Referred Sections:
Section 69C
Section 68 of the Act.
1 ITA No. 4670/Del/2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: `SMC', NEW DELHI)
BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER
ITA No:-4670/Del/2018
(Assessment Year: 2014-15)
Jhabua Power Investments Income Tax Officer
Ltd. Vs. Ward 13 (3)
Thapar House, 124 Janpath New Delhi
New Delhi
PAN No. AADCG5445K
APPELLANT RESPONDENT
Assessee by : Sh. P. C. Yadav, Advocate
Revenue by : Sh. S. L. Anuragi, Sr. DR
Date of Hearing : 21.05.2019
Date of Pronouncement : 22 .05.2019
ORDER
PER: N. K. BILLAIYA, AM
This appeal by the assessee is preferred against the order of
the Commissioner of Income Tax [Appeals]-5, New Delhi dated
19.04.2018 for Assessment Year 2014-15.
2. The sum and substance of the grievance of the assessee that
the CIT(A) erred in confirming the additions made by the A.O u/s
68 of the Act when the A.O has made the addition u/s 69C of the
Act.
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3. Facts on record show that the assessee filed its return of
income on 23/09/2014. The return of income was selected for
scrutiny assessment and accordingly statutory notices were issued
and served upon the assessee.
4. During the course of the scrutiny assessment proceedings the
A.O noticed that the assessee has made purchase of linen fabric to
the tune of Rs. 4,97,589/- to verify the purchases. The assessee
issued notices u/s 133(6) of the Act to M/s Kumar Sales from
whom the purchases were made. The notice sent returned
unserved, the same was confronted to the assessee and the
assessee furnished new address M/S Kumar Sales. Thereafter,
fresh notice was issued to M/s Kumar Sales at new address which
was duly served. The A.O asked M/s Kumar Sales to confirm the
transaction with supporting evidence. On receiving no plausible
reply once again notice was issued and served upon M/s Kumar
Sales. Once again, no reply was received and the A.O formed a
belief that the assessee has claimed bogus expenses on account of
purchase from M/s Kumar Sales and proceeded by making the
addition of Rs.4,97,589/- u/s 69C of the Act.
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ITA No.-938/Del/2018
5. The assessee assailed the assessment before the CIT(A) and
strongly contended that the purchases are duly recorded in the
books of accounts supported by invoices and, therefore, provisions
of Section 69C do not apply on the facts of the case. It was further
pointed out that the A.O has accepted the sales made out of the
purchases.
6. The CIT (A) was convinced that Section 69C is not applicable
on the facts of the case. However, the CIT (A) was of the opinion
that the A.O should not have accepted the credit in the books
amounting to Rs. 5,02,075/- as explained. The CIT(A) asked the
assessee to show cause why the credit in the books of
Rs.5,020,75/- be not treated as unexplained credit u/s 68 of the
Act. The assessee filed a detailed reply dated 18/4/2018. In its
submission, the assessee explained the sale transaction by
furnishing copies of the sale invoices and also the banks statement
showing that the money has been received through banking
channel. The reply of the assessee did not find any favour with the
CIT (A) who made addition of credit of Rs.5,02,075/- u/s 68 of the
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ITA No.-938/Del/2018
Act. However, the assessee CIT(A) restricted the addition to
Rs.4,97,589/-, the addition which the A.O made.
7. By this, the assessee before me. The counsel for the assessee
reiterated what has been stated due before the lower authorities.
Per contra, the DR strongly stated that since, the CIT(A) himself has
not examined the genuineness of the credit entries. The matter
may be restored to the file of the CIT(A) for fresh adjudication
8. I have carefully considered the order of the authorities below.
It is not in dispute that the A.O made impugned addition of Rs.
4,97,589/- treating the purchases as bogus expenses. It is equally
true that the purchases were debited in the regular books of
account of the assessee. The sales out of the purchases were
accepted by the A.O. I further find that the notices issued by the
A.O on the address of M/s Kumar Sales were duly served. Nothing
prevented the A.O to issue summons to M/s Kumar Sales to force
its attendance and examine the transaction. I further find that the
CIT(A) realizing that Section 69C is not applicable on the facts of
the case invoked Section 68 of the Act. In find that the assessee
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ITA No.-938/Del/2018
has furnished all the details of sales made to M/s Overseas and
such details can be seen from the following chart:-
Details of sales:
S. Date Party Name Quantity Invoice
No. amount
1 4/1/2014 M S Overseas 945 68,985
2 14/01/2014 M S Overseas 1.050 76,891
3 23/01/2014 M S Overseas 1,510 107,738
4 14/02/2014 M S Overseas 945 67,426
5 13/03/2014 M S Overseas 1,201 89,054
6 18/03/2014 M S Overseas 1,240 91,981
Total 6,891 502,075
9. The sale invoices are exhibited at Pages 5 to 10 of the paper
book. In my considered opinion, the power of the CIT(A) are co
terminus to that of the A.O and, therefore, he should have
examined the transaction if he wanted to invoke the provisions of
Section 68 of the Act. Failing which the action of the CIT (A) cannot
be upheld. The contention of the DR that fresh opportunity should
be given to the CIT (A) to examine the transaction does not have any
force. In my considered view, no second innings should be given to
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examine the same set of facts which were very much before the
lower authorities. I do not find any merit in the order of the CIT(A).
I have accordingly direct the A.O to delete the addition of Rs.
4,97,589/-. The appeal filed by the assessee is accordingly allowed.
10. In result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 22 .05.2019.
Sd/-
(N.K.BILLAIYA)
ACCOUNTANT MEMBER
Dated: .05.2019
R.N
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELH
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ITA No.-938/Del/2018
Date of dictation 21.05.2019
Date on which the typed draft is placed before the 21.05.2019
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr. 22.05.2019
PS/PS
Date on which the final order is uploaded on the 22.05.2019
website of ITAT
Date on which the file goes to the Bench Clerk 22.05.2019
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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