The DCITS.K.Circle, Himatnagar V. Century Tiles Ltd., Himatnagar

ITA 637/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62912 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PHAGU ORAM
• Assessee Lawyers: D K PARIKH

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.637/AHD/2010 ( ! ) ! ) ! ) ! ) / / / / ASSESSMENT YEAR : 2006-07) THE DY.CIT SABARKANTH CIRCLE HIMATNAGAR ! ! ! ! / VS. CENTURY TILES LTD. AT & PO GADHODA TALOD ROAD HIMATNAGAR * $% ./+, ./ PAN/GIR NO. : AACCC 2531 M ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 $ / APPELLANT BY : SHRI PHAGU ORAM, SR.D.R. ./*- 1 0 $ / RESPONDENT BY : SHRI D.K.PARIKH, A.R. !2 1 % / / / / DATE OF HEARING : 22/08/2012 34) 1 % / DATE OF PRONOUNCEMENT : 24/08/12 $5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FR OM THE ORDER OF LEARNED CIT(APPEALS)-VI, AHMEDABAD DATED 30/10/2009 PASSED FOR A.Y. 2006- 07. REVENUE HAS RAISED THE SUBSTANTIVE GROUND AS A RGUED BEFORE US IS AS FOLLOWS:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION OF RS.8,74,104/- MADE ON ACCOUNT FREE SAMPLE BOXES OF CERAMIC TILES WHICH WAS DETECTED BY THE CENTRAL EXCISE DEPARTMENT DURING THE COURSE OF SEARCH. ITA NO.637/AHD/ 2010 DCIT VS. CENTURY TILES LTD. ASST.YEAR - 2006-07 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 28/1 1/2008 WERE THAT THE ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTURI NG OF CERAMIC TILES. THERE WAS A SEARCH BY CENTRAL EXCISE DEPARTMENT ON 12.4.2006. THE EXCISE DEPARTMENT HAS NOTICED THAT CERTAIN GOODS WE RE CLEARED WITHOUT PAYMENT OF EXCISE DUTY. THE ASSESSING OFFICER HAS HELD THAT THOSE GOODS STATED TO BE FREE SAMPLES OF CERAMIC TILES HAVE BEE N SOLD BY THE ASSESSEE. THE ASSESSING OFFICER HAS HELD THAT THOSE CERAMICS WERE SOLD FOR A SUM OF RS.8,74,104/- AND, ACCORDINGLY, THE SAME WAS TAX ED IN THE HANDS OF THE ASSESSEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. AFTER APPRECIATING THE FACTS OF THE CASE, THE LE ARNED CIT(APPEALS) HAS FOLLOWED AN EARLIER ORDER OF HIS PREDECESSOR AN D DELETED THE ADDITION IN THE FOLLOWING MANNER:- ON VERIFICATION OF BOOKS OF ACCOUNTS THE ASSESSEE HAS DECLARED NET SALES AND NOT CREDITED SAMPLE SALES IN TRADING ACCOUNT AND NOT DEBITED SAMPLES SALES EXPENSES IN PROFIT AND LOSS A CCOUNTS, BOTH ENTRIES ARE NULLIFY AND THERE IS NO EFFECT TO PROFI T AND LOSS ACCOUNT AS WELL AS COMPUTATION OF INCOME. YOUR HONOUR, LEARNED AO HAS MADE ADDITION ON SAME VIEW IN ASST.YEAR 2005-06 OF RS.1894861- AND IT HAS BEEN DE LETED BY LEARNED CIT(A)-X AHMEDABAD VIDE ORDER NO.CIT(A) NO. X/149/07- 08 DT. 27/10/2008. YOUR HONOUR, ON VERIFICATION OF SHOW CAUSE NOTICE I SSUED BY CENTRAL EXCISE DEPARTMENT AND PANCHANAMA IT IS CLEA R THAT THE ASSESSEE HAS CLEAR FREE SAMPLES TO HIS DEALERS AND EVADE THE EXCISES DUTY OF RS.898791- BUT THE ASSESSEE HAS NOT RECEIVED ANY AMOUNT FOR FREE SAMPLES AND IT WAS NOT A INCOME IN HAND OF THE ASSESSEE, SO PLEASE DELETED SAID ADDITION OF RS.874 104/-. ITA NO.637/AHD/ 2010 DCIT VS. CENTURY TILES LTD. ASST.YEAR - 2006-07 - 3 - RESPECTFULLY FOLLOWING THE FINDINGS OF MY LD.PREDEC ESSOR IN THE CASE OF APPELLANT ITSELF IN THE IMMEDIATE PRECEDING YEAR (I.E. CIT(A)-X, VIDE ORDER NO.CIT(A)-X/149/07-08 DATED 27/10/2008 F OR A.Y. 2005-06) WITH IDENTICAL FACTS AND CIRCUMSTANCES, TH EREBY, WITH IDENTICAL REASONING; THE ADDITION IN QUESTION IS NO T CALLED FOR, HENCE, DELETED. 4. NOW BEFORE US, FROM THE SIDE OF THE RESPONDENT-A SSESSEE THE SAID ORDER OF LD.CIT(A)-X, AHMEDABAD DATED 27/10/2008 FO R A.Y. 2005-06 HAS ALSO BEEN PLACED ON RECORD WHICH WAS FOLLOWED I N THE IMPUGNED APPELLATE ORDER UNDER APPEAL. IN THAT ORDER (DATED 27/10/2008), THE LEARNED CIT(APPEALS) HAS DECIDED THE ISSUE AS FOLLO WS:- 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE LD.A.R. CAREFULLY. THE A.O. WHILE MAKING THE A DDITION IN RESPECT OF FREE SAMPLES HAS NOT BROUGHT ON RECORD A NY EVIDENCE TO SHOW THAT THE APPELLANT HAD RECEIVED ANY MONEY FROM ITS DEALERS AGAINST SUCH SAMPLES. THE PAYMENT OF EXCISE DUTY B Y THE APPELLANT ON SUCH SAMPLES DOES NOT, IPSO FACTO, PRO VIDES A GROUND FOR THE A.O. TO TREAT THE SAME AS SALES OUTSIDE THE BOOKS OF ACCOUNT. THE A.O. HAS ALSO NOT BROUGHT ON RECORD TO SHOW THA T THE SALES OF SAMPLES DISCLOSED BY THE APPELLANT WERE NOT OUT OF THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY HIM. THEREFORE, UN DER THESE CIRCUMSTANCES, I DO NOT FIND ANY JUSTIFICATION FOR MAKING ANY ADDITION UNDER THIS HEAD. IN VIEW OF THIS, THE ADD ITION MADE BY THE A.O. IS HEREBY DELETED. 5. THE LD.AR MR.D.K.PARIKH, HAS ALSO INFORMED THAT THE SAID ORDER OF THE LEARNED CIT(APPEALS) OF A.Y. 2005-06 WAS NOT CO NTESTED BY THE REVENUE DEPARTMENT. WE, THEREFORE, HOLD THAT UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, SPECIALLY WHEN NO CONTRADICTORY MATERIAL HAS BEEN PLACED FROM THE SIDE OF THE REVEN UE IN SUPPORT OF THE ITA NO.637/AHD/ 2010 DCIT VS. CENTURY TILES LTD. ASST.YEAR - 2006-07 - 4 - ALLEGED ADDITION, WE HEREBY CONFIRM THE FACTUAL FIN DING OF LD.CIT(A). RESULTANTLY, THIS GROUND OF THE REVENUE IS HEREBY D ISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. SD/- SD/- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 24/ 08 /2012 6..!, .!../ T.C. NAIR, SR. PS $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7) $5 1 .7 8$7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-VI, AHMEDABAD 5. 7<= .! , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. = >2 / GUARD FILE. $5! $5! $5! $5! / BY ORDER, /7 . //TRUE COPY// ? ?? ?/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATIONON 22.8.12 (DICTATION PAD 4 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.8.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S24.8.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.8.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER