BEING RUN OF JANGOAN BY SHRI BUTCHAIAH TILL 31-3-2005. DUE TO HIS OLD AGE THE BUSINESS W AS TRANSFERRED TO HIS SON SHRI K.L. PRASAAD BOOK STALL JANGOAN. THE OPE NING CREDIT BALANCE OF RS.4 00 000 AS ON 1-4-2005 IN THE ACCOUNT OF KOO RAPATI BUTCHAIAH & SONS WAS ADJUSTED AGAINST SUPPLY OF MATERIAL ON 13 TH AND 14 TH APRIL 2005 TO K.L. PRASAD BOOK STALL. DUE TO STRAINED REL ATIONS BETWEEN THE PETITIONER AND THE CREDITOR IN LATER YEARS PETITIO NER COULD NOT GET M.A.NO.03/HYD/2011 SRI ALLAM BALI REDDY WARANGAL. ============================ 4 CONFIRMATION FROM THE CREDITOR OF THE CREDIT DURING FINANCIAL YEAR 2004- 05. THOUGH RELEVANT ACCOUNT EXTRACTS FROM BOOKS O F THE PETITIONER HAVE BEEN FILED BEFORE THE CIT (A) IN THE EXPLANATION D ATED 6-6-2008 SUBMITTED BEFORE HIM IT WAS CONCEDED THAT THE ABOV E TRANSACTION COULD NOT BE CONFIRMED DUE TO CIRCUMSTANCE BEYOND CONTROL OF THE PETITIONER. SINCE THE PETITIONER HAS DISCHARGED HIS ONUS OF IDE NTIFYING THE CREDITOR HIS CREDIT WORTHINESS AND ADJUSTMENT OF CREDIT BALA NCE BY MEANS OF COST OF GOODS SUPPLIED WITHIN A FORTNIGHT OF OBTAINING THE CREDIT THERE IS NO WARRANT TO SUSTAIN THIS ADDITION. SINCE RELEVANT M ATERIAL HAS ALREADY BEEN SUBMITTED BEFORE THE ASSESSING OFFICER THE CI T (A) AND ALSO BEFORE THE TRIBUNAL AS STATED ABOVE AND THE SAME HAS NOT B EEN CONSIDERED AT ALL AT ANY STAGE IT IS HUMBLY PRAYED THAT THE TRIB UNAL INSTEAD OF CONFIRMING THE ADDITION ON GROUND OF NO EVIDENCE AS A FINAL FACT FINDING AUTHORITY THIS ISSUE MAY KINDLY BE RECONSIDERED FO R SETTING ASIDE FOR A FRESH FINDING BY THE ASSESSING OFFICER AS IN CASE O F OTHER CREDITS IN THE INTEREST OF NATURAL JUSTICE. IN VIEW OF THE ABOVE THE LEARNED COUNSEL FOR THE ASESSEE PRAYS THE TRIBUNAL TO RECALL THEIR ORDE R DATED 27-8-2010 AND DISPOSE OF THE SAME ON MERITS ON THE ABOVE TWO ISSU ES IN THE INTEREST OF NATURAL JUSTICE. 3. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE WHILE OPPOSING THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE NOT AGREED WITH THE RECALLING OF THE TRIBUNAL ORDER IN THE INSTANT CASE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIB UNAL IN PARA-10 OF ITS ORDER DATED 27 TH AUGUST 2010 CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITH REGARD TO M/S RAMESH GENERAL STORES AT RS.3 LAKHS AND KOORA BHUCHAIAH AT RS. 4 LAKHS AS THERE I S NO CONFIRMATION M.A.NO.03/HYD/2011 SRI ALLAM BALI REDDY WARANGAL. ============================ 5 LETTER OR ANY OTHER INFORMATION TO PROVE THE IDENTI TY GENUINENESS OF THE TRANSACTION AND CAPACITY OF THE CREDITOR WAS NOT P ROVED. NOW THE PRAYER OF THE ASSESSEE IS THAT THIS ISSUE MAY BE SE T ASIDE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE GENUINENESS AN D THE CAPACITY OF THE CREDITOR. IT WE ACCEPT THE ARGUMENT OF THE ASSESSE ES COUNSEL IT WOULD AMOUNT TO REVIEW OF THE EARLIER ORDER OF THE TRIBUN AL WHICH IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE I. T. ACT HOWEVER WE ARE INCLINED TO MODIFY PARA-10 OF THE TRIBUNAL ORDER A S FOLLOWS:- WITH REGARD TO M/S. RAMESH GENERAL STORES AT RS.3 LAKHS AND KOORA BUTCHAIAH AT RS.4 LAKHS THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE CAPACITY OF THE CREDITOR AND IN THE ABSENCE OF THESE THINGS THE ADDITION TO BE SUSTAINED. ON THIS WE CONFIRM THE ORDER OF THE ASSESSING OFFI CER. HOWEVER THERE IS NO CHANGE IN THE FINAL RESULT OF THE ORDER OF THE TRIBUNAL. 5. IN THE RESULT THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISPOSED OFF AS INDICATED ABOVE. ORDER WAS PRONOUNCED IN THE COURT ON 4-11-2011. SD/- SD/- SMT ASHA VIJAYARAGHAVAN (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER. DATED: 04-11-2011. M.A.NO.03/HYD/2011 SRI ALLAM BALI REDDY WARANGAL. ============================ 6 COPY FORWARDED TO: 1. SRI ALLAM BALI REDDY PRP. NIRMALA BINDING WORKS 15 - 7 - 21 INDUSTRIAL ESTATE WARANGAL. 2. DCIT CIR - I WARANGAL. 3 4. 5 JMR* CIT (A) - IV HYDERABAD. CIT HYDERABAD. DR ITAT HYDEERABAD.