M/s. Sravani Impex Pvt.Ltd., Hyderabad V. Income Tax Officer, Ward-3(2), Hyderabad

ITA 600/HYD/2012

• Counselvise Citation: 60022514 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: A V RAGHURAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 600/HYD/2012 ASSESSMENT YEAR: 2003-04 M/S.SRAVAN I IMPEX PVT. LTD., HYDERABAD [PAN: AAECS1690P] VS INCOME TAX OFFICER, WARD-3(2), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V.RAGHU RAM FOR REVENUE : SHRI D.SUDHAKAR RAO DATE OF HEARING : 04 - 0 2 - 201 5 DATE OF PRONOUNCEMENT : 13 - 02 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN ASSESSEE'S APPEAL FILED AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, HYDERABAD D ATED 29-02-2012 FOR THE ASSESSMENT YEAR (AY) 2003-04. THE ISSUE IN APPEAL IS WITH REFERENCE TO CLAIM OF RS.34,73,668/- AS DEMURRAGE C HARGES. 2. BRIEFLY STATED, ASSESSEE IS ENGAGED IN THE BUSIN ESS OF MANUFACTURE AND EXPORT SALES AND HAS ENTERED INTO AN AGREEMENT WITH M/S.RELIANCE PHARMA LIMITED, NAIROBI, KENYA FOR UNDERTAKING THE EXPORTS. AS PER THE I.T.A. NO. 600/HYD/2012 :- 2 -: OVERSEAS AGENTS AGREEMENT, ASSESSEE WAS TO PAY C OMMISSION OF 12.5%. THERE SEEMS TO BE SOME SUPPLEMENTARY AGREEMENT CLAI MING 2% OF THE EXPORT VALUE TOWARDS DEMURRAGE CHARGES AND ROYALTY. IN THE ORIGINAL ASSESSMENT COMPLETED BY THE ASSESSING OFFICER, CLA IM OF COMMISSION AND DEMURRAGE CHARGES TOTALING RS.1,66,26,434/- WAS ALLOWED. ON NOTICING THAT ASSESSING OFFICER HAS NOT EXAMINED TH E ROYALTY /DEMURRAGE CHARGES, LD.CIT(A)-III, HYDERABAD INITIA TED PROCEEDINGS U/S.263 OF THE INCOME TAX ACT (ACT) AND VIDE ORDER DT.11-01-2010, SET ASIDE THE ISSUE TO THE ASSESSING OFFICER FOR RE-EXA MINATION OF THE ABOVE CLAIM. ASSESSEE HAS NOT CHALLENGED THE ORDER U/S.2 63. 3. IN THE COURSE OF RE-ASSESSMENT PROCEEDINGS, ASSE SSEE WAS ASKED TO SUBMIT THE ORIGINAL COPY OF THE SO CALLED SUPPLEMEN TARY AGREEMENT WITH M/S.RELIANCE PHARMA LIMITED, NAIROBI, KENYA AND JUS TIFICATION FOR PAYMENT OF DEMURRAGE CHARGES. IN THE ORDER AO DISA LLOWED THE AMOUNT ON THE REASON THAT ASSESSEE HAS NOT JUSTIFIED THE A MOUNTS. BEFORE THE LD.CIT(A) ALSO, ASSESSEE MADE SIMILAR SUBMISSIONS A BOUT CLAIM OF THE ADDITIONAL DEMURRAGE CHARGES AT 2% ON THE EXPORT VA LUE AND SUBMITTED THAT SUPPLEMENTARY AGREEMENT IN ORIGINAL WAS SUBMIT TED TO THE ASSESSING OFFICER. LD.CIT(A), HOWEVER, DID NOT AGR EE WITH ASSESSEE'S CONTENTIONS AND CONFIRMED THE ADDITION BY STATING A S UNDER: 'I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THE LIABILITY FOR PAYMENT OF DEMURRAGES AND ROYALTY CHARGES BY WAY OF ANY CREDIBLE EVIDENCE. THE 'OVE RSEAS AGENCY AGREEMENT' SUBMITTED BY THE APPELLANT IS ONLY A SE LF SERVING ONE, AS THE SAME IS NOT SUPPORTED BY ANY CONTEMPORANEOUS E VIDENCE. IT WAS IN THIS CONTEXT THAT THE ASSESSING OFFICER APP EARS TO HAVE EMPHASIZED THE IMPORTANCE OF A REGISTERED DOCUMENT , WHICH INDEED IS ENFORCEABLE AND VERIFIABLE. SINCE THE APPELLAN T GROSSLY FAILED IN ESTABLISHING THE CLAIM OF DEMURRAGES AND ROYALTY C HARGES, FINDING NO INFIRMITY IN THE ACTION OF THE ASSESSING OFFICE R, THE GROUNDS TAKEN IN THIS APPEAL ARE DECIDED AGAINST THE APPELLANT.' I.T.A. NO. 600/HYD/2012 :- 3 -: 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). SINCE ASS ESSEE DID NOT JUSTIFY THE DEMURRAGE CHARGES BEFORE THE AUTHORITIES NOR ANY AD DITIONAL EVIDENCE WAS FURNISHED BEFORE US TO JUSTIFY THE CLAIM, WE AR E OF THE OPINION THAT ORDER OF THE CIT(A) ON THE FACTS OF THE ISSUE HAS T O BE APPROVED. ACCORDINGLY, THE GROUNDS RAISED BY ASSESSEE ARE DIS MISSED. 5. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 TH FEBRUARY, 2015. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH ) JUDICIAL MEMBER ACCO UNTANT MEMBER HYDERABAD, DATED 13 TH FEBRUARY, 2015. TNMM COPY TO : 1. M/S. SRAVANI IMPEX PVT. LTD. , FLAT NO.B - 4, PRESIDENT BANJARA, ROAD NO.2, BANJARA HILLS, HYDERABAD; C/O.S HRI A.V.RAGHU RAM, ADVOCATE, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD-1. 2. ITO, WARD-3(2), I.T.TOWERS, A.C.GUARDS, HYDERABA D 3. CIT(A)-IV, HYDERABAD 4. CIT-III, HYDERABAD 5. D.R. ITAT, HYDERABAD