International Agricultural Processing (P) Ltd., CHENNAI v. ACIT, Madurai

ITA 1638/CHNY/2013 | 2008-2009
Pronouncement Date: 30-10-2013 | Result: Allowed

Appeal Details

RSA Number 163821714 RSA 2013
Assessee PAN AAACI3593B
Bench Chennai
Appeal Number ITA 1638/CHNY/2013
Duration Of Justice 2 month(s) 17 day(s)
Appellant International Agricultural Processing (P) Ltd., CHENNAI
Respondent ACIT, Madurai
Appeal Type Income Tax Appeal
Pronouncement Date 30-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-10-2013
Date Of Final Hearing 26-09-2013
Next Hearing Date 26-09-2013
Assessment Year 2008-2009
Appeal Filed On 12-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN VICE PRESIDENT & SHRI VIKAS AWASTHY JUDICIAL MEMBER I.T.A. NO. 1638/MDS/2013 ASSESSMENT YEAR : 2008-09 M/S. INTERNATIONAL AGRICULTURAL PROCESSING (P) LTD. 332/5-A PERANAI ROAD MUSUVANATHU MADURAI 624 219 [PAN: AAACI 3593 B] (APPELLANT) VS ASST. COMMISSIONER OF INCOME TAX COMPANY CIRCLE-III MADURAI (RESPONDENT) APPELLANT BY : SHRI V. JAGADISAN FCA RESPONDENT BY : SHRI SHAJI P. JACOB ADDL. CIT DATE OF HEARING : 26-09-2013 DATE OF PRONOUNCEMENT : 30-10-2013 O R D E R PER VIKAS AWASTHY JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNIN G THE ORDER OF THE COMMISSIONER OF INCOME TAX-II MADURAI DATED 2 6-12-2012 RELEVANT TO THE ASSESSMENT YEAR (AY) 2008-09 PASSED U/S. 263 OF THE INCOME TAX ACT 1961 (HEREIN AFTER REFERRED TO AS THE ACT ). :2: I.T.A. NO. 1638/MDS/2013 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCE SSING GHERKINS ONIONS AND OTHER VEGETABLES. ASSESSEE FILED ITS RE TURN OF INCOME FOR THE AY. 2008-09 ON 30-09-2008 DECLARING ITS INCOME AS NIL UNDER THE NORMAL PROVISIONS. THE CASE OF THE ASSESSEE WAS RE -OPENED U/S.147 ON THE ISSUE OF DEDUCTION U/S.10B. THE ASSESSING OFFI CER IN HIS ASSESSMENT ORDER DATED 30-12-2011 PASSED U/S.143(3) R.W.S 147 OF THE ACT OBSERVED THAT THOUGH ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUC TION U/S.10B FOR TEN AYS I.E. FROM AY. 2000-2001 TO 2009-10 IT HAS OPT ED OUT OF DEDUCTION U/S. 10B FROM AY. 2008-09 TO CLAIM BENEFIT OF ANOTH ER SCHEME VISHESH KRISHI GRAM UDYOG YOJANA (VKGUY). THE ASSESSEE IS ELIGIBLE TO TAKE THE BENEFIT UNDER THE SPECIAL SCHEME ONLY IF THE AS SESSEE OPTS OUT OF DEDUCTION U/S.10B OF THE ACT. THE INCOME OF THE AS SESSEE WAS COMPUTED UNDER THE PROVISIONS OF SECTION 115JB BY T HE ASSESSING OFFICER. 3. THE CIT ISSUED SHOW CAUSE NOTICE DATED 11-10-201 2 U/S.263 OF THE ACT FOR THE FOLLOWING REASONS: 2. FOR THE ASSESSMENT YEAR 2008-09 THE RETURN OF I NCOME WAS FILED BY THE ASSESSEE-COMPANY ENGAGED IN PROCESSING OF G HERKINS ONIONS & OTHER VEGETABLES ON 30-09-2008 ADMITTING NIL TOTAL INCOME. THE SAME WAS PROCESSED U/S.143(1) OF THE IT ACT ON 22-03-2010. :3: I.T.A. NO. 1638/MDS/2013 2.1 THE CASE WAS REOPENED U/S.147 OF THE IT ACT ON THE ISSUE OF DISALLOWANCE OF DEDUCTION U/S.10B OF THE IT ACT. T HE REOPENED ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER O N 30-12-2011 DETERMINING THE TOTAL INCOME AT ` 61 73 222/- AND A DEMAND OF ` 70 528/- WAS RAISED. IT IS SEEN FROM THE MISCELLANEOUS RECORDS THAT WHIL E COMPLETING THE RE-OPENED ASSESSMENT THE TOTAL INCOME WAS ARRIVED AT WITHOUT EXCLUDING OTHER INCOMES OF ` 96 40 634/- AS DETAILED BELOW AND DEDUCTION U/S.10B OF THE IT ACT WAS ALLOWED: INTEREST ON DEPOSIT : ` 1 54 083/- TRANSPORT SUBSIDY : ` 22 70 315/- SALE OF IMPORT LICENSE : ` 60 29 867/- MANAGING CONSULTANT SERVICE ` 10 00 000/- OTHER INCOME : ` 1 86 369/- ------------------- `9 6 40 634/- -------------------- 2.2 IT IS ALSO SEEN THAT THE GENUINENESS OF THE EXP ENDITURE CLAIMED IN THE P&L ACCOUNT WERE NOT VERIFIED. 2.3 ALSO THE BALANCE SHEET ITEMS AND DETAILS OF AN NEXURES WERE NOT EXAMINED. THE CIT VIDE IMPUGNED ORDER DIRECTED THE ASSESSING OFFICER TO REDO THE ASSESSMENT KEEPING IN VIEW THE POINTS RAISED IN THE SHOW CAUSE NOTICE. THE CIT FURTHER OBSERVED THAT THE AR OF THE ASSESSE E HAS PRODUCED :4: I.T.A. NO. 1638/MDS/2013 UN-AUTHENTICATED STATEMENT OF ACCOUNTS WITHOUT ANY SUPPORTING DOCUMENTS BILLS AND VOUCHERS ETC. AGGRIEVED AGAINST THIS ORDER OF THE CIT THE ASSES SEE HAS COME IN APPEAL BEFORE US. 4. SHRI V. JAGADISAN FCA APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT THE VERY FIRST GROUND ON WHICH SHOW CAUSE NOTICE U/S.263 HAS BEEN ISSUED THAT IS THE ASSESSEE HAS CLAIMED DEDUCTION U/S.10B IS FACTUALLY INCORRECT. THE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S.10B FOR THE AY. 2008-09. THIS FACT HAS BEEN RECORDED BY TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 30-12-2011 WHICH IS A T PAGE NOS. 6 TO 9 OF THE PAPER BOOK. THE LD. AR CONTENDED THAT THE I MPUGNED ORDER IS CRYPTIC. IT IS NOT MENTIONED IN THE ORDER AS TO WH AT IS THE LOSS CAUSED TO THE GOVERNMENT EXCHEQUER AND WHAT IS THE ERROR IN A SSESSMENT ORDER. ALL RELEVANT DOCUMENTS WERE PRODUCED BEFORE THE ASS ESSING OFFICER AT THE TIME OF ASSESSMENT. THE ASSESSING OFFICER VIDE NOTICE DATED 21-12-2011 ISSUED U/S.142(1) HAD DIRECTED THE ASSES SEE TO PRODUCE PROFIT & LOSS A/C AND BALANCE SHEET RELEVANT TO THE AY. 2008-09 EVIDENCE FOR EXPENDITURE CLAIMED IN THE PROFIT & LO SS A/C ETC. THE ASSESSEE HAD ALREADY FILED BALANCE SHEET FOR THE YE AR ENDED 31-03-2007 AND PROFIT & LOSS A/C FOR THE FY. 2006-0 7 ALONG WITH THE :5: I.T.A. NO. 1638/MDS/2013 RETURN OF INCOME FILED IN E-MODE YET AGAIN THE ASSE SSEE FURNISHED ALL THE DOCUMENTS AS CALLED FOR. THEREFORE THE OBSERVATIO NS OF THE CIT THAT THE AR OF THE ASSESSEE HAD PRODUCED UN-AUTHENTICATED ST ATEMENT OF ACCOUNTS IS ERRONEOUS. 5. ON THE OTHER HAND SHRI SHAJI P. JACOB APPEARIN G ON BEHALF OF THE REVENUE SUBMITTED THAT THE NOTICE U/S.142(1) ISSUED BY THE ASSESSING OFFICER ASKING THE ASSESSEE TO PRODUCE PROFIT & LOS S A/C BALANCE SHEET AND EVIDENCE FOR EXPENDITURE CLAIMED FOR THE PROFIT & LOSS A/C WAS ISSUED ON 21-12-2011 AND WITHIN A SHORT SPAN OF ONE WEEK ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER ON 30-12- 2011. THIS CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS NOT GONE IN TO DETAILS OF BOOKS OF ACCOUNT. THE LD. DR FURTHER SUBMITTED THAT THE ASS ESSEE HAD FILED CERTAIN DETAILS BEFORE CIT VIDE LETTER DATED 20-12- 2012 WHICH IS AT PAGE NO. 40 TO 42 OF THE PAPER BOOK RELATING TO SUNDRY C REDITORS AND DEBTORS DETAILS OF SALE OF IMPORT LICENSES EXCHANGE FLUCTU ATION ETC. THE SAID INFORMATION WAS NOT SHARED BY THE ASSESSEE DURING T HE ASSESSMENT PROCEEDINGS. THEREFORE THE IMPUGNED ORDER OF THE CIT IS JUSTIFIED AND WELL REASONED. IN ORDER TO SUPPORT HIS CONTENTIONS THE LD. DR RELIED ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CA SE OF TTK LIG LTD. VS. ACIT REPORTED AS 51 DTR (MAD) 228 JUDGMENT OF KARNATAKA HIGH :6: I.T.A. NO. 1638/MDS/2013 COURT IN THE CASE OF CIT. VS. INFOSYS TECHNOLOGIES LTD. REPORTED AS 341 ITR 293 AND THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT. VS. ASHOK LOGANI REPORTED AS 342 ITR 228 (DEL). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRES ENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PERUSED THE IMPUGNED ORDER AND THE DECISIONS RELIED UPON BY THE LD. DR. PROCEEDINGS U /S. 263 HAVE BEEN INITIATED BY THE CIT FOR THE REASONS RECORDED IN PA RA NO.3 HEREIN ABOVE. THE FIRST REASON CITED IN THE SHOW CAUSE NOTICE IS THAT DEDUCTION U/S.10B HAS BEEN ALLOWED WITHOUT EXCLUDING OTHER INCOMES TO THE TUNE OF ` 96 40 634/-. THE LD. AR HAS PLACED ON RECORD THE C OPY OF ASSESSMENT ORDER DATED 30-12-2011 PASSED U/S.143(3) R.W.R.147 WHEREIN THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE ASSESSEE HAS NOT CLAIMED DEDUCTION U/S.10B. THE RELEVANT EXTRACT OF THE ASSESSMENT ORDER IS RE-PRODUCED HEREIN BELOW: 3. ASSESSEE COMPANY WAS INCORPORATED ON 24.03.1998 . THE ASSESSEE COMPANY IS A 100% EXPORT ORIENTED UNIT AND HAD CLAIMED DEDUCTION U/S.10B OF THE INCOME TAX ACT 1961 FROM AY.2000-01 TO AY. 2007-08. THOUGH ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S.10B FOR 10 ASSESSMENT YEARS I.E. FROM AY: 2000- 01 TO AY: 2009- 10 IT OPTED OUT OF DEDUCTION U/S.10B FROM 2008-09. ASSESSEE MOVED OVER TO ANOTHER SCHEME VISHISH KRISH GRAM UP AJ YOJANA (VKGUY) FROM AY: 2008-09. ASSESSEE IS ELIGIBLE FO R BENEFITS UNDER :7: I.T.A. NO. 1638/MDS/2013 VKGUY ONLY IF IT RELINQUISHES ITS CLAIM OF DEDUCTIO N U/S.10B OF THE IT ACT 1961. THEREFORE THE OBSERVATION OF THE CIT THAT THE ASSE SSEE HAS CLAIMED DEDUCTION U/S.10B IS FACTUALLY INCORRECT. 7. THE OTHER TWO REASONS FOR REVIEW AS MENTIONED IN THE SHOW CAUSE NOTICE ARE THAT THE GENUINENESS OF THE EXPENDITURE CLAIMED IN THE PROFIT & LOSS A/C WERE NOT VERIFIED BY THE ASSESSING OFFIC ER AND THE BALANCE SHEET ITEMS AND DETAILS OF ANNEXURE WERE NOT EXAMIN ED AT THE TIME OF ASSESSMENT. FROM THE PERUSAL OF THE IMPUGNED ORDER IT IS NOT CLEAR AS TO HOW THE CIT HAS COME TO THE CONCLUSION THAT THE GENUINENESS OF THE EXPENDITURE CLAIMED IN THE PROFIT & LOSS A/C WERE N OT VERIFIED AND WHAT ARE THE ITEMS IN THE BALANCE SHEET WHICH WERE NOT E XAMINED AT THE TIME OF ASSESSMENT. THE CIT HAS ALSO NOT MENTIONED THE EXPENDITURE CLAIMED IN PROFIT & LOSS A/C WHICH NEEDS VERIFICATI ON. THE CIT CANNOT DIRECT THE ASSESSING OFFICER TO CONDUCT ROVING ENQU IRY WITHOUT ANY SPECIFIC DIRECTIONS WITH REGARD TO SPECIFIC EXPENDI TURE OR INCOME CLAIMED OR SUPPRESSED BY THE ASSESSEE. THE DR HAS RELIED O N JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF TTK LIG LTD. VS. ACIT (SUPRA) JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE OF CIT. VS. :8: I.T.A. NO. 1638/MDS/2013 INFOSYS TECHNOLOGIES LTD. (SUPRA) AND THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT. VS. ASHOK LOGANI (SUPRA). WE FIND THAT THE RATIO LAID DOWN BY THE HONBLE HIGH COURTS IN T HE AFORESAID JUDGMENTS DO NOT APPLY ON THE FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE. THE IMPUGNED ORDER IS A NON-SPEAKING AND CRY PTIC. NO VALID REASON HAS BEEN GIVEN AS TO IN WHAT MANNER THE ORD ER OF ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE AND WHAT IS THE BASIS OR MATERIAL FOR FORMING SUCH AN O PINION. THE CIT HAS LEVELED GENERAL ALLEGATIONS WHICH IS NOT PERMISSIBL E UNDER THE PROVISIONS OF THE ACT FOR INITIATING REVISION PROCEEDINGS U/S. 263. THEREFORE THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY THE 30 TH OCTOBER 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 30 TH OCTOBER 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR