M/s Garg Duples & Paper Mills Pvt. Ltd., Muzaffarnagar V. ACIT, Muzaffarnagar

ITA 4354/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4294 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 28-11-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Opportunity of being heard
• Section: 143(3); 234B; 115JB; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 4354/DEL/2016 ASSESSMENT YEAR: 2012-13 GARG DUPLES & PAPER MILLS PVT LTD. VS. ACIT, CIRCL E-1 8 TH K.M. STONE MUZAFFARNAGAR BHOPA ROAD, MUZAFFARNAGAR (PAN: AABCG1393C) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. ANKIT GUPTA, ADV. REVENUE BY : MS. ASHIMA NEB, SR. DR. ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 25.5.2016 PASSED BY THE LD. CIT(A), MUZAFFARNAGAR R ELATING TO ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL READ AS UNDER:- 1. THAT ASSESSMENT ORDER PASSED U/S 143(3) BY THE ASSESSING OFFICER IS ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION AND THE CIT(A) HAS ALSO ERRED IN UPHOLDING THE SAME. 2. THE ADDITION/DISALLOWANCES MADE BY THE ASSESSING OFFICER ARE ILLEGAL, UNJUST, HIGHLY EXCES SIVE AND ARE NOT BASED ON ANY MATERIAL ON RECORD BY THE 2 ASSESSING OFFICER. THE TOTAL INCOME OF THE ASSESSEE APPELLANT HAS BEEN WRONGLY AND ILLEGALLY COMPUTED BY THE ASSESSING OFFICER ON AT RS.43,15,620.00 AS AGAINST DECLARED INCOME OF RS.30,13,232.00. 3. THAT, THE ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OFRS.12,390.00 TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF DIFFERENCE IN CLOSING BALANCE, WHICH IS HIGHLY ARBITRARY, UNJUSTIFIED AND AGAINST FACTS OF THE CASE. THE CIT (A) HAS ERRED IN UPHOLDING THE SAME. 4. THE ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITIONAL DISALLOWANCE OF RS.2,10,000.00 ON ACCOUNT OF VARIOUS EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT TO THE INCOME OF THE ASSESSEE COMPANY WITHOUT APPRECIATING THE FACT. THE CIT (A) HAS ERRED IN UPHOLDING THE SAME. 5. THE ADDITIONS MADE AND THE OBSERVATIONS MADE ARE UNJUST, UNLAWFUL AND BASED ON MERE SURMISES AND CONJUNCTURES. THE ADDITIONS MADE CANNOT BE JUSTIFIED BY ANY MATERIAL ON RECORD. 6. THAT THE EXPLANATION GIVEN EVIDENCE PRODUCED, MATERIAL PLACED AND AVAILABLE ON RECORD HAS NOT BEEN PROPERLY CONSIDERED AND JUDICIALLY INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIONS/ ALLOWANCES MADE. 7. THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND ORDER PASSED BY CIT(A) ARE AGAINST THE PRINCIPLES OF NATURAL JUSTIC E 3 AND THE SAME HAS BEEN PASSED WITHOUT AFFORDING REASONABLE AND ADEQUATE OPPORTUNITY OF BEING HEARD. 8. THAT THE INTEREST U/S 234B & 234C HAS BEEN WRONGLY AND ILLEGALLY CHARGED AS THE APPELLANT COUL D NOT HAVE FORESEEN THE DISALLOWANCES/ADDITIONS MADE AND COULD NOT HAVE INCLUDED THE SAME IN CURRENT INCOME FOR PAYMENT OF ADVANCE TAX. THE INTEREST CHARGED UNDER VARIOUS SECTIONS IS ALSO WRONGLY WORKED OUT. 9. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND OR MODIFY THE GROUNDS OF APPEAL OF THE SAID APPEAL. ALL OF THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE AND ARE MUTUALLY EXCLUSIVE TO EACH OTHER. 3. THE BRIEF FACTS OF THE CASE ARE THAT E-RETURN OF INCOME WAS FILED ON 21.9.2012 DEPICTING TOTAL INCOME OF RS.30, 13,230/- AS PER NORMAL PROVISIONS OF THE I.T. ACT, 1961. HOWEVER H IGHER TAX WAS PAID U/S. 115JB AT BOOK PROFIT OF RS. 51,73,330/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 29.3.2014. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND AN INITIAL ST ATUTORY NOTICE U/S. 143(2) OF THE I.T. ACT WAS ISSUED ON 6.8.2012. IN R ESPONSE TO STATUTORY NOTICES, THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE DETAILS. DURING THE YEAR UNDE R CONSIDERATION, THE ASSESSEE COMPANY REMAINED ENGAGED IN THE BUSINE SS OF 4 MANUFACTURING & TRADING ACTIVITIES OF KRAFT (PACKI NG) PAPER AND MEDIA PAPER AS DEPICTED IN THE COMPUTATION OF INC OME ALSO. THE AO OBSERVE THAT DURING THE COURSE OF ASSESSMENT PROCE EDINGS, NOTICES U/S. 133(6), INTER ALIA, HAS BEEN ISSUED TO M/S ABH INANDAN PERSHAD & BROS. ON EXAMINATION OF THE COPY OF ACCOUNT AS OB TAINED FROM THE SAID CONCERN, DIFFERENCE OF RS. 12,390/- IN THE CLO SING BALANCE WAS NOTICE. VIDE ORDER SHEET ENTRY DATED 4.3.2015, THE SAID DIFFERENCE IN CLOSING BALANCES HAS BEEN CONFRONTED TO THE AR OF THE ASSESSEE AND A COPY OF THE SAID OBTAINED ACCOUNT HAS ALSO BE EN GIVEN TO HIM. IN RESPONSE TO THE SAME, IN RELY DATED 5.3.2015 OF THE ASSESSEE, IT IS MERELY SUBMITTED THAT THE SAID DIFFERENCE IS PE TTY ONE, MAY BE DUE TO OVERSIGHT CLERICAL MISTAKE. SINCE, THE DIFF ERENCE IS REMAINED TO RECONCILED, THE SAID DIFFERENCE AMOUNT OF RS. 12 ,390/- WAS BROUGHT TO TAX. FURTHER, ON ACCOUNT OF VARIOUS EXP ENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT, THE AO HAD MADE ADDIT ION OF RS. 2,10,000/- ON ACCOUNT OF VARIOUS EXPENSES BEING UNV ERIFIABLE. THE ASSESSEE HAS SUBMITTED THAT IT HAS MAINTAINED PROP ER AUDITED BOOKS OF ACCOUNT SUPPORTED BY BILLS/ VOUCHERS AND T HE AO HAS MADE THE DISALLOWANCE ON SURMISES AND CONJECTURES WITHOU T FINDING ANY SPECIFIC DEFECT. HOWEVER, ON GOING THROUGH THE A SSESSMENT ORDER THE AO HAS NOTED THAT THE SUPPORTING BILLS / VOUCHE RS PRODUCED BY THE ASSESSEE BEFORE THE AO WERE DEFECTIVE, HENCE, ADDITION WAS 5 MADE BY ASSESSING THE INCOME AT RS. 43,15,620/- A ND TAX ON INCOME AS PER NORMAL PROVISIONS OF THE ACT IS HIGHE R THAN THAT OF INCOME U/S. 115JB OF THE ACT. ACCORDINGLY, TAX IS CHARGEABLE ON INCOME OF RS. 43,15,620/- VIDE ORDER DATED 23.3.201 5 PASSED U/S. 143(3) OF THE ACT. 4. AGAINST THE ASSESSMENT ORDER DATED 23.3.2015, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGN ED ORDER DATED 25.5.2016 HAS PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE AND CONFIRMED THE ADDITION OF RS. 12,390/- ON ACCOUNT O F DIFFERENCE IN CLOSING BALANCE AND RS. 2,10,000/- ON ACCOUNT OF VA RIOUS EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT. AGGRIEVED WITH THE IMPUGNED ORDER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL OF THE ASSESSEE STATED THAT LOWER A UTHORITIES HAVE WRONGLY MADE THE ADDITIONS OF RS. 12,390/- ON ACCOU NT OF DIFFERENCE IN CLOSING BALANCE AND RS. 2,10,000/- ON ACCOUNT OF VARIOUS EXPENSE DEBITED TO PROFIT AND LOSS ACCOUNT OF THE INCOME OF THE ASSESSEE COMPANY WITHOUT APPRECIATING THE FACT AND BASED ON MERE SURMISES AND CONJECTURES, WHICH ARE NOT TENABLE IN THE EYES OF LAW AND NEEDS TO BE DELETED. 6. ON THE CONTRARY, LD. DR HEAVILY RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES AND STATED THAT BOTH THE LOWE R AUTHORITIES HAVE 6 PASSED A WELL REASONED ORDER, WHICH DOES NOT NEED ANY INTERFERENCE. HENCE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 7. I HAVE HEARD THE RIVAL CONTENTIONS AND CONSIDE RED THE WRITTEN SUBMISSIONS FILED BY BOTH THE PARTIES AND THE ORDER S OF THE AUTHORITIES BELOW. 7.1 I FIND THAT IN THIS CASE THE AO HAD MADE ADDITI ON OF RS.12,390/- ON ACCOUNT OF NON-RE-CONCILATION OF CL OSING BALANCE OF M/S ABHINAND PRASAD & BROTHERS AND DURING THE APPE LLATE PROCEEDINGS, THE REPLY OF THE ASSESSE HAS BEEN VAGU E AND NON- SPECIFIC. IT WAS NOTED THAT THE ASSESSE COULD NOT R ECONCILE THE CLOSING BALANCE AS PER BOOKS OF ACCOUNT AND AS INTI MATED ULS 133(6) BY THE ABOVE ENTITY, ACCORDINGLY ADDITION OF RS.12, 390/- WAS RIGHTLY CONFIRMED BY THE LD. CIT(A), WHICH DOES NOT NEED AN Y INTERFERENCE ON MY PART, HENCE, I UPHOLD THE FINDING OF THE LD . CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY TH E REVENUE. 7.2 I FURTHER FIND THAT AGAINST THE DISALLOWANCE O F RS. 2,10,000/- ON ACCOUNT OF VARIOUS EXPENSES DEBITED TO THE PROFI T & LOSS ACCOUNT, THE AO HAD MADE ADDITION OF RS. 2,10,000/- ON ACCOU NT OF VARIOUS EXPENSES BEING UNVERIFIABLE AND THE BILLS PRODUCED BEFORE THE AO WERE DEFECTIVE. IT WAS NOTED THAT AO HAS MADE THE A DDITION BY FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OW N CASE FOR AY 7 2009-10, HENCE, LD. CIT(A) RIGHTLY CONFIRMED THE AD DITION OF RS.2,10,0000/-, WHICH DOES NOT NEED ANY INTERFERENC E ON MY PART, HENCE, I UPHOLD THE FINDING OF THE LD. CIT(A) ON TH E ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 04/05/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 04/05/2018 COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES