Shri Brass Tech Engineering Pvt. Ltd., Jamnagar V. The Deputy Commissiner of Income Tax, Circle-3, , Jamnagar

ITA 273/RJT/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3388 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 18-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAMITA KHURANA
• Section: 69C; 143(3); 133A; 143(2); 43; 13; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER ./ I.T.A. NO. 273/RJT/2018 ( / ASSESSMENT YEAR 2015 - 1 6 ) M/S BRASSTECH ENGINEERING PVT. LTD., PLOT NO.3081, PHASE - 3 , JAMANAGAR. / VS. D.C.T.T , CIRCLE - 3, JAMNAGAR . PAN NO . AAHFB9663K ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI BHAVIN SHAH , A.R / RESPONDENT BY : MS NAMITA KHURANA , SR. D . R. / DATE OF HEARING 26 /02 /20 20 / DATE OF PRONOUNCEMENT 28 / 0 2 /20 20 / O R D E R PER BENCH : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) , JAMNAGAR [ LD. CIT(A) IN SHORT] DATED 22/05/2018 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3 ) OF THE INCOME TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') DATED 21/12/2017 RELEVANT TO THE ASSESSMENT YEAR S (A . Y . ) 2015 - 1 6 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) ERRED IN LAW BY NOT FOLLOWING DIRECTIONS OF CENTRAL BOARD OF DIRECT TAXES AS PER CBDT INSTRUCTION NO.20/2015 DATED ITA NO. 273 /RJT / 2018 A.Y.2015 - 1 6 - 2 - 29/12/2015 AND MADE/CONFIRMED THE ADDITION ON A MATTER WHICH WAS NOT THE ISSUE OF THE LIMITE D SCRU TINY . HENCE THE ADDITION IS NOT SUSTAINABLE. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A NY ON OR MORE GROUNDS OF APPEAL. 1. T HE ISSUE RAISED BY THE ASSESSEE IS THAT LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER FOR RS.1 , 16 , 736/ - ON ACCOUNT OF DIFFERENCE IN THE STOCK FOUND ON THE DATE OF SURVEY. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF BRASS PARTS. THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY U/S.143(3) OF THE ACT UNDER THE SCHEME OF LIMITED SCRUTINY FOR THE EXAMINATION OF THE ISSUES AS DETAILED UNDER: 1. CUSTOM DUTY PAYMENT MISMATCH. 2. PAYMENT TO RELATED PERSONS MISMATCH. 3. DUTY DRAWBACK RECEIVED/RECEIVABLE. 2.1 HOWEVER THE ASSESSING OFFICER , IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 2/12/2017, MADE THE ADDITION U/S 69C OF THE ACT FOR RS.1,16,736/ - BEING EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. AS PER THE ASSESSEE THE ASSESSING OFF ICER HAS EXCEEDED HIS JURISDICTION BY MAKING THE ADDITION WHICH WAS NOT SUBJECT MATTER OF DISPUTE UNDER THE LIMITED SCRUTINY AS PROVIDED IN THE INSTRUCTION NO.20/2015 DATED 29/12/2015 ISSUED BY THE CBDT. 3. HOWEVER, THE LD.CIT(A) DISREGARDED THE CONTEN TION O F THE ASSESSE E BY OBSERVING THAT THERE WAS A SURVEY ACTION U/S 133A OF THE ACT ON THE ASSESSEE DATED 10/12/2014. AS ON THE DATE THE DATE OF SURVEY THE ASSESSEE HAS ADMITTED THE EXCESS STOCK OF RS. 1,16,736/ - AND AGREED TO OFFER THE SAME AS INCOME. H O WEVER, THE ASSESSEE DID NOT DISCLOSE THE IMPUGNED AMOUNT OF EXCESS STOCK AS ITA NO. 273 /RJT / 2018 A.Y.2015 - 1 6 - 3 - INCOME IN THE INCOME TAX RETURN . A CCORDINGLY , THE LD. CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US . 4. THE LD.AR BEFORE US FIELD A PAPER BOOK RUNNING FROM PAGES 1 TO 43 AND REITERAT ED THE SUBMISSION AS MADE BEFORE THE LD.CIT(A). 4.1 THE LD.AR ALSO DR E W OUR ATTENTION ON PAGE 28 OF THE PAPER BOOK WHERE THE NOTICE FO R LIMITED SCRUTINY ISSUED U/S 143(3) OF THE ACT WAS PLACED. 4.2 THE LD. A.R . FURTHER CLAIMED THAT THE ASSESSING OFFICER HAS NOT CONVERTED THE LIMITED SCRUTINY TO THE NORMAL/REGULAR SCRUTINY U/S.143(3) OF THE ACT AFTER TAKING NECESSARY APPROVAL FROM TH E APPROPRIATE AUTHORITY. 5. ON THE OTHER HAND THE LD. D.R SUBMITTED THAT THE CASE ON HAND WA S SUBJECT TO SURVEY PROCEEDINGS U/S.13 3A OF THE ACT. ACCORDINGLY THE LD. A.R . CLAIMED THE CASE O F THE ASSESSEE WAS TO BE SELECTED UNDER SCRUTINY MANUALLY FOR REGUL AR ASSESSMENT UNDER SECTION 143(3) OF THE ACT . 5.1 THE LD. DR FURTHER SUBMITTED THE ASSESSING OFFICER WAS AUTHORIZED TO MAKE THE ADDITION OF THE INCOME WHICH WAS SURRENDERED DURING THE SURVEY PROCEEDINGS. THE LD. D.R . VEHEMENTLY SUPPORTED THE ORDER OF TH E AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD BEFORE US. ADMITTEDLY, THE CASE OF THE ASSESSEE WAS SELECTED UNDER LIMITED SCRUTINY SCHEME AS EVIDENT FROM THE NOTICE U/S.143(3 ) OF THE ACT. AS PER THE CBDT CIRCULAR AS DISCUSSED ABOVE THE ASSESSING OFFICER CAN EXAMINE UNDER THE LIMITED SCRUTINY ONLY THOSE IS SUES WHICH WERE ITA NO. 273 /RJT / 2018 A.Y.2015 - 1 6 - 4 - MENTIONED THEREI N. HOWEVER, ON PERUSAL OF THE NOTICE FOR LIMITED SCRUTINY WE FIND THAT THERE WA S NO MENTIONING/WHISPER ABOUT EXAMINATION OF THE EXCESS STOCK FOUND DURING THE COU RSE OF SURVEY PROCEEDINGS U/S 13 3A OF THE ACT. ACCORDINGLY, WE H O LD THAT THE ASSESSING OFFICER HAS EXCEEDED HIS JURISDICTION BY MAKING THE ADDITION OF EXCESS STOCK FOUND DURI NG THE COURSE OF SURVEY AS THE SAME WAS NOT MANDATED UNDER THE LIMITED SCRUTINY NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT. 6.1 THE LD.DR BEFORE US HAS NOT BROUGHT ANYTHING ON RECORD JUSTIFYING THAT THE LIMITED SCRUTINY WAS CONVERTED BY THE ASSESS ING OFFICER UNDER NORMAL SCRUTINY AFTER OBTAINING NECESSARY APPROVAL FROM THE APPROPRIATE AUTHORITY. 6.2 HOWEVER, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE GIVE THE LIBERTY TO THE REVENUE TO MOVE AN APPLICATION FOR RECALLING OF THE ORDER IF IT IS DISCO VERED THAT THE LIMITED SCRUTINY WAS CO N VERTED INTO NORMAL SCRUTINY AFTER OBTAINING NECESSARY APPROVAL WITHIN THE TIME PRESCRIBED UNDER THE STATUE. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28 / 02 /20 20 - SD - - SD - ( MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DATED 28 /02 /20 20 MANISH