ARCH PHYTOCHEMICALS P.LTD, MUMBAI V. ACIT CEN CIR 32, MUMBAI

ITA 2416/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0554 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 11-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.2416 TO 2419/MUM/2012 (ASSESSMENT YEAR 2003-04,2005-06 TO 2007-08) M/S. ARCH PHYTOCHEMICALS PVT. LTD., H-WING, 4 TH FLOOR, TEX CENTRE, NARAYAN PROPERTIES, CHANDIVALI, ANDHERI (E), MUMBAI PAN: AACCA 8994L ..... APPE LLANT VS. THE ACIT, CENTRAL CIR.32, MUMBAI 400 020 .... RESPO NDENT APPELLANT BY : NONE RESPONDENT BY : SHRI R.P.MEENA DATE OF HEARING : 22/05/2017 DATE OF PRONOUNCEMENT : 22/05/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED ARE BUNCH OF FOUR APPEALS PERTAININ G TO THE SAME ASSESSEE FOR ASSESSMENT YEARS 2003-04, 2005-06 TO 2007-08. 2. AT THE TIME OF HEARING, IT WAS NOTICED THAT ON A N EARLIER DATE AN ADJOURNMENT APPLICATION WAS MOVED ON BEHALF OF THE ASSESSEE, IN TERMS OF WHICH THE MATTER WAS ADJOURNED FOR TODAY. ON THE AP POINTED DATE OF HEARING, NEITHER THE ASSESSEE NOR ANY REPRESENTATIVE APPEA RED ON ITS BEHALF AND, THEREFORE, IN TERMS OF RULE 24 OF THE INCOME TAX (A PPELLATE TRIBUNAL) RULES, 2 ITA NO.7152/MUM/2013(AY. 2009-10) 1963, THE APPEAL IS BEING DISPOSED OFF EXPARTE, QU A THE ASSESSEE AFTER HEARING THE RESPONDENT REVENUE ON MERIT. 3. THE LD. DEPARTMENTAL REPRESENTATIVE APPEARING FO R THE REVENUE POINTED OUT THAT THE ISSUES IN ALL THE ASSESSMENT Y EARS WERE QUITE SIMILAR AND ARISE OUT OF THE RESPECTIVE ASSESSMENTS MADE BY TH E ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 153A OF THE ACT DATED 20/12 /2010, AS A CONSEQUENCE OF SEARCH AND SEIZURE ACTION CARRIED OUT BY THE DEPART MENT UNDER SECTION 132(1) OF THE ACT IN THE ARCH GROUP OF CASES ON 24 /04/2008. 4. FIRSTLY, WE MAY TAKE UP THE APPEAL IN ITA NO.2 416/MUM/2012 FOR ASSESSMENT YEAR 2003-04, WHICH IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-37, MUMBAI DATED 13/02/2012, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143( 3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 20/12/2010. 4.1 IN THIS APPEAL, THE GRIEVANCE OF THE ASSESSEE I S AGAINST THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF SALARY EXP ENDITURE AND PROFESSIONAL FEE OF RS.4,95,187/- AND RS.2,68,350/- RESPECTIVEL Y. 4.2 IN BRIEF, THE RELEVANT FACTS ARE THAT IN RESPON SE TO A NOTICE ISSUED UNDER SECTION 153A OF THE ACT, ASSESSEE FILED A RETURN OF INCOME DECLARING A LOSS OF RS.2,96,744/-, WHICH WAS SIMILAR TO THE RETURN OF I NCOME ORIGINALLY FILED UNDER SECTION 139(1) OF THE ACT FOR THE INSTANT ASSESSMEN T YEAR. IN THE ENSUING ASSESSMENT, THE ASSESSING OFFICER NOTED THAT NO BUS INESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE AND THE ONLY INCOME DECLARED W AS BY WAY OF INTEREST. THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE DE BITED IN THE P&L ACCOUNT ON ACCOUNT OF SALARIES - RS.4,95,187/- AND PROFESSI ONAL FEE RS.2,68,350/- ON 3 ITA NO.7152/MUM/2013(AY. 2009-10) THE GROUND THAT THERE WAS NO BUSINESS ACTIVITY CARR IED OUT BY THE ASSESSEE. THE CIT(A) HAS ALSO AFFIRMED THE DECISION OF THE AS SESSING OFFICER. 4.3 BEFORE US, NONE APPEARED ON BEHALF OF THE ASSES SEE TO SUPPORT THE GROUNDS OF APPEAL RAISED. THE LD. DEPARTMENTAL REP RESENTATIVE, ON THE OTHER HAND, POINTED OUT THAT IN PARA 2.4.15 OF THE ORDER, THE CIT(A) HAS SUSTAINED THE ADDITION, INTER-ALIA, ON THE GROUND T HAT NO SUBMISSIONS WERE MADE BY THE ASSESSEE ON MERITS OF THE CLAIM OF SA LARY AND PROFESSIONAL FEE. QUITE CLEARLY, THE AFORESAID POSITION CONTINUES BEF ORE US AND, THEREFORE, WE UPHOLD THE FINDINGS OF THE CIT(A) TO THE EFFECT THA T ASSESSEE HAD FAILED TO SUBSTANTIATE THE CLAIMS OF THE AFORESAID EXPENDITUR E AND, THEREFORE, THE APPEAL OF THE ASSESSEE HAS TO FAIL. THUS, IN SO FA R AS, THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 IS CONCERNED, THE SAME IS DISMISSED. 5. IN THE APPEAL FOR ASSESSMENT YEAR 2007-08, THE I SSUE RELATES TO ALLOWABILITY OF FINANCIAL CHARGES OF RS.79,100/- DE BITED BY THE ASSESSEE IN THE P&L ACCOUNT. THE ASSESSING OFFICER NOTED THAT NO B USINESS ACTIVITY HAD MATERIALIZED DURING THE YEAR UNDER CONSIDERATION AN D THAT THE FUNDS RELATABLE TO THE AFORESAID FINANCIAL CHARGES COULD BE UNDERST OOD NOT TO HAVE BEEN USED FOR THE PURPOSES OF BUSINESS. THEREFORE, THE EXPEN DITURE WAS DISALLOWED, WHICH, HAS ALSO BEEN AFFIRMED BY THE CIT(A). IT IS NOTICED THAT THE CIT(A) HAS PASSED A COMMON ORDER FOR THE THREE ASSESSMENT YEAR S AND THE FINDINGS OF WHICH WE HAVE APPROVED FOR THE ASSESSMENT YEAR 200 3-04 IN RELATION TO THE CLAIM OF SALARY AND PROFESSIONAL FEE PAYMENT, ALSO APPLY IN SO FAR AS THE ALLOWABILITY OF FINANCIAL CHARGES ARE CONCERNED. TH US, FOR THE REASONS DISCUSSED IN THE EARLIER PARAS, IN ASSESSMENT YEAR 2007-08 ALSO THE ORDER OF THE CIT(A) IS AFFIRMED AND ASSESSEE FAILS IN ITS AP PEAL. 4 ITA NO.7152/MUM/2013(AY. 2009-10) 6. IN THE APPEALS FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07, THE ISSUE INVOLVES THE ALLOWABILITY OF FINANCIAL CHAR GES, WHICH IS SIMILAR TO THE ISSUE DISCUSSED BY US IN THE EARLIER APPEAL AND, TH EREFORE, IN THESE TWO YEARS ALSO, THE ORDER OF THE CIT(A) IS AFFIRMED AND ASSES SEE FAILS IN ITS APPEALS. 7. RESULTANTLY, THE CAPTIONED APPEALS OF THE ASSESS EE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENC E OF DEPARTMENTAL REPRESENTATIVE AT THE CONCLUSION OF HEARING ON 22/05/2017. SD/- SD/- (RAVISH SOOD) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 22/05/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI