DCIT, Madurai V. Sony Fireworks Private Limited, Sivakasi

MA 124/CHNY/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3571 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 06-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 26-03-2015
• Court: TRIBUNAL
• Section: 143(3); 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.P. NOS.157 TO 160/MDS./2015 [I.T.A.NOS.1747, 1748, 1749 & 1750/MDS/2014 ASSESSMENT YEARS :2005-06,2006-07,2007-08 & 2008-09] THE ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI VS. SHRI P. PANJURAJAN , NO. 74, VELAYUTHAM ROAD, SIVAKASI 626 123. [PAN : AHIPP5789J] PETITIONER ( APPELLANT IN APPEAL ) ( / RESPONDENT ) M.P. NOS.161 TO 165/MDS./2015 [C.O.NOS.74, 75, 76, 77 & 78/MDS/2014 IN I.T.A.NOS.1746, 1747, 1748, 1749 & 1750/MDS/2014 ] ASSESSMENT YEARS :2005-06,2006-07,2007-08 & 2008-09] AND M.P. NO.156/MDS./2015 [ITA NO.1746/MDS/2014, FOR A.Y. 2004-05] SHRI P. PANJURAJAN , NO. 74, VELAYUTHAM ROAD, SIVAKASI 626 123. [PAN : AHIPP5789J] VS. THE ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, MADURAI PETITIONER (RESPONDENT IN APPEAL) M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 2 M.P. NOS.123 TO 126 /MDS./2015 [I.T.A.NOS.2017 TO 2020 /MDS/2013 ASSESSMENT YEARS :2005-06, 06-07, 07-08 & 08-09] THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-2, MADURAI. VS. M/S.SONY FIREWORKS PVT. LTD., 74,A,VELAYUTHAM ROAD, SIVAKASI 626 123. [PAN :AADCS 3010 J ] APPELLANT RESPONDENT DEPARTMENT BY : SHRIP.RADHAKRISHNAN,JCIT, DEPARTMENTAL REPRESENTATIVE REVENUE BY : SHRI V. RAJASEKARAN, C.A. $ % & '( / DATE OF HEARING : 06.11.2015 )* & '( /DATE OF PRONOUNCEMENT : 20.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: FOUR FOUR MISCELLANEOUS PETITIONS IN M.P NO.157 T O 160/MDS./15 IN THE CASE OF SHRI P. PANJURAJAN ARE F ILED BY THE REVENUE AND THE OTHER SIX MISCELLANEOUS PETITIONS B Y THE ASSESSEE IN MP NO.161 TO 165 & 156/MD./15, PRAYING FOR RECTI FICATION OF THE ORDER OF THE TRIBUNAL IN ITA NOS.1747 TO 1750 /MDS. /2014 & C.O. NOS.74 TO 78/MDS./2014 DATED 09.01.2015 FOR THE ASS ESSMENT YEARS 2004-05 TO 2008-09 RESPECTIVELY. M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 3 ANOTHER FOUR MISCELLANEOUS PETITIONS IN THE CASE OF M/S.SONY FIREWORKS PVT. LTD., ARE FILED BY THE REVENUE , PR AYING FOR RECTIFICATION OF THE ORDER OF THE TRIBUNAL IN ITA NOS.2017, 2018, 2019 & 2010/MDS./2013 DATED 22.09.2014 FOR THE ASSESSMENT YEARS 2005- 06 TO 2008-09 RESPECTIVELY. SINCE THE ISSUES IN ALL THESE MISCELLANEOUS PETITIONS ARE IDENTICAL, THEY ARE ADJ UDICATED BY THIS COMMON ORDER. 2. THE IDENTICAL WRITTEN SUBMISSIONS SUBMITTED BY THE ASSESSEE & REVENUE IN RESPECT TO ALL THESES MISCELLANEOUS PETI TIONS ARE CONCISED HEREIN BELOW FOR REFERENCE:- 2.1 IN THE CASE OF SHRI P.PANJURAJAN BY REVENUE BRIEF FACTS OF THE CASE:- 1. IN THE ITAT ORDER DATED 09.01.2015, THERE IS A M ISTAKE APPARENT ON RECORD AND HENCE AGGRIEVED BY THE SAME, THE FOLLOWING SUBM ISSIONS ARE MADE REQUESTING THAT THE IMPUGNED ORDER MAY BE RECTIFIED AND JUSTICE RENDERED. 2. THE INCOME FROM M/S.AJANTHA TRADING CORPORATION WAS ADDED PROTECTIVELY IN THE ASSESSMENT OF SHRI.P.PANJURAJAN FOR THE ASSESSM ENT YEAR AS UNDER:- M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 4 A.Y TOTAL INCOME ASSESSED U/S 143(3) RWS 153A ADDITION MADE ON ACCOUNT OF INCOME FROM M/S.AJANTHA TRADING CORPORATION ADDITION CONFIRMED BY CIT(A) 2005-06 5170265 4589651 NIL 2006-07 21060005 20780111 NIL 2007-08 4919448 4341491 NIL 2008-09 14964084 14305953 NIL 3. LIKEWISE THE INCOME FROM M/S.AJANTHA TRADING COR PORATION WAS ASSESSED, SUBSTANTIVELY IN THE ASSESSMENT OF M/S.SONY FIREWOR KS PRIVATE LIMITED FOR THE FOLLOWING ASSESSMENT YEARS AS UNDER: A.Y TOTAL INCOME ASSESSED U/S 143(3) RWS 153A ADDITION MADE ON ACCOUNT OF INCOME FROM M/S.AJANTHA TRADING CORPORATION ADDITION CONFIRMED BY CIT(A) 2005-06 6450641 4589651 1806969 2006-07 22881786 20780111 4113828 2007-08 7080930 4341491 7288 2008-09 17523619 14305953 1150336 4. IN THE PRESENT ORDER IN ITA NOS.1746,1747,1748 ,1749 & 1750/MDS/2014, WHILE DECIDING THE APPEALS FILED BY THE REVENUE, TH E HONBLE ITAT SET A SIDE THE ORDER OF THE LEARNED CIT(A) IN THE CASE OF ASSESSEE SHRI.P.PANJURAJAN BY FOLLOWING ITS EARLIER ORDER IN ITA NOS.2016 TO 2021 /MDS/2013 IN THE CASE OF M/S.SONY FIREWORKS P LTD. IN THE CASE OF M/S.SONY F IREWORKS P LTD, WHERE THE ADDITIONS WERE MADE ON SUBSTANTIVE BASIS, THE HONB LE ITAT HELD THAT THE ADDITIONS FOR ALL ASSESSMENT YEARS HAD BEEN WRONGLY MADE ON SUBSTANTIVE BASIS IN THE ASSESSEES (M/S.SONY FIREWORKS P LTD) CASE A ND DIRECTED THE ASSESSING OFFICER TO RESTORE THE ADDITION IN SHRI.P.PANJURAJA NS HANDS. M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 5 5. IN THE CASE OF SONY FIREWORKS P LTD, THE CIT(A) CONFIRMED CERTAIN AMOUNT OF ADDITION MADE BY THE AC AND GRANTED RELIEF ON TH E BALANCE AMOUNT OF ADDITION TO THE ASSESSEE. HENCE THIS OFFICE SEEKS CLARIFICAT ION ON THE ABOVE ISSUE AS TO WHETHER THE ADDITION BY AC SHOULD BE MADE SUBSTANTI VELY IN THE HANDS OF SHRI.P.PANJURAJAN OR AS TO WHETHER THE ADDITION CON FIRMED BY CIT (A) IN THE CASE OF M/S.SONY FIREWORKS PRIVATE LTD SHOULD BE MADE SU BSTANTIVELY IN THE HANDS OF SHRI. P. PANJURAJAN. IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDL Y CONSIDER RECTIFYING THE ORDERS PASSED BY IT IN THIS CASE, BY RECALLING ITS ORDERS AND DISPOSING OF THE DEPARTMENTS APPEAL BASED ON THE GROUNDS ALREADY FI LED. 2.2 IN THE CASE OF SHRI P.PANJURAJAN BY ASSESSEE IT IS SUBMITTED THAT:- 2. THE ASSESSMENT WAS SUBSTANTIALLY ASSESSED IN T HE HANDS OF SONY FIREWORKS PRIVATE LIMITED BY A.O. AND RELIEF WAS GIVEN BY CIT (A) VIDE ORDER DATED.07/08/2013 AS BELOW: A.Y. NATURE OF ADDITION ADDITIONS AMOUNT RELIEF GIVEN BY CIT(A) CONFIRMED BY CIT(A) 2004-05 ADVANCE FROM CUSTOMERS PROFIT FROM AJANTA TRADING CORPORATION 10334 278660 -- 278660 103334 2005-06 ADVANCE FROM CUSTOMERS PROFIT FROM AJANTA TRADING CORPORATION 4476271 113380 2669302 113380 1806969** 2006-07 CREDIT IN GROUP CONCERNS IN THE NAME OF ATC PROFIT FROM ATC 3881480 621607 -- 621607 3881480 -- M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 6 BANK CREDIT IN ATC 16277024 16044676 232348 2007-08 ADVANCE FROM CUSTOMERS BANK CREDIT IN AJANTA TRADING CORPORATION 3841290 505201 3841290 432313 72888 2008-09 CREDIT IN GROUP CONCERNS IN THE NAME OF ATC BANK CREDIT IN ATC 1257000 13048953 1257000 11898617 --- 1150336 ** AGAINST THIS SONY FIREWORKS PRIVATE LIMITED HAS FILED APPEAL BUT DISMISSED BY HONORABLE ITAT ALONG WITH COMMON ORDER FOR SONY FIR EWORKS PRIVATE LIMITED DT.22/09/2014. 3. THE ABOVE ASSESSMENTS WERE PROTECTIVELY ASSESSED BY A.O IN THE HANDS OF RESPONDENT (P.PANJURAJAN) AND CIT (A) SETASIDE THE PROTECTIVE ASSESSMENT. BUT THE HONORABLE ITAT SETASIDE THE CIT (A) ORDER IN TH E HANDS OF RESPONDENT (P.PANJURAJAN) AND DIRECTED THE A.O TO MAKE SUBSTAN TIVE ADDITION IN THE HANDS OF RESPONDENT. (P.PANJURAJAN). 4. THE HONORABLE ITAT DID NOT SPEAK ABOUT THE RELIE F GIVEN BY CIT (A) BASED ON MANY EVIDENCES PRODUCED BY SONY FIREWORKS PRIVATE L IMITED AT THE TIME OF COMPLETION OF ITS ORDER DATED 07/08/2013. (ALL EVID ENCES RELATES TO AJANTA TRADING CORPORATION). 5. THE COUNSEL FOR THE RESPONDENT ALSO REQUESTED TO GIVE RELIEF TO THE EXTENT ALREADY GIVEN BY CIT (A) IN THE CASE OF SONY FIREWO RKS PRIVATE LIMITED. 6. AOS GROUNDS OF APPEAL QUESTIONS ONLY IN WHOSE H ANDS, IT IS TO BE ASSESSED. 7. AS EVIDENCES FOR RELIEF ALLOWED BY CIT (A) IN HI S ORDER FOR SONY FIREWORKS PRIVATE LIMITED ALREADY PRODUCED BEFORE HIM, THE PE TITIONER HUMBLY PRAYS THAT THE M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 7 HONTBLE INCOME TAX APPELLATE TRIBUNAL MAY BE PLEASE D TO CONSIDER THE RELIEF GIVEN BY CIT (A) AND TO PASS APPROPRIATE ORDER. 2.3 IN THE CASE OF M/S.SONY FIREWORKS P. LTD. BY REVENU E IT IS SUBMITTED THAT THE DEPARTMENT HAD RAISED THE FOLLOWING TWO ISSUES FOR ADJUDICATION OF HONBLE ITAT. S.NO. A.Y ISSUES 1 2003-04 & 2009-10 THE ISSUES ARE ABOUT SUBSTANTIVE OR PROTECTIVE IN T HE HANDS OF INDIVIDUAL OR ASSESSEE COMPANY 2 2005-06 TO 2008- 09 THE APPEAL FILED BY THE REVENUE IS AGAINST THE RELI EF GRANTED TO THE ASSESSEE BY THE CIT(A). WHEREAS, IT IS FOUND THAT IN THE TRIBUNALS ORDER I N ITA NOS. 2016 TO 2021/MDS/2013 & CO NOS. 188 TO 193/MDS/2013 FOR THE AYS 2003-04, 2005-06 TO 2009-10, THE HONBLE ITAT HAS NOT CONSIDERED AND RENDERED ANY DECISION ON THE APPEAL FILED BY THE REVENUE AGAINST THE RELIEF ALLOWED BY CIT(A) IN RESPECT OF FOLLOWING ADDITIONS MADE TOWARDS AJANTA TRADING COR PORATION FOR THE ASST. YEARS 2005-06, AY 2006-07, AY2007-08 AND AY 2008-09. (ISS UE IN S NO. 2) A.Y. TOTAL ASSESSED INCOME ADDITION MADE BY AO IN RESPECT OF ATC RELIED ALLOWED BY CIT(A) ADDITION CONFIRMED BY CIT(A) 2008-09 RS.17523619 RS. 14305953 RS. 13155617 RS. 11,50,336 2007-08 7080930 RS. 4341491 RS. 4268603 RS. 72,888 2006-07 22881786 RS. 20780111 RS. 16666283 RS. 41,13,828 M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 8 2005-06 6450641 RS. 4589651 RS. 2782682 RS. 18,06,969 - WHEREAS, THE HONOURABLE TRIBUNAL HAS NOT RENDERED A NY DECISION ON THE ABOVE ISSUE AS TO WHETHER THE ADDITION BY AD SHOULD BE MA DE SUBSTANTIVELY IN THE HANDS OF SHRI. PANJURAJAN OR AS TO WHETHER THE ADDI TION CONFIRMED BY CIT(A) SHOULD BE MADE SUBSTANTIVELY IN THE HANDS OF SHRI P ANJURAJAN. HENCE, THIS MISCELLANEOUS PETITION UNDER SECTION 25 4(2) BEFORE THE INCOME TAX APPELLATE TRIBUNAL REQUESTING FOR TAKE UP THE ABOVE ISSUE FOR ITS ADJUDICATION. IT IS REQUESTED THAT THE HONBLE TRIBUNAL MAY KINDL Y CONSIDER RECTIFYING THE ORDERS PASSED BY IT IN THIS CASE, BY RECALLING ITS ORDERS AND DISPOSING OF THE DEPARTMENTS APPEAL BASED ON THE GROUNDS ALREADY FI LED. 3. THE ASSESSEE, M/S.SONY FIREWORKS P LTD, SIVAKAS I HAS ALSO FILED THE FOLLOWING COUNTER SUBMISSIONS. WRITTEN SUBMISSION RELIEF GIVEN BY CIT(A) FOR THE CREDIT IN THE BOOKS OF M/S.ATC A GROUP CONCERN) A.Y ISSUES AMOUNT 2005-06 EVIDENCE FOR EXPENSES SISTER CONCERN INCREASE ALREADY OFFERED AS INCOME DURING THE A.Y 2003-04 (SUBEQUENTLY BROUGHT IN UNDER THE NAME ADVANCE FROM CUSTOMERS) ADVANCE FROM CUSTOMERS ALREADY OFFERED DURING THE A.Y.2004-05 RELIEF GIVEN BY CIT(A) 1,33,380 25,65,922 1,03,380 27,82,682 2006-07 EVIDENCE FOR EXPENSES SISTER CONCERN CREDIT RS.38,81,480/- ADDED AS INCOME IN THE A.Y 2006-07 WHICH IS SOURCE FOR BALANCE BANK CREDIT. 6,21,607 35,44,676 M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 9 TRANSFER FROM SISTER CONCERN OD A/C (FOR BANK CREDIT) RELIEF GIVEN BY CIT(A) 1,25,00,000 1,66,66,283 2007-08 ADVANCE FROM CUSTOMERS (DECLINED FROM RS.49,40,323/- TO RS.38,41,288/- DURING THE A.Y 2007-08) CASH ON HAND BEING SOURCE FOR BANK CREDIT RELIEF GIVEN BY CIT(A) 38,41,290 4,32,313 42,73,603.00 (42,68,603.00 ) 2008-09 TRANSFER FROM SISTER CONCERN OD A/C (FOR BANK CREDIT) OUT OF CASH ON HAND FOR BANK CREDIT SALES REALIZATION FROM M/S.KALISWARI FIREWORKS FOR BANK CREDIT SISTER CONCERNS CREDIT ALREADY SUFFERED TAX RELIEF GIVEN BY CIT(A) 1,05,00,000 3,50,000 10,48,617 12,57,000 1,31,55,617 SUBSTANTIVE ADDITION :- THE APPELLANT APPROACHED THE AO TO MAKE ADDITIONS I N THE HANDS OF APPELLANT ONLY. BUT DUE TO THE WORDS, ADDITIONS FOR ALL THE ASSESS MENT YEARS HAVE BEEN WRONGLY MADE ON SUBSTANTIVE BASIS IN THE PRESENT ASSESSEE S CASE(IN THE ITAT ORDER), THE AO INFORMED THAT ADDITIONS HAVE TO BE MADE IN S RI.P.PANJURAJAN. THE APPELLANT RELIED ON THE WORDS THAT, AS A RESUL T THE IMPUIED ADDITIONS IN ALL ASSESSMENT YEARS ARE DEEMED TO HAVE MADE SUBSTANTI VELY IN SHRI. PANJURAJANS HANDS(IN THE ITAT ORDER), AND ACCORDINGLY REQUESTE D THE AO TO ASSESS THE INCOME IN THE HANDS OF APPELLANT. THE APPELLANT HAS AFREADY PAID ENTIRE TAX ON THE AD DITIONS CONFIRMED BY CIT(A). AS SUCH THE APPELLANT PRAYS FOR ADDITIONS IN THE HA NDS OF APPELLANT ONLY. ALSO, DUE TO THE WORDS, CIT(A)S APPEAL ORDER MODI FYING THE ASSESSMENTS HAVE GOT NO LEGS TO STAND(IN THE ITA T ORDER), THE AO Q UESTIONED THE RELIEF GIVEN BY CIT(A). M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 10 CIT(A) GAVE RELIEF BASED ON THE FACTUAL FINDING AFR EADY DETAILED IN THE CIT(A) ORDER ITSELF AND DR ACCEPTED THE RELIEF GIVEN BY TH E CIT(A). AS SUCH, THE APPELLANT PRAYS FOR CONFIRMATION OF RE LIEF GIVEN BY CIT(A). DATED AT CHENNAI THIS THE 16TH DAY OF SEPTEMBER, 20 15 4. CONSIDERING THE COMPLEXITIES OF THE ISSUES AND THE MULTIPLE MISTAKES POINTED OUT BY BOTH THE PARTIES IN THE ORD ER OF THE TRIBUNAL CITED HEREIN ABOVE WE ARE OF THE CONSIDERED VIEW TH AT ALL THE AFORESAID RELEVANT APPEALS REQUIRE TO BE RECALLED A ND HEARD TOGETHER IN ORDER TO RECTIFY THE MISTAKES POINTED OUT BY BOT H THE PARTIES. IT APPEARS THAT SINCE THE APPEALS IN THE CASE OF MR.PA NJURAJAN AND M/S.SONY FIREWORKS PVT. LTD., WERE NOT HEARD TOGETH ER, THOUGH THE ISSUES WERE INTER LINKED, THE MISTAKES POINTED OUT BY BOTH THE PARTIES MIGHT HAVE RESULTED. THEREFORE IN THE INTEREST OF J USTICE WE HEREBY RECALL ALL THE AFORESAID APPEALS POINTED OUT BY BOT H THE PARTIES FOR FRESH HEARING TOGETHER. THE REGISTRY IS DIRECTED TO POST ALL THESE APPEALS TOGETHER IN DUE COURSE AND INTIMATE BOTH TH E PARTIES. M.P.NOS.156 TO 165/MDS./15 MR.P.PANJURAJAN M.P. NO.S123 TO 126/MDS./15 M/S.SONY FIREWORKS P LTD. 11 5. IN THE RESULT, ALL THE MISCELLANEOUS PETITIONS F ILED BY THE ASSESSEES & THE REVENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON 20 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH NOVEMBER, 2015 . K S SUNDARAM. & +',-. / -*' /COPY TO: 1. .01 /APPELLANT 2. +201 /RESPONDENT 3. $ 3' (.) /CIT(A) 4. $ 3' /CIT 5. -6 +'78 /DR 6. 9: ;% /GF