VALIANT GLASS WORKS P. LTD, MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 5076/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8541 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 17-10-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 17-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH MEENA
• Keywords: Search and seizure; Opportunity of being heard
• Section: 143(3); 80HHC; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI D. KARUNAKARA RAO (A.M.) ITA NO. 5076/MUM /2010 ASSESSMENT YEAR : 2003-04 M/S VALIANT GLASS WORKS PVT. LIMITED, C/O SHANKARLAL JAIN & ASSOCIATES, 12, ENGINEER BUILDING, 265, PRINCESS STREET, MUMBAI 400 002. PAN AAACV1224E VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 39, MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI S.L. JAIN DEPARTMENT BY : SHRI OM PRAKASH MEENA DATE OF HEARING 17-10-2012 DATE OF PRONOUNCEMENT 19-10-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DTD. 21-05-2010 PASSED BY THE LD. CIT(A) 41, MUMB AI FOR THE A.Y. 2003-04. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BLEACHING OF FABRICS AND ITS EXPORT. THE ORIGINAL ASSESSMENT WAS COMPLETED AT AN INCOME OF R S. 1,63,79,023/- VIDE ORDER DTD. 29-3-2006 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 ITA NO. 5076/MUM/2010 2 (THE ACT). SUBSEQUENTLY A SEARCH AND SEIZURE OPERAT ION U/S 132 OF THE ACT WAS CARRIED OUT ON 10-10-2007 AT THE BUSINESS AND R ESIDENTIAL PREMISES OF JIMTEX GROUP AND ITS GROUP ASSOCIATES INCLUDING THE DIRECTORS/PARTNERS. THE ASSESSEE IS ONE OF THE GRO UPS OF THE SAID GROUP. IN RESPONSE TO THE NOTICE ISSUED U/S 153A, THE ASSE SSEE FILED RETURN DECLARING INCOME OF RS. 88,16,140/-. HOWEVER THE AS SESSMENT WAS COMPLETED AT AN INCOME OF RS. 1,63,79,020/- INCLUDI NG THE DISALLOWANCE OF DEDUCTION U/S 80HHC OF THE ACT RS. 75,12,882/- A ND ADDITION MADE ON ACCOUNT OF WASTE RS. 50,000/- VIDE ORDER DTD. 22 -12-2009 PASSED U/S 143(3) R.W.S. 153A OF THE ACT. THE ASSESSEE PREFERR ED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) WHILE AGREEING WITH THE VIE WS OF THE A.O. UPHELD THE DISALLOWANCE/ADDITION MADE BY THE A.O. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US. 4. GROUND NO. 1 IS AGAINST THE SUSTENANCE OF ADDITI ON OF RS. 50,000/- MADE ON ACCOUNT OF WASTE. 5. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT WHILE CO MPLETING THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT, THE A.O. ON THE B ASIS OF MATERIAL IMPOUNDED DURING THE COURSE OF SURVEY MADE AN ADDIT ION OF RS. 50,000/- ON ACCOUNT OF SALE OF WASTE NOT FOUND RECORDED IN T HE REGULAR BOOKS OF ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS U/S 153A ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAME AD DITION SHOULD NOT BE ITA NO. 5076/MUM/2010 3 MADE. NO FRESH MATERIAL HAS BEEN FURNISHED BY THE ASSESSEE FOR THE SATISFACTION OF THE A.O. AS SUCH THE A.O. MADE AN ADDITION OF RS. 50,000/- BEING CASH SALES ON ACCOUNT OF WASTE GENER ATED DURING THE COURSE OF MANUFACTURING PROCESS WHICH WAS UPHELD BY THE LD. CIT(A). 6. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE SUBMITS THAT THE TRIBUNAL, IN ASSESSEES OWN CASE, IN THE F IRST ROUND OF PROCEEDING VIDE PARA 11 OF THE ORDER HAS REDUCED THE ADDITION TO RS. 20,000/-. HE, THEREFORE, SUBMITS THAT HE HAS NO OBJECTION IF THE ADDITION IS REDUCED TO RS. 20,000/-. HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL. 7. ON THE OTHER HAND, THE LD. D.R. SUPPORTS THE ORD ER OF THE A.O. AND LD. CIT(A). 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT IN THE ORIGINAL ASSESSMENT THE A.O. HAD MADE AN ADDITION OF RS. 50, 000/- ON ACCOUNT OF WASTE GENERATED DURING THE COURSE OF MANUFACTURING PROCESS. ON APPEAL THE LD. CIT(A) UPHELD THE SAME. ON FURTHER APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL HELD THAT REASONABLE ESTIMATE COULD BE AT RS. 20,000/- INSTEAD OF RS. 50,000/- CONFIRMED BY THE LD. CIT(A) . IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE PARTIES, WE RESPECTFULLY FOLLOWING THE SAME VIEW UPHELD THE ADD ITION OF RS. 20,000/- ITA NO. 5076/MUM/2010 4 AND DELETE THE BALANCE AMOUNT OF RS. 30,000/-. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. 9. GROUND NO. 2 IS AGAINST THE DISALLOWANCE OF DEDU CTION U/S 80HHC ON DEPB LICENCE. 10. BRIEF FACTS OF THE ABOVE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDING, IT WAS SUBMITTED BY THE ASSESSEE THAT I N VIEW OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TOPMAN EXPO RTS VS. ITO (2009) 318 ITR (AT) 87 (MUMBAI) [SB] DEDUCTION U/S 80HHC O N ACCOUNT OF DEPB IS ALLOWABLE. HOWEVER, THE A.O. WHILE OBSERVI NG THAT THE SAID DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D THE SAME SUB- JUDICE, DISALLOWED U/S 80HHC OF THE ACT ON DEPB WHI CH WAS ALSO CONFIRMED BY THE LD. CIT(A). 11. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN THE FIR ST ROUND OF PROCEEDING IN THE ORDER PASSED IN M.A. NO. 166/MUM/2012 FOR A. Y. 2003-04 ARISING OUT OF ITA NO. 858/MUM/2007 ORDER DTD. 5-9-2012 SET ASIDE THE ISSUE TO THE FILE OF THE A.O. TO DECIDE THE SAME IN THE LIGH T OF THE DECISION OF THE HONBLE SUPREME COURT IN TOPMAN EXPORTS VS. CIT (20 12) 342 ITR 49 (SC) WHICH WAS NOT OBJECTED TO BY THE LD. D.R. 12. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND MERIT IN THE PLEA OF THE PARTIES THAT THE TRIBUNAL IN ASSESSEES OWN CAS E HAS SET ASIDE THE ITA NO. 5076/MUM/2010 5 ISSUE TO THE FILE OF THE A.O. TO DECIDE THE SAME FO LLOWING THE DECISION OF HONBLE SUPREME COURT IN TOPMAN EXPORTS (SUPRA). I N THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE PARTIES, WE RESPECTFULLY FOLLOWING THE ABOVE JUDGMENT, SET ASID E THE ISSUE TO THE FILE OF THE A.O. TO DECIDE THE SAME IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN TOPMAN EXPORTS (SUPRA) AFTER PROVI DING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GR OUND TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED FOR STATISTI CAL PURPOSE. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 19-10-2012 SD/- (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 19-10-2012 RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 41, MUMBA I 4. COMMISSIONER OF INCOME TAX CENTRAL III MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH F, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI