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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI N. K. PRADHAN, AM
सुनवाई क" तार"ख / : 13.10.2016 Date of Hearing घोषणा क" तार"ख / : 26 .10.2016 Date of Pronouncement आदेश / O R D E R Per N. K. Pradhan, A. M.: This is an appeal filed by the assessee. The relevant assessment year is 2007- 08. It is directed against the order of Commissioner of Income Tax (Appeals)-3, Mumbai and arises out of the order u/s. 143(3) of the Income Tax Act, 1961 (‘the Act’).
The grounds of appeal
filed by the assessee read as under: ‘1) The learned CIT(A) erred in law and on facts in confirming the disallowance of purchases from Ashish Interiors amounting to Rs.24,08,175/- without appreciating the fact that your appellant had discharged onus on his part to 2 prove the genuineness of the transaction by furnishing bank details of this creditor to which the account payee cheques issued by your appellant were credited, producing the invoices and documents in support of transaction, giving reasonable explanation and there is nothing on the record brought out by the assessing officer to establish that the transaction was not genuine except not attendance of Ashish Interiors. 2) The learned CIT(A) erred in law and on facts in relying upon the remand report that was deficient in as much as the assessing officer did not verify the documents filed before him in support of the genuineness of transaction but the only reason for considering the purchases from Ashish Interiors as unproven was failure of this party to respond to the summons issued by him. 3) The CIT(A) erred in law and on facts by not giving reasonable opportunity to your appellant by directing the assessing officer to obtain PAN details of Ashish Interiors from their banker, as requested by your appellant, details whereof were available in the bank certificate obtained by your appellant and produced before the assessing officer during remand proceedings. 4) The CIT(A) erred in law and on facts in not dealing with various documents and the explanation in support of genuineness of the purchases made from Ashish Interiors amounting to Rs.24,08,175/-. 5) The CIT(A) erred in law and on facts in confirming disallowance of purchases made from Ashish Interiors amounting to Rs.24,08,175/-as unproven purchases.’
3. The Assessing Officer (AO) during the course of assessment proceedings issued letter to M/s. Colour Solutions , Shri Gangaram Mistry , Shri Ompraksash Sutar and M/s Ashish Interior seeking information u/s. 133(6) of the Act, in respect of goods supplied by them, with copies of bills, details of payment received by them from the assessee and a copy of the ledger account of the assessee as appearing in their books of account. The letters sent by the AO were returned by the postal authority with the remark “left”,/ “not claimed”. The assessee was asked by the AO vide letter dated 18.12.2009, requesting to produce the above party on 23.12.2009 with books of accounts. In response to it, the assessee filed before the AO the confirmation letter from M/s. Ashish Interior. The AO noted that no PAN has been given in the said confirmation. Also no copies of bills raised were filed. Further, it 3 was found by the AO that the said confirmation is not signed by Shri Prakash Dubey, who is the proprietor of the concern, but by somebody else. The assessee did not produce the above parties and instead filed a letter dated 23.12.2009 before the AO. In view of the above, the AO made a disallowance of Rs.14,92,398/- in the case of M/s. Colour Solutions; Rs.20,88,618/- in the case of Shri Gangaram Mistry; Rs.17,15,073/- in the case of Shri Omprakash Sutar and Rs.24,08,175/- in the case of M/s. Ashish Interior.
The ld. CIT(A) deleted the disallowance of Rs.14,92,398/- in the case of M/s. Colour Solution; Rs.20,88,618/- in the case of Shri Gangaram Mistry; and Rs.17,15,073/- in the case of Shri Ompraksash Sutar. However, She confirmed the disallowance of Rs.24,08,175/- in the case of M/s. Ashish Interior for the reason that the assessee claimed to have made TDS in respect of the above concern, which certificate would require the assessee to have furnished the PAN of M/s. Ashish Interior. Therefore the assessee’s submission that he did not have the PAN was not accepted by the ld. CIT(A). The ld. CIT(A) noted that in the assessment proceedings, the AO has not been able to successfully contact or obtain the confirmations from the said party that invoices were raised by them, details of the work done by that party and that payments were made in that party’s account. The ld. CIT(A) came to a finding that the assessee had claimed the party to be a sundry creditor and, therefore, the onus was on the assessee to establish the genuineness of the claim. In view of the above, the ld. CIT(A) sustained the disallowance of Rs.24,08,175/- made by the AO in the case of M/s Ashish Interior .
The ld. Counsel of the assessee submits that reasonable opportunity was not given to the assessee to explain its case in respect of M/s. Ashish Interior either before the AO or the ld. CIT(A). It is submitted by him that a reasonable opportunity may be 4 given by the AO to the assessee to put forth the details in respect of M/s. Ashish Interiors and explain its case.
The ld. DR supports the order of the ld. CIT(A) in respect of disallowance of Rs.24,08,175/- made in the case of Ashish Interiors.
We have considered the rival submissions and perused the relevant material on record. We find that the assessee could successfully file the details before the ld. CIT(A), its transactions with M/s. Colour Solutions (Rs.14,92,398/-); Shri Gangaram Mistry (Rs.20,88,618/); Shri Omprakash Sutar (Rs.17,15,073/-). Only in the case of M/s Ashish Interiors (Rs.24,08,175/-), the assessee has failed before the ld. CIT(A). Having gone through the order passed by the AO and the ld. CIT(A), we deem it fit for the sake of justice to set aside the order of the ld. CIT(A) in respect of transaction of Rs.24,08,175/- made by the assessee with M/s Ashish Interior and restore the matter to the file of the AO for deciding the issue afresh as per the provisions of the Act after giving reasonable opportunity of being heard to the assessee. The assessee is also directed to furnish the relevant details of M/s Ashish Interior before the AO.