The ITO,Vapi Ward-1, Vapi V. Hinafil India Ltd., Vapi

ITA 1247/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1918 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NRENDRA SINGH
• Keywords: Opportunity of being heard; Retrospective amendment; Additional evidence; Tax effect

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.1247/AHD/2013 / ASSTT. YEAR: 2009-10 ITO, VAPI WARD - 1 VAPI. VS HINAFIL INDIA LTD. PLOT NO.786/2, 40 SHED AREA VAPI. PAN : AAACH 6063 K ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI NRENDRA SINGH, SR.DR ASSESSEE BY : NONE / DATE OF HEARING : 30/03/2016 / DATE OF PRONOUNCEMENT: 01/04/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF THE LD.CIT(A), VALSAD DATED 22.2.2013 PASSED FOR THE AS STT.YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.17,77,976/- MADE ON ACCOUNT OF UNVERIFIABLE PURC HASE. ITA NO.1247/AHD/2013 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RESTRICTING THE DISALLO WANCES OF EXPENSES TO ONLY 10% INSTEAD OF 25%. ON THE FACTS A ND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID CIT(A) HAS ERRED IN CONSIDERING THE ADDITIONAL EVIDENCES WITHO UT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE AO AND THEREB Y DEFIED THE PROVISIONS OF RULE 46A OF THE I T RULES 1962. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD.CIT(A) HAS ERRED IN CONSIDERING THE ADDITIONAL E VIDENCES WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO TH E AO AND THEREBY DEFIED THE PROVISIONS OF RULE 46A OF THE IT RULES, 1962. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFO RE, THE APPEAL OF THE REVENUE IS DISPOSED OF EX PARTE QUA THE ASSESSEE-RESPONDENT, AFTER HEARING THE LD.DR AND CONSIDERING THE MATERIAL AVAI LABLE ON RECORD. 3. AT THE OUTSET, A QUERY WAS RAISED BY THE BENCH A S TO THE MAINTAINABILITY OF APPEAL OF THE REVENUE IN VIEW OF LATEST CBDT CIRCULAR RESTRICTING THE FILING OF THE APPEAL BY TH E REVENUE BEFORE THE TRIBUNAL, WHERE THE TAX EFFECT IS BELOW RS.10 LAKHS . THE LD.DR HAS NOT DISPUTED THE CBDT INSTRUCTIONS IN THIS BEHALF. 4. WE FIND THAT THE APPEAL OF THE REVENUE IS PRESEN TED ON 3.5.2013 BEFORE THE TRIBUNAL. ON 10.12.2015 THE CBDT HAS IS SUED INSTRUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUT HORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. WE FIND THAT THE LD.AO HAS MADE THE FOLLOWING COMPU TATION OF INCOME: ITA NO.1247/AHD/2013 3 TOTAL INCOME AS PER COMPUTATION RS.NIL ADD: DISALLOWABLE/ ADDITION AS DISCUSSED ABOVE: I) ON ACCOUNT UNVERIFIABLE PURCHASES AS PER PARA 3 RS.17,77,976/- II) UNEXPLAINED SUNDRY CREDITORS AS PER PARA 4 RS.34,36,347/- III) UNVERIFIABLE EXPENSES AS PER PARA 5 RS.1,59,880/- RS.53,74,203/- TOTAL INCOME RS.53,74,203/- FOUNDED OFF U/S.288A RS.53,74,200/- THE LD.CIT(A) HAS DELETED THE ADDITION AT SR.NO.(I) AND PARTLY AT SR.NO.(III). THE TAX EFFECT ON ACCOUNT OF DELETION OF THESE TWO ADDITIONS WOULD BE LESS THAN RS.10 LAKHS. THE ABOVE REFERRED CBDT INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RETROSPECTIVE EFFECT , MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEAL S ALSO. IN ACCORDANCE WITH THE ABOVE CBDT CIRCULAR THE TAX EFFECT AFTER T HE ORDER OF THE LD.CIT(A) WOULD BE LESS THAN RS.10 LAKHS, AND THERE FORE, THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DISMISSED BEIN G TREATED TO BE FILED IN VIOLATION OF CBDT INSTRUCTIONS. FURTHER, THE CA SE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION S. IT IS FURTHER OBSERVED THAT SINCE, WHILE HEARING THE APPEALS, SUC H FACTORS COULD NOT BE CROSS-VERIFIED, THEREFORE, IN CASE, ON RE-VERIFICA TION AT THE END OF THE AO, IT CAME TO THE NOTICE THAT THE TAX EFFECT IS MORE O R IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER. SUCH APPLICATION ITA NO.1247/AHD/2013 4 SHOULD BE FILED WITHIN FOUR YEARS OF THIS ORDER. I N VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST APRIL, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER