ASHU ORGANICS (I) P.LTD, THANE V. ASST CIT CIR-1, MUMBAI

ITA 3341/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3208 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M MURLIDR
• Assessee Lawyers: R K MULCHANDANI; SUNIL S GARDE
• Section: 143(3); 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.3341/MUM/2012 ASSESSMENT YEAR-2008-09 ASHU ORGANICS (I) PVT. LTD. 1/C, GURUKRUPA SOCIETY, VEER SAWARKAR MARG, NEAR 3 PETROL PUMP, NAUPADA, THANE (WEST)-400602 / VS. ACIT, CIRCLE-1, THANE, VARDAN BUILDING, M.I.D.C. WAGLE ESTATE, THANE (WEST) PAN NO. AABCA4578P ( / APPELLANT) ( / RESPONDENT) ! / ASSESSEE BY SHRI R. K. MULCHANDANI & SHRI SUNIL S. GARDE ' / REVENUE BY SHRI M. MURLI -DR # '$ % !& / DATE OF HEARING : 30/03/2016 % !& / DATE OF ORDER: 01/04/2016 ITA NO.3341/MUM/2012 ASHU ORGANICS (I) PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 17/02/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND AGITATED/PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE IS WITH RESPECT TO ADOPTING THE NET PROFIT OF UNIT-I AT THE RATE OF 4.15% OF THE TOTAL RECEIPT (I.E. 4.15% OF RS.15,11,97,160/- I.E. RS.62,74,682/-) INSTEAD OF CONSIDERING THE SAME AT RS.22,50,776/- (WHICH IS CO NSIDERED IN THE RETURN OF INCOME BY WRONGLY APPLYING THE PRO VISIONS OF SECTION 145(3) OF THE ACT THAT TO WITHOUT ANY COGEN T REASON. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI R. K. MULCHANDANI ALONG WITH SHRI SUNIL S. GAD RE, ADVANCED ARGUMENTS WHICH ARE IDENTICAL TO THE GROUN D RAISED. ON THE OTHER HAND, THE LD. DR, SHRI M. MURL I, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY CONTENDING THAT FOR A.Y. 2005-06, THE NET PROFIT WA S CONSIDERED AT 4.15%, WHEREIN, FACTS ARE IDENTICAL, THEREFORE, THE SAME NET PROFIT WAS APPLIED BY THE LD. CIT(A). IT WAS FURTHER CONTENDED THAT REDUCTION TO 4.15% WAS FROM 10% ADOPTED BY THE ASSESSING OFFICER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUS INESS OF MANUFACTURING SPECIALTY CHEMICALS, PIGMENTS AND INTERMEDIATES, DYES, ETC. THE ASSESSEE IS HAVING TW O ITA NO.3341/MUM/2012 ASHU ORGANICS (I) PVT. LTD. 3 MANUFACTURING UNITS ONE AT MIDC, BADLAPUR (UNIT-I) AND ANOTHER ONE AT MIDC, AMBERNANTH (UNIT-II). UNIT-II OF THE ASSESSEE COMPANY IS AN 100% EOU AND ELIGIBLE TO CLA IM EXEMPTION U/S 10B OF THE INCOME TAX ACT, 1961 (HERE INAFTER THE ACT). THE ASSESSEE MAINTAINED SEPARATE BOOKS OF ACCOUNTS FOR BOTH THE UNIT. THE ASSESSEE WAS ASKED TO EXPLAIN THE DETAILS OF APPORTIONMENT OF EXPENSES ET C. CONSIDERING THE EXPLANATION OF THE ASSESSEE AND PRO FITABILITY OF UNIT-II, THE ASSESSING OFFICER ESTIMATED THE NET PROFIT OF UNIT-I AT THE RATE OF 10% OF THE TOTAL RECEIPTS. TH E LD. ASSESSING OFFICER APPLIED THE PROVISIONS OF SECTION 145(3) OF THE ACT ON THE PLEA THAT THE ACCOUNTS OF THE ASSESS EE, WITH RESPECT TO UNIT-I, THE SAME ARE INCOMPLETE/INCORREC T. THE NET PROFIT OF UNIT-I WAS ESTIMATED AT RS.1,51,19,71 6/- AS AGAINST THE CLAIMED NET PROFIT OF RS.20,20,814/- (A S PER PROFIT & LOSS ACCOUNT). 2.2. ON APPEAL, BEFORE THE LD. CIT(A), THE EXPLANA TION OF THE ASSESSEE WAS CONSIDERED AND FINALLY THE NET PROFIT OF UNIT-I WAS REDUCED TO 4.15%, AS AGAINST 10% ADOPTED BY THE LD. ASSESSING OFFICER. THE ASSESSEE IS IN FURTHER A PPEAL BEFORE THIS TRIBUNAL. 2.3. CONSIDERING THE TOTALITY OF FACTS, WE NOTE TH AT WHILE COMING TO A PARTICULAR CONCLUSION THE LD. CIT (A) ANALYZED THE NET PROFIT OF UNIT-I FOR FINANCIAL YEA RS 2007-08 (1.33%), F.Y. 2006-07 (4.96%) AND F.Y. 2005-06 (4.1 5%). IT IS FURTHER NOTED THAT THE LD. CIT(A) DULY CONSIDERE D THE EXPLANATION OF THE ASSESSEE WITH RESPECT TO INCREAS E IN ITA NO.3341/MUM/2012 ASHU ORGANICS (I) PVT. LTD. 4 FREIGHT EXPENSES, CETP, AFFLUENT TREATMENT EXPENSES OF PRECEDING YEARS, WHICH AS PER THE ASSESSEE, REDUCED THE PROFITABILITY. HOWEVER, NEITHER BEFORE THE LD. CIT( A) NOR BEFORE THIS TRIBUNAL, THE ASSESSEE HAS PRODUCED ANY MATERI AL OR SATISFACTORY EXPLANATION FOR ITS CLAIM FOR BOOKING THE LARGE EXPENSES OF UNIT-I AS COMPARE TO UNIT-II. IT IS NOT EWORTHY THAT FOR A.Y. 2006-07, THE NET PROFIT OF THE ASSESS EE WAS 4.15% AND THE SAME WAS ACCEPTED BY THE DEPARTMENT W HILE FINALIZING THE ASSESSMENT U/S 143(3) OF THE ACT. TH E ASSESSEE HAS NOT ADDUCED ANY PLAUSIBLE REASONING FOR ITS CLA IM. THUS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) , CONSEQUENTLY, THERE IS NO MERIT IN THE IMPUGNED GRO UND, RAISED BY THE ASSESSEE. 3. SO FAR AS, THE ALTERNATE GROUND RAISED BY THE ASSESSEE IS CONCERNED, IT WAS NOT PRESSED BY THE LD . COUNSEL FOR THE ASSESSEE, THEREFORE, THE ALTERNATE GROUND I S DISMISSED AS NOT PRESSED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESEN CE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCL USION OF THE HEARING ON 30/03/2016. SD/- SD/- (RAJENDRA) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ) DATED : 01/04/2016 ITA NO.3341/MUM/2012 ASHU ORGANICS (I) PVT. LTD. 5 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT (RESPECTIVE ASSESSEE) 2. / THE RESPONDENT. 3. + + # ,! ( ) / THE CIT, MUMBAI. 4. + + # ,! / CIT(A)- , MUMBAI, 5. /'01 !2 , + & 23 , # $ / DR, ITAT, MUMBAI 6. 14 5$ / GUARD FILE. / BY ORDER, /! ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI