Plasticon Technologies P Ltd, Hyderabad, Hyderabad V. ITO, Ward-16(2), Hyderabad, Hyderabad

MA 87/HYD/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3621 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 13-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Assessment record
• Section: 143(3); 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE : SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A.NO.87/HYD/2015 ARISING OUT OF ITA.NO.751/HYD/2011 - ASSESSMENT YEARS 2006-2007 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. PAN AADCP0670M VS. INCOME TAX OFFICER WARD 16(2) HYDERABAD. (APPL IC ANT) (RESPONDENT) M.A.NO.88/HYD/2015 ARISING OUT OF ITA.NO.1280/HYD/2013 - ASSESSMENT YEARS 2006-2007 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. PAN AADCP0670M VS. INCOME TAX OFFICER WARD 16(2) HYDERABAD. (APPL IC ANT) (RESPONDENT) FOR ASSESSEE : MR. K.A. SAI PRASAD FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 09.10.2015 DATE OF PRONOUNCEMENT : 16 .10.2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH THESE M.AS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 31.08.2013 IN ITA.NO.751/HYD/2011 AND ORDER DATED 08.01.2014 IN ITA.NO.1280/HYD/2013. 2 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT UNDER SECTION 143(3) OF THE I.T. ACT WAS COMPLETED BY THE A.O. ON 30.12.2008 ASSESSING THE T OTAL INCOME OF RS.6,41,511. THEREAFTER, THE LD. CIT PERU SED THE ASSESSMENT RECORDS AND FOUND THAT THE ASSESSMEN T ORDER IS BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO T HE INTERESTS OF THE REVENUE AS THE A.O. HAS FAILED TO CONSIDER AND VERIFY THE PURCHASES FROM RELIANCE INDUSTRIES L TD., I.E., WHETHER OR NOT THEY ARE INCLUSIVE OF TRANSPOR T CHARGES. HE THEREFORE, REVISED THE ASSESSMENT ORDER BY EXERCISING HIS POWERS UNDER SECTION 263 OF THE I.T. ACT AND DIRECTED THE A.O. TO BRING TO TAX THE SAID SUM OF RS.18,23,885, REPRESENTING THE INFLATION IN PURCHAS ES DEBITED TO THE P & L ACCOUNT AND TO TAX THE TRANSP ORT CHARGES OF RS.12,32,779 AND ALSO TO CONSIDER THE TO TAL CENVAT CREDITS AVAILED BY THE ASSESSEE OF RS.69,64, 036 AS AGAINST THE FIGURE OF RS.66,74,967 REDUCED FROM THE PURCHASES BY THE ASSESSEE. FURTHER, HE ALSO DIRECTE D THE A.O. TO TAKE INTO ACCOUNT THE VAT INPUT TAX OF RS.8,92,677 AS FURNISHED BY THE SALES TAX AUTHORITI ES AS PER THE INFORMATION FILED BY THE ASSESSEE BEFORE TH E SALES TAX AUTHORITIES AS AGAINST THE LESSER FIGURE OF RS. 7,06,971 REDUCED BY THE ASSESSEE FROM THE PURCHASES. HE ACCORDINGLY, DIRECTED THE A.O. TO RE-DO THE ASSESSM ENT IN THE LIGHT OF FINDINGS OF THE CIT. 2.1. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFOR E THE ITAT AGAINST THE ORDER OF THE LD. CIT UNDER SEC TION 263. THIS TRIBUNAL VIDE ORDER DATED 31.08.2012 IN 3 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. ITA.NO.751/2011 DISMISSED ASSESSEES APPEAL STATING THAT THE LD. CIT WAS RIGHT IN DIRECTING THE A.O. TO RE-D O THE ASSESSMENT IN VIEW OF THE FACT THAT THE A.O. DID NO T VERIFY THE CORRECTNESS OF THE PURCHASES ETC., THEREAFTER, THE A.O. PASSED THE ORDERS UNDER SECTION 144 READ WITH SECTI ON 263 OF THE I.T. ACT GIVING EFFECT TO THE ORDER OF T HE LD. CIT AND HAS ADOPTED THE FIGURE MENTIONED BY THE LD. CIT WITHOUT MAKING ANY FURTHER ENQUIRIES WHATSOEVER. 2.2. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) ALONG WITH EVIDENCE IN SUPPORT OF IT S CONTENTION. THE LD. CIT(A) CALLED FOR A REMAND REPO RT FROM THE A.O. WHO SUBMITTED THAT HE HAS FOLLOWED THE DIRECTIONS OF THE LD. CIT ISSUED UNDER SECTION 263 DATED 25.03.2011 WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 144 READ WITH SECTION 263, AND IN THESE CIRCUMSTANCES, VERIFICATION OF THE DATA SUBMITTED B Y THE ASSESSEE WOULD BE AGAINST THE DIRECTION OF THE LD. CIT UNDER SECTION 263. TAKING NOTE OF THE SAME, THE LD. CIT(A) CONFIRMED THE ORDER OF THE A.O. BY FOLLOWING THE DE CISION OF THIS TRIBUNAL IN ITA.NO.751/HYD/2011 ATED 31.08. 2012 AND DISMISSED ASSESSEES APPEAL. AGGRIEVED, ASSESSE E IS IN APPEAL BEFORE THIS TRIBUNAL AND THE TRIBUNAL VIDE O RDER DATED 08.01.2014 DISMISSED ASSESSEES APPEAL HOLDIN G THAT THERE IS NO MERIT IN THE SAME. ALLEGING THAT T HERE ARE MISTAKES APPARENT FROM RECORD IN THE ORDERS OF THE TRIBUNAL IN BOTH THE APPEALS, I.E., AGAINST ORDER U NDER SECTION 263 AND ALSO AGAINST THE ORDER GIVING EFFEC T TO THE 4 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. ORDER UNDER SECTION 263, THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATIONS. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS AN ADMITTED FACT THAT THE A.O. DURING TH E ORIGINAL ASSESSMENT PROCEEDINGS HAS NOT VERIFIED THE TRANSPO RT CHARGES WHETHER ARE INCLUDED IN THE PURCHASES MADE FROM RELIANCE INDUSTRIES OR NOT AND WHETHER THE PURCHASE S DECLARED BY THE ASSESSEE IS TO BE ACCEPTED. HE SUBM ITTED THAT TO THAT EXTENT THE ORDER UNDER SECTION 263 WAS SUSTAINABLE. HOWEVER, ACCORDING TO HIM, THE LD. CIT UNDER SECTION 263 DID NOT VERIFY THE DETAILS BY HIMSELF T O BE SATISFIED ABOUT THE ALLOWABILITY OR OTHERWISE OF TH E PURCHASES BUT HAS DIRECTED THE A.O. TO RE-DO THE ASSESSMENT IN THE LIGHT OF HIS DIRECTIONS AND THE A .O. FOLLOWING THE SAME, HAS ADOPTED THE FIGURES POINTED OUT BY THE LD. CIT WITHOUT ANY VERIFICATION. HE SUBMITTED THAT THIS HAS CAUSED GRAVE INJUSTICE TO THE ASSESSEE AND THEREFORE, THE ASSESSEE APPROACHED THE LD. CIT(A) F OR SUITABLE DIRECTIONS AND HAS ALSO FILED THE EVIDENCE IN SUPPORT OF ITS CONTENTION ABOUT THE ALLOWABILITY OF THE CLAIM. HE HAS SUBMITTED THAT THE LD. CIT(A) ALSO H AD CALLED FOR A REMAND REPORT FROM THE A.O. BUT THE A. O. HAS FAILED TO CONSIDER THE SAME ON THE GROUND THAT IT W OULD BE IN VIOLATION OF THE DIRECTIONS OF THE LD. CIT UNDER SECTION 263. HE HAS SUBMITTED THAT THE FINDINGS AND CONCLUS IONS IN THE ORDER UNDER SECTION 263 ARE SELF-CONTRADICTO RY IN THEMSELVES AS THE LD. CIT IN THE EARLIER PARAGRAPH HAS POINTED OUT THE DISCREPANCIES IN THE ASSESSMENT 5 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. COMPLETED BY THE A.O. BUT IN THE FINAL PARAGRAPH HA S DIRECTED THE A.O. TO RE-DO THE ASSESSMENT IN ACCORD ANCE WITH THE DIRECTIONS AND OBSERVATIONS GIVEN BY HIM. THUS, ACCORDING TO HIM, THE LD. CIT HAS COMMITTED AN ERRO R IN NOT DIRECTING THE A.O. TO VERIFY THE DETAILS BEFORE MAKING ANY ADDITION. HE HAS SUBMITTED THAT THE TRIBUNAL HA S TAKEN NOTE OF THE FINAL DIRECTIONS GIVEN BY THE LD. CIT TO RE- DO THE ASSESSMENT AND UNDER THE IMPRESSION THAT THE A.O. WOULD VERIFY THE DETAILS BEFORE RE-DOING THE ASSESSMENT, HAS DISMISSED ASSESSEES APPEAL AGAINST THE ORDER UNDER SECTION 263. THUS, ACCORDING TO HIM, TH E TRIBUNAL THOUGH HAS DISMISSED THE APPEALS, OUGHT TO HAVE TAKEN NOTE OF CONTRADICTORY STAND OF THE LD. CIT AN D OUGHT TO HAVE DIRECTED THE A.O. TO VERIFY THE DETAILS FIL ED BY THE ASSESSEE BEFORE MAKING THE ASSESSMENT. TO THAT EFFE CT, ACCORDING TO HIM, THERE IS A MISTAKE APPARENT IN TH E ORDER OF THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE F URTHER SUBMITTED THAT WHILE GIVING EFFECT TO THE ORDER OF THE LD. CIT UNDER SECTION 263, THE A.O. HAS MERELY FOLLOWED THE OBSERVATIONS OF THE LD. CIT AND HAS NOT MADE ANY VERIFICATION AND BOTH LD. CIT(A) AS WELL AS ITAT HA VE COMMITTED MISTAKE APPARENT FROM RECORD BY NOT DIREC TING THE A.O. TO VERIFY THE DETAILS BEFORE MAKING ANY AD DITION. THIS, ACCORDING TO HIM, IS A MISTAKE APPARENT FROM RECORD WHICH HAS CAUSED GRAVE INJUSTICE TO THE ASSESSEE. H E THEREFORE, PRAYED THAT THE TRIBUNAL MAY RECTIFY THE ORDER OF THIS TRIBUNAL IN ITA.NO.751/HYD/2011 BY DIRECTIN G THE A.O. TO VERIFY THE DETAILS FILED BY THE ASSESSEE BE FORE 6 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. COMPLETING THE ASSESSMENT WHILE GIVING EFFECT TO TH E ORDER OF THE LD. CIT UNDER SECTION 263 OF THE I.T. ACT. 4. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THERE WAS NO MISTAKE APPARENT FROM RECORD IN THE OR DERS OF THE TRIBUNAL IN BOTH THE APPEALS AND WHAT THE AS SESSEE IS NOW SEEKING THROUGH THESE APPLICATIONS IS REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE I.T. ACT, 1961. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE A.O., WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3), HAS NOT VERIFIED THE DETAILS OF PURCHASES ADOPTED BY THE AS SESSEE AND TO THAT EXTENT, THE LD. CITS ORDER UNDER SECTI ON 263 HOLDING ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUD ICIAL TO THE INTERESTS OF THE REVENUE ALSO HAS BEEN UPHEL D BY THE ITAT. FURTHER, IN THE FINAL PARAGRAPH OF ITS OR DER, THIS TRIBUNAL HAS HELD THAT THE LD. CIT WAS RIGHT IN DIR ECTING THE A.O. TO RE-DO THE ASSESSMENT AS THE A.O. IN THE ORIGINAL ASSESSMENT HAD NOT MADE ANY ENQUIRIES AS T O THE GENUINENESS OF THE PURCHASE FIGURE OR TO THE VALIDI TY OF THE ASSESSEES SEPARATE DEBIT OF TRANSPORT EXPENDITURE UNDER THE HEAD DIRECT EXPENSES I.E., SCHEDULE-11 TO THE P & L ACCOUNT AND FURTHER THAT THE A.O. HAS NOT APPLIED H IS MIND BY VERIFYING FROM THE SALES TAX AUTHORITIES AN D FAILED TO ASCERTAIN CORRECT FIGURES AND HENCE, THE ORDER OF THE ASSESSMENT PASSED BY THE A.O. WITHOUT MAKING NECESSARY ENQUIRIES ON SUCH IMPORTANT POINTS CONNEC TED 7 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. WITH ASSESSMENT WOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FROM THESE OBSERVATIO NS OF THE TRIBUNAL, IT IS EVIDENT THAT THIS TRIBUNAL HAS HELD ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND HAS UPHELD THE ORDER O F THE LD. CIT UNDER SECTION 263 IN DIRECTING THE A.O. TO RE-DO THE ASSESSMENT. THOUGH, THERE IS A FINDING BY THE L D. CIT IN PARAS 1 TO 3 OF HIS ORDER THAT THE A.O. HAS NOT MADE PROPER ENQUIRIES ON THE ISSUE OF INFLATED PURCHASES , IN THE PENULTIMATE PARA 4, HE HAS DIRECTED THE A.O. TO RE- DO THE ASSESSMENT IN ACCORDANCE WITH HIS DIRECTIONS WHICH IS CLEARLY IN CONTRADICTION TO HIS EARLIER FINDING. TH E TRIBUNAL HAS NOT GIVEN ANY FINDING ON THIS PART OF THE ORDER OF THE LD. CIT. THIS, IN OUR OPINION, IS A MISTAKE APPAREN T FROM RECORD. IN VIEW OF THE SAME, WE MODIFY THE ORDER OF THIS TRIBUNAL BY ADDING THE FOLLOWING SENTENCES TO THE E ND OF PARAGRAPH-19. HOWEVER, THE DIRECTION OF THE LD. CIT IN PARAS 4 A ND 5 ARE SET ASIDE AND THE A.O. IS DIRECTED TO RE-DO T HE ASSESSMENT AFTER VERIFICATION OF THE DETAILS RELATI NG TO THE ISSUE AND AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, M.A.NO.87/HYD/2015 IN ITA.NO.751/HYD/2011 IS ALLOWED. 7. IN VIEW OF THE ABOVE ORDER IN M.A.NO.87/HYD/2015, THE M.A.NO.88/HYD/2015 IS INFRUCTUOUS AND IS ACCORDINGLY REJECTED. 8 ITA.NO.87 & 88/H/2015 IN ITA.NO.751/H/2011 & ITA.NO.1280/H/2013 PLASTICON TECHNOLOGIES P. LTD., HYDERABAD. 8. TO SUM-UP, M.A.NO.87/HYD/2015 IN ITA.NO.751/HYD/2011 IS ALLOWED AND M.A.NO.88/HYD/2015 IN ITA.NO.1280/HYD/2013 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.10.2015. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 16 TH OCTOBER, 2015 VBP/- COPY TO : 1. PLASTICON TECHNOLOGIES P. LTD., B-10, C.I.E. BALANA GAR, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD 16(2), HYDERABAD. 3. CIT(A) - V, HYDERABAD 4 . CIT - IV, HYDERABAD 5 . D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE