SHREEJI BOTTLE TRADING CO., MUMBAI V. CIT 24, MUMBAI

ITA 7504/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8312 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 08-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Keywords: Assessment record
• Section: 143(3); 142(1); 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , . / BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER / AND , . . SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 7504/MUM/2011 / ASSESSMENT YEAR 2007-08 M/S. SHREEJI BOTTLE TRADING CO., 179/5, 1 ST FLOOR, AASHIRWAD INDL ESTATE, RAM MANDIR ROAD, GOREGAON (W), MUMBAI-400 104. PAN: AACFS 3250 N VS. COMMISSIONER OF INCOME TAX-24, PRATYAKSHA KAR BHAVAN, C-10, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI. ( / APPELLANT ) ( ! / RESPONDENT ) ' / APPELLANT BY : SHRI PARESH SHAPARIA ! # ' /RESPONDENT BY : SHRI GIRIJA DAYAL # $%& / DATE OF HEARING : 16 -10-2012 '( # $%& / DATE OF PRONOUNCEMENT : 07 -11-2012 )* / O R D E R PER RAJENDRA, AM THE APPELLANT HAS FILED THIS APPEAL AGAINST THE ORD ER DT.26-08-2011 OF THE CIT- 24, MUMBAI PASSED U/S. 263 OF THE INCOME TAX ACT 19 61 (ACT) ON THE FOLLOWING GROUNDS: I. ORDER PASSED U/S 263 IS BAD IN LAW:- 1. THE LEARNED CIT 24 ERRED IN TREATING THE ORDER P ASSED BY A.O. U/S. 143(3) DATED 18-05-2009 AS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF REVENUE. 2. THE LEARNED CIT CITY 24 ERRED IN DRAWING CONCLUS IONS THAT NECESSARY ENQUIRIES WERE NOT MADE FOR COMPLETION OF ASSESSMENT U/S. 143 (3). 3. THE LEARNED CIT CITY 24 OUGHT NOT TO HAVE TREATE D ORDER PASSED U/S. 143(3) AS ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE . 4. THE ORDER PASSED U/S. 263 IS BAD IN LAW. ITA NO. 7504/MUM/2011 M/S. SHREEJI BOTTLE TRADING CO., 2 2. ASSESSEE-FIRM, ENGAGED IN TRADING OF GLASS BOTTLES, FILED ITS RETURN ON 29-10- 2007. INITIALLY, THE RETURN WAS PROCESSED U/S. 143 (1) OF THE INCOME TAX ACT, 1961 (ACT). LATER ON IT WAS SELECTED FOR SCRUTINY AND A SSESSING OFFICER (AO) FINALIZED THE ASSESSMENT ON 18-05-2009 U/S. 143(3) OF THE ACT. 2.1 ON GOING THROUGH THE ASSESSMENT RECORDS AND THE ASS ESSMENT ORDER PASSED, CIT-24, MUMBAI FOUND THAT THERE WERE MANY A DISCREP ANCIES IN THE ORDER. HE ISSUED A NOTICE U/S. 263 OF THE ACT ON 26-10-2010 HOLDING THAT ASSESSMENT PASSED BY THE AO WAS ERRONEOUS AND PRE-JUDICIAL TO THE INTEREST OF R EVENUE. AFTER CONSIDERING THE REPLY FILED BY THE ASSESSEE-FIRM DT. 24-11-2010, HE HELD THAT NECESSARY ENQUIRIES WERE NOT MADE BY THE AO. INITIALLY, THE NOTICE U/S. 263 WAS ISSUED WITH REGARD TO SEVEN ITEMS, BUT LATER ON FINAL ORDER WAS PASSED ONLY FOR TWO IT EMS VIZ REASONABLE AND GENUINENESS OF THE BUSINESS REQUIREMENTS OF PAYMENT MADE BY THE ASSESSEE AS SALARY AND COMMISSION TO THE PARTNERS AND NEPHEWS OF THE PARTN ERS DISCREPANCIES IN PURCHASE SHOWN BY THE ASSESSEE FROM THREE PARTIES I.E., M/S. AGI GLASS PACK, M/S. HALDYN GLASS AND M/S. HINDUSTAN NATIONAL GLASS. 3. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTE D THAT DETAILS CALLED FOR BY THE AO WERE SUBMITTED DURING THE ASSESSMENT PROCEED INGS, THAT DETAILS OF SALARY/COMMISSION PAID TO THE PARTNERS/THEIR NEPHEW S WERE SUBMITTED, THAT AO HAD ISSUED NOTICE U/S. 142(1) AND 143(2) OF THE ACT, TH AT AO HAD APPLIED HIS MIND BEFORE PASSING THE AO, THAT ORDER OF THE AO WAS NEITHER ER RONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE, THAT DETAILS OF PURCHASE MADE FROM VARIOUS PARTIES WAS MADE AVAILABLE TO THE AO, THAT THERE WAS NO DISCREPANCY IN THE PURCHASE ACCOUNT, THAT CIT HAD ISSUED NOTICE FOR SEVEN ITEMS, THAT ONLY TWO IT EMS WERE PICKED UP FOR REVISIONARY PROCEEDINGS, THAT WAS NO LAPSE ON THE PART OF THE A SSESSEE OR THE AO. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THERE WAS NON-AP PLICATION OF MIND ON THE PART OF THE AO, THAT DETAILS OF SALARY/COMMISSION AND PURCH ASES WERE NOT VERIFIED BY THE AO, THAT CIT HAD DIRECTED THE AO TO MAKE PROPER VERIFIC ATION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. WE FIND THAT WHILE PASSING THE ORDER U/S. 14 3(3) OF THE ACT, AO HAS NOT DISCUSSED ANYTHING RELATED WITH ANY OF THE ISSUES DISCUSSED I N THE NOTICE ISSUED U/S. 263 OF THE ACT BY THE CIT. IF THE DETAILS ABOUT RETURN FILED, RETURNED INCOME AND OTHER SUCH NORMAL INFORMATION IS IGNORED BALANCE ASSESSMENT OR DER IS HARDLY OF 150 WORDS AND IN THE SAID ORDER ALSO THERE IS SPECIFIC FINDING ABOUT FILING OF DETAILS BY THE ASSESSEE. AO HAS NO-WHERE HELD THAT HE HAD GONE THROUGH THE DETA ILS FILED AND FOUND THE SAME SATISFACTORY. IN THESE CIRCUMSTANCES, IN OUR OPINI ON, CIT HAS RIGHTLY INVOKED HIS REVISIONARY PROVISIONS. NON-APPLICATION OF MIND BY THE AO IS ONE OF THE BASIS FOR APPLYING THE PROVISIONS OF SECTION 263. 5. AS THE ORDER PASSED BY THE AO IS NOT A SPEAKING ORD ER, SO TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CA SE, CIT HAD ISSUED NOTICE FOR INITIATING REVISIONARY PROCEEDINGS. WE FIND THAT A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT(A) HAD DROPPED PROCEEDING WITH RE GARD TO FIVE ISSUES OUT OF THE SEVEN ISSUES. IN OUR OPINION, CIT HAD FOLLOWED A J UDICIOUS AND FAIR APPROACH. AS FAR AS REMAINING TWO ISSUES ARE CONCERNED, WE FIND THAT THERE ALSO HE HAS TAKEN A REASONABLE STAND. FROM THE PAPER BOOK (24-39) IT IS CLEAR THAT ASSESSEE HAD FURNISHED DETAILS OF COMMISSION PAID BY THE COMPANY TO THE RE LATIVES OF THE PARTNERS OF THE ITA NO. 7504/MUM/2011 M/S. SHREEJI BOTTLE TRADING CO., 3 ASSESSEE FOR THE SERVICE RENDERED BY THEM. AO IS D IRECTED TO VERIFY THE DETAILS FILED BY THE AO WHILE PASSING FRESH ORDER. AS FAR AS RECONC ILIATION OF PURCHASES MADE FROM THREE PARTIES ARE CONCERNED, AO IS DIRECTED TO VERI FY THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE DETAILS FILED. FOR THE LIMITED PURPOS E OF VERIFICATION OF BOTH THE ISSUES I.E., PAYMENT OF COMMISSION, RECONCILIATION OF DISCREPANC Y IN PURCHASES, MATTER IS RESTORED BACK TO THE FILE OF THE AO. 6. IN OUR OPINION, CIT WAS NOT UNJUSTIFIED IN INVOKING PROVISIONS OF SEC. 263. THEREFORE, WE HOLD THAT THE ORDER OF THE AO WAS ERR ONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND REVISIONARY ACTION TAKEN BY THE CIT WAS AS PER THE PROVISIONS OF THE ACT. APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOVEMBER, 2012. SD/- SD/- ( . . / B.R. MITTAL ) ( / RAJENDRA ) )+ / JUDICIAL MEMBER & )+ / ACCOUNTANT MEMBER MUMBAI, ,) DATE: 7 TH NOVEMBER, 2012 TNMM )* )* )* )* # ## # $- $- $- $- .-$ .-$ .-$ .-$ / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE !-$ $ //TRUE COPY// )* )* )* )* / BY ORDER, / // / / 0 0 0 0 DY./ASSTT. REGISTRAR , / ITAT, MUMBAI