Mamta Industries, Vapi V. The Income Tax Officer, Vapi Ward-3, Vapi

ITA 1575/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6248 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 10-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1575/AHD/2013 (ASSESSMENT YEAR: 2009-10) MAMTA INDUSTRIES, PLOT NO.2705/1, L TYPE SHED, 3 RD PHASE, GIDC, VAPI - 396195 APPELLANT VS. INCOME TAX OFFICER, VAPI WARD-3, VAPI RE SPONDENT PAN: AALFM6236B /BY ASSESSEE : SHRI M. K. PATEL, A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /DATE OF HEARING : 10.04.2017 /DATE OF PRONOUNCEMENT : 12.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 IS PREFERRED AGAINST THE CIT(A), VALSADS ORDER DATED 25.03.2013, PASSED IN APPEAL NO. CIT(A)/VLS/389/11-12, UPHOLDING ASSESSING OFFICERS ACTION MAKING ADDITION OF RS.4,62,736/- PERTAINING TO VALUE OF UN ACCOUNTED PURCHASES MADE DURING THE RELEVANT PREVIOUS YEAR, IN PROCEEDINGS U /S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 1576/AHD/2013 (MAMTA INDUSTRIES VS. ITO) A.Y. 2009-10 - 2 - HEARD BOTH SIDES. CASE FILE PERUSED. 2. RELEVANT FACTS INVOLVED HEREIN ARE IN A NARROW C OMPASS. THE ASSESSEE / FIRM MANUFACTURES MANMADE LAMINATED FABRIC, PVC PRO DUCT AND POLYESTER FILAMENT YARN. THE DEPARTMENT CARRIED OUT A SURVEY IN ITS CASE ON 12.09.2008. THE ASSESSEES AUTHORIZED PERSON APPEA RS TO HAVE VOLUNTARILY DISCLOSED ADDITIONAL INCOME OF RS.16.04 LACS IN COU RSE THEREOF. IT THEREAFTER FILED RETURN ON 18.09.2009 STATING INCOME OF RS.15, 93,823/-. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE FIRST OF ALL REFERRED TO IMPOUNDED DOCUMENTS DURING SURVEY INVENTORIED AS ANNEXURE BF/1; ESPECIA LLY PAGES 71 TO 74 INDICATING CERTAIN UNACCOUNTED RECEIPTS INDICATING PURCHASE OF VARIOUS ITEMS OUTSIDE BOOKS. HE THEREAFTER REJECTED ASSESSEES E XPLANATION DISPUTING THE SAME TO ARRIVE AT SUCH TOTAL RAW MATERIAL PURCHASED WEIGHING 6070 KGS. AND DANA RECEIVED OF 827.25 KGS.; AGGREGATING TO 6897.2 5KGS. THE ASSESSING OFFICER THEREAFTER RELIED ON AVERAGE MARKET PRICE P REVALENT IN THE RELEVANT PREVIOUS YEAR AS PER MARKET SOURCES OF RS.67.09PE R KG. RESULTING THE IMPUGNED ADDITION OF RS.4,62,736/- AS UNACCOUNTED P URCHASES. 3. THE CIT(A) UPHOLDS THE IMPUGNED ADDITION AS UNDE R: 8. DECISION:- I HAVE CAREFULLY PERUSED THE FACTS OF THE CASE AN D THE SUBMISSIONS MADE BY THE APPELLANT. I HAVE ALSO THOU GHTFULLY PERUSED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER. THE AO MADE THE ADDITION ON THE BASIS OF IMPOUNDED MATERIALS DURING THE COURSE OF SURVEY U/S. 133A(5) OF THE ACT. HE CATEGORICALLY BROUGHT OUT ON RECOR DS HOW THE APPELLANT HAD SUPPRESSED PURCHASES WHICH ARE EVIDENCED IN PG. 71 TO 74 OF THE IMPOUNDED MATERIALS. THE AO ALSO ADOPTED RATE OF P ER KG. ON THE BASIS OF MARKET INFORMATION GATHERED BY HIM FOR QUANTIFYING THE SUPPRESSED PURCHASES OF DANA ETC. ON THE OTHER HAND THE LD. AL L CONTENDED THAT THE AO SHOULD ADOPT, THE NET OF PURCHASES I.E. RECEIVED GO ODS MINUS DISPATCHED GOODS FOR MANUFACTURING. THE LD. ALL ALSO CONTESTED AGAINST THE RATE ADOPTED BY THE AO BY PLACING A DELIVERY CHALLAN COP Y DATED. 28.12.2007 FROM KWALITY PLASTIC WITH A REQUEST TO BROUGHT THAT DELIVERY CHALLAN COPY ON RECORDS BY INVOKING RULE 4&A OF THE ACT. I HAVE CONSIDERED THE PIECE OF EVIDENCE IN THE FORM OF DELIVERY CHALLAN PLACED BEF ORE ME DURING THE APPELLATE PROCEEDING. THE SAID DOCUMENT DOES NOT HE LP THE CAUSE FOR TAKING AN APPROPRIATE DECISIONS BECAUSE OF THE FACT THAT T HAT DELIVERY CHALLAN ITA NO. 1576/AHD/2013 (MAMTA INDUSTRIES VS. ITO) A.Y. 2009-10 - 3 - PERTAINS TO F.Y. 2007-08 NOT RELEVANT TO ASSESSMENT YEAR IN HAND FOR DECISION. THEREFORE, THE ID. AR PLEA FOR INVOKING RULE 46A OF THE ACT IS NOT ENTERTAINED AND THE MATTER WAS DECIDED ON MERIT. AS MENTIONED EARLIER, THE AO'S FINDING WAS MERITORIOUSLY BASED ON IMPOUNDED D OCUMENTS. THE LD. ALL'S DEFENSE IS ON LOGIC AND WITHOUT COGENT EVIDEN CE. IF THE APPELLANT HAD NOT SHOWN THE PURCHASES IN THE BOOKS OF A/C. THAT M EANS CORRESPONDING SALES ARE ALSO NOT SHOWN. THAT MEANS, THE APPELLANT HAS BEEN USING THE FUNDS FROM UNDISCLOSED SOURCE FOR SUCH PURCHASES. IN THIS CIRCUMSTANCES, TO QUANTIFY THE UNACCOUNTED MONEY USED FOR SUCH PUR CHASES, THE AO BASED HIS FINDINGS ON THE IMPOUNDED MATERIALS WHICH IS VE RY MUCH CORRECT APPROACH. THAT LEAVES WHICH RATE TO BE ADOPTED FOR QUANTIFYING THE VALUE? THE AO TRIED AND ADOPTED MARKET VALUE. THE LD. AR D ID NOT REBUT THE MARKET VALUE BY GIVING EVIDENCES RELEVANT, TO THE C URRENT YEAR. THEREFORE, THE AO'S FINDING IS MORE LOGICAL AND ACCEPTABLE. I N VIEW OF THIS, I AM NOT INCLINED TO INTERFERE IN THE FINDINGS OF THE AO. TH US THIS GROUND IS DISMISSED. 4. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERU SED. LD. COUNSEL REPRESENTING ASSESSEE IS FAIR ENOUGH IN NOT DISPUTI NG CORRECTNESS OF THE ABOVE QUANTIFICATION OF UNACCOUNTED PURCHASES IN QUESTION IN PRINCIPLE. HIS ONLY PLEA IS THAT THERE IS NO FOUNDATION IN ASSESSING OF FICERS ACTION IN ARRIVING AT THE IMPUGNED ADDITION AFTER TAKING MARKET PRICE OF RS.67.09 PER KG. (SUPRA) WITHOUT EVEN INDICATING THE RELEVANT MATERIAL IN TH E CASE FILE. LD. DEPARTMENTAL REPRESENTATIVE HOWEVER STRONGLY SUPPOR TS THE SAID BASIS. IT IS EVIDENT THAT THERE IS NO MATERIAL TO QUOTE THE FOUN DATION OF THE ALLEGED MARKET SOURCES IN QUESTION IN ORDER TO ARRIVE AT THE IMPUG NED VALUE OF RS.67.09 PER KG. IT IS ALSO A FACT THAT EVEN THE CIT(A) DOES NO T DISPUTE CORRECTNESS OF ASSESSEES DELIVERY CHALLAN (SUPRA) DISCLOSING THE SAID PRICE @RS.28 PER KG. HE HOWEVER IS OF THE VIEW THAT THE SAME COULD NOT SUBJECTED AS ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES SIN CE THE ABOVE CHALLAN PERTAINS TO THE PRECEDING FINANCIAL YEAR 2007-08. WE OBSERVE IN THIS FACTUAL BACKDROP THAT THE SAID VALUATION IS VERY MUCH LIABL E TO BE ACCEPTED @RS.28 PER KG. AS IT THROWS LIGHT ON THE RELEVANT MARKET PRICE OF THE SAME MATERIAL IN PRECEDING ASSESSMENT YEAR. WE THEREFORE DISAGREE W ITH LD. CIT(A)S CONCLUSION REJECTING THE SAID ADDITIONAL EVIDENCE. WE HOWEVER OBSERVE THAT THE ABOVE ITEM CAN BE SAFELY INFERRED TO HAVE BECOM E COSTLY IN THE IMPUGNED ITA NO. 1576/AHD/2013 (MAMTA INDUSTRIES VS. ITO) A.Y. 2009-10 - 4 - ASSESSMENT YEAR AT LEAST BY RS.7/- PER KG. TAKING I TS PRICE TO RS.35/- PER KG. WE THEREFORE PARTLY ACCEPT ASSESSEES SOLE SUBSTANT IVE GROUND AND DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE ADDITION IN QUE STION BY TAKING AVERAGE MARKET PRICE OF THE ABOVE UNACCOUNTED PURCHASES AT RS.35/-PER KG. IT IS MADE CLEAR THAT OUR INSTANT OBSERVATIONS SHALL NOT BE TR EATED AS A PRECEDENT IN ANY PRECEDING OR SUCCEEDING ASSESSMENT YEAR . 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF APRIL, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 12/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0