SSF PLASTICS INDUSTRIES, MUMBAI V. DCIT 20(3),

CO 141/MUM/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0587 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 16-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 09-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNIDR
• Keywords: Gross profit estimation; Condonation of delay

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.6750/MUM/2010 ASSESSMENT YEAR: 2006-07 DY. COMMISSIONER OF INCOME TAX-20(3), 5 TH FLOOR, ROOM NO.506, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 / VS. M/S SSF PLASTICS INDUSTRIES, 32 SARVODAYA INDUSTRIAL ESTATE, MAHAKALI CAVES ROAD, ANDHERI(E), MUMBAI-400093 ( ! / REVENUE) ( '#$ % /ASSESSEE) P.A. NO AAKFS6017R C.O. NO.141/MUM/2013 (ARISING OUT OF ITA NO.6750/MUM/2010) ASSESSMENT YEAR: 2006-07 M/S SSF PLASTICS INDUSTRIES, 32 SARVODAYA INDUSTRIAL ESTATE, MAHAKALI CAVES ROAD, ANDHERI(E), MUMBAI-400093 / VS. DY. COMMISSIONER OF INCOME TAX-20(3), 5 TH FLOOR, ROOM NO.506, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 ( '#$ % /ASSESSEE) ( ! / REVENUE) P.A. NOAAKFS6017R ! / REVENUE BY SMT. N.V. NADKARNI-DR '#$ % / ASSESSEE BY SHRI NITESH JOSHI & ! ' % ( / DATE OF HEARING 16/04/2015 ' % ( / DATE OF ORDER: 24/04/2015 M/S SSF PLASTICS INDUSTRIES 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 26/07/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. 2. FIRST, WE SHALL TAKE UP THE CROSS OBJECTION OF THE ASSESSEE. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI NITESH JOSHI, CONTENDED THAT THERE IS DELAY OF 599 DAYS IN FILING THE CROSS OBJECTION BEFORE THE TRIBUNAL B Y INVITING OUT ATTENTION TO THE AFFIDAVIT, FILED BY THE ASSESS EE, MENTIONING THE REASONS OF DELAY. IT WAS CONTENDED THAT THE ASSESSEE RECEIVED THE APPEAL MEMO, FILED BY THE REV ENUE (ITA NO.6750/MUM/2010) ON 09/10/2011, THEREFORE, AS PER SECTION 253(4) OF THE INCOME TAX ACT, 1961 (HEREINA FTER THE ACT), THE ASSESSEE WAS TO FILE THE CROSS OBJECTION BY 18/11/2011. HOWEVER, THE ASSESSEE FILED THE CROSS OBJECTION BEFORE THE TRIBUNAL ON 09/07/2013 AS THE PAPERS WER E SENT TO THE CHARTERED ACCOUNTANT ON 21/10/2011 WHO SENT THE DRAFT TO THE ASSESSEE ON 04/04/2012. FURTHER, IT WA S CONTENDED THAT INADVERTENTLY, THE CROSS OBJECTION R EMAINED IN THE DRAWER OF THE ACCOUNTANT AND THUS COULD NOT BE FILED. IT WAS PLEADED THAT THIS FACT CAME TO THE NOTICE OF THE ASSESSEE IN THE MONTH OF JULY, 2013 AND THUS, IT CO ULD BE FILE ON 09/07/2013. THE LD. DR, SMT. N.V. NADKARNI, OPPO SED THE SUBMISSIONS OF THE ASSESSEE BY CONTENDING THAT IT IS MERELY AN AFTERTHOUGHT AND THE ASSESSEE HAS TO EXPL AIN THE M/S SSF PLASTICS INDUSTRIES 3 DELAY OF EACH DAY, WHICH HAS NOT BEEN DONE. THE CONDONATION OF DELAY WAS STRONGLY OPPOSED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE DEPONENT (PARTNER) IS WITH THE ASSESSEE FIRM SINCE JUNE, 1999 AND DULY RECEIVED THE APPEAL MEMO, FILED BY TH E REVENUE ON 09/10/2011, CONSEQUENTLY, THE ASSESSEE W AS TO FILE CROSS APPEAL/CROSS OBJECTION, IF ANY, UP TO 18 /11/2011. AS PER THE ASSESSEE, THE PAPERS FOR PREPARATION OF CROSS OBJECTION WERE SENT TO THE CHARTERED ACCOUNTANT ON 21/10/2011 AND THE RESULTANT DRAFT CO WAS SENT BY T HEM TO THE ASSESSEE ON 04/04/2012. IT IS PATENTLY PROFESS IONAL MISCONDUCT, IF THE VERSION OF THE AFFIDAVIT IS ACCE PTED TO BE CORRECT, THE ASSESSEE HAS NOT FILED ANY AFFIDAVIT F ROM THE CHARTERED ACCOUNTANT, ADMITTING HIS GUILT SUBSTANTI ATING THE VERSION OF THE ASSESSEE. THE AFFIDAVIT FURTHER SAYS THAT THE ACCOUNTANT OF THE ASSESSEE KEPT THE DRAFT CO IN HIS DRAWER AND IT CAME TO THE NOTICE IN JULY, 2013. WE DONT ACCEPT THE CONCOCTED STORY OF THE ASSESSEE AS HAS B EEN MENTIONED IN THE AFFIDAVIT. WITHOUT ADVERTING FURTH ER, WE FIND NO MERIT IN THE VERSION OF THE ASSESSEE, THEREFORE, DISMISS THE APPLICATION FOR CONDONATION OF DELAY, RESULTING INTO DISMISSAL OF THE CROSS OBJECTION AS NOT MAINTAINABL E. 3. NOW, WE SHALL TAKE UP THE APPEAL OF THE REVENUE , WHEREIN, THE ONLY GROUND PERTAINS TO ADOPTING GROS S PROFIT RATIO OF 10.03% AGAINST 13.78% ADOPTED BY THE ASSES SING OFFICER GRANTING RELIEF TO THE EXTENT OF RS.28,05,2 18/- OUT OF M/S SSF PLASTICS INDUSTRIES 4 THE TOTAL ADDITION OF RS. 35,00,561/- MADE BY THE A SSESSING OFFICER ON ACCOUNT OF LOW GROSS PROFIT. THE LD. DR, ADVANCED HER ARGUMENTS, WHICH ARE IDENTICAL TO THE GROUND RA ISED BY FURTHER SUBMITTING THAT IN IMMEDIATE PRECEDING YEAR , THE GROSS PROFIT OF THE ASSESSEE WAS 13.78%, ARRIVED AT BY THE ASSESSEE, IN POST SURVEY PERIOD. ON THE OTHER HAND , THE LD. COUNSEL FOR THE ASSESSEE, STRONGLY DEFENDED THE CON CLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDER TH E FACTS MENTIONED IN THE ASSESSMENT ORDER/IMPUGNED ORDER AN D THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYAZED, WE FIND THAT IN PARA 2. 3 OF THE IMPUGNED ORDER, THE GROSS PROFIT RATIO OF PRE AND P OST SURVEY PERIOD HAS BEEN SUMMARIZED. AS A RESULT OF SURVEY, IT WAS FOUND THAT THE ASSESSEE WAS HAVING EXCESS STOCK OF RAW MATERIAL AND SEMI FINISHED GOODS TO THE EXTENT OF RS.35,00,561/- WHICH WAS DULY ADMITTED AND DISCLOSE D AS ADDITIONAL INCOME AND FURTHER OFFERED FOR TAXATION BY THE ASSESSEE. THE STAND OF THE REVENUE IS THAT THE TRA DING RESULTS DO NOT DEDUCE THE CORRECT INCOME AS THE ASS ESSEE IS ALSO ENGAGED IN PURCHASE OF RAW MATERIAL WHICH WAS NOT PROPERLY ACCOUNTED FOR IN BOOKS OF ACCOUNTS. WE FU RTHER NOTE THAT IF THE VERSION OF THE REVENUE, FOR ARGUME NT SAKE, IF ADMITTED TO BE CORRECT, STILL THE ASSESSEE HAS ALRE ADY ADMITTED THE PROFITABILITY BY DECLARING THE ENTIRE AMOUNT OF RS.35,00,561/- AND PAID TAX THEREON. THUS, WE FIND NO MERIT IN THE ARGUMENT OF THE LD. DR/CONCLUSION OF T HE M/S SSF PLASTICS INDUSTRIES 5 ASSESSING OFFICER IN MAKING THE DOUBLE ADDITION ON THE SAME INCOME. THE TOTAL ADDITION IS DUE TO EXCESS STOCK FOUND AT THE TIME OF SURVEY, THUS, SINCE THE ASSESSEE HAS AL READY DISCLOSED THE SAME, THERE IS NO QUESTION OF CONSIDE RING IT AGAIN. CONSIDERING THE TOTALITY OF FACTS AS MENTIO NED IN PARAS 2.3.3 AND 2.3.4 OF THE IMPUGNED ORDER, WE F IND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS). HIS STAND IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED, WH EREAS THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS NOT MAINTAINABLE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF HEARING ON 24/04/2015. SD/- SD/- ( B.R.BASKARAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; ) DATED : 24/04/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. & 0% ( *+ ) / THE CIT, MUMBAI. P4. & 0% / CIT(A)- , MUMBAI 5. 2! 3 .%' , *+( *' 4 , & / DR, ITAT, MUMBAI 6. 5# 6 / GUARD FILE. / BY ORDER, /2+% .% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI