RAMASWAMY SANKARANARAYANAN, MUMBAI V. ITO WD 22(2)2, MUMBAI

ITA 2359/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1949 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 29-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2013
• Court: TRIBUNAL
• Department Lawyers: DR DARSI S RATNAM
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

, , D , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.2359/MUM/2013 ASSESSMENT YEAR: 2009-10 RAMASWAMY S ANKARANARAYANAN , M/S. NATVARLAL VEPARI & CO. ORICON HOUSE 4 TH FLOOR, 12, K. DUBASH MARGH, MUMBAI -400023 / VS. ITO 22 ( 2 ) 2 MUMBAI (ASSESSEE ) (REVENUE) P.A. NO. AMBKP 520E / ASSESSEE BY SHRI DEEPAK TRALSHAWALA (AR) / REVENUE BY DR. DARSI S. RATNAM (DR) ! ' / DATE OF HEARING : 24/11/2015 ! ' / DATE OF ORDER: 18/12/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-33, MUMBAI {(IN SHORT CIT(A)}, DATED 29.01.2013 FOR T HE RAMASWAMY 2 ASSESSMENT YEAR 2009-10, PASSED AGAINST THE ASSESSM ENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT, ON THE FOLLOWING GROUND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME- TAX (APPEALS) -33, MUMB AI [CIT (A)] ERRED IN CONFIRMING THE DISALLOWANCE OF RS.46,64,335/- BEING EXPENSES INCURRED BY THE APPELLANT TOWARDS DEVELOPMENT OF DIES ON THE GROUND THAT THE APPELLANT COULD NOT JUSTIFY THE GENUINENES S AND PURPOSE FOR HIS CLAIM, IGNORING THAT THE EXPENSES W ERE INCURRED FOR THE PURPOSE OF BUSINESS OF THE APPELLA NT, DURING THE COURSE OF BUSINESS AND ARE ALLOWABLE UND ER LAW. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI DEEPAK TRALSHAWALA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI DARSI S. RATNAM, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE. 3. FROM THE PERUSAL OF THE GROUND, IT IS NOTED THAT S OLITARY ISSUE RAISED IN THIS APPEAL IS WITH REGARD DISALLOW ANCE OF EXPENSES CLAIMED BY THE ASSESSEE ON ACCOUNT OF DEVE LOPMENT OF DIE FOR AN AMOUNT OF RS.46,64,335/-. THE FACTS , AS BORNE OUT IN THE ASSESSMENT ORDER AND ORDER PASSED BY LD. CIT(A), ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE A SSESSEE HAD PROPRIETARY BUSINESS IN THE NAME OF M/S. SOLDEZ IND USTRIES WHICH WAS ENGAGED IN THE BUSINESS ACTIVITY OF TRADI NG IN MACHINERY, SPARE AUTO, HOSE PIPE, HOSE PIPE FITTING ETC. IN THE ASSESSMENT PROCEEDINGS, IT WAS NOTED BY AO THAT THE ASSESSEE HAD DEBITED A SUM OF RS.46,64,335/- ON ACCOUNT OF DIE PURCHASES. THE CLAIM OF THE ASSESSEE WAS DENIED BY THE AO RAMASWAMY 3 ON THE GROUND THAT ASSESSEE COULD NOT ESTABLISH THA T THE AFORESAID EXPENSES INCURRED BY THE ASSESSEE WERE FO R THE PURPOSE OF ITS BUSINESS. 3.1. IN THE FIRST APPEAL BEFORE LD. CIT(A), THE ASSESSE E HAS MADE DETAILED SUBMISSIONS AND BROUGHT ON RECORD THE DOCUMENTARY EVIDENCES IN SUPPORT OF HIS CLAIM TO ES TABLISH THAT DIES WERE PURCHASED FOR THE PURPOSE OF SUPP LYING FLANGES TO ITS CUSTOMERS AFTER GETTING MANUFACTURE D AS PER DESIGN SPECIFICATION OF THE CUSTOMERS FORM THE CONC ERNED MANUFACTURER. IT WAS SUBMITTED THAT DIES WERE PUR CHASED FROM M/S. JAI MARUTHI ENGINEERING, CHENNAI AND WERE GIVEN TO SRI VARI WORKS FOR MANUFACTURING THE FLANGES. FOR T HIS PURPOSE, REQUISITE DETAILS AND DOCUMENTS WERE SUBMI TTED BY THE ASSESSEE IN THE FORM OF PURCHASE ORDERS DELIVER Y CHALLANS AND CONFIRMATION ETC. FROM THE MANUFACTURERS. BUT, LD. CIT(A) WAS NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE AN D HE CONFIRMED THE DISALLOWANCE OF THE AO BY MAKING FOLL OWING OBSERVATIONS: 4.8. IN VIEW OF THIS FINDING THAT PURCHASES OF DIE S ARE REFLECTED AS MADE SUBSEQUENT TO FLANGES MANUFACTURE D, THE CLAIM OF THE APPELLANT REMAINS UNSUPPORTED BY F ACTS ON RECORD. ACCORDINGLY, I AM IN AGREEMENT WITH AO THAT ASSESSEE MADE A CLAIM FOR PURCHASES OF DIES BUT COU LD NOT JUSTIFY THE GENUINENESS AND PURPOSE BEHIND THE SAME AND HENCE I AM CONVINCED THAT CLAIM FOR PURCHASE OF DIE MADE AT RS.46,64,335/- BEING NOT ADMISSIBLE, THE DISALLO WANCE MADE FOR THE AMOUNT RS.46,64,335/- IS UPHELD. THE GROUND NOS.2, 3, & 4 ARE DISMISSED. RAMASWAMY 4 3.2. DURING THE COURSE OF HEARING BEFORE US, LD. COUNSE L OF THE ASSESSEE DREW OUR ATTENTION ON THE VARIOUS PAGES OF THE PAPER BOOK SHOWING VARIOUS EVIDENCES FILED BEFORE LOWER A UTHORITIES IN SUPPORT OF HIS CLAIM. OUR ATTENTION WAS ALSO DRA WN ON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WHICH CL ARIFY DOUBTS RAISED BY THE LOWER AUTHORITIES. IT IS NOTED BY US THAT THE ASSESSEE HAS FILED CONFIRMATION FROM SRI VARI WORKS WHICH NOT ONLY CONFIRMED THE TRANSACTIONS BUT ALSO CLARIFIES THE DOUBTS WITH REGARD TO DATES RAISED BY THE LD. CIT(A). THE ASSESSEE HAS ALSO FILED DELIVERY CHALLANS FROM M/S. JAI MARUTHI ENGINEERING DATED 05.11.2008 SHOWING ITS RECEIPT FROM SHRI VARI WORKS. IN OUR CONSIDERED VIEW, THESE EVIDENCES ARE VERY CRUCI AL AND GO TO THE ROOT OF THE MATTER, AND THEREFORE, THESE ARE AD MITTED IN THE INTEREST OF JUSTICE. WE SEND THIS MATTER BACK TO TH E FILE OF AO, DIRECTING TO HIM TO CONSIDER ALL THE EVIDENCES OF T HE ASSESSEE, FAIRLY AND ON OBJECTIVE BASIS. IN CASE, HE HAS ANY DOUBTS, HE SHALL GET IT CLARIFIED AFTER MAKING REQUISITE VERIF ICATIONS WITH THESE PARTIES WHOSE EVIDENCES ARE SUBMITTED BY THE ASSESSEE. THE CLAIM SHOULD NOT BE REJECTED BY MAKING GUESS WO RK, AS WAS DONE IN THE ASSESSMENT ORDER BY THE AO AND IN T HE APPELLATE ORDER BY LD. CIT(A). NEEDLESS TO ADD, THE AO SHALL ALSO GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE CAN FILE ALL THE DETAILS AND DOCUMENTS AS ARE REQUI RED BY THE AO AND AS ARE CONSIDERED APPROPRIATE BY ASSESSEE, A S PER LAW AND FACTS. WITH THESE DIRECTIONS, THIS ISSUE IS SEN T BACK TO THE FILE OF AO FOR AFRESH ADJUDICATION. RAMASWAMY 5 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER MUMBAI; $ DATED : 18/12/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. & '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. , ( & ) / THE CIT, MUMBAI. 4. , / CIT(A)- , MUMBAI 5. /0 ) 1 , &' 12 , / DR, ITAT, MUMBAI 6. 3 4 / GUARD FILE. / BY ORDER, * /& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI