Asian Petroproduct & Exports Limited, Baroda V. The Dy.CIT., Circle-1(1), Baroda

ITA 1206/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94295 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 01-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAVIN KUMAR
• Assessee Lawyers: M K PATEL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND ANIL CHATURVEDI ACCOUNTANT MEMBER I.T.A. NO.1206/AHD/2012 AND I.T.A. NO.989/AHD/2012 (ASS TT. YEARS: 2005-06 & 2008-09) ASIAN PETROPRODUCTS AND EXPORTS LIMITED, 204/205 STERLING CENTRE, R.C. DUTT ROAD, ALKAPURI, BARODA PAN AACCA 8443 J VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), AAYKAR BHAVAN, NEAR RACE COURSE CIRCLE, BARODA. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M.K. PATEL, A.R. REVENUE BY SHRI PRAVIN KUMAR, D.R. / DATE OF HEARING : 06- 08-2015 / DATE OF PRONOUNCEMENT: 28/08/2015 / O R D E R PER ANIL CHATURVEDI ACCOUNTANT MEMBER: ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 2 THESE TWO APPEAL FILED BY THE ASSESSEE ARE AGAINST THE ORDER OF CIT (A)-I, BARODA DATED 26-03-2012 FOR ASSESSMENT Y EAR 2005-06 AND DATED 3-2-2012 FOR A.Y. 2008-09 RESPECTIVELY. 2. BEFORE US, AT THE OUTSET BOTH THE PARTIES SUBMIT TED THAT THOUGH THE APPEALS OF THE ASSESSEE RELATES TO TWO DIFFEREN T ASSESSMENT YEARS BUT THE ISSUE IN BOTH THE APPEALS ARE IDENTICAL EXC EPT FOR THE ASSESSMENT YEAR AND THE AMOUNT INVOLVED AND THEREFO RE THEIR SUBMISSIONS WOULD BE APPLICABLE TO BOTH THE APPEALS . WE THEREFORE PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLI DATED ORDER FOR THE SAKE OF CONVENIENCE. WE THUS PROCEED WITH THE FACTS OF THE CASE FOR A.Y. 2005-06. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN TH E BUSINESS OF MANUFACTURING AND SELLING OF VARIOUS CHEMICALS. ASS ESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 27-10-2005 DECLARING TOTAL LOSS OF RS.47,36,330/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED UNDER SECTION 143(3) R.W.S. 1 44 BY ORDER DATED 16-11-2007 AND THE TOTAL LOSS WAS DETERMINED AT RS. 34,85,180/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSE E CARRIED THE MATTER BEFORE LD. CIT (A) WHO VIDE ORDER DATED 26-03-2012 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT (A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLO WING GROUNDS. 1. THE LD.CIT (A) ERRED IN LAW AND ON FACTS HAS CO NFIRMED THE GROUNDS RELATING TO THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 144 OF THE INCOME TAX ACT,1961. ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 3 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS HA S CONFIRMED THE ADDITION OF RS.6,14,472/- RELATING TO THE ESTIM ATION OF NET PROFIT @ 1% OF TOTAL SALES. IT IS SUBMITTED THA T THE ESTIMATING NET PROFIT @ 1% IS UNCALLED FOR AND B E DIRECTED TO BE DELETED. 3. THE LD. CIT (A) ERRED IN LAW AND ON FACTS HAS DI SMISSED THE GROUND RELATING TO THE INITIATION OF PENALTY PROCEE DINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT,1961. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DEL ETE OR MODIFY ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT TH E TIME OF HEARING OF THIS APPEAL. 5. BEFORE US, AT THE OUTSET THE LD. A.R. SUBMITTED THAT THE ONLY EFFECTIVE GROUND IS WITH RESPECT TO THE ESTIMATION OF NET PROFITS. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS SESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS, THE INVENTO RY OF STOCK WITH THE DAY-TO-DAY STOCK REGISTER, CONSUMPTION REGISTER AND OTHER DOCUMENTS. ASSESSING OFFICER HAS NOTED THAT DESPITE VARIOUS OP PORTUNITIES, ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS. ASSESSING OFF ICER IN THE ABSENCE OF THE DETAILS AND THE NON CO-OPERATION BY THE ASSESSE E, PROCEEDED TO FRAME THE ASSESSMENT UNDER SECTION 144 READ WITH SE CTION 143(3). ASSESSING OFFICER NOTED THAT ASSESSEE HAS DISCLOSED GROSS PROFIT AT 0.25% ONLY WHICH CONSIDERING THE HUGE INVESTMENT AN D THE TURNOVER OF THE ASSESSEE, WAS TOO LOW. ASSESSING OFFICER HAS N OTED THAT HE WAS NOT SATISFIED WITH THE CORRECTNESS AS WELL AS THE COMPL ETENESS OF THE ACCOUNTS OF THE ASSESSEE. HE ACCORDINGLY, ESTIMATED THE NET PROFIT TO BE ONE PERCENT OF THE SALES AND MADE ADDITION OF RS.6, 14,472/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER ASSESSE E CARRIED THE MATTER BEFORE THE LD. CIT (A) WHO UPHELD THE ACTION OF ASS ESSING OFFICER BY HOLDING AS UNDER:- ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 4 REGARDING ADDITION OF RS.6,14,472/-, BEING 1% OF TURNOVER TO APPELLANTS INCOME AS NET PROFIT, FACT REMAINS T HAT APPELLANT DID NOT FURNISH THE INFORMATION CALLED FOR BY THE ASSES SING OFFICER DURING ASSESSMENT PROCEEDINGS TO VERIFY CORRECTNESS OF ITS ACCOUNTS. ASSESSING OFFICER HAD ASKED FOR JUSTIFICA TION FOR ABNORMAL INCREASE, I.E. BY MORE THAN 25% IN ITEMS O F EXPENSES AS COMPARED TO PRECEDING YEAR, INVENTORY OF OPENING AN D CLOSING STOCK OF FINISHED GOODS, DAY TO DAY STOCK REGISTER ETC., WHICH WERE NOT PRODUCED. NO SUBMISSIONS ARE MADE REGARDING THE SE ASPECTS DURING APPEAL ALSO. IN VIEW OF THIS, APPELLANTS CO NTENTION ABOUT A.OS OBSERVATION BEING VAGUE AND NOT SPECIFIC IS N OT TENABLE. FOLLOWING RATIO OF DECISION RELIED UPON BY THE ASSE SSING OFFICER IN THE CASE OF SAMIR DIAMOND EXPORTS LTD., 71 ITD 75 ( MUMBAI), IT IS HELD THAT ASSESSING OFFICER WAS JUSTIFIED IN BEING NOT SATISFIED WITH COMPLETENESS AND CORRECTNESS OF APPELLANTS ACCOUNT S AND IN INVOKING SECTION 145(3) OF THE ACT, THEREBY MAKING ADDITION OF 1% OF SALES TO APPELLANTS INCOME. ADDITION OF RS.6,14 ,472/- TO APPELLANTS INCOME IS CONFIRMED. 7. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), ASSES SEE IS NOW IN APPEAL BEFORE US. 8. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIO NS MADE BEFORE LD. CIT (A). ON THE OTHER HAND LD. D.R. SUPPORTED T HE ORDER OF ASSESSING OFFICER AND LD. CIT (A) AND SUBMITTED THA T IN THE ABSENCE OF DETAILS, THE ONLY RECOURSE AVAILABLE TO ASSESSING O FFICER WAS ESTIMATION AND HE HAS BEEN FAIR IN HIS ESTIMATION. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THE ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE, ASSESSING OFFICER MADE ADDITION OF 1% OF THE TURNOVER OF THE ASSESSEE. LD. CIT (A) HAS ALSO NOTED THAT THE REQUI RED DETAILS WERE NEITHER FILED BEFORE A.O. NOR FILED BEFORE HIM DURI NG THE APPELLATE PROCEEDINGS. BEFORE US ALSO NO MATERIAL EVIDENCE HA S BEEN FURNISHED BY THE ASSESSEE TO DEMONSTRATE THE UNREASONABLENESS OF THE ADDITION. IN ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 5 VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF LD. CIT (A) AND THUS THE GROUND OF ASSESSEE IS D ISMISSED. 10. OTHER GROUNDS RAISED ARE GENERAL AND CONSEQUENT IAL IN NATURE AND NOT ARGUED AND THEREFORE NOT ADJUDICATED. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DI SMISSED. I.T.A. NO.989/AHD/2012 A.Y. 2008-09. 12. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASS ESSING OFFICER NOTICED THAT ASSESSEE HAD NOT CARRIED OUT ANY MANUF ACTURING ACTIVITIES DURING THE YEAR AND HAD ALSO FAILED TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS, VOUCHERS ETC., FOR VERIFICATION. HE WAS THER EFORE, OF THE VIEWS THAT THE GENUINENESS OF THE EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE CANNOT BE RULED OUT. HE ACCORDINGLY REJECTE D THE BOOKS OF ACCOUNTS AND COMPUTED THE NET PROFIT AT THE RATE OF 8% OF THE TOTAL RECEIPTS AND THUS MADE AN ADDITION OF RS.4,54,065/- . AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MA TTER BEFORE THE LD. CIT (A) WHO VIDE ORDER DATED 3-2-2012 DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER:- 3.2. I HAVE CONSIDERED THE SUBMISSIONS. DURING ASS ESSMENT PROCEEDINGS, APPELLANT COULD NOT PRODUCE DETAILS OF EXPENSES CLAIMED OR PRODUCE BOOKS OF ACCOUNTS FOR VERIFICATION BEFORE THE ASSESSING OFFICER. ALTHOUGH , IT WAS DUE TO SEALING OF APPELLANTS FACTORY PREMISES BY B ANK TO RECOVER ITS OUTSTANDING DUES, I.E. FOR REASONS BEYO ND APPELLANTS CONTROL, FACT REMAINS THAT THE VERIFICA TION OF EXPENSES/BOOKS OF ACCOUNTS COULD NOT BE DONE DURING ASSESSMENT PROCEEDINGS. ASSESSING OFFICERS OBSERVA TIONS THAT MANUFACTURING ACTIVITY WAS NOT CARRIED OUT DUR ING THE YEAR, DUE TO WHICH CLAIM OF CERTAIN EXPENSES DID NO T APPEAR TO BE JUSTIFIED, HAS ALSO NOT BEEN REBUTTED. FOR TH ESE REASONS, DURING ASSESSMENT PROCEEDINGS, APPELLANT A GREED ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 6 TO ASSESSING OFFICERS PROPOSAL TO ASSESS TOTAL INC OME AT 8% OF TURNOVER AND ASSESSMENT WAS ACCORDINGLY FINALIZE D. IT IS ALSO A FACT THAT TAX AUDIT REQUIRED U/S. 44AB COULD NOT BE GOT DONE BY THE APPELLANT. CONSIDERING THESE ASPECT S AND THE FACT THAT APPELLANT AGREED TO ASSESSMENT OF ITS NET PROFIT/INCOME AT 8% OF RECEIPTS, NO INTERFERENCE IS CALLED FOR AND ASSESSMENT BY ASSESSING OFFICER OF TOTAL INCOME AT RS.4,54,065/- IS CONFIRMED. 13. AGGRIEVED BY THE ORDER OF LD. CIT (A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: 1.0 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND IN FACTS HAS CONFIRMED THE REJECTION OF BOO K RESULTS AND ESTIMATION OF NET PROFIT @ 8% OF THE TOTAL RECE IPTS OF RS.56,75,819/- [INCLUDING OTHER INCOME OF RS.21,41, 147/-] AND THEREBY CONFIRMING THE TOTAL INCOME AT RS.4,54, 065/- BEFORE SET OFF OF EARLIER YEARS LOSSES. IT IS SUBM ITTED THAT THE ESTIMATING NET PROFIT @ 8% IS UNCALLED FOR AND BE DIRECTED TO BE DELETED. 2.0 THE LD. CIT (A) ERRED IN LAW AND ON FACTS HAS DISMISSED THE GROUND RELATING TO THE INITIATION OF PENALTY PROCEE DINGS UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT,1961 . 3.0 THE LD. CIT (A) ERRED IN LAW AND ON FACTS HAS D ISMISSED THE GROUND RELATING TO THE INITIATION OF PENALTY PROCEE DING UNDER SECTION 271B OF THE INCOME TAX ACT,1961 FOR ALLEGED CONTRAVENTION OF PROVISION OF SECTION 44AB OF THE I .T. ACT. 4.0 THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DE LETE OR MODIFY ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT TH E TIME OF HEARING OF THIS APPEAL. 14. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O. AND THE LD. CIT (A). HE FURTHER SUBMITTED THAT THE ESTIMATION MADE BY THE ASSESSING OFFICER WAS ON A HIGHER SIDE CONSIDER ING THE FACT THAT NO MANUFACTURING ACTIVITIES HAVE BEEN CARRIED OUT BY T HE ASSESSEE DURING THE YEAR. HE THEREFORE SUBMITTED THAT THE ADDITION BE DELETED. LD. D.R. ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 7 ON THE OTHER HAND SUPPORTED THE ORDER OF ASSESSING OFFICER AND THE LD. CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAD AGRE ED TO THE ASSESSING OFFICERS PROPOSAL TO ASSESS THE TOTAL INCOME AT 8% OF THE TURNOVER AND THEREFORE THE ASSESSING OFFICER PROCEEDED WITH ESTI MATING THE INCOME. HE THUS SUPPORTED THE ORDER OF ASSESSING OFFICER AN D THE LD. CIT (A). 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT BEFORE ASSESSING OFFICER, ASSE SSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND THE VERIFICATION OF THE E XPENSES ALSO COULD NOT BE CARRIED OUT BY THE ASSESSING OFFICER. WE FUR THER FIND THAT LD. CIT (A) WHILE UPHOLDING THE ADDITIONS MADE BY THE ASSES SING OFFICER HAS NOTED THAT DURING THE ASSESSMENT PROCEEDINGS APPELL ANT AGREED TO THE ASSESSING OFFICERS PROPOSAL TO ASSESS THE TOTAL IN COME AT 8% OF THE TURNOVER AND ACCORDINGLY THE ASSESSMENT WAS FINALIZ ED. BEFORE US, THE LD. A.R. HAS NOT PLACED ANY MATERIAL ON RECORD TO C ONTROVERT THE FINDINGS OF LD. CIT (A). IN VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT (A) AND THUS TH E GROUND OF ASSESSEE IS DISMISSED. 16. OTHER GROUNDS RAISED BEING GENERAL AND CONSEQU ENTIAL IN NATURE AND THEREFORE NOT ADJUDICATED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 18. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 28 TH AUGUST, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER PATKI AHMEDABAD. DATE:- 28-08-2015 ITA NO 1206AHD/2012 ITA NO.989/AHD/2012 ASSESSMENT YEARS 2005-06 & 2008-09 ASIAN PETROPRODUCTS & EXPORTS LTD 8 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A), AHMEDABAD 5. $%& '' , , / DR, ITAT, AHMEDABAD 6. &,-. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) ! '#$, / ITAT, AHMEDABAD. 1. DATE OF DICTATION- -DIRECT 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFO RE THE DICTATING MEMBER :21-8-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO TH E SR.P.S./P.S. - 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFO RE THE DICTATING MEMBER FOR PRONOUNCEMENT 28-8-2015 5. DATE ON WHICH THE FILE GOES TO THE BENCH CL ERK 28-8-2015: 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLE RK. 7. THE DATE ON WHICH THE FILE GOES TO THE ASSIS TANT REGISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER