M/s. Shilpa Creation (P) Ltd., Kolkata V. ITO, Ward - 12(1), Kolkata, Kolkata

ITA 597/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78318 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 18-04-2011
• Court: TRIBUNAL
• Department Lawyers: SNEHANGSHU BISWAS
• Assessee Lawyers: SAJJAN KUMAR TULSIYAN
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.597/KOL/2011 #$ %&/ ASSESSMENT YEAR: 2003-04 M/S. SHILPA CREATION (P) LTD. VS. INCOME-TAX OFF ICER, WD-12(1), KOLKATA. (PAN: AAECS5267L) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 06.05.2014 DATE OF PRONOUNCEMENT: 06.05.2014 FOR THE APPELLANT: SHRI SAJJAN KUMAR TULSIYAN, ADVO CATE FOR THE RESPONDENT: SHRI SNEHANGSHU BISWAS, JCIT , SR. DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XII, KOLKATA IN APPEAL NO. 59/CIT(A)-XII/WD-12(1)/06-07 DATED 24.01.2011. ASS ESSMENT WAS FRAMED BY ITO, WARD- 12(1), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1 961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2003-04 VIDE HIS ORDER DATED 29.03. 2006. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE DISALLOWANCE OF CLAIM OF EXEMPTION U/S. 10A OF THE ACT. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NOS. 2 AND 3: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT DURING THE YEAR UNDER CONSIDERATION, THE APPEL LANT HAD NOT DONE ANY MANUFACTURING ACTIVITY IN ITS SEZ UNIT AT FALTA AND THAT IT HAD N OT PRODUCED ANY ARTICLE OR THING FOR THE PURPOSE OF EXPORT, WITHOUT APPRECIATING THAT AS PER THE INCOME TAX ACT, MANUFACTUIRNG INCLUDES PROCESSING OR ASSEMBLING ALSO. 3.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF THE CLAIM OF EXEMPTION U/S. 10A OF THE INCOME-TAX ACT, 196, IN RESPECT OF ITS PROFITS FROM EXPORT IN ITS SEZ AT FALTA, TO THE EXTENT OF RS.19,55,398/-. 3 . BRIEFLY STATED FACTS ARE THAT THE ASSESSEE CLAIMED THAT IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF EXPORT OF LEATHER GOODS AND COTTON KNITTING T-SHIRTS. THE ASSESSEE CLAIMED THAT LEATHER MOSTLY PURCHASED FROM LOCAL MARKET AND CONVERTED INTO SEMI FINISHED WALLETS AND 2 ITA NO. 597/K/2011 M/S. SHILPA CREATION (P) LTD. AY 2003-04 JACKETS AT ITS MAIN UNITS AT SHILPA CREATION, GREEN PARK. FURTHER, COTTON KNITTED T-SHIRTS ARE ALSO CONVERTED INTO SEMI FINISHED AT THE MAIN UNIT. THE REAFTER, SEMI FINISHED LEATHER JACKETS, WALLATS AND SEMI FINISHED COTTON KNITTED T-SHIRTS ARE BROUG HT TO ASSESSEES NEW UNIT AT FALTA EXPORT PROCESSING ZONE AND THEREAFTER EXPORTED. THE ASSES SEE EXPLAINED THE PROCESS CARRIED OUT IN ITS WRITTEN SUBMISSION BUT ASSESSEE ALSO EXPLAINED THAT NOW ASSESSEE HAS FILED ADDITIONAL EVIDENCE TO PROVE THAT THE ASSESSE IS CARRYING OUT VARIOUS P ROCESSING LIKE EMBOSSING, SPRAYING AND GLAZING, IRONING ETC. AS WELL AS RE-PACKAGE OF THE SAME AND ALSO VARIOUS PROCESSES ARE CARRIED OUT. FOR THIS, HE HAS FILED PAPER BOOK CONSISTING OF PAGES 1 TO 108 WHEREIN VARIOUS DETAILS ARE ENCLOSED. HE STATED THAT THESE ARE ADDITIONAL EVID ENCES AND THESE WERE NEVER FILED BEFORE THE AO OR BEFORE THE CIT(A). IN VIEW OF THIS, LD. COUN SEL FOR THE ASSESSEE MADE SUBMISSION THAT LET THESE EVIDENCES BE ADMITTED IN VIEW OF RULE 29 OF THE I. T. RULES, 1963 (HEREINAFTER REFERRED TO AS THE RULES) AND ISSUE BE SET ASIDE TO THE FI LE OF THE AO FOR FRESH ADJUDICATION OF THIS ISSUE IN THE LIGHT OF THE ABOVE EVIDENCES. THE ASSESSEE S PLEA FOR THE NEW EVIDENCES IS AS UNDER: IN SUPPORT OF ABOVE, COPIES OF RELEVANT VOUCHERS S UBSTANTIATING THE FACT THAT ALTHOUGH PAYMENT OF PROCESSING EXPENSES WERE MADE BY THE MAI N UNIT INITIALLY IN THE FALTA ZONE, THE SAME WERE DULY REIMBURSED WITHIN THE YEAR ITSEL F BY THE FALTA UNIT ARE ENCLOSED AT PAGE NOS. 10 TO 164 OF THE P/B. PERUSAL OF THE VOUCHERS AS ENCLOSED (AT PAGE NOS. 1 1-151 OF THE P/B) CLEARLY SHOW THAT INITIALLY IT WAS THE MAIN UNIT I.E. SHILPA CREATION , GREEN PARK, WHICH HAD MADE PAYMENT IN THE FALTA ZONE TO THE VARIOUS LABOURERS ENGAGED THEREIN. AGAIN, PERUSAL OF THE VOUCHES OF THE FALTA UNIT (ENCLOSED AT PAGES 152-164 OF THE P/B) CONFIRMS THE FACT THAT THE SAID EXPENSES WERE DULY REIMBURSED BY THE FALTA UNIT WIT HIN THE RELEVANT YEAR ITSELF. IN ADDITION TO ABOVE, COPY OF STATEMENT SHOWING THE BREAK-UP OF THE COST OF GOODS SOLD TO THE TUNE OF RS. 1,49,42,010/- IS ENCLOSED AT PAGE N O. 9 OF THE P/B, WHICH SHOWS THAT EXPENSES BELONGING TO THE FALTA UNIT WERE ALSO INCL UDED UNDER THE HEAD MANUFACTURING & FABRICATION CHARGES IN THE CONSOLIDATED PROFIT & LOSS A/C OF THE ASSESSEE. 5. ASSESSEE SUFFERED LOSS FROM FUTURE & OPTIONS FR OM SHARE OF RS.3,63,543/- AND HE HAD CARRIED FORWARD THE LOSS AGAINST OTHER INCOME TREAT ING AS BUSINESS LOSS BUT CONTRACT NOTE SUBMITTED BY THE ASSESSEE SOMEWHERE THERE IS NO SET TLEMENT NUMBER AND SOMEWHERE NO STT DEDUCTED. EVEN IN CONTRACT NOTE NO SUBMITTED B Y THE ASSESSEE IN PHOTOCOPY 5 IN NUMBERS, THERE IS NO SETTLEMENT NO. FOR FUTURE & OP TIONS AN ENTIRE AMOUNT OF RECEIPT I.E. RS.8,80,202/- IS BEING TREATED AS ASSESSEES INCOME DURING THE FINANCIAL YEAR. THEREFORE, ENTIRE RECEIPT FROM ASHIKA STOCK BROKING OF RS.8,80 ,202/- IS BEING DISALLOWED FOR CARRIED FORWARD AND SET OFF APART FROM ASSESSEES SUBMITTED RETURN BELATED. 4. WHEN CONFRONTED, THE LD. SR. DR FAIRLY CONCEDED THAT THIS ISSUE CAN BE REMITTED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN CASE T HESE EVIDENCES ARE ADMITTED. WE FEEL THAT THESE EVIDENCES ARE VITAL FOR DECIDING THIS ISSUE AND THE SE WERE NEVER PRODUCED BEFORE THE LOWER AUTHORITIES. IN SUCH CIRCUMSTANCES, WE SET ASIDE T HE ORDERS OF THE LOWER AUTHORITIES AND REMIT 3 ITA NO. 597/K/2011 M/S. SHILPA CREATION (P) LTD. AY 2003-04 THIS ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJ UDICATION. APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 06.05.2 014 SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06 TH MAY, 2014 -. #/0 1 JD.(SR.P.S.) 2 *3 4 3%5- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT M/S. SHILPA CREATION (P) LTD., 3/2, GRE EN PARK, KOLKATA-700 019. 2 *+() / RESPONDENT ITO, WARD-12(1), KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:; *# / DR, KOLKATA BENCHES, KOLKATA +3 */ TRUE COPY, #