The ACIT, Circle-1, Surat V. Punam Filaments Pvt.Ltd., Surat

ITA 2678/AHD/2012

• Counselvise Citation: 267820514 RSA 2012
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 09-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2012
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: R N VEPARI
• Keywords: Additional evidence; Onus to prove
• Section: 234B; 14A; 145

Judgement Text

, , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2642/AHD/2012 A.Y. 2008-09 M/S PUNAM FILAMENTS PVT. LTD. 49/1542, PIMTEX SUBSTATION, CHINMI TEKRA, UMARWADA RD. SURAT-395002. PAN: AABCP4349M VS ACIT, CIRCLE-1, SURAT (APPELLANT) (RESPONDENT) ITA NO.2678/AHD/2012 A.Y. 2008-09 ACIT, CIRCLE-1, SURAT VS M/S PUNAM FILAMENTS PVT. LTD. 49/1542, PIMTEX SUBSTATION, CHINMI TEKRA, UMARWADA RD. SURAT-395002. PAN: AABCP4349M (APPELLANT) (RESPONDENT) REVENUE BY : SH. O.P. BATHEJA, SR.D.R., ASSESSEE(S) BY : SH. R.N. VEPARI, AR / // / DATE OF HEARING : 09/12/2013 !' / DATE OF PRONOUNCEMENT : 13/12/2013 #$/ O R D E R PER SHRI A. K. GARODIA, ACCOUNTANT MEMBER: 1. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AN D REVENUE WHICH ARE DIRECTED AGAINST THE ORDER OF THE CIT, CIRCLE-1, SU RAT DATED 28.9.2011 FOR AY 2008-09. 2. FIRST WE TAKE UP THE APPEAL FILED BY THE ASSESSE E IN ITA NO. 2642/AHD/2012. 3. IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE T HAT GROUND NO. 1, 2 &3 IN HIS APPEAL ARE REGARDING REJECTION OF BOOK RESUL T, NON-CONSIDERATION OF EVIDENCES BY CIT(A) AND ADDITION PARTLY CONFIRME D BY THE CIT(A). ITA NO.2642/AHD/2012 & 2678 AHD 2012 PUNAM FILAMENTS PVT. LTD. VS. ACIT, CIR. 1, SURAT FOR A.Y. 2008-09 - 2 - 4. REGARDING REVENUES APPEAL, IT WAS OBSERVED THAT GROUND NO. 1 OF REVENUES APPEAL IS INTER-CONNECTED REGARDING REDUC TION OF GROSS PROFIT TO 7.5% AS AGAINST 10% MADE BY THE A.O. AND SECOND GROUND IS REGARDING DELETING THE ADDITION OF RS 647714/- MADE BY THE A.O. AFTER DISALLOWING BROKERAGE EXPENSES. 5. IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE T HAT FOR DECIDING THIS ISSUE, GROUND NO. 2 OF THE ASSESSEE IS VERY IMPORTA NT AS PER WHICH, THE CLAIM OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN INVOKING RULE 46A IN NOT CONSIDERING THE STOCK RECORDS. IT WAS SUBMI TTED BY HIM THAT IN THE FACTS OF THE PRESENT CASE, THERE WAS NO QUESTION OF INVOKING RULE 46A AS STOCK RECORDS WERE ALREADY PRODUCED BEFORE THE A.O. IN THE ASSESSMENT PROCEEDINGS. AS AGAINST THIS, IT WAS SUBMITTED BY LD. DR THAT NO SUCH STOCK RECORD WAS PRODUCED BEFORE THE A.O. AND THERE FORE, NO ADDITIONAL EVIDENCE CAN BE ADMITTED AS PER RULE 46A OF I.T. RU LES BECAUSE AMPLE OPPORTUNITY WAS PROVIDED BY THE A.O.. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL PLACED ON RECORD. WE FIND THAT AS PER THE A.O., TH E ASSESSEE HAS NOT MAINTAINED DAY-TO-DAY STOCK REGISTER. WE FAIL TO U NDERSTAND THAT IF THE STOCK REGISTER WAS NOT PRODUCED BEFORE THE A.O. AND THE SAME WAS NOT EXAMINED BY THE A.O., HOW HE COULD FIND OUT THAT TH E ASSESSEE HAS NOT MAINTAINED DAY-TO-DAY STOCK REGISTER BECAUSE IN THA T SITUATION, THIS FINDING CAN BE GIVEN THAT NO STOCK REGISTER WAS PRO DUCED BEFORE HIM, BUT NO ONE CAN SAY THAT THE ASSESSEE DID NOT MAINTA IN DAY-TO-DAY STOCK REGISTER. THIS OBSERVATION OF THE A.O. IN HIS ORDE R SUPPORTS THIS CLAIM OF THE ASSESSEE THAT THE STOCK REGISTER WAS PRODUCED B EFORE THE A.O. THIS IS A DIFFERENT ASPECT ALTOGETHER WHETHER SUCH STOCK REGISTER WAS MAINTAINED ON DAY-TO-DAY BASIS OR THE SAME IS NOT M AINTAINED ON DAY-TO- DAY BASIS, BUT IT CANNOT BE SAID THAT NO STOCK REGI STER WAS MAINTAINED BY THE ASSESSEE. FROM THESE FACTS, IT IS OUR CONSIDER ED OPINION THAT THE ITA NO.2642/AHD/2012 & 2678 AHD 2012 PUNAM FILAMENTS PVT. LTD. VS. ACIT, CIR. 1, SURAT FOR A.Y. 2008-09 - 3 - CIT(A) WAS NOT JUSTIFIED IN STATING IN HIS ORDER IN PARA 11.8 THAT THE REQUEST FOR ADMITTING ADDITIONAL EVIDENCES OF STOCK REGISTER CANNOT BE GRANTED AS THE ASSESSEE HAD FAILED TO MAKE OUT THE CASE UNDER RULE 46A. WHEN IT IS SEEN THAT SOME STOCK REGISTER WAS PRODUC ED BY THE ASSESSEE BEFORE THE A.O. AS STATED BY HIM IN THE ASSESSMENT ORDER THAT DAY-TO-DAY STOCK REGISTER IS NOT MAINTAINED, WE ARE OF THE CON SIDERED OPINION THAT THE STOCK REGISTER MAINTAINED BY THE ASSESSEE SHOUL D BE ADMITTED AND AFTER EXAMINING THE SAME ONLY, THE ISSUE REGARDING REJECTION OF BOOK RESULT SHOULD BE DECIDED AFRESH. WE, THEREFORE, SE T ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE F ILE OF THE A.O. FOR A FRESH DECISION. THE ASSESSEE SHOULD PRODUCE STOCK RECORDS MAINTAINED BY HIM BEFORE THE A.O. AND THEREAFTER, THE A.O. SHO ULD EXAMINE THE SAME AND GIVE A FINDING AS TO WHETHER IT IS DAY-TO- DAY STOCK REGISTER OR NOT AND WHETHER THE INCOME OF THE ASSESSEE CAN BE C OMPUTED OR NOT ON THE BASIS OF THE SAME. HE SHOULD ALSO DECIDE WHETH ER THE BOOKS OF THE ASSESSEE ARE LIABLE TO BE REJECTED OR NOT U/S 145 O F THE I.T. ACT. IF IT IS FOUND BY THE A.O. THAT THE BOOKS ARE NOT LIABLE TO BE REJECTED, THEN HE SHOULD COMPLETE THE ASSESSMENT ON THE BASIS OF BOOK S AND IF IT IS FOUND BY HIM THAT THE SAID BOOKS ARE TO BE REJECTED, THEN HE SHOULD ASSESS THE INCOME OF THE ASSESSEE AFRESH ON A REASONABLE BASIS . NEEDLESS TO SAY, THE A.O. SHOULD PROVIDE ADEQUATE OPPORTUNITY OF HEA RING TO THE ASSESSEE. ACCORDINGLY, GROUND NO. 1, 2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 7. GROUND NO. 4 RAISED BY THE ASSESSEE IS REGARDING DISALLOWANCE OF RS 11,21,196/- U/S 14A OF THE I.T. ACT. THIS IS NOTED BY THE CIT(A) IN HIS ORDER THAT IT WAS POINTED OUT BY HIM TO THE LD. AR THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE BY THE TRIBUNALS DECI SION RENDERED IN THE CASE OF SHANKAR CHEMICAL WORKS AS REPORTED IN 47 SO T 121 AHMEDABAD AND LD. AR OF THE ASSESSEE VIDE ORDER SHE ET ENTRY ITA NO.2642/AHD/2012 & 2678 AHD 2012 PUNAM FILAMENTS PVT. LTD. VS. ACIT, CIR. 1, SURAT FOR A.Y. 2008-09 - 4 - 20.09.2012 HAS ADMITTED THE SAME. HENCE, WE DONT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE SECOND PART OF THE GROUND NO. 4 IS REGARDING CHARGE OF INTEREST U/ S 234B AND 234D OF THE ACT WHICH IS CONSEQUENTIAL. ACCORDINGLY, GROUN D NO. 4 OF THE ASSESSEE IS REJECTED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. 