Sanchita Bhattachariya, CHENNAI V. ACIT, CHENNAI

ITA 304/CHNY/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3946 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 11-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Opportunity of being heard; Additional evidence; Reassessment proceedings
• Section: 143(3); 80HHC

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.304/MDS/2014 ( / ASSESSMENT YEAR: 2002-03) MS. SANCHITA BHATTACHARIYA, Y-90, 7 TH STREET ANNA NAGAR, CHENNAI-600 040. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-XIV, CHENNAI. PAN: ABGPS4532C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 1 ST SEPTEMBER,2016 /DATE OF PRONOUNCEMENT : 23 RD NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- VII, CHENNAI DATED 02.01.2014 IN ITA NO.963/13-14 PASSED UNDER SECTION 143(3) R.W.S. 254 & 250(6) OF THE AC T. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HER APPEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOW S:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD DISALLOWED RS.22,99,918/- TOWARDS CLAIM OF LOSS IN DOMESTIC BUSINESS. 2 ITA NO.304/MDS/2014 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE EXPORT BUSINESS OF LEATH ER GARMENTS UNDER THE NAME & STYLE OF M/S. SAMSAN INTERNATIONAL FILED HER RETURN OF INCOME ON 30.10.2 002 FOR THE ASSESSMENT YEAR 2002-03 ADMITTING TOTAL INCOME OF RS.6,22,160/- AFTER CLAIMING DEDUCTION UNDER SECTIO N 80HHC ON EXPORT PROFITS AND LOSS ON DOMESTIC SALE OF RS.2 2,99,918/-. THIS IS THE SECOND ROUND OF LITIGATION. EARLIER, T HE TRIBUNAL VIDE ITS ORDER DATED 26.11.2007 IN ITA NO.1270/MDS/ 2006 HAD REMITTED THE MATTER BACK TO THE FILE OF THE LEA RNED ASSESSING OFFICER TO REDO THE ASSESSMENT AFTER CONS IDERING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . EVEN IN THE SECOND ROUND BEFORE THE LEARNED ASSESSING OF FICER, THE ASSESSEE COULD NOT ESTABLISH THAT THE EXPENSES INCU RRED WITH RESPECT TO PURCHASE OF RAW MATERIALS ETC., WERE GEN UINE. FURTHER, THERE WERE NO SALES OTHER THAN FEW SAMPLE SALES DECLARED BY THE ASSESSEE FOR THE RELEVANT ASSESSMEN T YEAR. 3 ITA NO.304/MDS/2014 THEREFORE, THE LEARNED ASSESSING OFFICER ONCE AGAIN DISALLOWED THE CLAIM OF LOSS. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER ONCE AGAIN BY OBSERVING AS UNDER :- 6.2 BUT IN THE PRESENT CASE I.E. FOR THE ASSESSME NT YEAR 2002-03 THE FACTS ARE TOTALLY DIFFERENT. IN TH E REASSESSMENT PROCEEDINGS, THE FOLLOWING FINDINGS WE RE ARRIVED AT BY THE ASSESSING OFFICER:- - THE ASSESSEE COULD NOT FURNISH ANY FURTHER EVIDENCE IN SUPPORT OF HER CLAIM - THE PARTIES WERE NOT PRODUCED FOR VERIFICATION. - THE ASSESSEE COULD NOT ESTABLISH AND PROVE THE GENUINENESS OF THE ALLEGED PURCHASES MADE. - THOUGH THE BILLS WERE PRODUCED, THE PARTIES HAVE NO T CONFIRMED THE TRANSACTION. - THE ASSESSEE USED TO GIVE DIFFERENT ADDRESSES TO TH E PARTIES AT DIFFERENT POINT OF TIME. - 6.3 PERUSAL OF THE ORIGINAL ASSESSMENT ORDER AND CONSEQUENT APPEAL ORDER CLEARLY PROVE THAT THE APPE LLANT COULD NOT PROVE THE PURCHASES MADE TO THE EXTENT OF RS.23,14,332/-. IN THE ORIGINAL ASSESSMENT ORDER, I T WAS ESTABLISHED THAT KAPIL MONGA OF DELHI, M/S. BENGAL TANNING INDUSTRY OF CALCUTTA, M/S. SHEEP SKIN LEATH ER P.LTD. OF NEW DELHI AND M/S. MERCURY EXPORTS OF CAL CUTTA REPLIED THAT THEY HAVE NEVER RECEIVED ANY SAMPLES F ROM THE ASSESSEE. THE LETTER ISSUED TO M/S. PRICE OVERS EAS TRADING PVT.LTD. RETURNED UNSERVED. FROM OTHER PART IES, NO CONFIRMATION LETTERS WERE RECEIVED IN SPITE OF REMI NDERS. EVEN IN RESPECT OF PURCHASE OF CONSUMABLES AND OTHE R MATERIALS FOR THE ALLEGED MANUFACTURE OF SAMPLES, T HE TRANSACTIONS WERE NOT CONFIRMED BY THE CONCERNED PA RTIES. IN SPITE OF SEVERAL OPPORTUNITIES PROVIDED, THE APP ELLANT COULD NOT PROVE THE TRANSACTIONS EITHER BEFORE THE ORIGINAL ASSESSMENT PROCEEDINGS, EARLIER APPEAL PROCEEDINGS, REASSESSMENT PROCEEDINGS AND/OR THE PRESENT APPEAL PROCEEDINGS. 4 ITA NO.304/MDS/2014 6.4 IN VIEW OF THE ABOVE DISCUSSIONS, I AM OF THE CONSIDERED VIEW THAT THE FACTS OF THE CASE PERTAINI NG TO ASSESSMENT YEAR 2002-03 ARE DISTINGUISHABLE FROM TH E FACTS OF THE CASE OF ASSESSMENT YEAR 2003-04 AND TH E APPELLANT COULD NOT PROVE THE GENUINENESS OF PURCHA SE EITHER AT THE ORIGINAL ASSESSMENT TIME OR AT THE TI ME OF REASSESSMENT PROCEEDINGS/PRESENT APPEAL PROCEEDINGS . THEREFORE, I HOLD THAT THE DISALLOWANCE OF LOSS FRO M DOMESTIC TRADING BY THE ASSESSING OFFICER IS IN ORD ER. 5. EVEN BEFORE US AT THIS STAGE NO FURTHER EXPLANAT ION OR EVIDENCE WERE BROUGHT BEFORE US BY THE LEARNED AUTH ORIZED REPRESENTATIVE NOR THE ASSESSEE TO PROVE THAT SHE H AD INCURRED LOSS OF RS.22,99,918/- DURING THE RELEVANT ASSESSMENT YEAR ON THE DOMESTIC SALES. FURTHER ON P ERUSING THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE, WE FIND THAT THE ASSESSEE HAD DISCLOSED CONSUMPTION OF LEATHER (RAW MATERIALS) OF RS.12,12,388/-, OTHER CONSUMABLES RS.3,73,042/- AND LABOUR CHARGES OF RS.2,79,781/-. THUS TOTAL EXPENDITURE OF RS.18,65,213/- WAS INCURRED BY THE ASSESSEE FOR PRODUCING THE LEATHER PRODUCTS. AGAINS T THESE MANUFACTURED PRODUCTS THE ASSESSEE HAD DECLARED ONL Y SALE OF RS.16,414/- AND NOT DISCLOSED ANY CLOSING STOCK FOR THE RELEVANT ASSESSMENT YEAR. IT IS HARD TO BELIEVE THA T, AS TO HOW 5 ITA NO.304/MDS/2014 GOODS MANUFACTURED AT THE COST OF RS.18,65,213/- W ERE SOLD ONLY FOR RS.16,414/-. THE ASSESSEE HAS NOT STATED ANY CL ARIFICATION IN THIS REGARD NOR SUBSTANTIATED HER CLAIM OF LOSS WITH PROPER DOCUMENTARY EVIDENCE. IN THIS SITUATION, WE DO NOT HAVE ANY OTHER OPTION BUT TO CONFIRM THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD NOVEMBER, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD NOVEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF