S.B. Organics Limited, Hyderabad, Hyderabad V. ACIT,Circle-3(1) Hyderabad, Hyderabad

ITA 1451/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2386 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: SAURABH AGARWAL
• Keywords: Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1451/HYD/2016 ASSESSMENT YEAR: 2008-09 S.B. ORGANICS LIMITED, HYDERABAD [PAN: AACCS8221L] VS ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SAURABH AGARWAL, AR FOR REVENUE : SHRI K.J. RAO, DR DATE OF HEARING : 13-11-2017 DATE OF PRONOUNCEMENT : 22-11-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-10, HYDERABAD, DATED 15-06-2016, FOR THE AY. 2008-09. ASSESSEE IS AGGRIEV ED ON THE ADDITION MADE OF RS. 9,06,755/- , THE DIFFERENCE IN S ALES AS PER VAT RETURNS AND BOOKS OF ACCOUNT. 2. BRIEFLY STATED, IN THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER (AO) ASKED FOR VAT RETURNS. THE A O NOTED THAT THE SALES SHOWN IN VAT RETURNS ARE TO THE TUNE OF RS. 2,21,61,662/-, WHEREAS THE SALES SHOWN IN P&L A/C AR E RS. 2,12,54,907/-. AS ASSESSEE COULD NOT RECONCILE THE DI FFERENCE IN SALES, AO BROUGHT TO TAX THE DIFFERENCE OF RS. 9,06,75 5/-. HE ALSO INITIATED PROCEEDINGS U/S. 271D OF THE INCOME TAX ACT [ ACT]. ASSESSEE QUESTIONED THE ISSUE BEFORE THE LD.CIT(A). IN SPITE OF GIVING VARIOUS OPPORTUNITIES, ASSESSEE DID NOT PRESEN T BEFORE THE I.T.A. NO. 1451/HYD/2016 :- 2 - : CIT(A). ACCORDINGLY, LD.CIT(A) CONFIRMED THE ACTION OF THE AO IN BRINGING TO TAX THE AMOUNT AND WITH REFERENCE TO INITIA TION OF PENALTY PROCEEDINGS, DISMISSED THE GROUND STATING THAT THERE IS NO APPEAL PROVIDED AGAINST INITIATION OF PENALTY PROCEED INGS. 3. ASSESSEE WAS CONTESTING THE SAME TWO ISSUES. AS FAR AS INITIATION OF PENALTY PROCEEDINGS ARE CONCERNED, THER E CANNOT BE ANY APPEAL ON THAT, UNLESS AN ORDER IS PASSED U/S. 2 71D, LEVYING PENALTY. THEREFORE, THIS GROUND RAISED IS PREMATURE IN NATURE, HENCE DISMISSED. 4. WITH REFERENCE TO DIFFERENCE IN SALES TO THE EXTENT O F RS. 9,06,755/-, IT WAS CONTENDED THAT DETAILED EXPLANATION WA S IN FACT GIVEN BEFORE THE AO AT THE TIME OF HEARING. THE AO DID NOT ACCEPT THE DOCUMENT AND ASSESSMENT WAS COMPLETED. 5. BEFORE THE LD.CIT(A), ASSESSEE COULD NOT APPEAR AS THERE WERE DISPUTES IN THE MANAGEMENT AND REGISTERED OFFICE HAS BE EN CHANGED. ACCORDINGLY, THERE WAS NO REPRESENTATION BEF ORE THE LD.CIT(A). HOWEVER, WITH RESPECT TO HEARING FOR NOTICE DT. 14-06- 2016, ASSESSEE APPEARED ON 15-06-2016 JUST ONE DAY L ATER ON THE REASON OF RECEIPT OF NOTICE LATE. IT WAS SUBMITTED THAT AS SESSEE HAS INDEED FILED RECONCILIATION BEFORE THE AO AND AO HAS NOT EXAMINED THE SAME NOR ASSESSEE ALSO COULD AVAIL THE OPPORTUNITY TO RECONCILE BEFORE THE CIT(A) DUE TO CERTAIN OTHER FACTORS. HENCE, IT WAS PLEADED THAT MATTER MAY BE RESTORED TO THE AO. 6. LD. COUNSEL PLACED ON RECORD THE RECONCILIATION A S SUBMITTED BEFORE THE AO TO INDICATE THE DIFFERENCE MAINLY PERTAINI NG TO EXCISE I.T.A. NO. 1451/HYD/2016 :- 3 - : DUTY NOT SHOWED IN VAT RETURNS, FOREIGN EXCHANGE VARI ATION AND RETURN OF EXPORT SALES WHICH ARE NOT SHOWN IN VAT RETU RNS TO AN EXTENT OF RS. 15,43,500/-. 7. LD.DR, WHILE ADMITTING THAT THERE IS MORE AMOUNT TO BE RECONCILED THAN THAT WAS ADDED BY AO, HOWEVER, RELIED ON THE ORDERS OF THE CIT(A), AS ASSESSEE DID NOT APPEAR BEFO RE THE LD.CIT(A) INSPITE OF GIVING MANY OPPORTUNITIES. 8. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECONCILIATION PLACED ON RECORD. IT SEEMS THERE ARE MORE VARIATIONS THAN THOSE DETERMINED BY THE AO WHICH REQUIRES RECONC ILIATION. HOW THE AO HAS ARRIVED AT THE DIFFERENCE, SO AS TO ARR IVE AT AN ADDITION OF RS. 9,06,755/- IS NOT EXPLAINED. THE RECO NCILIATION STATEMENT SHOWS THAT THERE ARE EXPORT RETURNS TO THE TUNE OF RS. 15,43,500/- . SINCE ASSESSEE WAS ABLE TO RECONCILE THE TURNOVERS WITH REFERENCE TO VAT RETURNS AND THE AMOUNT DECLARED I N P&L A/C, I AM OF THE OPINION THAT THIS ISSUE CAN BE RE-EXAM INED BY THE AO. FOR THIS PURPOSE, THE ORDERS OF THE AO AND CIT(A) ON THIS ISSUE ARE SET ASIDE AND THE MATTER IS RESTORED TO AO FOR FRESH EXAMINATION, AFTER GIVING DUE OPPORTUNITY TO ASSESSEE. 9. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND NOVEMBER, 2017 TNMM I.T.A. NO. 1451/HYD/2016 :- 4 - : COPY TO : 1. SB ORGANICS LIMITED, PLOT NO. 19, BHAGYA LAKSHMI COLONY, SUBASH NAGAR, JEEDIMETLA, HYDERABAD. 2. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1 ), HYDERABAD. 3. CIT (APPEALS)-10, HYDERABAD. 4. CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.