9. NOW, WE TAKE UP THE APPEAL FILED BY THE REVENUE. THE GROUNDS OF REVENUES APPEAL ARE AS UNDER: 9.1 ON THE FACTS AN CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ESTIMATION OF G.P. AT 7.5% AS AGAINST 10% MADE BY THE A.O., AS THE FACTS THAT SER IOUS DEFECTS IN THE BOOKS OF THE ACCOUNTS AND VARIOUS DISCREPANCIES SUCH AS PURCHASE AND SALES DETAILS ASKED FOR WERE NOT SUBMI TTED, NOT MARINATING EXCISE RECORDS, NOT MAINTAINED BY DAY-TO -DAY STOCK REGISTER, WERE NOT APPRECIATED. 9.2 ON THE FACT AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A)HAS ERRED IN DELETING THE ADDITION MADE OF RS 6,47,714/- MADE BY THE A.O. AFTER DISALLOWING BROKERAGE EXPENS ES IN SPITE OF THE FACT THAT THE ONUS TO PROVE THE GENUINENESS OF THE EXPENDITURE INCURRED IS ON THE ASSESSEE, WHICH IT F AILED TO DO. 10. AS FAR AS GROUND NO. 1 OF REVENUES APPEAL IS C ONCERNED, WE FIND THAT THIS ISSUE IS INTERCONNECTED WITH THE ISSUES RAISED BY THE ASSESSEE IN GROUND NO. 3 OF HIS APPEAL AND SINCE THE ENTIRE MAT TER ON THIS ASPECT IS RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH DEC ISION, THE GROUND NO. 1 RAISED BY THE REVENUE IS ALSO ALLOWED FOR STATISTIC AL PURPOSE AND THE ISSUE IS RESTORED BACK TO THE FILE OF THE A.O. FOR FRESH DECISION SIMULTANEOUSLY. ITA NO.2642/AHD/2012 & 2678 AHD 2012 PUNAM FILAMENTS PVT. LTD. VS. ACIT, CIR. 1, SURAT FOR A.Y. 2008-09 - 5 - 11. AS FOR GROUND NO. 2, THE LD. DR OF REVENUE HAS SUPPORTED THE ASSESSMENT ORDER, WHEREAS THE LD. AR OF THE ASSESSE E HAS SUPPORTED THE ORDER OF CIT(A). 12. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND SINCE THE ISSUE REGARDING THE REJECTION OF BOOKS U/S 145 IS RESTORED BACK TO FILE OF THE A.O. FOR FRESH DECISION AFTER FINAL DECISION REGARDING ACCEPTABILI TY OF BOOKS U/S 145 OF THE ACT, THIS GROUND IS ALSO ALLOWED FOR STATISTI CAL PURPOSE. 13, IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSE. 14. IN THE COMBINED RESULT, THE ASSESSEES APPEAL S TANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE AND REVENUES APPEAL STANDS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON THE DATE MENTIONED ON CAPTION PAGE. SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER ( A.K. GARODIA) ACCOUNTANT MEMBER AHMEDABAD; DATED 13/12/2013 GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA GHANSHYAM MAURYA, SR. P , SR. P , SR. P , SR. P. .. .S SS S. .. . TRUE COPY #$ %& '#&' #$ %& '#&' #$ %& '#&' #$ %& '#&'/ COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. %*() / THE RESPONDENT. 3. ++ , / CONCERNED CIT 4. ,() / THE CIT(A)-III, AHMEDABAD 5. &/0 % , , / DR, ITAT, AHMEDABAD 6. 012 3 / GUARD FILE. #$ #$ #$ #$ / BY ORDER, 4 44 4/ // / +5 +5 +5 +5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD