A.L. Gayathri, CHENNAI V. ACIT, CHENNAI

CO 153/CHNY/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3002 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , ! . , ! ' BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.2519 TO 2523/CHNY/2016 /ASSESSMENT YEARS: 2007-08 TO 2011-12 & CO NOS.151 TO 154/CHNY/2016 (IN ITA NOS.2519 TO 2522/CHNY/2016 FOR THE AYS 2007-08 TO 2010-11 ) THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-13(1), CHENNAI-34. VS. SMT.A.L.GAYATHRI, NO.11/6, PAPPATHI AMMAL STREET, KODAMBAKKAM, CHENNAI-24. [PAN: AAIPA 3035 F] ( ) /APPELLANT) ( *+) /RESPONDENT/CROSS OBJECTOR) ) , / APPELLANT BY : MR.SRIDHAR DORA, JCIT *+) , /RESPONDENT BY : MR.T.BANUSEKAR, CA , /DATE OF HEARING : 04.03.2019 , /DATE OF PRONOUNCEMENT : 04.03.2019 / O R D E R PER BENCH : ITA NOS.2519 TO 2523/CHNY/2016 ARE THE APPEALS FIL ED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)- 14, CHENNAI, IN ITA NOS.52 TO 56/2014-15 DATED 31.0 5.2016 FOR THE AYS 2007-08 TO 2011-12 AND CO NOS.151 TO 154/CHNY/2016 ARE THE CROSS- ITA NO. 2519 TO 2523/CHNY/2016 & CO NOS.151-154/CHNY/2016 :- 2 -: OBJECTIONS FILED BY THE ASSESSEE IN THE REVENUE APP EALS FOR THE AYS 2007- 08 TO 2010-11. 2. SHRI SRIDHAR DORA, JCIT, REPRESENTED ON BEHALF O F THE REVENUE AND SHRI T.BANUSEKAR, CA, REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD.AR THAT IN THE CROSS- OBJECTIONS THE ASSESSEE HAS CHALLENGED THE RE-OPENING OF THE ASSES SMENT. IT WAS A FURTHER SUBMISSION THAT IN THE REVENUES APPEAL, TH E REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION MADE U/S.68 OF THE ACT TREATING THE CASH ADVANCES RECEIVED BY THE ASSESSEE AS UNEXPLAIN ED CASH CREDIT OF THE ASSESSEE. IT WAS SUBMITTED BY AO THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING AND SELLING OF LINEAR ALKYL BENZENE S ULPHURIC ACID (IN SHORT LABSA). THE ASSESSEE WAS RUNNING THE BUSINESS UN DER PROPRIETORSHIP CONCERN IN THE NAME OF M/S.SRINIVASA CHEMICALS ENTE RPRISES AND THE ASSESSEE WAS ALSO MANUFACTURING ACID SLURRY, SPENT ACID AND DETERGENT CAKE/POWDER. THERE WAS A SURVEY CONDUCTED ON THE P REMISES OF THE ASSESSEE ON 14.02.2012 AND A STATEMENT HAD BEEN REC ORDED FROM THE HUSBAND OF THE ASSESSEE. ON THE BASIS OF THE STATEM ENT, THE AO HAD DENIED THE ADDITION OF BENEFIT OF DEDUCTION U/S.80I B OF THE IT ACT ON THE GROUND THAT NO MANUFACTURING ACTIVITY WAS DONE BY T HE ASSESSEE AND HAD FURTHER MADE AN ADDITION REPRESENTING CASH ADVANCES RECEIVED BY THE ASSESSEE DEPOSITED IN HER BANK ACCOUNT. IT WAS A S UBMISSION THAT ON MERITS, THE LD.CIT(A) HAD CONSIDERED THE SUBMISSION S OF THE ASSESSEE AND ITA NO. 2519 TO 2523/CHNY/2016 & CO NOS.151-154/CHNY/2016 :- 3 -: HAD GRANTED THE ASSESSEE THE BENEFIT OF DEDUCTION U /S.80IB OF THE ACT IN PARA NO.4.2.2 OF HIS ORDER, WHEREIN, HE AGREED THAT THE PRODUCTION OF LABSA BY THE ASSESSEE IS A MANUFACTURING PROCESS. IT WAS A SUBMISSION THAT THE ISSUE OF THE GRANT OF BENEFIT OF DEDUCTION U/S.80IB HAS NOT BEEN CHALLENGED BY THE REVENUE. IT WAS A SUBMISSION THA T IN REGARD TO THE ISSUE OF ADDITION MADE U/S.68, REPRESENTING THE CAS H ADVANCES RECEIVED BY THE ASSESSEE HAS BEEN INCLUDED IN THE TURNOVER OF T HE ASSESSEE AND HAD BEEN TALLIED WITH THE CORRESPONDING SALES, THE LD.C IT(A) HAD GIVEN RELIEF TO THE ASSESSEE IN PARA NO.4.2.2 TO 4.3.4 OF HIS ORDER . IT WAS A SUBMISSION THAT THE LD.CIT(A) HAS CATEGORICALLY GIVEN A FINDIN G THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS AND THE SAME H AD BEEN AUDITED, A FACT ACCEPTED BY THE AO AND THE CORRECTNESS OF THE BOOK RESULTS RELATED TO THE PRODUCTION OF LABSA HAS BEEN ACCEPTED IN THE PA ST. NEITHER THE EXCISE AUTHORITIES NOR THE SALES TAX AUTHORITIES HAVE FOUN D ANY DISCREPANCY IN THE RECORDS MAINTAINED BY THE ASSESSEE. NEITHER EXCESS STOCK NOR UNACCOUNTED CASH WAS FOUND IN THE COURSE OF SURVEY PROCEEDINGS. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS CO NSEQUENTLY LIABLE TO BE UPHELD. THE LD.AR DREW OUR ATTENTION TO VARIOUS P AGES OF THE PAPER BOOK TO SUBMIT THAT THE ADVANCES RECEIVED HAVE BEEN CULM INATED INTO SALES AND THE SALES HAVE BEEN BILLED AND THE SAME HAVE ALSO B EEN ACCOUNTED IN THE BOOKS OF THE ASSESSEE. 4. IN REPLY, THE LD.DR SUBMITTED THAT IN PARA NO.4. 3.3 OF THE ORDER OF THE LD.CIT(A), THE LD.CIT(A) HAS GIVEN A FINDING AS FOLLOWS: ITA NO. 2519 TO 2523/CHNY/2016 & CO NOS.151-154/CHNY/2016 :- 4 -: HOWEVER, ON VERIFICATION IT IS FOUND THAT MOST OF THE DETAILS OF THE BUYERS/CUSTOMERS FURNISHED AT THE TIME OF SURVEY SUBSTANTIALLY TALLY WITH THOSE PRODUCED ALONG WITH THE RETURNS OF INCOME, IN FACT, THE NUMBER OF PARTIES F ROM WHOM CASH ADVANCES HAVE BEEN CLAIMED TO HAVE BEEN RECEIVED BY THE APPELLANT ARE MORE THAN THAT WAS ADMITTED AT THE TIME OF SURVEY PROCEEDINGS. IT WAS A SUBMISSION THAT THESE DETAILS WERE NOT SH OWN BEFORE THE AO. HE HAD NO OBJECTION IF THE ISSUES ARE RESTORED TO THE FILE OF THE AO FOR EXAMINATION OF THE SAID FINDINGS AS RECORDED BY THE LD.CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. ADMITTEDLY, THE ISSUE OF DEDUCTION U/S.80IB HAS REACHED FINALITY. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ADDI TION REPRESENTING THE ADDITION MADE INVOKING THE PROVISIONS OF SEC.68 HAS BEEN MADE UNDER THE HEAD INCOME FROM OTHER SOURCES. HOWEVER, THERE I S NO FINDING IN THE ASSESSMENT ORDER AS TO WHY IT IS BEING TREATED UNDE R THE HEAD INCOME FROM OTHER SOURCES ESPECIALLY WHEN IT IS AN ADMITT ED FACT THAT THE ADDITIONS ARE IN RESPECT OF THE ADVANCES ALLEGEDLY RECEIVED BY THE ASSESSEE. FURTHER, AS IT IS NOTICED THAT THE LD.DR HAS SPECIFICALLY ALLEGED THAT THE DETAILS OF THE BUYERS/CUSTOMERS AT THE TIM E OF SURVEY SUBSTANTIALLY TALLYING WITH THOSE PRODUCED ALONG WI TH THE RETURNS OF INCOME HAVE NOT BEEN EXAMINED BY THE AO, IN THE INTEREST O F NATURAL JUSTICE, THE ISSUE IS RESTORED TO THE FILE OF THE AO FOR EXAMINA TION OF THE DETAILS OF THE BUYERS/CUSTOMERS WHO HAVE GIVEN THE ADVANCES AND WH OSE DETAILS WERE FURNISHED AT THE TIME OF SURVEY AND AS TO WHETHER T HE SAME IS TALLIED WITH THE ACTUAL ACCOUNTS OF THE ASSESSEE. IF THE ASSESS EE IS ABLE TO SHOW THE ADVANCES RECEIVED TO BE CULMINATING IN SALES AND TH E SALES HAVING BEEN ITA NO. 2519 TO 2523/CHNY/2016 & CO NOS.151-154/CHNY/2016 :- 5 -: RECORDED IN THE BOOKS OF THE ASSESSEE, THEN ADMITTE DLY NO FURTHER ADDITION WOULD BE CALLED FOR IN THE HANDS OF THE ASSESSEE. WITH THESE DIRECTIONS, THE ISSUES IN THESE APPEALS ARE RESTORED TO THE FIL E OF THE AO FOR VERIFICATION OF THE SAME. 7. COMING TO THE ISSUE OF THE RE-OPENING OF ASSESSM ENT, WHICH HAS BEEN RAISED IN THE CROSS-OBJECTIONS FILED BY THE AS SESSEE, AS THE ISSUES ON MERITS ARE RESTORED TO THE FILE OF THE AO FOR RE-AD JUDICATION, WE ARE NOT GIVING ANY FINDING ON THE RE-OPENING OF THE ASSESSM ENT AND CONSEQUENTLY, THE ISSUES ARE LEFT OPEN AND RESTORED TO THE FILE O F THE AO FOR RE- ADJUDICATION. 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE IN ITA NOS.2519 TO 2523/CHNY/2016 ARE PARTLY ALLOWED FOR STATISTICAL P URPOSES AND THE APPEALS FILED BY THE ASSESSEE IN CO NOS.151 TO 154/ CHNY/2016 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH DAY OF MARCH, 2019, IN CHENNAI. SD/- SD/- ( ) ( S. JAYARAMAN ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER ITA NO. 2519 TO 2523/CHNY/2016 & CO NOS.151-154/CHNY/2016 :- 6 -: /CHENNAI, 3 /DATED: 4 TH MARCH, 2019. TLN , *45 65 /COPY TO: 1. ) /APPELLANT 4. 7 /CIT 2. *+) /RESPONDENT 5. 5 * /DR 3. 7 ( ) /CIT(A) 6. /GF