M/s. ARYA SHIP BREAKING CORPORATION, MUMBAI v. ITO - 14(3)(3), MUMBAI

CO 22/MUM/2007 | 2002-2003
Pronouncement Date: 06-08-2010 | Result: Dismissed

Appeal Details

RSA Number 2219923 RSA 2007
Assessee PAN AABFA1353R
Bench Mumbai
Appeal Number CO 22/MUM/2007
Duration Of Justice 3 year(s) 6 month(s)
Appellant M/s. ARYA SHIP BREAKING CORPORATION, MUMBAI
Respondent ITO - 14(3)(3), MUMBAI
Appeal Type Cross Objection
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 06-08-2010
Assessment Year 2002-2003
Appeal Filed On 05-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI S.V. MEHROTRA (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) C.O. NO. 22/MUM/2007 (ARISING OUT OF ITA NO. 5139/MUM/2006_ ASSESSMENT YEAR- 2002-03 M/S. ARYA SHIP BREAKING CORPN. 43 RAMWADI KALBADEVI ROAD MUMBAI-400 002 PAN - AABFA1353R VS. THE ITO 14(3)-3 EARNEST HOUSE NARIMAN POINT MUMBAI-400 021 (CROSS OBJECTOR) (RESPONDENT) CROSS OBJECTOR BY: SHRI DHIRENDRA M. SHAH RESPONDENT BY: SHRI S.K. PAHWA O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS CROSS OBJECTION IS PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15 TH JULY 2008 PASSED BY THE ITAT FOR THE ASSESSMENT YEAR 2002-03. 2. THE FACTS OF THE CASE ARE THAT AN APPEAL WAS FIL ED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-XV MUM BAI PASSED ON 19.7.2006 FOR THE ASSESSMENT YEAR 2002-03. THE ITA T VIDE ORDER DT. 15 TH JULY 2008 HAS DISMISSED THE REVENUES APPEAL AS U NDER: THE GROUNDS OF APPEAL OF THE REVENUE READ AS UND ER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) ERRED IN NOT DECIDING THE CASE O N MERIT AND BASED ON THE ORDER OF THE ITAT J BENCH MUMBA I DATED 29.06.2006 HOLDING THE ORDER UNDER SECTION 1 43(3) R.W.S. 263 OF AO BEING INFRUCTUOUS AND IN THAT VIEW C.O. NO. 22/M/07 2 ANNULLING THE ORDER OF THE AO AND ALLOWING THE ASSE SSEES APPEAL. .THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) MUMBAI ON THE ABOVE GROUND(S) BE SET ASIDE AND THE ORDER OF THE AO BE RESTORED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SHIP BREAKING. ORIGINALLY THE ASSESSMENT WAS MADE U/S 1 43(3) OF THE IT ACT ON 31.01.2005 DETERMINING THE TOTAL I NCOME AT RS. 5 81 574/- AS AGAINST THE RETURNED TOTAL INCOME OF RS. 5 49 074./-. THE ASSESSEE HAD PURCHASED A SHIP WIT H 229.79 MT OF OIL (DIESEL FUEL LUBRICANT VALUED AT RS. 8 63 500/-. THE AO NOTICED THAT THE ASSESSEE HAD SH OWN SALE OF ONLY 40 MT OIL VALUED AT RS. 7 48 500/- AND THEREFORE THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE BALANCE QUANTITY OF OIL WAS NEITHER SHOWN IN THE SA LES NOR AS CLOSING STOCK. THE EXPLANATION OF THE ASSESSEE W AS THAT NO DAY-TO-DAY RECORDS OF OIL USED IS POSSIBLE TO SU BMIT. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE T HE AO WAS OF THE VIEW THAT SINCE THE ASSESSEE DID NOT MAI NTAIN DAY TO DAY DETAILS OF OIL CONSUMED THE POSSIBILITY OF SALE OUT OF BOOKS CANNOT BE RULED OUT ALSO USE OF THE O IL FOR THE PURPOSE OF OTHER THAN THE BUSINESS CANNOT BE RULED. THUS THE AO ADDED A SUM OF RS. 25 000/- TO COVER UP ANY DILUTION OF INCOME TO THE RETURNED INCOME. THE ASS ESSMENT ORDER PASSED BY THE AO WAS PRIMA FACIE CONSIDERED B Y THE CIT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF RE VENUE AND A NOTICE U/S 263 WAS ISSUED PROPOSING SETTING ASIDE THE SAME FOR AOS FAILURE IN CARRYING OUT REQUISITE ENQUIRY BEFORE PASSING OF THE ASSESSMENT ORDER. THEREFORE THE CIT SET ASIDE THE ORDER OF THE AO IN SO FAR AS IT RELAT ES TO THE ADDITION OF RS. 25 000/- MADE ON ACCOUNT OF NON-DIS CLOSURE OF OIL OF 189.79 MT NEITHER IN THE SALES NOR IN THE CLOSING STOCK WITH A DIRECTION TO MAKE DUE ENQUIRIES REGARD ING THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE. THE AO THEREAFTER PASSED AN ORDER U/S 143(3) R.W.S. 263 V IDE ORDER DATED 13.01.2006 MAKING AN ADDITION OF RS. 35 26 44 5/- BEING THE VALUE OF 189.79 MT. THE ASSESSEE APPEALED AGAINST THE REVISION ORDER DATED 14.10.2005 BEFORE THE ITAT. THE ITAT VIDE ITS ORDER DATED 29 TH JUNE 2006 IN ITA NO. 7147/MUM/2005 QUASHED THE REVISION ORDER PASSED BY THE CIT U/S 263. C.O. NO. 22/M/07 3 THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AGAINST THE ORDER PASSED BY THE AO U/S 143(3) R.W.S . 263 DATED 13.01.2006. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE VIDE HIS ORDER DATED 19 TH JULY 2006 BY HOLDING THAT THE ORDER PASSED BY THE AO U/S 143(3) R.W.S. 2 63 ON 13.01.2006 BECAME INFRUCTUOUS IN VIEW OF THE DECISI ON OF THE HONBE ITAT (SUPRA). HENCE THE REVENUE IS IN A PPEAL BEFORE THE ITAT AGAINST THE ORDER OF THE CIT(A). WE HAVE HEARD THE LEARNED REPRESENTATIVE PARTIES AND PERUSED THE RECORD AS ALSO THE VARIOUS ORDERS O F THE REVENUE AUTHORITIES INCLUDING THE ORDER OF THE CIT U/S 263. WE FIND THAT ONCE THE ITAT SET ASIDE THE ORDER OF T HE CIT U/S 263 THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) R.W.S. 263 DATED 13.01.2006 DOES NOT HAVE AN Y LEGS TO STAND IN THE EYE OF LAW. THEREFORE THE CIT(A) H AS RIGHTLY ANNULLED THE ORDER OF THE AO DATED 13.01.2006 AND HENCE WE CONFIRM THE ORDER OF THE CIT(A). IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. 3. WE FIND THAT THE REVENUES APPEAL HAS BEEN DISMI SSED BY THE ITAT (SUPRA) THE C.O. BECOME INFRUCTUOUS. ORDER PRONOUNCED ON THIS DAY OF AUGUST 2010 (S.V. MEHROTRA ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED .. AUGUST 2010 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI C.O. NO. 22/M/07 4 DATE INITIALS 1 DRAFT DICTATED ON: 3.8 .2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 3.8.2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______