M/s World Wide Shipping Inc., Mangalore V. DCIT, Mangalore

ITA 90/BANG/2011

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8228 (ITAT-BANGALORE)
• Duration Of Justice: 7 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-12-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 01-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: V SRINIVASAN
• Section: 143(3); 142(1); 153A; 37(1); 143(1); 132; 90; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, B E NGAL U R U BEFORE SHRI A .K. GARODIA , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO S . 90 TO 92 /BANG/201 1 (ASSESSMENT YEAR S : 2004 - 05 TO 2006 - 07 ) M/S.WORLDWIDE SHIPPING INC. NO.202, VEE KAY TOWERS, KULUR BANGRA ROAD, KULUR, MANGALORE. PAN:AAAFW3568 K VS. APPELLANT DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE, MANGALORE. RESPONDENT APPELLANT BY : SHRI V.SRINIVASAN, ADVOCATE. RESPONDENT BY : SHRI K.V.ARAVIND, STANDING COUNSEL DATE OF HEARING : 20/12/2018 DATE OF PRONOUNCEMENT: 31/ 12/2018 O R D E R PER PAVAN KUMAR GADALE , J M : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX(APPEALS) - VI, BENGALURU, FOR THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 AND 2006 - 07 PASSED U/S 153A R.W.S. 143(3) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT]. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THESE ARE CLUBBED TOGETHER AND HEARD AND DISPOSED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO S . 90 TO 92 /BANG/201 1 PAGE 2 OF 11 2. BEFORE WE PROCEED, THE LEARNED AR OF THE ASSESSEE HAS NOT PRESSED THE GROUNDS NO.2 TO 8 IN THE ASSESSMENT YEAR 2004 - 05 (ITA NO.90/BANG/2011) AND ACCORDINGLY MADE ENDORSEMENT IN THE GROUNDS OF A PPEAL. THEREFORE, THE EFFECTIVE GROUNDS ARE GROUNDS NO.1 AND 9 TO 12 WHICH READ AS UNDER: ITA NO S . 90 TO 92 /BANG/201 1 PAGE 3 OF 11 3 . FOR THE ASSESSMENT YEAR 2005 - 06 (ITA NO.91/BANG/2011) THE LEARNED AR HAS NOT PRESSED THE GROUNDS NO.2 TO 8 AND ACCORDINGLY MADE ENDORSEMENT IN THE GROUND S OF APPEAL. THEREFORE, THE EFFECTIVE GROUNDS ARE GROUNDS NO.1 AND 9 TO 13 WHICH READ AS UNDER: ITA NO S . 90 TO 92 /BANG/201 1 PAGE 4 OF 11 4. FOR THE ASSESSMENT YEAR 200 6 - 0 7 (ITA NO.9 2 /BANG/2011) ALSO, LEARNED AR HAS NOT PRESSED THE GROUNDS NO.2 TO 7 AND ACCORDINGLY MADE ENDORSEMENT IN THE ITA NO S . 90 TO 92 /BANG/201 1 PAGE 5 OF 11 GROUNDS OF APPEAL. THEREFORE, THE EFFECTIVE GROUNDS ARE NO.1 AND 8 TO 10 WHICH READ AS UNDER: 5. FOR THE SAKE OF CONVENIENCE, WE TAKE UP APPEAL NO.ITA 90/BANG/2011 FOR ASSESSMENT YEAR 2004 - 05 AND THE FACTS NARRATED THEREIN AS UNDER: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENT AND FILED THE RETURN OF INCOME ON 22/10/2004 DECLARING TOTAL INCOME OF RS.16,13,616 / - . T HE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, SEARCH U/S 132 OF THE ACT WAS CONDUC TED ON THE ITA NO S . 90 TO 92 /BANG/201 1 PAGE 6 OF 11 PREMISES OF ASSESSEE AND NOTICE U/S 153A OF THE ACT WAS ISSUED. IN COMPLIANCE, T HE ASSESSEE FILED LETTER TO TREAT THE RETURN OF INCOME FILED EARLIER AS IN RESPONSE TO NOTICE U/S 153A OF THE ACT. FURTHER, T HE ASSESSING AUTHORI TY HAS ISSUED NOTI CE U/S 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE AND CALLING FOR VARIOUS DETAILS. THE ASSESSING AUTHORITY FOUND THAT THE ASSESSEE HAS NOT SUBMITTED THE INFORMATION FOR VARIOUS REASONS AND F INALLY, THE ASSESSEE WAS REPRESENTED BY ITS LEARNED AR AND THE CASE WAS DISCUSSED. THE ASSESSING AUTHORITY DEALT ON THE NATURE OF BUSINESS ACTIVITIES AND NATURE OF INCOME WHEREAS THE ASSESSEE HAS CHALLENGED THE VALIDITY OF SEARCH U/S 132 OF THE ACT AND CLAIM OF EXPENDITURE. THE ASSESSING AUTHORITY, AFTER CO NSIDERING THE SUBMISSIONS OF THE ASSESSEE AND MATERIAL FILED AND INFORMATION OBTAINED ON VERIFICATION RELIED ON DOCUMENTS . FURTHER DUE TO NON - AVAILABILITY OF CONF IRMATION OF CREDITORS AND EVIDENCE OF CLAIM OF EXPENDITURE HAS MADE AN ADDITION OF EXPENSES O F RS.51,465/ - TO THE R ETURNED INCOME U/S 37(1) OF THE ACT AND BALANCE OF SUNDRY CREDITORS TO THE EXTENT OF NON - AVAILABILITY OF CONFIRMATION OF RS.38,97,404/ - AND FINALLY A SSESSED THE TOTAL INCOME OF RS.55,62,490/ - U/S 153A R.W.S. 143(3) BY ORDER DATED 04/12 /2009. 6. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A), IN THE APPELLATE ITA NO S . 90 TO 92 /BANG/201 1 PAGE 7 OF 11 PROCEEDINGS, HAVING CONSIDERED THE GROUNDS OF APPEAL AND THE SUBMISSIONS AND DETAILS FILED IN THE COURSE OF APPELLATE PROCEEDINGS IN RESPECT OF SUNDRY CREDITORS HAS GRANTED RELIEF IN RESPECT OF THE ADDITION OF SUNDRY CREDITORS AND RESTRICTING THE ADDITION OF TIPPER EXPENSES BY ESTIMATING AT 20% WORKED OUT TO RS.10,293/ - AND PARTLY ALLOWED THE APPEAL. 7. BEFORE US, T HE LD.AR HAS MADE ENDORSEMENT FOR NOT PRESSING GROUNDS NO.2 TO 8 AND HAS ARGUED ONLY ONE EFFECTIVE GROUND NO.9 IN RESPECT OF RESTRICTING DISALLOWANCE OF RS.10,293/ - , THE LD. DR SUPPORTED THE ORDER OF THE CIT(A). HENCE, WE ADJUDICATE ONLY EFFECTIVE GROUND ARGUED B Y THE LD. AR. 8. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT T HE ASSESSEE HAS CLAIMED EXPENDITURE U/S 37(1) OF THE ACT WHICH IS IN THE NATURE OF TIPPER EXPENSES AND SUCH EXPENSES ARE CUSTOMARILY INCURRED IN THE NO RMAL C OURSE FOR EFFECTIVE WORKING OF THE ASSESSEE S BUSINESS ACTIVITIES. WE FOUND THAT T HE CIT(A) , HAVING CONSIDERED TH ESE S FACT S HAS RESTRICTED THE ADDITION TO RS.10,293/ - . WE ALSO OBSERVED THAT THE CIT(A) CONSIDERED TH E SUBMISSIONS OF THE ASSESSEE VIS - - VIS EXPLANATION S , TOOK A DECISION OF RESTRICTING THE ESTIMATION OF EXPENDITURE . EVEN BEFORE US, THE LD. AR COULD NOT BRING ANY EVIDENCE OR ITA NO S . 90 TO 92 /BANG/201 1 PAGE 8 OF 11 CONTROVERT THE FINDING OF THE CIT(A). THEREFORE, W E, CONSIDERING THE APPARENT FACT S AND THE CIRCUMSTANCES OF THE ASSESSEE S CASE AND BUSINESS ACTIVIT IES FIND THE CIT(A) DEALT ON TH E DISPUTED ISSUE AND RESTRICTED THE ADDITION. ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF THE CIT(A) ON THIS GROUND. ACCORDINGLY, WE UPHOLD THE ACTION OF THE CIT(A) AND DISMISS THE EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004 - 05. 9. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2004 - 05 IS DISMISSED. 10. SIMILARLY, FOR THE ASSESSMENT YEAR 2005 - 06 IN ITA NO.91/BANG/2011, TH E FACTS ARE SIMILAR AND THE ASSESSEE HAS RAISED EFFECTIVE GROUNDS NO .1 AND 9 TO 13 . BUT WHEREAS AT THE TIME OF HEARING, THE LD. AR HAS A RGUED ONLY EFFECTIVE GROUNDS NO.9 AND 10. WHEREAS THE GROUND NO. 9 IS THE ADDITION OF TIPPER EXPENSES RESTRICTED BY THE CIT(A). W E HAVE DEALT ON THIS ISSUE IN THE ASSESSEE S OWN CASE IN ITA NO.90/BANG/2011 FOR THE ASSESSMENT YEAR 2004 - 05 AND CONFIRMED THE ORDER OF THE CIT(A) ON THIS GROUND. ACCORDINGLY, WE FOLLOW THE DECISION TAKEN BY US FOR THE EARLIER ASSESSMENT YEAR 20 04 - 05 AND DISMISS THIS GROUND OF APPEAL FOR THE ASSESSMENT YEAR 2005 - 06. ITA NO S . 90 TO 92 /BANG/201 1 PAGE 9 OF 11 11. IN RESPECT OF GROUND NO.10, WE FOUND THE AO HAS MADE ADDITION OF RS.74,29,518/ - AS NO CONFIRMATION S WERE PROVIDED IN RESPECT OF BALANCE OF SUNDRY CREDITORS BY THE ASSESSEE AND THE APPELLATE AUTHORITY CONSI DERED TH E FACT S AND THE SUBMISSIONS WITH EVIDENCE AND RESTRICTED THE ADDITION TO A N EXTENT OF RS.51,084/ - . WHEREAS T HE CONTENTION OF THE LD. AR THAT THE ASSESSEE COULD NOT SUBSTANTIATE WITH ANY EVIDENCE OF CONFIRMATION TO TH E EXTENT OF RS.51,084/ - AS THEY WERE NOT RECEIVED BY THE ASSESSEE AND THE CIT(A) HAS GRANTED PARTIAL RELIEF. WE FOUND THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE AND CONFIRMATION EVEN BEFORE US TO SUBSTANTIATE BALANCE OF SUNDRY CREDITOR S . THEREFORE, WE AR E OF THE CONSIDERED OPINION THAT THE CIT(A) HAS GRANTED OPPORTUNITY TO THE ASSESSEE FOR SUBMITTING THE CONFIRMATION S . BUT ASSESSEE COULD NOT SUBMIT TO THE EXTENT AND THE CIT(A) HAS OBSERVED THAT THE ASSESSEE H AS FAILED TO EXPLAIN THE CREDIT IN THE APPELLAT E PROCEEDINGS. WE FOUND , IN SPITE OF PROVIDING OPPORTUNITIES TO SUBSTANTIATE , THE ASSESSEE COULD NOT SUBSTANTIATE WITH EVIDENCE BEFORE THE LOWER AUTHORITIES AND ALSO LD. AR COULD NOT CONTROVERT THE FINDING OF CIT(A) . A CCORDINGLY WE ARE NOT INCLINED TO IN TERFERE WITH THE ORDER OF CIT(A) AND UPHOLD THE SAME. ACCORDINGLY, T HE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2005 - 06 IS DISMISSED. ITA NO S . 90 TO 92 /BANG/201 1 PAGE 10 OF 11 13. WE FOUND F OR ASSESSMENT YEAR 2006 - 07 IN I TA NO.92/BANG/2011 THE ASSESSEE HAS ARGUED ONLY THE SOLE EFFECTIVE GROUND NO.7.1 IN RESPECT OF BALANCE OF SUNDRY CREDITORS. WHEREAS THE CIT(A) IN APPELLATE PROCEEDINGS AFTER CALLING FOR INFORMATION AND CONFIRMATION HAS RESTRICTED THE ADDITION TO THE EXTEN T OF RS.6,034/ - . WE HAVE DECIDED THIS ISSUE IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2005 - 06 IN ITA NO.91/BANG/2011 IN PARA.11 ABOVE AND UPHOLD THE ORDER OF THE CIT(A) ON THIS GROUND . THEREFORE, THE OBSERVATION S MADE IN ITA NO.91/BANG/2011 SHALL ALSO A PPLY TO THE SAID ASSESSMENT YEAR UNDER CONSIDERATION. ACCORDINGLY, WE UPHOLD THE ACTION OF THE CIT(A) IN RESTRICTING THE ADDITION TO RS.6,034/ - AND T HE GROUND S OF APPEAL OF THE ASSESSEE ARE DISMISSED. IN THE RESULT, THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 2006 - 07 IS DISMISSED. 14 . IN THE RESULT, THE ASSESSEE S APPEALS FOR THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 AND 200 6 - 07 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2018. S D/ - SD/ - ( A .K. GARODIA ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : B EN GAL URU D A T E : 31 / 12 / 2018 SRINIVASULU, SPS ITA NO S . 90 TO 92 /BANG/201 1 PAGE 11 OF 11 COPY TO : 2 RESPONDENT 3 CIT(A) - 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL B ANGALORE