Asian Petroproducts & Exports Ltd., Baroda V. The Dy.CIT., Circle-1(1), Baroda

ITA 2341/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8344 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 19-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: M K PATEL
• Section: 234B; 115JB

Judgement Text

, *MH *MH*MH *MH* ** * IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO. 2341/AHD/2014 ( / ASSESSMENT YEAR : 2010-11) ASIAN PETROPRODUCTS & EXPORTS LTD. 204/205, STERLING CENTRE, RC DUTT ROAD, ALKAPURI, BARODA VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BARODA ! PAN/GIR NO. : AACCA 8443 J ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI M.K. PATEL, A.R. #'%$ / RESPONDENT BY : SHRI V. K. SINGH, SR.D.R. & ' (%) * / DATE OF HEARING 10/08/2017 +,-. %) * / DATE OF PRONOUNCEMENT 11/10/2017 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I, BARODA, DATE D 21/05/2014 FOR THE ASSESSMENT YEAR (AY) 2010-11, ON THE FOLLOWING GROUNDS: I. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS HAS CONFIRMING INVOCATION OF THE PROVISIONS O F SECTION 115JB OF THE IT ACT AND HAS COMPUTED THE BOOK PROFIT AT RS.80,67 ,181/- WITHOUT CONSIDERING THE FACT THAT THE APPELLANT IS A SICK I NDUSTRIAL UNIT IS, ITA NO.2114/AHD /2014 DCIT VS. GUJARAT GAS FINANCIAL SERVICE LTD. ASST.YEAR 2010-11 - 2 - THEREFORE, COVERED BY THE CLAUSE (VII) OF EXPLANATI ON-1 TO THE SECOND PROVISO OF SUB-SECTION (2) OF SECTION 115JB OF THE IT ACT. II. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN LAW AND ON FACTS HAS INITIATED PENALTY PROCEEDINGS UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR THE ALLEGED CONCEALMENT AN D/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. III. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN CHARGING INTEREST UNDER SECTION 234 A, 234B AND 234C OF THE INCOME TAX ACT, 1961. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, THE ASSESSEE COMPANY IS ENGAGED IN T HE BUSINESS OF MANUFACTURING AND SALE OF CHEMICALS. DURING THE YEA R UNDER CONSIDERATION THE ASSESSEE HAS SHOWN TOTAL RECEIPTS OF RS.7,38,70,536/- GROSS PROFIT OF RS.1,12,88,318/- I.E.15.28%. IN THE EARLIER YEAR THE FIGURES WERE RESPECTIVELY RS.11,20,289/- AND RS.1,12,525/- I.E.10%. 2.2 AS PER PROFIT AND LOSS ACCOUNT FURNISHED, IT IS OBSERVED THAT THERE WAS NET PROFIT OF RS.80,67,181/-. AS PER PROVISIONS OF SECTION 115JB OF THE INCOME-TAX ACT, THE ASSESSEE WAS REQUIRED TO PAY TA XES ON THE ABOVE BOOK PROFIT CALCULATED @15% OF THE PROFIT. FURTHER, THE ASSESSEE HAD NOT FURNISHED A REPORT IN THE PRESCRIBED FORM AN ACCOUNTANT CERTI FYING THAT THE BOOK PROFIT HAD BEEN COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE SECTION. THE ASSESSEE WAS THEREFORE REQUIRED, AS PER ORDER SHEET ENTRY DATED 07/03/2013 TO SHOW CAUSE AS TO WHY THE TAX SHOULD NOT BE LEVIE D AS PROVIDED U/S.115JB OF INCOME-TAX ACT. ITA NO.2114/AHD /2014 DCIT VS. GUJARAT GAS FINANCIAL SERVICE LTD. ASST.YEAR 2010-11 - 3 - 2.3 THE ASSESSEE COMPANY SUBMITTED ITS REPLY ON 20/ 03/2013 STATING THAT COMPANY ALTHOUGH HAS FILED AN APPLICATION BEFORE THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION (BIFR), IT HAS ALREADY B ECAME A SICK INDUSTRIAL UNIT AS ITS NET WORTH HAS COMPLETELY ERO DED. DUE TO ITS FINANCIAL SICKNESS, COMPANY HAS NOT BEEN ABLE TO MAKE PAYMENT TO ITS CREDITORS. 2.4 THE ASSESSEE'S SUBMISSION WAS DULY CONSIDERED B Y THE AO BUT ASSESSEE HAS NOT FURNISHED ANY DOCUMENTS IN THE FOR M OF REGISTRATION AS SICK UNIT, REGISTRATION CERTIFICATE UNDER BIFR ETC. THEREFORE, THE ASSESSEE COULD NOT PROVE THAT THE ASSESSEE WAS DECLARED A SICK UNIT IN THE UNDER CONSIDERATION. THE ASSESSEE DOES NOT FULFILL THE CO NDITIONS PRESCRIBED AS PER EXPLANATION-(VII) OF SECTION 115JB(2) OF IT ACT . FURTHER, THE ASSESSEE HAS NOT FURNISHED ACCOUNTANT'S REPORT IN FORM NO 29 B ALONGWITH THE RETURN OF INCOME. THEREFORE, THE ASSESSEE HAS NOT C OMPLIED TO THE PROVISIONS OF SECTION 115JB(4) OF THE ACT. CONSIDER ING ALL THESE FACTS, IT WAS HELD BY THE LEARNED AO THAT THE ASSESSEE WAS LI ABLE TO PAY TAXES U/S.115JB OF IT ACT AND BOOK PROFIT AS PER ACCOUNT OF RS.80,67,181/-. 2.5 SINCE THE INCOME TAX PAYABLE ON THE TOTAL INCOM E AS COMPUTED UNDER NORMAL PROVISIONS OF THE IT ACT IS LESS THAN TAX PAYABLE UNDER SECTION 115JB OF BOOK PROFIT, THE INCOME DETERMINED U/S.115JB SHALL BE TOTAL INCOME OF THE ASSESSEE. 3. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A) WHO PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE. ITA NO.2114/AHD /2014 DCIT VS. GUJARAT GAS FINANCIAL SERVICE LTD. ASST.YEAR 2010-11 - 4 - 4. NOW APPELLANTS APPEAL IS BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTION AND PERUSED THE M ATERIAL ON RECORD BEFORE US. LD. A.R. STATED THAT BOTH THE PARTIES AU THORITIES BELOW ERRED IN LAW AND ON FACTS HAS CONFIRMED INVOCATION OF THE PR OVISIONS OF SECTION 115JB OF THE I.T. ACT AND HAS COMPUTED THE BOOK PRO FITS AT RS.80,67,181/- WITHOUT CONSIDERING THE FACT THAT TH E APPELLANT IS A SICK INDUSTRIAL UNIT AND IS, THEREFORE, COVERED BY THE C LAUSE (VII) OF EXPLANATION-1 TO THE SECOND PROVISO OF SUB-SECTION (2) OF SECTION 115JB OF THE I.T. ACT. 5.2 WE HAVE NOTICED THAT APPELLANT DURING THE COURS E OF ASSESSMENT PROCEEDINGS AND APPELLANT PROCEEDINGS COULD NOT FUR NISH ANY DOCUMENT IN THE FORM OF REGISTRATION AS SICK UNIT, REGISTRATION CERTIFICATE UNDER BIFR ETC. TO THE AUTHORITIES BELOW. APPELLANT ALSO FAILE D TO PROVE BEFORE THE AUTHORITIES BELOW THAT IT WAS DECLARED SICK UNIT IN THE YEAR UNDER CONSIDERATION. EVEN BEFORE US APPELLANT HAS NOT FUR NISHED ANY DOCUMENTS IN THE FORM OF REGISTRATION AS SICK UNIT AND IT IS ALSO PERTINENT TO MENTION HERE THAT APPELLANT HAD MADE A PROFIT OF RS.85,11,3 91/- FOR THE YEAR UNDER CONSIDERATION AND APPELLANT HAS NOT CONTROVERTER TH IS FINDINGS BEFORE THE AUTHORITIES BELOW. THE APPELLANT HAS EARNED SUBSTAN TIAL PROFIT FOR THE YEAR UNDER CONSIDERATION. CONSIDERING ALL THESE FACTS, I T IS HELD THAT APPELLANT HAS NOT FULFILLED THE CONDITIONS PRESCRIBED AS PER EXPLANATION (VII) OF SECTION 115JB(2) OF THE IT ACT, HE HAS ALSO NOT FUR NISHED ACCOUNTANTS ITA NO.2114/AHD /2014 DCIT VS. GUJARAT GAS FINANCIAL SERVICE LTD. ASST.YEAR 2010-11 - 5 - REPORT IN FORM NO.29B ALONGWITH THE RETURN OF INCOM E. IN VIEW OF ALL THESE FACTS IT IS HELD THAT APPELLANT HAS LIABLE TO PAY TAXES U/S.115JB OF IT ACT. 5.3 SO FAR GROUND NO.2 WITH REGARD INITIATED PENALT Y PROCEEDINGS U/S.271(1)(C) IS CONCERNED, SAME DOES NOT REQUIRE A NY ADJUDICATION MERELY IN THE BASIS OF INITIATION AND SAME IS PREMA TURE. 5.4 SO FAR GROUND NO.3 WITH REGARD TO INTEREST UNDE R SECTION 234A, 234B & 234C OF THE INCOME TAX ACT, WHICH WILL BE CO MPUTED AS A RESULT EFFECT TO THIS APPEAL ORDER. 6. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS DI SMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 11/10/2017 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ EGKOHJ EGKOHJ EGKOHJ IZLKN IZLKN IZLKN IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 11/10/2017 PRITI YADAV, SR.PS ITA NO.2114/AHD /2014 DCIT VS. GUJARAT GAS FINANCIAL SERVICE LTD. ASST.YEAR 2010-11 - 6 - !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-I, BARODA. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY // '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 09/10/2017 (DICTATION-PAD 5 P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10/10/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER