ITO, Bangalore V. M/s Hi- Tech Pneumatics & Heat Treaters Pvt. Ltd., Bangalore

ITA 782/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1650 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-12-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 11-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 782/BANG/2010 ASSESSMENT YEAR : 2002-03 THE INCOME TAX OFFICER, WARD 11(2), BANGALORE. : APPELLANT VS. M/S. HI-TECH PNEUMATICS & HEAT TREATERS PVT. LTD., V-34(A),7 TH MAIN, IIND STAGE, PEENYA INDUSTRIAL AREA, BANGALORE 560 058. : RESPONDENT APPELLANT BY : SMT. JACINTA ZIMIK VASHAI, ADDL. CIT (DR) RESPONDENT BY : NONE O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT (A)-I, BANGALORE, IN ITA NOS: 275,276,277 & 89/ W-11(2)/A-I/07-08 DATED: 11.3.2010 FOR THE ASSESSMENT YEAR 2002-03 [CONSOLIDATED ORDER FOR THE AYS.2001-02 TO 04-05] IN THE CASE OF M/S. HI-TECH PNEUMATICS & HEAT TREATERS PVT. LTD. , BANGALORE. ITA NO.782/BANG/10 PAGE 2 OF 5 2. THE REVENUE HAD RAISED FOUR GROUNDS, IN WHICH, GROUND NOS.1 AND 4 BEING GENERAL AND NO SPECIFIC ISSUES INVOLVED, TH EY HAVE BECOME NON- CONSEQUENTIAL. IN THE REMAINING GROUNDS, THE CRUX OF THE ISSUE WAS THAT THE CIT (A) HAD ERRED IN DELETING THE ADDITIONS MA DE ON ACCOUNT OF UNDER-VALUATION OF EXCISABLE GOODS AND SUPPRESSI ON OF SALES RELYING ON THE ORDER OF THE CUSTOMS EXCISE AND SERV ICE TAX APPELLATE TRIBUNAL. 3. BRIEFLY STATED, THE ASSESSEE COMPANY [T HE ASSESSEE IN SHORT] WAS ENGAGED IN THE MANUFACTURE AND SALE OF DTH HAMMERS/ BUTTON BITS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, AN ADDITION OF R S.6.08 LAKHS WAS MADE BY THE AO [FOR THE REASONS SET-OUT IN THE IMPUGNED ASSESSMENT ORDER] ON THE BASIS OF INFORMATION RECEIVED FROM THE ZONAL DI RECTOR GENERAL, DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE ZONAL UNIT, BANGALORE TO THE EFFECT THAT THE ASSESSEE HAD RESORTED TO GROSS UNDER-VALUATION OF EXCISABLE GOODS BY SHOWING LESSER VALUES IN ITS INV OICES RESULTING IN EVASION OF INCOME-TAX ALSO. 4. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSU E WITH THE CIT (A) FOR SOLACE. IT WAS CONTENDED BEFORE THE FIRST APPE LLATE AUTHORITY, AMONG OTHERS, THAT IN RESPECT OF THE FINDING OF THE CENTR AL EXCISE INTELLIGENCE ZONE UNIT TO THE EFFECT THAT THE ASSESSEE HAD INDULGED IN EVASION OF DUTY BY RESORTING TO GROSS UNDER-VALUE OF EXCISABLE GOODS M ANUFACTURE AND CLEARED BY SHOWING LESSER VALUE IN THE INVOICE AND COLLECTE D REMAINING AMOUNTS IN CASH ETC., THE ASSESSEE TOOK UP THE ISSUE WITH COMMISSIONER OF CENTRAL EXCISE WHO CONFIRMED THE ORDER PASSED BY THE LOWER AUTHORITY. HOWEVER, THE HONBLE CUSTOMS EXCISE AND SERVICE TAX APPELLAT E TRIBUNAL [CESTAT], ACCORDING TO THE ASSESSEE, WHILE DISPOSING OF THE A SSESSEES APPEAL VIDE ITA NO.782/BANG/10 PAGE 3 OF 5 ITS ORDER IN APPEAL NOS: 165 TO 167 OF 2006 DATED 2 5.11.2009, OBSERVED THUS: SO LONG AS THE REVENUE HAS NOT BEEN SUCCESSFUL IN PROVIDING THAT THE ACTUAL BUYER HAD PAID AN AMOUNT MUCH MORE THAN THE VALUE SHOWN IN THE INVOICE ISSUED AT THE TIME OF REMOVAL OF GOODS FROM THE FACTORY, THE ALLEGATION OF UNDER-VALUATION SHOULD F AIL AND NO DEMAND ON THAT BASIS CAN BE SUSTAINED 4.1. TAKING SANCTUARY UNDER THE FINDING O F HONBLE CESTAT CITED SUPRA, THE ASSESSEE VEHEMENTLY ARGUED BEFORE THE LD . CIT (A) THAT THERE WAS NO CASE FOR MAKING ANY ADDITION BY THE AO AS TH E ALLEGED EVASION OF DUTY BY SHOWING GROSS UNDER-VALUATION OF EXCISABLE GOODS MANUFACTURED ETC., WAS STRUCK DOWN BY THE HONBLE CESTAT. 4.2. AFTER DUE CONSIDERATION OF THE ASSESSE ES CONTENTIONS AND ALSO IN CONFORMITY WITH THE FINDING OF THE HONBLE CESTAT, THE CIT (A) DELETED THE ADDITION. 5. AGITATED, THE REVENUE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LD. D R WAS VERY FIRM IN HER URGE THAT AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF T HE ISSUE, THE AO HAD WORKED OUT THE ADDITIONAL GROSS PROFIT AT RS.6.08 LAKHS WHICH WAS DULY ADDED TO THE ASSESSEES INCOME. IN FURTHERANCE, IT WAS SUBMITTED THAT (I) THE CIT (A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDER-VALUATION OF EXCISABLE GOODS AND SUPPRESSION OF SALES RELYING ONLY ON THE ORDER OF THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WITHOUT APPRECIATING THAT T HE MATTER HAD NOT REACHED FINALITY; & (II) THAT HE HAD FAILED TO APPRECIATE THE FACT THAT THOU GH THE INFORMATION WAS RECEIVED FROM CENTRAL EXCISE DEPART MENT, THE ASSESSMENT WAS COMPLETED BASED ON INDEPENDENT F INDINGS OF THE ASSESSING OFFICER. ITA NO.782/BANG/10 PAGE 4 OF 5 IT WAS, THEREFORE, VOCIFEROUSLY PLEADED THAT THE ST AND OF THE AO REQUIRES TO BE SUBSTANTIATED. 5.1. ON THE OTHER HAND, NONE WAS PRESENT O N BEHALF OF THE ASSESSEE TO PORTRAY ITS STAND ON THE ISSUE. 6. WE HAVE DULY CONSIDERED THE S UBMISSION OF THE REVENUE AND ALSO METICULOUSLY PERUSED THE RELEVANT CASE REC ORDS. 6.1. AT THE OUT-SET, WE WOULD LIKE TO POIN T OUT THAT ON THE BASIS OF INFORMATION TO THE EFFECT THAT THE ASSESSEE HAD INDULGED IN EVASION OF DUTY ETC., FROM THE CENTRAL EXCISE DEPARTMENT; THE AO HAD DETE RMINED THE ADDITION AS RECORDED IN HIS IMPUGNED ORDER UNDER CO NSIDERATION. HOWEVER, THE HONBLE CESTAT, IN ITS FINDINGS CITED SUPRA, HA D EMPHATICALLY RULED THAT THE ALLEGATION OF UNDER-VALUATION SHOULD FAIL AND NO DEMAND ON THAT BASIS CAN BE SUSTAINED. THUS, THE INFORMATION - ALLEGED EVASION OF DUTY BY RESORTING TO UNDER-VALUATION OF EXCISABLE GOODS MAN UFACTURED ETC., HAS BEEN STRUCK DOWN BY THE HONBLE TRIBUNAL CITED SUPRA - ON THE BASIS OF WHICH ADDITION MADE BY THE AO, AS RIGHTLY HIGHLIGHTED BY THE LD. CIT (A) IN HIS IMPUGNED ORDER UNDER DISPUTE, IN OUR CONSIDERED VIE W, DOESNT STAND THE TESTIMONY OF LAW. WE, ARE, THEREFORE, OF THE FIRM VIEW THAT THE STAND OF THE LD. CIT (A) DOESNT REQUIRE ANY INTERFERENCE AT THI S STAGE. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT , THE REVENUES APPEAL IS DISMISSED . ITA NO.782/BANG/10 PAGE 5 OF 5 PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF JANUARY, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 3 RD JANUARY, 2011. DS/- COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE. 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE