DCIT, New Delhi V. M/s. Padmini Technologies Ltd, New Delhi

ITA 2781/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9700 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1997-1998
• Appeal Filed On: 08-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PANDEY
• Keywords: Set aside
• Section: 147; 68

Judgement Text

ITA NO. 2781/DEL/2009 A.Y. 1997-98 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2781/DEL/2009 A.Y. 1997-98 DY. CIT, VS. M/S PADMINI TECHNOLOGIES LTD. CENTRAL CIRCLE-18, 245, DAYANAND VIHAR, NEW DELH I ROOM NO. 327, ARA CENTRE, E-2, JHANDEWALAN, NEW DELHI [APPELLANT] (RESPONDENT) APPELLANT BY : SHRI A.K. PANDEY, CIT DR RESPONDENT BY : SH. SANJEEV JAIN, CA ORDER PER SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDERS OF THE CIT(A) DATED 03.03.2009 FOR THE ASSESSMENT YEARS 1997-98. 2. THE ISSUE RAISED IN THE APPEAL IS THAT THE CIT( A) HAS ERRED IN DELETING THE ADDITION OF RS. 38,12,25,856/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE IT ACT. 3. IN THIS CASE ORIGINALLY AN ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT FOR ASSESSMENT YEAR 19 97-98 ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTORATE OF REVENUE (INTELLIGE NCE), NEW DELHI ACCORDING TO WHICH THE ASSESSEE HAD OBTAINED ADVANCE LICENSES FOR DUTY FREE IMPORTS AND HAD SHOWN FULFILLMENT OF THE EXPORT OBLIGATION THROUGH GROSSL Y OVER INVOICED EXPORT OF CD ROMS WITH AN INTENTION TO EVADE CUSTOM DUTIES. ON THE BASIS OF SUCH SHOW CAUSE NOTICE, THE ITA NO. 2781/DEL/2009 A.Y. 1997-98 2 ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD O VER INVOICED HIS EXPORTS. THE ASSESSEE HAD DECLARE THE SALES OF RS. 40,12,25,856/ - WHEREAS THE REAL VALUE THEREOF WAS ONLY RS. 2,35,12,163/- I.E. THE DIFFERENCE OF BOTH T HE TWO AMOUNTS CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR A.Y. 1997-98 CANNOT BE SAID TO BE THE SALES PROCEEDS OF EXPORTS. ACCORDINGLY, THE SOURCE OF RS. 38,12,25,8 56/- REMAINED UNEXPLAINED AND, THUS, THE SAME WAS TREATED AS INCOME OF THE ASSESSEE UNDE R SECTION 68 OF THE ACT. 4. UPON CONFIRMATIONS BY LD. CIT(A) THE MATTER EARL IER TRAVELLED TO THE TRIBUNAL AND THE TRIBUNAL HAD SET ASIDE THE ORDER OF THE CIT(A) IN APPEAL NO. 119/2003-04 AND HAS DIRECTED TO FRAME DENOVO APPELLATE ORDER AFTER CONS IDERING THE COPY OF THE FINAL ORDER PASSED BY THE CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION (C&CESC) DATED 31.5.2005 AND ALSO THE COPY OF THE LETTER OF DIRECT ORATE OF ENFORCEMENT DATED 2 ND MARCH, 2005 AND ALSO AFTER ALLOWING DUE OPPORTUNITY OF HEARING TO THE PARTIES. 5. ACCORDINGLY, THE LD. CIT(A) EXAMINED THE COPY OF THE ORDER OF THE C&CESC AND CIT(A) NOTED THAT FROM THAT ADJUDICATION FOLLOWING EMERGED:- THAT THE CHARGES OF OVER INVOICING HAVE NOT BEEN CO NCLUSIVELY PROVED BY THE REVENUE. THE EVIDENCE PUTFORTH IN THIS REGARD CAN UTMOST BE SAID TO BE IN THE REALM OF SPECULATION. - THAT THERE IS NO ALLEGATION OF ANY HAWALA PAYMENT OR ANY EVIDENCE THAT THE PROCEEDS RECEIVED WERE IN RESPECT OF ANY THING OTHER THAN THE EXPORT OF GOODS IN QUESTION. - THE LIABILITY ACCEPTED BY THE ASSESSEE IS ONLY IN RESPECT OF NON- FULFILLMENT OF EXPORT OBLIGATION WHICH IN ANY CASE HAS NOTHING TO DO WITH SALES ALREADY MADE FOR WHICH ADDITION HAS BEEN MADE. - NO SHOW CAUSE NOTICE WAS EVER ISSUED FOR OVER INVO ICING BY THE DIRECTORATE OF ENFORCEMENT AS THERE WAS NO EVIDENCE TO THAT EFF ECT. - THAT THE APPELLANT HAS SUCCEEDED IN ESTABLISHING T HAT THE REVENUE HAS NOT SUBSTANTIATED THEIR CHARGE OF OVER VALUATION. ITA NO. 2781/DEL/2009 A.Y. 1997-98 3 6. ON THE BASIS OF ABOVE, LD. CIT(A) CONCLUDED AS U NDER:- IN VIEW OF AFORESAID CATEGORICAL FINDINGS OF C&CES C IN ITS ORDER DATED 31.5.2009, IT IS EVIDENT THAT THERE IS NO JUSTIFICA TION TO DRAW ANY ADVERSE INFERENCE AGAINST THE ASSESSEE REGARDING THE EXPOR T SALES PROCEEDS OF RS. 40,47,38,019/-. THE ASSESSING OFFICER HAS DRAWN THE ADVERSE INFERENCE SOLELY ON THE BASIS OF SHOW CAUSE NOTICE AND IN MY CONSIDERED OPINION THE CONCLUSION DRAWN BY THE ASSESSING OFFICER CANNOT BE NOW SUSTAINED IN VIEW OF THE CATEGORICAL FINDINGS OF THE SETTLEMENT COMMI SSION. ON THESE FACTS AND CIRCUMSTANCES, THE ADDITION OF RS. 38,12,25,856 /- AS MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED AND IS, THERE FORE, DELETED. 7. AGAINST THIS ORDER THE REVENUE IS AN APPEAL BEF ORE US. 8. ONE OF THE GROUNDS TAKEN BY THE REVENUE IS THAT C USTOM DEPARTMENT HAS NOT ACCEPTED THE ORDER OF THE C&CESC AND HAS FILED AN A PPEAL BEFORE THE HIGH COURT. AGAINST THE SAID ORDER OF THE C&CESC IT HAS ALSO BE EN CONTENDED THAT CIT(A) HAS COMPLETELY RELIED UPON THE ORDER OF THE C&CESC AND FAILED TO APPRECIATE THAT OVERWHELMING EVIDENCE AGAINST THE ASSESSEE BROUGHT BY THE ASSESSING OFFICER. 9. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT MATTER HAD ALREADY TRAVELLED EARLIER TO THE TRIBUNAL AND T HE TRIBUNAL HAS REMANDED THE MATTER TO THE LD. CIT(A) TO BE CONSIDERED ON THE BASIS OF THE FOLLOWING DIRECTIONS:- WE HOLD THAT IT SHALL BE JUSTIFIED TO SET ASIDE TH E ORDER OF THE CIT(A) TO HIS FILE WITH DIRECTION TO FRAME DE-NOVO APPELLATE ORDER AFTE R CONSIDERING THE COPY OF THE FINAL ORDER PASSED BY THE CUSTOM AND CENTRAL EXCISE SETTLEMENT COMMISSION DATED 31.5.2005 AND ALSO THE COPY OF THE LETTER OF DIREC TORATE OF ENFORCEMENT DATED 02.03.2005 AND AFTER ALLOWING DUE OPPORTUNITY OF H EARING TO THE PARTIES. WE DIRECT ACCORDINGLY. 10. FROM THE ABOVE, IT IS EVIDENT THAT THE MATTER H AD BEEN REMANDED TO THE CIT(A) TO CONSIDER THE SAME ON THE BASIS OF THE C&CESC ADJUDI CATION. THE CIT(A) HAS ACCORDINGLY DELETED THE ADDITION AFTER CONSIDERING THE SAME. T HAT THE DECISION OF C&CESC HAS BEEN CHALLENGED BY THE CUSTOM DEPARTMENT BEFORE THE HIG H COURT, CANNOT BE A REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) WHO HAS CONSIDERED THE SAME AS PER REMAND BY ITA NO. 2781/DEL/2009 A.Y. 1997-98 4 TRIBUNAL. FURTHER, THE ASSESSEE COUNSEL HAS GIVEN A COPY OF DIRECTOR OF ENFORCEMENT LETTER DATED 2.3.2005 IN PAGE NO. 51 OF THE PAPER B OOK. IN THIS IT IS MENTIONED THAT M/S PADMINI POLYMERS, NEW DELHI AND ITS DIRECTORS HAVE NOT BEEN ISSUED WITH ANY SCN FOR OVER INVOICING, AS THERE WAS NO EVIDENCE TO THAT EF FECT. AS SUCH CONSIDERING THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CI T(A), HENCE WE UPHOLD THE ORDER OF THE CIT(A). 11. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2009. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 4 TH SEPTEMBER, 2009 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES