The ACIT, Circle-2(1), Vijayawada V. Smt Kanumilli Suseela, Vijayawada

CO 6/VIZ/2011

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6279 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G V V SATYANARAYANA
• Assessee Lawyers: TH L PETER
• Section: 263

Judgement Text

ITA NO26/V/2011 & CO 6 OF 11 K SUSEELA, VJA. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 26 /VIZAG/ 20 11 ASSESSMENT YEAR : 2007 - 08 SMT. K. SUSEELA VIJAYAWADA VS. ACIT, CIRCLE - 2(1) VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO.AFWPK 8823N CO NO.6/VIZAG/2011 ASSESSMENT YEAR : 2007 - 08 ACIT CIRCLE - 2(1) VIJAYAWADA VS. SMT. K. SUSEELA VIJAYAWADA (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI G.V.V. SA TYANARAYANA, CA RESPONDENT BY: SHRI TH.L. PETER, CIT(DR) ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THE ASSESSEE HAS PREFERRED AN APPEAL AGAINST THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT ON THE GROUND THAT CIT HA S ERRED IN ISSUING DIRECTIONS TO THE ASSESSING OFFICER TO EXAMINE THE SUNDRY CREDITORS I.E. M/S. GHARDA CHEMICALS & M/S. GUJARAT INSECTICIDES GROUP AGAINST WHOM THE CREDIT OF RS.2,76,93,279/- WAS SHOWN AND MADE THE ADDITION OF THE SAME WITHOUT REALIZING THAT THE SAID CREDITS WERE EXAMINED IN 20 05-06 AND AN ADDITION OF RS.2,85,79,116/- WERE MADE U/S 41(1) OF THE ACT ON CESSATION OF LIABILITY. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ASSESSMENT ORDER AND THE ORDER OF THE CIT PASSED U/ S 263 OF THE ACT. THE ASSESSMENT WAS REVISED ON DIFFERENT POINTS BUT THE ASSESSEE HAS MAIN GRIEVANCE WITH REGARD TO THE DIRECTIONS OF THE CIT FOR MAKING AN ADDITION WITH RESPECT TO THE CREDITS APPEARING IN THE NAME OF M/S . GHARDA CHEMICALS ITA NO26/V/2011 & CO 6 OF 11 K SUSEELA, VJA. 2 LIMITED AND GUJARAT INSECTICIDES LTD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSMENT FOR THE ASSESSMENT YE AR 2005-06 WAS RE- OPENED AND THE VERIFICATION WAS MADE FROM THE AFORE SAID CREDITORS AND IN RESPONSE THEREOF, IT WAS INFORMED TO THE ASSESSING OFFICER THAT THERE WERE NO BALANCE DUE BY THE ASSESSEE SINCE THE AMOUNTS WERE WRITTEN OFF IN THE YEAR 2001-02 BY M/S. GUJARAT INSECTICIDES LTD. AND IN TH E YEAR 2004-05 BY M/S. GHARDA CHEMICALS LTD. RELYING UPON THIS INFORMATIO N, THE ASSESSING OFFICER HAS TREATED THE ENTIRE CREDIT AS AN INCOME OF THE A SSESSEE U/S 41(1)(A) OF THE I.T. ACT. AGAINST THE ORDER OF THE A.O. THE APPEAL IS PENDING WITH THE CIT (A). SINCE THE ISSUE IS SUB-JUDICE BEFORE THE CIT (A) AN D ADDITION TO THIS EFFECT WAS MADE IN A.Y. 2005-06, THE SIMILAR ADDITION CANN OT BE MADE IN THE IMPUGNED ASSESSMENT YEAR AS IT AMOUNTS TO A DOUBLE ADDITION. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN THE LIGHT OF THESE FACTS, THE DIRECTIONS OF THE CIT EITHER BE QUASHED OR MODI FIED. 3. THE LD. D.R. DID NOT DISPUTE THIS FACTUAL ASPECT AND HE WAS AGREED TO THE PROPOSITION THAT THE DIRECTIONS OF THE CIT MAY BE MODIFIED. 4. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE R IVAL SUBMISSIONS AND FROM PERUSAL OF RECORD, WE FIND THAT THE CIT HAS GI VEN A DIRECTION TO THE A.O. TO EXAMINE THIS ISSUE AND MAKE AN ADDITION IN THIS YEAR. THE CIT HAS NOT TAKEN A COGNIZANCE OF THE FACTS THAT IN THE ASSESSM ENT YEAR 2005-06 THE ASSESSMENT WAS RE-OPENED AND THE ADDITION OF THE AF ORESAID CREDIT WAS MADE ON ITS CESSATION U/S 41(1)(A) OF THE ACT AGAINST WH ICH THE APPEAL IS PENDING BEFORE THE CIT(A). SINCE THE ISSUE IS SUB-JUDICE I N A.Y. 2005-06, THE ADDITION OF THE SAME CREDIT ON ITS CESSATION CANNOT BE MADE IN THE IMPUGNED ASSESSMENT YEAR. WE, THEREFORE, OF THE VIEW THAT D IRECTION OF THE CIT REQUIRES A PROPER MODIFICATION. ACCORDINGLY, WE MO DIFY THE DIRECTION OF THE CIT AND DIRECT THE A.O. TO EXAMINE THIS ISSUE IN TH E LIGHT OF OUTCOME OF THE FIRST APPEAL PENDING BEFORE THE CIT (A) PERTAINING TO THE ASSESSMENT YEAR 2005-06 AND THEREAFTER ADJUDICATE THE ISSUE IN ACCO RDANCE WITH LAW. ITA NO26/V/2011 & CO 6 OF 11 K SUSEELA, VJA. 3 5. THE REVENUE HAS FILED THE CROSS OBJECTIONS IN SU PPORT OF THE ORDER OF THE CIT. SINCE THE ORDER OF THE CIT IS MODIFIED, T HIS CROSS OBJECTION BECOMES INFRUCTUOUS. WE ACCORDINGLY DISMISS THE SAME. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND C.O. OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13.7.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 13 TH JULY, 2011 COPY TO 1 G.V.V. SATYANARAYANA, FCA, Y.V. JAGANNADHA RAO & CO ., D.NO.29 - 1 - 17, 2 ND FLOOR, SRI KRISHNA NILAYAM, SESHADRI SASTRI STREET , GOVERNORPET, VIJAYAWADA-520 002. 2 ACIT, CIRCLE - 2(1), VI JAYAWADA 3 THE CI T, VIJAYAWADA 4 THE CIT (A) , VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM