Poonam Dyeing & Printing Mills Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(4), Surat

ITA 3330/AHD/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6463 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 17-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWA LA
• Keywords: Additional evidence; Non compliance; Notional interest
• Section: 68

Judgement Text

ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH,AHM EDABAD. ( BEFORE SHRI BHAVNESH SAINI AND SHRI D.C. AGRAWAL) I.T .A. NO. 3330/AHD/2009 (ASSESSMENT YEAR : 2006-07) POONAM DYEING & PRINTING MILLS PRIVATE LTD., 286, G.I.D.C.,PANDESARA, SURAT-394 221 . (APPELLANT) VS. INCOME TAX OFFICER, WARD 1(4), AAYAKAR BHAVAN, MAJURA GATE, SURAT . (RESPONDENT) PAN: AABCP 6272 B APPELLANT BY : MS. URVASHI SHODHAN RESPONDENT BY : SHRI SAMIR TEKRIWALA, SR. D.R. ( (( ( )/ )/)/ )/ ORDER PER: SHRI BHAVNESH SAINI , J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF C.I.T. (APPEALS)-I, SURAT DATED 23-09-2009 FOR ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS:- (1) THE LEARNED CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ADDITION OF WORK-IN-PROGRESS OF RS.5 ,67,408/-. (2) THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AND O N FACTS, IN CONFIRMING THE ADDITION OF RS.18,18,804/- AS UNEXPL AINED CASH CREDIT UNDER SECTION 68 IN RESPECT OF UNSECURED LOA N. (3) THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ADDITION OF RS.69,30,814/- BEING SUN DRY CREDITORS WHICH REMAINED UNVERIFIABLE. ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 2 (4) THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE DISALLOWANCE OF EXPENSES OF RS. 3,91 ,91,190/- UNDER THE HEAD MANUFACTURING & OTHER DIRECT EXPENS ES AND RS. 65,15,416/- UNDER THE HEAD ADMINISTRATIVE EXPE NSES. (5) THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS, IN CONFIRMING THE ADDITION OF RS.5,27,000/-ON ACCOUNT OF NOTIONAL INTEREST O ADVANCE GRANTED FOR BUSINESS PURPOSE. 2. IT IS STATED THAT THE APPEAL IS TIME BARRED BY11 DAYS. THE AFFIDAVIT OF SHRI ANIL GARG DIRECTOR OF THE ASSESSEE-COMPANY IS FILED TO EXPLAIN THE DELAY WHICH WAS MAINLY ON ACCOUNT OF THE APPEAL PAPERS HA NDED OVER TO THE COURIER COMPANY FOR FILING THE APPEAL BEFORE THE TR IBUNAL CONSIDERING THE EXPLANATION OF THE ASSESSEE AND THAT THERE IS NOMIN AL DELAY, THE LD. D.R. HAS NO OBJECTION FOR CONDONING THE DELAY, WE CONDONE TH E DELAY IN FILING THE APPEAL. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE A.O. ISSUED SEVERAL STATUTORY NOTICES ASKING THE ASSESSEE TO FILE THE DETAILS FOR ALL THE ABOVE GROUNDS OF APPEAL BUT THE ASSESSEE DID NOT ATTEND THE PROCEEDI NGS BEFORE THE A.O. AND NO DETAILS WERE SUBMITTED. THE A.O. ON THE BASIS OF NON COMPLIANCE FROM THE SIDE OF THE ASSESSEE PROCEEDED TO PASS EX-PARTE ASS ESSMENT ORDER U/S. 144/143(3) OF THE I.T. ACT AND MADE THE ABOVE ADDIT IONS ON WHICH GROUNDS OF APPEAL HAVE BEEN RAISED. THE LD. CIT (A) NOTED WITH REGARD TO THE ADDITION OF WORK-IN-PROGRESS THAT ASSESSEE DID NOT PRODUCE THE DETAILS AND THE ASSESSMENT ORDER STATED THAT PERUSAL OF INVENTORY O F CLOSING STOCK SHOWS THAT THE ASSESSEE HAS NOT SHOWN ANY CLOSING STOCK OF WOR K-IN-PROGRESS. THE A.O. HAS STATED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF DYEING AND PRINTING OF ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 3 ART SILK CLOTH. FABRIC UNDER PROCESS BEARS PART OF THE EXPENSES INCURRED ON ACCOUNT OF COLOUR CHEMICALS, WAGES, POWER, FUEL ETC . THEREFORE, THE FABRIC UNDER PROCESS ON THE CLOSE OF THE FINANCIAL YEAR SH OULD HAVE BEEN SHOWN IN THE CLOSING STOCK OF WORK-IN-PROGRESS. THE A.O. ON THE BASIS OF THE DATA NOTED THAT ASSESSEE HAS NOT CORRECTLY SHOWN THE WOR K-IN-PROGRESS AND MADE THE ADDITION. BEFORE THE LD. CIT (A) NO SUBMISSION WAS MADE. THE LD. CIT (A) ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSE E ON ACCOUNT OF WORK-IN- PROGRESS. 4. ON GROUND NO.2 ADDITION WAS MADE ON ACCOUNT OF U NEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. THE ASSESSEE HA S ACCEPTED UNSECURED LOANS OF RS.18,18,804/- DURING THE YEAR AND THE ASS ESSEE HAS NOT FURNISHED ANY DETAILS IN RESPONSE TO THE STATUTORY NOTICE AND EVEN FAILED TO ATTEND THE PROCEEDINGS BEFORE THE A.O. THE ONUS UPON THE ASSE SSEE TO PROVE GENUINENESS OF THE CREDITS WAS NOT DISCHARGED. THER EFORE, THE ADDITION U/S. 68 WAS MADE. SAME IS THE POSITION BEFORE THE LD. CI T (A) AND THE GENUINENESS OF CASH CREDIT COULD NOT BE PROVED THER EFORE, THE LD. CIT (A) DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 5. ON GROUND NO.3, ADDITION WAS MADE ON ACCOUNT OF SUNDRY CREDITORS WHICH REMAINED UNVERIFIABLE. IN THE ABSENCE OF DETA ILS AVAILABLE ON RECORD, THE A.O. DISALLOWED 25% OF THE SAME AND MADE THE AD DITION. BEFORE THE LD. CIT (A) NO DETAILS WERE FURNISHED. THEREFORE, THE A PPEAL OF THE ASSESSEE WAS DISMISSED. 6. ON GROUND NO.4, THE A.O. STATED THAT THE ASSESSE E HAS CLAIMED EXPENSES OF RS.3,91,91,190/- UNDER THE HEAD MANUFAC TURING AND OTHER DIRECT ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 4 EXPENSES AND RS. 65,15,416/- UNDER THE HEAD ADMINIS TRATIVE EXPENSES. NO DETAILS WERE PRODUCED BEFORE THE AO AND EVEN BOOKS OF ACCOUNTS WERE ALSO NOT PRODUCED. 10% OF THE EXPENSES WERE DISALLOWED W HICH WAS ALSO CONFIRMED BY THE LD. CIT (A). 7. ON GROUND NO.5, ADDITION WAS MADE ON ACCOUNT OF DISALLOWANCE OF INTEREST ON ADVANCE GRANTED FOR NON BUSINESS PURPOS ES. THE AO STATED THAT THE ASSESSEE-COMPANY HAS SHOWN SECURED LOAN AND CAS H CREDIT FROM BANK. THE ASSESSEE HAS DEBITED BANK INTEREST OF RS.18,41, 132/- AND HAS GIVEN INTEREST FREE LOANS TO THREE PARTIES IN SUBSTANTIAL AMOUNT. THE AO THEREFORE, STATED THAT THE ASSESSEE HAS DIVERTED ITS INTEREST FREE FUNDS FOR NO BUSINESS PURPOSES AND IN THE FORM OF INTEREST FREE ADVANCE T O THE ABOVE PARTIES. ADDITION WAS ACCORDINGLY MADE. BEFORE THE LD. CIT ( A) NO SUBMISSION WAS MADE. THEREFORE, THE ADDITION WAS ACCORDINGLY CONFI RMED. 8. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE STATEMENT OF FACTS FILED BEFORE THE LD. CIT (A) STATED THAT DUE TO REA SONABLE CAUSE DETAILS COULD NOT BE PRODUCED BEFORE THE AUTHORITIES BELOW AND NO W THE ASSESSEE IS WILLING TO PRODUCE THE DETAILS. THEREFORE, THE MATTER MAY B E REMANDED TO THE A.O. FOR FRESH ADJUDICATION. SHE HAS SUBMITTED THAT ON A CCOUNT OF WORK-IN- PROGRESS THE ADDITION IS DELETED IN THE CASE OF JAY SANTOSHI TEX PRINTS PVT. LTD., SURAT VS. ITO WARD 1(3), SURAT IN ITA NO.130/ AHD/2009 BY D BENCH OF THE TRIBUNAL VIDE ORDER PRONOUNCED ON 13-5-2011. SHE HAS ALSO RELIED UPON THE DECISION OF GAUHATI HIGH COURT IN THE CASE OF B AND A PLANTATIONS & IDUSTRRIES LTD., VS. CIT (2000) (242 ITR-22) FOR THE PROPOSITION THAT ADDITION ON ACCOUNT OF NOTIONAL INTEREST CANNOT BE MADE. ON THE OTHER ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 5 HAND, THE LD. D.R. RELIED UPON THE ORDERS OF THE AU THORITIES BELOW AND SUBMITTED THAT ASSESSEE DID NOT CO-OPERATE BEFORE T HE AUTHORITIES BELOW AND NO DETAILS HAVE BEEN FURNISHED, THEREFORE, THE APPE AL OF THE ASSESSEE MAY BE DISMISSED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. 10. IT IS AN ADMITTED FACT THAT ASSESSEE DID NOT CO MPLY WITH THE STATUTORY NOTICES BEFORE THE A.O. AND NO DETAILS ARE FURNISHE D. IT IS ALSO ADMITTED THAT EVEN BOOKS OF ACCOUNTS WERE NOT PRODUCED BEFORE THE A.O. OR THE LD. CITA (A). THE LD. COUNSEL OF THE ASSESSEE REFERRED TO T HE STATEMENT OF FACTS IN WHICH IT IS STATED THAT ASSESSEE CAN PRODUCE BOOKS OF ACCOUNT AND OTHER RECORDS BEFORE THE A.O. BECAUSE THE BUSINESS ACTIVI TY OF THE ASSESSEE WERE CLOSED AND NO DETAILS COULD BE FURNISHED. IT IS ALS O STATED ON OTHER DETAILS, THAT DETAILS COULD BE FILED AND A.O. COULD HAVE VER IFIED THE FACTS FROM THE OTHER PARTIES. THIS STATEMENT OF FACT WOULD SHOW TH AT ASSESSEE DID NOT PRODUCE ANY DETAILS AND THE BOOKS OF ACCOUNTS BEFOR E THE A.O. NO BOOKS OF ACCOUNTS AND DETAILS WERE FURNISHED BEFORE THE LD. CIT (A). IF THE ASSESSEE WANTED THAT MATTER MAY BE REMANDED TO THE FILE OF T HE A.O. ASSESSEE SHOULD HAVE MADE OUT A CASE ON THE BASIS OF THE FACTS AVAI LABLE ON RECORD BUT ASSESSEE DID NOT EVEN RAISED ANY GROUND OF APPEAL B EFORE THE TRIBUNAL AND NO EVIDENCE OR MATERIAL IS PRODUCED AS TO WHY THE ASSE SSEE DID NOT COMPLY WITH THE STATUTORY NOTICES BEFORE THE AUTHORITIES BELOW. EVEN BEFORE THE TRIBUNAL THE ASSESSEE DID NOT TAKE ANY STEPS IN BRINGING ANY EVIDENCE ON RECORD AND EVEN NO STEPS HAVE BEEN TAKEN FOR ADMISSION OF THE ADDITIONAL EVIDENCES. IN ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 6 THE ABSENCE OF ANY EXPLANATION OR REASONS AND EVIDE NCE, NO CASE IS MADE OUT FOR REMANDING THE MATTER TO THE FILE OF THE A.O. ON ALL THE GROUNDS OF APPEAL. THE ASSESSEE THROUGHOUT REMAINED NON CO-OPERATIVE A ND DID NOT FURNISH ANY EVIDENCE OR MATERIAL. FOR CASH CREDIT/SUNDRY CREDIT ORS EVEN NO CONFIRMATION OF THE PARTIES HAVE BEEN FILED. THE RATIO OF THE OR DER OF THE TRIBUNAL OR THE HIGH COURT COULD BE APPLIED IF THE FACTS ARE AVAILA BLE ON RECORD. IN THE ABSENCE OF ANY FACTS, DETAILS AND EVIDENCES ON RECO RD, NO RELIANCE COULD BE PLACED ON THE DECISION CITED BY THE LD. COUNSEL FOR THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE AND IN THE ABSENC E OF ANY EVIDENCE OR MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATIO N TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. WE CONFIRM THE ORD ER OF THE CIT (A) AND DISMISS THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON 31 - 05 - 2011. SD/- SD/- (D. C. AGRAWAL) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD. DATED: 31 - 05 - 2011. S.A.PATKI. ITA NO..333 0/AHD/2009 . ASSESSMENT YEAR 2006-07. 7 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-I, SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. 1.DATE OF DICTATION 31 - 05 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 31 /05 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 31 - 05 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 31 - 05 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 31 -05 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3 1 -05 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..