ACIT, Coimbatore V. M/s. Rasna Bottle Suppliers, Pollachi

ITA 529/CHNY/2011

• Counselvise Citation: 52921714 RSA 2011
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 24-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR I VIJAYAKUMAR
• Keywords: Depreciation
• Section: 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C' BENCH, CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER] I.T.A.NOS.529 & 530/MDS/2011 ASSESSMENT YEARS : 2005-06 & 2007-08 THE ACIT SALARY CIRCLE COIMBATORE VS M/S RASNA BOTTLE SUPPLIERS NETHAJI ROAD T.S.NO.4/92, VALLIAMMAL LAYOUT POLLACHI - 1 [PAN AAEFR3230K] (APPELLANT) (RESPONDENT) APPELLANT BY : DR.I.VIJAYAKUMAR, CIT/DR RESPONDENT BY : NONE DATE OF HEARING : 26.9.2011 DATE OF PRONOUNCEMENT : 26.9.2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE APPEALS FILED BY THE REVENUE, FO R ASSESSMENT YEARS 2005-06 AND 2007-08, ARE DIRECTED AGAINST SEPARATE ORDERS OF THE LD. CIT(A), COIMBATORE, BUT DATED 28.12.2010. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE- FIRM DEALS IN USED BOTTLES. M/S RASANA BOTTLE SUPP LIERS(THE ASSESSEE) ITA 529 & 530/11 :- 2 -: WAS CONSTITUTED AS A FIRM ON 1.9.1998 HAVING SHRI V .S. RAMAKRISHNAN AND KUM. V.R. RASANA AS ITS PARTNERS. SHRI V.S.RAM AKRISHNAN IS THE MANAGING PARTNER. THE PARTNERSHIP DEED WAS LATER O N MODIFIED ON 1.9.1999. THE ASSESSEE-FIRM FILED ITS RETURN OF IN COME FOR ASSESSMENT YEAR 2005-06 ON 2.11.2007 DECLARING A TOTAL INCOME OF ` 8,65,530/-. THIS RETURN WAS NOT FOUND TO BE IN TERMS OF SECTION 139(5) OF THE ACT. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED ON 14.5.2008 AFTER RECORDING REQUISITE REASONS. IN COMPLIANCE, THROUGH LETTER D ATED 9.6.2008, THE RETURN FILED ON 18.12.2007 WAS REQUESTED TO BE TREA TED AS THE RETURN HAVING BEEN FILED IN RESPONSE TO NOTICE U/S 148. THROUGH LETTER DATED 17.6.2008 IT WAS INFORMED TO THE ASSESSEE THAT RETU RN REFERRED TO IN THE LETTER DATED 9.6.2008 IS IN RESPECT OF ASSESS MENT YEAR 2006-07 AND NOT FOR ASSESSMENT YEAR 2005-06. THEREAFTER, T HROUGH LETTER DATED 25.6.2008, THE ASSESSEE FILED A COPY OF THE R ETURN ALONGWITH AUDITED BALANCE SHEET PERTAINING TO ASSESSMENT YEA R 2005-06. SO, THE ASSESSING OFFICER HAS CONSIDERED 25.6.2008 AS THE DATE OF COMPLIANCE OF NOTICE ISSUED U/S 148. THE ASSESSEE -FIRM HAS CLAIMED A DEPRECIATION OF ` 84,375/- @ 50% ON THE BOTTLE-CRATES. DEPRECIATION @ 50% IS ALLOWABLE ONLY ON CONTAINERS MADE OF GLASS OR PLASTIC USED AS REFILLS. ACCORDING TO THE ASSESSING OFFICER, TH E BOTTLE CRATES USED IN THE BUSINESS OF DEALING IN USED BOTTLES CAN ONLY BE TREATED AS PLANT ITA 529 & 530/11 :- 3 -: FOR WHICH DEPRECIATION @ 15% ONLY IS ADMISSIBLE. T HE ASSESSEE HAS MADE PURCHASES TO THE EXTENT OF ` 3,40,58,749/- OUT OF WHICH PURCHASES OF ` 3,39,57,306/- HAVE BEEN MADE LOCALLY BY PAYING IN CASH. THESE PURCHASES WERE STATED TO BE FROM BARS THROUGH VOUCHERS WHICH ARE NOT FOUND TO BE VERIFIABLE. THEREFORE, T HE ASSESSING OFFICER HAS DISALLOWED 25% OF THE LOCAL PURCHASES WHICH COM ES TO ` 84,89,327/-. THE ASSESSEE HAD DEBITED ` 25,000/- AS AUDIT FEES. HOWEVER, WHILE MAKING THE CORRESPONDING CREDIT, TAX HAS NOT BEEN DEDUCTED AT SOURCE UNDER THE PROVISIONS OF SECTION 40(A)(IA). THE AUDIT FEE DEBITED IS NOT TREATED AS THE AMOUNT DEDU CTIBLE WHILE COMPUTING THE PROFITS FROM BUSINESS U/S 28. AGAINS T THE ADDITIONS SO MADE, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DELETED THE DISALLOWANCE MADE ON ACCOUNT OF GROSS PROFIT AFTER MENTIONING THAT THE GROSS PROFIT DECLARED IN THIS YEAR IS MORE THAN THAT DECLARED IN PREVIOUS YEARS. LIKEWISE, TH E ADDITION MADE ON ACCOUNT OF PURCHASES, WHICH WERE NOT FOUND TO BE VE RIFIABLE IN THE ABSENCE OF PROPER BILLS/VOUCHERS, THE LD. CIT(A), A FTER ADMITTING EVIDENCE(S) PRODUCED BEFORE HIM, HAS DELETED THE SA ME. THESE EVIDENCE(S) WERE NOT PRODUCED BEFORE THE ASSESSIN G OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS. ITA 529 & 530/11 :- 4 -: 3. AT THE TIME OF HEARING, DESPITE BEING DULY SERVED W ITH NOTICE, NOBODY CAME PRESENT TO REPRESENT THE CASE OF THE AS SESSEE NOR ANY REQUEST FOR ADJOURNMENT WAS MADE, THEREFORE, WE PRO CEEDED EX-PARTE AGAINST THE ASSESSEE-RESPONDENT AND HEARD THE LD.CI TDR AT LENGTH. 4. AFTER HEARING THE LD.CIT/DR AND IN THE LIGHT OF THE RECORDS AVAILABLE ON RECORD, WE FIND THAT THE LD. CIT(A) HA S TAKEN THE DECISION BASED ON EVIDENCE(S) WHICH WERE NOT AVAILABLE BEFOR E THE ASSESSING OFFICER, THEREFORE, IT BECOMES MANDATORY AND IMPERA TIVE TO REMIT BACK THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFIC ER FOR FRESH CONSIDERATION. WE, THEREFORE, REMIT THE ENTIRE IS SUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING AFRESH AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER LAW. 5. IN ASSESSMENT YEAR 2007-08 SIMILAR ISSUES ARE RAIS ED. THE REASONS FOR ADDITION AND DELETION ARE EXACTLY IDEN TICAL TO ASSESSMENT YEAR 2005-06. THEREFORE, WITH SIMILAR REASONING, W E RESTORE THE ENTIRE APPEAL TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION. ITA 529 & 530/11 :- 5 -: 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE STAN D ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT O N 26.9.2011. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 26 TH SEPTEMBER, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR