DCIT, CHENNAI V. M/s. Letraco India, CHENNAI

ITA 1315/CHNY/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5230 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 16-06-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: MDS; D ANAND I T A NO
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1315/MDS/2008 ASSESSMENT YEAR : 2002-03 THE DEPUTY COMMISSIONER OF INCOME-TAX, BUSINESS CIRCLE-VI, CHENNAI. V. M/S. LETRACO INDIA, 1B, ATKINSON PALACE, 2, JOTHI VENKATACHALAM ROAD, VEPERY, CHENNAI-600 007. (PAN : AAAFL7664D) I.T.A. NO. 1316/MDS/2008 ASSESSMENT YEAR : 2005-06 THE JOINT COMMISSIONER OF V. M/S. LETRACO KID LEATHER, INCOME TAX, 1B, ATKINSON PALACE, BUSINESS RANGE-VI, 2, JOTHI VENKATACHALAM ROAD, CHENNAI. VEPERY, CHENNAI-600 007. (PAN AABFL4487H) AND I.T.A. NO. 1006/MDS/2009 ASSESSMENT YEAR : 2005-06 THE ASSISTANT COMMISSIONER OF V. M/S. LETRACO INDIA, INCOME-TAX, FLAT NO. 1B, ATKINSON PALAC E, BUSINESS RANGE-VI, NO.2, VENKATACHALAM R OAD, CHENNAI. VEPERY, CHENNAI-600 007. (PAN : AAAFL7664D) (APPELLANTS) (RESPONDENTS) APPELLANTS BY : SHRI P.B. SEKARAN RESPONDENTS BY : SHRI D. ANAND I.T.A. NO.1315 & 1316/MDS/08 & 1006/MDS/09 2 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : ITA NO. 1315/MDS/2008 IS AN APPEAL FILED BY THE RE VENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN IT A NO. 157/07-08 DATED 24- 03-2008 FOR THE ASSESSMENT YEAR 2002-03 IN THE CASE OF M/S. LETRACO INDIA, ITA NO. 1316/MDS/2008 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN ITA NO. 156/07- 08 DATED 24-03-2008 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF M/S. LETRACO KID LEATHER AND ITA NO. 1006/MDS/2009 IS AN APPEAL FILED BY THE REVENUE AGA INST THE ORDER OF THE LEARNED CIT(APPEALS)-IX, CHENNAI IN ITA NO.155/07-0 8 DATED 21-10-2008 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF M/S. LETRACO INDIA. AS ALL THE THREE APPEALS RELATE TO THE SAME GROUP OF ASSESSEES AND I NVOLVE IDENTICAL ISSUES, THE SAME ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. SHRI P.B. SEKARAN, LEARNED CIT-DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI D. ANAND, ADVOCATE REPRESENTED ON BEHALF O F THE ASSESSEES. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THERE WA S A SURVEY ON THE PREMISES OF THE ASSESSEES ON 04-05-2006. IN THE CO URSE OF THE SURVEY THE PURCHASES OF THE ASSESSEES HAD BEEN EXAMINED. IT W AS THE SUBMISSION THAT THE ASSESSEES WERE UNABLE TO PROVE ALL THE PURCHASES AN D GET THE CONFIRMATION FROM THE SELLERS. CONSEQUENTLY, THE ASSESSEES HAD OFFER ED 5% OF THE UNPROVED I.T.A. NO.1315 & 1316/MDS/08 & 1006/MDS/09 3 PURCHASE BILLS AS THE INCOME OF THE ASSESSEES. IT WAS THE SUBMISSION THAT IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAD BRO UGHT THE SAME TO TAX. IT WAS THE FURTHER SUBMISSION THAT IN THE CASE OF LETRACO KID LEATHER AN ADDITION ON ACCOUNT OF THE STOCK DIFFERENCE HAD ALSO BEEN MADE REPRESENTING THE DIFFERENCE BETWEEN THE CLOSING STOCK FOR THE ASSESSMENT YEAR 2 004-05 AND THE OPENING STOCK FOR THE ASSESSMENT YEAR 2005-06. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD DELETED THE ADDITIONS REPRESENTING THE 5% ADDITIONAL INCOME OFFERED BY THE ASSESSEE BY HOLDING THAT IN THE COURSE OF AS SESSMENT THE ASSESSING OFFICER HAD NOT DISCUSSED THE DISCLOSURE MADE BY TH E ASSESSEE AND HE HAD NOT GIVEN ANY REASON FOR THE NON-ACCEPTANCE. IT WAS TH E SUBMISSION THAT THE LEARNED CIT(A) HAD HELD THAT THERE WAS NOTHING IN THE SURVE Y REPORT FOR ADOPTING THE AMOUNT OF ` 28.94 CRORES FOR THE ASSESSMENT YEAR 2002-03 IN TH E CASE OF M/S. LETRACO INDIA AS ALSO ` 68.64 CRORES FOR THE ASSESSMENT YEAR 2005-06 AND ` 11.26 CRORES FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF M/S. LETRACO KID LEATHER. CONSEQUENTLY, THE LEARNED CIT(A) HAD DELE TED THE ADDITION. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) IS LIABLE TO BE REVERSED AND THAT OF THE ASSESSING OFFICER RESTORED. 4. IN REGARD TO THE DIFFERENCE IN THE CLOSING STOCK FOR THE ASSESSMENT YEAR 2004-05 AND THE OPENING STOCK FOR THE ASSESSMENT YE AR 2005-06 IN THE CASE LETRACO KID LEATHER, THE LEARNED CIT(A) HAD DELETED THE ADDITION OF ` . 56.33 LAKHS. HE VEHEMENTLY SUPPORTED THE ORDER OF THE AS SESSING OFFICER. IT WAS THE I.T.A. NO.1315 & 1316/MDS/08 & 1006/MDS/09 4 SUBMISSION THAT THE LEARNED CIT(A) HAD CONSIDERED F RESH EVIDENCES WITHOUT GRANTING THE ASSESSING OFFICER AN OPPORTUNITY TO EX AMINE THE SAME. 5. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT HE HAD NO OBJECTION IF THE ISSUES ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE- ADJUDICATION. IT WAS THE SUBMISSION THAT THE FINDI NG OF THE LEARNED CIT(A) WAS ON THE BASIS OF THE EVIDENCES AVAILABLE IN THE ASSE SSMENT RECORDS AND NO FRESH EVIDENCES HAD BEEN PRODUCED. IT WAS THE SUBMISSION THAT THE ASSESSEES HAD ION THE COURSE OF SURVEY OFFERED 5% UNPROVED PURCHASES. IT WAS THE SUBMISSION THAT THIS WAS DONE BECAUSE OF THE PAUCITY OF TIME. IT WAS THE SUBMISSION THAT IF THE ASSESSEES WERE GIVEN AN OPPORTUNITY THEY WOULD BE ABLE TO PROVE ALL THE PURCHASES AS ALSO RECONCILE THE DIFFERENCE BETWEEN THE OPENING STOCK FOR THE ASSESSMENT YEAR 2005-06 AND THE CLOSING STOCK FOR T HE ASSESSMENT YEAR 2004- 05. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN T HE PRESENT CASE IT IS NOTICED THAT THE SURVEY HAS BEEN CONDUCTED ON 04-09 -2006. NOTICE U/S. 148 HAS BEEN ISSUED ON 29.3.2007 AND THE ASSESSMENT PROCEDU RE HAS BEEN STARTED ONLY IN JULY, 2007 AND HAS BEEN COMPLETED IN DECEMBER, 2 007. OBVIOUSLY, THE TIME AVAILABLE FOR THE ASSESSEES TO PROVE THEIR PURCHASE S AS CLAIMED BY THEM IS FOUND TO BE SHORT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEES SHOULD BE GRANTED ONE MORE OPPORTUNITY TO SUBSTANTI ATE ITS CASE. IN THE CIRCUMSTANCES, THE ISSUES IN THESE APPEALS ARE REST ORED TO THE FILE OF THE I.T.A. NO.1315 & 1316/MDS/08 & 1006/MDS/09 5 ASSESSING OFFICER FOR RE-EXAMINATION. THE ASSESSEE S SHALL HAVE THE LIBERTY TO PRODUCE ALL SUCH EVIDENCES AS ARE REQUIRED TO SUBST ANTIATE THEIR CASE BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL GRA NT THE ASSESSEES ADEQUATE OPPORTUNITY TO SUBSTANTIATE THE CLAIMS MADE BY THEM . IN THE CIRCUMSTANCES, THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 21/04/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 21 ST APRIL, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE