ACIT, New Delhi V. M/s. Supreme Exports (India), New Delhi

ITA 236/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98325 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-10-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 15-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SM MATHUR
• Keywords: Reopening of assessment; Tax effect
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 236/DEL /2010 ASSESSMENT YEAR: 2002-03 THE A.C.I.T VS. SUPREME EXPORTS [INDIA] CIRCLE-33(1) SATYAM CINEMA BUILDING NEW DELHI RANJIT NAGAR, NEW DELHI [APPELLANT] [RESPONDENT] DATE OF HEARING : 19.10.2015 DATE OF PRONOUNCEMENT: 31 .12.2015 APPELLANT BY : SHRI S.M. MAT HUR, CA RESPONDENT BY : SHRI SUJIT KUMAR , SR DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE CIT(A)-XXVI, NEW DELHI, DATED 30/10/20 09 FOR A.Y 2002-03. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD BEFORE US. 2 2 3. THE LD. DR SUPPORTING THE ACTION OF THE AO, DREW OUR ATTENTION TOWARDS PARA 2 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE EXPENSES CLAIMED BY THE ASSESSEE ON FUEL AND POWER WAS RS. 36.99 LAKHS AND AS PER THE FIGURE S MENTIONED AT SL. NO. 112 AT PAGE 39 OF PART III OF AUDITORS REPORT, THE ALLOCATION IN RESPECT OF AMOUNT HAS BEE N ON FUEL AND POWER IN THE HANDS OF THE ASSESSEE WAS ONLY 15. 12 LAKHS. THEREFORE, THE AO RIGHTLY HELD THAT THE ASSESSEE HA S CLAIMED EXCESS AMOUNT OF RS. 21.87 LAKHS UNDER THE HEAD OF POWER AND FUEL AND INCOME OF THE FIRM CONSEQUENTLY HAS BE EN SHOWN LESS BY AN AMOUNT OF RS. 21.87 LAKHS WHICH WAS RIGH TLY DISALLOWED AND ADDED TO THE TAXABLE INCOME OF THE A SSESSEE BEING EXCESS EXPENSES CLAIMED UNDER THE HEAD FUEL AND POWER. THE LD. DR FURTHER DREW OUR ATTENTION TOWA RDS PARA 5.2 OF THE FIRST APPELLATE ORDER AND SUBMITTED THAT THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY B ASIS AND LOGICAL REASONS. 4. REPLYING TO THE ABOVE, THE LD. AR SUPPORTING THE IMPUGNED ORDER, SUBMITTED THAT THE ORIGINAL ASSESSM ENT WAS DONE U/S 143(3) OF THE INCOME-TAX ACT, 1961 ['THE A CT' FOR 3 3 SHORT] AND REASONS RECORDED BY THE AO FOR INITIATIO N OF PROCEEDINGS U/S 147/148 OF THE ACT WAS NOT LOGICAL AND PROPER. THE LD. AR VEHEMENTLY CONTENDED THAT THE RE ASONS RECORDED BY THE AO FOR REOPENING ASSESSMENT U/S 147 OF THE ACT WERE BASED ON INCORRECT FACTS. HENCE THE ACTIO N OF THE AO FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT ON THE BASIS OF SUSPICION WAS BAD IN LAW. THE LD. AR FURTHER CONTEN DED THAT THERE WAS NEITHER ESCAPEMENT OF INCOME NOR THERE WA S ANY EVIDENCE IN THIS REGARD IN RESPECT OF EXCESS CLAIM OF FUEL AND POWER AS PER SPECIAL AUDIT REPORT IN THE CASE OF SU PERIOR CRAFTS FOR A.Y 2002-03 WHICH WAS USED BY THE AO ON THE SOLE BASIS FOR INITIATION OF ACTION U/S 148 OF THE ACT. THEREFORE, THE SAME WAS RIGHTLY DELETED BY THE LD. CIT(A). 5. ON CAREFUL PERUSAL OF THE SUBMISSIONS OF BOTH TH E RIVAL REPRESENTATIVES, AT THE VERY OUTSET, FROM THE OPERA TIVE PART OF THE IMPUGNED ORDER, WE NOTE THAT THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY HOLDING THAT THERE WAS NE ITHER ESCAPEMENT OF INCOME NOR THERE WAS ANY EVIDENCE IN THIS REGARD IN RESPECT OF EXCESS CLAIM OF FUEL AND POWER AS PER SPECIAL AUDIT REPORT IN THE CASE OF SUPERIOR CRAFTS FOR A.Y 4 4 2002-03 WHICH WAS USED BY THE AO ON THE SOLE BASIS FOR INITIATION OF ACTION U/S 148 OF THE ACT. IN VIEW O F THE ABOVE, IT IS AMPLY CLEAR THAT THE LD. CIT(A) NOTED THAT TH E AO WHILE RECORDING REASONS FOR INITIATION OF PROCEEDINGS U/S 147/148 OF THE ACT MENTIONED THAT AS PER FIGURES MENTIONED AT SL. NO. 1 AND 2 ON PAGE 39 OF PART AAA OF AUDITORS REPORT, T HE ALLOCATION IN RESPECT OF AMOUNT HAS BEEN OF FUEL A ND POWER IN THE HANDS OF M/S SUPREME EXPORTS [INDIA] IS RS. 15.12 LAKHS. THE LD. CIT(A) FURTHER NOTED THAT THERE WA S NO SUCH CATEGORICAL FINDING MADE BY THE SPECIAL AUDITORS A T PAGE NO. 39 OF PART 3 AAA OF AUDITORS REPORT, AS MENTIONED ABOVE AT THE SAID PAGE NO. 39 ANNEXURE AAA IS PLACED IN THE SPECIAL AUDIT REPORT, WHICH SUMMARISES THE VARIOUS EXPENSES AND THEIR RESPECTIVE RATIOS THAT THE TURNOVER OF THE TH REE SISTER CONCERNS OPERATING FROM THE SAME PREMISES. IN THIS SITUATION, THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE REASONS RECORDED BY THE AO FOR REOPENING OF ASSESSMENT U/S 148 OF THE ACT WAS BASED ON INCORRECT FACTS. HENCE THE AC TION OF THE AO FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT ON THE BASIS OF SUCH REASONS IS BAD IN LAW. THE LD. CIT(A) WAS QUITE JUSTIFIED AND CORRECT IN DELETING THE ADDITION MADE BY THE AO 5 5 HOLDING THE SAME BEING ARBITRARY, BASELESS AND WITH OUT ANY COGENT EVIDENCE AND WE UPHOLD THE CONCLUSION OF THE LD. CIT(A). 6. AT THIS JUNCTURE, WE MAY ALSO POINT OUT THAT AT THE TIME OF DICTATION, AND PASSING OF THIS ORDER, WE TAKE CO GNIZANCE OF THE CBDT INSTRUCTION NO. 21 OF 2015 DATED 10.12.201 5, BY WHICH THE CBDT HAS REVISED THE MONETARY LIMIT TO RS . 10,00,000/- FOR FILING THE APPEAL BEFORE THE TRIBUN AL. FURTHER IN PARA 10 OF THE CIRCULAR, IT IS PROVIDED THAT THIS INSTRUCTION WOULD APPLY RETROSPECTIVELY AND THE PEN DING APPEALS BELOW THE SPECIFIED TAX LIMIT OF RS. 10 LAK HS MAY BE WITHDRAWN/NOT PRESSED. 7. KEEPING IN VIEW THE CBDT INSTRUCTION NO. 21 OF 2 015 DATED 10.12.2015 AND ALSO THE PROVISIONS OF SECTION 268A OF INCOME TAX ACT, 1961, WE ARE OF THE VIEW THAT THE R EVENUES APPEAL IS NOT MAINTAINABLE AS THE INSTRUCTIONS ISSU ED IN THE CIRCULARS BY CBDT ARE APPLICABLE FOR PENDING CASES ALSO. IN VIEW OF THE ABOVE, WE ARE UNABLE TO SEE ANY VALID R EASON TO INTERFERE WITH THE IMPUGNED ORDER AND EVEN IN THE L IGHT OF 6 6 THE SUBSEQUENT CIRCULAR DATED 10.12.2015 [SUPRA] WE DISMISS THE APPEAL FILED BY THE REVENUE AS TAX EFFECT IN TH IS APPEAL IS LESS THAN RS. 10 LAKHS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 . 12.2015. SD/- SD/- (L.P. SAHU) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST DECEMBER, 2015 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI