ITO, Ward - 43(4), Kolkata, Kolkata V. M/s. Amrit Packaging, Kolkata

ITA 154/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75091 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 08-03-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2012
• Court: TRIBUNAL
• Department Lawyers: SANJAY MUKHERJEE JDIT
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained cash credit; Question of law; Wrong claim; Reassessment proceedings
• Section: 80IB; 133(6); 68

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 126/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2005-06 & & & & & / I.T.A NO. 154/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WD-43(4), KOLKATA. VS. M/S. A MRIT PACKAGING (PAN: AAEFA2861P) (,- /APPELLANT ) (./,-/ RESPONDENT ) DATE OF HEARING: 05.03.2014 DATE OF PRONOUNCEMENT: 13.03.2014 FOR THE APPELLANT: SHRI SANJAY MUKHERJEE, JDIT, SR. DR FOR THE RESPONDENT: SHRI S. M. SURANA, ADVOCATE $0 / ORDER PER SHRI MAHAVIR SINGH, JM: BOTH THESE APPEALS BY REVENUE ARE ARISING OUT OF CO MMON ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NOS. 244 & 335/CIT(A)-XXX/WARD-43 (4)/2010-11 DATED 29.09.2011. SEPARATE ASSESSMENTS WERE FRAMED BY ITO, WARD-43(4) , KOLKATA U/S. 143(3)/254 AND 147/143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2005-06 AND A.Y. 2004-05 VIDE HIS ORDERS DATE D 27.12.2010 AND 29.12.2009 RESPECTIVELY. 2. APPEAL FOR AY 2005-06 IS DELAYED BY 03 DAYS AND APPEAL FOR AY 2004-05 IS DELAYED BY 11 DAYS. REVENUE HAS FILED CONDONATION PETITION AL ONG WITH AFFIDAVITS EXPLAINING THE REASONS FOR THE DELAY IN ABOVE TWO APPEALS. SINCE LD. COUNS EL FOR THE ASSESSEE DID NOT RAISE ANY OBJECTION, WE CONDONE THE DELAY AND ADMIT THE APPEA LS FOR HEARING. 3. THE ONLY COMMON ISSUE IN THESE TWO APPEALS OF AS SESSEE IS AGAINST THE ORDER OF CIT(A) ALLOWING EXEMPTION U/S. 80IP OF THE ACT. THE FOLLO WING ARE THE GROUNDS IN BOTH THE YEARS: AY 2005-06: 1)THAT THE LD. CIT(A)-XXX, KOLKATA HAS ERRED IN ALL OWING THE 100% CLAIM OF EXEMPTION U/S. 80IB OF THE I. T. ACT, 1961 TO THE TUNE OF RS. 70,84,573/-, RS.11,31,960/-. 2) THAT THE ONLY ISSUE FOR ALLOWING EXEMPTION U/S. 80IB INVOLVES SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE IN THIS CASE, WHICH WAS EXCLUSIVE LY NARRATED IN THE ASSESSMENT ORDER ITSELF. 2 ITA NO.126/K/2012 & ITA NO.154/K/2012 M/S. AMRIT PACKAGING , AY:2005-06 & 2004-05 AY 2004-05: 1)THAT THE LD. CIT(A)-XXX, KOLKATA HAS ERRED IN ALL OWING THE 100% CLAIM OF EXEMPTION U/S. 80IB OF THE I. T. ACT, 1961 TO THE TUNE OF RS. 11,31,960/-. 2) THAT THE ONLY ISSUE FOR ALLOWING EXEMPTION U/S. 80IB INVOLVES SUBSTANTIAL QUESTION OF LAW OF IMPORTANCE IN THIS CASE, WHICH WAS EXCLUSIVE LY NARRATED IN THE ASSESSMENT ORDER ITSELF. 