AISHLONI COPPER ALLOYS P.LTD, AHEMEDABAD V. DCIT 4(1)(2), MUMBAI

ITA 256/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0547 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 12-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAVDR
• Keywords: Depreciation; Application of stay
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.256/MUM/2017 ASSESSMENT YEAR:2013-14 AISHLONI COPPER ALLOYS P. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED, MEHTA LODHA & CO. CHARTERED ACCOUNTANTS, 105, SAKAR-I, ASHRAM ROAD, AHMEDABAD-380009 / VS. DCIT-4(1)(2), MUMBAI ( ! /ASSESSEE) ( ' / REVENUE) P.A. NO.AADCA6807H S.A. NO.115/MUM/2017 (ARISING OUT OF ITA NO.256/MUM/2017) ASSESSMENT YEAR:2013-14 AISHLONI COPPER ALLOYS P. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED, MEHTA LODHA & CO. CHARTERED ACCOUNTANTS, 105, SAKAR-I, ASHRAM ROAD, AHMEDABAD-380009 / VS. DCIT-4(1)(2), MUMBAI ( ! /ASSESSEE) ( ' / REVENUE) P.A. NO.AADCA6807H ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 2 ! / ASSESSEE BY SHRI VIMAL PUNMIYA ' / REVENUE BY SHRI RAJESH KUMAR YADAV-DR # '$ % !& / DATE OF HEARING : 29/01/2018 % !& / DATE OF PRONOUNCEMENT 29/01/2018 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 01/11/2016 OF THE FIRST APPELLATE AUTHORITY, MUMBAI . THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO CON FIRMING THE ADDITION OF OPENING STOCK OF RS.4,30,176/-. 2. DURING HEARING, THE CRUX OF ARGUMENT ADVANCED BY SHRI VIMAL PUNMIYA, LD. COUNSEL FOR THE ASSESSEE, IS THAT THE BASIC CONCEPT OF ACCOUNTING IS THAT THE CLOSING STOCK OF LAST YEAR SHOULD BE TREATED OPENING STOCK OF CURREN T YEAR AND IF THE ASSESSING OFFICER WANTED TO COMPARE THE AMOUNT, IT SHOULD BE LAST YEAR CLOSING STOCK WITH CURRENT Y EAR OPENING STOCK. IT WAS CONTENDED THAT THE DIFFERENCE OF CLOSING STOCK OF ASSESSMENT YEAR 2013-14 AND CLOSIN G STOCK OF ASSESSMENT YEAR 2012-13 (RS.4,14,62,973 - 4,10,32,796/-) AMOUNTS TO RS.4,30,177/-, WHICH CANN OT BE TREATED AS UNEXPLAINED OPENING STOCK. OUR ATTENTION WAS ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 3 INVITED TO PAGE-19 OF THE PAPER BOOK READ WITH PAGE -37 OF THE PAPER BOOK CONSISTING OF RAW MATERIAL, WORK IN PROGRESS AND STORES/OTHER INVENTORIES. ON THE OTHER HAND, TH E LD. DR, SHRI RAJESH KUMAR YADAV, STRONGLY DEFENDED THE ADDITION MADE BY THE LD. ASSESSING OFFICER AND SUST AINED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) BY CONTENDING THAT A REASONABLE VIEW HAS BEEN TAKEN BY THE LD. ASSESSING OFFICER AND THE NECESSARY DETAILS WER E NOT FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED NIL INCOME IN ITS RE TURN FILED ON 30/09/2013. THE ASSESSMENT WAS COMPLETED ON 22/02/2016 DETERMINING TOTAL INCOME AT RS.56,35,840 /- U/S 143(3) OF THE ACT. THE EXPLANATION OF THE ASSES SEE WAS NOT FOUND SATISFACTORY AND AS PER THE REVENUE THE V ARIATION IN OPENING STOCK AND RESULTANT CALCULATION OF PROFI T WAS AFFECTED BY RS.4,30,176/- AND WAS NOT EXPLAINED. TH E STAND OF THE REVENUE AND ALSO OF THE ASSESSING OFFI CER WAS THAT THE EXCESS STOCK WAS FOUND TO BE UNEXPLAINED A ND ADDED TO THE TOTAL INCOME. CONSIDERING THE TOTALITY OF FACTS ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 4 NARRATED BEFORE US, WE DEEM IT APPROPRIATE TO REMAN D THIS ISSUE (AS AGREED BY THE LD. COUNSEL FOR THE ASSESSE E ALSO) TO THE FILE OF THE LD. ASSESSING OFFICER TO VERIFY THE FIGURES/OTHER DETAILS AND DECIDE AS PER LAW. THE AS SESSEE BE GIVEN OPPORTUNITY TO SUBSTANTIATE ITS CLAIM. THU S, THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 3. THE NEXT GROUND PERTAINS TO UPHOLDING THE ADDITION OF TIME DEPOSITS OF RS.25 LAKH. THE LD. CO UNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO PAGE-79 OF TH E PAPER BOOK AND CONTENDED THAT THE LD. ASSESSING OFFICER M AY BE DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE. HOWEV ER, THE LD DR CONTENDED THAT NO FAULT HAS BEEN POINTED OUT IN THE OBJECTIONS RAISED BY THE ASSESSING OFFICER, THEREFO RE, THE ADDITION SUSTAINED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEAL) MAY BE UPHELD. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT ED THAT BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL) ALSO WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE AND THE LD. FIRST APPELLATE AUTHORITY HAS OBSERVED THAT IT HAS NOT BEEN ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 5 PROPERLY CONSIDERED AS PER THE ASSESSEE THE FIXED D EPOSITS MADE FROM REGULAR AUDITED BOOKS OF ACCOUNTS. THERE WERE DEPOSITS OF RS.25 LAKH IN BANK OF BARODA AND THE AS SESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF SUCH DEPOSITS IN THE BANK ACCOUNT IN THE FORM OF TIME DEPOSITS/FDRS. THE ADDITION WAS MADE BY THE LD. ASSESSING OFFICER ON T HE PLEA THAT NO DETAILS AND EVIDENCES OF SOURCE WERE NEVER FILED BY THE ASSESSEE. WHEREAS, THE STAND OF THE ASSESSEE IS THAT NECESSARY DETAILS WERE FILED. CONSIDERING THE TOTAL ITY OF FACTS, WE DIRECT THE ASSESSEE TO FURNISH THE SOURCE OF DEPOSITS AND ITS GENUINENESS TO SUBSTANTIATE ITS CL AIM. THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE THE CL AIM OF THE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW. THE ASS ESSEE BE GIVEN OPPORTUNITY TO SUBSTANTIATE ITS CLAIM. THU S, THIS GROUND OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTI CAL PURPOSES. 4. THE NEXT GROUND PERTAINS TO UPHOLDING THE ADDITI ON OF CASH DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS.23,50,000/-. IDENTICAL IS THE ARGUMENT FROM BOTH SIDES AS RAISED FOR TIME DEPOSIT OF RS.25 LAKH. CONSIDERI NG THE TOTALITY OF FACTS, WE DIRECT THE ASSESSEE TO FURNIS H THE PROOF ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 6 OF SOURCE AND ITS GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOUNT. THE LD. ASSESSING OFFICER IS TO VERIF Y THE CLAIM OF THE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN OPPORTUNITY. THIS GROUND IS A LSO ALLOWED FOR STATISTICAL PURPOSES. 5. THROUGH GROUND NO.4 CONFIRMATION OF ADDITION OF BANK INTEREST INCOME OF RS.10, 05,953/- HAS BEEN CHALLEN GED. IT WAS CLAIMED THAT THE TOTAL INTEREST INCOME WITH THE ASSESSEE RS.25 LAKH WHICH WAS ARGUED TO BE NOT CONS IDERED PROPERLY BY THE LD. ASSESSING OFFICER. THE LD. DR D EFENDED THE ADDITION. WE HAVE CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CLAIM OF THE ASSESSEE IS THAT THE CASH DEPOSIT WAS MADE OUT OF R EGULAR AUDITED BOOKS OF ACCOUNTS AND FURTHER OUT OF CASH B ALANCE IN HAND. CONSIDERING THE TOTALITY OF FACTS, WE DIRE CT THE ASSESSEE TO FURNISH THE EVIDENCE OF ITS CLAIM BEFOR E THE LD. ASSESSING OFFICER. THE LD. ASSESSING OFFICER IS DIR ECTED TO EXAMINE THE CLAIM OF THE ASSESSEE AND THEN DECIDE A S PER LAW. THE ASSESSEE BE GIVEN OPPORTUNITY. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 7 6. THE LAST GROUND PERTAINS TO CONFIRMING THE DISALLOWANCE OF DEPRECIATION OF RS.5,17,252/-. THE CRUX OF ARGUMENT IS THAT THE MACHINERY WAS PURCHASED ON 15/11/2008 AND INSTALLED AFTER FEW YEARS. THE LD. D R STRONGLY OBJECTED TO THE CLAIM OF THE ASSESSEE BY I NVITING OUR ATTENTION TO CERTAIN PAGES OF THE PAPER BOOK. 6.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT ED THAT THE ASSESSEE IN ITS SCHEDULE OF ASSETS MADE ADDITIO N OF CERTAIN MACHINERY. THE ASSESSEE CLAIMED THE ADDITI ON OF PLANT AND MACHINERY AMOUNTING TO RS.34,48,346/- AS PER THE RECORD, THE MACHINERY WAS CLAIMED TO BE PURCHAS ED ON 01/04/2012 AND PUT TO USE ON THE SAME DAY I.E. 01/04/2012. THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM. IT IS NOTED THAT THE MACHINERY WAS PURCHASED FROM FORTUNE FURNACE CORPORATION FROM TARAPUR (MAHARASHT RA) THROUGH INVOICE NO.68/08-09 DATED 15/11/2008 AND WA S PUT TO USE ON 01/04/2012. NO PROOF OF TRANSPORTATIO N OF THE MACHINERY AT THE SITE OF THE ASSESSEE, PROOF OF INSTALLATION AND OTHER NECESSARY EVIDENCE WAS NEVER FURNISHED BY THE ASSESSEE. BEFORE US ALSO, NO EVIDE NCE WAS ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 8 FURNISHED WITH RESPECT TO PURCHASE, INSTALLATION AN D USE OF THE SAID MACHINERY. CONSIDERING THE TOTALITY OF FAC TS, WE DONT FIND ANY MERIT IN THE CLAIM OF THE ASSESSEE, THUS, THIS GROUND OF THE ASSESSEE IS DISMISSED. 7. SINCE, WE HAVE DISPOSED OF THE APPEAL OF THE ASSESSEE ON MERIT, THEREFORE, THERE IS NO NEED TO D ISPOSE OF THE STAY APPLICATION OF THE ASSESSEE BEING IN-FRUCT UOUS. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 29/01/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 29/01/2018 F{X~{T? P.S/. . . , %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 # 3! , ( ,- ) / THE CIT, MUMBAI. 4. 2 2 # 3! / CIT(A)- , MUMBAI ITA NO. 256 /MUM/2017 & S.A. NO.115/MUM/17 AISHLONI COPPER ALLOYS PVT. LTD. (NOW KNOWN AS BRASSCO INTERNATIONAL PRIVATE LIMITED.) 9 5. 5'6 0! , 2 ,-& , , # $ / DR, ITAT, MUMBAI 6. 7 8$ / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI