THE ACIT, Circle-8,, Ahmedabad V. WINNERS BUSINESS LINK PVT.LTD., Ahmedabad

ITA 3624/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6493 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 03-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C PATWARI
• Keywords: Block assessment
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 12/05/2011 DRAFTED ON: 13 /05/2011 ITA NO.3624/AHD/2008 ASSESSMENT YEAR : 2005-06 THE ACIT CIRCLE-8 AHMEDABAD VS. WINNERS BUSINESS LINK PVT.LTD. ABOVE CANARA BANK JIVAN KAMAL CHAMBERS NAVRANGPURA AHMEDABAD PAN/GIR NO. : AAACW 1747 P ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI D.C PATWARI, CIT-D.R. RESPONDENT BY: -NONE- O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -XIV, AHMEDABAD DATED 12/08/2008 PASSED FOR ASSESSMENT YEAR 2005-06 AND THE ONLY SUBSTANTIVE GROUND WHICH IS ARGUED BEFORE US IS GRO UND NO.1; REPRODUCED BELOW: 1. THE LD. COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.16,38,89,666/- REJECTING THE ACCOUNTING POLICIES . 2. FROM THE SIDE OF THE REVENUE, LD.DR MR. D.C. PAT WARI APPEARED AND MENTIONED THAT THOUGH THE LD.CIT(A) HA S FOLLOWED AN ITA NO.3624/AHD /2008 ACIT VS. WINNERS BUSINESS LINK P.LTD. ASSESSMENT YEAR 2005-06 - 2 - ORDER OF THE RESPECTED TRIBUNAL IN ASSESSEES OWN C ASE BUT HIS SUBMISSION IS THAT THE AMENDMENT IN ACCOUNTING STAN DARD-9 AS ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANT DESERVES T O BE TAKEN INTO CONSIDERATION. IT IS ALSO WORTH TO MENTION THAT T HE RESPONDENT- ASSESSEE HAS NEVER APPEARED IN THE PAST AND THE NOT ICE OF THE PRESENT DATE HAS ALSO BEEN SERVED THROUGH REVENUE DEPARTMEN T. ON CAREFUL READING OF THE ORDER OF THE LD.CIT(A) THE I SSUE APPEARS TO BE COVERED BY THE DECISION OF THE TRIBUNAL, BY REFEREN CE, RELEVANT PARAGRAPH IS EXTRACTED BELOW: 3.1. THE MAIN ADDITION OF RS.16,38,89,666/- IS ON ACCOUNT OF REJECTION OF THE METHOD OF ACCOUNTING FOLLOWED BY T HE APPELLANT. IN THE ASSESSMENT ORDER, THE AO HAS E XPLAINED THE NATURE OF BUSINESS OF THE APPELLANT AND TRACED OUT THE HISTORY OF THE CASE WITH REGARD TO THE ACCOUNTING POLICY FO LLOWED BY THE COMPANY VIS-A-VIS REVENUES STAND AGAINST IT. THE AO HAS ALSO DISCUSSED DIFFERENT CASE LAWS WHICH THE DE PTT. HAS BEEN RELYING UPON FOR REJECTING THE APPELLANTS ACC OUNTING POLICY AND FOR APPLYING SEC. 145(3) IN ITS CASE. A LL THESE CASES STAND INCORPORATED IN THE ASST.ORDER FOR A.Y. 2001- 02 PASSED ON 31-3-04. THE AO HAS ALSO TRIED TO DIFFERENTIAT E THE APPELLANTS CASE FROM THE CASE OF UNIQUE MERCANTILE SERVICES (P) LTD. 3.2. ON THE OTHER HAND THE REPRESENTATIVE OF THE APPELLANT, SHRI R.J. SHAH FILED A COPY OF ORDER OF HON.ITAT, A HMEDABAD BENCH ORDER DATED 23/12/05 IN ITA (SS) NO.206/AHD/2 004, ITA (SS) NO.30/AHD/2003, ITA NO.2197/AHD/2004, ITA NO.3221, 3396 AND 3397/AHD/2003 FOR ASST.YEARS 1989 -90 TO 1998-99 & UPTO 17-3-99, 1998-99, 1999-2000, 2000-01 AND 2001-02 IN THE APPELLANTS OWN CASE, TO PROVE THAT ALL ASPECTS ITA NO.3624/AHD /2008 ACIT VS. WINNERS BUSINESS LINK P.LTD. ASSESSMENT YEAR 2005-06 - 3 - OF THE CASE AND HAD BEEN DISCUSSED BY THE HON'BLE I TAT WHILE DISCUSSING THE DEPARTMENTAL APPEALS AND ALLOWING TH E APPELLANTS APPEALS. 3.3.1. A PERUSAL OF THE ABOVE TRIBUNAL ORDER IN TH E APPELLANTS OWN CASE FOR EARLIER YEARS DOES SUPPORT THE APPELLANTS CONTENTION. HON. ITAT HAS DISCUSSED AL L THE POINTS APPEARING IN THE ASSESSMENTS ORDER THREADBAR E (PARAS 11 TO 22 FOR ORDER U/S.263 AND PARAS 23 TO 26 FOR M ETHOD OF ACCOUNTING). 3.3.2 THE MAIN POINT OF ADJUDICATION BY HON.ITAT IS CONCERNING THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT COMPANY. THE AO ACCEPTED APPELLANTS MET HOD OF ACCOUNTING IN THE BLOCK ASSESSMENT ORDER DATED 28-0 1-01 FOR THE PERIOD ASST.YEARS 1989-90 TO 1998-99 & UPTO 17- 3-99. THE APPEAL AGAINST THIS ORDER HAS BEEN DECIDED BY T HE CIT(A) ON 28-06-02, WHICH HAS NOT BEEN CHALLENGED FURTHER BY THE REVENUE. SUBSEQUENTLY, THE ASSESSMENT ORDER BECAME A BASIS FOR INVOKING SEC. 263 ON 3-2-03 VIDE WHICH THE THEN CIT, CENTRAL-1, AHMEDABAD SET ASIDE THE ASSESSMENT AND G AVE DIRECTIONS TO FRAME THE ASSESSMENT DE-NO-VO BY REJE CTING THE ASSESSEES METHOD OF ACCOUNTING U/S.145 OF THE I.T. ACT, WHICH THE AO DID. HOWEVER, THE REVENUE REJECTED THE APPE LLANTS METHOD OF ACCOUNTING IN THE SUBSEQUENT YEARS TOO (A SST.YEARS 1998-99 TO 2001-02) AND THE APPELLANT AGITATED ALL OF THEM IN APPEAL BEFORE CIT(A) WHICH WERE AGAIN DECIDED IN IT S FAVOUR AND AGAINST THE REVENUE. THE MATTER FOR ALL THESE ASST.YEARS (ASST.YEARS 1989-90 TO 1998-99 & UPTO 17-3-99, 1998 -99, 1999-2000, 2000-01 AND 2001-02) HAS BEEN AGITATED B EFORE THE ITAT WHICH HAS BEEN CONSIDERED BY THE HON.ITAT AND DECIDED VIDE ORDER DATED 23-12-05 AS REFERRED TO IN PARA 3.2 ABOVE. HON.ITAT HAS NOT ONLY QUASHED THE ORDER U/S .263 PASSED BY THE CIT., CENTRAL-1, AHMEDABAD ON THIS AC COUNT, BUT ALSO ACCEPTED THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT COMPANY (PARAS 32). ITA NO.3624/AHD /2008 ACIT VS. WINNERS BUSINESS LINK P.LTD. ASSESSMENT YEAR 2005-06 - 4 - 3.3.3. IN BRIEF, THE HON.ITAT UPHELD THE METHOD O F ACCOUNTING FOLLOWED BY THE APPELLANT ON THE FOLLOWI NG GROUNDS: A) THE ASSESSMENT ORDER FOR THE BLOCK PERIOD 1989-90 TO 1998-99 AND UPTO 17-3-99 WAS PASSESD BY THE AO ON 28/11/01 WHEREIN THE METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE WAS ACCEPTED BY THE AO , AFTER APPLYING HIS MIND TO THE CONTENTIONS RAISED B Y THE ASSESSEE. B) THE APPEAL FILED AGAINST THIS ORDER HAS BEEN DECIDE D BY THE CIT(A) ON 28-6-02. THIS ORDER HAS NOT BEEN CHALLENGED BEFORE TRIBUNAL. THEREFORE, THE SAID ORDER OF THE CIT(A) HAS BECOME FINAL. C) CONSIDERING THE COMPLEXITIES OF THE ACCOUNTING SYSTEM OF THE ASSESSEE COMPANY, ITS ACCOUNTS GOT AUDITED U/S.142(2A) OF THE ACT. THE AUDITORS GAVE THEIR REPORT ON 16-7-01 ON THE BASIS OF WHICH ADDITION HAS BEEN MADE BY THE AO. THE AUDITOR HAS ACCEPTED THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE. D) THE BLOCK ASSESSMENT HAS BEEN PASSED ON 28-11-01 AND APPEAL AGAINST THIS ORDER WAS DECIDED BY CIT(A) ON 28/6/02, THEREBY THE ORDER OF THE AO MERGED WITH THE ORDER OF CIT(A). THE CIT PASSED THE ORDER U/S.263 ON 3-2-03. BUT, ON THE DAY, THER E WAS NO ORDER OF THE AO BECAUSE OF THE DOCTRINE OF MERGER. HENCE, THE CIT HAD NO POWER TO INVOKE SECTION 263 AGAINST THE ORDER OF THE CIT(A). E) THE APPELLANT FOLLOWED SAME METHOD OF ACCOUNTING IN THE ASST.YEARS 1998-99, 1999-2000, 2000-01 & 2001-02 WHICH HAS BEEN FOLLOWED BY IT IN THE ASST.YEAR 1997-98 AND, THEREFORE, THE CIT(A) RIGHTL Y UPHELD IT FOR ALL THESE YEARS. ITA NO.3624/AHD /2008 ACIT VS. WINNERS BUSINESS LINK P.LTD. ASSESSMENT YEAR 2005-06 - 5 - .. .. 3.3.6 IN VIEW OF THE CLEAR FINDING IN ORDER DATED 23-12- 2005 BY THE HON.ITAT AHMEDABAD BENCH, IN THE APPELL ANTS OWN CASE AND SUBSEQUENT APPEAL ORDERS PASSED BY CIT (A) FOR ASST.YEARS 2002-03 AND 2003-04 AND ORDER OF ITAT DT : 8/2/2006 IN ITA NO.2083/AHD/2005 FOR A.Y. 2002-03, GROUNDS OF APPEAL NO.1,2,3 & 4 ARE ALLOWED IN SO FAR AS THE MAIN ADDITION OF RS.16,38,89,666/- IS CONCERNED FOR MAIN TAINING CONSISTENCY AND FOLLOWING THE JUDGEMENT OF THE HON. ITAT, AHMEDABAD ON THE POINT OF METHOD OF ACCOUNTING FOLL OWED BY THE APPELLANT. 3. IN VIEW OF ABOVE, ONCE IN ASSESSEES OWN CASE A VIEW HAS BEEN TAKEN BY THE RESPECTED CO-ORDINATE BENCH AND LD.CIT (A) HAS SIMPLY FOLLOWED THAT VIEW, THEREFORE, WE FIND NO FA LLACY IN THE SAID JUDGEMENT OF THE FIRST APPELLATE AUTHORITY. IN TH E RESULT, WE FIND NO FORCE IN THIS GROUND OF THE REVENUE, HENCE, DISMISS ED. 4. AS A RESULT, REVENUES APPEAL IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 27/ 5 /2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 27/ 05 /2011 T.C. NAIR, SR. PS ITA NO.3624/AHD /2008 ACIT VS. WINNERS BUSINESS LINK P.LTD. ASSESSMENT YEAR 2005-06 - 6 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD 1. DATE OF DICTATION.. 12.5.2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.05.2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 27/5/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27/5/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER