The ACIT, Circle-5, RAJKOT-GUJARAT V. M/s. Sardar Food Products P. Ltd., RAJKOT-GUJARAT

ITA 24/RJT/2012

• Counselvise Citation: 2424914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVIN ASH KUMAR IHE
• Assessee Lawyers: VIMAL DESAI E
• Section: 133(6)

Judgement Text

T, IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO S . 455 / RJT/2011 & 24/RJT/2012 . I I / ASSESSMENT YEAR S 20 0 7 - 0 8 ASST. COMMISSIONER OF INCOME TAX, CIRCLE 5 RAJKOT ( P / APPELLANT) VS. M/S. SARDAR FOOD PRODUCTS PVT. LTD., 21 - ROYAL COMPLEX, BHUTKHANA CHOWK, DHEBAR ROAD, RAJKOT PAN : AADCS 0960P P / RESPONDENT E / REVENUE BY SHRI AVIN ASH KUMAR IHE / ASSESSEE BY SHRI VIMAL DESAI E /DATE OF HEARING 08 . 0 3.2013 E / DATE OF PRONOUNCEMENT 11.4 . 2013 / ORDER A.. O, UE / T. K. SHARMA, J. M . THESE APPEALS BY THE REVENUE A RE AGAINST THE TWO SEPARATE O RDER S DATED 07 . 10 .2012 & 28.11.2011 OF CIT(A) FOR THE ASSESSMENT YEAR 200 7 - 08 . BOTH THESE APPEALS WERE HEARD TOGETHER ON THE SAME DATE REPRESENTED BY COMMON REPRESENTATIVE, THEREFORE, DECIDED BY THIS COMMON ORDER. 2. THE BRIE F FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 20 .10.2007 DECLARING LOSS RS.( - )7,06,105/ - . THE AO FRAMED THE ASSESSMENT U/S. 144 OF THE IT ACT, 1961 ON 29.12.2009, WHEREIN HE DISALLOWED VARIOUS EXPENSES AMOUNTING RS.23,40,372/ - A S LISTED IN PARA 3 OF THE ASSESSMENT ORDER AND ALSO SUNDRY CREDITORS AMOUNTING TO RS.78,07,449/ - . 3. ON APPEAL, BEFORE THE LD.CIT (A) ASSESSEE CONTENTED THAT ON ACCOUNT OF CERTAIN DISPUTES AROSE BETWEEN DIRECTORS, THE TWO DIRECTORS (1. SHRI JAGDISHBHAI R. KANANI & 2. SHRI JHAVERBHAI R. BHUDHELIA) THE BOTH DIRECTORS RESIGNED FROM THE POST OF DIRECTOR S HIP WITHOUT ANY SPECIFIC COMMUNICATION TO THE REMAINING TWO DIRECTORS ON 21.03.2008. THEY DID IT BY UPLOADING THEIR RESIGNATION ON THE WEBSITE OF MINISTRY OF COMPANY AFFAIRS. AT THIS TIME, THE BUSINESS WAS NOT ITA NO S . 455 /RJT/201 1 & 24/RJT/2012 2 RUNNING WELL AND HENCE THE SAME WAS CLOSED AND PREMISES WERE ALSO CLOSED DOWN. UNDER THESE CIRCUMSTANCES, NO COMPL IANCE WAS MADE BEFORE THE AO. THE V ARIOUS DETAILS, AS REQUIRED BY THE AO, WERE FURNIS HED BEFORE THE LD CIT (A), WHO CALLED THE REMAND REPORT AND AFTER COUNTER COMMENTS OF THE ASSESSEE THE LD CIT (A) DELETED BOTH THE DISALLOWANCES OF RS.23,40,372/ - AND ADDITION OF SUNDRY CREDITORS OF RS.78,07,449/ - . AGGRIEVED WITH THE ORDER OF THE LD CIT ( A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: - ITA NO.455/RJT/2011 GROUNDS OF APPEAL RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER : 1. THE LD. CIT(A) IV, RAJKOT HAS ERRED IN LAW AND ON F A C T S IN DELETING THE ADDITION MADE BY THE AO OF RS.23,40,372/ - ON ACCOUNT OF DISALLOWANCE OF FREIGHT, POWER & FUEL, REPAIRS TO MACHINERY, SALARY, WAGES & BONUS, REIMBURSEMENT OF MEDICAL EXPENSES, SALES PROMOTION INCLUDING PUBLICITY, TELEPHONE EXPENSES & OTHER/MISCELLANEOUS EXPENSES. 2 . THE LD. CIT (A) - IV, RAJKOT HAS ERRED IN LAW AND ON FACT IN DELETING THE ADDITION MADE BY THE AO OF RS.78,07,449/ - ON ACCOUNT OF SUNDRY CREDITORS. 3. ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 4. ANY OT HER GROUND THAT THE REVENUE MAY RAISE BEFORE OR DURING HEARING PROCEEDINGS BEFORE THE HONBLE ITAT. 5. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A) - IV, RAJKOT MAY KINDLY BE SET - ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 4. AT THE TIME O F HEARING BEFORE US, SHRI AVINASH KUMAR, THE LD. DR APPEARED ON BEHALF OF REVENUE AND POINTED OUT THAT THE LD. CIT (A) OUGHT TO HAVE CONFIRMED THE ADDITIONS. AS AGAINST THIS, THE LD COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE LD CIT (A) DIRECTED THE AO TO VERIFY THE CREDITORS BY EXAMINING THE WITNESSES. THE AO EXAMINED THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS IN RESPECT OF ALL THE EXPENDITURES AND ALSO OBTAINED THE CONFIRMATION LETTERS FROM THE SUNDRY CREDITORS BY ISSUING NOTICE U/S. 133(6) OF THE ACT. THE AO PLACED ALL THESE DOCUMENTS ON RECORD. AFTER DUE VERIFICATION, AS MENTIONED BY THE LD. CIT (A) IN PARA NO.4 AT PAGE 12 OF THE IMPUGNED ORDER. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF LD. CIT (A) IN THIS REGARD B E UPHELD. ITA NO S . 455 /RJT/201 1 & 24/RJT/2012 3 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE PERUSAL OF PARA 4 AT PAGE 12 OF THE IMPUGNED ORDER, IT IS CLEAR THAT REMAND REPORT SUBMITTED BY THE AO CLEARLY SHOWS THAT HE HAS CARRIED OUT NECESSARY VERIFICATION AND NO DISCREPANCY IS FOUND IN THE ACCOUNTS. ON THE BASIS OF THIS REMAND REPORT, THE LD. CIT (A) DELETED THE ADDITIONS. WE, THEREFORE, DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 24/RJT/2012 THIS APPE AL IS AGAINST THE CANCELLATION OF PENALTY OF RS.34,15,757/ - LEVIED BY THE AO U/S. 271 (1)(C). THIS PENALTY LEVIED BY THE AO HAS BEEN CANCELLED BY THE LD. CIT (A) BECAUSE THE ADDITION MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY WAS LEVIED AR E DELETED. THEREFORE, THERE REMAINS NO BASIS FOR IMPOSING PENALTY FOR CONCEALMENT. WE, THEREFORE, INCLINED TO UPHELD THE ORDER OF LD. CIT (A). 6 . IN THE RESULT, BOTH THE APPEAL S OF THE REVENUE ARE DISMISSED . THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD SD ( D. K. SRIVASTAVA ) (T. K. SHARMA) ARE / ACCOUNTANT MEMBER / JUDICIAL MEMBER N/ ORDER DATE 11.4 .2013 . /RAJKOT BT T EJ / COPY OF ORDER FORWARDED TO: - 1. P / APPELLANT - , 2. P / RESPONDENT - 3. T / CONCERNED CIT . 4. - / CIT (A) . 5. T, T, / DR, ITAT, RAJKOT 6. I / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.