The ITO, Ward-5(2), Ahmedabad V. Ome-Shiv Dye Stuff Pvt.Ltd., Ahmedabad

ITA 1374/AHD/2011

• Counselvise Citation: 137420514 RSA 2011
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 12-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWIJIT RAKSHIT
• Assessee Lawyers: TARAK DAMANI
• Keywords: Unexplained investment; Unexplained expenditure; Business expenditure; Deemed to accrue or arise in india
• Section: 69

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI B.P.JAIN, ACCOUNTANT MEMBER 1. ./ ././ ./ I.T.A. NO.1374/AHD/2011 - ' ' ' ' ' ' ' ' / A.Y.2004-05 2. ./ ././ ./ I.T.A. NO.1375/AHD/2011 - ' ' ' ' ' ' ' ' / A.Y.2004-05 THE ITO WARD-5(2) AHMEDABAD ' ' ' ' / VS. M/S.OME-SHIV DYESTUFF PVT.LTD. NR.KANBHA POLICE QUARTERS, KANBHA ROAD KLANBHA, DASCROI, AHMEDABAD ( #$ ./ ) ./ PAN/GIR NO. : AAACO 1843L ( (* / // / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - # / APPELLANT BY : SHRI AWIJIT RAKSHIT, SR.DR +,(* . - # / RESPONDENT BY : SHRI TARAK DAMANI, A.R. '/ . 0$ / / / / DATE OF HEARING : 29/12/2011 12' . 0$ / DATE OF PRONOUNCEMENT : 30/12/2011 #3 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE, ONE IS AGAINST THE QUANTUM ADDITION WHICH WAS DELETED BY THE LD.CI T(A)-XI, AHMEDABAD ORDER DATED 04/03/2011 AND THE OTHER APPE AL IS AGAINST THE DELETION OF PENALTY BY THE SAME LD.CIT(A) VIDE ORDE R DATED 7/03/2011. WE SHALL FIRST TAKE UP THE ISSUE PERTAINING TO THE QUANTUM ADDITION. ITA NOS.1374 & 1375/AHD/2011 ITO VS. M/S.OME-SHIV DYESTUFF P .LTD. ASST.YEAR - 200 4-05 - 2 - [A] ITA NO.1374/AHD/2011 2. RELEVANT GROUND IS REPRODUCED BELOW:- 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 98,98,259/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S.69. 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASST ORDER PASSED U/S.143(3) R.W.S.250 OF THE I.T.ACT, 1961 DATED 30 /12/2008 WERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTURIN G OF CHEMICALS AND DYES INTERMEDIATES. CONSEQUENCE UPON THE PROCEEDI NGS INITIATED BY THE GUJARAT ELECTRICITY BOARD ALLEGEDLY FOR THE THEFT O F ELECTRICITY, THE AO HAD HELD THAT THE ASSESSEE WAS CORRESPONDINGLY INDULGE D IN ILLEGAL MANUFACTURING ACTIVITY. BASED UPON THE ALLEGED TH EFT OF ELECTRICITY OF 2,81,147 UNITS THE AO HAD WORKED OUT AN UNACCOUNTE D MANUFACTURING AND ASSESSED THE SAME AT RS.98,98,259/- AS DEEMED INCOME BY INVOKING THE PROVISIONS OF SECTION 69 OF THE I.T.ACT. THERE AFTER, AN APPEAL WAS FILED BEFORE THE FIRST APPELLATE AUTHORITY, WHO VID E AN ORDER DATED 10/09/2007 HAS PARTLY ALLOWED THE ASSESSEES APPEAL . IT WAS HELD THAT THERE WAS NO EVIDENCE THAT THE STOLEN ELECTRICITY W AS ACTUALLY UTILIZED FOR THE MANUFACTURING OF ANY PRODUCT. HOWEVER, EXPENDI TURE INVOLVED TOWARDS ALLEGED STOLEN ELECTRICITY WAS NOT ALLOWED AS BUSINESS EXPENDITURE. HE WAS OF THE OPINION THAT AO IS REQ UIRED TO ASCERTAIN THE EXPENDITURE INVOLVED AND IF THE SAID EXPENDITURE WA S NOT CLAIMED, THEN UNITS TO BE TREATED AS AN UNEXPLAINED EXPENDITURE. THE IMPUGNED ORDER OF THE AO NOW UNDER APPEAL IS A CONSEQUENTIAL ORDER IN TERMS OF THE DIRECTIONS OF LD.CIT(A). VIDE THIS ORDER, REFERR ED SUPRA, THE AO HAD AGAIN ASSESSED THAT VERY AMOUNT U/S.69 OF IT ACT. AGAIN THE ASSESSEE HAD CHALLENGED THE ADDITION AND CIT(A) VIDE ORDER D ATED ITA NOS.1374 & 1375/AHD/2011 ITO VS. M/S.OME-SHIV DYESTUFF P .LTD. ASST.YEAR - 200 4-05 - 3 - 4/03/2011(SUPRA) HAS MENTIONED THAT AGAINST THE FIR ST ORDER OF THE CIT(A) REVENUE HAD GONE IN APPEAL BEFORE THE TRIBUNAL AND HONBLE ITAT AHMEDABAD VIDE ITA NO.4061/AHD/2007 AND CO NO.380/A HD/2007 (A.Y. 2004-05) ORDER DATED 12/11/2010 HAS DISMISSED THAT APPEAL OF THE REVENUE. THE TRIBUNAL HAS OPINED THAT WHEN THERE W AS NOT AN IOTA OF EVIDENCE AVAILABLE ON RECORD IN RESPECT OF UNACCOUN TED PURCHASES OR ALLEGED PRODUCTION THEN THERE WAS NO BASIS TO TAKE A DIFFERENT VIEW IN THE MATTER BUT TO AFFIRM THE ORDER OF LD.CIT(A). IN THE PRESENT ORDER OF CIT(A), WHICH IS NOW UNDER APPEAL, IT WAS HELD THAT SINCE THE TRIBUNAL HAS ALREADY AFFIRMED THE DELETION, THEREFORE, THE I MPUGNED ADDITION WHICH WAS ONCE AGAIN MADE BY THE AO SHOULD NOT BE SUSTAIN ED. 3. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HEREBY AFFIRM THE VIEW TAKEN BY THE LD.CIT(A). RATHER WE ARE SUR PRISED THAT WHY AT ALL A REPETITIVE APPEAL HAS BEEN FILED BY THE REVENUE O N 12/05/2011 WHEN THAT VERY ISSUE HAD ALREADY BEEN DECIDED BY THE RES PECTED CO-ORDINATE BENCH VIDE AN ORDER DATED 12/11/2010. SUCH REPETI TIVE LITIGATION SHOULD BE AVOIDED. NOT ONLY THIS, THE AO HAD ALSO REPEATE D THE SAME ADDITION THOUGH IT WAS NOT WITHIN THE SCOPE OF THE REMAND PR OCEEDINGS AS DIRECTED BY THE LD.CIT(A) EARLIER. ON ALL THESE COUNTS AND ONCE THE ISSUE HAD ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THA T THERE WAS NO EVIDENCE OF ALLEGED UNACCOUNTED MANUFACTURING, THER EFORE WE FIND NO FORCE IN THIS GROUND OF THE REVENUE AND DISMISS THE SAME. [B] ITA NO.1375/AHD/2011 4. THE ONLY GROUND OF THE REVENUE READS AS FOLLOWS: - ITA NOS.1374 & 1375/AHD/2011 ITO VS. M/S.OME-SHIV DYESTUFF P .LTD. ASST.YEAR - 200 4-05 - 4 - 1. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF ` 31,51,100/- LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 4.1. THE LD.CIT(A) HAS HELD THAT SINCE THE QUANTUM ADDITION HAS ALREADY BEEN DELETED, THEREFORE CONSEQUENCE THEREUPON CONCE ALMENT PENALTY DO NOT SURVIVE. WE HEREBY AFFIRM THE SAID OBSERVATION OF LD.CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 5. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE A RE HEREBY DISMISSED. SD/- SD/- ( .. !' ) ( ) #$ ( B.P. JAIN ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 30/ 12 /2011 40..', .'../ T.C. NAIR, SR. PS #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5'/ COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-XI, AHMEDABAD 5. 5:; +' , , / DR, ITAT, AHMEDABAD 6. ;< =/ / GUARD FILE. #3' #3' #3' #3' / BY ORDER, ,5 + //TRUE COPY// > >> >/ // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD