The Asstt. Commissioner of Income-tax, Bathinda V. M/s. Laxmi Rice Mills, Muktsar

MA 121/ASR/2014

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4184 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER M. A. NO.121 (ASR)/2014 (ARISING OUT OF ITA NO.438(ASR)/2013) ASSESSMENT YEAR: 2008-09 ASST. CIT, CIRCLE-2 BATHINDA. VS. M/S LAUXMI RICE MILLS, BALAMGARH ROAD, MUKTSAR. PAN: AACFL0970A (APPELLANT) (RESPONDENT) APPELLANT BY: SH. UMESH TAKYAR (DR) RESPONDENT BY: SH. ASHWANI KUMAR (CA.) DATE OF HEARING: 20.05.2016 DATE OF PRONOUNCEM ENT: 27.05.2016 ORDER PER T. S. KAPOOR (AM): THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY R EVENUE AGAINST THE ORDER OF TRIBUNAL DATED 27.03.2014. 2. IN THE MISCELLANEOUS APPLICATION THE REVENUE IS MAINLY AGGRIEVED WITH THE ORDER OF TRIBUNAL BECAUSE THE HONBLE TRIBUNAL WHILE DECIDING THE CASE HAD NOT FOLLOWED THE JUDGMENT OF HONBLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF M/S KIM PHARMA (PVT.) LIMITED IN ITA NO .106 OF 2011 (O&M) DATED 27.04.2011. 3. AT THE TIME OF HEARING, THE LEARNED DR WAS ASKED AS TO WHETHER THE JUDGMENT OF M/S KIM PHARMA (PVT.) LTD. IN ITA NO.10 6 OF 2011 WAS BROUGHT 2. M.A. NO.121(ASR)/2014 (ARISING OUT O F ITA NO.483(ASR)/2013) ASST. YEARS. 20 08-09 TO THE NOTICE OF TRIBUNAL OR NOT. THE LEARNED DR AF TER GOING THOROUGH THE TRIBUNAL ORDER WITH RESPECT TO ARGUMENTS OF DR SUBM ITTED THAT THIS JUDGMENT WAS NOT BROUGHT TO THE NOTICE OF HONBLE T RIBUNAL. 4. THE LEARNED AR ALSO SUBMITTED THAT THIS JUDGMENT WAS NOT BROUGHT BEFORE THE HONBLE TRIBUNAL, THEREFORE, THE TRIBUNA L HAS RIGHTLY PASSED THE ORDER AND THERE IS NO MISTAKE APPARENT FROM RECORD. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ARGUMENTS OF LEARNED DR ARE REPRODUCED BY THE HONBLE TRIBUNAL IN ITS ORDER AT PARA 24 WHEREI N THE LEARNED DR HAD RELIED UPON THE ORDERS OF LEARNED CIT(A). 6. THE CONTENTS OF PARA 24 INDICATES THAT THE LEAR NED DR HAD NOT BROUGHT TO NOTICE OF TRIBUNAL THE CASE LAW OF M/S K IM PHARMA (PVT.) LTD., AND HAD JUST RELIED UPON THE ORDER OF THE LD. CIT(A ) 7. THE DATE OF PASSING THE ORDER IN THE CASE OF M/S . KIM PHARMA (P) LTD., IS 27.04.2011, WHEREAS THE ORDER OF ASSESSMEN T IS DATED 24.12.2010, THEREFORE, THE ASSESSING OFFICER CANNOT BE EXPECT ED TO RELY ON THIS ORDER. THE DATE OF PASSING OF ORDER BY LD. CIT(A) IS DATED 28.03.2013, WHICH IS AFTER THE DATE OF PASSING THE ORDER IN THE CASE OF KIM PH ARMA PVT. LTD.,(SUPRA) AND THE LD. CIT(A) WHILE CONFIRMING THE ADDITION H AS NOT RELIED UPON THIS ORDER. FOR THE SAKE OF CONVENIENCE, THE FINDINGS O F THE LD. CIT(A) ARE REPRODUCED BELOW: 3. M.A. NO.121(ASR)/2014 (ARISING OUT O F ITA NO.483(ASR)/2013) ASST. YEARS. 20 08-09 IN GROUND NO.6 OF APPEAL, IT HAS BEEN CONTENDED THAT THAT THE RESERVATION OF THE AO THAT THE ADDITIONAL INCOME OF RS.55,25,00 0/- SURRENDERED DURING SURVEY OPERATION DID NOT FALL UNDER THE FIVE HEADS OF INCOME IS NOT JUSTIFIED. DURING ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD CREDITED RS.55,25,000/- TO P&L ACCOUNT ON ACCOUNT O F INCOME SURRENDERED DURING SURVEY OPERATION AND SEVERAL EXPENSES HAVE B EEN ADJUSTED/SET OFF AGAINST THIS SURRENDERED AMOUNT AND RESULTANTLY THE ASSESSEE HAS SHOWN LESSER NET PROFIT THAN THE FIGURE OF INCOME SURREND ERED. IN SUCH A SITUATION, THE AO AFTER CONSIDERING THE EXPLANATION OF THE A/R HEL D THAT DURING SURVEY OPERATION, THE ASSESSEE HAD SURRENDERED INCOME OF R S.55.25 LACS AS ADDITIONAL INCOME WHICH WAS NOT TO BE AGAINST ANY O F THE LOSSES INCURRED DURING THE YEAR. IN APPEAL BEFORE ME, THE LD. A/R OF THE APPELLANT S TATED THAT DURING SURVEY OPERATION, THE ACCOUNT BOOKS WERE PRODUCED AND THE SAME WERE ALSO IDENTIFIED BY THE SURVEY TEAM IN AS MUCH AS THERE W AS LOSS DURING THE PERIOD 1-4-2007 TO 31-1-2008 AND IT WAS GOT THE ADJUSTED A GAINST THE SURRENDERED INCOME. THE ASSESSMENT ORDER HAS BEEN PERUSED AND THE EXPLA NATION OF THE APPELLANT HAS ALSO BEEN CONSIDERED. IN THIS REGARD, AN EXTRAC T FROM THE JUDGMENT OF HBLE GUJARAT HIGH COURT IN THE CASE OF FAQIR MOHME D HAJI HASAN VS. CIT REPORTED AT (2001) 247 ITR 290 IS GIVEN BELOW WHICH THROWS AMPLE LIGHT ON THIS ISSUE:- THE SCHEME OF SECTIONS 69, 69A, 69B AND 69C WOULD SHOW THAT IN CASES WHERE THE NATURE AND SOURCE OF INVESTMENT MAD E BY THE ASSESSEE OF NATURE AND SOURCE OF ACQUISITION OF MON EY, BULLION ETC., OWNED BY THE ASSESSEE OR THE SOURCE OF EXPENDITURE INCURRED BY THE ASSESSEE ARE NOT EXPLAINED AT ALL, OR NOT SATISFACT ORILY EXPLAINED, THEN, THE VALUE OF SUCH INVESTMENTS AND MONEY OR VALUE OF ARTICLES NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE UN-EXPLAIN ED EXPENDITURE MAY BE DEEMED TO BE THE INCOME OF SUCH ASSESSEE. HOWEVE R, WHEN THESE PROVISIONS APPLY BECAUSE NO SOURCE IS DISCLOSED AT ALL ON THE BASIS OF WHICH THE INCOME CAN BE CLASSIFIED UNDER ONE OF THE HEAD OF INCOME UNDER SECTION 14 OF THE ACT, IT WOULD NOT BE POSSIB LE TO CLASSIFY SUCH DEEMED INCOME UNDER ANY OF THESE HEADS INCLUDING I NCOME FROM OTHER SOURCES WHICH HAVE TO BE SOURCES KNOWN OR EXPLAINE D. WHEN THE INCOME CANNOT BE SO CLASSIFIED UNDER ANY ONE OF THE HEADS OF INCOME UNDER SECTION 14, IT FOLLOWS THAT THE QUESTION OF G IVING ANY DEDUCTION UNDER THE PROVISIONS WHICH CORRESPOND TO SUCH HEADS OF INCOME WILL NOT ARISE. KEEPING IN VIEW THE RATIO OF THE AFORESAID JUDGMENT , THE OBSERVATION MADE BY THE AO HAS BEEN FOUND TO BE JUSTIFIED. ACCORDINGLY, THIS GROUND OF APPEAL IS REJECTED. 4. M.A. NO.121(ASR)/2014 (ARISING OUT O F ITA NO.483(ASR)/2013) ASST. YEARS. 20 08-09 FROM THE ABOVE FINDINGS OF LEARNED CIT(A), WE FIND THAT LEARNED CIT(A) HAS NOT MENTIONED ABOUT THE CASE LAW OF M/S KIM PHARMA (PVT.) LTD. (SUPRA), AND THEREFORE, THE JUDGMENT OF M/S KIM PHARMA (PVT. ) LTD., DATED 27.04.2011 COULD NOT HAVE BEEN CONSIDERED BY THE T RIBUNAL AS NEITHER THE LD. DR NOR LD. CIT(A) RELIED UPON THE SAID JUDGMENT . 7. IN VIEW OF THE ABOVE, THERE IS NO MISTAKE APPARE NT FROM THE RECORD AND THEREFORE, THE MISCELLANEOUS APPLICATION FILED BY T HE REVENUE IS DISMISSED. 8. IN NUTSHELL, THE MISCELLANEOUS APPLICATIONS FILE D BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ORALLY AT THE CO NCLUSION OF HEARING IS PRONOUNCED IN WRITING ON THIS DATE OF 27 TH MAY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 27.05.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER