ACIT, Circle-1, Nellore V. M/s. Avanthi Warehousing Services Ltd., Nellore

ITA 986/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66308 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: C P RAMASWAMY
• Keywords: Additional evidence; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.986/ HYD/2012 : ASSESSMENT YEAR 2008-09 ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE 1, NELLORE V/S. M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. ( PAN - AADCA 1884 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. AMISHA S.GUPT RESPONDENT BY : SHRI C.P.RAMASWAMY DATE OF HEARING 0 3.10.2012 DATE OF PRONOUNCEMENT 0 5 .10.2012 O R D E R PER SANJAY ARORA, ACCOUNTANT MEMBER: THIS IS AN APPEAL BY THE REVENUE, DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS), GUNTUR (CIT(A) HEREINAFT ER) DATED 14.7.2011, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT DATED 31.12.2010 FRAMED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 2008-09. 2. THE ONLY GRIEVANCE, AS PROJECTED BY THE REVENUE PER THE VARIOUS (FOUR) GROUNDS OF ITS APPEAL, IS THE CONTRAVENTION BY THE FIRST APPEL LATE AUTHORITY OF THE MANDATORY PROCEDURE QUA ADDITIONAL EVIDENCE PER RULE 46A OF THE INCOME-TAX RULES, 1962 (THE RULES, HEREINAFTER) QUA VIOLATION OF BOTH SUB-RULES (2) AND (3) OF RULE 46 A. ITA NO.986/HYD/2012 M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. 2 3.1 NARRATING THE FACTS, IT WAS SUBMITTED BY THE L EARNED DEPARTMENTAL REPRESENTATIVE (DR), THAT THE ONLY DISALLOWANCE UNDER CHALLENGE IS IN RESPECT OF WHARFAGE & DEMURRAGE CHARGES FOR RS.37,30,426, CLAIMED BY THE ASSESSEE I N THE SUM OF RS.3,78,10,982/-. THE DISALLOWANCE WAS EFFECTED BY THE ASSESSING AUTHORIT Y IN VIEW OF THE NON-SUBSTANTIATION OF ITS CLAIM BY THE ASSESSEE BEFORE HIM DURING THE ASS ESSMENT PROCEEDINGS, I.E., IN RESPECT OF THE SAID AMOUNT, STATED AS HAVING BEEN PAID TO THE RAILWAYS. IN THE APPELLATE PROCEEDINGS, AS EVIDENT FROM PARA 4.1 OF THE IMPUGNED ORDER, THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCE IN THE FORM OF THE MONEY RECEIPTS IN RESP ECT OF THE SAID CHARGES ISSUED BY THE INDIAN RAILWAYS, AND WAS GRANTED RELIEF BY THE LEAR NED CIT(A) ON THAT BASIS. 3.2 THERE IS CLEARLY NO REASON, MUCH LESS COGENT, AS REQUIRED BY RULE 46A(2), THE LD. DR CONTINUED, FOR ADMITTING THE SAID EVIDENCE, AS H AS BEEN BY THE LD. CIT(A). EVEN SO, THE SAID EVIDENCE, RELYING ON WHICH RELIEF HAS BEIN G GRANTED TO THE ASSESSEE, WAS NOT ALLOWED TO BE EXAMINED BY THE ASSESSING OFFICER (AO ) BY THE LD. CIT(A), I.E., IN TERMS OF, AND AS REQUIRED BY, RULE 46A(3). THE MATTER, ACCORD INGLY, WOULD NEED TO BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR THE SAME, I.E., E VEN GRANTING ITS ADMISSION, WHICH IS ALSO SEPARATELY CHALLENGED BY THE REVENUE, AS NO PLAUSIB LE REASON WAS ADVANCED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY FOR N OT SUBMITTING THE SAID EVIDENCE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, IN VIEW OF WH ICH THE ASSESSEE HAS NO CASE AT ALL. 3.3 THE LD. AUTHORIZED REPRESENTATIVE (AR), IN RES PONSE, TOOK US TO THE LETTER DATED 22.12.2010 BY THE AO TO THE ASSESSEE DURING THE ASS ESSMENT PROCEEDINGS (PB PAGE 6-8), ADVERTING TO PARA 3 THEREOF, WHEREIN DETAILS OF THE IMPUGNED EXPENSES, AMONG OTHERS, STAND SOUGHT BY HIM. THE SAME WAS REPLIED TO BY THE ASSES SEE VIDE LETTER DATED 26.12.2012 (PB PAGES 1-3), SUBMITTING THE LEDGER COPY OF THE SAID ACCOUNT (PB PAGES 4-5), WHILE ALSO CLARIFYING (PER PARA 3 OF THE SAID LETTER) THAT THE SAME STANDS PAID TO THE INDIAN RAILWAYS. HE THEN TOOK US THROUGH THE STATEMENT OF FACTS, F ORMING PART OF THE ASSESSEES MEMO OF ITA NO.986/HYD/2012 M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. 3 APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHEREI N, AT PARA (C), IT IS STATED THAT VOUCHERS AND PAYMENT DETAILS OF WHARFAGE & DEMURRAGE (W&D) C HARGES PAID TO THE INDIAN RAILWAYS WERE SUBMITTED BEFORE THE AO. CLEARLY, THE REFORE, NO FRESH EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE BEFORE THE FIRST APPELLAT E AUTHORITY, AND THE REVENUES GROUNDS ARE MISCONCEIVED, PRAYING FOR THE CONFIRMATION OF T HE IMPUGNED ORDER. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. 4.1 WE ARE, FIRSTLY, NOT INCLINED TO ACCEPT THE ASSESSEES CONTENTION THAT THE VOUCHERS, BEING MONEY RECEIPTS ISSUED BY THE INDIAN RAILWAYS FOR RS.37.30 LAKHS, WERE SUBMITTED TO THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDI NGS. THIS IS AS THE ASSESSEE DOES NOT STATE AS TO WHEN AND VIDE WHICH LETTER WERE THE SAM E SO SUBMITTED; THE ONLY REPLY REFERRED TO BEING PER LETTER DATED 26.12.2010, WHICH ONLY SP EAKS OF THE LEDGER EXTRACT, AND THE CLARIFICATION AS TO THE SAID W&D CHARGES HAVING BEE N PAID TO THE INDIAN RAILWAYS. IN FACT, WHERE SO, BEING IN CLEAR CONFLICT WITH THE AOS FINDING, WHIC H FORMS THE BASIS FOR THE DISALLOWANCE MADE BY HIM, THE ASSESSEE WOULD HAVE R AISED A SPECIFIC GROUND BEFORE THE FIRST APPELLATE AUTHORITY, CLAIMING THE ASSESSMENT ORDER TO BE FACTUALLY INCORRECT IN THIS REGARD, AND QUA WHICH THE FIRST APPELLATE AUTHORITY WOULD THEN BE REQUIRED TO ISSUE A SPECIFIC FINDING, CONSULTING THE ASSESSMENT RECORD FOR THE PURPOSE, AND WHICH IS CLEARLY NOT THE CASE. 4.2 AT THE SAME TIME, HOWEVER, IT IS CLEAR THAT THE ASSESSEES CONSISTENT STAND THROUGHOUT HAS BEEN THAT THE IMPUGNED (W&D) CHARGES WERE PAID TO THE INDIAN RAILWAYS, WITHOUT PAYING WHICH, IT WOULD NOT, UNDERSTANDABLY, BE ABLE TO LIFT THE GOODS, I.E., ON WHICH THE SAID CHARGES, ON ACCOUNT OF DELAY IN TAKING THEIR D ELIVERY, ARE LEVIED, AS IS GENERALLY THE CASE. THE ONLY ISSUE, THEREFORE, WAS TO DEMONSTRATE THAT THE CLAIMED CHARGES ARE ACTUALLY WHAT THEY PURPORT TO BE, I.E., FOR WHARFAGE & DEMU RRAGE AND, FURTHER, INCURRED IN THE ITA NO.986/HYD/2012 M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. 4 SUM CLAIMED. THE AO, THEREFORE, IN OUR VIEW, IF IN DOUBT AS TO THE ASSESSEES CLAIMS, OUGHT TO HAVE REQUIRED THE ASSESSEE TO PRODUCE THE RELEVA NT VOUCHERS, EXAMINING THEM, AT LEAST ON A TEST CHECK BASIS. THIS IS ALL THE MORE SO AS THE ASSESSEE, SUBSEQUENT TO 26.12.2010, ATTENDED THE HEARING ON TWO DATES, I.E., ON 29.12.2 010 AND 30.12.2010, BEFORE THE AO. ON THE OTHER HAND, IF THE ASSESSEE HAD FAILED TO PRODU CE THE SAME, THE SAID FACT WOULD ITSELF FIND MENTION IN HIS ORDER, WHICH IS NOT THE CASE. U NDER THE CIRCUMSTANCES, THE ASSESSEE, TO REMOVE ANY VESTIGE OF DOUBT THAT MAY PREVAIL IN THE MATTER, ALSO ADDUCED THE RELEVANT VOUCHERS BEFORE THE FIRST APPELLATE AUTHORITY, EXAMINING WHI CH, AND BEING SATISFIED WITH THE VALIDITY OF THE ASSESSEES CLAIM, THE SAID AUTHORIT Y ALLOWED RELIEF THERETO. NO DOUBT, A BETTER COURSE FOR THE LD. CIT(A) WOULD HAVE BEEN TO CONFRO NT THE AO WITH THE SAME, WHO, WE FIND, HAS ALSO NOT APPEARED/PARTICIPATED IN THE PRO CEEDINGS BEFORE THE CIT(A), WAIVING THUS HIS RIGHT OF ATTENDANCE BEFORE HIM. HOW COULD, PARTICULARLY IN VIEW OF ITS CONSISTENT STAND, AND THE FACT THAT THE PROCEEDINGS CONTINUED, WITH TWO HEARING BEING GRANTED AFTER THE ASSESSEES REPLY ON 26/12/2010, THE ASSESSEE BE PRE JUDICED IN THE FACTS AND CIRCUMSTANCES OF THE CASE; IT HAVING, BY PRODUCING THE MONEY RECE IPTS, ONLY CLARIFIED/SUPPORTED ITS CLAIM/S, ON WHICH NEITHER ANY DOUBT HAS BEEN EXPRES SED BY THE AO TO IT, NOR ANY OPPORTUNITY EXTENDED TO SATISFY HIM ON ANY ASPECT O F THE MATTER. REMISSION OF THE MATTER, AS PLEADED BY THE REVENUE, UNDER THE CIRCUMSTANCES, IN OUR OPINION, WOULD AMOUNT TO A PREJUDICE BEING CAUSED TO THE ASSESSEE, OR OF AT LE AST BEING PUT TO AN INCONVENIENCE FOR A LAPSE ON THE PART OF THE REVENUE AUTHORITIES. 4.3 CONTINUING FURTHER, IT IS APPARENT THAT TH E ASSESSING OFFICER WAS CONSTRAINED FOR WANT OF TIME - SITTING AS HE WAS AT THE FAG END OF THE TIME LIMIT FOR FRAMING THE ASSESSMENT, IN CONDUCTING A PROPER ENQUIRY OR VERIFICATION IN T HE MATTER. COULD THE ASSESSEE BE BLAMED FOR THAT, EXCEPT, OF COURSE, WHERE IT ITSELF INDULG ES IN DILATORY TACTICS ? FURTHER, THE AO CHOOSES TO ABSENT HIMSELF FROM THE PROCEEDINGS BEFO RE THE FIRST APPELLATE AUTHORITY, WHO, SATISFIED WITH THE VALIDITY OF THE ASSESSEES CLAIM , SEES NOTHING AMISS THEREIN TO REQUIRE AS ITA NO.986/HYD/2012 M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. 5 MUCH AS ITS VETTING BY THE ASSESSING OFFICER, SETTI NG FORTH HIS COMMENTS PER A REMAND REPORT THERETO UNDER S.250(4). SURELY, THERE IS NO CONFLICT OR OVERLAP BETWEEN THE PROCEDURE U/S. 250(4), AND THAT PRESCRIBED U/R. 46A, AND THE TWO OPERATE IN DIFFERENT FIELDS, AS ALSO OPINED BY THE TRIBUNAL PER ITS DECISION IN THE CASE OF ITO V. ELECTRICAL MANUFACTURING CO. LTD . (IN ITA NO. 638/KOL./2012 DATED 25/9/2012), SO TH AT WHERE ADDITIONAL EVIDENCE IS LED BY THE ASSESSEE, THE RIGOR OF RULE 46A WOULD APPLY, BEING MANDATORY IN ITS SCOPE AND APPLICATION. FURTHER, NO DOUBT, IT IS THE SATISFACT ION OF THE ASSESSING AUTHORITY THAT IS PARAMOUNT; BUT THE QUESTION, HOWEVER, THAT ARISES I S: HOW DOES THE ASSESSEE KNOW, EXCEPT BY PRESUMING IT TO POSSESS PRESCIENCE, THAT THE ASS ESSING OFFICER SHALL NOT BE SATISFIED WITH THE DETAILS AS FURNISHED ? ALSO, THE AO NEED NOT REQUISITION THE EVIDENCE/MA TERIAL BY ISSUING A LETTER EVERY TIME, AND MAY WELL DO SO BY MAKING AN ENTRY IN THE ORDER-SHEET. IF NOT RESPONDED TO BY THE ASSESSEE, IT WOULD THEN FOR M THE BASIS OF HIS DISALLOWANCE, WHEREAT, AGAIN, IT IS INCUMBENT ON HIM TO MAKE REFE RENCE THERETO IN HIS ORDER. IN FACT, THIS IS A CLEAR CASE FOR CAUSING FURTHER ENQUIRY AND REP ORT BY THE ASSESSING OFFICER TO THE FIRST APPELLATE AUTHORITY - WHOSE POWERS ARE CO-TERMINUS WITH THAT OF THE AO, U/S. 250(4). IF THE SAID AUTHORITY DOES NOT THINK IT TO BE A FIT CASE F OR SEEKING THE AOS INDULGENCE, EXERCISE OF WHICH DISCRETION BY HIM WAS NOT OBJECTED TO BY THE ASSESSING OFFICER BEFORE HIM, NOR IS APPEALABLE , WE DO NOT THINK THAT THE REVENUE CAN POSSIBLY SEEK OUR INTERFERENCE IN THE MATTER AT THIS STAGE. IN ANY CASE, HOW COULD, WE WONDER, THE ASSESSEE UND ER SUCH CIRCUMSTANCES BE PREJUDICED BY ALLOWING AN OPPORTUN ITY TO THE ASSESSING AUTHORITY TO EXAMINE ITS CLAIM(S) ? THE ANSWER TO THE AFORE-SAID QUESTIONS WOULD BE CLEARLY IN THE NEGATIVE. ITA NO.986/HYD/2012 M/S. AVANTI WAREHOUSING SERVICES LTD., NELLORE. 6 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 5, 2012 SD/- SD/- (SAKTIJIT DEY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/- OCTOBER 5, 2012 COPY FORWARDED TO: 1. M/S. AVANTI WAREHOUSING SERVICES LTD., 24/1/1501/2, ADITYA NAGAR, DARGAMITTA, NELLORE. 2. 3. 4 5 ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 1, NELLORE COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR COMMISSIONER OF INCOME-TAX, GUNTUR DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.