Amin Silk Mills Pvt.Ltd., Surat V. The Addl.CIT.,Range-1, Surat

ITA 916/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89597 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K N BHATT
• Keywords: Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.3157/AHD/2011 A.Y.2008-09 2. ./ I.T.A. NO.916/AHD/2012 A.Y.2009-10 M/S.AMIN SILK MILLS PVT.LTD. PLOT NO.83/84/85, GIDC PANDESARA, SURAT / VS. THE ADDL.CIT RANGE-I, SURAT ' ./ ./ PAN/GIR NO. AACCA 3420 H ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '%( / APPELLANT BY : SHRI K.N. BHATT, AR &''% )( / RESPONDENT BY : SHRI NIMESH YADAV, SR.DR *) / DATE OF HEARING 15/06/2015 +,-.) / DATE OF PRONOUNCEMENT 19/06/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : BOTH THESE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-I, SURAT (CIT(A) IN SHORT) DATED 30/09/2011 AND 20/03/201 2 PERTAINING TO ASSESSMENT YEARS (AYS) 2008-09 AND 2009-10. SINCE IDENTICAL GROUNDS HAVE BEEN RAISED IN BOTH THESE APPEALS BY THE ASSES SEE, THEREFORE THESE ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 2 - APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE ASSESSEES APPEAL IN ITA N O.3157/AHD/2011 FOR AY 2008-09 AS A LEAD CASE. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD.CIT(A) OUGHT TO HAVE HELD THAT THE LD.A.O. HAS ERRED IN LA W AND IN FACTS IN ADDING THE SUM OF RS.5,98,461 AS DIFFERENCE IN THE OPENING AND CLOSING STOCK OF WORK-IN-PROGRESS AND HENCE YOUR AP PELLANT MOST HUMBLY PRAYS THAT THE IMPUGNED ADDITION BE DELETED. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE HELD THAT THE LD.A.O. HAS ERRED IN LA W AND IN FACTS IN DISALLOWING ON AD-HOC BASIS 10% OF THE EXPENDITURE ON REPAIRS AND MAINTENANCE OF PLANT AND MACHINERY WHICH AMOUNTED T O RS.2,83,028 AND HENCE YOUR APPELLANT MOST HUMBLY PRAYS THAT THE IMPUGNED ADDITION BE DELETED. 3. SUCH OTHER RELIEF(S) TO WHICH THE APPELLANT MAY BE LAWFULLY ENTITLED TO. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 10/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.5,98,461/- AS DIFFERENCE IN THE OPEN ING AND CLOSING STOCK OF WORK-IN-PROGRESS. THE AO FURTHER MADE DISALLOWA NCE OF EXPENDITURE OF RS.2,83,028/- BEING 10% OF THE PLANT & MACHINERY REPAIRS & MAINTENANCE EXPENSES OF RS.28,30,276/-. AGAINST TH E SAID ASSESSMENT ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 3 - ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) AND THE LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A ), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. GROUND NO.1 OF ASSESSEES APPEAL IS AGAINST CONF IRMING THE ADDITION OF RS.5,98,461/- MADE ON ACCOUNT OF DIFFER ENCE IN THE OPENING AND CLOSING STOCK OF WORK-IN-PROGRESS. THE LD.COU NSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL GROUND WAS RAISED BEFOR E THE TRIBUNAL (ITAT D BENCH AHMEDABAD) IN ASSESSEES OWN CASE IN ITA NO.976/AHD/2010 FOR AY 2007-08 AND THE TRIBUNAL VID E ITS ORDER DATED 31/08/2012 WAS PLEASED TO DIRECT THE ASSESSING OFFI CER TO TREAT THE CLOSING STOCK OF LAST YEAR AS OPENING STOCK OF CURR ENT YEAR. 3.1. ON THE OTHER HAND, LD.SR.DR SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW, HOWEVER FAIRLY CONCEDED THAT IN ASSESSEES O WN CASE IN AY 2007- 08, THE TRIBUNAL HAS DIRECTED THE AO TO ALLOW THE C LOSING STOCK OF PRECEDING YEAR AS OPENING STOCK OF CURRENT YEAR. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE BEARING ITA NO.976/AHD/2010 FOR AY 2007-08 WA S PLEASED TO ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 4 - DECIDE THE ISSUE OF DIFFERENCE IN THE OPENING AND C LOSING STOCK OF WORK- IN-PROGRESS IN PARA-7 OF ITS ORDER DATED 31/08/2012 , BY OBSERVING AS UNDER:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORDS. IT IS NOT DISPUTED BY REVENU E THAT IN AY 2005-06 THE ASSESSEE WAS ALLOWED TO TREAT THE CLOSING STOCK OF EARLIER YEAR AS OPENING STOCK OF NEXT YEAR. IT IS WELL SETTLED THA T THE CLOSING STOCK OF EARLIER BECOMES THE OPENING STOCK OF SUCCEEDING YEA R. IN THIS VIEW OF MATTER AND EXAMINING ALL ASPECTS, IT WOULD BE IN TH E INTEREST OF JUSTICE IF THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLOS ING STOCK OF LAST YEAR AS THE OPENING STOCK OF CURRENT YEAR. WE ACCORDINGLY, HEREBY DIRECT THE ASSESSING OFFICER TO ALLOW THE CLOSING STOCK OF LAS T YEAR AS THE OPENING STOCK OR CURRENT YEAR. THIS GROUND OF APPEAL IS AL LOWED FOR STATISTICAL PURPOSES. 4.1. NO MATERIAL HAS BEEN PLACED BEFORE US BY THE R ESPECTIVE PARTIES SUGGESTING THAT THERE IS A CHANGE INTO THE FACTS AN D CIRCUMSTANCES OF THE CASE IN THE YEAR UNDER APPEAL. THEREFORE, TAKING A CONSISTENT VIEW, WE HEREBY DIRECT THE AO TO ALLOW CLOSING STOCK OF PREC EDING YEAR AS OPENING STOCK OF CURRENT YEAR. WITH THIS DIRECTION, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO.2 IS ASSESSEES APPEAL IS AGAINST ADHO C DISALLOWANCE OF 10% OF THE EXPENDITURE ON REPAIRS AND MAINTENANCE O F PLANT AND MACHINERY. THE LD.COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADHOC DISALL OWANCE AND CONFIRMING THE SAME. ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 5 - 5.1. ON THE OTHER HAND, LD.SR.DR SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW AND SUBMITTED THAT BEFORE THE AO THE ASSESSEE FAILED TO FURNISH THE REQUISITE DETAILS IN SUPPORT OF THE EXPENDITURE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO IN HIS ASSESSMENT ORDER IN PARA -5 HAS OBSERVED THAT IN THE INSTANT CASE, THE ASSESSEE HAS SIMPLY FURNIS HED COPY OF LEDGER ACCOUNT OF THE PLANT & MACHINERY REPAIRS AND MAINTE NANCE EXPENSES CLAIMED DURING THE YEAR. MERE FURNISHING OF THE COP Y OF THE LEDGER ACCOUNT WOULD NOT PROVE THAT THE EXPENDITURE HAS BE EN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS. I T IS OBSERVED BY THE AO THAT NO OTHER SUPPORTING EVIDENCE HAS BEEN PRODUCED FOR VERIFICATION. IT IS TRANSPIRED FROM THE RECORDS THAT THE ASSESSEE HA S NOT FILED ANY SUPPORTING EVIDENCE IN THE FORM OF BILLS OR VOUCHER S EITHER BEFORE THE AO OR BEFORE THE LD.CIT(A) AND EVEN BEFORE THIS TRIBUN AL ALSO NO MATERIAL HAS BEEN PLACED SUGGESTING THAT THE ASSESSEE HAS IN CURRED THE SAID EXPENDITURE. UNDER THESE FACTS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW ON THIS IS SUE. THUS, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 6 - 7. GROUND NO.3 IS GENERAL IN NATURE WHICH REQUIRES NO INDEPENDENT ADJUDICATION. AS A RESULT, ASSESSEES APPEAL IN ITA NO.3157/AHD/2011 FOR AY 2008-09 IS PARTLY ALLOWED FOR STATISTICAL PU RPOSES. 8. NOW, WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 916/AHD/2012 FOR AY 2009-10. THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD.CIT(A) OUGHT TO HAVE HELD THAT THE LD.A.O. HAS ERRED IN LA W AND IN FACTS IN ADDING THE SUM OF RS.21,26,942 AS DIFFERENCE IN THE OPENING AND CLOSING STOCK OF WORK-IN-PROGRESS AND HENCE YOUR AP PELLANT MOST HUMBLY PRAYS THAT THE IMPUGNED ADDITION BE DELETED. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE HELD THAT THE LD.A.O. HAS ERRED IN LA W AND IN FACTS IN DISALLOWING ON AD-HOC BASIS 10% OF THE EXPENDITURE ON REPAIRS AND MAINTENANCE OF PLANT AND MACHINERY WHICH AMOUNTED T O RS.2,83,028 AND HENCE YOUR APPELLANT MOST HUMBLY PRAYS THAT THE IMPUGNED ADDITION BE DELETED. 3.SUCH OTHER RELIEF(S) TO WHICH THE APPELLANT MAY B E LAWFULLY ENTITLED TO. 9. IN THIS APPEAL, THE FACTS ARE IDENTICAL TO T HE FACTS OF ASSESSEES OWN CASE IN ITA NO.3157/AHD/2011 FOR AY 2008-09(SUPRA). THE RESPECTIVE REPRESENTATIVES OF THE PARTIES ADOPTED THEIR ARGUME NTS AS WERE ADVANCED IN ITA NO.3157/AHD/2011(SUPRA), WHEREIN WE HAVE ALL OWED THE GROUND NO.1 FOR STATISTICAL PURPOSES WITH A DIRECTION TO A O TO ALLOW THE CLOSING STOCK OF PRECEDING YEAR AS OPENING STOCK OF CURRENT YEAR. ACCORDINGLY, GROUND NO.1 OF ASSESSEES APPEAL IN ITA NO.916/AHD/ 2012 FOR AY 2009- 10, IS ALLOWED FOR STATISTICAL PURPOSES. THE AO IS DIRECTED TO ALLOW THE ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 7 - CLOSING STOCK OF THE PRECEDING YEAR AS OPENING STOC K OF THE CURRENT YEAR AS NO CHANGE INTO FACTS HAS BEEN POINTED OUT IN THE YEAR UNDER APPEAL. 9.2. APROPOS TO GROUND NO.2, BOTH THE PARTIES HAV E ADOPTED THEIR ARGUMENTS AS WERE ADVANCED IN ASSESSEES OWN CASE I N ITA NO.3157/AHD/2011 FOR AY 2008-09. SINCE THE FACTS A RE IDENTICAL TO THE FACTS OF ASSESSEES OWN CASE IN AY 2008-09(SUPRA) A ND ASSESSEE HAS NOT PLACED ANY MATERIAL IN SUPPORT OF ITS CLAIM FOR EXP ENDITURE TOWARDS REPAIR AND MAINTENANCE OF PLANT AND MACHINERY, THEREFORE T HIS GROUND OF ASSESSEES APPEAL IS REJECTED. 9.3. GROUND NO.3 IS GENERAL IN NATURE WHICH REQUIRE S NO INDEPENDENT ADJUDICATION. AS A RESULT, THIS APPEAL OF THE ASSES SEE FOR AY 2009-10 IS ALSO PARTLY ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE COMBINED RESULT, BOTH THE APPEALS OF TH E ASSESSEE, I.E. ITA NO.3157/AHD/2011 FOR AY 2008-09 & ITA NO.916/AHD/20 12 FOR AY 2009-10, ARE PARTLY ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 19 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19 / 06 /2015 2..,.../ T.C. NAIR, SR. PS ITA NOS.3157/AH D/2011 & 916/AHD/2012 AMIN SILK MILLS P.LTD. VS. THE ADDL.CIT ASST.YEARS 2008-09 & 2009-10 RESPECTIVELY - 8 - !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-I, SURAT 5. 78& 45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:; * / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 15.6.15 (DICTATION-PAD 9+ PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.6.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.19.6.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.6.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER