ITO, Ward-3(2)(5), Surat V. M/s. Nageshwar Enterprise, Surat

MA 56/SRT/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9346 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: P M JAGASHETH
• Keywords: Unexplained investment; Tax effect
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR.SHRI ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) MISCELLANEOUS APPLICATION NOS.56 & 57/SRT/2019 (ARISING OUT OF I.T.A NOS.146 & 3259/AHD/2011/SRT) [ [ / ASSESSMENT YEARS: 2006-07 & 2008-09 THE INCOME TAX OFFICER , WARD-3(2)(5), SURAT. VS. M/S NAGESHWAR ENTERPRISE, I.C.GANDHI COMPOUND, A.K.ROAD, SURAT. [PAN: AAJFS 3952 J] / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI P.M.JAGASHETH - AR /REVENUE BY MS. ANUPAMA SINGLA SR.DR / DATE OF HEARING: 18 . 1 2 .20 20 /PRONOUNCEMENT ON: 29 . 1 2 .20 20 /O R D E R PER PAWAN SINGH, JM: 1. THESE MISCELLANEOUS APPLICATIONS (MA) ARE FILED BY THE REVENUE FOR SEEKING RECTIFICATION IN THE CONSOLIDATED ORDER DATED 06.12.2018 PASSED IN ITA NOS.146 & 3259/AHD/2011 FOR A.Y. 2006-07 AND 2008-09 RESPECTIVELY. 2. IN BOTH THE MAS THE REVENUE HAS PLEADED RAISED CERTAIN COMMON FACTS, EXCEPT VARIATION OF FIGURES OF ADDITIONS ON ACCOUNT OF UNACCOUNTED INVESTMENT AND GROSS PROFIT ADDITION OF UNACCOUNTED PURCHASES. MOREOVER, THE TRIBUNAL ALSO PASSED THE CONSOLIDATED ORDER FOR BOTH THE ASSESSMENT YEARS IN ITA NOS.146 & M/S.NAGESHWAR ENTERPRISE VS. ITO, WARD-3(2)(5), SURAT./ MA NOS.56 & 57/SRT/2019 FOR A.Y. 2006-07 & 08-09 2 3259/AHD/2011 (SUPRA). THUS, BOTH THE APPLICATIONS ARE CLUBBED, HEARD AND ARE DECIDED BY COMMON ORDER. 3. FOR APPRECIATION, THE FACTS IN MA NO.56/SRT/2019 ARE TREATED AS LEAD CASE. IN THE APPLICATION, THE REVENUE INTER-ALIA STATED THAT DURING THE ASSESSMENT, THE ASSESSING OFFICER(AO) NOTED FOUND THAT DIRECTORATE OF REVENUE INTELLIGENCE (DRI), AHMEDABAD HAS CONDUCTED INVESTIGATION THAT ASSESSEE FIRM HAD RESORTED TO UNDER INVOICING OF IMPORT OF METALLIC YARN OF RS.1.14 CRORE. STATEMENT OF ASSESSEE WAS ALSO RECORDED BY DRI TEAM. ON THE BASIS OF STATEMENT OF ASSESSEE, THE LD.AO CONCLUDED THAT ASSESSEE MADE UNACCOUNTED INVESTMENT OF RS.45.53 LAKHS AND MADE ADDITION ACCORDINGLY. THE LD.AO FURTHER MADE ADDITION ON ACCOUNT OF UNACCOUNTED GROSS PROFIT @10% ON DIFFERENTIAL AMOUNT AND MADE ADDITION OF RS.11.43 LAKHS. THE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE BY TAKING VIEW THAT THE TAX EFFECT INVOLVED IN APPEAL IS BELOW MONETARY LIMIT OF RS.20 LAKHS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SUBMITS THAT DURING THE ASSESSMENT, THE LD.AO MADE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM EXTERNAL SOURCES I.E. DRI, AHMEDABAD. THE ADDITION SO MADE WAS DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)]. AND ON FURTHER APPEAL BEFORE THE TRIBUNAL, THE APPEAL OF THE REVENUE WAS DISMISSED DUE TO LOW TAX EFFECT. THE LD. DR SUBMITS THAT THOUGH, ADMITTEDLY THE TAX EFFECT INVOLVED IN BOTH THE APPEALS ARE BELOW THE MONETARY LIMIT OF RS.20 M/S.NAGESHWAR ENTERPRISE VS. ITO, WARD-3(2)(5), SURAT./ MA NOS.56 & 57/SRT/2019 FOR A.Y. 2006-07 & 08-09 3 LAKHS, AS PRESCRIBED IN CBDT CIRCULAR NO.3/2018, HOWEVER, THE CASE FALLS WITHIN THE EXCEPTION CLAUSE IN PARA 10(E) OF THE CIRCULAR DATED 11.07.2018.. THE LD. DR FOR THE REVENUE SUBMITS THAT ORDER OF THE TRIBUNAL DATED 06.12.2018 IS LIABLE TO BE RECALLED FOR ADJUDICATION OF APPEAL ON MERIT. 5. ON THE OTHER HAND, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITS THAT THE APPEAL OF THE REVENUE WAS DISMISSED DUE TO LOW TAX EFFECT. THE LD.AR FURTHER SUBMITTED THAT THOUGH, IT IS A MATTER OF FACT THAT THE LD.AO MADE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM EXTERNAL SOURCES I.E. DRI, AHMEDABAD. HOWEVER, THAT INFORMATION WAS ULTIMATELY PROVED TO BE UNTRUE. THE LD. AR FOR THE ASSESSEE SUBMITS THAT ON THE BASIS OF ACTION OF DRI, THE LEVIED PENALTY FOR UNDER VALUATION OF GOODS UNDER SECTION 114A OF CUSTOMS ACT FOR 2006-07 AND 2007-08. THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE PENALTY LEVIED UNDER SECTION 114A OF CUSTOMS ACT WAS DELETED BY CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL (CESTAT) IN ITS ORDER DATED 25/02/2019, COPY OF WHICH IS ALSO PLACED ON RECORD. THUS, THE THIRD PARTY INFORMATION WAS NOT CORRECT AND NO ADDITIONS ON SUCH INFORMATION IS LIABLE TO BE SUSTAINED. 6. IT WAS ARGUED THAT ON THE BASIS OF SAME INFORMATION THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 FOR ASSESSMENT YEAR 2006-07 TO 2008-09. IN THE REASSESSMENT ORDER FOR ALL THREE YEARS THE ASSESSING OFFICER MADE SIMILAR ADDITIONS. HOWEVER, ON M/S.NAGESHWAR ENTERPRISE VS. ITO, WARD-3(2)(5), SURAT./ MA NOS.56 & 57/SRT/2019 FOR A.Y. 2006-07 & 08-09 4 APPEAL BEFORE FIRST APPELLATE AUTHORITY / LD. CIT(A) DELETED THE ADDITIONS IN ALL YEARS. ON FURTHER APPEAL BY REVENUE BEFORE TRIBUNAL, THE APPEAL FOR ASSESSMENT YEAR 2006-07 AND 2008-09 WAS DISMISSED DUE TO LOW TAX EFFECT. IN APPEAL FOR ASSESSMENT YEAR 2007-08 THE ADDITIONS WERE DELETED BY TRIBUNAL BY HOLDING THAT IN ABSENCE ON EVIDENCE NO ADDITIONS CAN BE MADE ON THE BASIS OF THIRD PARTY INFORMATION VIDE ORDER DATED 03.05.2019 IN ITA NO. 14/AHD/2011. THE LD. AR FOR THE ASSESSEE FURTHER SUBMITS THAT REVENUE FILED APPEAL AGAINST THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2007-08 BEFORE GUJARAT HIGH COURT VIDE TAX APPEAL NO. 806 OF 2019, WHICH HAS BEEN DISMISSED VIDE ORDER 03.02.2020. THEREFORE, THE ISSUE RAISED BY THE REVENUE IS NOW STAND COVERED IN FAVOUR OF THE ASSESSEE. THUS, THE APPLICATION FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 7. IN THIRD ALTERNATIVE SUBMISSIONS THE LD. AR FOR THE ASSESSEE SUBMITS THAT THE MONETARY LIMITS FOR FILING APPEAL BY REVENUE BEFORE THE TRIBUNAL HAS BEEN REVISED BY CBDT IN ITS CIRCULAR NO. 17/2019 DATED 8 TH AUGUST 2020, WHEREIN THE MONETARY LIMITS FOR FILING APPEAL BEFORE TRIBUNAL IS ENHANCED TO RS. 50.00 LAKHS AND THERE IS NO SUCH EXCEPTION CLAUSE IN THE LATEST CBDT CIRCULAR, THEREFORE, EVEN IF IT IS PRESUMED THAT THE REVENUE HAS ANY MERIT IN THEIR FAVOUR, THE RECALLING THE ORDER AND TO DISMISS IT AGAIN WOULD BE A FUTILE EXERCISE. THE LD. AR FOR THE ASSESSEE PRAYED FOR DISMISSAL OF THE MAS. M/S.NAGESHWAR ENTERPRISE VS. ITO, WARD-3(2)(5), SURAT./ MA NOS.56 & 57/SRT/2019 FOR A.Y. 2006-07 & 08-09 5 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND HAVE GONE THROUGH THE ORDER DATED 06.12.2018. WE HAVE NOTED THAT ON THE BASIS OF SAME INFORMATION (DRI) THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 FOR ASSESSMENT YEAR 2006-07 TO 2008-09. FURTHER IT IS AN UNDISPUTED FACTS THAT IN THE REASSESSMENT ORDERS FOR ALL THREE YEARS THE ASSESSING OFFICER MADE SIMILAR ADDITIONS IN THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 147. HOWEVER, ON APPEAL BEFORE FIRST APPELLATE AUTHORITY / LD. CIT(A) DELETED THE ADDITIONS IN ALL THREE ASSESSMENT YEARS. ON FURTHER APPEAL BY REVENUE BEFORE TRIBUNAL, THE APPEAL FOR ASSESSMENT YEAR 2006-07 AND 2008-09 WAS DISMISSED DUE TO LOW TAX EFFECT. HOWEVER, IN APPEAL FOR ASSESSMENT YEAR 2007-08 THE ADDITIONS WERE DELETED BY TRIBUNAL VIDE ORDER DATED 03.05.2019 IN ITA NO. 147/AHD/2011 BY HOLDING THAT IN ABSENCE ON EVIDENCE NO ADDITIONS CAN BE MADE ON THE BASIS OF THIRD PARTY INFORMATION. THE ORDER OF THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2007-08 HAS BEEN AFFIRMED BY HON'BLE GUJARAT HIGH COURT VIDE TAX APPEAL NO. 806 OF 2019, VIDE ORDER 03.02.2020. 9. WE HAVE FURTHER NOTED THAT ON THE BASIS OF REPORT OF DRI, THE CUSTOMS AUTHORITIES LEVIED PENALTY ON THE ASSESSEE UNDER SECTION 114A OF CUSTOMS ACT. HOWEVER, THE PENALTY LEVIED AGAINST THE ASSESSE HAS BEEN DELETED BY CESTAT VIDE ORDER DATED 25/02/2019 IN APPEALS NO.C/915 TO 917 & 947/2009. THUS, IN VIEW OF THE AFORESAID FACTUAL DISCUSSIONS, WE FIND MERIT IN THE SUBMISSIONS OF M/S.NAGESHWAR ENTERPRISE VS. ITO, WARD-3(2)(5), SURAT./ MA NOS.56 & 57/SRT/2019 FOR A.Y. 2006-07 & 08-09 6 THE LD. AR FOR THE ASSESSEE THAT EVEN IF IT IS PRESUMED THAT THE REVENUE HAS ANY MERIT IN THEIR FAVOUR, THE ISSUE RAISED IN THE PRESENT APPEALS ARE COVERED BY THE DECISION OF GUJARAT HIGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08(SUPRA) AND BY RECALLING THE ORDER AND TO DISMISS IT AGAIN WOULD BE FUTILE EXERCISE. 10. IN THE RESULT THE MA NO. 56/SRT/2019 IN ITA NO. 146/AHD/2011 FILED BY THE REVENUE FOR ASSESSMENT YEAR 2006--7 IS DISMISSED. 11. CONSIDERING THE FACTS THAT WE HAVE DISMISSED THE MA NO. 56/SRT/2019 IN ITA NO. 146/AHD/2011 FILED BY THE REVENUE FOR ASSESSMENT YEAR 2006-07, THEREFORE, MA NO. 57/SRT/2019 IN ITA NO. 3259/AHD/2011 IS ALSO DISMISSED WITH SIMILAR OBSERVATION. 12. IN THE RESULT BOTH THE MAS FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 29-12-2020 BY PLACING THE RESULT ON THE NOTICE BOARD. SD/- SD/- (DR.ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 29 TH DEC , 2020 S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT