Bosch Rexroth (India) Ltd., Ahmedabad V. The ACIT.,(OSD),Range-1, Ahmedabad

ITA 3261/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0447 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-03-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 09-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA SR D R
• Assessee Lawyers: S R SHAH
• Section: 43B; 143(3); 80HHC; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI, A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.3261/AHD/2010 ASSESSMENT YEAR :2004-05 BOSCH REXROTH (INDIA) LTD., NR. VATVA RAILWAY STATION, VATVA, AHMEDABAD [ PAN NO. AAACM 9898 F ] V/S . ASST. COMMISSIONER OF INCOME-TAX. OF INCOME TAX (OSD), RAANGE-1, AHMEDABAD /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.R. SHAH, AR /BY RESPONDENT SHRI Y. P. VERMA, SR-DR /DATE OF HEARING 14-03-2013 /DATE OF PRONOUNCEMENT 22-03-2013 / // / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VI, AHMEDABAD (CIT(A) FOR SHORT) DATED13-09-2-10 FOR THE ASSESSMENT YEAR (AY) 2004-0 5. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS AND CONTRARY TO THE PROVISIO NS OF LAW AND FACTS AND THEREFORE REQUIRES TO BE SUITABLY MODIFIED. IT IS SUBMITTED THAT IT BE SO DONE NOW. 2. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE AD DITION OF RS.1,22,639 BEING THE DIFFERENCE IN THE VALUE OF ST OCK OF TOOLS AS ITA NO.3261/AHD/2010 A.Y. 2004-05 BOSCH REXROTH (I) LTD. V. ACIT (OSD), RNG-1, ABD PAGE 2 SUBMITTED TO BANK AND THE VALUE RECORDED IN THE BOO KS OF ACCOUNTS. IN FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLANT H AS RECORDED CORRECT VALUE OF STOCK IN THE BOOKS OF ACCOUNT AND IN THE F ACTS AND CIRCUMSTANCES OF THE CASE PROVISIONS OF SECTION 69 ARE NOT APPLICABLE AND NO DISALLOWANCE IS REQUIRED TO BE MADE. IT IS S UBMITTED THAT IT BE SO HELD NOW. 2.1 THE LEARNED CIT(A) ERRED IN NOT RESTRICTING THE DISALLOWANCE TO THE OVERALL DIFFERENCE BETWEEN THE VALUE OF CLOSING STO CK OF FINISHED GOODS DECLARED TO THE BANK AND SHOWN IN THE BOOKS OF ACCO UNTS OF RS.53,000. IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE EVEN IF ADDITION IS TO BE CONFIRMED, THEN IT SHOULD BE REST RICTED TO RS.53,000/-- IT IS SUBMITTED IT BE SO HELD NOW. 3. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING DISALL OWANCE OF RS.328082/- BEING THE EARLIER YEARS BONUS PAID DUR ING THE YEAR AND CLAIMED AS DEDUCTION U/S. 43B OF THE ACT FOR WANT O F PROOF OF PAYMENT. IN THE FACTS & CIRCUMSTANCE OF THE CASE THE APPELLA NT SUBMITS THAT SUCH PAYMENT HAD BEEN CERTIFIED BY THE TAX AUDITOR IN TH E TAX AUDIT REPORT AND THE SAME OUGHT TO HAVE BEEN ALLOWED AS PER PROV ISIONS OF SECTION 43B. IT IS SUBMITTED IT BE SO HELD NOW. 2. THE BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DESIGNING AND MANUFACTURING OF HYDRAULI C SYSTEMS WHICH ARE USED IN THE MACHINE TOOLS INDUSTRIES AND HEAVY ENGINEERI NG INDUSTRIES. THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) WAS FRAMED THEREBY THE ASSESSING OFFICER (AO) MADE VARI OUS ADDITIONS ON ACCOUNT OF LIQUIDATED DAMAGES PROVISIONS FOR AFTER SALES SE RVICES DISALLOWANCE OF CLAIM OF U/S 80HHC DIFFERENCE IN STOCK OF GOODS AND DISAL LOWANCE U/S. 43B OF THE ACT. THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO AFTER CONSIDERING THE SUBMISSIONS MADE BY ASSESSEE PARTLY ALLOWED THE APPEAL. THEREBY THE DISALLOWANCE OF LIQUIDATED DAMAGES WAS DELETED, DIS ALLOWANCE OF PRODUCTS FOR SERVICE AMOUNTING TO RS.84,372/- AND DEDUCTION U/S. 80HHC WAS DIRECTED IS TO BE RECOMPUTED. HOWEVER, DISALLOWANCE IN DIFFERENCE OF RS.1,22,639/- IN RESPECT OF DIFFERENCE IN STOCK OF TOOLS AND DISALLO WANCE U/S. 43B OF THE ACT FOR THE PAYMENT OF BONUS OF EARLIER YEAR WAS CONFIRMED. EFFECTIVELY THE ASSESSEE ITA NO.3261/AHD/2010 A.Y. 2004-05 BOSCH REXROTH (I) LTD. V. ACIT (OSD), RNG-1, ABD PAGE 3 HAS RAISED TWO GROUNDS AGAINST THE CONFIRMATION OF DISALLOWANCE OF DIFFERENCE IN STOCK-IN-TRADE AND CONFIRMATION OF DISALLOWANCE MADE U/S. 43B OF THE ACT. 3. FIRST GROUND RELATES TO CONFIRMATION OF DISALLOW ANCE BEING DIFFERENCE IN THE VALUE OF STOCK OF TOOLS AS SUBMITTED TO BANK AN D THE VALUE RECORDED IN THE BOOKS OF ACCOUNT. LD. COUNSEL FOR THE ASSESSEE STRO NGLY ARGUED THAT FINAL ACCOUNTS WERE NOT PREPARED AND THERE WAS A SLIGHT D IFFERENCE BETWEEN THE RECORDED VALUE OF STOCK AND STOCK POSITION GIVEN TO THE BANK. HE FURTHER SUBMITTED THAT ACCOUNTS WERE SUBSEQUENTLY AUDITED A ND WERE DULY RECONCILED. IN SUPPORT OF HIS CONTENTION THAT ONCE THE AUDITOR HAD ACCEPTED THE QUANTITY OF STOCK POSITION THEN THIS CANNOT BE THE SUBJECT-MATT ER OF THE SCRUTINY, LD. AR OF THE ASSESSEE RELIED ON CIRCULAR ISSUED BY CBDT NO. 387 OF 1984 DATED 06-07- 1984 AND ALSO RELIED ON THE DECISION OF THE HONBLE CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 30/AHD/2007 & CO NO. 76/AHD/2007 DATED 15-05-2009 FOR THE AY 2003-04. HE FURTHER RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT V. N. SWAMY (2002) 241 ITR 363 (MAD) IN SUPPORT OF HIS CONTENTION THAT THE FIG URE GIVEN TO BANKING AUTHORITY CANNOT BE THE CRITERIA FOR DISBELIEVING T HE FIGURE GIVEN IN THE BOOKS OF ACCOUNT. ON THE CONTRARY, LD. SR-DR OF THE REVENUE RELIED ON THE ORDERS OF AUTHORITIES BELOW. HE RELIED ON THE DECISION OF HON BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF RECON MACHINE TOOLS P. LTD. V. CIT (2006) 286 ITR 637 (KAR). IN SUPPORT OF HIS CONTENTION THAT THE CL OSING STOCK DECLARED TO THE BANK CANNOT BE DISLODGED AS IN THE PRESENT CASE ALS O THERE IS A QUANTITATIVE DIFFERENCE AND THE ASSESSEE HAS NOT RECONCILED THE QUANTITATIVE DIFFERENCE. LD. COUNSEL FOR THE ASSESSEE IN REJOINDER SUBMITTED THA T EVEN IF THE ADDITION HAS TO BE SUSTAINED IT IS EXTENT OF RS.53,000/- ONLY. ITA NO.3261/AHD/2010 A.Y. 2004-05 BOSCH REXROTH (I) LTD. V. ACIT (OSD), RNG-1, ABD PAGE 4 4. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL ON RECORD AND THE CASE LAWS CITED BY BOTH THE SIDES. WE FIND THAT THE CONTENTION OF LD. AR OF THE ASSESSEE IS THAT THE FIGURE GIVEN TO BANK WAS ON ESTIMATION BASIS, HOWEVER, LD. AR OF THE ASSESSEE HAS NOT SUPPLIED AN Y MATERIAL IN SUPPORT OF THE CLAIM THAT THE SAME WAS MADE ON ESTIMATION BASI S. THEREFORE, WE DO NOT FIND ANY MERIT INTO THE CONTENTION OF ASSESSEE THAT IF AT ALL THE DISALLOWANCE IS TO BE RESTRICTED TO THE EXTENT OF RS.53,000/- ONLY. THE CASE LAWS AS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE DOES NOT HELP. THI S GROUND OF ASSESSEES APPEAL IS DISMISSED. 5. NEXT GROUND IS AGAINST THE UPHOLDING THE DISALLO WANCE OF RS.3,28,082/-. LD. AR FOR THE ASSESSEE SUBMITTED THAT THE DISALLOW ANCE WAS MADE ONLY ON THE BASIS THAT EVIDENCES FOR THE PAYMENT OF BONUS W AS NOT SUPPLIED. HE SUBMITTED THAT BONUS WAS DULY PAID AND HE FURTHER S UBMITTED THAT THE AUDITORS HAVE NOT MADE ANY OBSERVATION IN THIS BEHALF AS ALL THE EVIDENCES OF PAYMENTS WERE PLACED BEFORE THE AUDITORS. ON THE CONTRARY, L D. DR OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY EVIDENCE FOR PAYMENT OF BONUS NEITHER BEFORE THE AS SESSING OFFICER NOR BEFORE THE LD. CIT(A) AND IT WAS SPECIFICALLY ASKED TO THE LD. AR OF THE ASSESSEE WHETHER HE CAN PLACE THE EVIDENCES ON RECORD EVEN A T THIS STAGE ALSO. HE EXPRESSED HIS INABILITY, HOWEVER, HE RELIED ON THE AUDITED BOOKS OF ACCOUNT. WE FEEL IN THE ABSENCE OF THE SUPPORTING CLAIM MERE LY ON THE BASIS OF BOOKS OF ACCOUNT CLAIM OF THE ASSESSEE CANNOT BE ALLOWED. SI NCE THE ONUS IS ON ASSESSEE IS TO SUBSTANTIATE ITS CLAIM WITH SUPPORTI NG EVIDENCES. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY INTO THE O RDER PASSED BY LD. CIT(A), ITA NO.3261/AHD/2010 A.Y. 2004-05 BOSCH REXROTH (I) LTD. V. ACIT (OSD), RNG-1, ABD PAGE 5 HENCE, SAME IS HEREBY UPHELD. THIS GROUND OF ASSESS EES APPEAL IS DISMISSED. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.MOHAN ALANKAMONY) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP !' #- 22/03/2013 )*+ , --. --. --. --. /. /. /. /. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '+'-1 2 / CONCERNED CIT 4. 2- / CIT (A) 5. .56 ---1, -1 , )*+ / DR, ITAT, AHMEDABAD 6. 69: ;< / GUARD FILE. BY ORDER/ , /TRUE COPY/ =/) '> -1 , )*+ , STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 19/03 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 20/03 4) DATE OF CORRECTION 20/03 5) DATE OF FURTHER CORRECTION 20/03, 21/03 6) DATE OF INITIAL SIGN BY MEMBERS 21/03 7) ORDER UPLOADED ON - - 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 22/03