Sivam Textile Mills, Erode V. ITO, Erode

CO 36/CHNY/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8459 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-04-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S SRIDHAR
• Section: 143(3); 37

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO. 299/MDS/2012 ASSESSMENT YEAR : 2008-09 & C.O. NO. 37/MDS/2012 [IN I.T.A. NO. 299/MDS/2012] THE INCOME TAX OFFICER, WARD I(1), ERODE. VS. M/S. SRI VELAVAR TEXTILE INDUSTRIES, PAVADI STREET, KOLLAMPALAYATHARKADU, SURAMPATTYVALASU, ERODE 638 009. [PAN: AAHFS5499Q] (APPELLANT) (RESPONDENT/ CROSS OBJECTOR) I.T.A. NO. 300/MDS/2012 ASSESSMENT YEAR : 2008-09 & C.O. NO. 36/MDS/2012 [IN I.T.A. NO. 300/MDS/2012] THE INCOME TAX OFFICER, WARD I(1), ERODE. VS. M/S. SIVAM TEXTILE MILLS, NO. 102, CHOKKANATHAR STREET, ERODE 638 001. [PAN: AAHFS5299L] (APPELLANT) (RESPONDENT/ CROSS OBJECTOR) APPELLANT BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE DATE OF HEARING : 15.04.2013 DATE OF PRONOUNCEMENT : 17.04.2013 ORDER PER S.S. GODARA, JUDICIAL MEMBER THESE TWO REVENUES APPEALS AND CROSS OBJECTIONS IN CASE OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .299 & 300 299 & 300 299 & 300 299 & 300/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO NONO NOS SS S. .. .37 & 36 37 & 36 37 & 36 37 & 36/M/12 /M/12 /M/12 /M/12 2 DIFFERENT ASSESSEES, EMANATE FROM SEPARATE ORDERS O F THE COMMISSIONER OF INCOME TAX (APPEALS) I, COIMBATORE; BOTH DATED 29.1 1.2011 IN ITA NO. 199/10-11 AND 200/10-11; RESPECTIVELY, FOR ASSESSME NT YEAR 2008-09, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. IN BOTH CASES, THE REVENUE VEHEMENTLY SUBMITS T HAT THE CIT(A) HAS ERRED IN DELETING ADDITIONS REGARDING TRADE CREDITS MADE BY THE ASSESSING OFFICER TO THE TUNE OF ` .11,62,552/- AND ` .18,93,470/- FOR WANT OF GENUINENESS. THE DR INVITES OUR ATTENTION TO THE FI NDINGS IN THE ASSESSMENT ORDERS AND PRAYS FOR ACCEPTANCE OF THE APPEAL BY RE STORING THE ADDITIONS. 3. THE ASSESSEES IN BOTH CASES CHOOSES TO RELY ON CROSS OBJECTIONS SUPPORTING THE FINDINGS OF THE CIT(A) UNDER CHALLEN GE. IN LIGHT THEREOF, IT WOULD BE ARGUED BEFORE US THAT THE ADDITIONS HAVE B EEN RIGHTLY DELETED BY THE CIT(A). ACCORDINGLY, PRAYER HAS BEEN MADE TO AF FIRM THE FINDINGS OF CIT(A). 4. IN BOTH CASES, THE ASSESSEES NAMELY; M/S. SRI VE LAVAR TEXTILE INDUSTRIES AND M/S. SIVAM TEXTILE MILLS ARE FIRMS ENGAGED IN THE BUSINESS OF TEXTILE PRINTERS AND TRADING RESPECTIVELY. ON 25.08 .2008, THERE WAS A SURVEY IN THE BUSINESS PREMISES OF M/S. EASWARA & COMPANY GROUP OF CASES CONSISTING OF THESE TWO ASSESSEES. IN COURSE THEREO F, BOTH OF THEM ARE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .299 & 300 299 & 300 299 & 300 299 & 300/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO NONO NOS SS S. .. .37 & 36 37 & 36 37 & 36 37 & 36/M/12 /M/12 /M/12 /M/12 3 STATED TO HAVE DISCLOSED SPECIAL SALES AS ADDITIO NAL INCOME OF ` .12.00 LAKHS EACH WHICH WAS OVER AND ABOVE THE NORMAL INCO ME. HOWEVER, IN THEIR RESPECTIVE RETURNS, THEY HAD ONLY DISCLOSED INCOM ES OF ` .7,90,687/- AND ` .7,20,434/-. 5. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFI CER NOTICED THAT EACH ASSESSEE HAD RAISED CLAIM OF TRADE CREDITORS TO THE TUNE OF ` .24,07,930/- AS ON 31.03.2008 ATTRIBUTED TO VARIOUS CREDITOR SAND T HAT SOME OF THEM WERE COMMON IN BOTH CASES. THIS PROMPTED THE ASSESSING O FFICER TO SEEK VERIFICATION OF THE TRADE CREDITS CLAIMED. HE IS AL SO STATED TO HAVE ISSUED NOTICES TO THE CREDITORS, WHEREIN, SOME OF THEM WER E SERVED AND OTHERS REMAINED UNSERVED. THEREAFTER, IN THE COURSE OF ASS ESSMENT, SOME OF THE CREDITORS DID NOT SUPPORT ASSESSEES CLAIMS. AS THE ASSESSMENT ORDERS IN BOTH CASES SUGGEST, FEW OF THE CREDITORS COULD NOT EVEN BE FOUND BY THE ASSESSING OFFICER. SO, HE WAS OF THE VIEW THAT SINC E THE CREDITORS HAD NEITHER DEPOSED IN SUPPORT OF ASSESSEES VERSIONS OR THEY C OULD BE FOUND, THE EXPLANATION TENDERED IN SCRUTINY LACKED GENUINENE SS. THEREFORE, HE MADE ADDITIONS ABOVE SAID IN BOTH ASSESSMENT ORDERS. 6. AGGRIEVED, THE ASSESSEES HEREIN PREFERRED APPEA LS. WE NOTICE FROM THE ORDERS UNDER CHALLENGE THAT THE CIT(A) HAS ACCE PTED THE CONTENTIONS AND DELETED THE ADDITIONS. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .299 & 300 299 & 300 299 & 300 299 & 300/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO NONO NOS SS S. .. .37 & 36 37 & 36 37 & 36 37 & 36/M/12 /M/12 /M/12 /M/12 4 THIS LEAVES THE REVENUE AGGRIEVED. 7. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO TH E RESPECTIVE CONTENTIONS OF THE PARTIES AND HAVING PERUSED THE CASE FILES, W E FIND THAT BEFORE DELETING THE ADDITIONS, THE CIT(A) HAS SPECIFICALLY HELD THA T EVEN IN SUBSEQUENT ASSESSMENT YEARS, THE ASSESSEES HEREIN HAVE TRANSAC TED WITH THE CREDITORS IN QUESTION NUMBERING FIVE IN I.T.A. NO. 299/MDS/20 12 AND EIGHT IN I.T.A. NO. 300/MDS/2012. THEREAFTER, HE HOLDS THAT DATE-WISE, PAYMENT-WISE AND BILL- WISE PAYMENTS STAND TALLIED IN THE LOWER APPELLATE PROCEEDINGS. HE ALSO PROCEEDS TO CONCLUDE THAT THE ASSESSEES GROSS PROF IT MARGIN IN THE IMPUGNED ASSESSMENT YEAR ALSO EXCEEDS THE ONE DECLA RED IN THE EARLIER ASSESSMENT YEARS. HE ALSO RECORDS A FINDING THAT TH EIR BOOKS OF ACCOUNT HAVE NOT BEEN REJECTED IN THE ASSESSMENT PROCEEDING S. THEREFORE, IN TOTALITY OF CIRCUMSTANCES, THE LOWER APPELLATE AUTHORITY HAS PROCEEDED TO DELETE THE ADDITIONS. WE MAKE IT CLEAR THAT NO PAPER BOOK ETC OR ANY OTHER DOCUMENTARY EVIDENCE HAS BEEN FILED BEFORE US BY THE REVENUE TO SUBSTANTIATE ITS BALD ASSERTIONS. WE REITERATE THE TRITE PREPOSITION OF L AW THAT FIRST APPELLATE AUTHORITY CAN RE-APPRECIATE THE ENTIRE EVIDENCE AVA ILABLE ON RECORD AS PER THE PROVISIONS OF THE ACT. PROCEEDING ON THIS ANA LOGY, WE UPHOLD CIT(A)S ORDER DELETING THE ADDITIONS IN QUESTION 8. CONSEQUENTLY, BOTH APPEALS ARE DISMISSED. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .299 & 300 299 & 300 299 & 300 299 & 300/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO NONO NOS SS S. .. .37 & 36 37 & 36 37 & 36 37 & 36/M/12 /M/12 /M/12 /M/12 5 9. SINCE THE CROSS OBJECTIONS FILED BY THE ASSESSE ES ONLY SUPPORT CIT(A)S ORDERS, THE SAME HAVE BECOME INFRUCTUOUS. ORDER PRONOUNCED ON WEDNESDAY, THE 17 TH OF APRIL, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 17.04.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.