Assistant Commissioner of Income Tax, Vapi Circle, Vapi V. Vapi Care Pharma Pvt. Ltd., Vapi

MA 18/SRT/2023

AI Insights

The case involves a Miscellaneous Application (MA) filed by the revenue seeking rectification of an earlier Tribunal order concerning the assessment year 2017-18. The revenue contended that the Tribunal's previous order was factually incorrect and left a vital part of the controversy un-adjudicated, specifically regarding the availability of physical cash with the assessee during the demonetization period. The assessee, represented by Shri Hardik Vora, Advocate, opposed the application, arguing that the revenue was essentially seeking a review of the Tribunal's order, which is beyond the scope of Section 254(2) of the Income Tax Act. The Tribunal, after considering the submissions, dismissed the MA, reaffirming its earlier findings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302203 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 02-05-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 263; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER M.A. No. 18/Srt/2023 (Arising out of ITA No. 94/SRT/2022) (Assessment Year: 2017-18) (Virtual hearing) A.C.I.T., Vapi Circle, Vapi. Vs. M/s Vapi Care Pharma Private Limited, Plot No. 225/3, 0, Near Morarji circle, G.I.D.C., Vapi-396195 (Gujarat) PAN: AAACV 8291 M APPELLANT RESPONDEDNT Assessee represented by Shri Hardik Vora, Advocate Respondent represented by Shri Vinod Kumar, Sr.DR Date of hearing 21/08/2023 Date of pronouncement 21/08/2023 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This Miscellaneous Application (MA) is filed by the revenue for seeking rectification in order of this Tribunal dated 22/12/2022 passed in ITA No. 94/Srt/2022 for the Assessment Year (AY) 2017-18. 2. The learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the order of Tribunal is factually incorrect and needs to be rectified which is clearly discernible from the submission of assessee before ld. Pr.CIT, Valsad during the proceedings of Section 263 (Revision Proceedings) wherein the assessee narrated various things but failed to answer the most MA No.18/SRT/2023 ACIT Vs M/s Vapi Care Pharma P Ltd. 2 vital question. The question before the ld. Pr.CIT was whether the Income Tax Department, returned the money to the assessee which was seized and it was available with the assessee for deposit during demonetization period. The cash deposited with PD account maintained by ld. Pr.CIT, Valsad and thereafter it was subsequently transferred to the office of Pr.CIT (Central) Ahmedabad. The cash was never released to the assessee. During demonetization period, only physical cash was to be deposited and not the cash available as per journal entries. The assessee failed to explain how physical cash was available with the assessee on the date of deposit, therefore, the submission taken by assessee falls apart. Since the assessee failed to explain the availability of cash on the date of deposit. There is no finding of Tribunal on such fact. The ld. Sr. DR for the revenue submits that either suitable correction in the order dated 22/12/2022 may be made or order may be recalled for adjudication afresh as the vital part of controversy in the matter was left un-adjudicated and thus the mistake apparent in the order of Tribunal. 3. On the other hand, the learned Authorised Representative (ld. AR) of the assessee supported the order of Tribunal. The ld. AR of the assessee submits that the revenue/Assessing Officer is seeking review of the order which is beyond the scope of Section 254(2) of the Income Tax Act, 1961. On merit, the ld. AR of the assessee MA No.18/SRT/2023 ACIT Vs M/s Vapi Care Pharma P Ltd. 3 submits that in para 6 and 7 of the order, the Tribunal has given categorical finding on appreciation of fact that amount of Rs. 15.50 lacs is already added in the hands of Director of assessee and same cannot be added in the hand of assessee company, thus the assessment order passed by assessing officer was not at all prejudicial to the interest of revenue and the order passed under section 263 was quashed/ set aside. The ld. AR of the assessee further submits that the stand of assessee right from the beginning was that the cash seized from the residence of Director was belonging to assessee company, the department taxed the same in the hand of individual Director namely Shri Kamal J Shah. When the cash was added in the hand of Shri Kamal J Shah, the assessee company reduced the cash balance by passing the accounting entry by crediting Rs. 15.50 lacs and debiting the same amount to the cash seized in the search. The said cash balance deposited was shown by assessee separately in its books of account under the head “cash seized in the IT search”. Such contention of assessee was accepted by Assessing Officer during the assessment of assessee and this fact is clearly accepted by the Assessing Officer in sub-para 2 of para 3 of present application. The ld. AR of the assessee submits that the order passed by the Tribunal does not require any rectification or interference. MA No.18/SRT/2023 ACIT Vs M/s Vapi Care Pharma P Ltd. 4 4. We have considered the submission of both the parties and perused the record carefully including the order of Tribunal dated 21/11/2022. We find that in the present appeal, the assessee has challenged the validity of order under Section 263 passed by the ld. Pr.CIT, Valsad. The core issue while adjudicating appeal was, if the twin condition of Section 263 whether the assessment order passed by assessing officer was erroneous and in so far as prejudicial to the interest of revenue. We find that while adjudicating the appeal of assessee, we have already took a view that the order passed by the Assessing Officer was not at all prejudicial to the interest of revenue as the impugned amount of Rs. 15.50 lacs were already taxed in the hands of individual Director. This fact was initially accepted by the assessing officer while passing the assessment order, though, the assessment order was revised by ld PCIT. The revenue in the present application is seeking revive of the order, which is not permissible under section 254(2). So far as specific plea raised in the present application that there is no clear finding about the availability of cash in the hand of assess- company is concerned, we find that once we impliedly accepted the plea of the assessee that same amount cannot be taxed twice. And that assessee company reduced the cash balance by passing the accounting entry by crediting Rs. 15.50 lacs and debiting the same amount to the cash MA No.18/SRT/2023 ACIT Vs M/s Vapi Care Pharma P Ltd. 5 seized in the search. Thus, we do not find any merit in this present Misc. application and we dismiss the same. 5. In the result, this Misc. application of revenue is dismissed. Order was pronounced in the open court on 21 August, 2023. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 21/08/2023 *Ranjan Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order Sr. Pvt. Secretary, ITAT, Surat