ACIT 8(3), MUMBAI V. YUVA TEXTILES INDUSTRIES LTD, MUMBAI

ITA 6863/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3606 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 28-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSA IN, JM ITA NO.6863/MUM/2012 (ASSESSMENT YEAR: 2006-07) THE ASSTT. COMMISSIONER OF INCOME TAX-8(3), ROOM NO.217, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. VS. M/S. YUVA TEXTILE INDUSTRIES LTD., 188/5C, SANJAY BUILDING NO.45, MITTAL INDUSTRIAL ESTATE, ANDHERI (EAST), MUMBAI 400 059. PAN: AAACY 0568Q APPELLANT .. RESPONDENT APPELLANT BY SHRI ANIL KUMAR DAS RESPONDENT BY NONE DATE OF HEARING: 28-04-2016 DATE OF PRONOUNCEMENT:17-05-2016 O R D E R PER SANDEEP GOSAIN,JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF THE LEARNED CIT (A)-18, MUMBAI DATED 23-08 -2012 PASSED IN APPEAL NO.CIT (A) -18/ACIT-S(3)/IT-247/09-10 FOR AS SESSMENT YEAR 2006- 07 ON THE FOLLOWING GROUNDS:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN DELETING THE DISALLOWANCE OF R S.61,99,005 OF TRADING PURCHASES/SALES RETURN WITHOUT APPRECIATI NG THE FINDINGS OF THE ASSESSING OFFICER. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN DELETING THE DISALLOWANCE OF R S.61,99,005 OF TRADING PURCHASES/SALES RETURN BY ERRONEOUSLY OBS ERVING THAT THE AO IN THE REMAND REPORT HAS ACCEPTED THE VERIF ICATION OF SALES RETURN WHEREAS IN THE REMAND REPORT THE ASSE SSING OFFICER HAS HELD THE CLAIM OF THE ASSESSEE TO BE UNTENABLE, PARTICULARLY SINCE THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE C ORRECTNESS, GENUINENESS AND VERACITY OF THE SO-CALLED SALES RET URN. ITA NO.6863/MUM/2012 ACIT VS. M/S. YUVA TEXTILE INDUSTRIES LTD. 2 (III) THE APPELLANT PRAYS THAT THE ORDER OF THE C IT (A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ITO/AC/DCIT BE RESTORED. (IV) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. AT THE TIME OF HEARING, WHEN THE CASE WAS CALLED FOR, NEITHER ANY ONE APPEARED NOR WAS ANY ADJOURNMENT APPLICATION FI LED ON BEHALF OF THE ASSESSEE. ON THE PREVIOUS OCCASIONS ALSO THERE WAS NO RESPONSE ON THE PART OF THE ASSESSEE ON THE DATE OF HEARING. THE LE ARNED DR REPRESENTING THE REVENUE WAS PRESENT AND READY FOR ARGUMENTS. TH EREFORE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE IN THE AB SENCE OF THE RESPONDENT ASSESSEE AFTER HEARING THE LEARNED DR AN D CONSIDERING THE MATERIALS ON RECORD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY BEING IN TEXTILE BUSINESS FILED THE RETURN OF INCOME ON 28.1 1.2006 DECLARING TOTAL LOSS AT RS.59,31,273/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND AFTER ISSUING STATUTORY NOTICES AND SEEKING REP LY FROM THE ASSESSEE, THE AO DISALLOWED THE SUM OF RS.61,99,005/- IN THE PROFIT AND LOSS ACCOUNT AND ADDED THE SAME TO THE TOTAL INCOME OF T HE ASSESSEE. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE LEARNED CIT (A) AND THE LEARNED C IT (A) AFTER HEARING BOTH THE PARTIES AND PERUSAL OF THE RECORD, HAD PAR TLY ALLOWED THE APPEAL OF THE ASSESSEE. BEING AGGRIEVED BY THIS ORDER OF T HE ASSESSEE, THE REVENUE IS NOW IN APPEAL BEFORE US ON THE AFOREMENT IONED GROUNDS. ITA NO.6863/MUM/2012 ACIT VS. M/S. YUVA TEXTILE INDUSTRIES LTD. 3 4. THE SOLE GROUND RAISED BY REVENUE BEFORE US IS T HAT THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.61,99,005/ - OF TRADING PURCHASES/ SALES RETURN WITHOUT APPRECIATING THE F INDINGS OF THE AO. IN THIS RESPECT, LD. DR REPRESENTING THE REVENUE SUBMI TTED THAT THE CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.61,99,005/ - OF TRADING PURCHASES/ SALES RETURN BY ERRONEOUSLY OBSERVING T HAT THE AO IN THE REMAND REPORT HAS ACCEPTED THE VERIFICATION OF SALE S RETURN WHEREAS IN THE REMAND REPORT THE AO HAS HELD THE CLAIM OF THE ASSESSEE TO BE UNTENABLE, PARTICULARLY SINCE THE ASSESSE HAD FAILE D TO SUBSTANTIATE THE CORRECTNESS, GENUINENESS AND VERACITY OF THE SO-CAL LED SALES RETURN. 5. WE HAVE ANALYZED THE ORDER OF CIT (A) WHILE DEAL ING WITH THE SAID ISSUE AND THE OPERATIVE PORTION OF HIS ORDER IS REP RODUCED HEREIN BELOW FOR REFERENCE:- 1.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. C OUNSEL, THE REMAND REPORT OF THE AO AND THE REPLY OF THE APPELL ANT TO THE REMAND REPORT OF THE AO AND SINCE THE AO IN THE REM AND REPORT HAS ACCEPTED THE VERIFICATION OF SALES RETURNS THE ADDI TION/DISALLOWANCE OF RS.61,99,005/- IS HEREBY DELETED AND THIS GROUND OF APPEAL IS ALLOWED. AS REGARDS OBJECTION OF AO TO THE SUBMISSION OF ADD ITIONAL EVIDENCE RULE 46A OF I.T. RULES, 1962 THE FOLLOWING DECISIONS PERMIT THE ADMISSION OF SUCH EVIDENCE WHICH IS NECE SSARY AND RELEVANT FOR DECIDING THE APPEAL:- (A) CIT VS. SMT. PRABHAVATI SHAH 231 ITR 1 (BOM) (B) CIT VS. SURETECH HOSPITAL & RESEARCH CENTRE LTD (2007) 293 ITR 53 (BOM) HENCE, THE OBJECTION OF THE A.O. IS OVERRULED. FROM CAREFUL READING OF THE ABOVE PARAGRAPH WE HAV E NOTICED THAT THE CIT (A) HAS DELETED THE ADDITIONS OF RS. 61,99, 005/- SOLELY ON THE ITA NO.6863/MUM/2012 ACIT VS. M/S. YUVA TEXTILE INDUSTRIES LTD. 4 GROUND THAT SINCE THE AO IN THE REMAND REPORT HAS A CCEPTED THE VERIFICATION OF SALES RETURN. THEREFORE, WHILE KEEP ING IN MIND THE SAID PROPOSITION, CIT(A) DELETED THE ADDITION/DISALLOWAN CE OF RS.61,99,005/-. IN THIS CONTEXT PARA NUMBER 1.2 OF CIT(A) ORDER IS IMPORTANT TO REFER WHICH RELATES TO THE REMAND REPORT DATED 17.02.2012 SUBMITTED BY AO AND THE OPERATIVE PARA OF THE SAME IS AS UNDER: IN THIS REGARD, IT IS SUBMITTED THAT SALES MADE TO THREE PARTIES OF FINISHED GOODS DURING A.Y.2005-06 HAVE BEEN TOTA LLY RETURNED IN THE SUBSEQUENT YEAR WITHOUT PAYING ANY PENNY ALMOST FOR 6 MONTHS DOES NOT PRIMA FACIE APPEARS SA TISFACTORY. FURTHER, NO CONFIRMATIONS WITH PAN HAVE BEEN PROVID ED BY THE ASSESSEE OF THESE PARTIES. AS A RESULT CORRECTNESS, GENUINENESS AND VERACITY OF THE SO CALLED SALES RET URN HAS NOT BEEN SUBJECTED TO SCRUTINY AND VERIFICATION. THEREF ORE, THE CLAIM MADE BY THE ASSESSEE MAY NOT BE TAKEN AT ITS FACE VALUE. 6. FROM THE CO-JOINT READING OF PARA NO. 1.2 I.E. R EMAND REPORT AND PARA NO.1.3 OF CIT(A) ORDER, WE HAVE NOTED THAT THE AO IN HIS REMAND REPORT HAS CATEGORICALLY HELD THAT THE CORRECTNESS, GENUINENESS AND VERACITY OF THE SO-CALLED SALES RETURN HAS NOT BEEN SUBJECTED TO SCRUTINY AND VERIFICATION AND THEREFORE THE CLAIM MADE BY TH E ASSESSE MAY NOT BE TAKEN AT ITS FACE VALUE. WHEREAS ON THE CONTRARY, L D. CIT(A) HAS MENTIONED IN ITS OPERATIVE PORTION WHILE DELETING THE ADDITIO NS THAT THE AO HAS ACCEPTED THE VERIFICATION OF SALES RETURN WHICH IS ABSOLUTE CONTRARY TO THE RECORDS WHICH SHOWS NON APPLICATION OF MIND ON THE PART OF THE CIT(A) AND THEREFORE CONSIDERING THE ABOVE FACTUAL POSITIO N WE REMAND THE CASE BACK TO THE FILE OF CIT(A) TO DECIDE THIS ISSUE AFR ESH, AFTER CAREFULLY PERUSING AND CONSIDERING THE REMAND REPORT SUBMITTE D BY AO. IT IS ITA NO.6863/MUM/2012 ACIT VS. M/S. YUVA TEXTILE INDUSTRIES LTD. 5 NEEDLESS TO MENTION THAT AFRESH ORDERS WOULD BE PAS SED BY CIT(A) AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSESSEE. W ITH THESE OBSERVATIONS, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17-05-2016. SD/- SD/- (JASON P. BOAZ) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI , DATED 17/5/2016 ASHWINI / ASHWINI / ASHWINI / ASHWINI /PS PSPS PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//