EXCEL PHARMACEUTICALS P.LTD, PALGHAR V. ASST CIT PALGHAR CIR, PALGHAR, PALGHAR

ITA 180/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7136 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 09-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR, HON'BLE ACCOUNTANT MEMBER ITA. NO . 180 /MUM/201 7 (A.Y: 2012 - 13 ) M/S. EXCEL PHARMACEUTICALS PVT. LTD., PLOT NO.11, DEWAN & SHAH UDYOG NAGAR, ALIYALI, DIST. PALGHAR PIN NO: 401 404 PAN NO: AACFE 3907 G V. ASST. CIT, PALGHAR CIRCLE, AAYAKAR BHAVAN, BIDCO ROAD, PALGHAR (WEST), PALGHAR 401 404 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI V. JUSTIN DATE OF HEARING : 18.06.2018 DATE OF PRONOUNCEMENT : 22 .06 .2018 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) - 3, THANE DATED 24.10.2016 FOR THE ASSESSMENT YEAR 2012 - 13. 2. ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL IN ITS APPEAL: - (1) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING ALL ADDITIONS AGGREGATING TO RS 1,31,36,598/ - MADE BY AO ON THE GROUND THAT APPELLANT FAILED TO APPEAR BEFORE HIM {CIT(A)} AND THEREBY ASSUMING THAT THE APPELLANT HAS NOTHING TO OFFER ANY EXPLANATION IN SUPPORT OF VARIOUS GROUNDS OF APPEAL IN SPITE OF THE FACT THAT SEVERAL OPPORTUNITIES OF BEING HEARD WAS GIVEN TO APPELLANT. 2 ITA.NO.180/MUM/2017 (A.Y: 2012 - 13) M/S. EXCEL PHARMACEUTICALS PVT. LTD., (2) (I) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 33,29,282/ - ON ACCOUNT OF LOANS U/S 68 OF THE IT ACT 1961. (II) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING LOANS OF RS. 33,29,282/ - WITHOUT APPRECIATING THE FACT THAT NO SUFFICIENT TIME WAS GIVEN TO THE APPELLANT AND A PPELLANT NEVER SHOWN ITS INABILITY TO FILE CONFIRMATION LETTERS. (3) (I) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED' IN CONFIRMING DISALLOWANCE OF RS 7,23,690/ - US 40(A)(IA) OF THE IT ACT 1961 (II) ON FACTS AND CIRCUMSTANCES OF THE CASE AND HI LAW LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS 7,23,690/ - US 40(A)(IA) WITHOUT APPRECIATING THE FACTS THAT BOTH DIRECTORS OF COMPANY HAVE FILED THEIR INDIVIDUAL RETURNS OF INCOME AND INCLUDED THEIR SALARY OF RS 3 LACS EACH AND PAID TAXE S AS PER THEIR RETURNS AND IN CASE OF BALANCE AMOUNT OF RS 1,23,690/ - PAID TO TWO PARTIES FOR REPAIR WORKS THE COMPONENT OF LABOUR WORK CONTRACT IN THE BILLS WERE LESS THEN RS 50,000/ - EACH SO PAYMENTS WERE NOT LIABLE FOR TDS. (4) (I) ON FACTS AND CIRCUMST ANCES OF THE CASE AND IN LAW LD CIT(A) IN CONFIRMING ADDITION ON ACCOUNT OF CURRENT LIABILITIES AND TRADE PAYABLES OF (RS 85,47,692/ - + 1,19,334= ) RS 86,6 7,026/ - US 41(1) OF THE I T ACT. (II) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ER RED IN CONF IRMING ADDITION OF RS 86,67,026/ - U / S 41(1) WITHOUT APPRECIATING FACT THAT NO SUFFICIENT OPPORTUNITY TO FILE CONFIRMATIONS AND FOR FILING OTHER DETAILS WERE PROVIDED TO THE APPELLANT AND APPELLANT HAS NEVER SHOWN ITS INABILITIES IN PRODUCING CON FIRMATIONS OR OTHER DETAILS. (5) (I) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW L D. CIT(A) ERRED HI DISALLOWING AD - HOC AMOUNT OF RS 3 ,42,500/ - - OUT OF LABOUR CHARGES WHICH IS 50% O F TOTAL EXPENSES OF RS 6,85,000/ - . (II) ON FACTS AND CIRCUMSTANCES O F THE CASE AND IN LAW LD. CIT(A) ERRED IN CONFIRMING AD - HOC DISALLOWANCE OF RS 3,42,500/ - OUT OF LABOUR CHARGES WITHOUT APPRECIATING THE FACT THAT THESE PAYMENT S WERE MADE TO CONTRACTORS DULY SUPPORTED BY BILLS AND TDS WERE ALSO MADE. (6) ON FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DISALLOWING RS 15,000/ - OUT OF REPAIRS EXPENSES BY CONSIDERING THE SAME AS CAPITAL IN NATURE. (7) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DI SALLOWING EXPENSES OF RS 59,100/ - OUT OF REPAIRS EXPENSES. (8) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. C1T(A) ERRED HI INITIATING PENALTY PROCEEDINGS US 271(L)(C) OF THE I T ACT 1961 . 3 ITA.NO.180/MUM/2017 (A.Y: 2012 - 13) M/S. EXCEL PHARMACEUTICALS PVT. LTD., 3. IN SPITE OF ISSUE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE. THE NOTICE ISSUED HA S BEEN RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH AN ENDORSEMENT THAT THE COMPANY HAS LEFT THE PREMISES. IN THE CIRCUMSTANCES , WE PROCEED TO DISPOSE OFF THIS APPEAL ON HEARING THE LD.DR. 4. LD. DR SUBMITTED THAT , IN THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN UNSECURED LOANS OF .1,00,06,6 60/ - . WHEN ASKED FOR THE DETAILS, ASSESSEE SUBMITTED DETAILS PARTIALLY OUT OF THE SAID .1,00,06,660/ - AND THE ASSESSEE COULD NOT PRODU CE THE CONFIRMATIONS FROM TEN PARTIES AMOUNTING TO .33,29,282/ - AND COULD NOT PROVE THE GENUINENESS OF THE TRANSACTIONS. HENCE THE ASSESSING OFFICER TREATED THE SAID AMOUNT AS UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT, WHICH THE LD.CIT(A) HAS RIGHTLY CO NFIRMED. 5. LD. DR SUBMITTED THAT I N THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSEE HAS MADE CERTAIN PAYMENTS TO VARIOUS PARTIES WITHOUT DEDUCTING TDS OUT OF TOTAL PAYMENTS OF .7,26,0690 / - , ASSESSEE ALSO PAID DIRECTOR S REMUNERA TION OF. .6,00,000/ - WITHOUT DEDUCTING THE TDS. LD. DR SUBMITTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEES COUNSEL AGREED FOR DISALLOWANCE OF THESE AMOUNTS AND THE ASSESSING OFFICER THEREFORE RIGHTLY DISALLOWED THE ENTIRE AMOUNT OF .7, 23,690/ - FOR NOT DEDUCTING THE TDS. 4 ITA.NO.180/MUM/2017 (A.Y: 2012 - 13) M/S. EXCEL PHARMACEUTICALS PVT. LTD., 6. LD. DR SUBMITTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO JUSTIFY WHY THERE SHOULD NOT BE ANY DISALLOWANCE U/S. 41(1) ACT IN RESPECT OF THE CURRENT LIABILITIES SHOWN BY THE ASSESSEE. HOWEVER , ASSESSEE DID NOT SUBMIT ANY DETAILS. THEREFORE, THE ASSESSING OFFICER DISALLOWED .86,67,026/ - U/S. 41(1) OF THE ACT WHICH THE LD.CIT(A) HAS RIGHTLY CONFIRMED. 7. LD. DR FURTHER SUBMITTED THAT ASSESSEE ALSO INCURRED LABOUR CHARGES OF .6,85,000/ - BUT FAILED TO PRODUCE THE BILLS, VOUCHERS, PAYMENT DETAILS ALONG WITH THE BANK STATEMENTS. THUS THE ASSESSING OFFICER DISALLOWED 50% OF SUCH LABOUR CHARGES AS THE ASSESSEE COULD NOT PRODUCE ANY DETAILS LIKE VOUCHERS, BILLS ETC., GENUINENESS OF THE EXPENSES WAS ALSO NOT PROVED. THEREFORE, IT IS SUBMITTED BY THE LD. DR THAT THE LD.CIT(A) RIGHTLY SUSTAINED THE DISALLOWANCE. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTIONS OF THE ASSESSING OFFICER AND THE FINDINGS OF THE LD.CIT(A) COULD NOT BE REBUTTED WITH EVIDENCE BY THE ASSESSEE. ON A READING OF THE LD.CIT(A) ORDER , WE FIND THAT EVEN BEFORE THE LD.CIT(A) ASSESSEE COL D NOT PRODUCE ANY EXPLANATION OR EVIDENCE S WHATSOEVER IN SPITE OF SEVERAL OPPORTUNITIES. EVEN BEFORE US THE ASSESSEE COULD SUBSTANTIATE ITS CLAIMS WITH EVIDENCES. THE FINDINGS OF THE LOWER 5 ITA.NO.180/MUM/2017 (A.Y: 2012 - 13) M/S. EXCEL PHARMACEUTICALS PVT. LTD., AUTHORITIES HAVE NOT BEEN REBUTTED BEFORE US. HENCE, WE SUSTAIN THE ORDER OF THE LOWER AUTHORITIES AND DISMISS THE GROUNDS OF THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22 ND JUNE, 2018 . SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 22 / 06/ 2018 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM BAI