M/s. Cosmonaut Chemicals, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

CO 136/AHD/2012

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4198 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 142(1); 143(2); 68; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 1188/AHD/2012 & CO NO.136/AHD/2012 / ASSESSMENT YEAR : 2008-09 ITO, WARD-6(4), AHMEDABAD VS M/S. COSMONAUT CHEMICALS, 201/202, PHASE-II, GIDC, VATVA, AHMEDABAD PAN : AAAFC 5426 E / (APPELLANT) / (RESPONDENT) & CROSS-OBJECTOR REVENUE BY : SHRI K. MADHUSUDAN, SR DR ASSESSEE BY : SHRI KARAN SHAH, AR / DATE OF HEARING : 28/07/2016 / DATE OF PRONOUNCEMENT: 09/09/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE AND THE CROSS-OBJECTION THEREOF FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME- TAX (APPEALS)-XI, AHMEDABAD DATED 29.03.2012 FOR AY 2008-2009. 2. FOLLOWING GROUNDS ARE RAISED IN REVENUES APPEAL :- THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) IS NOT JUSTIFIED IN FACTS AND IN LAW IN ADMITTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE-46A OF THE I.T. RULES, AND IN DELETING THE FOLLOWING ADDITIONS/DISA LLOWANCES OF RS.39,55,105/-, MADE BY THE ASSESSING OFFICER, ON TH E BASIS OF SUCH ADDITIONAL EVIDENCES. I) ADDITION U/S 68 ON ACCOUNT OF UNEXPLAINED - RS. 3,39,478/- CAPITAL INTRODUCTION II) DISALLOWANCE OUT OF PURCHASE EXPENSES - RS. 12 ,47,562/- III) DISALLOWANCE OUT OF OTHER EXPENSES - RS. 1,84,4 85/- IV) ADDITION ON ACCOUNT OF SUNDRY CREDITORS - RS. 19,11 ,301/- V) DISALLOWANCE OUT OF SALARY AND WAGES - RS. 1,11,6 41/- ITA NO. 1188 & CO NO.136/AHD/2012 ITO VS. COSMONAUT CHEMICALS AY : 2008-09 2 VI) DISALLOWANCE OUT OF POWER AND FUEL EXPENSES- RS. 54,724/- VII) ADDITION ON ACCOUNT OF INTEREST INCOME - RS. 1,05, 914/- RS.39,55,105/- 3. THE ASSESSEES CROSS-OBJECTION IS ONLY IN SUPPOR T OF THE ORDER OF THE LD. CIT(A); THEREFORE, THE SAME IS HELD TO BE INFRUCTUO US AND HENCE DISMISSED. 4. BRIEF FACTS ARE THE ASSESSEES CASE WAS SELECT ED FOR SCRUTINY U/S 143(2), NOTICE U/S 143(2) DATED 19.08.2009 WAS ISSU ED. THEREAFTER, NOTICES U/S 142(1) WERE ISSUED ASKING FOR VARIOUS COMPLIANC ES; HOWEVER, TILL THE DATE OF ASSESSMENT NO DETAILS WERE FURNISHED. CONS EQUENTLY, THE IMPUGNED ASSESSMENT WAS FRAMED U/S 144 ON 10.12.2010. 4.1 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHERE ASSESSEE FILED ADDITIONAL EVIDENCES WITH A REQUEST TO ADMIT THE SA ME UNDER RULE 46A. THE ADDITIONAL EVIDENCES WERE FORWARDED TO THE ASSESSIN G OFFICER FOR VERIFICATION. THE AO SUBMITTED REMAND REPORT, OBJE CTING TO THE ADMISSION OF ADDITIONAL EVIDENCES ON THE GROUND THAT I) THE ASSESSEE HAS FAILED TO DEMONSTRATE ANY SUFFICIE NT CAUSE IN NOT FILING THE EVIDENCES IN QUESTION BEFORE THE AO; II) THE AO FURTHER MENTIONS THAT THE ASSESSEE WAS GIVEN VARIOUS OPPORTUNITIES OVER A PERIOD OF 12 MONTHS TO FILE TH E COMPLIANCE TO WHICH ASSESSEE DID NOT RESPOND AT ALL, DESPITE THE FACT THAT ITS BOOKS OF ACCOUNTS WERE AUDITED AND THE ASSESSEE WAS IN PO SSESSION OF RECORD; III) LD. AO REQUESTED THAT IF THE LD. CIT(A) WAS INCLIN ED TO ACCEPT THE ADMISSION OF ADDITIONAL EVIDENCES, THEN SUFFICIENT TIME MAY BE GIVEN TO HIM; IV) IN THE GROUNDS OF APPEAL, THE ASSESSEE HAD NOT RAIS ED A GROUND THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN TO IT. ITA NO. 1188 & CO NO.136/AHD/2012 ITO VS. COSMONAUT CHEMICALS AY : 2008-09 3 4.2 LD. CIT(A), HOWEVER, BRUSHED ASIDE THE OBJECTIO NS OF THE LD. AO AND ADMITTED THE ADDITIONAL EVIDENCES BY OBSERVING THAT THE ADDITIONAL EVIDENCES WERE ACCEPTED FOR THE SAKE OF SUBSTANTIAL JUSTICE. THEREAFTER, SUBSTANTIAL RELIEF WAS GIVEN BY THE LD. CIT(A). 4.3 AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE US. 5. LD. DR, RELYING UPON THE JUDGMENT OF HONBLE DEL HI HIGH COURT IN THE CASE OF MANISH BUILD WELL (P) LTD. (2011) 245 CTR 397 (DEL), VEHEMENTLY CONTENDS THAT RULE 46A(1) STIPULATES MAN DATORY CONDITIONS WHICH ARE REQUIRED TO BE FULFILLED BEFORE ADMISSION OF ADDITIONAL EVIDENCE. LD. CIT(A) WAS NOT JUSTIFIED IN ADMITTING THE ADDIT IONAL EVIDENCE ON FOLLOWING COUNTS:- I) THERE BEING NO GROUNDS OF APPEAL ALLEGING THAT THE ASSESSEE WAS DENIED SUFFICIENT OPPORTUNITY OF BEING HEARD; II) LD. CIT(A) HAS NOT MENTIONED AS TO HOW THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT PRODUCING THE EVIDENCE, WHICH WAS IN ITS POSSESSION, BEFORE THE AO AND BEING NON-COOPERATIVE FOR A PERIOD OF 12 MONTHS DURING THE COURSE OF ASSESSMENT; III) THE ADDITIONAL EVIDENCES CANNOT BE ADMITTED WITH A VAGUE FINDING THAT IT IS FOR THE SAKE OF SUBSTANTIAL JUSTICE. THUS, IT IS PLEADED THAT THE LD. CIT(A) HAS FAILED TO COMPLY WITH THE MANDATORY PROVISIONS OF RULE 46A AS PROPOUNDED BY T HE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUIL D WELL (P) LTD. (SUPRA). SINCE THE LD. CIT(A) HAS FAILED TO DISCHARGE THE ST ATUTORY OBLIGATION IN TERMS OF RULE 46A, THE APPELLATE ORDER MAY BE REVERSED AN D THE ORDER OF THE LD. AO MAY BE RESTORED. ITA NO. 1188 & CO NO.136/AHD/2012 ITO VS. COSMONAUT CHEMICALS AY : 2008-09 4 5.1 LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND , CONTENDS THAT THERE SHOULD BE NO PREJUDICE TO REVENUE INASMUCH AS THE A O WAS GIVEN SUFFICIENT OPPORTUNITY BY CALLING A REMAND REPORT ON ADDITIONA L EVIDENCES AND LD. CIT(A) GAVE THE RELIEF IN QUESTION BASED ON THE REM AND REPORT AND MATERIAL AVAILABLE ON RECORD. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. FROM THE RECORD, IT EMERGES THAT. A) THE ASSESSEE HAD NOT RAISED ANY GROUND ALLEGING THA T THE SUFFICIENT OPPORTUNITIES OF HEARING WERE NOT GIVEN TO IT; B) THE CONTENTS OF APPLICATION FOR ADDITIONAL EVIDENCE ARE NOT MENTIONED; THUS, IT IS NOT CLEAR AS TO HOW THE ASSESSEE CLAIME D THAT IT WAS PREVENTED BY SUFFICIENT CAUSE IN NOT PRODUCING THE ADDITIONAL EVIDENCE BEFORE THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS; C) THE BOOKS OF ACCOUNTS ARE AUDITED AND IT IS NOWHERE CLAIMED THAT AT ANY TIME THE ASSESSEE WAS NOT IN POSSESSION OF RECO RD; D) LD. CIT(A) HAS NOT COMPLIED WITH THE MANDATORY COND ITIONS OF RULE 46A AS PROPOUNDED BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUILD WELL (P) LTD.(SUPRA). IT H AS BEEN HELD THAT NO EVIDENCE CAN BE ADMITTED UNLESS THE CONDITIONS MENT IONED IN RULE 46A ARE FULFILLED; E) THE ADDITIONAL EVIDENCES CANNOT BE ADMITTED MERELY ON THE ASSERTION THAT IT IS FOR THE SAKE OF SUBSTANTIAL JUSTICE AS IT IS NOT SPECIFIED BY RULE 46A. IN VIEW OF THE FOREGOING, WE ARE INCLINED TO SET AS IDE THIS MATTER BACK TO THE FILE OF LD. CIT(A) TO DECIDE THE ISSUE OF ADMIS SION OF ADDITIONAL EVIDENCES ITA NO. 1188 & CO NO.136/AHD/2012 ITO VS. COSMONAUT CHEMICALS AY : 2008-09 5 KEEPING IN VIEW RULE 46A, HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF MANISH BUILD WELL (P) LTD. (SUPRA) AND IN ACCORD ANCE WITH LAW, AFTER GIVING BOTH THE PARTIES ADEQUATE OPPORTUNITIES OF B EING HEARD. 7. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES AND ASSESSEES CO IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- PRAMOD KUMAR (ACCOUNTANT MEMBER) R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 09/09/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD