M/S Rjesh International, Solapur V. ACIT, Solapur

MA 76/PUN/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9749 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 25-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Assessee Lawyers: S N DOSHI
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI R.S.PADVEKAR, JUDICIAL MEMBER AND SHRI. R.K. PANDA, ACCOUNTAT MEMBER M.A. NO. 76/PN/2012 (ARISING OUT OF ITA NO. 828/PN/2010) (ASSTT. YEAR : 2 003-04) M/S. RAJESH INTERNATIONAL APPLICANT C-22, M.I.D.C., AKKALKOT ROAD, SOLAPUR 413005 PAN : AADFR5374 D V. ACIT, CIR. 2, SOLAPUR RESPONDENT APPLICANT BY : SHRI S.N. DOSHI RESPONDENT BY : SMT. V INITA MENON DATE OF HEARING : 23/11/ 12 DATE OF PRONOUNCEMENT : 07 -12-12 O R D E R PER R.S. PADVEKAR, JM THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASS ESSEE U/S. 254(2) OF THE ACT BY TAKING THE CONTENTION THAT THERE ARE MISTAKES APPARENT ON THE FACE OF THE ORDER PASSED BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN APPEAL BEING ITA NO. 828/PN/2010 DATED 14 TH MAY 2012 DISMISSING THE SAID APPEAL. 2. IN THE APPLICATION, IT IS STATED THAT IN RESPONS E TO NOTICE ISSUED U/S. 148, THE ASSESSEE APPLICANT FILED THE RETURN OFFERI NG ADDITIONAL AMOUNT OF RS. 50,000/- FOR INCREASE IN VALUATION OF STOCK ON ESTIMATED BASIS. IN PARA 4 OF THE ASSESSMENT ORDER, THE A.O HAS ACCEPTE D THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. IT IS FURTHER STAT ED IN THE APPLICATION THAT THE A.O VERIFIED THE CALCULATION AND THE PURCH ASE BILLS PRODUCED BY THE ASSESSEE FOR THE REVISED VALUATION. THE A.O FO UND THAT VALUE OF CERTAIN TYPE OF TOWELS WERE TAKEN AT LESSER RATE TH AN THAT OF ACTUAL COST. THE A.O. REQUIRED THE ASSESSEE TO RE-SUBMIT THE CA LCULATION. THE ASSESSEE SUBMITTED THE RE-CALCULATION IN WHICH THE CLOSING STOCK WAS INCREASED BY RS. 1,17,302/- IN PLACE OF RS. 50,000/ - AND AGREED FOR THE ADDITION IN RESPECT OF THE BALANCE BETWEEN THE SAID TWO FIGURES WHICH WORKED IS OUT AT RS. 67,302/-. THE SAID ADDITION W AS CONSIDERED FOR LEVY OF PENALTY. THE ASSESSEE CONTENDED THAT EVEN THE A DDITION IS BASED ON 2 M.A. NO.76/PN/2012 M/S.RAJESH INTERNATIONAL A.Y.2003-04 THE ESTIMATION, SAME CANNOT BE SUBJECTED TO PENAL CONSEQUENCES. IT IS FURTHER STATED IN THE APPLICATION THAT THE A.O HAS ALSO LEVIED PENALTY ON ADDITION OF RS. 1,38,861/- MADE ON ACCOUNT OF EXCES S CLAIM OF DEDUCTION U/S. 80HHC. THE ASSESSEE HAD CONTENDED BEFORE THE BENCH THAT THE CALCULATION OF CLAIM ALLOWABLE U/S. 80HHC THOUGH WA S NOT FOUND TO BE SUSTAINABLE, ALL THE FACTS, MATERIAL AND RELEVANT F IGURES WERE BEFORE THE A.O. THE ASSESSEE RELIED ON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS P. LTD., 322 ITR 158 AS WELL AS DILIP SHROFF, 291 ITR 591. IT IS STATED THAT THE TRIBUNAL HAS NOT CONSIDERED THE DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS P. LTD. (SUPRA). EVEN, THERE IS NO DISCUSSION IN THE ORDER SPECIFYING ANY DISTINGUISHABLE FACT. IT IS, THEREFORE, PLEADED THAT THE SAID AMOUNT TO MIST AKE AND THE SAME IS TO BE RECTIFIED U/S. 254(2) BY RE-CALLING THE ORDER. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE HAVE ALSO ANXIOUSLY PERUSED THE ORDER PASSED BY THE TRIBUNAL IN ITA NO. 828/PN/2010 FOR THE A.Y. 2003-04 DATED 14 TH MAY 2012. THE ASSESSEE IS ENGAGED IN THE TRADING AS WELL AS MANUFACTURING OF TOWELS IN INTERNATIONAL MARKET. THE TRIBUNAL HAS NOTED THAT VALUATION OF THE CLOSING STOCK WAS DONE ON THE ESTIMATE BASIS AND NOT AS PER THE ACTUA L PURCHASE VALUE. THE ASSESSEE WAS ASKED BY THE A.O TO SUBMIT THE BASIS O F VALUATION OF THE CLOSING STOCK AND THE DETAILS OF RELEVANT CALCULAT ION. IN RESPONSE, THE ASSESSEE SUBMITTED THE DETAILED WORKING OF THE CLOS ING STOCK AT RS. 59,00,121/- AS AGAINST RS. 58,53,121/-. THE A.O. V ERIFIED THE BOOKS OF ACCOUNT, BILLS ETC. AND WORKED OUT THE CORRECT VALU ATION OF CLOSING STOCK WHICH WAS EXCESS BY RS. 1,17,302/- AND AFTER DEDUC TING THE VALUE OF CLOSING STOCK SHOWN BY THE ASSESSSEE I.E. RS. 50, 000/-, MADE ADDITION OF RS. 67,302/. THE A.O. LEVIED THE PENALTY U/S. 271(1)(C ) ON THE SAID AMOUNT FOR FURNISHING INACCURATE PARTICULARS AND C ONCEALING THE PARTICULARS OF INCOME. SAME WAY, BY CALCULATING TH E DEDUCTION U/S. 80HHC, THE ASSESSEE HAD CLAIMED THE FREIGHT AND IN SURANCE CHARGES OF RS.17,56,689/- TO THE TRANSPORT OF GOODS BEYOND THE CUSTOM STATION BUT THE SAME WERE NOT EXCLUDED FROM THE EXPORT TURNOVER AS PER EXPLANATION (B) OF SEC. 80 HHC. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSEE ACCEPTED THAT RS. 13,78,924/- PAID TO CROWNCOM LTD. HAD BEEN RECEIVED AFTER 351 DAYS AND NOT WITHIN 180 DAYS. THE A.O. WORKED OUT THE CORRECT AMOUNT OF DEDUCTION U/S. 80 HHC AT RS. 12,40,563/- INSTEAD OF RS. 13,78,924/- CLAIMED BY THE ASSESSEE. THE DIFFERENC E WAS ADDED TO THE INCOME OF THE ASSESSEE. THE A.O. LEVIED PENALTY ON THE SAID ADDITION. THE 3 M.A. NO.76/PN/2012 M/S.RAJESH INTERNATIONAL A.Y.2003-04 LD CIT(A) CONFIRMED THE PENALTY LEVIED BY THE A.O O N THE ABOVE TWO ADDITIONS. THE TRIBUNAL HAS DISMISSED THE APPEAL F ILED BY THE ASSESSEE, & CONFIRMED THE PENALTY. THE TRIBUNAL HAS GIVEN DET AIL REASONINGS IN PARA NOS. 8, 9 AND 10 OF ITS ORDER WHICH READ AS UNDER : 8. CONSIDERING THE ABOVE SUBMISSION, WE FIND THAT THE ASSESSEE HAS THOROUGHLY FAILED TO ESTABLISH ITS BONAFIDE ON ITS PART TOWARDS THE ABOVE ADDITION. SO FAR AS ADDITION OF RS. 67,302/- MADE BY THE A.O ON ACCOUNT OF DIFFERENCE IN THE VALUATION OF CLOSING STOCK IS CONCERNED, ADMITTEDLY, THE A.O HAD VALUED THE EXCESS OF CLOSING STOCK AT RS. 1 ,17,302/- ON THE BASIS OF MATERIAL AVAILABLE ON RECORD BEFORE HIM, HENCE I T CANNOT BE SAID THAT IT WAS BASED UPON ESTIMATION. THE A.O HAS MADE ADDITI ON OF RS. 67,302/- ON THIS ACCOUNT AFTER DEDUCTING THE EXCESS VALUE O F CLOSING STOCK SHOWN BY THE ASSESSEE AT RS. 50,000/- AGAINST RS. 1,17,30 2/-. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE AUTHORIT IES BELOW HAVE RIGHTLY INFERRED THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREOF ON THE PA RT OF ASSESSEE TOWARDS THE ADDITION OF RS. 67,302/- TO JUSTIFY LEVY OF PEN ALTY U/S. 271(1)(C ) ON THIS AMOUNT. THE SAME IS UPHELD. THE GROUND NO. 1 IS ACCORDINGLY REJECTED. 9. SIMILARLY, WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER WHEREIN THE LD CIT(A) HAS UPHELD THE PENALTY LEVIED ON THE ADDITION OF RS.1,38,861/- MADE ON ACCOUNT OF EXCESS CLAIM OF D EDUCTION MADE U/S. 80 HHC. IT IS AN ADMITTED FACT THAT THERE IS NO AM BIGUITY IN THE PROVISIONS LAID DOWN U/S. 80 HHC THAT THE ASSESSEE IS NOT ENTI TLED TO CLAIM DEDUCTION U/S. 80 HHC ON FREIGHT AND INSURANCE CHARGES TO THE TRANSPORT OF GOODS BEYOND THE CUSTOM STATION WHICH THE ASSESSEE WAS SU PPOSED TO EXCLUDE FROM EXPORT TURNOVER AS PER EXPLANATION (B) OF SEC. 80 HHC. IT WAS ALSO AN UNDISPUTED FACT THAT RS.13,72,572/- WAS PAID TO CROWNCOM LTD. WAS RECEIVED AFTER 351 DAYS AND NOT WITHIN 180 DAYS. T HUS, THE ASSESSEE WAS SUPPOSED TO CLAIM DEDUCTION U/S. 80 HHC AT RS. 12,40,563/- INSTEAD OF RS.13,78,924/- CLAIMED BY IT. UNDER THESE CIRCU MSTANCES, WE ARE OF THE VIEW THAT THE AUTHORITIES BELOW HAVE RIGHTLY I NFERRED THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF ASSESSEE TOWARDS RS.1,38,361 /-. THUS THERE IS NO INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGA RD. THE SAME IS UPHELD. GROUND NO. 2 IS ACCORDINGLY REJECTED. 10. BEFORE PARTING WITH THE ORDER, WE MENTION OVER HERE THAT THE DECISIONS RELIED UPON BY THE LD. A.R. ARE NOT HELPF UL TO THE ASSESSEE UNDER THE DISTINGUISHABLE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS IN THE PRESENT CASE BEFORE US, AS DISCUSSED ABOVE, THE ASS ESSEE HAS THOROUGHLY FAILED TO ESTABLISH HIS BONAFIDE IN NOT DISCLOSING THE ABOVE INCOME WHICH HAVE BEEN ADDED BY THE AUTHORITIES BELOW. IN BOTH THE ABOVE DISCUSSED ADDITIONS, THERE WAS NO SCOPE OF DEBATE AS TO WHETH ER THE ADDITIONS MADE WERE JUSTIFIED OR NOT. WE FIND THAT ON EACH ADDITION, THE TRIBUNAL HAS CO NSIDERED THAT THERE WAS JUSTIFICATION TO LEVY THE PENALTY. 4 M.A. NO.76/PN/2012 M/S.RAJESH INTERNATIONAL A.Y.2003-04 4. SO FAR AS CLOSING STOCK IS CONCERNED, THE ADDITI ONAL INCOME OFFERED WAS FOR VALUATION AND THE CORRECTION WAS ONLY MADE AFTER THE SAME IS POINTED OUT BY THE A.O. SO FAR AS DEDUCTION U/S. 8 0HHC IS CONCERNED, THE ASSESSEE WAS FULLY AWARE THAT THE PAYMENT WAS NOT RECEIVED WITHIN 180 DAYS BUT AFTER 351 DAYS. THE TRIBUNAL HAS RECORDED THE REASONS. IN OUR OPINION, THE ASSESSEE IS TRYING TO GET THE REVIEW O F THE ORDER INDIRECTLY THROUGH THE PRESENT APPLICATION, WHICH IS NOT PERMI SSIBLE U/S. 254(2) OF THE ACT. WE FIND NO MERIT IN THE MISCELLANEOUS APP LICATION FILED BY THE ASSESSEE. 5. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/ 12/2012. SD/- SD/- (R.K.PANDA) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 7TH DECEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT -IV,PUNE 4. THE CIT(A)- III, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE