M/s. Motorol Technologies Ltd., Baroda V. The Income tax Officer,Ward-4(1), Baroda

ITA 328/AHD/2009

• Counselvise Citation: 32820514 RSA 2009
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 13-03-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 02-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: J P SHAH
• Keywords: Unexplained investment; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT, JM AND SHRI A. MOHA N ALANKAMONY, AM) ITA NO.328/AHD/2009: A. Y.: 2002-03 MOTOROL TECHNOLOGIES LTD., 19, KALPANA SOCIETY, RACE COURSE CIRCLE, BARODA -7 VS THE INCOME TAX OFFICER, WARD -4( 1) BARODA, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA,-7 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI J. P. SHAH, AR RESPONDENT BY SHRI B. L. YADAV, SR. DR DATE OF HEARING: 13-03-2012 DATE OF PRONOUNCEMENT: 23-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-III, B ARODA DATED 14 TH NOVEMBER, 2008 FOR ASSESSMENT YEAR 2002-03 IN APPEA L NO. CAB/III- 198/07-08, SUSTAINING THE ADDITION MADE BY THE AO T O THE EXTENT OF RS.4,07,479/- IN RESPECT OF UNACCOUNTED PRODUCTION AND PROFIT ON UNRECORDED SALES. 2. BRIEFLY, THE FACTS OF THE CASE AS NOTED BY THE L EARNED CIT(A) ARE THAT ADDITION OF RS.5,29,072/- ON ACCOUNT OF UNACC OUNTED PRODUCTION AND PROFIT ON UNRECORDED SALES WAS MADE BY THE AO B ASED ON THE INFORMATION RECEIVED FROM CENTRAL EXCISE DEPARTMENT THAT THE ASSESSEE ITA NO.328/AHD/2009(AY 2002-03): DCIT, MOTOROL TEC HNOLOGIES LTD. VS ITO,W-4(1), BARODA 2 HAD REMOVED GOODS AMOUNTING TO RS.5,18,698/- WITHOU T PAYMENT OF EXCISE DUTY DURING THE FY 2001-02 RELEVANT TO ASSE SSMENT YEAR 2002- 03.FURTHER THE ASSESSEE ON BEING ASKED BY THE LD.A O, FAILED TO FURNISH MONTH WISE BREAK UP OF SALES IN TERMS OF QUANTITY A ND VALUE FOR HIS VERIFICATION. IN APPEAL, THE LEARNED CIT(A) CONSID ERING THE SUBMISSIONS OF THE ASSESSEE, THE FACTS OF THE CASE AND RELYING ON THE DECISION OF HIS PREDECESSOR ON SIMILAR ISSUE IN THE CASE OF THE AS SESSEE VIZ M/S. MOTOROL SPECIALITY OILS LTD. FOR AY 2002-03 CONFIRM ED THE ADDITION TO THE EXTENT OF RS. 4,07,479/-. 3. BEING AGGRIEVED AND DISSATISFIED WITH THE ABOVE FINDINGS OF THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US . 4. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT T HE AO HAS MADE THE ADDITION ONLY BASED ON PRESUMPTION ARISING OUT OF THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE DEPARTMENT WITHOUT POINTING OUT ANY DOCUMENTARY EVIDENCE REGARDING UNACCOUNTED PRODUCTI ON AND UNRECORDED SALES AND THAT THE LEARNED CIT(A) ALSO C ONFIRMED THE ADDITION BASED ON THE DECISION OF HIS PREDECESSOR IN THE CASE OF THE ASSOCIATE CONCERN OF THE ASSESSEE M/S. MOTOROL SPEC IALITY OILS LTD. FOR AY 2002-03 WITHOUT PROPER APPRECIATION OF FACTS OF THE PRESENT CASE AND GIVING NO SPECIFIC REASON FOR HIS DECISION. THE LEA RNED AR, IN SUPPORT OF HIS CONTENTIONS RELIED ON THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF CIT VS GURUBACHHAN SINGH J. JUNEJA, 302 ITR 63 WHEREIN IT HAS BEEN HELD THAT THE REVENUE HAD NOT PROVED BY BRINGING ANY MATERIAL ON RECORD THAT THE ASSESSEE HAD MADE ANY I NVESTMENT TO MAKE THE ALLEGED UNACCOUNTED SALES. THEREFORE, THE FINDING OF THE TRIBUNAL THAT ONLY THE GROSS PROFIT COULD BE BROUGH T TO TAX DID NOT CALL FOR ANY INFERENCE. ITA NO.328/AHD/2009(AY 2002-03): DCIT, MOTOROL TEC HNOLOGIES LTD. VS ITO,W-4(1), BARODA 3 4.1 THE LEARNED AR FURTHER RELIED ON THE DECISION O F ITAT AHMEDABAD, THIRD MEMBER BENCH IN THE CASE OF ITO VS GURUBACHAN SINGH J. JUNEJA, 54 TTJ (AHD) ( TM ) 1 (55 ITD 75 ( TM) WHEREIN IT H AS BEEN HELD AS UNDER: CONCLUSION: ADDITION OF ENTIRE UNACCOUNTED SALES CANNOT BE MAD E AS SALES IS NOT INCOME AND ONLY INCOME BY APPLICATION OF G.P. RATE CAN BE ADDED; HOWEVER, WHERE UNACCOUNTED SALES WERE COMPUTED AT A PARTICULAR FIGURE, CIT(A) WAS NOT JUS TIFIED IN DIRECTING ADDITION BY APPLYING G. P. RATE TO A LOWE R FIGURE AGREED BY ASSESSEE. 4.3 THE LEARNED AR ALSO RELIED ON THE DECISION OF T HE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ASHOK KUMAR RAS TOGI VS CIT IT REF. NO.229 OF 1983 DATED 18 TH JANUARY,1991 [100 CTR (ALL) 204] WHEREIN IT HAS BEEN HELD AS UNDER: CONCLUSION: WITHOUT REFERENCE TO ANY SUPPORTING EVIDENCE OR MAT ERIAL ITO CANNOT MAKE ANY ADDITION AS UNEXPLAINED INVESTMENT NOTWITHSTANDING SEIZURE OF CERTAIN DOCUMENTS FROM T HE ASSESSEE. 5. THE LEARNED DR ON THE OTHER HAND RELIED ON THE O RDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE SAME SHOUL D BE UPHELD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE CITED DECISION S AND MATERIAL AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE IT IS EVIDENT THAT THE ENTIRE ADDITION WAS MADE BY THE LD.AO BASED ON THE FINDINGS OF THE CENTRAL EXCISE DEPARTMENT. THE OBSERVATION OF THE E XCISE DEPARTMENT WAS THAT THE ASSESSEE HAD REMOVED GOODS WITHOUT PAY MENT OF EXCISE DUTY AMOUNTING TO RS. 5,18,698/-. FURTHER THE ASSES SEE COULD NOT ITA NO.328/AHD/2009(AY 2002-03): DCIT, MOTOROL TEC HNOLOGIES LTD. VS ITO,W-4(1), BARODA 4 PRODUCE BEFORE THE REVENUE THE MONTH WISE SALE IN T ERMS OF QUANTITY AND VALUE IN ORDER TO ESTABLISH THE SAME WAS RECORD ED IN THE REGULAR BOOKS OF ACCOUNTS. THEREFORE ADDITIONS WAS MADE BY THE LD.AO AMOUNTING TO RS.5,29,072/- [ RS. 5,18,608 BEING UNA CCOUNTED SALE AND RS. 10374 BEING 2% PROFIT ON SALE]. HOWEVER THE LD. CIT(A) MODIFIED THE SAME BY SUSTAINING ADDITION OF RS. 4,07,479/- BY ADAPTING THE G.P ON SALE @ 40% AMOUNTING TO RS. 2,07,479/- AND RS. 2,00 ,000/- BEING UNACCOUNTED INVESTMENT FOR EFFECTING THE SALE OF RS . 5,18,698/-. CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE WE ARE OF THE VIEW THAT THOUGH ADDITIONS ARE TO BE MADE IN THIS CASE T HE VIEW EXPRESSED AND THE AMOUNT OF ADDITION MADE AND SUSTAINED BY TH E LD.AO AND LD.CIT(A) IS NOT APPROPRIATE. HOWEVER DRAWING STREN GTH FROM THE VARIOUS JUDICIAL DECISIONS RENDERED BY THE ITAT AHMEDABAD B ENCHES VIZ ITA NO. 3407 ITO V/S SHRI SATHYNARAYAN P.RATHI DATED 1 0/02/2012 WHEREIN DECISION IN THE CASE M/S. VIJAY PROTEINS LTD. REPOR TED IN 58ITD 528 IS ALSO CONSIDERED, WE ARE OF THE CONSIDERED VIEW THA T 12.5% MARGIN ON SUCH UNCOUNTED SALE OF RS. 5,18,608/- WILL SUFFICE TO BE CONSIDERED AS PROFIT ON SUCH UNCOUNTED SALE WHERE BY ADDITIONS HA VE TO BE MADE. ACCORDINGLY WE HEREBY SUSTAIN AN ADDITION OF RS. 64 ,830/-. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2012 SD/- SD/- (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - ITA NO.328/AHD/2009(AY 2002-03): DCIT, MOTOROL TEC HNOLOGIES LTD. VS ITO,W-4(1), BARODA 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD