TMI Blog2012 (10) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... tu and then preferred the appeal. Nothing to suggest as to whether or not the CIT(A) examined the genuineness of additional evidence submitted by the assessee nor the AO seems to have been asked to verify its genuineness. In these circumstances, it can be concluded that the CIT(A) admitted additional evidence submitted by the assessee in its application under rule 46A of the IT Rules,1962, without following the procedure prescribed therein, thus in the interest of justice vacate the findings of the CIT(A) and restore the issues back to his file, with the directions to follow the mandate in terms of Rule 46A of the IT Rules, 1962 - in favour of revenue for statistical purposes. - ITA No.3886/Del./2012 - - - Dated:- 12-10-2012 - SHRI I.C. SUDHIR, SHRI A.N. PAHUJA, JJ. Assessee by Sh. V.K. Gupta, AR Revenue by Sh. Aroop Kumar Singh, DR O R D E R A.N. Pahuja:- This appeal filed on 27.07.2012 by the Revenue against an order dated 30.03.2012 of the ld. CIT(A)-XVI, New Delhi, raises following grounds : 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the amount of Rs. 45,76,244/- on account of disallowance of cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industries could not be contacted. Your Honour will appreciate that from the list of sundry creditors, most of the parties are small weavers based at Srinagar, Kashmir also and they visit our shop two to three times in a year or so. Due to bad weather at Kashmir now, they could not be contacted, and in other cases non-availability of concerned persons etc. Notwithstanding above difficulty, the assessee could manage to file confirmation in respect of 122 parties exceeding Rs.80,000/- where the balances outstanding worked out to Rs.1,68,19,565/-. As per list enclosed, confirmation in respect of 23 parties could not be filed owning to time constraint, non availability of concerned persons etc. The amount of balances outstanding in respect of 23 parties where confirmations could not be filed works out to Rs.45,76,244/-. To buy peace, to avoid undue hardships, litigations and due to no filing of confirmation in respect of enclosed parties, we hereby offer for taxation Rs.45,76,244/- in respect of 23 parties subject to the condition that no penalty proceedings u/s 271(1)(c) of Act or prosecution proceedings or any adverse view should be taken against the assessee company. 2.1 Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant for the reason that most the these parties were from outside Delhi, mainly from Jammu Kashmir, being small traders belonging to the unorganized sector. It has been submitted that owing to the shortage of time provided by the Assessing Officer to file the confirmations of so many parties (many of them located outside Delhi in Jammu Kashmir) and also because of the extreme cold conditions in Jammu Kashmir at that time of the year, confirmations of all the creditors above Rs.80,000/- could not be obtained by the appellant for filing before the AO. Accordingly, I am of the view that the appellant was prevented by sufficient cause from filing the confirmations of all the sundry creditors exceeding Rs. 80,000/- in the time provided by the AO and that the case of the appellant is covered by Rule 46(1)(b). The additional evidence filed before me by way of confirmation of these 23 sundry creditors is being, therefore, admitted. Since confirmations of 23 sundry creditors totaling to Rs.45,76,244/- were filed during the course of appellate proceedings for the first time, the matter was remanded to the AO who vide letter dated 14.07.2011 has sent his report. The appellant has su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsite also. Both the parties also registered under VAT Act in their respective states. Mere return of letter sent by the Department cannot give the rise of cause for concealment of income. However, it will not be out of place to mention that out explanation was accepted by Ld. A.O. and no addition made. Query:- Against the contention of Ld. A.O. that:-Assessee has itself expressed its inability to furnish further confirmations. Reply:- In this respect, we submit here as under :- As stated in out earlier reply filed vide letter dated 06.06.2011, total creditors for amounting to Rs. 4.7 Crores consisting of 550 parties, amount ranging between mere Rs. 1000/- to Rs.29.85 Lacs were required by the A.O. As per question at S.No.5 vide questionnaire dated 19.10.2010(copy filed vide out letter dated 06.06.2011 at S.No.9) mentioned to file confirmations ABOVE PRACTICAL LIMITS . Later on Ld. A.O. ordered to file addresses and confirmations of creditors exceeding Rs. 50,000/-. Appellant filed addresses as desired. And requested to enhance the limit to file confirmations for creditors of Rs.80,000/- and above, and accepted the same vide order sheet dated 13.12.2010. Income tax order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be treated as bogus and ingenuine, the same were the regular suppliers. ---------------------------------------------------------- Find enclosed herewith a statement giving the names of the creditors surrendered along with amounts outstanding as on 31.03.2007, 31.03.2008 and 31.03.2009 vide annexure no. N page no.130 from the same it may be seen that most of the cases as on 31.03.2008 have been paid off in the next year and creditors are admitting the same. Hence, the amount outstanding as on 31.03.2008 cannot be treated as bogus which is against the natural law of justice, unlawful, against the facts and circumstances of the case. Ld. A.O have not given any adverse comments against the evidences/confirmations filed as part of additional evidence. There were the reasons which prevented to submit the confirmations. Respected Madam, reasons were beyond the control. Hence, confirmations could not be filed. There was no reason to treat the unconfirmed as bogus. Hence, no addition can be made. Copy of account in the books of the appellant of the 23 parties:- Find enclosed herewith of the copy of account in the books of the appellant of the 23 parties. Vide ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings. As regards payments made to certain parties in cash, it is seen that such parties are few in number and appear to be small traders belonging to the unorganized sector of cottage industries. Regarding the contention of the A.O that no further purchases were effected during the year from certain sundry creditors, it has been pointed out by the appellant that if amounts were outstanding to certain parties from whom purchases were made in earlier years, payments had to be made to them even if no further purchases from them were made during the year. The complete addresses of the 2 parties, M/s Chirag Enterprises, Jaipur and M/s Libas Impex, New Delhi, from whom notices issued by the A.O came back unserved, were provided by the appellant to the A.O during assessment proceedings and no adverse inference in respect of these parties has been drawn by the Assessing Officer in the assessment order. Assessments of the appellant for assessment years 2005-06 and 2007-08 were completed u/s 143(3) on the returned incomes. Most of the parties who were appearing as sundry creditors as on 31.03.2008 were stated to be regular suppliers of the appellant. When the purchases of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who made the admission to show that it is incorrect, there is no such dispute with this proposition of law. In the instant case, neither before the ld. CIT(A) nor even before us, the ld. AR attempted to show as to how the surrender was incorrect and what prompted the assessee to file appeal without even retracting the surrender. Even after surrender of the amount, the assessee approached the ld. CIT(A) and furnished additional evidence in terms of rule 46A of the IT Rules,1962. There is nothing in the impugned order as to why the assessee offered the amount to tax suo motu and then preferred the appeal. The ld. CIT(A) did not care to ascertain as to how the assessee is aggrieved with the findings of the AO when it itself offered the amount to tax. The AO in his remand report dated 14.07.2011 succinctly pointed out that since the assessee itself expressed its inability to furnish further confirmations and produce the persons for cross-examination and offered the amount of Rs. 45,76,244/- to tax. There is nothing on record to suggest that the AO did not allow sufficient opportunity to the assessee to submit confirmations. When the assessee expressed its inability to furnish f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, except in the following circumstances, namely:-- (a) where the Assessing Officer has refused to admit evidence which ought to have been admitted; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer; or (c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or (d) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the Deputy Commissioner (Appeals) or as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3) The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Income-tax Officer has been allowed a reasonable opportunity (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be scrupulously followed. A distinction should be recognized and maintained between a case where the assessee invokes Rule 46A to adduce additional evidence before the CIT (A) and a case where the CIT (A), without being prompted by the assessee, while dealing with the appeal, considers it fit to cause or make a further enquiry by virtue of the powers vested in him under sub-Section (4) of Section 250. It is only when he exercises his statutory power suo motu under the above sub-section that the requirements of Rule 46A need not be followed. On the other hand, whenever the assessee who is in appeal before him invokes Rule 46A, it is incumbent upon the CIT (A) to comply with the requirements of the Rule strictly so that the Rule is meaningfully exercised and not exercised in a routine or cursory manner. The Hon ble High Court held that sub-rule (3) of Rule 46A interdicts the CIT (A) from taking into account any evidence produced for the first time before him unless the AO has had a reasonable opportunity of examining the evidence and rebut the same. In the instant case, there is nothing in the impugned order of the ld. CIT (A) to show that after the objections were raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