4. AT THE OUTSE, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE ISSUE OF ALLOWING DEDUCTION U/S. 80IB OF THE ACT IS SQUARELY COVERED IN FAVOUR OF AS SESSEE AND AGAINST REVENUE BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF ITO VS. M/S. SHARP PRI NTS IN ITA NO. 135/K/2012 FOR AY 2005-06 & ITA NOS. 157 & 158/K/2012, AYS 2004-05 & 2006-07 VIDE ORDER DATED 17.06.2013 EXACTLY ON SIMILAR FACTS. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE AO DURING THE COU RSE OF ASSESSMENT PROCEEDINGS DISALLOWED DEDUCTION CLAIMED BY ASSESSEE U/S. 80IB OF THE ACT AND TREATED THE PROFIT EARNED AS TAXABLE INCOME U/S. 68 OF THE ACT FOR THE REASON THAT THE F IRM IS NON-EXISTENT AND ALSO THE MANUFACTURING ACTIVITIES ALLEGEDLY CARRIED OUT ARE NOT GENUINE. THE AO NARRATED THE FACT THAT 3 PLOT NOS WERE MENTIONED IN FORM 3CD AS WELL AS IN PARTNERSHIP DEE D FROM WHERE THE ASSESSEE IS CARRYING ON MANUFACTURING ACTIVITY (ALLEGEDLY) THE BUSINESS PRE MISES COULD NOT BE VERIFIED FROM THE AVAILABLE DOCUMENTS. THE AO DISALLOWED BY OBSERVIN G AS UNDER: CONSIDERING THE ABOVE ANOMALIES AND IN VIEW OF THE POINTS RAISED, IT IS CRYSTAL CLEAR THAT THE ASSESSEE FIRM DID NOT CONFIRM ANY SPECIFIC PREM ISE NUMBER AS THEIR MANUFACTURING PREMISE. THE SUBMISSION IS HIGHLY PUZZLING AND DUM BFOUNDING. AND UPON EXAMINATION OF ALL TRANSACTIONS AND SUBMISSION OF DOCUMENTS THAT H AVE BEEN FILED FOR THE FIRM, CARRYING OF BUSINESS ACTIVITIES AND ALSO EXISTENCE OF PROPER BUSINESS PREMISES COULD NOT BE ADDUCED FROM THE AVAILABLE EVIDENCES AND DOCUMENTS. IN VIEW OF ABOVE FINDINGS, IT COULD NOT BE ESTABLISHED THAT ANY MANUFACTURING ACTIVITY WAS IN FACT CARRIED OUT AT THE SO-CALLED PREMISE, RATHER IT IS FALSE AND CLAIM FOR EXISTENCE OF THE FIRM ITSELF COULD NOT BE PROVED. HOWEVER, HE WAS GIVEN SUFFICIENT OPPORTUNITY TO EST ABLISH THE EXISTENCE OF FIRM. IT IS THE BURDEN OF THE ASSESSEE TO ESTABLISH THE EXISTENCE O F THE FIRM & GENUINENESS OF THE MANUFACTURING ACTIVITIES AS WELL. BUT THE ONUS HAS NOT BEEN DISCHARGED. IT IS EVIDENT THAT THE ASSESSEE HAS USED COLOURABLE DEVICE TO DEFRAUD REVENUE BY CLAIMING 100% DEDUCTION U/S. 80IB, HENCE, DEDUCTION CLAIMED U/S. 80IB OF TH E ACT IS A BOGUS CLAIM. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED DEDUCTION U/S. 80IB OF THE ACT BY OBSERVING IN PARA 4, 4.1 AND 4.2 AS UNDER: 4. THE SUBMISSIONS IN APPEAL HAVE BEEN CONSIDERED . THE AO CONCLUDED THAT EVIDENCE OF THE EXISTENCE OF THE BUSINESS PREMISES AND CARRYING ON OF THE BUSINESS ACTIVITIES WAS NOT ESTABLIHED THEREFORE IT WAS FALS E CLAIM FOR THE EXISTENCE OF THE FIRM ITSELF. HE CONCLUDED THAT ON EXAMINATION OF THE DOC UMENTS IT COULD NOT BE PROVED THAT THE ASSESSEE CARRIED ON ANY MANUFACTURING ACTIVITY, THA T THE ADDRESS AND EXISTENCE OF THE BUSINESS WAS NOT ESTABLISHED THAT THE GENUINENESS O F THE BUSINESS WAS NOT ESTABTISHED. IT 3 ITA NO.126/K/2012 & ITA NO.154/K/2012 M/S. AMRIT PACKAGING , AY:2005-06 & 2004-05 WAS HELD THAT THE ONUS WAS NOT DISCHARGED BY THE AS SESSEE AND HENCE THE INCOME WAS ASSESSED AS UNEXPLAINED CASH CREDIT AND CONSEQUENTL Y THE DEDUCTION U/S 80IB WAS DENIED. IT IS SEEN THAT IN RE-ASSESSMENT PROCEEDING S THE AO HAS REJECTED THE VARIOUS EVIDENCES PRODUCED BY THE APPELLANT IN THE FORM OF REGISTRATIONS AND LICENSES OBTAINED BY THE FIRM FROM DIFFERENT GOVERNMENT DEPATMENTS, HOWEVER THE AO HAS WITHOUT MAKING ANY FRESH ENQUIRIES OR BRINGING ON RECORD ANY FRESH EVIDENCES HAS WITHOUT EVEN CROSS VERIFYING THESE EVIDENCES ONCE AGAIN HAS RELIED ON THE REPORT OF JDIT(INV), SURAT AND THE ALLEGED DISCREPANCY REGARDING THE ADDRESS OF THE UN IT TO HOLD THAT THE APPELLANT HAS TRIED TO CAMOUFLAGE FROM THE IT DEPARTMENT THE NON- EXISTENCE OF THE FIRM. 4.1. IT IS FURTHER SEEN THAT IN THE RE-ASSESSMENT PROCEEDINGS ALSO, THE AO HAS NOT BOTHERED TO CROSS VERIFY OR EXAMINED THE AUTHENTICI TY OF THE DOCUMENTS RELIED UPON BY THE APPELLANT TO ESTABLISH THE EXISTENCE OF THE FI RM AS WELL AS ITS MANUFACTURING ACTIVITIES. HE HAS IN FACT AGAIN BASED HIMSELF ON S USPICION AND PREMISES RATHER THAN BRINGING ANY FRESH EVIDENCE ON RECORD OR CROSS VERI FYING THE EVIDENCES SUBMITTED BY THE APPELLANT LET ALONE DISPROVE THE SAME. IN FACT IT I S SEEN THAT THE AO HAS SIMPLY RECYCLED THE ORIGINAL ASSESSMENT ORDER PRESSING HIMSELF ON T HE REPORT OF THE JT. DIRECTOR OF INVESTIGATION AND ALLEGED ANOMALIES IN RESPECT OF T HE PLOT NO. AND ETC. WHICH HAD BEEN CONSIDERED IN ORIGINAL APPEAL AND HAS NOT BROUGHT A NY FRESH EVIDENCE ON RECORD. IT MAY BE MENTIONED HERE THAT THESE ISSUES HAD ALREADY BEE N CONSIDERED IN THE APPEAL AGAINST THE ORIGINAL ORDER FOR A.Y 2005-06 BY THE CIT(A) AN D IT WAS HELD THAT ON THE BASIS OF VARIOUS EVIDENCES INCLUDING COPIES OF ELECTRICITY B ILLS AND CERTIFCATES OF VARIOUS GOVERNMENT DEPARTMENTS DEALING WITH ITS BUSINESS CL EARLY PROVE THAT THE MANUFACTURING UNIT FUNCTIONED FROM PLOT 38 AND THEN FROM PLOT NO. 39 AND THAT THE UNIT WAS ELIGIBLE FOR DEDUCTION U/S 80IB.THIS HAD BEEN ARRIVED AT AFTER C ONSIDERING ALL ISSUES INCLUDING THE MATTER OF THE PLOT NUMBER WHICH HAS AGAIN BEEN EXPL AINED IN THE RE-ASSESSMENT PROCEEDINGS AND SUBSTANTIATED BY DOCUMENTARY EVIDEN CE FOR THE ADDITIONAL PLACE OF BUSINESS ON PLOT NO. 39. THEREFORE, SINCE NO FRESH EVIDENCE IS THERE IN REASSESSMENT PROCEEDINGS TO DISPROVE THE SAME, THERE IS NO NEED FOR THE ABOVE FINDINGS TO BE RECONSIDERED. EVEN OTHERWISE IT MAY BE MENTIONED IN RESPECT OF THE ENQUIRY REPORT, THAT THE ENQUIRY HAD BEEN CONDUCTED BY THE JDIT AFTER A LAPSE OF TIME BY WHICH APPELLANT SHIFTED THE BUSINESS AND HENCE NO OPERATION WAS NOT ICED AT THE PREMISES. THIS IS CLEAR FROM THE FACT THAT THE ACCOUNTING PERIOD IS F.Y. 20 04-05 WHEREAS THE ENQUIRY WAS MARKED FOR INVESTIGATION IN AUGUST, 2007. THEREFORE, SINCE THE ENQUIRY WAS CONDUCTED AT A LATER DATE IT CANNOT BE THE SOLE BASIS FOR CONCLUDING THAT THE FIRM OR MANUFACTURING ACTIVITY OF THE FIRM DID NOT EXIT AT THE RELEVANT POINT OF TIME. 4.2. ON THE OTHER HAND THE APPELLANT IN REPLY TO T HE QUERIES RAISED IN REASSESSMENT PROCEEDINGS HAS GIVEN ITS SUBMISSON TO THE AO VIDE LETTER DT 7.9.2010. THE EVIDENCES FLED ALONG WTH THIS LETTER NCLUDED POLLUTION CON TROL CERTIFCATE DATED 19-03-04, LETTER FROM ELECTRICTY DEPARTMENT DATED 10-03-04 DAMAN FO R ELECTRICITY CONNECTION AND ELECTRICITY BILLS , REGISTRATION UNDER SALES TAX AC T IN FORM S.T.V DATED 19-03-04, ETC. REGARDING PLOT NO.39 AS PLACE OF BUSINESS FORM B DATED 19-03-04 AND S.T.V HAS ALSO BEEN FILED MENTIONING PLOT 39 AN ADDITIONAL PLACE O F BUSINESS. IT IS ALSO SEEN THAT IN ORIGINAL ASSESSMENT PROCEEDING THE APPELLANT HAD FU RNISHED VARIOUS EVIDENCES INCLUDING SALE PURCHASE ACCOUNT, DETAILS OF ELECTRICITY CHARG ES, COPY OF APPLICATION FOR REGISTRATION AS SMALL SCALE UNDERTAKING ETC. AS MENTIOND EARLIER THE AO HAS RELIED ON MINOR DISCREPANCIES IN RESPECT OF THE PLOT NO. OF THE APP ELLANT TO SIMPLY REJECT THE EVIDENCES PRODUCED BY THE APPELLANT WITHOUT BRINGING ANY POSI TIVE EVIDENCE. IT MAY BE MENTIONED HERE THAT IN THE REASSESSMENT PROCEEDINGS THE APPEL LANT HAS ONCE AGAIN EXPLAINED THE ALLEGED DISCREPANCIES POINTED OUT IN THE ORIGINAL A SSESSMENT AND ON THE BASIS OF WHICH THE CLAIM OF THE APPELLANT HAD BEEN DISALLOWED INCL UDING THE ALLEGED DISCREPACNY OF THE MANUFACTURNG UNITS ADDRESS AND THE CONCLUSIONS OF JDIT REPORT. THE APPELLANT HAS SUBMITTED DETAILED EVIDENCES BEFORE THE AO WHICH HA VE BEEN IGNORED INCLUDING EVIDENC OF EXISTENCE OF ITS BUSINESS ON THE PLOT NO 38, THE ELECTRICITY BILLS AND DETAILS OF PURCHASES ETC. IT HAS ALSO BEEN SUBMITTED THAT THE FIRM STOOD DISSOLVED W.E.F 1.04.2006., I.E MUCH 4 ITA NO.126/K/2012 & ITA NO.154/K/2012 M/S. AMRIT PACKAGING , AY:2005-06 & 2004-05 BEFORE THE INQUIRY MADE BY THE DDIT (INV) AT DAMAN. THE AO HAS SIMPLY IGNORED EVEN THE EVIDENCE FLED IN REASSESSMENT PROCEEDINGS WHER EAS IT IS SEEN THAT THE ONUS OF ESTABLISHING THE EXISTENCE OF THE FIRM HAS BEEN DIS CHARGED BY THE APPELLANT IN REASSESSMENT PROCEEDINGS. THE AO ON THE OTHER HAND HAS NEITHER CROSS VERIFIED THESE EVIDENCE NOR BROUGHT ANYTHING ON RECORD TO ESTABLIS H THE ALLEGATION OF NON-GENUINENESS OF THE FRM AND ITS MANUFACTURING ACTIVITIES. THE A O WAS NOT JUSTIFYING IN CLAIMING THE APPELLANT HAS NOT DISCHARGED ITS BURDEN TO ESTABLIS H THE EXISTENCE OF THE FIRM AND THE GENUINENESS OF MANUFACTURING ACTIVITIES. ON THE OTH ER HAND THE AO HAS NOT BROUGHT CONCRETE EVIDNCE ON RECORD TO ESTABLISH HIS ALLEGAT ION ABOUT NO GENUINENESS OF THE ACTIVITIES WHICH HE HAS FAILED TO DO. IN VIEW OF TH E ABOVE DISCUSSION THE APPELLANTS CONTENTION REGARDING THE MANUFACTURING BUSINESS CON DUCTED FOR THE RELEANT ACCOUNTING PERIOD IS ACCEPTED AND THE AO IS DIRECTED TO COMPUT E THE PROFIT OF THE APPELLANT AND GRANT DEDUCTION U/S. 80IB. AGGRIEVED, REVENUE PREFERRED APPEAL BEFORE US. 6. WE FIND THAT THE ASSESSEE HAS COMPLIED WITH RULE S AND REGULATIONS AND OBTAINED INDUSTRIAL LICENSE AS SSI UNIT, POLLUTION CLEARANCE CERTIFICATE FROM POLLUTION CONTROL BOARD TOWARDS INDUSTRIAL UNDERTAKING, IT IS REGISTERED UN DER SALES TAX/VAT. IT HAS ALSO OBTAINED ELECTRICITY CONNECTION ON THE SAME ADDRESS. THE AS SESSEE CONTENDED THAT THE LEASE OF PLOT NO. 39 (WRONGLY MENTIONED IN THE AUDIT REPORT AS 3 NO. OF PLOTS) WAS REGISTERED AND COPY OF THE SAME WAS FILED BEFORE AO AS WELL AS BEFORE CIT(A). THE ASSESSEE ALSO PRODUCED DETAILS OF SALES AND PURCHASE INVOICE DURING THE COURSE OF ORIGINAL ASSE SSMENT PROCEEDINGS, DURING THE COURSE OF SET ASIDE PROCEEDINGS AND EVEN BEFORE CIT(A) AND WHICH WERE VERIFIED BY ISSUING NOTICES U/S. 133(6) OF THE ACT. THE AO ALSO VERIFIED THE TRANSA CTIONS OF PURCHASE OF MACHINERY AND SALES AS WELL AS MANUFACTURING OF GOODS HAVE BEEN ACCEPTED. IN SUCH CIRCUMSTANCES AND THE ABOVE EVIDENCES, WE FEEL THAT THE CIT(A) HAS RIGHTLY ALLO WED THE CLAIM OF ASSESSEE U/S. 80IB OF THE ACT TO THE ASSESSEE BEING A MANUFACTURING UNIT AND ALL RULES AND REGULATIONS AND NECESSARY PERMISSION ALSO OBTAINED ON THE SAME PLOT NO. 39. ACCORDINGLY, WE NEED NOT TO INTERFERE IN THE ORDER OF CIT(A) AS THIS BEING A FACTUAL ASPECT. TH IS APPEAL OF REVENUE IS DISMISSED. SIMILAR ARE THE FACTS IN AY 2004-05. SINCE WE DISMISS THE APPE AL OF REVENUE FOR AY 2005-06 AND THE FACTS FOR AY 2004-05 ARE EXACTLY IDENTICAL TO THE FACTS F OR AY 2005-06, THE APPEAL OF REVENUE FOR AY 2004-05 IS ALSO DISMISSED. 7. IN THE RESULT, APPEALS OF REVENUE ARE DISMISSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.03.2 014. SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH MARCH, 2014 12 '3' 4 JD.(SR.P.S.) 5 ITA NO.126/K/2012 & ITA NO.154/K/2012 M/S. AMRIT PACKAGING , AY:2005-06 & 2004-05 $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- ITO, WARD-43(4), KOLKATA. 2 ./,- / RESPONDENT M/S. AMRIT PACKAGING, 13, NOORMAL LO HIA LANE, 2 ND FLOOR, KOLKATA-700 007. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .