DCIT, Haldwani V. M/s. Kohli Oxide Industries (P) Ltd, Haldwani

ITA 3873/DEL/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58504 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 11-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Section: 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 3873/DEL/2009 ASSESSMENT YEAR: 2000-01 DEPUTY CIT, VS. M/S. KOHLI OXIDE INDUSTRIES HADLWANI. (P) LTD., DEWALCHAUR, RAMPUR ROAD, HALDWANI. (APPELLANT) (RESPONDENT) APPELLANT BY: MS. Y. KAKKAR , SR.DR RESPONDENT BY: SHRI GURDEV SINGH CHAWLA, CA DATE OF HEARING : 03.01.2012 DATE OF PRONOUNCEMENT : 13 .01.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 19.06.2009 PASSED FOR ASSESSMENT YEAR 2000-01. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.15,28,049. 2. THE BRIEF FACTS OF THE CASE ARE THAT ORIGINAL AS SESSMENT IN THIS CASE WAS COMPLETED ON 29.9.2003 AT AN INCOME OF RS.13,41,951 . THE ASSESSING OFFICER RECEIVED AN INFORMATION EXHIBITING THE FACT S THAT ASSESSEE COMPANY HAD MADE PURCHASES TO THE TUNE OF RS.91,24,449 WHER EAS IN ITS RETURN OF 2 INCOME PURCHASES HAVE BEEN SHOWN AT RS.79,63,899. A CCORDING TO THE ASSESSING OFFICER, THE PURCHASES OF RS.11,60,550 HA VE NOT BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN, THEREFORE, HE REOPENED THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SEC. 148 OF THE INCOME-TAX ACT, 196 1 AND FRAMED THE REASSESSMENT ORDER. HE MADE AN ADDITION OF RS.15,28 ,049 WHICH WAS CONFIRMED BY THE LEARNED CIT(APPEALS). DISSATISFIED WITH THE ORDER OF THE LEARNED CIT(APPEALS), ASSESSEE CARRIED THE MATTER I N APPEAL BEFORE THE ITAT BEARING ITA NO.2967/DEL/04. THIS APPEAL OF THE ASSESSEE WAS ALLOWED FOR STATISTICAL PURPOSES ON 17.8.2007. THE ITAT HAS SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION . IN THIS WAY, THE FRESH ASSESSMENT ORDER HAS BEEN PASSED ON 24.12.2008. IT EMERGES OUT FROM THE ASSESSMENT ORDER THAT ASSESSEE COMPANY IS ENGAGED I N MANUFACTURING AND SALE OF ZINC OXIDE. IT HAS MADE PURCHASES OF RS.15, 28,049 FROM M/S. SHAKHA ENTERPRISES , GURGAON VIDE BILL NO.110 AND 112 DAT ED 30.4.1999 AND 20.4.1999 FOR A SUM OF RS.7,90,934 AND RS.7,37,155. THE GOODS WERE TRANSPORTED THROUGH TRUNK NOS. USI 9927 AND UHG 242 . LEARNED ASSESSING OFFICER HAS CONFRONTED THE ASSESSEE AS TO WHY IT HA S NOT SHOWN THE PURCHASES IN THE BOOKS OF ACCOUNT. THE ASSESSEE CONTENDED THA T GOODS SENT BY M/S. SHAKHA ENTERPRISES WAS OF SUB-STANDARD AND, THEREFO RE, IT WAS RETURNED FROM THE GATE ITSELF. THE ENTRIES OF THE PURCHASES WERE NOT MADE IN THE ACCOUNT AND 3 NO DEDUCTION WAS CLAIMED. FOR BUTTRESSING ITS CONTE NTIONS, ASSESSEE HAS FILED THE ORDER OF SALES-TAX AUTHORITY VIDE WHICH MODVAT CREDIT HAS BEEN WITHDRAWN BY THE EXCISE AUTHORITY FROM THOSE BILLS. ACCORDING TO THE ASSESSEE, IT INDICATES THAT IT HAS NOT TAKEN THE BE NEFIT OF MODVAT CREDIT IN RESPECT OF THESE PURCHASES. THE ASSESSEE FURTHER CO NTENDED THAT SOME HOSTILE PERSONS HAVING BAD RELATION WITH THE ASSESSEE HAD M ADE A COMPLAINT AGAINST IT. LEARNED ASSESSING OFFICER REJECTED ALL THE CONT ENTIONS OF THE ASSESSEE ON THE GROUND THAT HE HAS COLLECTED INFORMATION UNDER SEC. 133(6) OF THE ACT. THE ASSESSEE WAS UNABLE TO POINT OUT THE NAME AND A DDRESS OF THE PERSON WHO IS HOSTILE TOWARDS IT. ACCORDING TO THE ASSESSI NG OFFICER, FRIENDSHIP AND ENMITY COME INTO PLAY ONLY WITH A KNOWN PERSONS AND , THEREFORE, ASSESSEE SHOULD BE IN A POSITION TO POINT OUT THE DETAILS OF HOSTILE PERSONS. HE MADE AN ADDITION OF RS.15,28,049. 3. ON APPEAL, ASSESSEE HAS REITERATED ITS CONTENTIO NS. LEARNED FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION BY OBS ERVING AS UNDER: 5.4 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE COUNSEL OF THE APPELLANT AND OTHER FACTS MENTIONED BY THE A.O. IN THE ASSESSMENT ORDER. IT IS OBSERVED THAT THE APPELLANT HAS CLAIME D TO HAVE MADE PURCHASE RETURN OF ZINC DROSS TO M/S. SHAKHA ENTERP RISES, GURGAON AMOUNTING TO RS.15,28,049. ACCORDING TO THE APPELLA NT, THE MATERIALS 4 HAVE RETURNED FROM THE GATE ITSELF AND ACCORDINGLY THE SAME HAVE NEVER BEEN DEBITED TO THE PURCHASE ACCOUNT OF THE A PPELLANT. THE NECESSARY ROAD PERMITS OF THE TRADE-TAX DEPARTMENT ACCOMPANYING THE SAID GOODS WERE STATED TO HAVE BEEN RETURNED TO THE TRADE TAX AUTHORITIES AND THE SAID ISSUE HAS BEEN DULY CONSID ERED AND VERIFIED BY THE TRADE TAX AUTHORITY WHICH IS CLEARLY EVIDENT FR OM THE ORDER OF THE AUTHORITIES FURNISHED IN THIS REGARD. THE EXCISE AU THORITIES HAVE ALSO WITHDRAWN THE MODVAT CREDIT FROM THE SAID BILLS AS INDICATED BY THE EVIDENCE PRODUCED IN THIS REGARD. THE APPELLANT HAS ALSO PRODUCED THE CONFIRMATION LETTER FROM M/S. SHAKHA ENTERPRISES WH EREIN IT HAS BEEN CLEARLY MENTIONED THAT THE GOODS WORTH OF RS.15,28, 049 VIDE BILL NO. 110 DATED 20.4.1999 AND BILL NO.112 DATED 20.04.199 9 HAVE BEEN RETURNED BACK AND THE SAME HAVE BEEN RECEIVED BY M/ S. SHAKHA ENTERPRISES ON 23.04.1999. EVEN THOUGH AS PER THE L ETTER OF THE RELATIVE OF THE PROMOTER OF M/S. SHAKHA ENTERPRISES, IT HAS BEEN ALLEGED THAT PAYMENTS ON ACCOUNT OF PURCHASES HAS BEEN RECEIVED THROUGH BANK DRAFT/CHEQUES BUT THE A.O. HAS NOT BEEN ABLE TO PRO VE THAT SUCH CHEQUES OR BANK DRAFTS HAVE ACTUALLY BEEN ISSUED FR OM THE ACCOUNT OF THE APPELLANT IN ORDER TO SUBSTANTIATE SUCH CONTENT ION OF THE RELATIVE OF THE PROMOTER. EVEN THOUGH THERE WAS A CLEAR CUT DIR ECTION BY THE HONBLE TRIBUNAL THAT IN ABSENCE OF PROPER ENQUIRY, THE BENEFIT OF CROSS EXAMINATION OF THE WITNESS WAS TO BE PROVIDED TO THE APPELLANT THE SAME HAS NOT BEEN COMPLIED WITH BY THE A.O. THE A.O. HAS NOT CAUSED ANY INDEPENDENT ENQUIRIES TO PROVE HIS CONTE NTION. THE A.O. HAS FAILED TO GIVE THE COPY OF LETTER OF THE RELATI VE OF THE PROMOTER TO THE APPELLANT AND NO OPPORTUNITY FOR CROSS EXAMINAT ION OF SUCH WITNESS WAS AWARDED TO THE APPELLANT. THE A.O. HAS ALSO FAILED TO 5 CONTROVERT THE FINDINGS OF THE SALES TAX AUTHORITIE S, REFUTE THE REVERSAL OF CREDIT BY THE EXCISE AUTHORITIES OR DISPROVE THE AFFIDAVITS AND CONFIRMATIONS RECEIVED FROM M/S. SHAKHA ENTERPRISES . THOSE EVIDENCE IN SATISFACTION OF THE CLAIM OF THE APPELLANT ARE S TILL ON RECORD TO SUBSTANTIATE THE CONTENTION OF THE APPELLANT. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE AND IN ABSENCE OF ANY FIN DINGS AGAINST THE CLAIM OF PURCHASE RETURN AS PER ORIGINAL BILL NO.11 0/20.04.1999 OF RS.790,934 AND BILL NO.112/20.04.1999 OF RS.7,37,11 5 AGGREGATING TO RS.15,28,049, I FIND NO REASON FOR REPEATING THE SA ME ADDITION OF RS.15,28,049 AND THE A.O. IS HEREBY DIRECTED TO DEL ETE SUCH ADDITION ON ACCOUNT OF UNEXPLAINED PURCHASE AND ALLOW CONSEQ UENTIAL RELIEF TO THE APPELLANT. HENCE, GROUND NOS.(I) TO (VI) ARE ALLOWED. 4. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT IN THE EARLIER ROUND OF LITIGATION, ITAT HAS REMITTED THE MATTER ON THE GROUND THAT THE ASSESSIN G OFFICER FAILED TO PROVIDE THE MATERIAL COLLECTED BY HIM I.E. THE LETT ER SIGNED BY THE RELATIVE OF THE PROPRIETOR OF SHAKHA ENTERPRISES. IN THIS ROUND OF LITIGATION, ASSESSING OFFICER INSTEAD OF ESTABLISHING ON RECORD THAT THE ASSESSEE HAS ACTUALLY MADE PURCHASES BUT NOT ACCOUNTED THEM PUT THE ONUS UPON THE ASSESSEE TO PROVE THAT IT HAS NOT MADE ANY PURCHASES. THE ASSESSEE HA S POINTED OUT TO THE ASSESSING OFFICER THAT GOODS REFERRED BY HIM WERE R ETURNED TO THE SELLER AND IT HAS NOT AVAILED ANY BENEFIT OF MODVAT CREDIT ETC . FOR BUTTRESSING ITS CASE, 6 ASSESSEE HAS FILED THE ASSESSMENT ORDER PASSED BY T HE SALES-TAX AUTHORITIES. IT HAS FILED AFFIDAVIT OF SHRI ABRAL JAIN AND IT HAS F ILED COPIES OF INVOICE FOR EXCISEABLE GOODS UNDER RULE 57G OR 57J INDICATING T HAT MODVAT CREDIT WAS DISALLOWED TO THE ASSESSEE. ASSESSING OFFICER INSTE AD OF POINTING OUT FAULT IN THE DOCUMENTARY EVIDENCE REFERRED ALTOGETHER DIFFER ENCE CIRCUMSTANCES AND FACTS. LEARNED FIRST APPELLATE AUTHORITY HAS CONSID ERED ALL THESE ASPECTS ELABORATELY IN THE FINDINGS EXTRACTED SUPRA. ON AN ANALYSIS OF THE RECORD IN THE LIGHT OF THE OBSERVATIONS MADE BY THE LEARNED F IRST APPELLATE AUTHORITY, WE DO NOT SEE ANY REASON TO INTERFERE IN THE WELL R EASONED ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 13.01.2012 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 /01/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR