Dy. Commissioner of Income Tax-6, Kanpur V. M/s. Kanpur Plastipack Ltd., Kanpur

ITA 76/LKW/2012

• Counselvise Citation: 7623714 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 08-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2012
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: S K GARG SHRI P K KAPOOR
• Keywords: Corroborative evidences

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.76/LKW/2012 A.Y.:2008 - 09 DY.C.I.T. - 6, KANPUR. VS. M/S KANPUR PLASTIPACK LTD., D - 19 - 20, PANKI INDUSTRIAL AREA, UDYOG NAGAR, KANPUR. PAN:AAACK5541K (APPELLANT) (RESPONDENT) C.O.NO.35/LKW/2012 (IN ITA NO.76/LKW/2012) A.Y.:2008 - 09 M/S KANPUR PLASTIPACK LTD., D - 19 - 20, PANKI INDUSTRIAL AREA, UDYOG NAGAR, KANPUR. PAN:AAACK5541K VS. DY.C.I.T. - 6, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI P. K. DEY, D. R. ASSESSEE BY SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. DATE OF HEARING 09/01/2014 DATE OF PRONOUNCEMENT 3 0 /01/2014 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT ( A) - II, KANPUR DATED 03/11/2011 FOR ASSESSMENT YEAR 2008 - 2009. 2. FIRST WE TAKE UP THE APPEAL FILED BY THE REVENUE. GROUND NO. 1 IS AS UNDER: 2 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR, HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACTS AND FINDINGS OF THE ASSESSING OFFICER THAT DURING THE COURSE OF SURVEY PROCEEDINGS IN THE PREMISES OF M/S KSM EXPORTS. LTD., NO STOCK WHATSOEVER, NO BOOKS OF ACCOUNTS AND NO PAPERS RELATING TO ANY BUSINESS CARRIED OUT BY M/S KSM EXPORTS LTD., WERE FOUND AND THE STOCKS AND MACHINES WHIC H WERE FOUND IN THE PREMISES BELONGED TO M/S KANPUR PLASTIC LTD. (ASSESSEE). MOREOVER, DURING THE COURSE OF SURVEY PROCEEDING, IN THE FACTORY PREMISES OF THE ASSESSEE COMPANY, NO ANY MANUFACTURING ACTIVITIES CARRIED OUT BY M/S KSM EXPORTS LTD., WERE FOUND. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS IT IS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN I.T.A. NO.274/LKW/2009 DATED 26/03/2010 IN ASSESSEES OW N CASE. HE ALSO SUBMITTED THAT COPY OF THE ORDER IS PLACED AT PAGE NO. 235 TO 255 OF THE PAPER BOOK AND IN PARTICULAR , HE DRAWN OUR ATTENTION TO PARA 10 OF THE TRIBUNAL ORDER AVAILABLE ON PAGE NO. 251 TO 253 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE TRIBUNAL ORDER IS ALREADY APPROVED BY HON'BLE ALLAHABAD HIGH COURT AS PER DECISION IN INCOME - TAX APPEAL NO. 113 OF 2011 DATED 12/09/2012, COPY OF WHICH IS AVAILABLE ON PAGE NO. 17 TO 18 OF THE COMPILATION OF THE CASE LAWS. HE SUBMITTED THAT ALTHOUGH THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS FOR ASSESSMENT YEAR 2007 - 08 BUT IN THIS ORDER , HON'BLE HIGH COURT HAS DULY CONSIDERED THIS VERY TRIBUNAL DECISION FOR ASSESSMENT YEAR 2005 - 06 AND REPRODUCED THE SAME PARA OF THE TRIBUNAL DECISION, WHICH HAS BEEN REPRODUCED BY LEARNED CIT ( A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT ADMITTEDLY THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE B Y THE TRIBUNAL DECISION RENDERED IN ASSESSEES OWN CASE AND HON'BLE ALLAHABAD HIGH COURT IS ALSO IN FAVOUR OF THE ASSESSEE AND IN THIS JUDGMENT , HON'BLE HIGH COURT HAS DULY CONSIDERED THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 2005 - 3 06 ALSO. THE ORDER OF LEARN ED CIT ( A) IS IN LINE WITH THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2005 - 06 AND, THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT ( A) ON THIS ISSUE. GROUND NO. 1 OF REVENUES APPEAL STANDS REJECTED. 5. G ROUND NO. 2 OF REVENUES APPEAL READS AS UNDER: 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR, HAS ERRED IN LAW AND ON FACTS BY IGNORING THE FACTS THAT EXCESS VALUE OF WASTAGE STOCK AT RS.4,16,925/ - AND HDPE GRANULES WEIGHING 10000 KGS. W AS RECEIVED ON 24 . 05.07 AND 21187 KGS. W AS ISSUE D FO R THE CONSUMPTION HAVE NOT BE EN TAKEN BY CIT(A) AT THE TIME OF CALCULATING THE VA LUE O F SHORTAGE IN STOCKS . 6. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE DRAWN OUR ATTENTION TO PAGE NO. 10 & 11 OF THE ORDER OF LEARNED CIT(A) AND POINTED OUT THAT IT IS NOTED BY LEARNED CI T(A) THAT ASSESSING OFFICER WAS PRESENT BEFORE HIM AND WAS CONFRONTED WITH THE ARGUMENTS OF THE ASSESSEE WHO ACCEPTED THE FACT THAT NOTHING INCRIMINATING WAS FOUND DURING THE COURSE OF SURVEY. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATER IAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND WE FIND THAT WHILE DECIDING THIS ISSUE, IT IS NOTED BY LEARNED CIT(A) ON PAGE NO. 10 OF THE ORDER THAT THE NOTICE WAS ISSUED TO THE ASSESSING OFFICER TO APPEAR AND DISCUSS ON THE ISSUE AND ON THE AVERMENTS MADE BY THE ASSESSEE. HE FURTHER NOTED THAT THE ASSESSING OFFICER, WHO WAS THE SAME PERSON, WHO COMPLETED THE ASSESSMENT, APPEARED ON 03/11/2011 AND HE WAS CONFRONTED WITH THE ARGUMENTS OF THE ASSESSEE AND THE DETAILS OF THE FACTS. HE HAS FURTHER NOTED THAT THE ASSESSING OFFICER AGREED WITH THE OBJECT ION S AND AVERMENTS OF THE ASSESSEE AND THEREAFTER , HE DECIDED THE ISSUE AS AGREED BY 4 BOTH THE SIDES. CONSIDERING THESE FACTS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE BECAUSE THE SAME IS ADMITTEDLY AS AGREED BY THE ASSESSING OFFICER HIMSELF. ACCORDINGLY, GROUND NO. 2 IS REJECTED. 8. GROUND NO. 3 OF REVENUES APPEAL READS AS UNDER: 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED ON LAW AND IN FACTS BY IGNORING THE FACTS AND FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT MAINTAINED DAY TO DAY RECORD IN RESPECT OF CONSTRUCTION OF BUILDING AND DIFFERENCE IN VALUATION HAS BEEN EMERGED AFTER S UBMISSION OF THE REPORT BY THE D.V.O. AND ADDITION MADE ON THE BASIS OF DIFFERENCE . 9. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 10. WE HAVE CONSIDERED THE RIVA L SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) ON PAGE 22 TO 23 OF HIS ORDER. ON THAT PAGE , IT IS NOTED BY LEARNED CIT(A) THAT IT HAS BEE N HELD BY VARIOUS COURTS IN THE CASES DISCUSSED BY HIM THAT T HE REFERENCE MADE BY THE ASSESSING OFFICER TO D.V.O. IS BAD IN LAW BECAUSE THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE NOT REJECTED BY THE ASSESSING OFFICER. THERE AFTER , HE HAS DECIDED THE ISSUE O N MERIT ALSO AND DELETED THE ADDITION ON THIS BASIS THAT THE DIFFERENCE IN THE VALUE OF THE ASSESSEE AND D.V.O. IS NOT EVEN 2%. AS PER GROUND NO. 3 RAISED BEFORE US, THERE IS NO GROUND RAISED ON THE FIRST ASPECT THAT THE REFERENCE TO D.V.O. IS ITSELF NOT VALID. HAVING ACCEPTED THIS DECISION OF LEARNED CIT(A), THE GROUND RAISED BY THE REVENUE ON THE MERIT OF THE DELETION OF THE ADDITION DOES NOT AFFECT THE DECISION ON THIS ISSUE EVEN IF THIS GROUND OF THE REVENUE IS ACCEPTED. HENCE, THIS GROUND IS REJECTE D AS INFRUCTUOUS. 5 11. GROUND NO. 4 & 5 OF REVENUES APPEAL ARE GENERAL IN NATURE AND DO NOT CALL FOR ANY SEPARATE ADJUDICATION. 12. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 13. NOW WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. 14. GR OUND NO. 1 AND 2 WERE NOT PRESSED AND ACCORDINGLY THESE GROUND ARE REJECTED AS NOT PRESSED. 15. THE REMAINING GROUNDS I.E. 3 & 4 ARE AS UNDER: 3. BECAUSE THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING AN ADDITION OF RS.1,05,721/ - ON ACCOUNT OF 'EXCESS / SHORT STOCKS FOUND DURING THE COURSE OF SURVEY', WITHOUT GIVING DUE CONSIDERATION TO THE RECONCILIATION SUBMITTED BY THE ASSESSEE, AT THE ASSESSMENT STAGE, AS WELL AS AT APPELLATE STAGE. 4. BECAUSE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING ADHOC DISALLOWANCES OF; (A) RS.1,50,000: OUT OF REPAIRS AND MAINTENANCE OF PLANT AND MACHINERY; AND (B) RS. 50,000 : OUT OF REPAIRS AND MAINTENANCE OF BUILDING; EVEN THOUGH THE CLAIMS MADE UNDER THE AFORESAID HEADS, STOOD FULLY SUPPORTED BY THE RELEVANT BILLS, VOUCHERS / ACKNOWLEDGEMENTS OF THE PAYEES AND ALSO ENTRIES APPEARING IN THE BOOKS OF ACCOUNT THAT HAD BEEN KEPT AND MAINTAINED BY THE ASSESSEE/CROSS OBJECTOR IN REGULAR COURSE (AND ACCEPTED ALSO AS SUCH). 16. THE LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS, WHICH WERE MADE BEFORE THE LEARNED CIT(A) AND LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 6 REGARDING GROUND NO. 3, WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) ON THE BASIS THAT BOTH THE SIDES I.E. TH E ASSESSING OFFICER AS WELL AS THE A.R. AGREED FOR THIS MUCH ADDITION AND HENCE, WE DO NOT FIND ANY MERIT IN THIS GROUND. THIS GROUND IS REJECTED. 18. REGARDING GROUND NO. 4, WE FIND THAT DISALLOWANCE OF RS.1.50 LAC AND RS.50,000/ - WAS MADE BY THE ASSESS ING OFFICER OUT OF REPAIRS & MAINTENANCE OF PLANT & MACHINERY AND OUT OF REPAIRS AND MAINTENANCE OF BUILDING. AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED A.R. OF THE ASSESSEE, THE LEARNED CIT(A) HAS RESTRICTED THE DISALLOWANCE TO RS.85,000/ - AND RS.3 5,000/ - RESPECTIVELY. THEREFORE, THE GROUND NO. 4 RAISED BY THE ASSESSEE IS INCORRECT IN RESPECT OF THE AMOUNT BECAUSE OUT OF THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.1.50 LAC AND RS.50,000/ - , THE LEARNED CIT(A) HAS RESTRICTED THE DISALLO WANCE TO RS.85,000/ - AND RS.35,000/ - RESPECTIVELY. SINCE THE ASSESSEE COULD NOT PRODUCE BILLS OR SUPPORTING EVIDENCE IN RESPECT OF THE EXPENSES INCURRED FOR REPAIRING OF PLANT & MACHINERY AND BUILDING, WE ARE OF THE CONSIDERED OPINION THAT SUCH SMALL DISALLOWANCE CONFIRMED BY LEARNED CIT(A) DOES NOT REQUIRE ANY INTERFERENCE FROM OUR SIDE. THEREFORE, GROUND NO. 4 IS REJECTED. 19. GROUND NO. 5 IS AS UNDER: 5. BECAUSE A LUMP - SUM ADDITION OF RS.10 LAKHS AS HAD BEEN MADE ON ACCOUNT OF INVESTMENT IN BUILDING, THE B ASIS OF DVO'S REPORT WAS LIABLE TO BE DELETED, INTER - ALIA, ON THE GROUNDS AND REASONING THAT; FIRSTLY : 'REFERENCE' ITSELF TO DVO UNDER SECTION 142A WAS ILLEGAL AND THE DVO'S REPORT COULD NOT HAVE BEEN CONSIDERED AS A MATERIAL FOR THE PURPOSES OF MAKI NG ANY ADDITION TO THE DISCLOSED VERSION OF INVESTMENT IN FIXED ASSETS; AND SECONDLY: 'INVESTMENT' MADE BY THE ASSESSEE STOOD FULLY SUPPORTED AND PROVED BY THE BOOKS OF ACCOUNT AND 7 OTHER RECORDS AS HAD BEEN MAINTAINED IN REGULAR COURSE, AND AS STOOD ACCEP TED ALSO AS SUCH FOR THE PURPOSES OF MAKING ASSESSMENT. 20. REGARDING THIS GROUND, WE FIND THAT IN RESPECT OF ADDITION MADE BY THE ASSESSING OFFICER OF RS.10 LAC ON THE BASIS OF D.V.O.S REPORT, THE ISSUE WAS DECIDED BY LEARNED CIT(A) ON PAGE 22 AND 23 AND THIS ADDITION WAS DELETED. HENCE, THIS GROUND RAISED BY TH E ASSESSEE IN CROSS OBJECTION IS NOT ARISING OUT OF THE ORDER OF LEARNED CIT(A) AND THEREFORE, THE SAME STANDS REJECTED. 21. IN THE RESULT, THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. 22. IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE AND THE CR OSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 /01/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW