STANDARD TIN WORKS P.LTD, MUMBAI V. DCIT 10(1), MUMBAI

ITA 4852/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0674 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-08-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 24-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Revised return
• Section: 142(1); 115JB; 194C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH , JM I.T.A. NO S . 4852 /M/ 20 1 2 & 4853 /M/201 2 ASSESSMENT YEAR S : 2006 - 07 & 2007 - 08 ) M/S. STANDARD TIN WORKS PVT. LTD. 5, AMAR APARTMENT, OPP. KAMANI ENGINEERING, L.B.S. MARG, KURLA. MUMBAI. VS. DCIT 10(1), AAYKAR BHAVAN, CHURCHGATE, MUMBAI. ./ ./ PAN/GIR NO. : AAECS 1544 E ( APPELLANT ) .. ( RESPONDENT ) DATE OF HEARING : 29.11 .2017 DATE OF PRONOUNCEMENT : 17.01. 2018 O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE ABOVE MENTIONED APPEA LS AGAINST THE DIFFERENT ORDER PASSED BY THE COMMIS S IONER OF INCOME TAX (APPEALS) - 21 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR S 20 06 - 07 & 2007 - 08 . ITA NO.4852 /M/201 2 : - 2. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 25.04.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 21, ASSESSEE BY: NONE DEPARTMENT BY: SHRI V. JUSTIN (DR) ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEARS 2006 - 07 . 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 THE LD. AO HAS ERRED IN ISSUING THE NOTICE UNDER SECTION 148 OF THE I .T. ACT, 1961 AND THERE WAS NO REASON FOR THE REOPENING OF THE ASSESSMENT WAS RECORDED, AND WITHOUT PREJUDICE, THE LD. AO H AS ASSESSED BEYOND ITS JURISDICTION AND THE SAME IS TO BE TREATED AS BAD IN LAW, AB INITIO AND THE SAID ORDER IS NOT MAINTAINABLE. B ) THE LD. CIT(A) HAS ERRED IN UPHELD THE ACTION TAKEN BY AO U/S 148 OF THE I.T. ACT, 1961. C) THE REOPENED THE ASSESSMENT BY LD. AO ITSELF IS BAD IN LAW AND NOT BINDING UPON THE APPELLANT. 2A) THE LD. AO HAS ERRED IN DISALLOWED DEPRECIATION OF RS.4,74,836/ - BEING 15% OF THE DEPRECIATION AMOUNT CLAIMED ON 31,65,573/ - ON THE GROUND THAT APPELLANT COULD NOT SUBMIT THE DETAILS OF DIFFERENCE IN ADDITION TO ASSET OF RS.53,30,313/ - . B) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SAID ADDITION OF DEPRECI ATION INSPITE OF APPELLANT HAS SUBMITTED THE DETAILS OF DIFFERENCE AND THE SAME HAS BEEN UPHELD ON THE GROUND THAT CAPITALIZATION OF THE INTEREST IS NOT APPEARING ANYWHERE. 3.THE LD. AO HAS ERRED IN MAKING ADDITION OF RS.1,19,890/ - TOWARDS THE DIFFERENCE O F 15% OF VALUE OF STOCK WHICH WAS UPHELD BY CIT (A). 4. THE APPELLANT CRAVES TO ADD, ALTER, AMEND THE AFORESAID GROUND OF APPEAL AS AN WHEN REQUIRED. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31 . 12 .20 06 DECLARING LOSS TO THE TUN E OF RS.16,64,272/ - . THEREAFTER THE ASSESSEE FILED THE REVISED RETURN ON 29.03.2007 DECLARING LOSS TO THE TUNE OF RS.1,99,005/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961 ON 21.12.2007 ACCEPTING THE SAID LOSS TO THE TUNE OF RS.1,99,005/ - . THEREAFTER, THE NOTICE U/S 148 OF THE ACT DATED 22.04.2009 WAS ISS UED AND THE ASSESSEE WAS DIRECTED TO FURNISH ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 3 THE RETURN OF INCOME WITHIN THE PERIOD OF 30 DAYS . T HE NOTICE WAS SERVED. IN RESPONSE TO THE NOTICE THE ASSESSEE FILED THE REPLY B Y VIRTUE OF THE LETTER DATED 10.08.2009 STATING THAT THE RETURN OF INCOME FILED ON DATED 29.03.2007 MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE SAID NOTICE. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WAS INTIMATED TO ASSESSEE COMPANY VIDE LE TTER DATED 11.08.2009. NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ALSO ISSUED ON 11.08.2 009. THE ASSESSEE DID NOT RAISE ANY OBJECTION TO THE NOTICE U/S 148 OF THE I.T. ACT, 196 1, T HEREFORE, THE OBJECTION WAS NOT DISPOSE OF F. T HE ASSESSEE DISALLOWANCE U/S 40(A)(IA) OF THE ACT IN RESPECT O F NON - COMPLIANCE OF PROVISIONS U/S 194C OF THE ACT WAS MADE AT RS.8,52,675/ - WHEREAS, THE D ISALLOWANCE AS PER FORM NO. 3CD AMOUNT WAS TO THE TUNE OF RS. 8,88,895/ - . THE DIFFERENCE TO THE TUNE OF RS.36,220/ - WAS NOT EXPLAI NED, THEREFORE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. ON PERUSAL OF THE STATEMENT OF FIXED ASSETS AND DEPRECIATION AS PER THE BOOKS AND AS PER THE ACT, IT WAS FOUND THAT THE TOTAL ADDITION TO THE FIXED ASSETS AS PER THE BOOKS OF ACCOUNT WAS TO THE TUNE OF RS. 2,99,32,280/ - WHEREAS THE AMOUNT WAS ADDITION AS PER STATEMENT NO. 3 OF FORM NO. 3CD AMOUNTS TO THE TUNE OF RS. 3,52,62,593/ - . T HE DIFFERENCE TO THE TUNE OF RS.53,30,313/ - WAS BROUGHT INTO NOTICE TO THE ASSESSEE. THE ASSESSEE EXPLAINED THAT T HE DIFFERENCE WAS DUE TO THE INTEREST ON CAPITAL WORK IN PROGRESS WHICH WAS ADDED TO THE ASSETS IN DEPRECIATION STATEMENT AS PER INCOME TAX ACT BUT NOT GIVEN EFFECT IN THE BOOKS OF ACCOUNT. THE DIFFERENCE WAS NOT EXPLAINED, THEREFORE, ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 4 15% OF THE DEPRECIAT ION TO THE TUNE OF RS.3 1,6 5 , 573 / - TOTAL TO THE TUNE OF RS.4,74,836/ - WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. THE CLOSING STOCK OF FINISHED GOODS OF RS.6,79,375/ - WHICH WAS VALUE @ 85% OF THE MARKET VALUE. THE ASSESSEE DID NOT ADOPT THE VALU ATION AS AGAINST THE ACCOUNTING STANDARDS PROVIDING TO VALUE THE STOCK AT COST OR NET REALIZABLE VALUE WHICH IS LOWER. THEREFORE, 15% I.E., TO THE TUNE OF RS.1,19,890/ - WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. AS PER FORM NO. 3CD, THE UNUTIL IZED MODVAT CREDIT AS ON 31.03.2007 WAS TO THE TUNE OF RS.2,20,151/ - WHICH WAS ALSO NOT EXPLAINED, THEREFORE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE FAILED TO PAY THE SUM TO THE TUNE OF RS.67,588/ - ON ACCOUNT OF EMPLOYEES CONTRIBUTION PROVIDENT FUND , THEREFORE, THE SAID SUM TO THE TUNE OF RS.67,588/ - WAS TAXED AN INCOME FROM OTHER SOURCES. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.6,52,090/ . T HE COMPUTATION OF BOOK PROFIT U/S 115JB OF THE ACT WAS ASSES SED IN LOSS TO THE TUNE OF RS.84,55,459/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) BUT THE CIT(A) DISALLOWED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF DEPRECIATION AND VALUATION OF STOCK, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO S .1 TO 3 : - 5 . WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. ISSUE NO. 1 IS CONNECTION WITH THE CHALLENGING THE ORDER U/S 148 OF THE I.T. ACT, 1961 ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 5 WHEREAS THE ISSUE NO. 2 AND 3 ARE ON MERITS IN WHICH THE ASSESSEE CHALLENGED THE DISALLOWANCE OF DEPRECIATION @ 15% OF UNEXPLAINED ASSETS TO THE TUNE OF RS.31,65,573/ - AND TOWARDS THE DIFFERENCE OF VALUATION OF STOCK TO THE TUNE OF RS.1,19,890/ - . THE ASSESSEE WAS NOT APPEARING BEFORE US DESPITE NOTICE. THE ASSESSEE DID NOT CHALLENGE THE NOTICE U/S 148 OF THE I.T. ACT AT THE TIME OF INITIATION BEFORE THE AO. NO MATERIAL OF ANY KIND HAS BEEN PRODUCED BEFORE US. EVEN ON MERITS NOTHING WAS PRODUCED BEFORE US. NO EVIDENCE OF ANY KIND HAS BE EN PRODUCED BEFORE US TO SUBSTANTIATE THE CLAIM. SINCE ON THE ABOVE SAID ALL THE ISSUES NOTHING WAS PRODUCED NOR APPEARED BEFO RE US, T HEREFORE, IN THE SAID CIRCUMSTANCES, WE FIND NO GROUND TO INTERFERE WITH THE FINDING OF THE CIT(A) IN QUESTION. ACCORDINGL Y, WE DECIDE THESE ISSUES ARE IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. IN RESULT, APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE DISMISSED. I TA NO.4853 /M/201 2 : - 6 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 25.04.2012 PAS SED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 21, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEARS 2007 - 08. 7 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.1,28,990/ - BEING 15% OF THE DIFFERENCE OF THE VALUE OF CLOSING STOCK, WHICH IS UPHELD BY COMMISSIONER OF INCOME TAX (APPEAL) ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 6 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION BY DISALLOWING THE DEPRECIATION CLAIMED TO THE EXT ENT OF 15% OF THE WDV OF RS.26,90,747/ - WHICH IS BEING PART OF THE PLANT & MACHINERY, WHICH WAS NOT CONSIDERED ON THE BASIS OF THE ASSESSMENT YEAR 2006 - 07 ON ACCOUNT OF INCOMPLETE AND UNRECONCILED OF THE ADDITION OF THE ASSETS, THE LEARNED COMMISSIONER (AP PEAL) HAS ERRED IN UPHELD THE ACTION TAKEN BY ASSESSING OFFICER UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. 3. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.2,18,000/ - TOWARDS THE EXCISE DUTY IRREVOCABLE DEBITED TO PROFIT & LOSS A CCOUNT, AND LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN UPHELD THE ADDITION MADE BY ASSESSING OFFICER. 4. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING THE ADDITION OF RS.1,14,697/ - BY CONSIDERING THE EXCESS INTEREST CLAIMED. THE LEARNED A SSESSING OFFICER HAS ERRED IN DISALLOWING THE SAID INTEREST WITHOUT CONSIDERING THE CIRCUMSTANCES AND SITUATION OF LOANS BORROWED BY THE APPELLANT, AND LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN UPHELD THE ADDITION MADE BY ASSESSING OFFICER. 5. THE LD. AO HAS ERRED IN MAKING, THE ADDITION OF RS.6996/ - CREDITED TO PROFIT & LOSS ACCOUNT TOWARDS THE INTEREST OF INCOME TAX REFUND AND CONSIDERED THE INCOME FROM OTHER SOURCES, AND NOT TREATED AS INCOME FROM BUSINESS, AND LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) HAS ERRED IN UPHELD THE ADDITION MADE BY AO. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE FOREGOING OF THIS APPEAL AS AND WHEN REQUIRED. 8 . THE FACTS OF THE PRESENT CASE ARE THE SAME AS MENTIONED IN TH E ABOVE IN THE APPEAL NO 4852 /M/201 2 . HOWEVER , THE FIGURE IS DIFFERENT. THEREFORE THERE IS NO NEED TO REPEAT THE SAME. ISSUE NOS . 1 TO 5 : - 9 . ON A LL THE ISSUES THE ASSESSEE FAILED TO BRING THE EVIDENCE OF ANY KIND ON RECORD. THE ASSESSEE DID NOT APPEAR BEFORE US DESPITE SERVICE OF NOTICE. NO DISTINGUISHABLE MATERIAL WAS FOUND ON RECORD TO ITA NO S . 4852 /MUM/201 2 4853/MUM/2012 A.Y. 2006 - 07 & 2007 - 08 7 SUBSTANTIATE THE CLAIM OF THE ASSESSEE, T HEREFORE, IN VIEW OF THE SAID CIRCUMSTANCES, WE FOUND NO GROUND INTERFERE WITH THE FINDING OF THE CIT(A) ON ALL THE ISSUES, THEREFORE, ALL THE ISSUES ARE DECIDED IN FAVOUR OF THE REVENUE AGAINST THE ASSESSEE. IN THE RESULT , ALL THE APPEALS FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE DISMISSED . ORDER P RONOUNCED IN THE OPEN COURT ON 17. 01. 201 8 SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 17. 01 . 2018 V IJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI