SAINATH INDUSTRIES, MUMBAI V. ITO 15(1)(1), MUMBAI

ITA 3637/MUM/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8273 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: VIRAG M SHAH
• Keywords: Corroborative evidences

Judgement Text

, ,L ,E LH ,L ,E LH ,L ,E LH ,L ,E LH INCOME TAX APPELLATE TRIBUNAL,MUM BAI - SMC BENCH. . . , BEFORE S/ SH.I.P.BANSAL, JUDICIAL MEMBER /. ITA NO.3637/MUM/2014, / ASSESSMENT YEAR-2008-09 M/S SAINATH INDUSTRIES C/O. M/S PANKAJ SHIPPING & TRANSPORT 02, SETHI MANSION 12, KUMPTHA STREET, BALLARD ESTATE, MUMBAI-400001. . . . /PAN:AAVFS7791K V/S. ITO 15(1)(1), MATRU MANDIR, MUMBAI-400007 ( / APPELLANT) ( !' / RESPONDENT) #$ #$ #$ #$ % % % % / ASSESSEE BY : SHRI VIRAG M. SHAH & ' % / REVENUE BY : SHRI NEIL PHILIP ' '' ' $( $( $( $( / DATE OF HEARING : 04-12-2014 )* ' $( / DATE OF PRONOUNCEMENT : 04-12-2014 , 1961 ' '' ' 254 )1 ( $+$ $+$ $+$ $+$ , , , , ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER I.P.BANSAL,JM: THIS APPEAL IS FILED BY THE ASSESSEE, IT IS DIRECTE D AGAINST THE EX-PARTE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-26 (CIT-A)-26 AGAINST THE ORDER DATED 11.02.2014 FOR THE AY- 2008-09. GROUNDS READ AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF THE A.O. OF RS.14,35,383/- AS 10% PROFIT ON ACCO UNT OF ALLEGED DIFFERENCE OF UNACCOUNTED SALES AMOUNTING RS.1,43,53,839 WITHOUT APPRECIATING THE FACT THAT THE SALES FIGURES SHOWN TO THE BANK IS GROSS SALES WHEREAS AU DITED SALES FIGURE IS NET SALES. YOUR APPELLANT SUBMITS THAT THE SALES FIGURE OF 8, 20,61,761/- AS SHOWN IN THE AUDITED FINANCIAL STATEMENTS TO BE CONSIDERED INSTEAD OF RS . 9,64,15,600/- AS COMPUTED BY THE A.O. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THAT THE LEARNED A.O ERRED IN ESTIMATIN G GROSS PROFIT OF 10% ON THE ALLEGED UNACCOUNTED SALES OF RS. 1,43,53,839/- DESPITE THE APPELLANT INCURRING GROSS LOSS IN THE YEAR UNDER CONSIDERATION. 2 ITA NO. 3637/M/2014 M/S SAINATH INDUSTRIES 2. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE HEARING. 2.DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT THERE WAS DISCREPANCY IN THE STOCKS AS THE STOCK DETAILS FILE D WITH THE BANKERS IN THE FORM OF STOCK STATEMENT DID NOT MATCH WITH THE STOCK FIGURE SHOWN IN THE BO OKS OF ACCOUNTS. THE ASSESSEE WAS REQUIRED TO EXPLAIN. THE DIFFERENCE SO WORKED OUT WAS OF RS. 1, 43,53,839/-. ACCORDING TO THE AO ASSESSEE COULD NOT SATISFACTORILY EXPLAINED THE DISCREPANCY AND THUS THE SAID AMOUNT WAS TREATED AS SUPPRESSION OF SALES AND THE AO WORKED OUT 10% GROS S PROFIT. ACCORDINGLY, AN ADDITION WAS MADE OF A SUM OF RS. 14,35,383/- WHICH WAS ADDED TO RETU RN LOSS OF RS. 9,53,101/- AND INCOME HAS BEEN ASSESSED AS RS. 4,82,280/. 3. BEFORE CIT(A) IT WAS CLAIMED THAT THE SALES IN T HE AUDITED ACCOUNTS ARE NETTED OF EXCISE DUTY ETC. WHEREAS THE SALES REPORTED TO THE BANK IS GROS S SALES. ON THESE SUBMISSION THE LEARNED CIT(A) HAS OBSERVED THAT ASSESSEE DID NOT EXPLAIN BY WHICH AMOUNT AND FOR WHAT REASONS AND HOW SUCH NETTING WAS DONE. LEARNED CIT(A) HAS ALSO OBSERVED THAT ASSESSEE DID NOT SUBMIT RECONCILIATION STATEMENT EXCEPT A BALD STATEMENT TO BE RECONCILED ON THE BASIS OF ACCOUNTS OF CENTRAL EXCISE , CESS DUTIES, GOODS RETURNED, DISCOUNT AND VATAV FIL ED IN TAPAL ON 19.03.2013. THUS, LEARNED CIT(A) HAS DISMISSED THIS EXPLANATION OF THE ASSESSEE ON T HE GROUND THAT DESPITE HAVING ISSUED SEVERAL NOTICES, THE ASSESSEE DID NOT EXPLAIN. 4. AT THE TIME OF HEARING, IT WAS SUBMITTED BY LEAR NED AUTHORIZED REPRESENTATIVE (AR) THAT COMPLETE DETAILS WERE SUBMITTED TO THE OFFICE OF LE ARNED CIT(A) ON 19.03.2013 AND REFERENCE WAS MADE TO PAGE 1 OF THE PAPER BOOK ON WHICH SUCH RECO NCILIATION HAS BEEN PLACED. IT WAS SUBMITTED BY LEARNED AR THAT THE ABOVE RECONCILIATION WAS SUB MITTED ALONG WITH THE STOCK STATEMENT SUBMITTED TO THE BANK AND ALSO ALONG WITH THE ALL R ELEVANT MATERIAL TO SUPPORT THE ACCURACY OF THE FIGURE SHOWN IN THE RECONCILIATION. IT WAS SUBMITTE D THAT LEARNED CIT(A) HAS FAILED TO APPRECIATE THOSE DETAILS AND HAS ERRED IN STATING THAT ASSESSE E DID NOT EXPLAIN THE SAME. IT WAS SUBMITTED THAT IT WILL SERVE THE INTEREST OF JUSTICE, IF THE MATTE R IS RESTORED BACK TO THE FILE OF CIT(A) FOR PROPER LY APPRECIATING THE DOCUMENTS FILED BEFORE HIM ON 19.0 3.2013. 5. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE (DR) SUBMITTED THAT ASSESSEE DID NOT APPEAR BEFORE THE CIT(A) ON SEVERAL DATES AND THERE FORE IN VIEW OF ABSENCE OF EXPLANATION FROM THE ASSESSEE, THE LEARNED CIT(A) HAS RIGHTLY CONFIR MED THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 6. I HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTI ONS ARE CAREFULLY CONSIDERED. I HAVE GONE THROUGH 3 ITA NO. 3637/M/2014 M/S SAINATH INDUSTRIES THE RECONCILIATION STATEMENT SUBMITTED BY THE ASSES SEE BEFORE LEARNED CIT(A). THE ASSESSEE HAS EXPLAINED THE DIFFERENCE IN THE SALE SHOWN TO THE B ANK AND AS FOUND IN THE BOOKS OF ACCOUNTS. THE ASSESSEE HAS ALSO SUBMITTED SUPPORTING EVIDENCE. TH EREFORE, IT CANNOT BE SAID THAT THE ASSESSEE DID NOT SUBMIT THE REQUIRED DETAILS TO THE FILE OF CIT( A) WHICH COULD BE APPRECIATED. HOWEVER, THERE IS DEFAULT OF THE ASSESSEE ALSO IN NON-APPEARING AND E XPLAINING THE RECONCILIATION SUBMITTED BY LETTER DATED 19.03.2013. KEEPING IN VIEW THE ENTIRETY OF F ACTS, I AM OF THE OPINION, THAT IT WILL SERVE THE INTEREST OF JUSTICE, IF THE MATTER IS RESTORED BACK TO THE FILE OF LEARNED CIT(A) FOR RE-ADJUDICATION OF THE ISSUE AFTER PROPERLY APPRECIATING THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM THAT THE SAID DIFFERENCE WAS EXPLAINABLE. IT MAY BE MENTIONED HERE THAT ASSESSEE WILL BE GIVEN REASONABLE AND FAIR OPPORTUNITY OF HEARING IN THE M ATTER. WITH THESE OBSERVATION I RESTORED THIS ISSUE TO THE FILE OF CIT(A). AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS CO NSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN TH E OPEN COURT ON 4 TH, DECEMBER2014 . , ' )* . / 4 FNLA , 201 4 * ' + 0 SD/- ( . . / I.P. BANSAL) / JUDICIAL MEMBER / MUMBAI, / /DATE: 04.12 . 2014. , , , , ' '' ' !$1 !$1 !$1 !$1 21$ 21$ 21$ 21$ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / !' 3. THE CONCERNED CIT(A)/ 3 4 , 4. THE CONCERNED CIT / 3 4 5. DR SMC BENCH, ITAT, MUMBAI / 15+ !$ ,L ,E LH ,L ,E LH ,L ,E LH ,L ,E LH , . . . 6. GUARD FILE/ + 6 '1$ '1$ '1$ '1$ !$ !$!$ !$ //TRUE COPY// , / BY ORDER, 7 / 8 & DY./ASST. REGISTRAR , /ITAT, MUMBAI