DEPUTY COMMISSIONER OF INCOME TAX 6(2)(1), MUMBAI V. CHARAK PHARMA PRIVATE LIMITED , MUMBAI

MA 452/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0260 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL LD
• Assessee Lawyers: YOGESH THAR LD
• Keywords: Bogus purchase; Depreciation; Tax effect; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

MA NO.452/MUM/2018 ARISING OUT OF ITA NO.7117/MUM/2016 CHARAK PHARMA PRIVATE LIMITED ASSESSMENT YEAR 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM MISCELLANEOUS APPLICATION NO.452/MUM/2018 (ARISING OUT OF ITA NO.7117/MUM/2016) ( / ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX-6(2)(1) R.NO.504, 5 TH FLOOR AAYKAR BHAVAN, M.K.ROAD MUMBAI 400 020 / VS. CHARAK PHARMA PRIVATE LIMITED 21, EVERGREEN INDUSTRIAL ESTATE OPP. DR. E.MOSES ROAD MAHALAXMI MUMBAI 400 011 ./ ./ PAN/GIR NO.AABCC-4014-A ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI YOGESH THAR, LD. AR REVENUE BY : SHRI RAJAT MITTAL, LD. DR / DATE OF HEARING : 30/11/2018 / DATE OF PRONOUNCEMENT : 05/12/2018 ORDER UNDER SECTION 254(2) OF INCOME TAX ACT, 1961 PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THIS MISCELLANEOUS APPLICATION, THE RE VENUE SEEKS RECALL OF TRIBUNAL ORDER ITA NO.7117/MUM/2016 DATED 20/09/ 2017 WHICH HAS DISMISSED REVENUES APPEAL CONSIDERING THE FACT THA T THE TAX EFFECT IN THE MA NO.452/MUM/2018 ARISING OUT OF ITA NO.7117/MUM/2016 CHARAK PHARMA PRIVATE LIMITED ASSESSMENT YEAR 2009-10 2 APPEAL WAS BELOW THE THRESHOLD LIMIT OF RS.10 LACS AS PRESCRIBED BY CBDT CIRCULAR NO. 21/2015 DATED 10/12/2015. 2.1 BRIEFLY STATED, THE ASSESSEE WAS REASSESSED U/S 143(3) READ WITH SECTION 147 ON 31/03/2015 WHEREIN THE ASSESSEE WAS SADDLED WITH ADDITIONS OF RS.31,200/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES. FURTHER, THE ASSESSEE WAS ALSO DENIED SET-OFF OF BR OUGHT FORWARD LOSSES & DEPRECIATION OF RS.703.05 LACS. THE ORIGINAL RETU RN WAS PROCESSED U/S 143(1). 2.2 AGGRIEVED, THE ASSESSEE CONTESTED THE PROCEEDIN GS ON LEGAL GROUNDS AS WELL AS ON MERITS WITH SUCCESS BEFORE LD . CIT(A) VIDE ORDER DATED 01/09/2016. THE LD. CIT(A) QUASHED THE REASSE SSMENT PROCEEDINGS ON LEGAL GROUNDS AND THEREFORE, DID NOT ADJUDICATE THE ISSUE ON MERITS, BEING ADDITIONS OF RS.31,200/- AND DISAL LOWANCE OF LOSSES OF RS.703.05 LACS, FINDING THE SAME AS INFRUCTUOUS. 2.3 AGGRIEVED, THE REVENUE PREFERRED FURTHER APPEAL BEF ORE THIS TRIBUNAL VIDE ITA NO. 7117/MUM/2016 ORDER DATED 20/ 09/2017 WHEREIN THE APPEAL GOT DISMISSED FOR THE REASON THAT TAX EF FECT IN THE APPEAL WAS LESS THAN THE PRESCRIBED THRESHOLD LIMIT. THE REVEN UE HAD TAKEN 5 GROUNDS OF APPEAL WHICH COULD BE SUMMARIZED IN THE FOLLOWING MANNER:- GROUND NO. NATURE OF THE GROUND 1. CONTESTED THE DELETION OF RS.31,200/- ON ACCOUNT OF BOGUS PURCHASES 2. CONTESTED THE QUASHING OF REOPENING PROCEEDINGS 3. CONTESTED CERTAIN DIRECTIONS GIVEN BY LD. CIT(A) 4 & 5 GENERAL IN NATURE MA NO.452/MUM/2018 ARISING OUT OF ITA NO.7117/MUM/2016 CHARAK PHARMA PRIVATE LIMITED ASSESSMENT YEAR 2009-10 3 AGAINST THIS ORDER OF THE TRIBUNAL, THE REVENUE HAS PREFERRED THIS MISCELLANEOUS APPLICATION ON THE GROUND THAT THE TA X EFFECT UNDER THE APPEAL IS, IN FACT, MORE THAN THE PRESCRIBED THRESH OLD LIMIT. 3. UPON HEARING BOTH THE REPRESENTATIVES, WE CONCUR WITH THE STAND OF THE REVENUE THAT THE TAX EFFECT IN THE APPEAL WAS, IN FACT, WAY MORE THAN THRESHOLD LIMIT OF RS.10 LACS. THE LD. AR HAS CANVA SSED THE POINT THAT THE REVENUE HAD AGITATED ONLY THE QUANTUM ADDITIONS OF RS.31,200/- ONLY AND NOT THE OTHER ADJUSTMENT OF RS.703.05 LACS AND THEREFORE, THE TAX EFFECT WAS BELOW THRESHOLD LIMIT. WE FIND NO FORCE IN THE SAME SINCE, IF THE LEGAL GROUNDS AS AGITATED BY REVENUE VIDE GROUN D NUMBER-2 WHICH CONTEST THE QUASHING OF REASSESSMENT PROCEEDINGS BY FIRST APPELLATE AUTHORITY IS ALLOWED BY THE TRIBUNAL, BOTH THE ADDI TIONS / ADJUSTMENTS, ON MERITS, WOULD BECOME SUBJECT MATTER OF APPEAL BEFOR E LD. FIRST APPELLATE AUTHORITY. THEREFORE, FINDING THE ORDER TO BE ERRON EOUS, WE RECALL THE SAME AND RESTORE THE APPEAL TO ITS ORIGINAL STATUS. THE REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING BEFORE REGUL AR BENCH IN REGULAR COURSE, DUE INTIMATION OF WHICH SHALL BE GIVEN TO B OTH THE PARTIES. 4. THE APPLICATION STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH DECEMBER, 2018. SD/- SD/- (C.N.PRASAD) (MANOJ KUMA R AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : SR.PS:-THIRUMALESH/ SR.PS:-JAISY VARGHESE MA NO.452/MUM/2018 ARISING OUT OF ITA NO.7117/MUM/2016 CHARAK PHARMA PRIVATE LIMITED ASSESSMENT YEAR 2009-10 4 ! / COPY OF THE ORDER FORWARDED TO : 1. %&' / THE APPELLANT 2. (&' / THE RESPONDENT 3. * ( % ) / THE CIT(A) 4. * / CIT CONCERNED 5. + , , % , , / DR, ITAT, MUMBAI 6. -./ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.