M/s. Cadila Pharmaceuticals Ltd. (Erstwhile known as Casil Industries Ltd.), Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-1(1)(2), Ahmedabad

ITA 1131/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6232 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-03-2020
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Initiation of penalty proceedings; Tax effect
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ( THROUGH VIRTUAL COURT ) ITA. NOS: 1131 & 1101/AHD/2017 (ASSESSMENT YEAR: 2009-10) CADILA PHARMACEUTICALS LTD. (ERSTWHILE KNOWN AS CASIL INDUSTRIES LTD.) 708, SARKHEJ DHOLKA ROAD, BHAT, AHMEDABAD-382210 DCIT, CIRCLE-1(1)(2), (ERSTWHILE ACIT(OSD), RANGE-1) AHMEDABAD V/S & DCIT, CIRCLE-1(1)(2), (ERSTWHILE ACIT(OSD), RANGE-1) AHMEDABAD CADILA PHARMACEUTICALS LTD. (ERSTWHILE KNOWN AS CASIL INDUSTRIES LTD.) 708, SARKHEJ DHOLKA ROAD, BHAT, AHMEDABAD-382210 (APPELLANT) (RESPONDENT) PAN: AAACC6251E APPELLANT BY : SHRI S.N. SOPARKAR, SR. ADV. & SHRI PARIN SHAH, A.R RESPONDENT BY : SHRI VINOD TANWANI, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -08-2020 DATE OF PRONOUNCEMENT : 24 -08-2020 ITA NOS. 1131 & 1101/AHD/2017 . A.Y. 2009-10 2 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE IN ITA NO. 1131/AHD/2017 AND REVENUE IN ITA NO. 1101/AHD/2017 AGAINST THE ORDER OF THE LD. CIT(A). IN ITA NO. 1131/AHD/2017, ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION U/S. 68 OF RS. 1,70,92,889/- IN RESPECT OF SUNDRY CREDITORS FOR THE REASON THAT APPELLANT FAILED TO SUBMIT CONFIRMATIONS IGNORING FACT THAT APPELLANT HAS FURNISHED COPIES OF INVOICES, BANK PAYMENT VOUCHERS, CONFIRMATIONS AND LEDGER COPIES WHICH PROVES IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. LD. CIT(A) OUGHT TO HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND DELETE THE ENTIRE ADDITION. IT BE SO HELD NOW. 2. INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) IS UNJUSTIFIED. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF PHARMACEUTICALS PRODUCTS AND ASSESSEEE COMPANY HAD GIVEN SUNDRY CREDITS TO 50 CONCERNED AMOUNTING TO RS. 24934596 AND WAS ASKED BY THE ASSESSING OFFICER TO SUBMIT THE DETAILS OF THE 50 PERSONS BUT ASSESSEE COULD NOT FURNISH ANY DETAIL. THEREFORE, IN THE ABSENCE OF REQUIRED DETAILS, LD. A.O. MADE DISALLOWANCE OF RS. 24934596/-. 3. THEREAFTER, ASSESSE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND ASSESSE FILED CERTAIN DETAIL OF 49 PERSONS AMOUNTING TO RS. 24934596/- AND STATED THAT ALL THESE ADVANCES WERE GIVEN FOR SUPPLY OF GOODS AND SERVICES. LD. CIT(A) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER BUT APPELLANT DID NOT ITA NOS. 1131 & 1101/AHD/2017 . A.Y. 2009-10 3 SUBMIT THE REQUIRED DETAILS BEFORE THE LD. A.O. IN REMAND PROCEEDINGS REGARDING BONAFIDE OF THE ADVANCES AND HAS FAILED TO DISCHARGE ITS ONUS. 4. AT THE OUTSET, SHRI S.N. SOPARKAR, LD. SENIOR ADVOCATE REQUESTED THAT IN ORDER TO MEET END OF THE JUSTICE IF THIS MATTER BE SENT BACK TO THE ASSESSING OFFICER WITH THE DIRECTION THAT LD. A.O. WILL MAKE ENQUIRY IF ADVANCES ARE GIVEN FOR SUPPLY OF GOODS AND SERVICES THEN DISALLOWANCES MAY BE DELETED. 5. ON THE OTHER HAND, LD. D.R. HAS FAIRLY AGREED. 6. THUS, IN SUCH CIRCUMSTANCES, WE REMAND THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO MAKE DETAILED ENQUIRY WHETHER DISALLOWED AMOUNT WAS PAID FOR PURCHASES AND SERVICES IF IT IS PROVED THEN ADDITION WILL BE DELETED BY THE LD. A.O. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. NOW WE COME TO ITA NO. 1101/AHD/2017, THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 14,23,179/-. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE MADE AGAINST SUNDRY CREDITORS TO THE EXTENT OF RS. 78,41,707/- AGAINST THE ADDITION OF RS. 2,49,34,596/-. ITA NOS. 1131 & 1101/AHD/2017 . A.Y. 2009-10 4 9. AT THE OUTSET, SHRI S.N. SOPARKAR, LD. SENIOR ADVOCATE ARGUED THAT DEPARTMENTAL APPEAL IS SQUARELY COVERED BY THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 WHEREIN NO APPEAL CAN BE FILED IN ITAT IF DISPUTED TAX AMOUNT IS LESS THAN RS. 50 LAKHS. IN THAT CASE, ITAT SHALL DISMISS THE APPEAL OF THE REVENUE. 10. ON THE LD. D.R. AGREED FOR THE SAME AND STATED THAT THIS APPEAL IS COVERED BY THE CBDT CIRCULAR NO. 17 OF 2019 DATED. 08.08.2019. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. 12. IN THE COMBINED RESULT ITA NO. 1131/AHD/2017 FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AND ITA N. 1101/AHD/2017 FILED ON BEHALF OF THE REVENUE IS DISMISSED ON ACCOUNT OF LOW TAX EFFECT COVERED BY THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019. ORDER PRONOUNCED IN OPEN COURT ON 24 - 08- 2020 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 24/08/2020 RAJESH COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD