Sampre Nutritions Limited, Hyderabad, Hyderabad V. DCIT, Circle-3(1), Hyderabad, Hyderabad

ITA 366/HYD/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2601 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 01-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 366/HYD/2017 ASSESSMENT YEAR: 2005-06 SAMPRE NUTRITIONS LTD., HYDERABAD. PAN AADCS 4038 A VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 3(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 06-04-2017 DATE OF PRONOUNCEMENT : 21-04-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS IS AN APPEAL OF THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 3, HYDE RABAD, DATED 02/01/2017 FOR AY 2005-06. 2. BRIEFLY THE FACTS OF THE CASE ARE, THIS IS A SEC OND ROUND OF LITIGATION. IN THE FIRST ROUND OF LITIGATION, THE A O MADE VARIOUS ADDITIONS ALONG WITH THE ADDITION OF RS. 1,31,45,57 7/-, WHICH IS THE SUBJECT MATTER OF APPEAL. WHEN THE ASSESSEE APPEALE D AGAINST THE SAID ADDITION BEFORE THE CIT(A), THE CIT(A) DELETED THE ADDITION. WHEN THE REVENUE WENT IN APPEAL BEFORE THE ITAT, TH E ITAT SET ASIDE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH. 2 ITA NO. 366/H/17 SAMPRE NUTRITIONS LTD., HYD. 3. DURING THE COURSE OF SET ASIDE PROCEEDINGS THE A SSESSEE HAD SUBMITTED TWO PAPER BOOKS CONSISTING OF FOLLOWING I NFORMATION BEFORE THE AO: PAPER BOOK I PAGE NO. DESCRIPTION 12 - 14 TDS CERTIFICATES ISSUE D BY M/S DABUR INDIA LTD. 17 - 19 LETTER TO CTO SUBMITTING C FORM 20 TDS RECEIVABLE LEDGER ACCOUNT 21 CST SALES FROM 01/04/2004 TO 31/03/2005 22 LEDGER ACCOUNT OF DABUR INDIA LTD. BHIWANDI 23 LEDGER ACCOUNT OF DABUR INDIA LTD. MUMBAI 24 - 28 LEDGER ACCOUNT OF DABUR INDIA LTD. GHAZIABAD 33 - 77 SALE, INVOICES, DELIVERY CHALLANS ETC. PAPER BOOK - II PAGE NO. DESCRIPTION 6 - 7 RECONCILIATION OF SALES TURNOVERS W.R.T. SALES TAX ASSESSMENT 27 - 38 SALES TAX ASSESSMENT ORDER 40 LETTER FROM DABU R INDIA LTD. 41 - 51 COPY OF AGREEMENT ENTERED WITH M/S DABUR INDIA LTD. 3.1 AFTER CONSIDERING THE INFORMATION SUBMITTED BY THE ASSESSEE, THE AO OBSERVED THAT IT IS SEEN FROM THE SALES LEDG ER FOR THE RELEVANT PERIOD, THE AMOUNTS AGAINST WHICH THE TDS IS DEDUCT ED ARE NOT AT ALL REFLECTED THEREIN. THOUGH THE TDS AMOUNTS ARE SHOWN AS RECEIVABLE IN THE LEDGER, THE CORRESPONDING SALES IS NOT SHOWN . THE TDS AMOUNT OF RS. 50,706/- IS SHOWN ON 07/02/05 WHEREAS THE CO RRESPONDING AMOUNT CREDITED/PAID IS NOT ADMITTED IN THE SALES L EDGER. SIMILARLY, THE TDS AMOUNTS OF RS. 58,388/- (45,677 + 12,711), RS. 1,52,939/- AND RS. 10,612/- ARE SHOWN ON 05/03/2005, 11/03/200 5 AND 31/03/2005 RESPECTIVELY BUT NO CORRESPONDING AMOUNT S CREDITED/PAID ARE ADMITTED. IN VIEW OF THE ABOVE OBSERVATIONS, TH E AO HELD THAT IT IS CLEAR THAT THE RECEIPTS WHICH WERE SUBJECTED TO TDS WERE NOT OFFERED TO TAX BY THE ASSESSEE COMPANY AND HAVE TO BE BROUGHT TO TAX AS UNDISCLOSED RECEIPTS. ACCORDINGLY, AN AMOUNT OF RS. 1,31,45,577/- WAS BROUGHT TO TAX BY THE AO. 3 ITA NO. 366/H/17 SAMPRE NUTRITIONS LTD., HYD. 4. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL B EFORE THE CIT(A), NONE APPEARED ON BEHALF OF THE ASSESSEE, TH OUGH SEVERAL OPPORTUNITIES WERE GIVEN BY THE CIT(A). THE CIT(A) ONCE AGAIN REQUESTED THE AO TO CONFIRM WHETHER THE PAYMENT MAD E BY M/S DABUR INDIA LTD. OF RS. 1,31,45,577/- WERE CREDITED TO P&L ACCOUNT OR NOT ?. THE AO IN HER REMAND REPORT DATED 05/10/201 6 CONFIRMED THE ADDITION WHICH WAS MADE IN THE ASSESSMENT. THE REMA ND REPORT WAS SENT BY THE CIT(A) TO ASSESSEE FOR HIS OBJECTIONS/C OMMENTS AND ASKED TO SUBMIT THE REPLY BY 26/10/2016. HOWEVER, T HE ASSESSEE FAILED TO SUBMIT ITS REPLY NOR SUBSTANTIATED ITS CL AIM EVEN THOUGH NUMBER OF OPPORTUNITIES WERE GIVEN BY THE CIT(A). 4.1 THE CIT(A) OBSERVED THAT ABUNDANT OPPORTUNITIES WERE GIVEN TO ASSESSEE DURING REMAND PROCEEDINGS AS WELL AS THE P RESENT APPEAL PROCEEDINGS AND THE ASSESSEE FAILED TO PROVE THAT T HE AMOUNTS PAID BY M/S DABUR INDIA LTD (ON WHICH TDS WAS DEDUCTED) WERE CREDITED TO P&L A/C. THEREFORE, THE ADDITION MADE BY THE AO OF RS. 1,31,45,577/- IS CONFIRMED. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, HYDERABAD, DISMISSING THE APPEAL FILED BY THE APPELLANT IS PER VERSE, ILLEGAL AND UNSUSTAINABLE ON FACTS AND IN LAW. 2. THE ORDER PASSED BY THE LD. COMMISSIONER (APPEAL S) IS ANTI- DATED AND IS IN GROSS VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE AND THEREFORE IS UNSUSTAINABLE IN LAW. THE COMMISSIONER (APPEALS) HAVING HEARD THE COUNSEL FOR THE APPELLANT ON 03.01 .2017 COULD NOT HAVE PASSED AN ORDER ON 31.12.2016 DISMISSING T HE APPEAL OF THE APPELLANT. 3. WITHOUT PREJUDICE TO ABOVE, THE LD. COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS.L,31,45,577. THE 4 ITA NO. 366/H/17 SAMPRE NUTRITIONS LTD., HYD. COMMISSIONER (APPEALS) FAILED TO APPRECIATE THE SUB STANTIAL EVIDENCE ON RECORD WHICH PROVE THAT THE SAID AMOUNT IS SALE, AND THAT THE SAME WAS ALREADY OFFERED AS INCOME IN THE BOOKS. 4. THE FINDINGS OF THE AUTHORITIES BELOW BORDERING ON THE ALLEGED DISCREPANCY IN THE BOOKS OF ACCOUNTS AND ALLEGED NO N REPORT OF SALES ARE FACTUALLY INCORRECT AND ARE A RESULT OF I MPROPER READING OF THE EVIDENCE FILED ON RECORD. 6. LD. AR OF THE ASSESSEE SUBMITTED THAT THOUGH THE SUBSTANTIAL EVIDENCE IS THERE ON RECORD TO PROVE THAT THE AMOUN T OF RS. 1,31,45,577/- IS SALE AND THE SAME WAS OFFERED AS I NCOME IN THE BOOKS, THE REVENUE AUTHORITIES FAILED TO APPRECIATE THE INFORMATION AVAILABLE ON RECORD AND MAKING ADDITION BY TREATING THE SAID AMOUNT AS UNDISCLOSED PROCESSING CHARGES, ARE NOT PROPER. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ERS OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE AO MADE THE ADDITION OF RS. 1,31,45, 577/- TREATING THE SAME AS UNDISCLOSED PROCESSING CHARGES, WHEREAS , THE ASSESSEE CLAIMS THAT THE SAID AMOUNT REPRESENTS THE SALE PRO CEEDS RECEIVED FROM M/S DABUR INDIA LTD. AND NOT PROCESSING CHARG ES. THOUGH THE CIT(A) GAVE AMPLE OPPORTUNITIES TO ASSESSEE TO SUBS TANTIATE ITS CLAIM, THE ASSESSEE FAILED TO APPEAR AND SUBSTANTIATE ITS CLAIM BEFORE HIM. THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. A S THE ASSESSEE DID NOT APPEAR AND SUBSTANTIATE ITS CLAIM BEFORE TH E CIT(A), BUT NOW ASSESSEE CLAIMS THAT ALL THE MATERIAL TO ESTABLISH ITS CLAIM ARE ALREADY AVAILABLE ON RECORD. WE ARE OF THE OPINION THAT TO MEET THE ENDS OF JUSTICE, IT IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE CIT(A) TO DECIDE THE ISSUE AFTER EXAMINING THE INFO RMATION AVAILABLE ON RECORD AND IN ACCORDANCE WITH LAW AFTER PROVIDIN G REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASS ESSEE IS DIRECTED 5 ITA NO. 366/H/17 SAMPRE NUTRITIONS LTD., HYD. TO COOPERATE AND APPEAR BEFORE THE CIT(A) TO SUBSTA NTIATE ITS CLAIM. IN CASE, THE ASSESSEE DOES NOT COOPERATE AND APPEAR BEFORE THE CIT(A), THE CIT(A) IS AT LIBERTY TO DECIDE THE ISSU E AS PER THE PROVISIONS OF LAW. 9. THOUGH A NUMBER OF OPPORTUNITIES WERE GIVEN BY T HE CIT(A), THE ASSESSEE FAILED TO APPEAR BEFORE THE CIT(A), WH ICH SHOWS THE LAXITY ON THE PART OF THE ASSESSEE TO PURSUE ITS AP PEAL AND HENCE, WE ORDER THE ASSESSEE TO PAY RS. 2,500/- TOWARDS PRIME MINISTERS RELIEF FUND AS COSTS. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RA HMAN) JUDICIAL MEMBER AC COUNTANT MEMBER HYDERABAD, DATED: 21 ST APRIL, 2017. KV COPY TO:- 1) SAMPRE NUTRITIONS LTD., C/O K. VASANTKUMAR, A.V. RAGHURAM, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 1 . 2) DCIT, CIRCLE 3(1), SIGNATURE TOWERS, OPP. BOTA NICAL GARDENS, KONDAPUR, HYDERABAD 84. 3) CIT(A) 3, HYDERABAD. 4 PR. CIT 3, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE