S.R. Thorat Milk Products Pvt. Ltd., Pune V. CIT-III, Pune

ITA 371/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56467 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V ANAND RAJAN
• Assessee Lawyers: NILESH KHANDELWAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 371/PN/2010 (ASSTT. YEAR: 2005-06) S.R. THORAT MILK PRODUCTS PVT LTD. ... APPELLANT 503, 5 TH FLOOR, MAYFAIR TOWERS-II, SHIWAJI NAGAR, PUNE- 411005 PAN : NOT AVAILABLE V. ACIT, CIR. 6, PUNE RESPONDENT APPELLANT BY : SHRI NILESH KHANDELWAL RESPONDENT BY : SHRI. V. ANAND RAJAN DATE OF HEARING : 9.8.11 DATE OF PRONOUNCEMENT: 30.9.11 ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED REVISIONAL ORDER PASSE D U/S. 263 OF THE ACT ON THE FOLLOWING GROUNDS : 1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT- III,PUNE HAS ERRED IN HELD THE ORDER PASSED BY THE A.O. IS TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE IT ACT. 2] ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE , THE LEARNED CIT HAS NOT GIVEN CLEAR CUT FINDING AS TO HOW THE SAID ASSESSMENT ORDER IS ERRONEOUS AND AS TO HOW IT IS PREJUDICIAL TO THE IN TEREST OF REVENUE, WHEN ENTIRE INFORMATION WAS FURNISHED BEFORE HIM ON THE ISSUE OF INTEREST PAID ON THE SHARE APPLICATION MONEY, EVEN THOUGH THE A.O. W AS SATISFIED DURING THE COURSE OF ASSESSMENT. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY T HE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW AND DECISIONS RELIE D UPON. ITA . NO 371/PN/2010 S.R.THORAT MILK PRODUCTS PVT. LTD. A.Y. 2005-06 PAGE OF 4 2 3. HAVING GONE THROUGH THE ORDER IMPUGNED AS WELL A S THE ASSESSMENT ORDER, WE FIND THAT THE LD CIT HAS INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT TO ARRIVE AT THE PROPOSED CONCLUSION THAT ASSESSMENT O RDER FRAMED U/S. 143(3) IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON TWO BASIS, NAMELY : 1) THE A.O COMPLETED ASSESSMENT WITHOUT EXAMINING FOLLOWING ASPECTS : I) ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 17,78,963 /- TOWARDS INTEREST ON SHARE APPLICATION MONEY ; AND II) RECORDS SHOW THAT THE TOTAL EXPENDITURE MADE DU RING THE YEAR IS RS. 82,22,856/- WHEREAS TDS PAID IS ONLY RS. 2,8 8,469/- 4. THE LD CIT ISSUED SHOW CAUSE NOTICE U/S. 263 OF THE ACT ON THE ABOVE ISSUES. IN RESPONSE, THE ASSESSEE SUBMITTED THAT SO FAR AS THE CLAIM OF EXPENDITURE AT RS. 17,78,963/- TOWARDS INTEREST ON SHARE APPLICATION M ONEY IS CONCERNED, NO QUESTION WAS ASKED IN THE QUESTIONNAIRE ISSUED BY THE A.O DU RING THE ASSESSMENT PROCEEDINGS NOR ANY ANSWER WAS DESIRED IN WRITING T HERETO BY THE A.O. THE A.O, HOWEVER, ON BEING SATISFIED WITH THE DISCUSSION DUR ING THE COURSE OF HEARING HAS ACCEPTED THE CLAIMED EXPENDITURE OF RS. 17,78,963/- . 5. REGARDING CLAIMED EXPENDITURE OF RS. 84,22,856/- AND IT BEING LIABLE TOWARDS TDS, THE ASSESSEE EXPLAINED THAT A SPECIFIC QUESTIO N NO. 27 WAS RAISED IN THE QUESTIONNAIRE ISSUED BY THE A.O IN THIS REGARD AND THE ASSESSEE HAD SUBMITTED REPLY ON THIS POINT VIDE ITS LETTER DATED 16.11.2007. 6. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT IN VIEW OF THE ABOVE, IT CANNOT BE SAID THAT NO ENQUIRY WAS CONDUCTED BY THE A.O O N THE ABOVE ISSUES. OF COURSE, THE RESULTS OF SUCH ENQUIRY ARE NOT BROUGHT OUT IN THE ASSESSMENT ORDER OR BY WAY OF A NOTE. ITA . NO 371/PN/2010 S.R.THORAT MILK PRODUCTS PVT. LTD. A.Y. 2005-06 PAGE OF 4 3 7. CONSIDERING THE ABOVE SUBMISSIONS, WE ARE OF THE VIEW THAT THE LD CIT HAS RIGHTLY COME TO THE CONCLUSION THAT NO CASE OF REVI EW IS MADE OUT ON SECOND ISSUE THAT THE EXPENDITURE OF RS. 84,22,856/- WAS LIABLE TOWARDS TDS AS A SPECIFIC QUERY VIDE QUESTION NUMBER 27 WAS RAISED IN THE QUESTIONN AIRE ISSUED BY THE A.O TO THE ASSESSEE IN THIS REGARD AND THE ASSESSEE COMPANY HA D SUBMITTED ITS REPLY TO THE QUESTION IN ITS LETTER DATED 16.11.2007. THUS, THE RE WAS APPLICATION OF MIND BY THE A.O ON THE ISSUE AND HE HAS TAKEN A POSSIBLE VIEW I N THIS REGARD. THE ASSESSMENT ORDER ON THE ISSUE THUS CANNOT BE TREATED AS ERRONE OUS, HENCE PREJUDICIAL TO THE INTEREST OF REVENUE. SO FAR AS ISSUE NO. 1 REGARDI NG CLAIMED EXPENDITURE AT RS. 17,78,963/- TOWARDS INTEREST ON SHARE APPLICATION MONEY IS CONCERNED, ADMITTEDLY, NO QUESTION WAS ASKED BY THE A.O IN THE QUESTIONNAI RE ISSUED BY HIM TO THE ASSESSEE. HENCE, NO ANSWER WAS FURNISHED THERETO IN WRITTEN BY THE ASSESSEE. THERE IS NO EVIDENCE ON RECORD TO SUPPORT THE SUBMISSION OF THE ASSESSEE THAT ON BEING SATISFIED BY THE DISCUSSION ON THE ISSUE DURING THE COURSE OF HEARING, THE A.O HAD ACCEPTED THE CLAIMED EXPENDITURE. SINCE THERE WAS NO APPLICATION OF MIND BY THE A.O ON THE ISSUE WHILE ACCEPTING THE CLAIMED EXPEND ITURE, WE FULLY CONCUR WITH THE FINDING OF THE LD CIT IN THIS REGARD THAT IN ABSENC E OF ENQUIRY BY THE A.O ON THE ISSUE, THE ASSESSMENT ORDER IN THIS REGARD IS ERRON EOUS AND HENCE PREJUDICIAL TO THE INTEREST OF REVENUE. THE REVISIONAL ORDER IS THUS U PHELD. THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF GUPTA INTERNATIONAL VS. ITO (2010), 2 ITR (TRIB.) 428 (DEL.) RELIED UPON BY THE LD. A.R. IS NOT HELPFUL T O THE ASSESSEE AS EVEN IN THAT CASE, THE DELHI BENCH OF THE TRIBUNAL HAS TAKEN THE VIEW THAT AN INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF LAW CAN ONLY SA TISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IT, RATHER, SUPPORTS THE CASE OF THE LD CIT AS THE A.O IN ABSENCE OF ENQUIRY CONDUCTED BY HIM HAD ACCEPTED THE CLAIMED E XPENDITURE ON AN INCORRECT ASSUMPTION OF FACTS OR ON INCORRECT APPLICATION OF LAW. WE, THUS, DO NOT FIND REASON TO INTERFERE WITH THE ORDER IMPUGNED ON THE ISSUE. THE SAME IS UPHELD. GROUNDS ARE ACCORDINGLY REJECTED. ITA . NO 371/PN/2010 S.R.THORAT MILK PRODUCTS PVT. LTD. A.Y. 2005-06 PAGE OF 4 4 8. IN RESULT, APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH SEPTEMBER 2011. SD/- SD/- (D.KARUNAKARA RAO) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH SEPTEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -III, PUNE 4. THE D.R. B BENCH, PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE