Maruthi Poly Bags P Ld, Pudukottai V. DCIT, Circle 3(1), Trichy

ITA 541/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8420 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 04-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D DIVAHAR IRS
• Assessee Lawyers: S KEERTHIRAJAN C A
• Keywords: Document seized; Documents seized

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NOS. 539, 540 & 541/CHNY/2019 ! ' / ASSESSMENT YEARS : 2009-10, 2010-11 AND 2011-1 2. MARUTHI POLY BAGS (P) LTD, NO.10-C, 11-C, SIPCOT INDUSTRIAL ESTATE, PUDUKKOTTAI 622 002. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1) TRICHY. [PAN AACCM 9978N] ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. S. KEERTHIRAJAN, C.A. &' # $ % /RESPONDENT BY : SHRI. D. DIVAHAR, IRS, JCIT. ( ) $ * /DATE OF HEARING : 19-09-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 09-10-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THESE ARE APPEALS FILED BY THE ASSESSEE DIRECTED AGAINST DIFFERENT ORDERS OF THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS)- 1, TRICHY (HEREINAFTER CALLED AS CIT(A)) FOR THE ASSESSMENT YEARS 2009-2010, 2010-11 AND 2011-2012. ITA NOS.539 TO 541/2019 :- 2 -: 2. SINCE, THE IDENTICAL FACTS AND ISSUES ARE INVOLVED IN THESE APPEALS, WE PROCEED TO DISPOSE THE SAME VIDE THIS C OMMON ORDER. 3. FOR THE SAKE OF CONVENIENCE AND CLARITY THE FACTS R ELEVANT TO THE APPEAL IN ITA NO.539/CHNY/2019 FOR ASSESSMENT YEAR 2009-10 ARE STATED HEREIN. 4. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE ASSESSING OFFICER IS AGAINST FACTS SINCE CONSIDERED RS.2,46,45,151/- AS SUPPRESSED SALES BAS ED ON THE SHOW CAUSE NOTICE ISSUED BY CENTRAL EXCISE DEPARTMENT. 2. SIMILARLY, THE ORDER OF COMMISSIONER OF INCOME T AX (APPEAL) IS ALSO NOT CORRECT BASED ON THE ORDER ISSUED BY CENTR AL EXCISE DEPARTMENT. SINCE NO INDEPENDENT MATERIAL WAS BROUG HT ON RECORD BY THE ASSESSING OFFICER. 3. THE ASSESSING OFFICER HAS NOT MADE ANY VERIFICAT ION OF RECORDS OR CONDUCTED ANY ENQUIRY BEFORE PASSING AN ORDER U/S 1 43(3). HE HAS SIMPLY ADOPTED THE FIGURE FURNISHED BY THE CENTRAL EXCISE DEPARTMENT IN THE SHOW CAUSE NOTICE. THE DECISION R ENDERED BY HIGH COURT IN THE FOLLOWING CASES IS IN SUPPORT OF OUR VIEW. A) CIT VS AMMAN STEEL AND ALLIED INDUSTRIES (2015) 377 ITR 0568 CHENNAI HIGH COURT. B) PRINCIPAL CIT, RAJKAT VS VRUNDAVAN CERAMICS (P) LTD (2018) 95 TAXMANNL3 (GUJARAT) 4. THERE WAS NO INDEPENDENT MATERIAL BROUGHT ON REC ORD BY ASSESSING OFFICER OTHER THAN THOSE COLLECTED BY THE CENTRAL EXCISE DEPARTMENT. 5. THE PROVISION UNDER THE TWO LAWS, VIZ CENTRAL EX CISE ACT AND INCOME TAX ACT, OPERATE IN TWO DIFFERENT FIELDS. WITHOUT THESE BEING AN INDEPENDENT ENQUIRY BY THE CONCERNED TAXIN G AUTHORITIES, ITA NOS.539 TO 541/2019 :- 3 -: THE DEMAND MADE UNDER THE PROVISIONS OF CENTRAL EXC ISE ACT COULD NOT BE INCORPORATED AS SUCH. 6. IN THE ABSENCE OF ANY INDEPENDENT ENQUIRY BY THE ASSESSING OFFICER, THE ADDITION MADE BY THE ASSESSING OFFICER , ON THE BASIS OF SHOW CAUSE NOTICE, ISSUED UNDER THE CENTRAL EXCISE ACT CANNOT BE SUSTAINED WE THEREFORE REQUEST THE HONOURABLE MEMBERS TO DIRE CT THE ASSESSING OFFICER TO DELETE THE ENTIRE ADDITIONS. 5. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE NAMELY M/S. MARUTHI POLY BAGS (P) LTD IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE C OMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF MANUFACTU RING POLY BAGS WITH PRINTING. THE RETURN OF INCOME FOR THE AY 2009-10 WAS FILED ON 24.09.2009 DISCLOSING TOTAL INCOME OF I16,04,020/-. SUBSEQUENTLY BASED ON THE INFORMATION RECEIVED FROM THE ASSISTAN T COMMISSIONER (AE) CENTRAL EXCISE & SERVICE TAX STATED THAT SEARC H OPERATIONS WERE CARRIED OUT ON 14.06.2012 IN ASSESSEES FACTORY PRE MISES DURING WHICH CERTAIN INCRIMINATING DOCUMENTS/ RECORDS FROM THE F ACTORY WERE FOUND AND SEIZED. IT IS STATED THAT SEIZED DOCUMENTS IN DICATED THAT ASSESSEE HAD MANUFACTURED POLY BAGS BOTH ACCOUNTED AND UNACC OUNTED, ACCORDINGLY TOTAL VALUE OF ACCOUNT AND UNACCOUNTED SALES OF POLY BAGS WERE DETERMINED AT I3,74,32,990/- AND I2,46,45,151 /- RESPECTIVELY. SINCE THE PROFIT OF UNACCOUNTED SALES WAS NOT OFFE RED TO TAX, THE ITA NOS.539 TO 541/2019 :- 4 -: ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE AC T ON 31.03.2016 . IN RESPONSE TO NOTICE, ASSESSEE HAS SUBMITTED THAT RET URN OF INCOME ORIGINALLY FILED SHOULD BE TREATED AS RETURN OF INC OME IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. AGAINST THE SA ID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSISTANT COMM ISSIONER OF INCOME TAX, CIRCLE 3 (1) TRICHY (HEREINAFTER CALLE D AO) BY MAKING ADDITION OF 8% ON UNACCOUNTED SALES. 6. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER PARTLY ALLOWED T HE APPEAL BY DIRECTING THE ASSESSING OFFICER TO MAKE ADDITION O N SUPPRESSED SALES OF ONLY RS.85,63,547/- AS THE BALANCE AMOUNT REPRE SENTS JOB WORK DONE TO RAJARAJAN INDUSTRIES OF 1,69,66,017/-. 7. BEING AGGRIEVED, BY THE ORDER OF THE LD. CIT(A), AS SESSEE IS BEFORE US IN THE PRESENT APPEAL. IT IS CONTENDED B EFORE US THAT THE ASSESSING OFFICER MADE ADDITION WITHOUT CONDUCTIN G ANY INDEPENDENT ENQUIRY AND MERELY RELYING UPON THE INFORMATION REC EIVED FROM CENTRAL EXCISE DEPARTMENT AND ALSO PLACING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS.VIGNESH KUMAR JEWELLARY (2011) 330 ITR 209. 8. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. ITA NOS.539 TO 541/2019 :- 5 -: 9. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. IN THE PRESENT CASE, THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM CENTRAL EXCISE DEPARTMENT STATING THAT ASSESSEE IS INDULGING IN MANUFACTURING OF POLYMER BAGS OUTSIDE THE BOOKS OF ACCOUNTS. THIS INFORMATION HAD BEEN PUT TO THE ASS ESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSES SEE HAD STATED THAT OUT OF THE UNACCOUNTED SUPPRESSED SALES OF I2 ,46,45,151/- STATED BY THE CENTRAL EXCISE DEPARTMENT IT ALSO INCLUDES PROCUREMENT OF RAW MATERIALS OF I28,45,845/- AND THE JOB WORK DO NE TO RAJARAJAN INDUSTRIES TO THE TUNE OF I1,69,66,017/- AND THE B ALANCE AMOUNT REPRESENTS UNACCOUNTED SALES WHICH IN FACT HAS BEE N ADMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. THE ASSESSING OFFICER HAD NOT ACCEPTED THE EXPLANATION THAT HE HA D DONE JOB WORK FOR RAJARAJAN INDUSTRIES. THE LD. CIT(A) ACCEPTED THE EXPLANATION, THE DEPARTMENT IS NOT IN APPEAL BEFORE US. THUS, ON TH E BALANCE AMOUNT, THE ASSESSEE HAD NOT RENDERED ANY EXPLANATION AND N O EXPLANATION WAS FORTHCOMING FROM THE ASSESSEE AS TO WHY PROFIT SHOULD NOT BE ESTIMATED AT 8% IN RESPECT OF BALANCE UNACCOUNTED TURNOVER. THEREFORE, WE CONFIRM THE ACTION OF THE LD. CIT(A). HENCE, WE UPHOLD THE APPLICATION OF 8% OF GROSS PROFIT ON UNACCOUNTE D SALES AND DISMISS THE APPEAL FILED BY THE ASSESSEE. ITA NOS.539 TO 541/2019 :- 6 -: ITA NOS.540 & 541/CHNY/ 2019 FOR ASSESSMENT YEARS 2010-2011 AND 2011-2012 10. SINCE, THE FACTS IN THE PRESENT APPEALS ARE IDENTI CAL TO THE FACTS IN ITA NO.539/CHNY/2019 FOR ASSESSMENT YEAR 2009-10 , FOR THE REASONS MENTIONED THEREIN, WE DISMISS THE APPEALS IN THE SAME LINES INDICATED IN APPEAL ITA NO.539/CHNY/2019 SUPRA. HEN CE, THE ABOVE CAPTIONED APPEALS FILED BY THE ASSESSEE STAND DIS MISSED. 11. TO SUMMARIZE THE RESULT, THE APPEALS FILED BY THE ASSESSEE IN ITA NOS. 539, 540 & 541/CHNY/2019 FOR ASSESSMENT YE ARS 2009-10, 2010-11 AND 2011-12 STAND DISMISSED. ORDER PRONOUNCED ON 9 TH DAY OF OCTOBER, 2019, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED:9TH OCTOBER, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF