ACIT, Circle-9(1), Hyderabad V. Anand Food Products, Hyderabad

ITA 1180/HYD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53622 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 17-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYA RAGHAVAN, JUDICIAL MEMBER ITA NO.1180/HYD/2011 ASSESSMENT YEAR 2004-05 THE ACIT, CIRCLE 9(1), HYDERABAD VS M/S ANAN D FOOD PRODUCTS, HYDERABAD (PAN AAEFA 2069 B) APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVAS RESPONDENT BY : SHRI SAI PRASAD DATE OF HEARING : 28.9.2011 DATE OF PRONOUNCEMENT : ORDER PER CHANDRA POOJARI, A.M. THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) VI , HYDERABAD DATED 1 5.3.2011 AND PERTAINS TO THE ASSESSMENT YEAR 2004-05. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN IT S APPEAL: 1. THE CIT(A) ORDER IS ERRONEOUS BOTH IN LAW AND ON FA CTS. 2. THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITIO N MADE ON ACCOUNT OF DISALLOWANCE TOWARDS EXPENDITURE ON PACKING MATERIAL. 3. THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITIO N MADE ON ACCOUNT OF DISALLOWANCE OF LOAN AMOUNTS U/S 269S S ITA NO.1180/H/2011 M/S ANAND FOOD PRODUCTS, HYDERABAD 2 4. THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITIO N MADE ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE PAID TO L ESLE GOMEZ. 5. THE CIT(A) ORDER QUOTING THE TRIBUNAL ORDER WAS CHALLENGED BEFORE THE HONBLE HC BY THE DEPARTMENT. 6. ANY OTHER GROUND THAT MAY URGED AT THE TIME OF HEARING. 3. WE HAVE HEARD BOTH PARTIES AND PERUSED THE M ATERIAL ON RECORD. IN THIS, CASE ORIGINALLY ON 26.03.2007 T HE CIT PASSED THE ORDER U/S 263 OF THE ACT. CONSEQUENT TO THIS THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER O N 30.12.2007 U/S 143(3) R.W.S 263 OF THE ACT. AGAINST THIS ASSESSMENT ORDER THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) DISPOSED OFF THE APPEAL VIDE OR DER DATED 15.3.2011 WHEREIN THE CIT(A) ALLOWED THE ISSUE AGIT ATED BY THE ASSESSEE IN FAVOUR OF THE ASSESSEE ON THE REASO NS THAT THE ISSUES IN DISPUTE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER DATED 23.4.2010 IN ASSESSEES APPEAL AGAINST THIS ORDER OF THE CIT(A) THE REVENUE IS APP EAL BEFORE US. 4. AFTER HEARING BOTH THE PARTIES WE ARE OF THE OPINION THAT THE ISSUE AGITATED BY THE REVENUE IN THIS APPE AL IS SUBJECT MATTER OF APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT U/S 263 DATED 30.12.200 7. THE PRESENT APPEAL IS AGAINST THE CONSEQUENTIAL ORD ER PASSED WITH REFERENCE TO THE ORDER OF THE CIT(A) DA TED 15.3.2011. ON APPEAL BY ASSESSEE AGAINST THE ORDER PASSED U/S 263, THE TRIBUNAL VIDE ITS ORDER DATED 23.4.2 010 IN ITA NO.598/H/2009 HAS PARTLY ALLOWED THE ASSESSEE S APPEAL. THE ISSUE ROSE BEFORE US WAS DECIDED IN FA VOUR OF ITA NO.1180/H/2011 M/S ANAND FOOD PRODUCTS, HYDERABAD 3 THE ASSESSEE BY HOLDING AS FOLLOWS IN ITS ORDER PAS SED ON 23.4.2010 IN ITA NO.598/H/2009: 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS FILED ALL THE COPIES OF PURCHASE B ILLS OF PACKING MATERIAL BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS WHICH WAS EVIDENCED BY THE COPY OF THE LETTER PLACED AT PAGE -1 OF THE PAPER BOOK ADDRESSED TO THE ASSESSING OFFICER B Y THE ASSESSEE ON 17.11.2006. WE ALSO FIND THAT THE ASSESSING OFFICER MADE SEVERAL OBSERVATIONS IN HIS ORDER U/S 143(3) OF THE ACT STATING THAT HE HAS VER IFIED THE BOOKS OF ACCOUNT WITH REFERENCE TO THE BILLS ET C. HENCE, THE ABOVE OBSERVATIONS MADE BY THE ASSESSING OFFICER CLEARLY SHOW THAT THE ASSESSING OFFICER EXAMINED ALL THE BILLS, BOOKS OF ACCOUNT, INVOICE PAYMENTS ETC. IN SOME CASES, HE MADE DISALLOWANCES WHEREVER HE WAS NOT SATISFIED WITH THE EVIDENCE FURNISHED BY THE ASSESSEE. HENCE IN OUR CONSIDERED VIEW, THE CIT WHILE EXERCISING HIS POWERS U/S 263 O F THE ACT IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME OR VIEW IN PLACE OF INCOME DETERMINED OR ASSESSED BY THE ASSESSING OFFICER. MOREOVER, THE LETTER FILED BY THE ASSESSEE FOR THE INFORMATION SUBMITTED BEFORE THE ASSESSING OFFICER SHOWS THAT THE ASSESSI NG OFFICER IN FACT MADE ENQUIRIES DURING THE ASSESSMEN T PROCEEDINGS ON THE ISSUE UNDER CONSIDERATION AND TH E ASSESSEE HAD GIVEN A DETAILED EXPLANATION BY A LETT ER FURNISHING THE RELEVANT DATA. IN SUCH CIRCUMSTANC ES, THE DECISION OF THE ASSESSING OFFICER CANNOT BE HEL D TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE SIMPLY BECAUSE HIS ORDER DOES NOT MAKE DETAILED DISCUSSION IN THIS REGARD. OUR VIEW IS FO RTIFIED BY THE DECISION OF THE AGRA BENCH OF ITAT IN THE CA SE OF RAJESH GOEL AND SONS VS. CIT REPORTED IN 29 SOT 253 AND THE DECISION OF MMBAI BENCH IN THE CASE OF MRS. KATIZA SOOMERBHOY VS. INCOME TAX OFFICER REPORTED IN 100 ITD 173. ITA NO.1180/H/2011 M/S ANAND FOOD PRODUCTS, HYDERABAD 4 REGARDING ACCEPTANCE OF LOANS OF RS.1,996,673/- IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS IN PARA 17 OR ITS ORDER: 17. WE HAVE CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT AS PER ANNEXURE TO THE FORM NO.3CD IN THE AUDIT REPORT, ALL THE DETAILS WERE INCORPORATED IN THE CERTIFICATE VIZ., NAME OF THE LENDER, AMOUNT OF THE LOAN, PAYMENT DETAILS LIKE DO NUMBERS ETC. THE OBSERVATI ON OF THE CIT THAT THE AUDITOR HAD NO CERTIFIED AS TO WHETHER THE LOANS/DEPOSITS IN QUESTION WERE ACCEPTE D BY WAY OF CROSSED CHEQUES/DO IS VERY MUCH CONTRARY TO THE FACT THAT THE AUDITOR HAD CERTIFIED IN HIS A UDIT REPORT IN FORM 3CD THAT THE LOANS/DEPOSITS IN QUEST ION BY WAY OF DO ONLY. HENCE THE CIT IS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO CALL FOR THE PAR TICULARS AS TO WHETHER THE DDS/CHEQUES WERE CROSSED OR NOT. SECURITY CHARGES RS.45,000 PAID TO LESLEY GOMEZ UND ER THE HEAD FINANCE CHARGES FOR THE SECURITY PROVIDED BY HIM FOR OBTAINING LOAN FROM APOSFC IN PARA 24 OR ITS OR DER: 24. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT SIMPLY DIRECTED THE ASSESSING OFFICER TO MAKE ENQUI RIES ABOUT THE COMPENSATION PAID TO SRI K. GOMEZ ON THE GROUND THAT THE MONTHLY AMOUNT OF COMPENSATION APPE ARS TO BE ON HIGHER SIDE WITHOUT ANY ADVERSE MATERIAL B ROUGHT ON RECORD. WE FIND THAT THE AGREEMENT FOR PAYMENT OF COMPENSATION IS IN EXISTENCE SINCE 1998 AND ALL THE ASSESSMENTS FOR THE EARLIER YEARS WERE COMPLETED U/ S 143(3) OF THE ACT. NOW THE ASSESSMENT UNDER CONSIDERATION IS 2004-05. FURTHER, WE FIND MERIT I N THE ASSESSEES SUBMISSION THAT THE COMPENSATION PAYMENT GETS REDUCED FROM RS.19,000 PER MONTH TO RS.45,000 FOR THE ENTIRE YEAR FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN VIEW OF OUR AFORESAID OBSERVATIONS AND FINDINGS, WE HOLD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ITA NO.1180/H/2011 M/S ANAND FOOD PRODUCTS, HYDERABAD 5 NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE IN SO FAR AS ALL THE ISSUES RAISED BY THE C IT. ACCORDINGLY, WE MODIFY HIS ORDER AS INDICATED ABOVE . 5. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, THE RE IS NO SURVIVING ISSUE RELATING TO THE GROUND RAISED BEFOR E US BY THE REVENUE. ACCORDINGLY, THIS REVENUE APPEAL HAVE BECOME INFRUCTUOUS AND DISMISSED AS INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 30.9.2011 SD/ - (ASHA VIJAYA RAGHAVAN) SD/ - (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT M EMBER DATED THE 30 TH SEPTEMBER, 2011 COPY FORWARDED TO: 1. THE ACIT, CIRCLE 9(1), AC GUARDS, HYDERABAD 2. M/S ANAND FOOD PRODUCTS D.NO.16-1-486, SAIDABAD, HYDERABAD 3. THE CIT(A) VI, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/