ACIT, CHENNAI V. M/s. PGR Associates, CHENNAI

MA 210/CHNY/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1342 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: S SRIDHAR
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER M.P. NO. 210/MDS/2013 & ITA NO.322/MDS/2012 ( IN ITA NO.322/MDS/2012) (ASSESSMENT YEAR: 2008-09) ASSISTANT COMMISSIONER OF INCOME TAX BUSINESS CIRCLE-XI 2 ND FLOOR, KANNAMMAL BUILDING 611, ANNA SALAI, CHENNAI-600 006. (APPLICANT) VS. M/S. PGR ASSOCIATES, 38, RAJAH MUTHIAH SALAI PERIAMET, CHENNAI-600 003. PAN: AAAFP5388G (RESPONDENT) APPLICANT BY : MR. N.MADHAVAN, JCIT RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE DATE OF HEARING : 17 TH JANUARY, 2014 DATE OF PRONOUNCEMENT : 28 TH JANUARY, 2014 O R D E R PER CHALLA NAGENDRA PRASAD, JM: THROUGH THIS MISCELLANEOUS PETITION, REVENUE SUBMI TS THAT THE TRIBUNAL DID NOT CONSIDER GROUND NO.2.2 RA ISED BY THE REVENUE WHILE DISPOSING OF THE APPEAL. THEREFORE, IT IS STATED THAT THIS GROUND OF APPEAL MAY BE CONSIDERED NOW BY RECALLING THE IMPUGNED ORDER IN ITA NO.322/MDS/2012 DATED 8 TH FEBRUARY, 2013. M.P. NO.210/MDS/2013& ITA NO.322/MDS/2012 2 2. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL C ITED ABOVE AND FOUND THAT GROUND NO.2.2 RAISED BY THE RE VENUE HAS NOT BEEN ADJUDICATED. THEREFORE, FOR THE LIMIT ED PURPOSE OF DISPOSING OF GROUND NO.2.2, ORDER IN ITA NO.322/ MDS/2012 DATED 8.2.2013 IS RECALLED AND THE GROUND IS DISPO SED OFF AS UNDER:- 2.2 WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT HAVING HELD THE PURCHASES AS GENUINE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAVING POWERS COTERMINOUS TO THAT OF THE ASSESSING OFFICER OUGHT TO HAVE EXAMINED THE APPLICABILITY OF SECTION 40A(3), SINCE THE ASSESSEE RESORTED TO CASH PURCHASES ALSO. 3. THE DEPARTMENTAL REPRESENTATIVE REFERRING TO TH E ABOVE GROUND OF APPEAL SUBMITS THAT THE COMMISSION ER OF INCOME TAX (APPEALS) WHILE DISPOSING OF THE APPEAL DELETED THE DISALLOWANCE MADE TOWARDS UNPROVED PURCHASES MA DE BY THE ASSESSEE FROM THE PROPRIETARY CONCERN OF ONE OF ITS PARTNERS. THE DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAVING HELD TH AT PURCHASES AS GENUINE HE SHOULD HAVE EXAMINED THE APPLICABILITY OF SECTION 40A(3), AS THE ASSESSEE RE SORTED TO CASH PURCHASES ALSO. M.P. NO.210/MDS/2013& ITA NO.322/MDS/2012 3 4. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT THE GR OUND RAISED BY THE REVENUE IS A NEW PLEA AND AT THIS ST AGE NEW PLEA CANNOT BE ENTERTAINED. IT WAS NEVER THE CONTE NTION OF THE REVENUE THAT PROVISIONS OF SECTION 40A(3) ARE APPLI CABLE IN ASSESSEES CASE. HE SUBMITS THAT ASSESSING OFFICER WAS ALL ALONG OF THE VIEW THAT PURCHASES WERE NOT GENUINE. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT PURC HASES WERE GENUINE AND THE TRIBUNAL HAS CONFIRMED THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE , HE SUBMITS THAT ALTERNATIVE GROUND RAISED BY THE REVEN UE IS ALTOGETHER A NEW PLEA AND IT CANNOT BE ENTERTAINED AT THIS STAGE. 5. HEARD BOTH SIDES. PERUSED THE ORDERS OF LOWER AUTHORITIES. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT CONSIDERED ` 3,47,65,402/- AS UNPROVED PURCHASES FROM RELATED CONCERN FOR THE REASON THAT THERE IS A DISCREPANCY AS PER COLUMN 18 OF FORM 3CD AND AS PE R PURCHASE LETTER SUBMITTED BY THE ASSESSEE, IGNORING THE SUBMISSION OF THE ASSESSEE THAT M/S. PGR LEATHERS, M.P. NO.210/MDS/2013& ITA NO.322/MDS/2012 4 PROPRIETARY CONCERN OF ONE OF THE PARTNERS OF THE FIRM IS ALSO INTO THE BUSINESS AND HAVING SIMILAR BUSINESS DOING INDEPENDENTLY IN RAW AND TANNED SKINS IN THE NAME O F PGR LEATHERS ASSESSED TO CST, TNGST AND VAT ACTS. IT W AS ALSO THE SUBMISSION OF THE ASSESSEE THAT THE PRODUC TS WERE MADE AT PRICE PREVALENT AT THE MARKET AND NOT PURCH ASED AT EXCESSIVE OR UNREASONABLE PRICE HAVING REGARD TO TH E FAIR MARKET PRICE. IT WAS ALSO THE SUBMISSION THAT MAJOR PORTION OF THE PAYMENT WAS MADE THROUGH BANK AND THEREFORE ASS ESSEE IS NOT COVERED BY THE PROVISIONS OF SECTION 40A(2) OF THE ACT. WE ALSO FIND THAT THE ASSESSING OFFICER HAS NEVER S TATED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD MADE CAS H PURCHASES EXCEEDING ` 20,000/- AND THEREFORE PROVISIONS OF SECTION 40A(3) ARE APPLICABLE. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE MADE TOWARDS UNPROVED PURCHASES AND THIS TRIBUNAL CONSIDERING T HE SUBMISSIONS AND FINDINGS OF THE COMMISSIONER OF IN COME TAX (APPEALS) CONFIRMED THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS) THAT THERE IS NO BASIS FOR MAKING AN Y DISALLOWANCE BY THE ASSESSING OFFICER TREATING THE PURCHASES M.P. NO.210/MDS/2013& ITA NO.322/MDS/2012 5 AS UNPROVED. IN THE ABSENCE OF ANY SUCH CONTENTION BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD MADE PURCHA SES FOR MORE THAN ` 20,000/- IN CASH ATTRACTING PROVISIONS OF SECTION 40A(3), THE PLEA OF THE ASSESSING OFFICER AT THIS S TAGE OF APPEAL BEFORE THE TRIBUNAL CANNOT BE ENTERTAINED. T HEREFORE, ALTERNATIVE GROUND RAISED BY THE REVENUE IS REJECTE D. 6. IN THE RESULT, MISCELLANEOUS PETITION IS ALLOWED WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 28 TH DAY OF JANUARY, 2014 AT CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) (CHALLA NAGEN DRA PRASAD) ACCOUNTANT MEMBER JUDI CIAL MEMBER CHENNAI, DATED THE 28 TH JANUARY, 2014. SOMU COPY TO: (1) APPLICANT (4) CIT (A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.