Concord Biotech Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

CO 77/AHD/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3834 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 14-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO.1245/AHD/2016 AND C.O.NO.77/AHD/2016 ASSESSMENT YEAR: 2011-12 DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(2), AHMEDABAD. .APPELLANT VS. CONCORD BIOTECH LTD., 403, 4 TH FLOOR, ISKON ELEGANCE, PRAHLADNAGAR CROSS ROAD, S.G. HIGHWAY, AHMEDABAD 380 015. [PAN :AAACC 8514 G] APPEARANCE BY SAURABH SINGH FOR THE ASSESSEE ANIL R. SHAH FOR THE REVENUE HEARING CONCLUDED ON : 15.03.2018 ORDER PRONOUNCED ON : 06.06.2018 .RESPONDENT / CROSS OBJECTOR O R D E R PER PRAMOD KUMAR, AM : 1. THIS SET OF APPEAL AND CROSS OBJECTION ARE DIREC TED AGAINST THE ORDER DATED 14 TH MARCH, 2016 PASSED BY THE LEARNED CIT(A) FOR ASSES SMENT YEAR 2011-12. 2. IN THE APPEAL FILED BY THE ASSESSING OFFICER, ON LY GRIEVANCE IS AS FOLLOWS: THE LD.CIT(A) ERRED IN LAW AND IN FACTS IN DELETI NG THE ADDITION OF RS.44,63,131/- MADE IN RESPECT OF PURCHASES NOT REF LECTED IN P& L ACCOUNT. 3. BRIEFLY STATED, THE RELEVANT MATERIAL FACTS ARE AS FOLLOWS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER NOTICED THAT THE ASSESSEE HAS SHOWN PURCHASES OF RS.20,96,45,469/- A S PER PROFIT AND LOSS ITA NO.1245/AHD/2016 & C.O. NO.77/AHD/2016 ASSESSMENT YEAR 2011-12 2 ACCOUNT BUT THE PARTY WISE DETAILS SHOW PURCHASES O F ONLY RS.20,51,82,338/-. WHEN CALLED UPON TO EXPLAIN THE VARIATION, THE ASSE SSEE SUBMITTED A RECONCILIATION STATEMENT WHICH WAS REJECTED BY THE ASSESSING OFFIC ER ON THE GROUND THAT THE REJECTION OF PURCHASES AND MISTAKES IN BOOKING OF P URCHASES ENTRIES WAS NOT SUPPORTED BY EVIDENCES. IN APPEAL, LEARNED CIT(A) D ELETED THE SAID ADDITION BY OBSERVING AS FOLLOWS: 6.3 DECISION : I HAVE GONE THROUGH THE SUBMISSIONS OF THE AO AND EXPLANATIONS FURNISHED BY THE APPELLANT. THIS ADDIT ION IS MADE BY THE AO ON ACCOUNT OF DIFFERENCE BETWEEN PURCHASES SHOWN IN SC HEDULE-14 OF P&L ACCOUNT AT RS.20,51,82,338/- AND THE AGGREGATE LIAB ILITY FOR CREDITORS FOR PURCHASES AT RS.20,96,45,469/- NOT BEING RECONCILED . THE APPELLANT HAS FURNISHED RECONCILIATION STATEMEN T COPIES OF ACCOUNTS, EVIDENCES AND EXPLANATIONS (PAGES 14 TO 4 1 OF THE PAPER BOOK). THE APPELLANT HAS CONTENDED THAT THEY ARE A LIMITED COMPANY; THEIR ACCOUNTS ARE AUDITED UNDER COMPANIES ACT, EXCISE DU TY, VAT AND INCOME- TAX. THE ACCOUNTS ARE MADE AS PER SCHEDULE-VI OF TH E COMPANIES ACT, THE FIGURES IN THE P&L ACCOUNT AND THE BALANCE SHEET AR E GROUPED IN ORDER TO FIT THE NOMINATED NOMENCLATURE AND IF THE GROUPINGS ARE RECONCILED, THEY MATCH WITH EACH OTHER. AMOUNT OF RS.20,96,45,469/- REFLECTING AGGREGATE CREDITORS FOR PURCHASES REPRESENTS TOTAL AMOUNT OF A PURCHASE BILL, WHICH INTER ALIA OVER AND ABOVE THE ACTUAL AMOUNT OF PURC HASE OF RAW MATERIALS/PACKING MATERIALS ALSO CONTAINS AS MANY A S 11 ITEMS/SEGMENTS/ELEMENTS FORMING PART OF THE PURCHAS E BILLS VIZ: EXCISE DUTY ON PURCHASES, EDUCATION CESS-RM, S&HS EDU. CESS ON RM-1%, VAT ON PURCHASE 4%, ADDL. VAT INPUT 1%, VAT ON PURCHASE 12 .5%, ADDL. VAT INPUT 2.5%, AED 4% ON RM, IDS ON CONTRACTOR, TRANSPORT FO R RAW MATERIAL AND VAT ON PURCHASE 1%, IT IS NOTEWORTHY THAT ONLY TWO ELEMENTS VIZ: PURCHASE OF RAW MATERIAL AND PURCHASE OF PACKING MATERIALS G ET REFLECTED AS PURCHASES IN SCHEDULE-14 OF THE P& L ACCOUNT WHICH AGGREGATES TO RS.20,51,82,338/-. ON MAKING A SUMMARY OF ALL THE 1 3 ITEMS/SEGMENT/ELEMENTS OF THE PURCHASE BILLS, THE A GGREGATE AMOUNT OF PURCHASES RS.20,51,62,338/- AND AGGREGATE AMOUNT OF CREDITORS FOR PURCHASES RS.20,96,45,469/-CAN BE RECONCILED IN A S UMMARIZED MANNER. SIMILARLY, DIFFERENCE OF RS.60,718 MENTIONED IN THE ORDER IS A PART OF THE SAME RECONCILIATION STATEMENT. CLAIMS FOR MISTAKES IN BOOKING PURCHASES MADE IN THE ACCOUNT OF SUJATA CHEMICALS AND CLAIMS OF EXCESS BOOKINGS ARE BY WAY OF REDUCING PURCHASES AND INCREASING PRO FITS TO THAT EXTENT; BY ITSELF; IS A JUSTIFICATION. I HAVE ALSO OBSERVED TH AT THE APPELLANT'S ACCOUNTING ON THE ISSUE IS CONSISTENT FROM ONE YEAR TO ANOTHER AND ACCEPTING THE VIEW OF THE AR SHALL NOT MAKE A DIFFERENCE TO BOOK RESUL TS. FURTHER, AS PER APPELLATE ORDER FOR A.Y.2010-11 IN APPELLANT'S OWN CASE, I HAVE DELETED ADDITION MADE TO THE VALUE OF THE CLOSING STOCK ON IDENTICAL GROUNDS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND CLEARLY ES TABLISHED RECONCILIATION ITA NO.1245/AHD/2016 & C.O. NO.77/AHD/2016 ASSESSMENT YEAR 2011-12 3 OF THE TOTAL PURCHASES IN SCHEDULE-14 OF P& L ACCOU NT RS.20,51,82,338/- AND THE AGGREGATE AMOUNT CREDITORS FOR PURCHASES AT RS.20,96,45,469/-, I HAVE NO HESITATION IN DELETING THE ADDITION OF RS.4 4,63,131/- MADE BY THE AO TO THE VALUE OF THE CLOSING STOCK. HENCE GROUND NO.4 IS ALLOWED AND THE APPELLANT GETS RELIEF OF RS.44,63,131/-. 4. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GRANTED BY THE LEARNED CIT(A) AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. 6. WE FIND THAT ON AN IDENTICAL ISSUE THE LEARNED C IT(A)S ACTION, IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11, HAS BEEN CONFIRMED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL, VIDE ORDER DATED 04.08.2017 . LEARNED CIT(A) HAS REFERRED AND RELIED UPON THE SAID ORDER, IN THE IMPUGNED ORD ER, AND WE SEE NO REASONS TO TAKE ANY OTHER VIEW THAN THE VIEW TAKEN BY THE CO-O RDINATE BENCH IN APPROVING SAME. IN ANY CASE, NO SPECIFIC INFIRMITIES HAVE BEE N POINTED OUT IN THE ORDER IMPUGNED IN APPEAL BEFORE US. IN VIEW OF THESE DISC USSIONS, AND BEARING IN MIND ENTIRETY OF THE CASE, WE APPROVE THE CONCLUSIONS AR RIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 8. TURNING TO CROSS OBJECTION FILED BY THE ASSESSEE , GROUND NOS.1, 2 AND 4 WERE NOT PRESSED AND ARE DISMISSED AS SUCH. 9. AS REGARDS, GROUND NO.3 I.E AGAINST LEARNED CIT( A) UPHOLDING THE DISALLOWANCE OF RS.75,229/- UNDER SECTION 14A, WE F IND THAT THIS ISSUE IS COVERED, AGAINST, THE ASSESSEE, BY TRIBUNALS ORDER DATED 04 .08.2017 IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11. WE SEE NO RE ASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDI NATE BENCH. THE GRIEVANCE OF THE ASSESSEE IS THUS REJECTED. ITA NO.1245/AHD/2016 & C.O. NO.77/AHD/2016 ASSESSMENT YEAR 2011-12 4 10. IN THE RESULT, CROSS OBJECTION IS ALSO DISMISSE D. 11. TO SUM UP, THE APPEAL AS ALSO THE CROSS OBJECTI ON ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JUNE, 2018. SD/- SD/- RAJPAL YADAV PRAMO D KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 6 TH JUNE, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD