The ACIT, Circle-2, RAJKOT-GUJARAT V. M/s. Prabhat Corporation, RAJKOT-GUJARAT

MA 26/RJT/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0698 (ITAT-RAJKOT)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-07-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR

Judgement Text

Y H , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM M. A . NO. 26 /RJT/2013 (ARISEN OUT OF THE ORDER IN ITA NO. 310 /RJT/201 1 & CO NO.53/RJT/2011 ) A A / ASSESSMENT YEAR 200 8 - 0 9 THE ACIT, CIRCLE - II, RAJKOT ( / APPELLANT) M/S. PRABHAT CORPORATION, NATVAR NIVAS, BARDANGALI, DA NAPITH, RAJKOT PAN: AAIAF 4173 B / RESPONDENT D M / REVENUE BY SHRI AVINASH KUMAR, DR ASM / ASSESSEE BY WRITTEN SUBMISSIONS M Y / DATE OF HEARING 08 . 0 7 . 2013 M Y / DATE OF PRONOUNCEMENT 12 . 0 7 . 2013 / ORDER . . , R / T. K. SHARMA, J. M. : THIS MISCELLANEOUS APPLICATION FILED BY THE REVENUE READS AS UNDER: - IN THIS CASE, THE DEPARTMENT HAD FILED APPEAL BEFORE THE HONBLE INCOME - TAX APPELLATE TRIBUNAL, RAJKOT AGAINST THE ORDER OF THE LD. CIT(A) - III, RAJKOT FOR A.Y. 2008 - 09. THE HONORABLE INCOME - TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT VIDE ORDER DATED 11 - 01 - 2013 IN ITA NO.310/RJT/2011 HAS DISMISSED THE APPEAL FILED BY THE DEPARTMENT AND UPHELD THE DECISION OF LD. CIT(A). IN ITS DECISION IT IS HELD THAT: WE HAVE HEARD BOTH THE SIDES. IT IS PERTINENT TO NOTE THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED U/S 44AB, THEREFORE, THIS CANNOT BE REJECTED U/S145(3) OF THE ACT WHICH IS STATUTORY REQUIREMENT FOR REJE CTING THE BOOKS OF ACCOUNT, 2. IT IS RESPECTFULLY SUBMITTED THAT IN THIS CASE, A.O. HAS NOT REJECTED THE BOOKS OF ACCOUNT U/S 145(3) OF THE I.T. ACT AS STATED IN THE ORDER. AS THE BOOKS ARE NOT REJECTED, AND NO SUCH ISSUE IS INVOLVED IN THIS CASE, THE OR DER OF HONBLE ITAT IS ERRONEOUS [TO THE FACTS OF CASE AND THERE APPEARS MISTAKE APPARENT FROM RECORDS]. ASSESSEE HAS NO OPENING STOCK AND MADE ALL THE PURCHASES DURING THE YEAR UNDER CONSIDERATION FROM ITS SISTER CONCERN AT HIGHER RATE. ONLY BECAUSE ASSE SSEES BOOKS ARE AUDITED, THE FACT CANNOT BE IGNORED THAT ASSESSEE HAS TRIED TO DIVERT ITS ENTIRE PROFIT TO THE SISTER CONCERN BY CREATING ARTIFICIAL LOSS TO THIS CONCERN. THUS AFTER TAKING INTO CONSIDERATION STOCK POSITION AND SALE - PURCHASE RATES, AO HAS RIGHTLY ESTABLISHED THAT ACTIVITIES OF ASSESSEE IS MEANT FOR DIVERTING THE FUND TOWARDS ITS SISTER CONCERN AND THUS DOES NOT DEPICT REAL AND CLEAR PICTURE OF STATE OF BUSINESS. HENCE AO HAS RIGHTLY ESTIMATED THE INCOME ON THE BASIS OF FACTS ON RECORD WHICH WAS NOT APPRECIATED BY LD. CIT(A) AND HONBLE ITAT HAS NOT CONFIRMED THE SAME. MA 26 - RJT - 2013 - PRABHAT CORPORATION 2 3. IN VIEW OF THE ABOVE, ORDER ITA NO.310/RJT/2011 DATED 11.01.2013 OF THE HONBLE ITAT FOR THE ASSESSMENT YEAR 2008 - 09 MAY BE RECALLED FOR FRESH ADJUDICATION. 4. THE MISCELL ANEOUS APPLICATION FILED BEFORE THE TRIBUNAL AS PER DIRECTION OF CIT, RAJKOT - II, RAJKOT COMMUNICATED BY ADDL. CIT, RANGE - 2, RAJKOT VIDE LETTER NO.ADDL.CIT/RR - 2/MISC.APPLN.PC/2013 - 14 DATED 22.05.2013. 2. AT THE TIME OF HEARING OF THIS MISCELLANEOUS APPL ICATION SHRI AVINASH KUMAR, DR APPEARED FOR THE REVENUE , POINTED OUT THAT ALL THE PURCHASES MADE DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE ARE FROM ITS SISTER CONCERN AT HIGHER RATE. KEEPING IN VIEW OF AFORESAID FACT, HE SUBMITTED THAT THOUGH AS SESSEES BOOKS ARE AUDITED , THESE CAN BE REJECTED AS THE ASSESSEE HAS CREATED ARTIFICIAL LOSS. HE ACCORDINGLY POINTED OUT THAT THE TRIBUNAL MAY RECALL ITS ORDER FOR FRESH ADJUDICATION. AS AGAINST THIS, FROM THE SIDE OF ASSESSEE, O NLY WRITTE N SUBMISSIONS WERE MADE; WHEREIN IT HAS BEEN POINTED OUT THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER U/S 254(2) OF THE INCOME - TAX ACT, 1961. 3. RIVAL SUBMISSIONS WERE CONSIDERED. THE TRIBUNAL IN ITS ORDER DATED 11.01.2013 HELD AS UNDER: - WE HAVE HEARD BOTH THE SIDES. IT IS PERTINENT TO NOTE THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED U/S 44AB, THEREFORE, THIS CANNOT BE REJECTED U/S 145(3) OF THE ACT WHICH IS STATUTORY REQUIREMENT FOR REJECTING THE BOOKS OF ACCOUNT . 4. IT IS WELL SETTLED LAW THAT BO OKS OF ACCOUNT , WHICH ARE AUDITED U/S 44AB , CANNOT BE REJECTED WITHOUT POINTING OUT ANY SPECIFIC DEFECT BY THE ASSESSING OFFICER. IN OTHER WORDS, E VEN THE BOOKS OF ACCOUNTS , WHICH ARE AUDITED U/S 44AB , CAN ALSO BE REJECTED PROVIDED THE ASSESSING OFFICER PO INTS OUT SPECIFIC DEFECT IN THE SAME. ADMITTEDLY, IN THIS CASE NO DEFECT WAS POINTED OUT IN THE BOOKS OF ACCOUNT BY THE ASSESSING OFFICER EXCEPT THAT THE PURCHASES MADE BY ASSESSEE FROM ITS SISTER CONCERN ARE AT INFLATED PRICE. FOR THIS REASON, THE LD CIT (A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF RS.3,69,105/ - . LOOKING TO THESE PECULIAR FACTS , WE ARE OF THE VIEW THAT THERE IS SOME TYPOGRAPHICAL ERROR IN THE AFORESAID PARAGRAPH OF THE TRIBUNALS ORDER. WE, THEREFORE, SUBSTITUTE THE AFORESAID PARAGRAP H WITH THE FOLLOWING: - MA 26 - RJT - 2013 - PRABHAT CORPORATION 3 WE HAVE HEARD BOTH THE SIDES. IT IS PERTINENT TO NOTE THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED U/S 44AB, THEREFORE, THIS CANNOT BE REJECTED U/S145(3) OF THE ACT , WITHOUT POINTING OUT ANY SPECIFIC DEFECT , WHICH IS STATU TORY REQUIREMENT FOR REJECTING THE BOOKS OF ACCOUNT 5. THE AFORESAID MODIFICATION WILL NOT CHANGE THE OUTCOME OF THE TRIBUNALS ORDER AS TO THE EXTENT THAT THE PURCHASES ARE INFLATED, ADDITION IS SUSTAINED BY LD CIT(A) AND THE SAME IS UPHELD BY THE TRIB UNAL. FOR THIS REASON, WE DO NOT CONSIDER IT NECESSARY TO RECALL OUR ORDER BUT THE ORDER STANDS MODIFIED TO THE EXTENT INDICATED ABOVE. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS PARTLY ALLOWED. SD/ - SD/ - ( . . PD D. K. SRIVASTAVA ) ( Y . . A / T. K. SHARMA) / ACCOUNTANT MEMBER D / JUDICIAL MEMBER / ORDER DATE 12 . 0 7. 2013. /RAJKOT * BT T RJO NO / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE ACIT, CIRCLE - II, RAJKOT 2 . / RESPONDENT - M/S. PRABHAT CORPORATION, BARDANGALI, DANAPITH, RAJKOT 3 . H / CONCERNED CIT - I I , RAJKOT 4 . - / CIT (A) - I II , RAJKOT 5 . H , Y H , / DR, ITAT, RAJKOT 6 . A / GUARD FILE. / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, R AJKOT