IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘F’: NEW DELHI
BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER
SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER
Assessment Year: 2009-10
M/s Rainbow Fabart P. Ltd.,
109, Ashirwad Complex,
D-1, K-84, Green Park,
PAN No. AACCR4098N
Company Circle 15(1),
Appellant by: Sh. K.V.S. Gupta, Adv.
Respondent by: Sh. Bhim Singh, Sr. DR
O R D E R
PER S.V. MEHROTRA, A.M.
This appeal, filed by the assessee, is directed against the order dated 31/08/2012 of CIT(A)-XVIII, New Delhi for A.Y. 2009-10.
2. Brief facts of the case are that in the relevant assessment year, the assessee company was engaged in the business of Export of Readymade Garments. The assessee had filed its return of income declaring total income of Rs. 3,63,33,946/-. In the course of assessment proceedings, the Assessing Officer noticed that assessee had furnished the list of parties from whom job work/fabrication was got done. In order to examine the same on test check basis, he issued notices u/s 133(6) of the Act. The AO has pointed out that no compliance was made in the case of M/s Nehru Style to whom the assessee had allegedly paid job work/fabrication charges amounting to Rs. 24,03,144/-. He has further observed that the assessee even failed to produce copy of bills of the party. He, therefore, disallowed the assessee’s claim of Rs. 24,03,144/- observing that assessee failed to establish the genuineness of the party and the expenditure claimed in respect of this party remained unverified.
3. Before ld. CIT(A), the assessee claimed that (a) it had submitted copies of bills of all the parties including M/s Nehru Style, (b) it had also produced the certificate of the party, wherein the party had confirmed that they had done job work of the assessee, (c) copy of the assessee’s bank statement reflecting the payments made to this party, (d) copies of invoices raised by the party, (e) copies of TDS certificate.
3.1 Ld. CIT(A) required the assessee to produce the following:
I. Original challans vide which goods had been sent to M/s Nehru Style for processing and goods have been received back;
II. Certificate from the bank that the cheques issued from the assessee’s bank account had been issued in favour of M/s Nehru Style;
III. Copy of bank account and Income tax return of M/s Nehru Style.
3.2 Ld. CIT(A) has observed that in response the assessee had only produced Bills of M/s Nehru Style but did not produce any other conformity evidence. He further pointed out that bank only certified that the cheques had been issued from the bank account of the assessee but could not specify the name of the party in whose favour the cheques had been issued. Further the assessee was unable to produce the bank account of M/s Nehru Style to show that cheques had been deposited in their bank account or their income tax return for the relevant period. He further pointed out that party also did not respond to notice u/s 133(6) issued by the AO. In view of these facts, ld. CIT(A) confirmed the addition.
4. Ld. Counsel submitted that before AO vide letter dated 19.12.2011, the assesse had submitted the certificate dated 15.12.2011 in original confirming job work done for the assessee by M/s Nehru Style. Ld. Counsel further referred to page 5 of paper book, wherein the certificate issued by Nehru Style is contained.
5. He referred to the letter of State Bank of India dated 24th August, 2011, wherein they had confirmed the payments being made from assessee’s bank account, but the name of party to whom the cheques were issued could not be confirmed because of old records being not available with them. Ld. Counsel further referred to the ledger account of M/s Nehru Style in its books of account contained at pages 223 to 227 to demonstrate that regular transactions regarding embroidery charges were made with the party and the regular payments were made to the party.
6. Ld. DR submitted that bills were not produced before AO which were produced before ld. CIT(A).
6.1 We have considered the submissions of both the parties and have perused the record of the case. We find from the order of ld. CIT(A) that original bills were produced before her. But no other conformity evidence was produced. However, conformity letter is contained at page 5 of the paper book. Ld. CIT(A) had required the assessee to produce various documents, noted earlier, but since those documents could not be produced as the transactions were over with the said party, she has drawn adverse inference. Since the bills were produced before her, therefore, ld. CIT(A) should have called for a remand report from the AO before disallowing the assessee’s claim. Under these circumstances, keeping in view the evidence produced before AO as well as before ld. CIT(A) and also taking into consideration the fact that the bank has not given complete details on the ground of the records being old, we consider it in the interest of justice that the matter be restored back to the file of AO for denovo consideration of this issue. We direct accordingly.
7. In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in the open court on 05/07/2013
(R.P. TOLANI) (S.V. MEHROTRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
4. CIT (A)
5. DR, ITAT, New Delhi.