M/s. Krishnaveni Carbon Products Pvt Ltd., Coimbatore V. ACIT, Coimbatore

ITA 1728/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0951 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIDISHA KALRA
• Assessee Lawyers: G BHASKAR
• Section: 143(3); 153A; 32; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER .. ITA NO.1728/MDS./2012 ASSESSMENT YEAR:2005-06 M/S.KRISHNAVENI CARBON PRODUCTS PVT LTD., 63/3,ATHIPALAYAM ROAD, CHINNAVENDAMPATTI, COIMBATORE 641 001. VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE. PAN AACCK 0858 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.BHASKAR, ADVOCATE RESPONDENT BY : SMT.VIDISHA KALRA CIT D.R. DATE OF HEARING : 22 .01.13 DATE OF PRONOUNCEMENT : 22 . 01.13 O R D E R PER S.S.GODARA, JUDICIAL MEMBER : THIS ASSESSEES APPEAL EMANATES FROM THE ORDER O F CIT(A)- II, COIMBATORE PASSED IN I.T.APPEAL NO.96C/2007-08 DATED 21.05.2012 FOR A.Y 2005-06 IN PROCEEDINGS UNDER SE CTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). ITA. 1728/MDS/12 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SAL E OF CARBON PRODUCTS. THE IMPUGNED ASSESSMENT YEAR IS 2005-06. AS IT IS REVEALED FROM THE ASSESSMENT ORDER, THE ASSESSEE HA D NOT FILED ITS RETURN OF INCOME WITHIN THE DUE DATE UNDER SECT ION 139 OF THE ACT. ON 27.09.05, THE DEPARTMENT CONDUCTED A SEARC H IN THE ASSESSEES PREMISES, WHICH LED TO SEIZURE OF SOME A LLEGED INCRIMINATING MATERIALS RESULTING A NOTICE UNDER SE CTION 153A OF THE ACT, WHICH WAS ISSUED ON 13-02-2006 SEEKING ASS ESSEES RETURN. IN RESPONSE, THE ASSESSEE FILED ITS RETU RN ON 05.05.06 AND DECLARED TOTAL INCOME OF ` 82,94,585/-. THEREAFTER, THE ASSESSING OFFICER COMPLETED ASSESSMENT UNDER SECTIO N 153A READ WITH SECTION 143(3) OF THE ACT. IN THE ASSES SMENT ORDER, A.O TOOK THE STOCKS VALUE AS ` 30 LAKHS AS ON 31.03.2004. HE ALSO INDENTIFIED UNCOUNTED PURCHASES OF ` 34,03,033/- BY PLACING RELIANCE ON THE INCRIMINATING EVIDENCE SEIZED. ON THE OTHER HAND, THE ASSESSEE HAD TAKEN STOCK DETAILS OF ` 26,41,558/- AS ON 24.12.2007. THEREAFTER, THE A.O. CONSIDERED IT AS ` 13,91,670/- REDUCED AN AMOUNT OF ` 4,18,807/- FOR GREY MARKET PURCHASES AND WORKED OUT UNACCOUNTED SALES OF ` 8,75,696/-. ITA. 1728/MDS/12 3 2.1. IN APPEAL, THE CIT(A) HAS ALSO UPHELD A.).S FINDINGS. SO, THE ASSESSEE IS AGGRIEVED. 3. IN THE COURSE OF HEARING, THE A.O ON BEHALF OF THE ASSESSEE HAS VEHEMENTLY ARGUED THAT THE ADDITION IN QUESTION BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) TO TH E TUNE OF ` 8,75,696/-(SUPRA) HAS BEEN WRONGLY MADE. HIS FURTHE R CONTENTION IS THAT THE SEIZED MATERIAL RELIED UPON BY THE REVE NUE IN THE ASSESSMENT PROCEEDINGS HAS NOT BEEN FURNISHED TO T HE ASSESSEE SO AS TO ENABLE IT TO FILE A DETAILED REPLY. ACCOR DINGLY, ON THE BASIS OF ABOVE CONTENTIONS, ACCEPTANCE OF THE INSTA NT APPEAL HAS BEEN PRAYED FOR. 3.1. PER CONTRA, THE ARGUMENT OF THE REVENUE IS TH AT THE CIT(A) HAS RIGHTLY UPHELD THE ADDITION IN QUESTION AND PRA YED FOR CONFIRMING THE SAME. 4. WE HAVE HEARD BOTH PARTIES AT LENGTH AND ALSO P ERUSED THE RELEVANT FINDINGS OF ASSESSING OFFICER AND THE CIT( A). ADMITTED FACTS ARE THAT A SEARCH HAD BEEN CONDUCTED IN THE A SSESSEES PREMISES, WHICH LEAD TO INITIATION OF THE PROCEEDIN GS UNDER SECTION 153A OF THE ACT. THE SAID SEARCH ALSO LED TO SEIZU RE OF ITA. 1728/MDS/12 4 INCRIMINATING MATERIAL AGAINST THE ASSESSEE, WHICH HAS BEEN EXTENSIVELY RELIED UPON BY THE ASSESSING OFFICER WH ILE MAKING THE ADDITION IN QUESTION. HOWEVER, WE NOTICE THAT NE ITHER IN THE ASSESSMENT ORDER NOR IN THE ORDER OF THE CIT(A), TH ERE IS ANY MENTION THAT THE ASSESSEE WAS EVER SUPPLIED THE COP Y OF INCRIMINATING MATERIAL SEIZED IN THE SEARCH. RATHE R, IT IS REVEALED FROM THE ORDER OF CIT(A) THAT THE ASSESSEE HAD NOT LED ANY EVIDENCE REGARDING THE MATERIALS SEIZED. SO, WE NO TICE THAT IN THE ABSENCE OF THE SEIZED MATERIAL, WHICH SHOULD HAVE B EEN PROVIDED BY THE ASSESSING OFFICER TO THE ASSESSEE, ASSESSEE S VALUABLE RIGHT TO BE CONFRONTED WITH THE INCRIMINATING MATER IAL STANDS VIOLATED. HENCE, IN THE LARGER INTEREST OF JUSTICE , WE DEEM IT APPROPRIATE THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER IN ACCORDANCE WITH LAW AFTER AFFO RDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE, WHO SHALL B E SUPPLIED COPY OF THE ALLEGED INCRIMINATING MATERIAL SOUGHT T O BE RELIED UPON FOR THE PURPOSE OF THE ADDITION IN HAND. IN THE LI GHT THEREOF, THE APPEAL IS ACCEPTED FOR STATISTICAL PURPOSES. ITA. 1728/MDS/12 5 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON TUESDAY, THE 22 ND JANUARY, 2013 . SD/- SD/- (ABRAHAM P GEORGE) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED 22 ND JANUARY, 2013. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 1728/MDS/12 6 THE MAIN CONDITION TO BE SATISFIED UNDER SECTION 32 A(1) AND (2) OF THE INCOME TAX ACT, 1961 ARE: 1) THE SUBJECT MATTER IS TO BE OWNED BY THE ASSESS EE; 2) IT IS TO BE WHOLLY USED FOR THE PURPOSE OF BUSI NESS OF ASSESSEE, AND 3) THE SUBJECT MATTER SHOULD COME UNDER ANY OF THE ENUMERATED CATEGORIES OF SEC.32(A) 2), ITA. 1728/MDS/12 7