M/S SAMPAT SCHIN SARRES PVT. LTD., SARDARSHAHAR V. ACIT, JHUNJHUNU

MA 93/JPR/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 5431 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: MADHUKAR GARG
• Keywords: Additional evidence
• Section: 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM M.A. NO. 93/JP/2016 ARISING OUT IF ITA NO. 1099/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. M/S. SAMPAT SACHIN SAREES (P) LTD., SARDARSHAHAR CUKE VS. THE ACIT, JHUNJHUNU CIRCLE, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAJCS 0297 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.07.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/09/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE ARIS E OUT OF THE ORDER OF THE TRIBUNAL IN ITA NO. 1099/JP/2011 AND C.O. NO. 22/JP /2012 SEEKING RECTIFICATION OF THE ORDER DATED 05.09.2015 ON THE GROUND THAT SOME INADVERTENT MISTAKES ARE CREPT IN THE ORDER. 2. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE MISCELLANEOUS APPLICATION. 2.1. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMI SSIONS. 2.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT THER E IS A MISTAKE APPARENT FROM THE RECORD IN THE ORDER OF THE TRIBUNAL. THE LD. COUNSE L SUBMITTED THAT THE AO AT PAGE 2 MA NO. 93/JP/2016 M/S. SAMPAT SACHIN SAREES PVT. LTD. 39 OF THE REMAND REPORT HAS CONFIRMED THE PERCENTAG E OF CASH DISCOUNT. THE TRIBUNAL IN PARA 3.9 OF ITS ORDER HAS OBSERVED AS U NDER :- 3.9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. THERE IS NO MERIT IN THE CONTE NTION OF THE LD. AR THAT THIS ALMOST THIRD ROUND OF THE ASSESSMENT AND A PERIOD OF 4 YEARS HAS ELAPSED BETWEEN THE ASSESSMENT AND THE EN D OF THE ACCOUNTING PERIOD. THE LD. CIT (A) HAS NEITHER REFE RRED TO THE DATE OF FILING OF THE ADDITIONAL EVIDENCE NOR THE CONTENTS THEREOF. THE REMAND REPORT WAS SUBMITTED BY THE AO VIDE HIS LETTER DATE D 28.06.2011. IN THE ABSENCE OF THE DETAILS AS TO APPLICATION FOR AD MISSION OF ADDITIONAL EVIDENCE, EVEN THREE MONTHS TIME IS GIVEN FOR APPLI CATION AND RECEIPT OF THE REMAND REPORT AND IT CAN BE ASSUMED THAT THE ASSESSEE FILED THE APPLICATION FOR ADDITIONAL EVIDENCE SOMEWHERE IN MA RCH 2011 I.E. AFTER FIVE YEARS FROM THE END OF THE FINANCIAL YEAR. THUS IN OUR CONSIDERED VIEW, THERE IS NO MENTION AS TO WHAT EVIDENCE WAS F ILED AND THE FILING OF ADDITIONAL EVIDENCE SUFFERS LATCHES OF TIME GAP OF FIVE YEARS AND THERE IS NO MENTIONED OF REASON FOR ACCEPTING THE D ELAY OF FILING OF ADDITIONAL EVIDENCE. THE CONDUCT OF THE ASSESSEE TH US ASSUMES SUSPICION AS TO WHY IT TOOK FIVE YEARS FOR ADDITION AL EVIDENCE WHICH IS PART OF REGULAR BOOKS OF ACCOUNT IN THE REMAND REPO RT ALSO, THE AO HAS BEHAVED IN BLUE HOT AND BLUE COLD MANNER. ON ONE HA ND, THE ADMISSION OF EVIDENCE IS QUESTIONED ON THE BASIS OF INDOLENT BEHAVIOR OF THE ASSESSEE. IN REMAND ALSO, THE AO HAS GIVEN SHAKY OBSERVATIONS THAT IT APPEARS THAT THE ASSESSEE FOLLOWS THE SYSTE M OF GIVING DISCOUNT TO THE CUSTOMERS. IN OUR CONSIDERED VIEW, THE FINDI NGS OF THE REMAND REPORT CONTAIN LOT OF CONTRADICTIONS. WE FIND MERI6 T IN THE ARGUMENTS OF THE LD. DR THAT IT WAS THE BURDEN ON THE ASSESSEE T O ESTABLISH AND FILE THE COGENT MATERIALS INSTEAD THE LD. CIT (A) HAS UN TENABLY FASTENED ON THE AO. SIMILARLY, THE RELIEF HAS BEEN GIVEN BY TH E LD. CIT (A) BY WRONGLY OBSERVING THAT THE AO HAS BRIEFLY AND UNREA SONABLY REJECTED THE CLAIM OF DISCOUNT OF THE ASSESSEE. IN OUR CONSI DERED VIEW, BOTH THE FINDINGS OF THE LD. CIT (A) SUFFER FROM UNTENABILIT Y AND FINDINGS FROM VAGUENESS LOOKING AT THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS WE SEEN NO TENABLE JUSTIFICATION IN THE LD. CIT (A)S ORDER GRANTING RELIEF BASED ON FANTASTIC ADDITIONAL EVIDE NCE BY SWEEPING OBSERVATIONS AND IRRELEVANT CONSIDERATION. WE FIND THAT THE TRIBUNAL WAS OF THE VIEW THAT THE ADDITIONAL EVIDENCES WHICH WERE FURNISHED SUFFER FROM THE DELAY AND LATCHES. HOWEV ER, THE CONTENTION OF THE ASSESSEE IS THAT NO GROUND WITH REGARD TO THE ADDIT IONAL EVIDENCE WAS TAKEN BY THE REVENUE. THEREFORE, ADJUDICATION OF A GROUND WHICH WAS NOT TAKEN BY THE REVENUE IS 3 MA NO. 93/JP/2016 M/S. SAMPAT SACHIN SAREES PVT. LTD. A MISTAKE APPARENT FROM RECORD. THE CONTENTION OF T HE ASSESSEE IS DEVOID OF ANY MERIT AS THE APPEAL WAS NOT DISMISSED ON THE BASIS OF ADMISSION OF ADDITIONAL EVIDENCES. THE AO IN REMAND REPORT AT PAGES 38-39 HAS STATED AS UNDER :- AFTER CONSIDERING THE SUBMISSIONS MADE, AT LEAST ONE THING WHICH APPEARS TO BE APPARENT IS, THAT THE APPELLANT COMPA NY DOES FOLLOW A DEFINITE SYSTEM OF ALLOWING CASH DISCOUNT IN THE CR EDIT BILLS AND THE VPP (DOD) BILL WHICH APPEARS TO BE GENUINE. THE DISCRET ION FOR ALLOWING OR NOT ALLOWING CASH DISCOUNT IS SOUGHT TO BE RETAINED UNTIL THE ACTUAL RECEIPT OF AMOUNT AND THEREBY THE INCENTIVE FOR THE DEALER TO MAKE TIMELY AND FULL PAYMENT IS MADE AVAILABLE. PERUSAL OF THE P & L A/C DOES REVEAL THAT NO BAD DEBT OR SHORT PAYMENT EXPEN SES HAVE BEEN CLAIMED. DURING REMAND PROCEEDINGS, THE ASSESSEE AL SO CLAIMED THAT THIS SYSTEM OF CASH DISCOUNT IS NOT NEW BUT HAS BEE N FOLLOWED IN ALL THE GROUP CONCERNS SINCE INCEPTION OF THE BUSINESS. AS REGARDS THE G.P. RATE AND N.P. RATE THE ASSESSEE DURING THE REMAND PROCEEDINGS EXPLAINED THAT NORMAL MARKET TREND OF N .P. IN WHOLESALE SAREE BUSINESS RANGES FROM 0.50% TO 1.00% AS NET PR OFIT. IT SUBMITTED THAT THE AMOUNT OF HUGE TURNOVER HAS BEEN ACHIEVED ONLY BY KEEPING LOW MARGINS AND HIGH SERVICE QUALITY. APPELLANT STA TED THAT G.P. AND N.P. RATES ARE ULTIMATELY DETERMINED BY MARKET FORC ES AND THE LANDED COST TO MANUFACTURE AS WELL AS DEALERS. PERCENTAGES LOSE THEIR IMPORTANCE AND RELEVANCE ONCE THE COSTS ARE DETERMI NED. ON VERIFICATION OF THE ADDITIONAL EVIDENCES SUBMITT ED BEFORE YOUR HONOUR AND ALSO BEFORE THE UNDERSIGNED, THE PERCENT AGE OF CASH DISCOUNT ALLOWED AND THE CONTRA ACCOUNTS IN THE BOO KS OF APPELLANT AND THE DEALERS STAND CONFIRMED. THE SYSTEM FOLLOWED BY DIFFERENT DEALERS AT DIFFERENT LOCATIONS MAY BE DIFFERENT BUT THE DIS COUNT OF 5% STANDS ADDED IN THEIR RECEIPTS OR REDUCED FROM THE PURCHAS ES. NO ANOMALY HAS BEEN NOTICED IN THE CONTENTIONS MADE BY APPELLANT A ND REPRODUCED AT SR. NO. (I) TO (VII) ABOVE AND SUBMISSIONS/EXPLANAT IONS GIVEN DURING THE COURSE OF REMAND PROCEEDINGS IN THE LIMITED CONTEXT OF ADDITIONAL EVIDENCES FURNISHED BEFORE YOUR KIND HONOUR. WE FIND THAT ORDER UNDER SECTION 263 WAS PASSED ON THE BASIS THAT THE APPELLANT HAS PROVED HIS CLAIM OF EXPENDITURE ON ACCOUNT OF DISCO UNT OF RS. 67,98,640/- WITH SUFFICIENT DETAILS AND SUPPORTING DOCUMENTS. THE L D. CIT (A) FURTHER OBSERVED THAT VERIFICATION OF EXPENDITURE RELATING TO DISCOUNT WA S NOT MADE BY THE AO. WE FIND 4 MA NO. 93/JP/2016 M/S. SAMPAT SACHIN SAREES PVT. LTD. THAT THE AO HAS OBSERVED THAT SHRI SAMPAT MAL BACHH AWAT IN HIS STATEMENT RECORDED ON 12.04.2010 HAS STATED THAT HE HAS NOT RECEIVED D ISCOUNT ON PURCHASE OF RAW CLOTHS FOR SAREES AND MADE DISALLOWANCE OF ENTIRE E XPENDITURE CLAIMED. ON FURTHER APPEAL TO LD. CIT (A), THE LD. CIT (A) PARTLY ALLOW ED THE CLAIM RESTRICTING THE SAME TO THE EXTENT OF RS. 6,79,864/- I.E. 10% OF SUCH DISCO UNT. NOW THE ISSUE IS RELATED TO CLAIM OF DISCOUNT BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE IS THAT LD. CIT (A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE ON TH E BASIS OF THE REMAND REPORT. THE GRIEVANCE OF THE REVENUE BEFORE THE TRIBUNAL WAS TH AT THE LD. CIT (A) HAS WRONGLY ALLOWED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL A FTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, CAME TO THE CONCLUSION THAT LD . CIT (A)S FINDING WAS NOT TENABLE AND UNJUSTIFIED. IT IS NOT THE CASE WHERE THE TRIB UNAL HAS DECIDED THE ISSUE PURELY ON THE BASIS OF ADMISSION OF ADDITIONAL EVIDENCES. WE FIND THAT THE TRIBUNAL HAS RECORDED ALL THE SUBMISSIONS OF THE LD. A/R. THERE FORE, IN OUR CONSIDERED VIEW, THE ASSESSEE THROUGHOUT THIS MISCELLANEOUS APPLICATION IS SEEKING REVIEW OF THE TRIBUNALS ORDER, WHICH IS NOT PERMISSIBLE UNDER TH E LAW. HENCE, THE MISCELLANEOUS APPLICATION IS DISMISSED. 4. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/09/20 16. SD/- SD/- FOE FLAG ;KNO] ( DQY HKKJR ) ( VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 16/09/2016. DAS/ 5 MA NO. 93/JP/2016 M/S. SAMPAT SACHIN SAREES PVT. LTD. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SAMPAT SACHIN SAREES (P) LT D., SARDARSHAHAR. 2. THE RESPONDENT- THE ACIT, JHUNJHUNU, CIRCLE JHUN JHUNU. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (MA NO. 93/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR