The ACIT,Vapi Circle, Vapi V. M/s. Sachin Metal Coats, Vapi

ITA 3310/AHD/2010

• Counselvise Citation: 331020514 RSA 2010
• Duration Of Justice: 4 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 14-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .. , , BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDEN T (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.3310/AHD/2010 ( / ASSESSMENT YEAR : 2005-06) THE ASST.CIT VAPI CIRCLE, VAPI / VS. M/S.SACHIN METAL COATS J-9, 1 ST PHASE, GTBL GIDC, VAPI ! '# ./ ./ PAN/GIR NO. : AAZFS 0758 G ( !% / APPELLANT ) .. ( &'!% / RESPONDENT ) !%(' / APPELLANT BY : SHRI NIMESH YADAV, SR.DR &'!%)(' / RESPONDENT BY : SHRI RAJESH UPADHYAY, AR * +) ,# / DATE OF HEARING 18/03/2015 -./0 ) ,# / DATE OF PRONOUNCEMENT 27/03/2015 '/ O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD (CIT(A) IN SHORT) DATED 04/10/2010 PERTAINING TO ASSESSMENT YEAR (AY) 2005-06. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO.3310/AHD /2010 ASST.CIT VS. M/S.SACHIN METAL COATS ASST.YEAR 2005-06 - 2 - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS DELETED ADDITION OF RS.9,07,400/- MADE B Y THE A.O. AS THE ASSESSEE HAD NOT FURNISHED ANY THIRD PARTY CONF IRMATION REGARDING THE TURNOVER. 2) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARN ED CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY GRO UNDS OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS REOPENED AND THE ASSESSMENT U/S.143(3) R.W.S.147 OF THE INCO ME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED V IDE ORDER DATED 16/12/2009. WHILE MAKING THE ASSESSMENT ORDER, TH E AO MADE ADDITION OF RS.9,07,400/- ON ACCOUNT OF DIFFERENCE OF TURNOV ER AS REPORTED BY THE PREVENTIVE WING OF CENTRAL EXCISE TO THE AO. 3. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE FINDING OF THE AO IS SOLELY BASED UPON THE RECORDS OF THE CENTRAL EXCISE DEPARTMENT. HE SUBMITTED THAT THE ACCOUNTS OF THE ASSESSEE ARE DULY AUDITED. HE FURTHER SUBMITTED THAT THE OFFICIALS OF THE CENTRAL EXCISE COULD NOT READ THE ACCOUNTS PROPERLY AND HAS GIVEN A FAULTY PICTUR E OF THE TURNOVER. HE SUBMITTED THAT EVEN THE AO ADDED THE ENTIRE SALES W ITHOUT DEDUCTING THE CORRESPONDING PURCHASES WHICH TANTAMOUNT TO 100% GR OSS PROFIT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE VERA CITY OF BOOK RESULT IS NOT CHALLENGED BY THE AO U/S.145 OF THE ACT. THE A O HAS NOT CALLED ANY ITA NO.3310/AHD /2010 ASST.CIT VS. M/S.SACHIN METAL COATS ASST.YEAR 2005-06 - 3 - PARTY U/S.131. NO CROSS-EXAMINATION OF THE WITNESS IS EVEN OFFERED. THE AO HAS WRONGLY MADE THE GUESSWORK OF ONLY SUPPRESSE D ALLEGED SALES AND NOT OVERSTATED SALES AS CAN BE SEEN FROM ABOVE CHART. 3.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DER OF THE AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT BY OBSERVING AS UNDER:- 7.3. DECISION :- I HAVE CAREFULLY CONSIDERED THE FINDING OF THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT. IT IS NOT DISPUTED THAT THE ADDITIONS MADE BY THE AO WAS MAIN LY BASED ON THE DOCUMENTS RECEIVED FROM THE EXCISE DEPTT. THE AO HAD NOT BROUGHT ON RECORD ANY OTHER MATERIALS IN SUPPORT OF SUCH ADDITIONS. THE APPELLANT HAD CONTENDED BEFORE THE AO THAT THE EXCISE DEPTT. HAD WRONGLY CALCULATED THE SALES FIGU RE TAKEN RECEIPTS OF THE DEPOSIT SIDE OF THE BANK STATEMENTS WHICH INCLUDES RECEIPTS OF SALES, REALIZATION OF SUNDRY DEBTORS, L OAN TRANSACTIONS, TRANSFER FROM ONE A/C TO ANOTHER A/C ETC. THE AO OUGHT TO HAVE VERIFIED THE FACTUAL POSITION IN THIS REGARD BEFORE ARRIVING AT THE ACTUAL SALES SUPPRESSION BUT DID NO T DO. THE ADDITIONS MADE BY THE AO SUFFERS FROM MANY DEFICIEN CIES. FIRST, THE ACCOUNTS OF THE APPELLANT HAS BEEN AUDITED BY T HE CERTIFIED CA AND THE AO HAD NOT REJECTED THE BOOKS OF A/C. IF TH ERE WAS DISCREPANCIES IN THE BOOKS OF A/C. SECOND, OUT OF THE FIGURES WORKED OUT BY THE EXCISE DEPTT. FOR 4 YEARS, THE DI FFERENCE AS PER B/S AND AS CALCULATED BY THEM, FOR TWO YEARS THE DI FFERENCES ARE IN ITA NO.3310/AHD /2010 ASST.CIT VS. M/S.SACHIN METAL COATS ASST.YEAR 2005-06 - 4 - NEGATIVE AND FOR OTHER TWO YEARS THE DIFFERENCE WAS IN POSITIVE. THIS SHOWS THAT THERE IS SOME ERRORS IN THEIR CALCU LATION. THIRD, THE AGGREGATE TURNOVER SHOWN BY THE APPELLANT AS PE R B/S FOR 4 YEARS WAS RS.3,45,57,400/- AS AGAINST RS.3,12,98,16 0/- CALCULATED BY THE EXCISE DEPTT. THAT IS THE APPELLANT HAD SHO WN EXCESS TURNOVER OF RS.32,59,240/-. HOW DOES THE FINDING OF EXCISE DEPTT.EXPLAIN THIS EXCESS? THIS CLEARLY SHOWS THAT THE WAS A NEED FOR RECONCILIATION OF THOSE FIGURES BEFORE COMING T O THE CONCLUSION THAT THERE WAS A SALES SUPPRESSION BY THE APPELLANT . FOURTH, PRESUMING THAT THE THERE WAS SALES SUPPRESSION BY T HE APPELLANT BUT CAN THE ENTIRE SALES BE ADDED AS INCOME IN THE HAND OF THE APPELLANT. THE ANSWER IS NO BECAUSE THE PROFITS IS ONLY TAXABLE NOT THE SALES. THAT MEANS THE AO SHOULD HAVE DONE MICR OSCOPIC BEFORE MAKING ADDITIONS. THE APPELLANT HAD DEMONST RATED BY THE RECONCILIATION THAT THERE WAS NO SALES SUPPRESSIONS DURING THE RELEVANT PERIODS. THE AO FAILED TO APPRECIATE THE SUBMISSIONS MADE BEFORE HIM AND HEAVILY RELIED UPON THE INFORMA TION RECEIVED FROM THE EXCISE DEPARTMENT AND MADE ADDITIONS. DEF INITELY, THE INFORMATION FROM EXCISE DEPTT. WAS A MEANS NOT THE END ITSELF. CONSIDERING THE FACTUAL MATRIX IN MY VIEW THE APPEL LANT HAS MADE A CASE FOR HIMSELF BY PUTTING COGENT EVIDENCE/EXPLA NATIONS THAT IT HAD NOT SUPPRESS THE SALES IN THE R/I FILED. THUS, THE ADDITIONS MADE BY THE AO IS NOT SUSTAINABLE IN THE EYES OF LA W. THEREFORE, THE AO IS DIRECTED TO DELETE THE ADDITIONS MADE IN THIS GROUND. THUS THIS GROUND OF APPEAL IS ALLOWED. 4.1. THE ABOVE FINDING ON FACT OF THE LD.CIT(A) IS NOT REBUTTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE L D.CIT(A), SAME IS HEREBY UPHELD. THUS, THIS GROUND OF REVENUES APPE AL IS REJECTED. ITA NO.3310/AHD /2010 ASST.CIT VS. M/S.SACHIN METAL COATS ASST.YEAR 2005-06 - 5 - 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 27 TH DAY OF MARCH, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 27/ 03 /2015 4,..* , .*../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. !% / THE APPELLANT 2. &'!% / THE RESPONDENT. 3. 567 8 / CONCERNED CIT 4. 8 ( ) / THE CIT(A)-VALSAD 5. 9 :&*67 , ,670 , 5 / DR, ITAT, AHMEDABAD 6. : <= + / GUARD FILE. ! / BY ORDER, ' 9& //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 19.3.15 (DICTATION-PAD 3- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..20.3.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.27.3.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.3.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER