PARAS ORGANICS PVT. LTD., NAVI MUMBAI V. ADDL.C.I.T. 10(2), MUMBAI

ITA 2878/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3008 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA
• Assessee Lawyers: C N VAZE
• Keywords: Opportunity of being heard; Retrospective amendment

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2878/MUM/2012 ASSESSMENT YEAR 2009-10 M/S PARAS ORGANICS PVT LTD PLOT NO.D-119, TTC INDL. AREA, NAVI MUMBAI-400076 / VS. ADDL. CIT-10(2), MUMBAI ( !' # /ASSESSEE) ( $ / REVENUE) PAN. NO. AABCP9468M !' # / ASSESSEE BY SHRI C.N.VAZE $ / REVENUE BY SHRI RANDHIR GUPTA $% & # ' / DATE OF HEARING : 26/10/2015 & # ' / DATE OF ORDER: 26/10/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 30/12/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. GROUND NO. 1, 3 AND 6 OUT OF THE GROUNDS OF APPEAL WERE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE, SHRI C .N. VAZE, THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESS ED. M/S PARAS ORGANICS P. LTD. ITA NO.2878/MUM/2012 2 2. THE NEXT GROUND I.E. NO. 2, PERTAINS TO DISALLO WING SERVICE CHARGES PAID FOR PROCUREMENT OF RAW MATERIA L AMOUNTING TO RS.19,36,700/- ON THE GROUND THAT NO T DS WAS DEDUCTED FROM THE SAID AMOUNT. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT CERTIFIC ATE OF ACCOUNTANT WAS FURNISHED BY THE ASSESSEE (PAGES 94 TO 97 OF THE PAPER BOOK) CERTIFYING FURNISHING RETURN OF INC OME AND PAYMENT OF TAX IN THE CASE OF STANDARD PHARMACEUTIC AL LTD. AND TIJYA STEELS PVT. LTD. UNDER FIRST PROVISO SUB- SECTION (1) OF SECTION 201 OF THE ACT. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR. HOWEVER, IT WAS SUBMITT ED THAT THE MATTER MAY BE SENT BACK TO THE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE CERTIFICATE OF THE ACCOUNTANT UNDER FIRST PROVISO T O SUB- SECTION (1) OF SECTION 201 CERTIFYING FURNISHING OF RETURN OF INCOME AND PAYMENT OF TAX, ETC, WE REMAND THIS ISSU E TO THE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE FA CTUAL MATRIX AND THEN DECIDE IN ACCORDANCE WITH LAW. THE ASSESSE E BE GIVEN OPPORTUNITY OF BEING HEARD. EVEN OTHERWISE, I NSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) WITH EFFECT FRO M 01/04/2003 IS DECLARATORY AND CURATIVE IN NATURE WI TH RETROSPECTIVE EFFECT FROM 01/04/2005, INSERTED BY F INANCE (NO.2) ACT, 2004, THUS, THE ASSESSING OFFICER IS DI RECTED TO EXAMINE THE CLAIM OF THE ASSESSEE WHETHER THE SAID AMOUNT M/S PARAS ORGANICS P. LTD. ITA NO.2878/MUM/2012 3 HAS BEEN INCLUDED AS INCOME OF THE PAYEE. THUS, TH IS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 3. GROUND NO. 4 & 5 PERTAINS TO NON-GRANTING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND FURT HER ARRIVING AT A PERCENTAGE OF PROCESS LOSS AND ADDING RS.96,98,214/- TO THE INCOME OF THE ASSESSEE ON THE GROUND THAT THE SALES WERE SUPPRESSED. THE LD. COUNSEL FOR THE ASSESSEE, CHALLENGED THE ADDITION FIRSTLY ON THE PL EA THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED TO THE ASSESSEE AND SECONDLY IT WAS CONTENDED THAT THERE W AS NO SUPPRESSED SALE. ON THE OTHER HAND, THE LD. DR, DEF ENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE SHOWED CONSUMPTION OF RAW MAT ERIALS TO THE TUNE OF 3,15,096.88 KGS., WHEREAS, THE FINIS HED GOODS WERE ONLY 2,27,508 KGMS. THE ASSESSING OFFICER ASKE D THE LOSS OF 87588 KGMS. OF RAW MATERIAL IN COMPARISON T O FINISHED GOODS. IN EARLIER YEAR, THE LOSS WAS 3 TO 10% ONLY WHEREAS IN THE PRESENT ASSESSMENT YEAR, THE LOSS OF RAW MATERIAL WAS EXTENT OF 27.79%. THE ASSESSEE VIDE L ETTER DATED 28/11/2011 FURNISHED THE DETAILS OF CONSUMPTI ON OF RAW MATERIAL. AS PER THE REVENUE, THE ASSESSEE DID NOT FILE THE NECESSARY DETAILS AND KEEP ON DELAYING THE PROC EEDINGS. THE ASSESSING OFFICER FOUND FOLLOWING DISCREPANCIES IN THE DETAILS FURNISHED BY THE ASSESSEE:- M/S PARAS ORGANICS P. LTD. ITA NO.2878/MUM/2012 4 S. NO. PARTICULARS QUANTITY AS PER ANNEXURE-A QUANTITY AS PER ANNEXURE-B DIFFERENCE 1 FERRIC CHLORIDE 6418.47 0 6418.47 2 SODIUM PROPYL PARABEN 3.44 0 3.44 3 SODIUM METHYL PARABEN 9.9 9 0.9 4 CALCIUM CARBONATE 3000 0 3000 5 ASCORBIC ACID 3568.06 619.64 2948.42 THE ASSESSING OFFICER NOTICED THAT TIJIYA STEEL DEB ITED THE AMOUNT OF COMMISSION ON SALE OF 400 KGS ASCORBIC AC ID VIDE LETTER DATED 15/08/2008 AND 1000 KGS ON 12/08/2008, WHEREAS, IN THE CASE OF STANDARD PHARMACEUTICAL, 50 0 KGS IN THE MONTH OF AUGUST AND 750 KGS IN THE MONTH OF SEP TEMBER. THE ASSESSEE DID NOT SHOW ANY PURCHASES IN THE MONT H OF AUGUST AND SEPTEMBER OF ASCORBIC ACID. THE ASSESSIN G OFFICER FOUND DEFECTS IN THE BOOKS OF ACCOUNTS AS THERE WAS SUPPRESSION OF SALES IN COMPARISON TO RAW MATERIAL PURCHASED, THEREFORE, THE BOOKS WERE REJECTED, BEIN G, FOUND UNRELIABLE. FROM THE QUANTITY DETAILS FILED BY THE ASSESSED, THERE IS A CLEAR DIFFERENCE/SHORTAGE OF MATERIAL. E VEN THE ASSESSEE ADMITTED BEFORE THE ASSESSING OFFICER THAT THERE WAS SHORTAGE OF THE YIELD/END PRODUCT AS HAS BEEN DISCU SSED AT PAGE-5 OF THE ASSESSMENT ORDER. THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) AND THE FACTUAL FINDING RECORD ED IN THE ASSESSMENT ORDER. SO FAR AS, THE CONTENTION OF THE LD. COUNSEL FOR T HE ASSESSEE THAT PROPER OPPORTUNITY WAS PROVIDED TO TH E ASSESSEE, IS CONCERNED, WE FIND NO MERIT IN THE CON TENTION AS SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE DURING M/S PARAS ORGANICS P. LTD. ITA NO.2878/MUM/2012 5 ASSESSMENT PROCEEDINGS AS WELL AS DURING FIRST APPE LLATE STAGE. EVEN IT IS PRESUMED THAT LESSER TIME WAS PRO VIDED DURING ASSESSMENT PROCEEDINGS, NOTHING PREVENTED TH E ASSESSEE TO FILE NECESSARY DETAILS BEFORE THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS BEFORE THIS TRIB UNAL. THE ASSESSEE IS MERELY HARPING THAT PROPER OPPORTUNITY WAS NOT PROVIDED. THE ASSESSEE HAS TO EXPLAIN AS TO HOW OPP ORTUNITY WAS NOT PROVIDED. THE FACTS, CLEARLY INDICATES THAT THE ASSESSEE WAS UNABLE TO SUBSTANTIATE ITS CLAIM WITH DOCUMENTARY EVIDENCE, THUS, WE FIND ON INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THIS GROUND OF THE ASSESSEE IS, THEREFOR E, DISMISSED. 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 26/10/2015. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % MUMBAI; ( DATED :26/10/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI M/S PARAS ORGANICS P. LTD. ITA NO.2878/MUM/2012 6 5. 3$4 .# , 0 *+' * 5 , % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % / ITAT, MUMBAI.