DCIT, Ghaziabad V. M/s. Hindon Forge (P) Ltd., Ghaziabad

ITA 4678/DEL/2012

• Counselvise Citation: 467820114 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: H G MALIK
• Keywords: Business income
• Section: 154

Judgement Text

ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO S . 665/DEL/2013, 4676 & 4677/DEL/2012 A.YRS. 2003-04, 2006-07 & 2008-09 DY. COMMISSIONER OF INCOME TAX, CIRCLE-I, GHAZIABAD VS. M/S HINDON FORGE PVT. LTD., C/O M/S MALIK & CO., 305/7, THAPAR NAGAR, MEERUT (PAN: AAACH4606E) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) C.O. NO. 351/DEL/2012 & CO NO. 84/DEL/2013 (IN I.T.A. NO. 4677/DEL/2012 ) A.Y. 2008-09 M/S HINDON FORGE PVT. LTD., C/O M/S MALIK & CO., 305/7, THAPAR NAGAR, MEERUT (PAN: AAACH4606E) VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-I, CGO COMPLEX, HAPUR ROAD, GHAZIABAD (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) I.T.A. NO. 4678/DEL/2012 A.Y . 2009 - 10 DY. COMMISSIONER OF INCOME TAX, CIRCLE-I, GHAZIABAD VS. M/S HINDON FORGE PVT. LTD., C/O M/S MALIK & CO., 305/7, THAPAR NAGAR, MEERUT (PAN: AAACH4606E) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 2 AND C.O. NO. 83/DEL/2013 (IN I.T.A. NO. 4678/DEL/2012 ) A.Y . 2009 - 10 M/S HINDON FORGE PVT. LTD., C/O M/S MALIK & CO., 305/7, THAPAR NAGAR, MEERUT (PAN: AAACH4606E) VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-I, CGO COMPLEX, HAPUR ROAD, GHAZIABAD (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. SATPAL SINGH, SR. D.R. ASSESSEE BY : SH. HG MALIK, ADV. DATE OF HEARING : 11.08.2014 DATE OF HEARING : 11.08.2014 DATE OF HEARING : 11.08.2014 DATE OF HEARING : 11.08.2014 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 12 1212 12.08.2014 .08.2014 .08.2014 .08.2014 ORDER ORDER ORDER ORDER PER PER PER PER BENCH BENCH BENCH BENCH THESE 04 APPEALS BY THE REVENUE AND 03 CROSS OBJE CTIONS BY THE ASSESSEE RELATE TO THE ASSESSMENT YEARS 2003-04 , 2006-07, 2008-09, 2009-10. SINCE SOME OF THE ISSUES INVOLVE D IN THESE APPEALS ARE COMMON, WE ARE THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CO NVENIENCE. ASSTT. YEAR 2003 ASSTT. YEAR 2003 ASSTT. YEAR 2003 ASSTT. YEAR 2003- -- -04 0404 04 2. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER PASSED BY THE LD. CIT(A) DATED 30.11.2012 DELETING THE PENALTY IM POSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT IN RELATION TO A SSTT. YEAR 2003.04. ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 3 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RELEVANT RECORDS. IT IS SEEN THAT THE LD. CIT(A) DELETED TH E PENALTY BY CONSIDERING THE ORDER PASSED BY THE TRIBUNAL IN QUA NTUM PROCEEDINGS DELETING THE ADDITIONS, FORMING FOUNDAT ION FOR THE IMPOSITION OF PENALTY. THE LD. AR WAS FAIR ENOUGH T O STATE THAT THE REVENUES APPEAL AGAINST THE TRIBUNAL ORDER IN QUAN TUM PROCEEDINGS FOR ASSTT. YEAR 2003-04 HAS BEEN ACCE PTED BY THE HONBLE HIGH COURT TO THE EXTENT THAT SUCH ORDER HA S BEEN SET ASIDE BY RESTORING THE MATTER TO THE LOWER AUTHORITIES. IN VIEW OF THE FACT THAT THE QUANTUM PROCEEDINGS HAVE COME BACK TO THE LOWER AUTHORITIES, THE LD. AR CANDIDLY ACCEPTED THAT THE INSTANT PENALTY PROCEEDINGS BE ALSO RESTORED. NO OBJECTION WAS RAI SED BY THE LD. DR IN THIS REGARD. IN VIEW OF THE ABOVE STATED FACTS, WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR A FRESH DECISION IN CONSONANCE WITH AND PURSUANT TO THE VIE W TO BE TAKEN BY HIM IN THE QUANTUM PROCEEDINGS ON THE ISSUES ON WHI CH SUCH PENALTY WAS IMPOSED. 4. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 2006 66 6- -- -0 00 07 77 7 5. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORD ER OF THE LD. CIT(A) DATED 15.6.2012. THE GROUND NOS. 1, 2 AND 4 ARE AGAINST THE ORDER HOLDING THAT NOT CREDITING THE EXCISE DUTY RE CEIVABLE TO THE PROFIT AND LOSS ACCOUNT DID NOT CONSTITUTE A RECTI FIABLE MISTAKE AND THEREBY DELETING THE ADDITION OF RS. 96,08,516/- S O MADE BY MEANS OF ORDER PASSED UNDER SECTION 154 OF THE ACT. ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 4 6. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE SHOWED A SUM OF RS. 96.08 LACS TO THE BALANCE SHEET AS EXCISE DUTY RECEIVABLE. THIS AMOUNT WAS NOT CREDITED TO THE PRO FIT AND LOSS ACCOUNT. THE AO PASSED ORDER UNDER SECTION 154 TRE ATING THIS AMOUNT AS ASSESSEES INCOME CHARGEABLE TO TAX. THE LD. CIT(A), FOLLOWING THE VIEW TAKEN BY HIM FOR THE ASSTT. YEAR 2003-04, DELETED THE ADDITION. IN THIS CONNECTION, THE LD. CIT(A) O BSERVED THAT THE ASSESSEE DID NOT CLAIM ANY DEDUCTION AT THE TIME OF PAYMENT OF EXCISE DUTY AND LIKEWISE THE EXCISE DUTY RECEIVABLE WAS ALSO NOT OFFERED FOR TAXATION. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT TH IS ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL FOR THE ASSTT. YEAR 2003-04 AND 2005-06. VIDE ORDER DATED 27.9.2012 IN ITA NO. 1091 AND 1092/DEL/2012, THE TRIBUNAL HAS UPHELD THE VIEW T AKEN BY THE LD. CIT(A) IN DELETING THE ADDITION. A COPY OF SUCH TRI BUNAL ORDER HAS BEEN PLACED AT PAGES 4 TO 12 OF THE PAPER BOOK. THE LD. DR REITERATED THE SUBMISSIONS AS WERE ADVANCED BEFORE THE TRIBUNAL WHILE ARGUING THE APPEALS FOR SUCH EARLIER YEARS. IT IS SEEN THAT THE TRIBUNAL HAS TAKEN A DECISION ON THIS ISSUE IN ASSE SSEES FAVOUR AFTER HEARING THE LD. DR. ADMITTEDLY THE FACTS FOR THE I NSTANT YEAR ARE IDENTICAL AND NO DIFFERENTIATION IN THE FACTS OR LE GAL POSITION HAS BEEN BROUGHT TO OUR NOTICE BY THE LD. DR. RESPECTF ULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORDER ON THIS SC ORE. THESE GROUNDS ARE NOT ALLOWED. 8. THE ONLY OTHER GROUND WHICH SURVIVES FOR OUR CON SIDERATION IS GROUND NO. 3 WHICH IS ABOUT THE DELETION OF ADDITIO N PURSUANT TO VARIATION IN THE FIGURES OF SALES AS PER THE TRADIN G ACCOUNT AND AS ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 5 PER THE SALES TAX ORDER. THE FACTS APROPOS THIS GR OUND ARE THAT THE ASSESSEE COMPANY HAD SHOWN TOTAL SALES INCLUDING EX PORT AND DOMESTIC SALES AT RS. 147060415/- IN ITS PROFIT AND LOSS ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE FILED MONTH-WISE DETAILS OF TOTAL SALES WHICH SUMMED UP T O RS. 153064877/-. THE ASSESSEE WAS CALLED UPON TO EXPL AIN THE DIFFERENTIAL AMOUNT OF RS. 6004462/-. IN THE ABSEN CE OF THE ASSESSEE FURNISHING ANY EXPLANATION TO RECONCILE THE DIFFERE NCE OR TENDERING ANY REPLY, THE AO MADE ADDITION OF RS. 60.04 LACS. THE LD. CIT(A) WAS PLEASED TO DELETE THIS ADDITION BY RELYING ON S OME CALCULATION WHICH IS NOW PLACE AT PAGE 13 OF THE PAPER BOOK. 9. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE AO HAS R ECORDED A CATEGORICAL FINDING THAT THE ASSESSEE DID NOT FURNI SH ANY EXPLANATION ABOUT THE DIFFERENCE IN THE FIGURES OF TURNOVER INC LUDED IN THE ANNUAL ACCOUNTS AND MONTH-WISE DETAILS FURNISHED DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. PAGE 13 OF THE PAPER BOOK RECONCILING THE TWO FIGURES APPEARS TO HAVE BEEN PLACED BEFORE THE LD. CIT(A) FOR THE FIRST TIME. IT CAN BE SEEN FROM THE IMPUGNED ORDER THAT THE LD. CIT(A) DID NOT CALL UPON FOR ANY REMAND REPORT FROM THE AO. IN OUR CONSIDERED OPINION, THE ENDS OF JUSTICE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER ON THIS SCORE IS SET ASIDE AND THE M ATTER IS RESTORED TO THE FILE OF THE AO. WE ORDER ACCORDINGLY AND DIRECT HIM TO DECIDE THIS ISSUE AFRESH IN LIGHT OF THE DETAILS TO BE FUR NISHED BY THE ASSESSEE RECONCILING THE TWO FIGURES. 10. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 6 ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 2008 88 8- -- -0 00 09 99 9 11. THE REVENUE HAS FILED THE APPEAL AGAINST THE OR DER PASSED BY THE LD. CIT(A) ON 14.6.2012. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST THE ORDER OF THE LD. FIRST APPEL LATE AUTHORITY. IT CAN BE SEEN THAT THE ASSESSEE FILED CROSS OBJECTION TWICE, WHICH HAVE BEEN NUMBERED AS CO NO. 351/DEL/12 AND CO NO. 84/DEL/13. ADMITTEDLY, BOTH THE CROSS OBJECTIONS HAVE SIMILAR GROUNDS. IT APPEARS THAT THE CROSS OBJECTION HAS BEEN INADVERTE NTLY FILED IN DUPLICATE. AS SUCH CROSS OBJECTION NO. 84/DEL/2013 IS DISMISSED AS INFRUCTUOUS AND CROSS OBJECTION NO. 351/DEL/2012 WI LL BE TAKEN FOR OUR DECISION ON MERITS. 12. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS AP PEAL IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITI ON ON ACCOUNT OF EXCISE DUTY SHOWN BY THE ASSESSEE AS RECEIVABLE WHI CH WAS NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT. BOTH THE S IDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THIS GROUND ARE SIMILAR TO THOSE FOR ASSTT. YEAR 2006-07. FOLLOWIN G THE VIEW TAKEN HEREINABOVE, WE UPHOLD THE IMPUGNED ORDER IN DELETI NG THE ADDITION ON ACCOUNT EXCISE DUTY SHOWN AS RECEIVABLE BUT NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT. 13. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESS EE IN ITS CROSS OBJECTION IS AGAINST CONFIRMATION OF DISALLOWANCE O F RS. 2.60 LACS OUT OF THE EXPENSES ON AD HOC BASIS. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE CLAIMED TOTAL EXPENSE S OF RS. 3908781. THE AO OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE COULD NOT PRODUCE CE RTAIN BILLS / VOUCHERS OF THE AMOUNTS CLAIMED UNDER THE HEADS ADV ERTISEMENT EXPENSES, CONVEYANCE, FURNACE REPAIRS, OFFICE MAINT ENANCE, ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 7 PACKING AND FORWARDING EXPENSES, PRINTING AND STATI ONERY, TRAVELING EXPENSES, VEHICLE RUNNING AND MAINTENANCE, FREIGHT AND CARRIAGE ETC.. ON ACCOUNT OF THIS DEFECT, THE AO MADE A LUM P SUM DISALLOWANCE OF RS. 2.60 LACS. THE LD. CIT(A) ECHO ED THE SAME. 14. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, IT IS FOUND AS AN UNDI SPUTED POSITION THAT CERTAIN EXPENSES CLAIMED BY THE ASSESSEE WERE NOT BACKED BY PROPER EVIDENCE. WHEN WE CONSIDER THE TOTAL AMOUNT OF EXPENSES CLAIMED AS DEDUCTION BY THE ASSESSEE TO THE TUNE OF RS. 39.08 LACS AND THE AMOUNT DISALLOWED ON AD HOC BASIS RS. 2.60 LACS, WE FIND THAT SUCH ESTIMATE OF DISALLOWANCE AS REASONABLE. WE THEREFORE, UPHOLD THE IMPUGNED ORDER ON THIS SCORE. 15. IN THE RESULT, THE APPEAL BY THE REVENUE AND TH E CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 200 ASSTT. YEAR 2009 99 9- -- -10 1010 10 16. THE ONLY ISSUE RAISED BY THE REVENUE IN ITS APP EAL IS AGAINST THE ADDITION ON ACCOUNT OF EXCISE DUTY SHOWN AS REC EIVABLE FROM THE GOVERNMENT WHICH WAS NOT CREDITED TO THE PROFIT AND LOSS ACCOUNT. BOTH SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRC UMSTANCES OF THE GROUNDS RAISED BY THE REVENUE ARE MUTATIS MUTANDIS SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09. FOLLOWING THE VIEW TAKEN HEREINABOVE, WE APPROVE THE DECISION TAK EN BY THE LD. CIT(A) IN DELETING THE ADDITION ON THIS SCORE. 17. THE ONLY ISSUE RAISED BY THE ASSESSEE IN ITS CR OSS OBJECTION IS AGAINST CONFIRMATION OF DISALLOWANCE OF RS. 3.50 LA CS OUT OF EXPENSES ON AD HOC BASIS. HERE AGAIN, WE FIND THAT THE FACTS AND CIRCUMSTANCES ARE SIMILAR TO THOSE FOR ASSTT. YEAR 2008-09. THE ONLY ITA NOS. 665/DEL/2013, 4676-4677/DEL/2012& CO NO. 351/DEL/2012, CO NO. 84/DEL/13; 4678/DEL/12 & CO NO. 83/DEL/13 8 DISTINGUISHING FEATURE IS THAT THE QUANTUM OF EXPEN SES CLAIMED AS DEDUCTION BY THE ASSESSEE IN THIS YEAR STANDS AT RS . 31.53 LACS AGAINST WHICH THE DISALLOWANCE OF EXPENSES HAS BEEN SUSTAINED AT RS. 3.50 LACS. CONSIDERING THE TOTALITY AND FACTS AND CIRCUMSTANCES AND VIEW TAKEN BY US FOR THE PRECEDING YEAR, WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE OF EXPENSE S SHOULD BE SUSTAINED AT THE SAME PERCENTAGE AS WAS THERE FOR T HE PRECEDING YEAR. ACCORDINGLY, THE DISALLOWANCE IS REDUCED TO RS. 2.09 LACS AS AGAINST RS. 3.50 LACS SUSTAINED IN THE FIRST APPEAL . THUS, THE ASSESSEE GETS RELIEF OF RS. 1.41 LACS. 18. IN THE RESULT, THE REVENUE APPEAL IS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/8/2014. SD/- SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] [ [[ [R. S. SYAL ] R. S. SYAL ] R. S. SYAL ] R. S. SYAL ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 12/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES