M/s Atma Petro Chemical Products., Vijayawada v. The ACIT(OSD), Ward-2(3)., Guntur

ITA 169/VIZ/2007 | 1997-1998
Pronouncement Date: 23-09-2010 | Result: Partly Allowed

Appeal Details

RSA Number 16925314 RSA 2007
Bench Visakhapatnam
Appeal Number ITA 169/VIZ/2007
Duration Of Justice 3 year(s) 4 month(s) 15 day(s)
Appellant M/s Atma Petro Chemical Products., Vijayawada
Respondent The ACIT(OSD), Ward-2(3)., Guntur
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 23-09-2010
Date Of Final Hearing 02-09-2010
Next Hearing Date 02-09-2010
Assessment Year 1997-1998
Appeal Filed On 08-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 169&170 /VIZAG/ 20 07 ASSESSMENT YEAR S : 1997 - 98 & 1999 - 2000 RES PECTIVELY ATMA PETRO CHEMICAL PRODUCTS VIJAYAWADA ACIT (OSD) WARD - 2(3) GUNTUR (APPELLANT) VS. (RESPONDENT) GIR NO.A - 347 APPELLANT BY: N O N E RESPONDENT BY: SHRI J. SIRI KUMAR DR ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER : - THESE APPEALS A RE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER OF THE CIT(A) ON VARIOUS GROUNDS . IN ITA NO.169 OF 2007 THE ORDER OF THE CIT(A) IS ASSAILED ONLY ON TWO ISSUES I.E. ( 1) WITH REGARD TO THE VALIDITY OF THE RE - OPENING OF ASSESSMENT AND ( 2) THE EST IMATION OF INCOME U/S 68 OF THE ACT. IN ITA NO. 1 70 OF 2007 THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL BUT THESE GROUNDS ARE NOT SPECIFIC NOR IT IS CLEAR OUT OF IT AS TO ON WHAT POINT THE ASSESSEE IS AGGRIEVED WITH THE ORDER OF THE CIT(A). ONLY TWO ISSUES ARE BORNE OUT I.E. ( 1) WITH REGARD TO THE VALIDITY OF RE - OPENING OF THE ASSESSMENT AND OTHER IS LEVY OF INTEREST U/S 234B OF THE ACT. OTHER GROUNDS ARE QUITE EVASIVE AND NOT CLEAR. WE HOWEVER FOR THE SAKE OF REFERENCE EXTRACT THEM AS UN DER: - 1. THE CIT(A) VIJAYAWADA HAS ERRED IN HOLDING THAT REOPENING OF ASSESSMENT IS VALID IN LAW ON THE FACTS AND MATERIAL AVAILABLE. 2. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND RAISED AGAINST THE ASSESSING OFFICER (AO) ADOPTING THE MATERIAL ONCE C ONSIDERED AND DISPOSED TO INVOKE THE POWERS OF THE REASSESSMENT WITHOUT ANY FRESH MATERIAL/EVIDENCE. 3. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND OF APPEAL RAISED AGAINST THE REASSESSMENT MADE IN PURSUANCE OF THE NOTICE ISSUED U/S 148 WITHOUT DISPOSI NG OFF THE RETURN OF INCOME FILED. 4. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND OF APPEAL RAISED AGAINST THE IMPROPER SERVICE OF NOTICE. 2 5. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND RAISED AGAINST THE POWERS OF THE AO TO REQUIRE THE FILING OF T HE ROI ONLY FOR THE PURPOSE OF ENABLING HIMSELF TO MAKE REASSESSMENT. 6. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND OF APPEAL RAISED AGAINST THE POWERS OF THE AO TO RECONSIDER THE SAME FACTS AND TO DISTURB THE FINDINGS MADE ON THE CONSIDERATION OF THE SAME MATTERS. 7. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND OF APPEAL RAISED AGAINST THE POWERS OF THE AO TO MAKE REASSESSMENT ON THE MATTERS ALREADY TOUCHED UPON I.E. THE RECONCILED STOCKS. 8. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND RAISED A GAINST THE NON CONSIDERATION OF THE AUDITED BOOKS OF ACCOUNTS OF THE APPELLANT FOR THE SUBJECT YEAR WHICH WERE NOT REJECTED BY THE AO AS UNRELIABLE. 9. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE AUDITED ACCOUNTS WITHOUT ANY INCRIMINATING EVIDENCE. 10. THE CIT(A) HAS ERRED IN CONFIRMING THE TELESCOPING THE ERRORS IF ANY IN THE EXCISE CORRESPONDENCE DATED FEB - MAR 1998 INTO THE A.Y. 1999 - 2000 AND ALSO NON CONSIDERATION OF THE PROCESS LOSS FOR THE ASSESSMENT YEAR 1998 - 99 IN ARRIVING AT THE OPENING STOCK AND ALSO IN CONFIRMING THE VALUE ADOPTED BY THE AO FOR THE STOCK VARIATION. 11. THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF THE PROCESS LOSS ON THE BASIS OF THE STATEMENTS UNSUPPORTED BY THE FACTS. 12. THE CIT(A) HAS ERRED IN UPHOLDING THE DISALLOWANCE U/S 40A(2) MADE BY THE AO ON THE IRRELEVANT CONSIDERATIONS. 13. THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION BASED ON THE SUPPORT OF THE SWORN STATEMENTS OF THE PERSONS SAID TO HAVE BEEN DEPOSED WHICH HAVE NOT BEEN SHOWN/SUPPLIED TO THE APPELLANT. 14. THE CIT(A) HA S ERRED IN CONFIRMING THE DISALLOWANCE OF THE DISCOUNTS WITHOUT CONSIDERING THE EXISTENCE OF THE LIABILITY AND PRUDENCE. 15. THE CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF INTEREST BY THE AO U/S 234B SINCE THE ADDITIONS MADE TO THE RETURNED INCOME ARE BEYOND T HE REASONABLE ESTIMATION OF THE APPELLANT AND IN SPITE OF THERE IS NO DEFAULT IN THE PAYMENT OF ADVANCE TAX AND ALSO NOT IN ACCORDANCE WITH THE LAW. 16. THE CIT(A) HAS ERRED IN NOT SETTING ASIDE THE ASSESSMENT DONE WITHOUT APPLICATION OF MIND TO THE FACTS REC ORDS STATEMENTS AVAILABLE IN THE FILE. 17. THE CIT(A) HAS ERRED IN CONFIRMING THE RECITAL IN THE ASSESSMENT ORDER THAT THE ASSESSMENT WAS REOPENED BY WAY OF ISSUE OF NOTICE U/S 148 WHILE IN FACT NO ASSESSMENT WAS MADE TO THE KNOWLEDGE OF THE APPELLANT. 18. THE CI T(A) HAS ERRED IN NOTING IN HIS ORDER THAT THE ORDER APPEALED AGAINST WAS PASSED U/S 143(3) R.W. 147 WHILE ASSESSMENT WAS DONE U/S 147 OF THE ACT. 19. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE GROUND RAISED AGAINST THE INITIATION OF THE PENALTY PROCEEDINGS E VEN BEFORE THE 3 ASSESSMENT HAS BECOME FINAL AND WITHOUT ESTABLISHING ANY CONCEALMENT. 20. THE APPELLANT CRAVES LEAVE TO AMEND ALTER OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 21. ANY OTHER GROUND OF APPEAL WHICH MAY BE TAKEN AT THE TIME OF HEARING WITH THE LEA VE OF THE HONBLE TRIBUNAL. 2. THESE APPEALS WERE FILED ON 15.5.2007 THEREAFTER IT WAS POSTED FOR HEARING ABOUT 9 TIMES BUT ALL THE TIME IT WAS ADJOURNED FOR THE ONE REASON OR THE OTHER. ON 1 ST SEPTEMBER 2009 IT WAS ADJOURNED TO 28.10.09 AND AGAIN ON 28.10.09 ASSESSEE SOUGHT AN ADJOURNMENT. THEREAFTER IT WAS LISTED FOR 21 ST OF JANUARY 2010 AND 21 ST APRIL 2010. BUT IT WAS AGAIN ADJOURNED AT THE REQUEST OF THE ASSESSEES. THE APPEAL WAS LISTED FOR HEARING ON 29.6.2010 AND THE HEARING OF THE APPEAL WAS ADJOURNED TO 2.9.2010 SUBJECT TO PAYMENT OF COST OF RS.2000/ - . W HEN THE MATTER WAS AGAIN LISTED FOR HEARING ON 2.9.2010 THE A SSESSEE FURTHER SOUGHT ADJOURNMENT ON THE GROUND THAT THE A.R. IS NOT WELL WITHOUT PLACING ANY EVIDENCE TO THIS FACT. ON VER IFICATION ON RECORD IT WAS BROUGHT TO OUR NOTICE THAT EVEN THE COST IMPOSED ON THE LAST DATE OF HEARING WAS NOT PAID BY THE ASSESSEES. IN THE LIGHT OF THESE FACTS WE ARE OF THE VIEW THAT ASSESSEE HAD BEEN MISUSING THE PROCESS OF LAW BY SEEKING ADJOURNMEN TS ON FRIVOLOUS GROUNDS. WE ACCORDINGLY REJECT THE REQUEST FOR ADJOURNMENT OF HEARING OF THE APPEAL AND HEARD THE REVENUE. 3. FROM A CAREFUL PERUSAL OF THE ORDERS OF LOWER AUTHORITIES WE FIND THAT THE SURVEY OPERATION U/S 133A WAS CONDUCTED AT THE BUSIN ESS PREMISES OF THE ASSESSEES AS WELL AS GROUP CASES ON 18.9.1998. DURING THE COURSE OF SURVEY THE ASSESSING OFFICER FOUND THE INCRIMINATING MATERIALS RELATING TO INTRODUCTION OF HUGE CASH CREDITS. THE A.O. THEREFORE FORMED AN OPINION THAT INCOME CHARG EABLE TO TAX HAD ESCAPED ASSESSMENT AND RECORDED REASONS AND THE PROPOSAL FOR REOPENING WAS SENT FOR APPROVAL TO THE ADDITIONAL CIT. AFTER OBTAINING THE APPROVAL THE ASSESSMENT WAS RE - OPENED. THE RE - OPENING OF THE ASSESSMENT IS ALSO CHALLENGED BEFORE US BUT UNDER THE GIVEN FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT SINCE THE ASSESSMENT WAS RE - OPENED ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SURVEY THE RE - OPENING IS VALID. ACCORDINGLY WE APPROVE THE ORDER OF THE CIT(A) WH O HAS RIGHTLY UPHOLD THE VALIDITY OF THE RE - OPENING OF THE ASSESSMENT. 4 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS BILLS AND VOUCHERS BUT THE SAME WERE NOT PRODUCED ON THE GROUNDS THAT THESE HAVE BEEN TAKEN AWAY BY CENTRAL EXCISE AUTHORITIES. THE A.O. AFFORDED OPPORTUNITY TO THE ASSESSEE TO OBTAIN COPIES OF CEASED RECORDS AND PRODUCED BEFORE HIM. BUT IT WAS NOT PRODUCED DESPITE VARIOUS OPPORTUNITIES. THE A.O. ACCORDINGLY FRAMED THE ASSESSMENT U/ S 144 AND DETERMINED THE TOTAL INCOME AT 3% TO THE TOTAL TURNOVER RELYING UPON THE ORDER OF THE CIT FOR THE ASSESSMENT YEAR 1998 - 99. ACCORDINGLY THE ADDITION U/S 68 WAS MADE AT RS.5 38 685/ - IN A.Y. 1997 - 98. 5 . IN THIS REGARD THE LD. D.R. HAD INVITED O UR ATTENTION TO THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 1998 - 99 IN WHICH THE IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL AND TRIBUNAL HAS ESTIMATED THE INCOME OF THE ASSESSEES AT 1.28% OF THE GROSS TURNOVER. COPY OF THE TRIBUNAL ORDER IS PLACED ON RECORD. WE THEREFORE FOLLOWING THE SAME ESTIMATED THE INCOME IN A.Y. 1997 - 98 AT 1.28% OF THE GROSS TURNOVER AND DIRECT THE A.O. TO COMPUTE ACCORDINGLY. 6 . IN ITA NO.170 OF 2007 RELATING TO ASSESSMENT YEAR 1999 - 2000 THOUGH IT IS NOT CLEAR FROM THE GROU NDS OF APPEAL RAISED BY THE ASSESSEES BUT FROM PERUSAL OF ORDER OF THE CIT(A) WE FIND THAT HE HAS CONFIRMED THE ADDITIONS ON CERTAIN ISSUES AFTER GRANTING A PARTIAL RELIEF. SO FAR AS VALIDITY OF THE RE - OPENING IS CONCERNED IN THE FOREGOING APPEAL WE HA VE APPROVED THE RE - OPENING OF THE ASSESSMENT. THE ADDITIONS ON ACCOUNT OF EXCESS STOCK WAS RESTRICTED TO RS.3 74 538/ - AGAINST RS.11 10 559/ - MADE IN THE ORIGINAL ASSESSMENT ORDER BY THE CIT(A). THE NEXT ISSUE RELATE TO THE DISALLOWANCE OF COMMISSION ATT RIBUTABLE TO SALE MADE TO SISTER CONCERN THE A.O. HAS DISALLOWED 50% OF TOTAL COMMISSION WHICH WAS CONFIRMED BY THE CIT(A) AFTER HAVING EXAMINED THE DETAILED MATERIAL PLACED BEFORE HIM. THE NEXT ISSUE RELATE TO THE DISCOUNT OF PROVISIONS OF RS.2 43 000/ - . THIS ISSUE WAS ALSO EXAMINED BY THE CIT(A) IN HIS ORDER IN THE LIGHT OF DETAILED SUBMISSION AND THE MATERIAL PLACED BEFORE HIM BUT HE WAS NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEES AND THE ADDITIONS WAS CONFIRMED. 5 7 . WITH REGARD TO THESE AD DITIONS NO SPECIFIC GROUNDS WERE RAISED IN THE GROUNDS OF APPEAL OF THE ASSESSEES . W E HOWEVER EXAMINED THE ORDER OF THE CIT(A) IN THIS REGARD AND WE FIND THAT HE HAS PROPERLY EXAMINED THESE ISSUES AND NO INTERFERENCE IS CALLED THEREIN. WE THEREFORE CO NFIRM THE ORDER OF THE CIT(A). 8 . IN THE RESULT THE ITA NO.169 OF 2007 IS PARTLY ALLOWED AND ITA NO.170 OF 2007 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23.9 .20 10 SD/ - SD/ - (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIA L MEMBER VG/SPS VISAKHAPATNAM DATED 23 RD SEPTEMBER 20 10 COPY TO 1 M/S. ATMA PETRO CHEMICAL PRODUCTS 5 TH ROAD AUTONAGAR VIJAYAWADA - 520 007 2 THE ITO WARD - 2(3) VIJAYAWADA 3 THE CI T VIJAYAWADA 4 THE CIT (A) VIJAYAWADA 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM