INDUSTRIAL PACKING PRODUCTS, MUMBAI V. CIT 14, MUMBAI

ITA 2276/MUM/2012

• Counselvise Citation: 227619914 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 22-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYASDR
• Assessee Lawyers: NARAYAN ATAL
• Keywords: Business income
• Section: 14A; 80IB

Judgement Text

, ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI , , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.2276/MUM/2012 ' ' ' ' # # # # / ASSESSMENT YEAR: 2008-09 M/S INDUSTRIAL PACKING, NIRANJAN BUILDING, 602, 6 TH FLOOR, 99, MARINE DRIVE, MUMBAI-400002 VS. THE COMMISSIONER OF INCOME TAX-14, 6 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400021 (ASSESSEE) (REVENUE) AAAFI0637H ASSESSEE BY : SHRI NARAYAN ATAL REVENUE BY : SHRI KISHAN VYAS-DR DATE OF HEARING : 14/10/2014 DATE OF PRONOUNCEMENT : 14/10/2014 O R D E R PER JOGINDER SINGH: JM THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 07/02/2012 OF THE LD. COMMISSIONER OF INCOME-TAX-14, MUMBAI. THE ASSESSEE RAISED THE FOLLOWING GROUNDS- 1.(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN INITIATING PROCEEDINGS U/S.263 OF THE INCOME TAX ACT. 1961 VID E SHOW-CAUSE NOTICE DATED 0905.2011 IN RESPECT OF VARIOUS EXPENS ES MENTIONED IN PARA 4 OF THE SHOW CAUSE NOTICE ON THE GROUND THAT TAX SHOULD HAVE 2 M/S INDUSTRIAL PACKAGING PRODUCTS . BEEN DEDUCTED ON THE SAME UNDER SECTION 194H WHEN N ONE OF THESE EXPENSES PERTAIN TO THAT SECTION I.E. COMMISSION AN D BROKERAGE. (B). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LA W, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN PASSING THE ORDER US. 263 OF THE INCOME TAX ACT, ] 961 WITHOUT POINTING OUT ANY DISCREPANCY IN THE AFORESAID EXPENSES AND THUS ERRONEOUSLY CONCLUDING THAT THE ORDER PASSED BY THE LEARNED ASS ESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. (C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN PASSING ORDER U/S. 263 OF THE INCOME TAX ACT. 1961 BY SETTING ASI DE THE ASSESSMENT ORDER AND REMITTING THE MATTER TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING AS TO WHY THE O RDER PASSED BY THE LEARNED ASSESSING OFFICER IS ERRONEOUS, WHICH IS CO NTRARY TO THE ESTABLISHED POSITION IN LAW. (D) THE APPELLANT THEREFORE PRAYS THAT AS THE ORDER OF THE LEARNED CIT PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 IN RES PECT OF THE AFORESAID EXPENSES HAS NO NEXUS WITH THE SHOW CAUSE NOTICE, THE SAME BE HELD VOID AND BAD IN LA 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN CONCLUDING THAT IT IS NOT POSSIBLE TO ACCEPT THAT THE APPELLANT HAS NOT INCURRED ANY ADMINISTRATIVE EXPENSES IN RELATION TO DIVIDEND INC OME RECEIVED WITHOUT CONSIDERING THE SUBMISSIONS OF THE APPELLAN T TO THE EFFECT THAT IN FACT NO ADMINISTRATIVE EXPENSES WERE INCURRED FO R EARNING DIVIDEND INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED 3 M/S INDUSTRIAL PACKAGING PRODUCTS . COMMISSIONER OF INCOME-TAX HAS ERRED IN APPLYING T HE PROVISIONS OF SECTION 40(A)(IA) TO VEHICLE EXPENSES OF RS.3,00,000/- WHICH WAS NEVER THE SUBJECT MATTER OF THE SHOW CAUSE NOTICE AND MORE SO WHEN THE PAYEES HAVE ALREA DY PAID TAX ON THE SAME. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASS ESSEE, SHRI NARAYAN ATAL CONTENDED THAT THE LD. COMMISSIONER WAS NOT JU STIFIED IN INVOKING REVISIONAL JURISDICTION U/S 263 OF THE ACT AND ERRE D IN SETTING ASIDE THE ASSESSMENT ORDER AND CONSEQUENT REMITTING THE SAME TO THE FILE OF THE ASSESSING OFFICER TO CONDUCT ENQUIRIES WITHOUT ASSI GNING ANY REASON AS TO HOW THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF THE REVENUE. RELIANCE WAS PLACED UPON THE DECISION IN 23 TAXMAN. 425 (CALCUTTA). ON THE OTHER HAND, THE LD. DR SHRI KIS HAN VYAS CONTENDED THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND PLACED RELIANCE UPON THE DECISION IN P.V.SREENIJIN VS CIT (2014) 47 TAXMAN.COM 61(KERALA) AND CIT VS. ASSAM TEA HOUSE ( 2012) 25 TAXMAN.COM 93 (P & H). 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT T HE ASSESSEE DECLARED INCOME OF RS.1,29,89,027/- WHICH WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT 1961 (HEREINAFTER THE ACT). SUBSEQU ENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS, THEREFORE, STATUT ORY NOTICES WERE SERVED UPON THE ASSESSEE TO WHICH THE ASSESSEE ATTENDED TH E PROCEEDINGS AND AS PER THE ASSESSING OFFICER SUBMITTED THE DETAILS. T HE ASSESSMENT ORDER FRAMED BY THE AO IS REPRODUCED HEREUNDER:- 3. IN RESPONSE TO THE SAID NOTICE, MR. SAMPATKUMAR B. KABRA, CA AND AR PARTNER ATTENDED AND SUBMITTED THE DETAILS CALLED F OR. THE CASE WAS DISCUSSED. 4 M/S INDUSTRIAL PACKAGING PRODUCTS . 4. SUBJECT TO THE ABOVE REMARKS, THE TOTAL INCOME O F THE ASSESSEE IS DETERMINED AS UNDER: I. INCOME FROM OTHER SOURCES - RS.1,73,11,140/- II. DEDUCTION UNDER CHAPTER VIA U/S 80IB OF THE I.T.AT 25% OF BUSINESS INCOME OF RS.1,72,88,451/ - - RS. 43,22,113/- _________________________ TOTAL INCOME RS.1,29,89,027/- 2.2. THE AFORESAID ASSESSMENT ORDER WAS FOUND TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON C ERTAIN POINTS, CONSEQUENTLY NOTICE U/S 263 OF THE ACT WAS ISSUED T O ASSESSEE WITH A DIRECTION TO EXPLAIN THE POSITION. THE SAID NOTICE HAS BEEN REPRODUCED IN THE IMPUGNED ORDER ITSELF. THE ASSES SEE FILED THE REPLY AND THE SUBMISSIONS WERE FORWARDED TO THE ASSESSING OFFICER FOR FACTUAL REPORT ON THE POINTS RAISED BY THE ASSESSEE . THE ASSESSING OFFICER VIDE LETTER DATED 08/08/2011, DULY ENDORSED BY THE ADDL. CIT, SENT HIS REPLY TO THE LD. CIT WHICH ALSO FIND MENTION IN THE IMPUGNED ORDER. ON CONSIDERATION OF REPLY/ENDORSEM ENT, THE LD. CIT FOUND THAT THE ASSESSEE CANNOT BE EXEMPTED FROM THE LIABILITY OF DISALLOWANCE U/S 14A READ WITH RULE 8D AS THERE WAS POSSIBILITY OF INCURRING OF ADMINISTRATIVE EXPENSES IN RELATION TO DIVIDEND INCOME RECEIVED BY THE ASSESSEE AS HUGE INVESTMENT WAS MAD E IN THE MUTUAL FUND. THUS, THIS POINT WAS SET ASIDE FOR LI MITED PURPOSES TO THE ASSESSING OFFICER TO APPLY THE PROVISION IN ACC ORDANCE WITH LAW. SO FAR AS, PRINTING AND STATIONARY EXPENSES ARE CON CERNED THE ASSESSEE SUBMITTED BILL OF RS.49,812/- OUT OF TOTAL CLAIMED EXPENSES OF RS.1,29,126/-. SINCE, THE REMAINING BILLS WERE NOT PRODUCED THE ISSUE WAS RESTORED BACK TO THE FILE OF THE AO TO LO OK INTO THE GENUINENESS OF THE REMAINING EXPENSES. SO FAR AS, PROFESSIONAL FEE IS 5 M/S INDUSTRIAL PACKAGING PRODUCTS . CONCERNED THE SUPPORTING BILLS WERE NOT PRODUCED TH EREFORE, IT WAS SET ASIDE TO BE REEXAMINE THE AUTHENTICITY OF EXPEN SES. IDENTICAL IS THE SITUATION FOR REPAIR AND MAINTENANCE BILL OF RS .7,99,679/- FOR WHICH ONLY SUPPORTING BILLS AMOUNTING TO RS.1,55,40 3/- WERE PRODUCED. ASSESSEE ALSO DID NOT PRODUCE TRANSPORTA TION/UNLOADING CHARGES OF RS.44,56,235/-. THEREFORE, THE AO WAS A SKED TO LOOK INTO THE CLAIM OF THE ASSESSEE. REGARDING VEHICLE EXPEN SES OF RS.7,06,833/-THERE WAS A FINDING THAT NO TDS WAS MA DE ON AMOUNT OF RS.3 LAKH. REGARDING LABOUR CHARGES OF RS.12,99 ,973/- ASSESSEE DID NOT PRODUCE SUPPORTING BILLS TO SUBSTANTIATE IT S CLAIM AND THIS ISSUE WAS ALSO SET ASIDE TO THE FILE OF THE ASSESSI NG OFFICER TO VERIFY THE BILLS, IF PRODUCE BY THE ASSESSEE. IN VIEW OF T HESE CLEAR FACTS, WE HAVE NO HESITATION TO CONCLUDE THAT THE ASSESSMENT ORDER IS NON- SPEAKING ONE AND THE REPLY OF THE ASSESSING OFFICER BEFORE THE LD. CIT CLEARLY INDICATES THAT THE ORDER IS ERRONEOUS AS WE LL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEREFORE, FROM THIS A NGLE WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT. THE TOTALIT Y OF FACTS CLEARLY INDICATE THAT THE LD. AO EVEN WITHOUT WHISPERING TO THE SUBMISSION, IF ANY, FILED BY THE ASSESSEE IN A SLIP SOT MANNER FRAMED ASSESSMENT ORDER CAUSING PREJUDICE TO THE REVENUE. IT IS WORT H MENTIONING THAT A WELL REASONED ORDER HAS BEEN PASSED INVOKING REVI SIONAL JURISDICTION U/S 263 OF THE ACT DIRECTING THE ASSES SING OFFICER TO REFRAME THE ASSESSMENT AFRESH AFTER PROVIDING PROPE R OPPORTUNITY TO THE ASSESSEE. HOW THE ASSESSEE IS AGGRIEVED IS NOT KNOWN. 2.3. FOR INVOKING REVISIONAL JURISDICTION U/S 263 OF THE ACT TOO PREREQUISITE MUST BE PRESENT BEFORE THE COMMISSIONE R CAN INVOKE THE SAME. FIRST IS THAT THE ORDER PASSED BY THE ASS ESSING OFFICER MUST BE ERRONEOUS AND SECOND IT SHOULD BE PREJUDICI AL TO THE INTEREST 6 M/S INDUSTRIAL PACKAGING PRODUCTS . OF REVENUE. AN ERRONEOUS ORDER, ADMITTEDLY, ALWAYS MAY NOT BE A WRONG ORDER. THE CONDITION IS THAT IT SHOULD BE PR EJUDICIAL TO THE INTEREST OF REVENUE ALSO. BEFORE THE COMMISSIONER INVOKES THE REVISIONAL JURISDICTION, HE SHOULD BE SATISFIED ABO UT THESE TWO CONDITIONS. THE HONBLE APEX COURT IN MALABAR INDU STRIAL CORP. LTD. 243 ITR 83(SC) IN A VERY DETAILED MANNER THREW LIGH T ON THE POWERS OF THE LD. COMMISSIONER WHILE INVOKING REVISIONS JU RISDICTION U/S 263 OF THE ACT. IN THE PRESENT CASE THE LD. COMMISSIONE R HAS PIN-POINTED EXACT ERROR IN THE ASSESSMENT ORDER AND EVEN AFFORD ED OPPORTUNITY TO THE ASSESSEE QUA SUCH ERRORS. THE ASSESSMENT ORDER IS CERTAINLY NON-SPEAKING ONE AND EVEN THE DETAILS, IF ANY, FILE D BY THE ASSESSEE HAS NOT BEEN SPELT OUT/MENTIONED WHILE FRAMING ASSE SSMENT. WHILE EXERCISING THE POWER OF REVISION DUE PROCESS HAS BE EN FOLLOWED BY THE LD. COMMISSIONER AND BY SETTING ASIDE TO THE FILE O F THE ASSESSING OFFICER DUE CARE HAS BEEN TAKEN SO THAT THE INTERES T OF THE ASSESSEE ALSO IS NOT JEOPARDIZED. THE TOTALITY OF FACTS CLE ARLY INDICATES THAT THE ASSESSMENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF REVENUE. THE CASES CITED BY THE LD. DR COMES TO TH E RESCUE OF THE REVENUE WHEREAS THE CASE CITED BY THE LD. AR IS ON DIFFERENT FACTS. THE LD. COUNSEL FOR THE ASSESSEE, DURING HEARING, T OOK THE PLEA THAT ALL THE DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER AND SUCH FINDING IS ALSO THERE IN ASSESSMENT ORDER. HOWEVER , AS MENTIONED EARLIER, WE FIND NO SUCH DETAILS MENTIONED IN THE A SSESSMENT ORDER. MERE WRITING THAT DETAILS WERE FILED IS NOT ENOUGH. THE LD. AO IS EXPECTED TO PEN DOWN THE SAME WHILE FRAMING THE ASS ESSMENT. IT WAS THE ERRONEOUS APPROACH ON THE PART OF THE AO WH ICH CAUSED PREJUDICE TO THE REVENUE RESULTING INTO INVOKING TH E REVISIONAL JURISDICTION BY THE LD. COMMISSIONER. THE RATIO LA ID DOWN IN H.H. MAHARAJA RAJA PAWAR DEVAS VS CIT 138 ITR 518 (MP), NAZIR SINGH VS 7 M/S INDUSTRIAL PACKAGING PRODUCTS . CIT 252 ITR 820, VENKATAKRISHNA RICE COMP. VS. CIT 163 ITR 129 (MADRAS), THALIBAI F.JAIN VS ITO 101 ITR 1 (KARNATKA ), CIT VS PUSHPA DEVI 164 ITR 639 (PATNA), GEE VEE ENTERPISES VS ADDL.CIT 99 ITR 375 (DELHI), CIT VS EMRY STONE MANUFACTURING CO MP. 231 ITR 843 (RAJASTHAN) SUPPORTS OUR VIEW. THE ASSESSMENT S EEMS TO BE FRAMED IN UNDUE HASTE. THE LD. COMMISSIONER REMAND ED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER EXAMINING THE CLAIM OF THE ASSESSEE CLEARLY DEMONST RATE THAT NO GRIEVANCE IS CAUSED TO THE ASSESSEE. EVEN AS PER T HE MANDATE OF THE CONSTITUTION DUE TAXES HAS TO BE LEVIED/COLLECTED, THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE CIT. I T IS AFFIRMED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F HEARING ON 14/10/2014. SD/- SD/- RAJENDRA JOGINDER SIN GH ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI, DATED -14/10/2014 F{X~{T? P.S. / ' . . % % % % & && & '() '() '() '() *)#( *)#( *)#( *)#( / COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT 2. '-+, / THE RESPONDENT. 3. . ( ) / THE CIT(A)- 4. . / CIT 5. )/0 '(' , , / DR, ITAT, MUMBAI 8 M/S INDUSTRIAL PACKAGING PRODUCTS . 6. 01 2 / GUARD FILE. %' %' %' %' / BY ORDER, -)( '( //TRUE COPY// 3 33 3 / 4 4 4 4 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI