M/s. B & A Multiwall Packaging Ltd., Balasore V. DCIT, Corporate Circle-1(1), Bhubaneswar

MA 24/CTK/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2402 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 28-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PARTHA MUKHOPADHYAY
• Keywords: Opportunity of being heard; Corroborative evidences; TDS
• Section: 201

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER M.A.NO.24/CTK/2017 (IN ITA NO . 59 /CTK/201 5) ASSESSMENT YEAR : 20 08 - 2009 M/S. B & A MULTIWALL PACKAGING LTD., TANKAPANI ROAD, BHUBANESWAR. VS. DCIT, CIRCLE 1(1), BHUBANESWAR. PAN/GIR NO. AABCB 2140 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PARTHA MUKHOPADHYAY, AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 19 / 0 8 / 201 9 DATE OF PRONOUNCEMENT : 4 / 0 9 / 201 9 O R D E R PER C.M.GARG,JM BY WAY OF THIS MISCELLANEOUS APPLICATION , THE ASSESSEE APPLICANT DRAWS OUR ATTENTION TO AN INADVERTENT MISTAKE SAID TO HAVE COMMITTED IN TRIBUNALS ORDER DATED 4.8.2017 IN ITA NO.59/CTK/2017 INASMUCH AS BY NOT INCORPORATING THE REFERENCE OF PRECEDENCE AND ITS BINDING EFFECT, IS MISTAKE APPAREN T ON RECORDS. 2. THE GIST OF MISTAKE S POINTED OUT BY THE APPELLANT ARE AS UNDER: (I) THAT AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE REFERRED TO PAPER BOOK PAGES 17 AND 84 TO 87, PARTICULARLY MENTIONED THE ASSESSMENT ORDER DATED 16.12.2011 BY THE ACIT CIRCLE 1(1), BHUBANESWAR FOR THE ASSESSMENT YEAR 2006 - 07 AND SUBMITTED THAT M.A.NO.24/CTK/2017 (IN ITA NO.59/CTK/2015) ASSESSMENT YEAR : 2008 - 2009 P A G E 2 | 6 THE SAID ORDER WAS PASSED CONSEQUENT TO THE PROCEEDING U/S.263 OF THE ACT BY THE CIT, BHUBANESWAR ON THE SAME GROUND. (II) IT WAS SUBMITTED THAT THE RATIO OF THE ORDER DATED 16.12.2011 BY THE ACIT SHALL BE TREATED AS PRECEDENCE WHILE ADJUDICATING THE APPEAL IN ITA NO.59/CTK/2015. (III) ON THIS ISSUE, LD D.R. HAD ALSO ACCEPTED THE ESTABLISHED LEGAL POSITION AND LEFT IT OPEN TO THE BENCH TO ADJUDICATE ACCORDINGLY. (IV) THE TRIBUNAL WITHOUT MENTIONING PAGES 84 TO 87 OF PAPER BOOK, HAS RESTORED THE APPEAL TO THE FI LE OF THE AO FOR STATISTICAL PURPOSES (V) THE ASSESSEE REFERRED VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF THE CONTENTION THAT THE PRECEDENCE IS BINDING IN NATURE. 3. LEARNED COUNSEL FOR THE ASSESSEE POINTS OUT THAT THE AFORESAID PLEA OF THE ASSESSEE WAS NOT ADJUDICATED UPON BY US AND, THEREFORE, THE ORDER PASSED BY US SUFFERS FROM A MISTAKE APPARENT FROM RECORD LIABLE TO BE RECTIFIED UNDER SECTION 254(2) OF THE ACT 3. REPLYING TO ABOVE, L D DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THERE IS NO MISTAKE IN THE IMPUGNED ORDER AND, AS SUCH, IT IS NOT A FIT CASE TO RECTIFY THE ORDER AS THE TRIBUNAL HAS NO POWER TO REVIEW ITS OWN ORDER. HE ALSO SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL DOES NOT SUFFER ANY MISTAKE APPARENT FROM RECORD AND, THEREF ORE, THERE IS NO OCCASION TO TINKER WITH THE ORDER SO PASSED BY THE TRIBUNAL 4. HAVING REGARD TO THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD, W E FIND THAT THE TRIBUNAL VIDE ITS COMPOSITE ORDER DATED 4.8.2017 I N THE APPEAL FILED BY THE ASSESSEE HELD AS UNDER: M.A.NO.24/CTK/2017 (IN ITA NO.59/CTK/2015) ASSESSMENT YEAR : 2008 - 2009 P A G E 3 | 6 7. LD. AR SUBMITTED BEFORE US THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 17,39,258/ - MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S263 OF THE ACT ON 18.2.2014. THE ASSESSEE HAS ALREADY INCLUDED THE VALUE OF STOCKS IN THE FINANCIAL STATEMENTS AND SUBMITTED THE RELEVANT DOCUMENTS. FURTHER, ID.AR REFERRED TO VARIOUS PAPERS IN THE PAPER BOOK AND PRAYED FOR ALLOWING THE A PPEAL. CONTRA, ID. DR RELIED ON THE ORDERS OF CIT(A) ON THIS GROUND. 8. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, ID. AR'S CONTENTION THAT CLOSING STOCK OF STORES AMOUNTING TO RS.17,38,258/ - WAS ALREADY CONSIDERE D IN THE BOOKS OF ACCOUNTS AND THE ID. AR DREW OUR ATTENTION TO THE PAPER BOOK AND REFERRED TO AT PAGE 120 & 121 OF THE PAPER BOOK WHERE THE FACT OF PURCHASE OF ENGINEERING STORES STOCK AND CONSUMABLE & ENGINEERING SPARES HAVE BEEN DEALT IN TRIAL BALANCE. SIMILARLY, ID. AR ALSO REFERRED TO THE ANNUAL REPORT OF THE ASSESSEE AT PAGE 88 WHERE THE VALUE OF STORES AND SPARES DISCLOSED AS OPENING BALANCE AS ON 31.3.2007. THE FACT THAT BEING THE ASSESSEE HAS GIVEN NET CALCULATIONS IN HIS STOCK STATEMENTS AND FILED VOLUMINOUS INFORMATION ON THE SYSTEM OF INCLUSION OF CLOSING STOCK IN THE GOODS CONSUMED. LD. AR FURTHER SUBSTANTIATE HIS ARGUMENTS WITH SUPPORTING EVIDENCE OF STOCKS AND SPARES. WE FIND STRENGTH IN THE ARGUMENTS OF ASSESSEE AS THE ASSESSEE HAS APPLIED AC COUNTING SYSTEM ADOPTED FROM THE EARLIER YEARS AND THE REVENUE HAS BEEN ACCEPTING THE SAME. FURTHER DOCUMENTS FILED IN THE PAPER BOOK NEEDS TO BE VERIFIED BY THE AO. ACCORDINGLY, WE IN THE INTEREST OF JUSTICE REMIT THE DISPUTED ISSUE TO THE FILE OF THE A O FOR EXAMINATION AND VERIFICATION OF INCLUSION OF CLOSING STOCK WITH SUPPORTING EVIDENCE AND THE ASSESSEE BE PROVIDED ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE PASSING THE ORDER ON MERITS. 5. IN THE APPEAL FILED BY THE REVENUE, IT IS HELD AS UNDER: WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND THE JUDICIAL DECISIONS. PRIMA FACIE, THE CONTENTION OF ID. DR THAT THE ASSESSEE SHOULD HAVE DEDUCTED TDS IN RESPECT OF IMPORT OF RAW MATERIAL WHERE THE PROFIT ELEMENT IS ALSO INCLUDED AND A LSO THE PROVISIONS OF SECTION 195(1) SHALL APPLY AND THE CBDT CIRCULAR. THE ASSESSEE HAS NOT DEDUCTED TDS AS IT WAS OUT OF THE PURVIEW OF TDS PROVISIONS, WE FIND THE ID. CIT(A) HAS DISCUSSED AT LENGTH ON THE PROVISIONS AT PAGE 3 TO 11 OF THE ORDER AND CONS IDERED THE FINDINGS OF AO AND SUBMISSIONS OF THE ASSESSEE AND JUDICIAL DECISIONS AND THE FACTS AND DEALT INDEPENDENTLY ON THE JUDICIAL DECISIONS AND FINALLY CONCLUDED RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF G.E.INDIA TECHNOLOGY CEN. (P) LTD., 327 ITR 456 (SC) AND OBSERVED AT PAGE 12 OF THE ORDER AS UNDER : - M.A.NO.24/CTK/2017 (IN ITA NO.59/CTK/2015) ASSESSMENT YEAR : 2008 - 2009 P A G E 4 | 6 'IN THE INSTANT CASE, THE AMOUNTS HAVE BEEN PAID TOWARDS PURCHASE OF RAW MATERIAL ON PRINCIPAL TO PRINCIPAL BASIS AND THE APPELLANT HAS PROCURED THE GOODS FROM THE NON - RESIDENT SELLER. THE RAW MATR5IAL IS SOLD BY THE NON - RESIDENT SELLER IN FOREIGN SOIL, HENCE, NO INCOME ACCRUES TO THE NON - RESIDENT SELLER IN THE INDIAN TERRITORY. THE AO HAS NOT BROUGHT ANY FACTS ON RECORD NOR IT IS APPARENT THAT INCOME IN RESPECT OF TRANSACTIONS ARISES IN FAVOUR OF THE NON - RESIDENT SELLERS IN THE INDIAN TERRITORY OR THAT THE INCOME OF SUCH NON - RESIDENTS IN RESPECT OF TRANSACTIONS IS ASSESSABLE UNDER THE INDIAN INCOME TAX LAW. 3.2.3 IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CAS E OF G.E. INDIA TECHNOLOGY CEN.(P) LTD. V. CIT(SUPRA), IT IS THE CLEAR THAT IF THE PAYMENT IS MADE TO A NON - RESIDENT, WHICH IS NOT A TAXABLE INCOME IN INDIA, THEN NO TAX IS REQUIRED TO BE DEDUCTED U/S.195. ACCORDINGLY, THE ADDITION OF RS.8,30,57,659/ - MADE BY THE AO U/S.40(A)(I) IS HEREBY DELETED. GROUND NOS. 3 TO 5 ARE THUS ALLOWED. FURTHER, ID. AR DREW OUR ATTENTION TO THE INVOICE RAISED BY ONE SELLER AND ALSO THE AMOUNT INVOLVED IN RESPECT OF INVOICES. IN ONE INSTANCE THE A SSESSEE SUBMITTED THAT THE COMMERCIAL INVOICE WAS RAISED AND CORRESPONDENCE PAYMENTS WAS MADE IN FOREIGN CURRENCY BY BANK AND NEVER ANY PAYMENT WAS MADE TO NON - RESIDENTS FOR ANY BUSINESS CONNECTION IN INDIA EXCEPT FOR SUPPLY OF RAW MATERIAL FROM ABROAD AND A LSO DREW OUR ATTENTION TO THE BANK STATEMENTS, INVOICES AS REFERRED IN THE PAPER BOOK. WE FOUND THAT THE CIT(A) HAS NOT CALLED FOR ANY REMAND REPORT ON THE SUBMISSIONS MADE BY THE ASSESSEE FROM THE AO. THE ID. AR HAS FILED VOLUMINOUS DOCUMENTS IN SUPPORT OF TRANSACTION BASED ON THE PRINCIPAL TO PRINCIPAL BASIS AND NON - RESIDENT IS ONLY A SUPPLIER AND NO BUSINESS CONNECTION OR PLACE OF BUSINESS AVAILABLE IN INDIA. THEREFORE, WE, IN THE INTEREST OF JUSTICE, ARE OF THE VIEW THAT THE AO HAS TO VERIFY THE DOCUMENTS FILED IN RESPECT OF TRANSACTIONS BEFORE US. ACCORDINGLY, THE DISPUTED ISSUE IS REMITTED TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION AND EXAMINATION FOR LIMITED PURPOSES AND THE ASSESSEE SHALL ALSO BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDER ON MERITS. ACCORDINGLY, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 5. THE CORE ISSUE WHICH REQUIRED OUR ADJUDICATION WAS WHETHER OR NOT THE REFERENCE OF ORDER DATED 16.12.2011 OF THE ACIT, CIRCLE 1(1) BHUBANESWAR FOR THE ASSESSMENT YEAR 2006 - 07 ON THE SAME SELF - GROUND AND CIRCUMSTANCES WAS NOT FOLLOWED BY THE ASSESSING OFFICER IN THE M.A.NO.24/CTK/2017 (IN ITA NO.59/CTK/2015) ASSESSMENT YEAR : 2008 - 2009 P A G E 5 | 6 ASSESSMENT YEAR UNDER CONSIDERATION. ON A PERUSAL OF ORDER OF THE TRIBUNAL, WE FIND THAT THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION AFTER VERIFYIN G THE DOCUMENTS TO FILED BY THE ASSESSEE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN OUR CONSIDERED VIEW, IF AT ALL THE ASSESSEE HAS GRIEVANCE, HE CAN SUBMIT BEFORE THE ASSESSING OFFICER AT THE TIME OF FRESH ASSESSMENT. FURTHE R, IN OUR CONSIDERED VIEW, IN THE GARB OF RECTIFICATION PETITION, THE ASSESSEE SEEKS TO REVIEW OUR OWN OR DER . THIS IS NOT PERMISSIBLE UNDER INHERENTLY LIMITED SCOPE OF SECTION 254(2). THE MISTAKE WHICH CAN BE RECTIFIED UNDER SECTION 254(2 ) ARE MISTAKES OF ERRORS AND OMISSIONS WHICH ARE GLARING, NOT CAPABLE OF TWO VIEWS BEING TAKEN AND WHICH ARE MANIFEST OR SELF - EVIDENT . IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND THE ENTIRETY OF THE CASE, WE DO NOT SEE ANY LEGALLY SUSTAINABLE MERITS IN THE RECTIFICATION PE TITION. WE, ACCORDINGLY, DISMISS THE SAME. 6. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED ON 4 / 0 9 /201 9 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 4 / 0 9 /20 9 B.K.PARIDA, SPS M.A.NO.24/CTK/2017 (IN ITA NO.59/CTK/2015) ASSESSMENT YEAR : 2008 - 2009 P A G E 6 | 6 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. B & A MULTIWALL PACKAGING LTD., TANKAPANI ROAD, BHUBANESWAR 2. THE RESPONDENT. DCIT, CIRCLE 1(1), BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//