M/s. Chemfilt, Anand V. The ACIT, Cent.Circle-I, Baroda

ITA 2627/AHD/2009

• Counselvise Citation: 262720514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 29-02-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N SOPARKAR

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !'# !'# !'# !'#, , , , $ $ $ $ %& %& %& %& , , , , &' ( & &' ( & &' ( & &' ( & # # # # BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.2627/AHD/2009 [ASSTT.YEAR : 2006-2007] M/S. CHEMFILT 1304/A, GIDC VITTHAL UDYOGNAGAR ANAND, GUJARAT. PAN: AABFC 5751 D /VS. ACIT, CENT.CIR.1 BARODA. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) .% / 0 &/ ASSESSEE BY : SHRI S.N.SOPARKAR ( / 0 &/ REVENUE BY : SHRI RAHUL KUMAR, SR.DR 2 / %3'/ DATE OF HEARING : 29 TH FEBRUARY, 2012 456 / %3'/ DATE OF PRONOUNCEMENT : 02-03-2012 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMI SSIONER OF INCOME TAX (APPEALS)-IV, AHMEDABAD DATED 17.03.2009 FOR TH E ASSESSMENT YEAR 2006-2007. 2. THE GROUND NOS.1 AND 2 OF THE ASSESSEES READ AS UNDER: ITA NO.2627/AHD/2009 -2- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.33,13,295/- MADE BY AO U/ S.40(A)(IA) OF THE ACT. BY CONFIRMING THIS ADDITION THE LD.CIT (A) HAS FAILED TO INTERPRET PROVISIONS OF THE NEWLY INTRODUCED SEC TION IN ITS PROPER PERSPECTIVE AND FURTHER NOT TAKING INTO CONS IDERATION VARIOUS SUBMISSIONS, JUDGMENTS AND CBDT CIRCULARS R ELIED UPON BY THE APPELLANT, THIS ACTION OF LD.CIT(A) BEI NG WITHOUT ANY MERITS OR JUSTIFICATION REQUIRES TO BE QUASHED. 2. THE LD.CIT(A) HAS FURTHER ERRED IN NOT APPRECIA TING THE FACT THAT NO TDS IS REQUIRED TO BE MADE FROM THE PA YMENT TO A FOREIGN SHIPPING COMPANY AS PER THE PROVISIONS OF S ECTION 172 OF THE ACT NOR TDS IS TO BE MADE FROM PAYMENTS TO A GENT OF A FOREIGN SHIPPING COMPANY IN LIGHT OF CIRCULAR NO.72 3 AND 786 OF CBDT. THIS ACTION OF LD. CIT(A) CONFIRMING ADDITIO N OF RS.33,13,295/- OF PAYMENTS TO JEBI SHIPPING AGENCIE S BEING WITHOUT MERITS OR JUSTIFICATION DESERVES TO BE QUAS HED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IDENTICAL ISSUE, AS IN THESE GROUNDS OF THE APPEAL OF THE ASS ESSEE, WAS DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR 2005-2006 IN IT(SS)A.NO.110/AHD/2009 DATED 22-7-201 1 WHEREIN THE ISSUE WAS RESTORED TO THE FILE OF THE AO WITH C ERTAIN DIRECTIONS. THE LEARNED DR HAS NOT SERIOUSLY CHALLENGED THE SUB MISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE RELIED ON THE ORDER OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE IDENTICAL ISSUE OF ADDITION UNDER SECTION 40(A)(IA) OF THE ACT WAS DEC IDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER ASS ESSMENT YEAR 2005- 2006 VIDE ORDER DATED 22-7-2011 (SUPRA) AND THE ISS UE WAS RESTORED TO THE FILE OF THE AO WITH CERTAIN DIRECTIONS. THE IS SUE BEING COVERED WITH THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ITA NO.2627/AHD/2009 -3- ASSESSMENT YEAR, AND WE ARE BEING IN AGREEMENT WITH THE DECISION OF THE TRIBUNAL, RESTORE THE ISSUE TO THE FILE OF THE AO WITH SIMILAR DIRECTIONS AS CONTAINED IN THE ORDER OF THE TRIBUNA L IN ASSESSEES OWN CASE FOR A.Y.2005-2006 DATED 22-7-2011 (SUPRA) FOR DE NOVO DECISION ON THE ISSUE, AFTER PROVIDING REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 5. THE GROUND NO.3 OF THE ASSESSEES APPEAL READS A S UNDER: 3. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION MADE BY THE AO OF RS.38,23,716/ - THAT COMPRISED OF RS.33,24,966/- ON ACCOUNT OF UNDISCLOS ED INVESTMENT IN PURCHASE AND OF RS.4,98,750/- OF PROF IT ON THIS UNDISCLOSED STOCK BY REJECTING THE BOOKS OF ACCOUNT S U/S.145A OF THE ACT. BOTH THE LOWER AUTHORITIES HAVE IGNORE D THE EXPLANATION, SUBMISSIONS AND DOCUMENTS SUBMITTED BY THE APPELLANT, SUCH ACTION REQUIRES TO BE QUASHED AND A DDITION DESERVES TO BE DELETED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT AT THE TIME OF SURVEY ON PHYSICAL VERIFICATION OF THE STOCK OF THE ASSESSEE, IT WAS FOUND A SHORTFALL OF RS.16,89,832/- AND THE AO SHOU LD HAVE AT THE MOST ADDED THE PROFIT MARGIN ON THIS COUNT. HE SUB MITTED THAT THE AO MADE AN ADDITION OF RS.38,23,716/- WITHOUT ANY VALI D REASON. THE LEARNED DR REFERRED TO THE RELEVANT PARA OF THE ASS ESSMENT ODER IN SUPPORT OF THE CASE OF THE REVENUE AND SUBMITTED TH AT THERE WERE BASIS FOR MAKING THE IMPUGNED ADDITION. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT AS A RESULT OF SURVEY, ON PHYSICAL VERIFICATION OF THE STOCK, THERE WAS A SHORTFALL OF RS.16,89,832/- IN THE STOCK OF THE ASSESSEE AND THE SAME WAS ACCEPTED ITA NO.2627/AHD/2009 -4- BY THE CEO, SHRI KEYUR AMIN. THE ASSESSEE HAS FILE D A RECONCILIATION STATEMENT AND HAS STATED THAT THE ACTUAL DIFFERENCE WAS RS.9,57,773/- AND NOT RS.16,89,832/-. WE FIND THAT THE ACTION OF THE AO IN MAKING AN ADDITION OF RS.38,23,716/- INCLUDING PROFIT ELEM ENT AND UNDISCLOSED INVESTMENT IN PURCHASES WAS NOT JUSTIFI ED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW T HAT ENDS OF JUSTICE SHALL MET IF AN ADDITION OF RS.5,00,000/- IS MADE O N THIS COUNT OF SHORTFALL IN STOCK FOUND AT THE TIME OF SURVEY WHIC H WILL COVER THE PROFIT ELEMENT AND ALSO THE INVESTMENT MADE BY THE ASSESSEE. ACCORDINGLY, WE SUSTAIN THE ADDITION OF RS.5,00,000 /- AND THE BALANCE ADDITION ON THIS COUNT IS DELETED AND THE GROUND NO .3 OF THE ASSESSEES APPEAL IS PARTLY ALLOWED. 8. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %& %& %& %& / TEJ RAM MEENA) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !'# !'# !'# !'# /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD