The DCIT, Circle-5, Ahmedabad V. M/s. Rushi Agrotech Marketing Pvt.Ltd., Ahmedabad

ITSSA 640/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9661 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: misc
• Appeal Filed On: 28-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR WITH P M MEHTA
• Keywords: Opportunity of being heard; Block assessment
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT M EMBER DY. CIT, CIRCLE-5, AHMEDABAD (APPELLANT) VS M/S. RUSHI AGROTECH MARKETING PVT. LTD. 2 ND FLOOR, C.U. SHAH CHAMBERS, ASHRAM ROAD, AHMEDABAD-380009 PAN: AAACR7359E (RESPONDENT) M/S. RUSHI AGROTECH MARKETING PVT. LTD. 2 ND FLOOR, C.U. SHAH CHAMBERS, ASHRAM ROAD, PAN: AAACR7359E (APPELLANT) VS DY. CIT, CIRCLE-5, AHMEDABAD (RESPONDENT) REVENUE BY: SRI SUBHASH BAINS CIT-D.R. ASSESSEE BY: SRI S.N. SOPARKAR WITH P .M. MEHTA, A.R. DATE OF HEARING : 04-12-2013 DATE OF PRONOUNCEMENT : 13-12-20 13 IT(SS)A NO. 640/AHD/2010 ASSESSMENT YEAR : BLOCK PERIOD C.O. NO. 287/AHD/2010 ( IN IT(SS)A NO. 640/AHD/2010) ASSESSMENT YEAR : BLOCK PERIOD I.T.(SS)A NO.640/AHD/2010 & CO 287/AHD/2010 A. Y. BLOCK PERIOD PAGE NO DCIT VS. M/S RUSHI AGROTECH MARKETING P. LTD 2 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- REVENUES APPEAL AND CO BY ASSESSEE HAVE BEEN FILE D AGAINST THE ORDER OF LD. CIT(A)- XI, AHMEDABAD DATED 06-05-2012 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF GUWAR AND GUWAR DA L. IN THE GROUP CASES SEARCH PROCEEDINGS WERE CARRIED OUT U/S. 132 OF THE ACT AT THE OFFICE PREMISES OF THE ASSESSEE. PURSUANT TO THIS OPERATI ON AO INITIATED PROCEEDINGS U/S. 158BC OF THE ACT. IN THE ASSESSME NT ORDER PASSED U/S. 158BC FOLLOWING ADDITIONS WERE MADE:- I) ADDITION FOR ALLEGED UNEXPLAINED SHARE APPLICATI ON MONEY RS. 40,73,000/- II) ADDITION FOR UNDISCLOSED INCOME FOR ALLEGED UNA CCOUNTED SALE AND PURCHASE AS PER BILLS FOUND AND ESTIMATED INITIAL C APITAL REQUIRED FOR THAT BUSINESS RS. 3,08,000/- IN APPEAL LD. CIT(A) DELETED BOTH THE ADDITIONS. O N FURTHER APPEAL THE HONBLE ITAT VIDE ITS ORDER DATED 16 TH MARCH, 2007 SET ASIDE THE MATTER TO THE FILE OF AO ON THE GROUND THAT LD. CIT(A) HAD NO T CALLED FOR THE REMAND REPORT FROM THE AO BEFORE PASSING APPELLATE ORDER. AO WAS DIRECTED TO MAKE THE ASSESSMENT DE-NOVO AFTER PROPER INQUIRY AN D AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN PUR SUANCE TO THESE DIRECTIONS OF THE HONBLE ITAT, AO PASSED THE ORDER DATED 11-1 2-2008 AND ASSESSED I.T.(SS)A NO.640/AHD/2010 & CO 287/AHD/2010 A. Y. BLOCK PERIOD PAGE NO DCIT VS. M/S RUSHI AGROTECH MARKETING P. LTD 3 THE TOTAL INCOME OF THE ASSESSEE AT THE SAME FIGURE AS WAS ASSESSED IN THE ORIGINAL ORDER PASSED BY HIM ON 30-07-2000. ASSESS EE AGAIN WENT IN APPEAL BEFORE LD. CIT(A) WHO HAS AGAIN DELETED BOTH THE AD DITIONS MADE BY AO. AGGRIEVED BY THIS ORDER OF LD. CIT(A), NOW THE REVE NUE IS IN APPEAL AGAINST THE RELIEF GIVEN BY LD. CIT(A) TO THE ASSESSEE WHIL E ASSESSEE HAS FILED CO IN SUPPORTING THE ORDER OF LD. CIT(A). 3. REVENUE IN ITS APPEAL HAS TAKEN FOLLOWING GROUND S. 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHME DABAD HAS ERRED IN LAW ARID ON FACTS IN DELETING THE ADDITION U/S. 68 MADE OF RS.40,73,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDI T. 2. THE LD. COMMISSIONER OF INCOME TAX (A)-X1, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS,L,20,000/-ON ACCOUNT OF G.P. 3. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMED ABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. L,88,000/-ON ACCOUNT OF CIRCULATING CAPITAL. 4. GROUND NO. 1 RELATES TO ADDITION OF RS. 40,73,00 0/- ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY. 5. AT THE TIME OF HEARING LEARNED COUNSEL OF THE A SSESSEE SUBMITTED THAT ISSUE IS NOW COVERED BY THE ORDER OF THIS TRIBUNAL IN THE CASE OF SRI RAMDAS AGRO P. LTDS, SISTER CONCERN OF THE ASSESSEE IN IT (SS)A NO. 110 & 112/AHD/2003 DATED 31-07-2000 WHEREIN ON IDENTICAL FACTS LD. CIT(A)S ORDER DELETING THE ADDITION OF RS. 44,84,500/- MADE BY AO ON ACCOUNT OF ALLEGED SHARE APPLICATION MONEY WAS CONFIRMED. IT WAS FURTHER SUBMITTED THAT THIS ORDER OF TRIBUNAL WAS UPHELD BY HONBLE J URISDICTIONAL HIGH COURT VIDE TAX APPEAL NO. 238 DATED 05-07-2011. HE THERE FORE PRAYED THAT I.T.(SS)A NO.640/AHD/2010 & CO 287/AHD/2010 A. Y. BLOCK PERIOD PAGE NO DCIT VS. M/S RUSHI AGROTECH MARKETING P. LTD 4 FOLLOWING THEM THE ORDER PASSED BY LD. CIT(A) DELET ING THE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY MAY KINDLY BE UPHELD. LD. DR ON THE OTHER HAND PLACING RELIANCE ON THE FOLLOWING DE CISIONS:- I) CIT VS. NOVA PROMOTERS & FINLEASE P LTD [2012] T AXMAN.COM 217(DELHI) II) CIT VS. TITAN SECURITIES LTD [2013] TAXMAN.COM 306 (DELHI) III) CIT VS. M/S N.R. PORTFOLIO PVT LTD (DEL) SUPPORTED THE ORDER PASSED BY AO. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT AO WHILE MAKING THE ADDITION HAS MADE REFERENCE OF FACTS OF ASSESSEES SISTER CONCERN IN THE CASE OF RAMDAS AGRO P. LTD AS UNDER:- IN THE CASE OF OTHER COMPANY OF THIS GROUP M/S RAM DAS AGRO PVT. LTD ALSO IDENTICAL ISSUE IS FOUND DURING THE BLOCK ASSESSMENT (1) IN THIS COMPANY SHARE APPLICATION MONEY IS BROUGHT OF RS. 43,33,000 WHILE IN THE CASE OF RAMDAS AGRO SHARE APPLICATION MONEY IS BROUGHT OF RS.47.51 LACS (2) THE MODUS OPERANDI APPLIED IN THE CASE OF RAMDAS AGRO IS IDENTICALLY SAME IN THE CASE OF ASSE SSES (3) IN THE CASE OF RAMDAS AGRO PVT. LTD, ALSO MONEY IS FOUND T O BE BROUGHT IN THE NAME OF THE PERSONS WHOSE CAPACITY TO ADVANCE T HE MONEY WAS NOT PROVED (4) IN THAT CASE ALSO THE PARTIES IN WHOSE N AME SHARE APPLICATION MONEY WAS BROUGHT WERE FOUND MONEY NAME LENDERS AND THEY WARE OF RAJASTHAN. WHILE IN THIS CASE THE NAME LENDERS ARE NEAR RELATIVES OF THE DIRECTORS OF THE COMPANY. (5) IN T HAT CASE ALSO BANK OPENING FARMS WERE FOUND DURING THE SEARCH, WHILE I N THIS CASE ALSO BANK OPENING FORMS OF THE PERSONS DISCUSSED ABOVE W ERE FOUND FROM THE POSSESSION OF THE GROUP OF THE DIRECTORS OF THE COMPANY. WHICH SHOWS THAT ACCORDING TO AO HIMSELF THE FACTS OF ASSESSEE-COMPANY AND THAT OF ITS SISTER CONCERN ON THIS ISSUE ARE ID ENTICAL. SINCE IN THE CASE OF M/S. RAMDAS AGRO P. LTD TRIBUNALS ORDER CONFIRMING THE ORDER OF LD. CIT(A) DELETING THE ADDITION HAS BEEN UPHELD BY HON BLE JURISDICTIONAL HIGH I.T.(SS)A NO.640/AHD/2010 & CO 287/AHD/2010 A. Y. BLOCK PERIOD PAGE NO DCIT VS. M/S RUSHI AGROTECH MARKETING P. LTD 5 COURT VIDE TAX APPEAL NO. 238 OF 2010 DATED 05/07/2 011, WE FEEL NO NEED TO INTERFERE WITH THE ORDER OF LD. CIT(A) DELETING TH E ADDITION FOLLOWING THE ORDER OF HONBLE ITAT IN THE CASE OF M/S RAMDAS AGR O P. LTD. THIS GROUND OF REVENUES APPEAL IS DISMISSED. 7. SECOND AND THIRD GROUND OF REVENUES APPEAL RELA TE TO ADDITION OF RS. 1,20,000/- ON ACCOUNT OF GP AND ADDITION OF RS. 1,8 8,000/- ON ACCOUNT OF CIRCULATING CAPITAL. 8. AT THE TIME OF HEARING LEARNED COUNSEL OF THE AS SESSEE AT THE OUTSET SUBMITTED THAT ON IDENTICAL FACTS SIMILAR ADDITION WAS MADE IN THE CASE OF M/S. RAMDAS AGRO P. LTD WHICH WAS DELETED BY LD. CI T(A) AND HIS ORDER WAS CONFIRMED BY THE TRIBUNAL VIDE ITS ORDER DATED 31/07/2013. THIS ORDER OF TRIBUNAL WAS UPHELD BY JURISDICTIONAL HIGH COURT VIDE ITS ORDER DATED 05/07/2011 THEREFORE THE ORDER PASSED BY LD. CIT(A) MAY KINDLY BE UPHELD. LD. DR RELIED ON THE ORDER OF AO. SINCE TRIBUNALS ORDER IN THE CASE OF RAMDAS AGRO P. LTD CONFIRMING THE ORDER OF LD. CIT( A) DELETING THE ADDITION MADE BY AO ON IDENTICAL FACTS HAS BEEN UPH ELD BY HONBLE JURISDICTIONAL HIGH COURT VIDE ITS ORDER IN TAX APP EAL NO. 238 OF 2010 DATED 05/07/2011, WE FEEL NO NEED TO INTERFERE WITH THE O RDER PASSED BY HIM AND THE SAME IS HEREBY UPHELD. THIS GROUND OF REVENUE S APPEAL IS ALSO DISMISSED. 9. AT THE TIME OF HEARING CO WAS NOT PRESSED BY ASS ESSEES COUNSEL, THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. I.T.(SS)A NO.640/AHD/2010 & CO 287/AHD/2010 A. Y. BLOCK PERIOD PAGE NO DCIT VS. M/S RUSHI AGROTECH MARKETING P. LTD 6 10. IN THE COMBINED RESULT, REVENUES APPEAL AS WEL L AS CO FILED BY ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (A.K. GARODIA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 13/12/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,