M/s. Rinki Petrochem Pvt.Ltd., Baroda V. The Dy.CIT.,Circle-4, Baroda

ITA 1818/AHD/2009

• Counselvise Citation: 181820514 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-12-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 01-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M J SHAH
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO. 1818/AHD/2009 A. Y.: 1995-96 RINKI PETROCHEM PVT. LTD., 19, KALPANA SOCIETY, RACE COURSE CIRCLE, BARODA 7 VS THE D. C. I. T., CIRCLE-4, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA -7 PA NO. AABCR 0055 Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. J. SHAH, AR RESPONDENT BY SHRI B. L. YADAV, DR DATE OF HEARING: 14-12-2011 DATE OF PRONOUNCEMENT: 16-12-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II I, BARODA DATED 17 TH FEBRUARY, 2009 FOR ASSESSMENT YEAR 1995-96 CHALLENG ING THE ORDER OF THE LEARNED CIT(A) IN MAKING THE ADDITION OF RS.26, 42,350/- ON ACCOUNT OF UNEXPLAINED PURCHASE OF USED TRANSFORMER OIL. 2. IT IS NOTED IN THE IMPUGNED ORDER ON THIS ISSUE THAT ASSESSMENT U/S 143(3) OF THE IT ACT WAS COMPLETED ON 16-03-199 8 ON TOTAL INCOME OF RS.1,51,73,935/-. THE TOTAL INCOME WAS RE VISED TO LOSS OF RS.25,98,409/- WHILE GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A). ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 2 THE DEPARTMENT FILED APPEAL BEFORE THE TRIBUNAL AGA INST THE DECISION OF THE LEARNED CIT(A). THE TRIBUNAL SET ASIDE THIS ISSUE. ACCORDINGLY, THE MATTER WAS TAKEN UP FOR FRESH HEARING AS PER DI RECTION OF THE TRIBUNAL. THE ASSESSEE DID NOT RESPOND TO THE OPPOR TUNITY. SINCE THE ASSESSEE HAS FAILED TO PROVE THAT TRANSFORMER OIL C AN BE TRANSPORTED THROUGH OPEN BODY TANKER AS DIRECTED BY THE TRIBUNA L, THE AO MADE ADDITION OF RS.26,24,350/- ON ACCOUNT OF UNEXPLAINE D PURCHASE OF USED TRANSFORMER OIL. IT WAS CONTENDED BEFORE THE L EARNED CIT(A) THAT SALE IS ACCEPTED GENUINE BY THE AO. HOWEVER, HE HAS FAILED TO CONSIDER THE ISSUE THAT WITHOUT PURCHASE OF RAW MAT ERIAL SUCH SALE WOULD NOT HAVE BEEN POSSIBLE. THE ISSUE OF TRANSPOR TATION BEING DEALT CONSISTENTLY BY VARIOUS INCOME TAX AUTHORITIES INCL UDING THE TRIBUNAL AND IT WOULD BE JUST UNFAIR IF ONE DOES NOT BELIEVE THE CORRESPONDING PURCHASE OF THE ACCEPTED SALE. IT WAS SUBMITTED THA T THE ASSESSEE IS AN EXCISABLE MANUFACTURING COMPANY AND NO QUESTION HAS BEEN RAISED BY THE AO AND QUANTITY DETAILS DECLARED BY T HE ASSESSEE IN THE PUBLISHED ACCOUNT AS WELL AS IN VARIOUS SUBMISSIONS . WHEN THE TRANSFORMER OIL IS COLLECTED IN TANK FROM DIFFERENT TRANSFORMERS OF ELECTRICITY BOARD, THUS BARRELS CAN ALWAYS BE TRANS PORTED THROUGH OPEN BODY TRUCK WHICH IS ALSO CONFIRMED BY THE THIR D PARTIES. THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITION. HIS FINDINGS IN THE IMPUGNE D ORDER IN PARA 3.3 AND 4 ARE REPRODUCED AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE COUNS EL AND FACTS OF THE CASE. THE ISSUE WAS SET ASIDE BY THE H ON. ITAT WITH A DIRECTION THAT IF ASSESSEE FAILED TO PROVE T HAT TRANSFORMER OIL CAN BE TRANSPORTED THROUGH THE OPEN TANKER ONLY , THE ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 3 PURCHASE OF TRANSFORMER OIL WHICH WAS TRANSPORTED T HROUGH VEHICLE OTHER THAN TANKERS SHOULD BE DISALLOWED. TH E ASSESSING OFFICER PROVIDED OPPORTUNITY TO THE APPELLANT. HOWE VER THE APPELLANT FAILED TO DISCHARGE ITS ONUS. SOME OF THE VEHICLES ARE MARUTI CARS, THREE WHEELERS AND TEMPO APART FROM OP EN BODY TRUCKS. THE APPELLANT HAD CLAIMED TRANSPORTATION OF 12000 LTRS IN A MARUTI CAR WITH VEHICLE NO. GQB-6510. EVEN OTHER VEHICLES, NOT TANKERS, WERE CLAIMED TO HAVE BEEN USED FOR TRA NSPORTING 6000-12000 LTRS OF TRANSFORMER OIL. EVEN BEFORE THE UNDERSIGNED, THE APPELLANT MADE LEGAL SUBMISSIONS W HICH ARE NOT RELEVANT CONSIDERING THE SPECIFIC DIRECTIONS OF HON. ITAT. THE APPELLANT SUBMITTED AFFIDAVIT OF ITS OWN EMPLOY EE THAT OPEN BODY TRUCKS WERE USED IN TRANSPORTING OIL. APA RT FROM THIS, A GENERAL LETTER WAS FILED FROM JAY AMBE TRANSPORT CO. THAT TRANSFORMER OIL STORED IN BARRELS OF ABOUT 200 25 0 LTRS CAN BE TRANSPORTED IN OPEN BODY TRUCKS. THESE LETTERS ARE NOT SUPPORTED BY ANY EVIDENCE OR PROOF THAT TRANSFORMER OILS WERE ACTUALLY TRANSPORTED BY THE APPELLANT THROUGH THE V EHICLES OTHER THAN TANKERS. AS REGARDS MARUTI CAR, THE APPELLANT ITSELF ACCEPTED THAT OIL CANNOT BE TRANSPORTED IN THAT. HO WEVER THE APPELLANT PLEADED WRONG MENTIONING OF VEHICLE NO. S INCE THE APPELLANT IS NOT ABLE TO PROVE THE TRANSPORTATION O F OIL IN VEHICLES OTHER THAN OIL TANKERS, THE ADDITION MADE BY THE AS SESSING OFFICER IS CONFIRMED. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE ORIGINAL ASSESSMENT ORDER DATED 16-03-1998 COPY OF WHICH IS FILED ON RECORD TO SHOW THAT THIS ISSUE IS COMING UP FROM SEVERAL P RECEDING YEARS. HE HAS, THEREFORE, SUBMITTED THAT IN SEVERAL PRECEDING YEARS THE MATTER WAS TAKEN UP BY ITAT AHMEDABAD BENCH IN THE CASE OF THE ASSESSEE VIDE ORDER DATED 20-06-2008 THE DISALLOWANCE OF THI S ISSUE WAS RESTRICTED TO 25% OF THE PURCHASES. HE HAS REFERRED TO ONE OF THE ORDERS OUT OF THE CONSOLIDATED ORDER DATED 20-06-20 08 IN ITA ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 4 NO.3746/AHD/1997 FOR ASSESSMENT YEAR 1994-95 AND SU BMITTED THAT ON IDENTICAL ISSUE THE TRIBUNAL SUBSEQUENTLY RESTRI CTED THE ADDITION TO 25% OUT OF SUCH PURCHASES AND SIMILAR VIEW IS TAKEN IN SIMILAR PRECEDING ASSESSMENT YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED THE COPY OF THE ORDER DATED 20-06-2008 ON RE CORD. HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT EXPL AIN AS TO WHY THIS ORDER WAS NOT PLACED BEFORE THE LEARNED CIT(A) FOR HIS CONSIDERATION. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SU BMITTED THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE LEARNED C IT(A) FOR RECONSIDERATION OF THE ISSUE AFRESH. ON THE OTHER H AND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE IN THE ASSESSMENT YEAR UNDER APPEAL, SPECIFIC DIRECTIONS WERE ISSUED BY THE TRIBUNAL, THEREFORE, SUBSEQUENT ORDER WOULD NOT BE RELEVANT AND THE LEARNED CIT(A) IS BOUND BY THE ORD ER OF THE TRIBUNAL. THE LEARNED DR HAS HOWEVER, NO OBJECTION IF THE MAT TER IS REMANDED TO THE FILE OF THE LEARNED CIT(A) FOR CONSIDERATION OF THE ISSUE AFRESH BECAUSE IN THE SUBSEQUENT ORDER PASSED BY THE TRIBU NAL DATED 20-06-2008 IN SEVERAL PRECEDING ASSESSMENT YEARS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND GONE THROUGH THE ORDER OF THE TRIBUNAL REFERRED BY THE PARTIES DURIN G THE COURSE OF ARGUMENTS. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT NOW THE ISSUE IS COVERED BY THE CONS OLIDATED ORDER OF THE TRIBUNAL DATED 20-06-2008 IN WHICH 16 CROSS APP EALS HAVE BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE . FOR ASSESSMENT YEAR 1994-95 IT WAS HIGHLIGHTED THROUGH THE ORDER O F THE TRIBUNAL DATED 20-06-2008 THAT BOTH THE PARTIES HAVE AGREED FOR THE ADDITION TO ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 5 THE EXTENT OF 25%. IN OTHER YEAR ALSO THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT SIMILAR VIEW IS TAKEN FOR RESTRICTING THE ADDITION TO 25% OF THE TOTAL ADDITION MADE ON THE A GREEMENT REACHED BY BOTH THE PARTIES I.E. THE ASSESSEE AND THE REVEN UE DEPARTMENT. THE LEARNED CIT(A) DECIDED THE APPEAL OF THE ASSESS EE FOR ASSESSMENT YEAR UNDER APPEAL ON 17-02-2009 BUT THE ORDER IN FAVOUR OF THE ASSESSEE DATED 20-06-2008 PRONOUNCED BY THE TRIBUNAL WAS NOT PLACED BY THE ASSESSEE BEFORE THE LEARNED CIT(A ) FOR HIS CONSIDERATION. WE MAY ALSO NOTE HERE THAT THE TRIBU NAL RESTRICTED THE ADDITION ON THIS ISSUE TO 25% OF THE DISALLOWANCE W HEN THE PARTIES AGREED TO THE SAME. SINCE THIS ISSUE IS COMING UP F ROM THE PRECEDING SEVERAL YEARS PRIOR TO THE ASSESSMENT YEAR UNDER AP PEAL, THEREFORE, THE ASSESSEE SHOULD HAVE PLACED THE ORDER OF THE TR IBUNAL DATED 20-06-2008 BEFORE THE LEARNED CIT(A) FOR HIS CONSID ERATION. BUT DUE TO SOME REASONS BEST KNOWN TO THE ASSESSEE THE SAME WAS NOT PLACED BEFORE THE LEARNED CIT(A) FOR HIS CONSIDERAT ION, OTHERWISE THE SAME SHOULD HAVE BEEN MENTIONED IN THE IMPUGNED ORD ER. EVEN, NO REASON HAS BEEN EXPLAINED BY THE LEARNED COUNSEL FO R THE ASSESSEE AS TO WHY THE ORDER OF THE TRIBUNAL DATED 20-06-200 8 WAS NOT PLACED BEFORE THE LEARNED CIT(A) FOR HIS CONSIDERATION. AP ART FROM THAT, WE MAY FURTHER NOTE THAT IN THE ASSESSMENT YEAR UNDER APPEAL I.E. 1995- 96, THE TRIBUNAL VIDE ORDER DATED 15-09-2006 IN DEP ARTMENTAL IN ITA NO.1433/AHD/1999 (ASSESSMENT YEAR 1995-96) RESTORED THE MATTER BACK TO THE FILE OF THE AO AND DIRECTED THE AO TO RE-DECIDE THE ISSUE AFRESH AFTER GIVING PROPER OPPORTUNITY TO THE ASSES SEE IF THE ASSESSEE FAILS TO PROVE THE TRANSFORMER OIL CAN BE TRANSPORT ED THROUGH THE OPEN BODY TANKER ONLY, PURCHASE OF TRANSFORMER OIL WHICH WAS TRANSPORTED ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 6 THROUGH VEHICLES OTHER THAN TANKERS SHOULD BE DISAL LOWED. IT IS WELL SETTLED LAW THAT IN THE SET ASIDE PROCEEDINGS THE A UTHORITIES BELOW ARE BOUND TO FOLLOW THE DIRECTION OF THE APPELLATE AUTH ORITIES WHEN THE MATTER IS REMANDED BACK TO THEM FOR RECONSIDERATION WITH SPECIFIC DIRECTION. IT APPEARS THAT THE LEARNED CIT(A) IN TH E ORDER HAS TAKEN INTO CONSIDERATION THE DIRECTION OF THE TRIBUNAL BU T THE SUBSEQUENT ORDER OF THE ITAT AHMEDABAD BENCH IN THE CASE OF TH E SAME ASSESSEE WAS NOT PLACED BEFORE THE LEARNED CIT(A) F OR HIS CONSIDERATION PARTICULARLY WHEN THE REVENUE AND THE ASSESSEE AGREED TO THE DISALLOWANCE OF 25%. SUCH PECULIAR FACTS NOT ED ABOVE WOULD, THEREFORE, JUSTIFY THAT THE MATTER SHOULD BE REMAND ED TO THE FILE OF THE LEARNED CIT(A) FOR RECONSIDERATION IN THE LIGHT OF THE SUBSEQUENT DECISION OF THE TRIBUNAL AS IS SUGGESTED BY BOTH TH E PARTIES. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND RESTORE THIS ISSUE TO HIS FILE WITH DIRECTION TO RE-DECIDE THE I SSUE STRICTLY IN ACCORDANCE WITH LAW. WE MAKE IT CLEAR THAT THE LEAR NED CIT(A) SHALL BE BOUND BY THE ORDER OF THE TRIBUNAL DATED 15-09-2 006 THROUGH WHICH THE MATTER WAS REMANDED FOR RECONSIDERATION O F THE ISSUE IN THE ASSESSMENT YEAR UNDER APPEAL. THE LEARNED CIT(A) SH ALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LEARNED CIT(A) IS ALSO DIRECTED TO GIVE FINDING S WHETHER THE ORDER PASSED WITH THE CONSENT/AGREEMENT OF BOTH THE PARTI ES WOULD BE BINDING IN LAW ON THE PARTIES IN SIMILAR MATTER IN ISSUE WITHOUT CONSIDERING MERIT OF THE CASE. ITA NO.1818/AHD/2009 RINKI PETROCHEM PVT. LTD. VS DCIT, CIR-4, BARODA 7 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD