ITO, Bangalore v. M/s NJCR Drilling Equipments, Bangalore

ITA 1208/BANG/2009 | 2002-2003
Pronouncement Date: 25-02-2011 | Result: Dismissed

Appeal Details

RSA Number 120821114 RSA 2009
Bench Bangalore
Appeal Number ITA 1208/BANG/2009
Duration Of Justice 1 year(s) 2 month(s) 7 day(s)
Appellant ITO, Bangalore
Respondent M/s NJCR Drilling Equipments, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 25-02-2011
Date Of Final Hearing 14-02-2011
Next Hearing Date 14-02-2011
Assessment Year 2002-2003
Appeal Filed On 18-12-2009
Judgment Text
PAGE 1 OF 5 ITA NO.1208/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K J.M. AND SHRI A MOHAN ALANKAMONY A.M ITA NO.1208/BANG/2009 (ASSESSMENT YEAR 2002-03) THE INCOME TAX OFFICER WARD-8(3) BANGALORE. - APPELLANT VS M/S NJCR DRILLING EQUIPMENTS NO.1324 7 TH MAIN 13 TH CROSS MAHALAKSHMIPURAM BANGALORE-86. - RESPONDENT APPELLANT BY : SMT. AMRITA RANJAN ADDL. C IT RESPONDENT BY : SMT. SHEETAL BORKAR ADVOCATE ORD ER PER GEORGE GEORGE K : THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-II BANGALORE D ATED 24/9/2009. THE ASST. YEAR CONCERNED IS 2002-03. 2. THE SOLITARY ISSUE THAT IS RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THE PEN ALTY LEVIED U/S 271(1)(C) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS A FIRM. IT IS ENGAGED IN THE BU SINESS OF MANUFACTURING AND SERVICING OF BOREWELL DRILLING RIGS. THERE WAS PAGE 2 OF 5 ITA NO.1208/BANG/2009 2 A SEARCH IN THE ASSESSEES PREMISES ON 17.1.2002 CA RRIED OUT BY THE CENTRAL EXCISE DEPARTMENT. THEREAFTER AN ORDER WA S PASSED BY THE CENTRAL EXCISE DEPARTMENT WHEREIN IT WAS STATE D THAT THE ASSESSEE HAS UNDER-VALUED THE SALES EFFECTED AND ES TIMATED THE TURNOVER AT RS.3 96 00 000/- AS AGAINST RS.2 12 38 439/- DECLARED BY THE ASSESSEE. BASED ON THE INFORMATION OF THE CENTRAL EXCISE DEPARTMENT THE INCOME TAX OFFICER ISSUED NOTICE U/ S 148 AND ASSESSMENT WAS COMPLETED VIDE ORDER DATED 31/3/2006 . THE ADDITION MADE BY THE AO OF RS.9 57 269/- WAS REDUCED IN APPEAL TO RS.8 84 922/- BY THE FIRST APPELLATE AUTHORITY. THE QUANTUM ADDITION SUSTAINED BY THE CIT(A) WAS AFFIRMED BY THE TRIBUNAL VIDE ITS ORDER DATED 25/02/2011 IN ITA NO.14/BANG/2010. BASED ON THE ADDITION SUSTAINED BY THE FIRST APPE LLATE AUTHORITY IN THE QUANTUM ASSESSMENT PENALTY PROCEED INGS U/S 271(1)(C) WAS INITIATED AND PENALTY OF RS.3 50 000/- WAS IMPOSED ON THE ASSESSEE FIRM. ON FURTHER APPEAL BEFORE THE CI T(A) THE CIT(A) FOLLOWING THE JUDGEMENT OF THE HONBLE PUNJ AB AND HARYANA HIGH COURT IN THE CASE OF CIT V SANGRUR VANASPATI M ILLS LTD. 303 ITR 53 ALLOWED THE APPEAL OF THE ASSESSEE AND DELE TED THE PENALTY LEVIED. 4. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFO RE US. PAGE 3 OF 5 ITA NO.1208/BANG/2009 3 5. IT WAS SUBMITTED BY THE LEARNED DR THAT THE CIT( A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)( C) OF THE ACT ON THE GROUND THAT GROSS PROFIT HAS BEEN ESTIMATED ON SUPPRESSED SALES WITHOUT APPRECIATING THE FACT THAT THE CENTRA L EXCISE AUTHORITIES HAVE CONCLUDED THAT THE ASSESSEE HAD RE SORTED TO UNDER-VALUATION OF SALES WHICH CLEARLY SUBSTANTIATES SUPPRESSION OF PROFITS. IT WAS FURTHER SUBMITTED THAT THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE CENTRAL EXCISE T RIBUNAL HAD CLEARLY COME TO THE CONCLUSION THAT THE ASSESSEE HAD RESORTED TO UNDER-VALUATION OF SALES WHICH IN TURN CLEARLY ESTAB LISHES THE SUPPRESSION OF TURNOVER AS WELL AS SUPPRESSION OF P ROFITS THEREON. 6. THE LEARNED AR FILED A PAPER BOOK COMPRISING 15 PAGES INTER ALIA CONTAINING COPY OF THE ORDER OF THE CUSTO MS & CENTRAL EXCISE SETTLEMENT COMMISSION AND COPY OF THE ORDER O F THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL. SHE REITERATED THE ARGUMENTS MADE BEFORE THE INCOME TAX AUTHORITIES AND ALSO SUPPORTED THE FINDING OF THE FIRST APPELLA TE AUTHORITY. 7. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAD FILED A PETIT ION BEFORE THE CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION U/ S 32F(7) OF THE CENTRAL EXCISE ACT 1944. AFTER HEARING BOTH T HE ASSESSEE AND THE DEPARTMENT THE HONBLE SETTLEMENT COMMISSION W AS PLEASED TO GIVE A FINDING THAT THE DUTY LIABILITY AS WORKED OUT BY THE ASSESSEE PAGE 4 OF 5 ITA NO.1208/BANG/2009 4 IN ITS APPLICATION WAS ACCEPTABLE. THE RELEVANT PA RAGRAPH IS EXTRACTED HEREIN FOR THE SAKE OF CONVENIENCE:- 10. THE BENCH HAS PERUSED AND CONSIDERED THE RELEVANT SUBMISSIONS MADE BY BOTH SIDES IN SUPPORT OF THEIR CLAIM FROM TIME TO TIME. THE ONLY DISPUTE IS RELATING TO THE ADOPTION OF THE CORRECT VALUE BY THE DEPARTMENT FOR THE GOODS CLEARED DURING THE PERIOD UNDER DISPUTE. THE DEPARTMENT HAS ADOPTED THE VALUE OF RS.9 00 000/- FOR BOTH NJCR 500 AND NJCR 750 RIGS AGAINST RS.6 50 000/- AND RS.7 75 000/- RESPECTIVELY AS CLAIMED BY THE APPLICANT. THE BENCH FINDS THAT THE ADOPTION OF A HIGHER SINGLE VALUE BY THE DEPARTMENT IS NOT REASONABLE AND ACCEPTABLE AS THERE WAS NO SUPPORTING CORROBORATIVE EVIDENCE FOR THE DEPARTMENT EXCEPT THE STATEMENTS RECORDED. THE APPLICANT FURTHER SUBMITTED A CHARTERED ENGINEERS CERTIFICATE IN SUPPORT OF THEIR CLAIM FO R ADOPTING THE CORRECT VALUE OF RS.6 00 000/- AND RS.7 50 000/-. THE BENCH ALSO OBSERVES THAT THE VALUE HAS BEEN ADOPTED IRRESPECTIVE OF THE MODEL AND THE YEAR DURING WHICH THE GOODS WERE CLEARED. IN VIEW OF THIS THE BENCH HOLDS THAT THE TOTAL DUTY LIABILITY OF RS.34 03 145/- AS WORKED OUT BY THE APPLICANT IN THEIR APPLICATION IS ACCEPTABLE. 7.1 IN THE INSTANT CASE THE ADDITION ON ACCOUNT O F SUPPRESSION OF TURNOVER PURSUANT TO CENTRAL EXCISE SEARCH WAS TO THE TUNE OF RS.9 57 269/-. IT WAS FURTHER REDUCED IN APPEAL TO RS.8 84 922/- BY THE CIT(A). THIS ADDITION OF RS.8 84 922/- WAS SUSTAINED BY THE TRIBUNAL. THE ADDITION HAS BEEN MA DE ON THE BASIS OF ALLEGED SALES MADE OUTSIDE THE BOOKS OF ACCOUNT BUT THE ADDITION HAS BEEN SUSTAINED BY ESTIMATING THE GROSS PROFIT ON SUPPRESSED PAGE 5 OF 5 ITA NO.1208/BANG/2009 5 SALES. AS RIGHTLY POINTED OUT BY THE CIT(A) IT CANNO T BE HELD THAT THERE WAS A CONCLUSIVE EVIDENCE THAT THE ASSESSEE H AS IN FACT CONCEALED THE INCOME TO THE EXTENT OF ADDITION MADE . 7.2 THE JUDGEMENT OF THE HONBLE PUNJAB AND HARYANA HIGH COURT DECISION (SUPRA) IS IDENTICAL TO THE FAC TS OF THE INSTANT CASE AND THE CIT(A)S RELIANCE ON THE SAME IS CORRE CT. THEREFORE WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND UPHOLD THE SAME. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED ON FRIDAY THE 25 TH DAY OF FEBRUARY 2011 AT BANGALORE. SD/- SD/- (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/21/2/ BY ORDER ASST. REGISTRAR ITAT BANGALORE.