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Income Tax Appellate Tribunal, CUTTACK
Before: SHRI N.S SAINI
This is an appeal filed by the assessee against the order of CIT(A)-
2, Bhubaneswar, dated 4.7.2016 for the assessment year 2009-2010.
The sole issue involved in this appeal is that the CIT(A) erred in
confirming the addition of Rs.5,90,184/- made by the Assessing Officer
under the head “undisclosed investment”.
I have heard the rival submissions, perused the orders of lower
authorities and materials available on record. In the instant case, the
Assessing Officer found that in the balance sheet, the assessee has shown
liability of Rs.5,90,184/-payable to Mahanadi Coal Field (MCL) against
purchase of coal. The Assessing Officer observed that the assessee was
2 ITA No. 373/CT K/ 2016 Asse ssment Year :20 09- 201 0 asked to explain how MCL was the creditor of the assessee as it sells coal
through auctions/tenders against advance payments only and it never
sells coal on credit. Since the assessee could not explain the same, the
Assessing Officer treated the sum of Rs.5,90,184/- shown as liability to
MCL towards purchase of coal as unexplained investment.
Before the CIT(A), it was submitted by the assessee that the
assessee purchased coal from MCL after making due payment through
cheques, but due to insufficient fund in the bank, the cheque was
returned and again cheque/draft was issued after 31st March and, hence,
the assessee was compelled to show the amount as outstanding in sundry
creditor in the balance sheet. It was submitted that if the subsequent
bank account will be looked into, the amount was paid immediately in the
month of April, 2009.
The CIT(A) after considering the submissions of the assessee
observed that the assessee could have produced ledger account of MCL,
bank reconciliation statement, bank statement of the year and bank
statement of the next following assessment year to prove that the
cheque of alleged sum was bounced back and, therefore, fresh
cheque/draft was issued which was encashed in the next following
assessment year. The assessee could have substantiated the claim by
producing the purchase bills, trading account, etc. Opportunities to
substantiate the same given on different dates by him were not availed
and thus, simply on the basis of unsupported words of grounds of appeal,
3 ITA No. 373/CT K/ 2016 Asse ssment Year :20 09- 201 0 he held that meaningful interference cannot be made in the findings of
the Assessing Officer and confirmed the action of the Assessing Officer.
Before me, ld A.R. of the assessee filed ledger account of MCL for
the period 1.4.2009 to 31.3.2010, wherein, on 1.4.2009, there is brought
forward opening balance of Rs.5,90,184/- and there is payment through
cheque on 28.8.2009 drawn on Uco Bank vide ch No.423059 for
Rs.5,00,000/- and cheque No.423067 for Rs.90,184/- of the same bank
on 3.11.2009. ld A.R. of the assessee has also enclosed the bank
statement of Uco Bank evidencing clear of all the cheques on the dates
stated in the ledger account. Ld A.R. of the assessee has prayed that in
view of above evidences, the liability of the assessee is genuine and,
therefore, the addition should be deleted.
Ld D.R. vehemently opposed the submission of ld A.R. of the
assessee on the ground that the evidences now filed before the Tribunal
were never produced before the lower authorities and hence, the addition
should be confirmed.
In the above background of the case, I am of the considered view
that it should be the endeavour of the Assessing Authority to make the
correct assessment of income of the assessee. In my considered view, if
the assessee failed to produce the evidences in support of its claim before
the Assessing Officer or CIT(A) that cannot be a ground to not to accept
the evidences now filed before the Tribunal for deciding the issue correctly
and completely. I am also alive to the fact that evidences now produced
4 ITA No. 373/CT K/ 2016 Asse ssment Year :20 09- 201 0 have to be verified, which should be done only by the Assessing Officer.
Therefore, in the interest of rendering substantial justice, I accept the
evidences now filed before the Tribunal and restore the issue back to the
file of the Assessing Officer and direct him to verify the same to arrive at
the conclusion that the liability shown by the assessee to MCL of
Rs.5,90,184/- is genuine or not and re-adjudicate the issue afresh as per
law. Needless to mention here that the Assessing Officer shall allow
reasonable and proper opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is allowed for statistical
purposes.
Order pronounced in the open court on 18 /08/2017. Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 18/08/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant : Anamika Sharma, W/O Binod Kumar Sharma, Prop. M/s. Sriram Syndicate, At: First Gate, Talcher. 2. The Respondent. ITO, Angul Ward, Angul. 3. The CIT(A) -2, Bhubaneswar 4. Pr.CIT, -2, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,
SR.PRIVATE SECRETARY ITAT, Cuttack