KANUNGO FERROMET P.LTD, MUMBAI V. DCIT 5(2), MUMBAI

ITA 5684/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6872 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 21-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Keywords: Principle of natural justice
• Section: 143(3); 5(2)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA, AM & HONBLE SH. SANDEEP GOSAIN , J M ./ I.T.A. NO . 5684 /MUM/201 6 ( / ASSESSMENT YEAR: 2010 - 11 ) M/S KANUNGO FERROMET PVT. LTD. SHOP NO. 6, MAHIMWALA BUNGLOW, 12 TH KHETWADI LANE, MUMBAI - 400004 / VS. DCIT - 5(2) , R. NO. 21, 3 RD FLOOR, B - WING, MITTAL COURT, NARIMAN POINT, MUMBAI - 400 021 ./ ./ PAN/GIR NO. A A BCK0892N ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SHRI V. VIDHYADHAR , DR / DATE OF HEARING : 06 /0 6 /201 8 / DATE OF PRONOUNCEMENT : 06 /0 6 /201 8 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 10 , MUMBAI, 2 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. DATED 28.0 7 .16 FOR AY 2010 - 11 O N THE GROUNDS MENTIONED HEREIN BELOW: - 1. THE LD CIT( A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 24,57,383/ - BEING REBATE AND DISCOUNT ALLOWED BY YOUR PETITIONER TO M/ S TULIP CASTING PVT LTD. 2. THE LD CIT(A) HAS ERRED IN IGNORING THAT THE APPELLANT HAD ACCEPTED THE CLAIM OF M/S TULIP CASTING PVT LTD FOR REBATE AND DISCOUNT OF RS. 24,57,383/ - IN THE PREVIOUS YEAR ENDED ON 31.03.2010 RELEVANT TO ASSESSMENT YEAR 2010 - 11. 3. THE LD CIT (A) HAS FURTHER ERRED NOT APPRECIATING THE FACT THAT THE CLAIM OF REBATE AND DISCOUNT OF RS. 24,57,383/ - WAS MADE BY TU LI P CA STING PVT LTD IN THE PREVIOUS YEAR RELEVANT TO AY 2009 - 10. IT WAS ONLY LONG DRAWN OUT NEGOTIATIONS AND CONTINUES TALK WEIGHED IN BY PRAGMATIC BUSINESS CONSIDERATION THAT THE ASSESSEE ACCEPTED THE SAID CLAIM IN THE NEXT YEAR ONLY AND CLAIMED DEDUCTION FOR T HE SAME. 4. THE ORDER APPEALED AGAINST IS BAD IN LAW AND IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 5. THE ORDER APPEALED AGAINST IS BASED ON SURMISES AND CONJECTURES. 3 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. 6. YOUR PETITIONER RESERVES THE RIGHT TO ADD, TO DELETE AND/OR AMEND ANY OF THE FOREGO ING GROUNDS. 2 . AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF SEVERAL CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED . ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREF ORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF IMPORTING AND TRADING ACTIVITIES OF FERROUS AND NON - FERROUS METALS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS E - FILED ON 17.09.10 DECLARING TOTAL INCOME OF RS. 1,53,99,020/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVIN G STATUTORY NOTICE AND SEEKING REPLY, ORDER OF ASSESSMENT U/S 143(3) WAS PASSED BY AO ON 11.03.13 THEREBY DETERMINING THE TOTAL INCOME AT RS. 1,86,64,423/ - . 4 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER C ONSIDERING THE CASE OF BOTH THE PARTIES, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE APPEAL BY RAISING THE ABOVE GROUNDS. 4 . THE SOLITARY GROUND RAISED BY THE ASSESSEE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 24,57,383/ - BEING REBATE AND DISCOUNT ALLOWED BY ASSESSEE TO M/S TULIP CASTING PVT LTD. 5 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. WE FIND THAT LD. CIT(A) HAS DEALT WITH THE ABOVE GROUNDS RAISED BY THE ASSESSEE IN PARA NO. 4 OF ITS ORDER AND T HE OPERATIVE POR TION OF THE ORDER OF LD. CIT(A) IS CONTAINED IN PARA NO. 4.2 & 4.2.1, WHICH IS REPRODUCED BELOW: - 4.2 I HAVE CAREFU LLY CONSIDERED THE FACTS OF THE CASE AND SUBMISS IONS MADE BY THE ID.AR. AS SEEN FROM THE FACTS OF THE CASE, THE APPELLANT HAS DEBITED RS.5639,390/ - UNDER THE HEAD REBATE AND DISCOUNT IN 5 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. ITS BOOKS ACCOUNT OUT OF WHICH THE AO HAS DISALLOWED RS.32,65,4031 - . T HIS AMOUNT OF RS.32,65,4031 - CONSISTS OF RS.8,08,020/ - AS SHORT PAYMENT RECEIVED FROM NINE PARTIES AND RS.24,57,3831 - AS SHORT PAYMENT RECEIVED FROM M/S. TULIP CASTING PVT. LTD. PERTAINING TO EARLIER TRANSACTIONS. SO FAR AS RS.8,08,020/ - IS CONCERNED I'M O F THE CONSIDERED OPINION THAT THE SAME NEEDS TO BE ALLOWED UNDER REBATE AND DISCOUNT SINCE THE APPELLANT HAS GOT A SHORT PAYMENT AND IT NEEDS TO BE DEBITED IN THE BOOKS OF THE APPELLANT COMPANY. THE CONTENTION OF THE ID.AR IS ACCEPTED TO THIS EXTENT. HOWEV ER, WITH REGARD TO THIS ALLOWANCE OF RS.24,57,383/ - ON ACCOUNT OF SHORT PAYMENT RECEIVED FROM M/S.TULIP CASTING PVT. LTD., THE SAME CANNOT BE ALLOWED SINCE IT PERTAINS EARLIER YEARS. FURTHER, THE APPELLANT HAS NOT FURNISHED ANY DETAILS WITH REGARD TO THE N EGOTIATIONS/CORRESPONDENCE TAKEN PLACE WITH M/S.TULIP CAST ING PVT.LTD. AND THE TERMS AND C ONDITIONS AGREED UPON WHILE ALLOWING THE PARTY TO CLAIM THE REBATE AND DISCOUNT TO THE EXTENT OF RS.24,57,383/ - . I, THEREFORE, DO NOT AGREE WITH THE VIEW OF THE LD. A R THAT THE DEBIT NOTE PASSED FOR RS,24,57,3831 - WHICH PERTAINS TO EARLIER YEARS SHOULD BE ALLOWED AS EXPENDITURE OF THE YEAR UNDER CONSIDERATION. 6 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. 4.2.1 IN VIEW OF THE ABOVE DISCUSSION, I DIRECT THE AO TO WITHDRAW THE DISALLOWANCE OF RS.8,08,020/ - BY CONSID ERING IT AS REBATE AND DISCOUNT FOR THE YEAR AND ASSESS RS.24,57,383/ - AS THE EXPENDITURE WHICH DOES NOT PERTAINS TO THE YEAR UNDER CONSIDERATION. THE GROUND IS PARTLY ALLOWED. AFTER HAVING GONE THROUGH THE ORDER PASSED BY LD. CIT(A), WE FIND THAT LD. CI T (A) HAD RIGHTLY APPRECIATED THE FACTS OF THE PRESENT CASE AND CORRECTLY RESTRICTED THE ADDITIONS TO THE EXTENT OF RS. 24,57,383/ - ON THE GROUND THAT SINCE ASSESSEE COULD NOT PLACE ON RECORD ANY DETAILS WITH REGARD TO NEGOTIATION /CORRESPONDENCES TAKEN PLACE WITH M/S TULIP CASTING PVT. LTD AND THE TERMS AND CONDI TIONS AGREED UPON WHILE ALLOWING THE PARTY TO CLAIM THE REBATE AND DISCOUNT. MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT (A) . THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT (A). HENCE , WE ARE OF THE CONSIDERED 7 I.T.A. NO. 5684 /MUM/201 6 M/S KANUNGO FERROMET PVT. LTD. VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. THUS, WE FIND NO INFIRMITY IN THE ORDER U NDER CHALLENGE. THE SAME IS HEREBY UPHELD. RESUL TANTLY, THIS GROUND RAISED BY THE ASSESSEE STANDS DISMISSED . 6 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JUNE , 2018. SD/ - SD/ - (SHAMIM YAHYA ) ( SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 06 . 06 .201 8 SR.PS . DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI