The DCIT, Bharuch Circle, Bharuch V. Crystal Chemie Pvt.Ltd., Bharuch

ITA 1005/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63082 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 01-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGHSR
• Keywords: Deemed dividend

Judgement Text

ITA NO 1005 AHD/2010 A.YR.. 2003 -04 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AH MEDABAD (BEFORE SHRI D.K. TYAGI, JM & SHRI ANIL CHATURVEDI A.M.) I.T.A. NO.1005/A HD/2010. (ASSESSMENT YEAR: 2003-04) DEPUTY COMMISSIONER OF INCOME TAX, BHARUCH CIRCLE, ABOVE BANK OF BARODA, STATION ROAD, BHARUCH (APPELLANT) VS. CRYSTAL CHEMIE PVT. LTD., PLOT NO.3809 TO 3811, G.I.D.C.,ANKLESHWAR, DIST. BHARUCH (RESPONDENT) PAN: AAACC9218P APPELLANT BY : MR.D.K.SINGH,SR. D.R. RESPONDENT BY : NONE. ( )/ ORDER DATE OF HEARING : 26-09-2012 DATE OF PRONOUNCEMENT : 27-11-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT (A)- VI, BARODA DATED 21-12-2009 FOR THE ASSESSMENT YEAR 2003-04. 2. IN THIS CASE NOTICE OF HEARING DATED 13-8-2012 F IXING THE HEARING ON 26-9-2012 WAS SENT BY R.P.A.D. ON THE ADDRESS MENTI ONED IN FORM NO.36. HOWEVER ON THE DATE OF HEARING I.E. ON 26-9-2012 NO NE APPEARED ON BEHALF ITA NO 1005 AHD/2010 A.YR.. 2003 -04 2 OF THE RESPONDENT NOR ANY ADJOURNMENT APPLICATION W AS RECEIVED. WE THEREFORE, DECIDE THE APPEAL ON THE MATERIAL AVAILA BLE ON RECORD. 3. THE PRESENT APPEAL IS AGAINST DELETING THE PENAL TY OF RS.5,59,910/- LEVIED U/S. 271(1)(C ) OF THE I.T. ACT IMPOSED VIDE ORDER DATED 30-6-2009. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS O F MANUFACTURE AND SELLING OF BULK DRUGS, INTERMEDIATES, AND CHEMICALS AND TRADING IN MEDICINES, DENSITY FIBRE. IT WAS FORMERLY KNOWN AS CRYSTAL SOLVENTS PVT. LTD., AND THE NAME WAS CHANGED TO CRYSTAL CHEMIE PV T. LTD. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30-11-2003 DECLARING TOTAL LOSS AT RS.19,54,880/-.THE RETURN OF INCOME WAS PROCESSED U /S. 143(1) OF THE ACT ON 3-3-2004 ACCEPTING THE INCOME AND THE BOOK PROFI T, AS DECLARED BY THE ASSESSEE. SUBSEQUENTLY THE CASE WAS REOPENED FOR TH E REASON THAT THERE WAS DEEMED DIVIDEND OF RS.16,63,433/- U/S. 2(22)(E) OF THE ACT. ASSESSMENT ORDER WAS FRAMED U/S.143(3) R.W.S. 147 V IDE ORDER DATED 29- 12-2008 AFTER MAKING ADDITIONS/DISALLOWANCES AND TH E TOTAL LOSS WAS DETERMINED AT RS.1,74,300/-. IT WAS ON THE ADDITION OF DEEMED DIVIDEND U/S.2(22)(E) THE A.O. INITIATED PENALTY PROCEEDINGS AND VIDE ORDER DATED 30- 6-2009 LEVIED THE PENALTY OF RS.5,59,910/- U/S. 271 (1) (C ). AGAINST THE AFORESAID ORDER OF THE A.O. ASSESSEE PREFERRED APPE AL BEFORE THE CIT (A). CIT (A) VIDE ORDER DATED 21-12-2009 DELETED THE PEN ALTY BY HOLDING AS UNDER:- 3.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. AR AND FACTS OF THE CASE. IT IS SEEN THAT THE A.O. WHILE MAKING QUA NTUM ADDITION MADE CERTAIN PRESUMPTIONS REGARDING SHARE HOLDING S O AS TO MAKE A CASE FOR REVENUE. WITHOUT GOING INTO THE MERITS OF ADDITION, DURING THE PENALTY PROCEEDINGS THE A.O. HAS NOT BROUGHT AN Y MATERIAL ON ITA NO 1005 AHD/2010 A.YR.. 2003 -04 3 RECORD SO AS TO MAKE A CASE EITHER FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. NO COGENT REASONS WERE ALSO GIVEN BY THE A.O. THE CONTENTION OF THE APPELLANT THAT ALL THE D ETAILS WERE AVAILABLE IN THE RETURN MERITS CONSIDERATION. THERE IS ALSO NO CLEAR CUT FINDING BY THE A.O. THAT WHETHER THE PENALTY WAS FOR FURNIS HING INACCURATE PARTICULARS OR CONCEALING THE INCOME. THUS, TAKING TOTALITY OF FACTS AND CIRCUMSTANCES INTO ACCOUNT, I AM OF THE VIEW THAT T HE A.O. WAS NOT JUSTIFIED IN LEVYING CONCEALMENT PENALTY IN THE CAS E OF THE APPELLANT. 4. IT IS AGAINST THE ORDER OF CIT (A), THE REVENUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US THE LD. D.R. SUBMITTED THAT ON PERUSIN G THE BALANCE SHEET IT WAS NOTICED BY THE A.O. THAT THE LOAN RECEIVED A MOUNTING TO RS.19,96,268/- FROM M/S. SHREE PHYLAM MARKETING PVT . LTD., WHICH IS A COMPANY CONTROLLED BY THE DIRECTORS. THE ASSESSEE W AS ASKED TO PRODUCE COPY OF ROC RETURN FILED BY SHREE PHYLAM MARKETING PVT. LTD., AND A COPY OF ITS AUDITED ACCOUNTS. SINCE THE ASSESSEE COULD N OT PRODUCE THE DETAILS CALLED FOR THE A.O., RELYING ON THE RATIO LAID DOWN BY THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. P.K. BADIANI (76 ITR 369) A. O. HELD THE AMOUNT RECEIVED AS LOAN TO BE DEEMED DIVIDEND AND ADDED IT TO THE INCOME. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. 6. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WHILE DELETING THE ADDITION OF PENALTY, CIT (A) HAS GIVEN A FINDING THAT A.O. WHILE MAKING QUANTUM ADDITIONS HAD MADE CERTAIN PRE SUMPTIONS REGARDING SHAREHOLDINGS. HE FURTHER HELD THAT A.O. HAD NOT BR OUGHT ANY MATERIAL ON RECORD TO MAKE A CASE FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. WE FURTHER FIND THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF DEEMING ITA NO 1005 AHD/2010 A.YR.. 2003 -04 4 PROVISIONS OF SECTION 2(22)(E). NOTHING HAS BEEN BR OUGHT ON RECORD BY THE REVENUE TO PROVE THAT THE ASSESSEE HAD SUBMITTED IN ACCURATE PARTICULARS OR THE EXPLANATION WAS FOUND TO BE FALSE. SINCE THE ADDITION HAS BEEN MADE ON THE BASIS OF DEEMING PROVISION WHICH DOES NOT NE CESSARY LEAD TO THE CONCLUSION OF CONCEALMENT OF INCOME OR FURNISHING O F INACCURATE PARTICULARS OF INCOME. WE ARE OF THE VIEW THAT NO PENALTY CAN B E IMPOSED IN THE PRESENT CASE. THUS WE FIND NO REASON TO INTERFERE I N THE ORDER OF CIT (A) AND WE THUS UPHOLD THE ORDER OF THE CIT (A) IN DELE TING THE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON 27 -11 - 2012. SD/- SD/- ( D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-VI,BARODA. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO 1005 AHD/2010 A.YR.. 2003 -04 5 1.DATE OF DICTATION 22 - 11 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 26 /11 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER ..