M/s. Ezy Slide Fastners Ltd., Baroda V. The ACIT., Circle-1(2), Baroda

ITA 3467/AHD/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5333 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-02-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 29-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Keywords: Bad and doubtful debts
• Section: 43B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER M/S EZY SLIDE FASTNERS LTD, 30, ORIENT BUSINESS CENTRE, SAYAJIGUNJ, BARODA PAN: AAACE4995P (APPELLANT) VS ACIT, CIRCLE-1(2) BARODA (RESPONDENT) REVENUE BY: SRI K.C. MATHEWS, SR.D.R. ASSESSEE BY: NONE DATE OF HEARING : 04-02-2014 DATE OF PRONOUNCEMENT : 07-02-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-I BARODA DATED 04-10-2010. ITA NO. 3467/AHD/2010 ASSESSMENT YEAR 2003-04 I.T.A NO. 3467/AHD/2010 A.Y. 2003-04 PAGE NO M/S. EZY SLIDE FASTNERS LTD VS. ACIT 2 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE DESPITE THE FACT THAT NOTICE FOR TODAYS HEARING WAS SERVE D UPON THE ASSESSEE THROUGH LD. DR. THE REPORT OF THE DR IN THIS RESPECT IS ON RECORD. SO WE PROCEEDED TO DECIDE THIS APPEAL AFTER HEARING LD. DR. 3. BRIEF FACTS OF THE ASSESSEE ARE THAT AO IN THIS CASE BESIDES MAKING A GP ADDITION OF RS. 1,49,95,793/- ALSO MADE FOLLOWIN G OTHER DISALLOWANCES 1 INCREASE IN UNSECURED LOAN RS. 2,12,57,278/- 2 DISALLOWANCE OF INTEREST RS. 25,94,943/- 3 METHOD OF VALUATION OF WIP RS. 75,57,888/- 4 BAD DEBTS RS. 39,99,990/- 5 EXPORT INCENTIVES WRITTEN OFF RS. 60,71,288/ - 6 INTEREST ON GSFC TERM LOAN RS. 75,07,046/- 7 LEGAL AND PROFESSIONAL CHARGES RS. 1,79,00 0/- 8 LIAISON FEES AND SERVICES CHARGES RS. 1,86 ,867/- 9 LEAVE ENCASHMENT PAYABLE RS. 59,190/- 10 SHARE APPLICATION MONEY RS. 55,000/- 11 DISALLOWANCE OF SALES-TAX CLAIMED U/S 43B RS. 6,98,747/- ON THE GROUND THAT DESPITE HAVING GIVEN SUFFICIENT OPPORTUNITIES NO DETAILS WERE FURNISHED BY ASSESSEE NOR ANY BOOKS OF ACCOUNT WERE PRODUCED. THE AO ALSO OBSERVED IN HIS ORDER THAT DURING THE YEAR UNDER APPEAL THERE WAS A FALL OF 17.79% IN GP AS COMPARED TO PREVIOUS YEAR A ND THEREFORE HE ADOPTED THE GP OF PREVIOUS YEAR AND MADE ADDITION OF RS. 1 ,49,95,793/- TO THE TOTAL I.T.A NO. 3467/AHD/2010 A.Y. 2003-04 PAGE NO M/S. EZY SLIDE FASTNERS LTD VS. ACIT 3 INCOME OF THE ASSESSEE. THE MATTER WAS CARRIED BY ASSESSEE BEFORE LD. CIT(A). LD. CIT(A) AFTER OBTAINING REMAND REPORT O F THE ASSESSING OFFICER ON THE SUBMISSION OF THE ASSESSEE CONFIRMED THE GP ADDITION OF RS. 1,49,95,793/- ON ADMITTED FACT THAT ASSESSEE DID NO T HAVE BOOKS OF ACCOUNT OR OTHER SUPPORTING DETAILS IN SUPPORT OF ITS SUBMISSI ON THAT THE FALL IN GP WAS ON ACCOUNT OF REDUCTION IN SALE PRICE AND INCREASED IN RAW MATERIAL PRICES. HE HOWEVER FOUND NO JUSTIFICATION ON THE PART OF AO FOR MAKING SEPARATE ADDITIONS ON SPECIFIC ITEMS OF EXPENDITURE ONCE THE INCOME WAS ESTIMATED BY HIM AFTER REJECTING BOOKS OF ACCOUNT. FOLLOWING TH E DECISION OF ANDHRA PRADESH HIGH COURT IN THE CASE OF M/S INDWELL CONST RUCTION VS. CIT 232 ITR 776, LD. CIT(A) DELETED THE FOLLOWING DISALLOWA NCES DISALLOWANCE OF INTEREST RS. 25,94,943/- METHOD OF VALUATION OF WIP RS. 75,57,888/- BAD DEBTS RS. 39,99,990/- EXPORT INCENTIVES WRITTEN OFF RS. 60,71,288/ - INTEREST ON GSFC TERM LOAN RS. 75,07,046/- LEGAL AND PROFESSIONAL CHARGES RS. 1,79,00 0/- LIAISON FESS AND SERVICE CHARGES RS. 1,86, 867/- LEAVE ENCASHMENT PAYABLE RS. 59,190/- DISALLOWANCE OF SALES-TAX CLAIMED U/S. 43B RS. 6,98,747/- AS FAR AS DISALLOWANCE OF RS. 2,12,57,278/- U/S. 68 OF THE ACT IS CONCERNED, LD. CIT(A) FOUND THAT AO IN HIS REMAND REPORT HAS G IVEN A CATEGORICAL I.T.A NO. 3467/AHD/2010 A.Y. 2003-04 PAGE NO M/S. EZY SLIDE FASTNERS LTD VS. ACIT 4 FINDING THAT IN RESPECT OF FOLLOWING FRESH LOANS T HE CREDITWORTHINESS OF THE CREDITORS WAS NOT ESTABLISHED. 1. RAGIV SURAIYA 1,10,900/- 2. RAJESH SHAH 1,30,000/- 3 RHINO FASTENER 36,00,000/- TOTAL 38,40,900/- HE THEREFORE CONFIRMED THE ADDITION OF RS. 38,40,90 0 /- /- AND BALANCE ADDITION OF U/S 68 WAS DIRECTED TO BE DELETED. AGA INST THE SUSTAINED GP ADDITION OF RS. 1,49,95,793/- AND ADDITION OF RS. 3 8,40,900/-, U/S. 68 BY LD. CIT(A) THIS APPEAL HAS BEEN FILED. SINCE THESE ADD ITIONS HAVE BEEN SUSTAINED BY LD. CIT(A) AFTER OBTAINING REMAND REPORT FROM TH E AO ON THE SUBMISSION OF THE ASSESSEE AND BY CLEARLY HOLDING THAT IN RESP ECT OF THESE ADDITIONS THE ASSESSEE HAS FAILED TO GIVEN ANY EVIDENCE TO SUBSTA NTIATE HIS SUBMISSION, WE ARE NOT INCLINED TO INTERFERE WITH HIS ORDER AND TH E SAME IS HEREBY CONFIRMED. 4. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 07/02/2014 AK I.T.A NO. 3467/AHD/2010 A.Y. 2003-04 PAGE NO M/S. EZY SLIDE FASTNERS LTD VS. ACIT 5 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,