The ACIT, 1(1), v. M/s Som Distilleries & Breweries Ltd.,

ITA 22/IND/2007 | 2000-2001
Pronouncement Date: 12-04-2010 | Result: Dismissed

Appeal Details

RSA Number 2222714 RSA 2007
Bench Indore
Appeal Number ITA 22/IND/2007
Duration Of Justice 3 year(s) 3 month(s) 7 day(s)
Appellant The ACIT, 1(1),
Respondent M/s Som Distilleries & Breweries Ltd.,
Appeal Type Income Tax Appeal
Pronouncement Date 12-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 12-04-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2000-2001
Appeal Filed On 05-01-2007
Judgment Text
PAGE 1 OF 5 - I.T.A.NO. 22/IND/2007 M/S. SOM DISTILLERIES & BREWERIES LIMITED BHOPAL IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : N.A. I.T.A.NO.22/IND/2007 A.Y. : 2000-01 ACIT M/S. SOM DISTILLERIES & BREWERIES LIMITED 1(1) VS 23 ZONE-II M. P. NAGAR BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI K.K.SINGH CIT RESPONDENT BY : SHRI R.N. GUPTA C. A. DATE OF HEARING : 07.04.2010 O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I BHOPAL DATED 23.10.2006 FOR THE ASSESSM ENT YEAR 2000-01. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO. 1 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN HOLDING THAT A.O. HAD WRONGLY ASSUM ED THE JURISDICTION U/S 147 AND NOT JUSTIFIED IN INITIATIN G THE PAGE 2 OF 5 - I.T.A.NO. 22/IND/2007 M/S. SOM DISTILLERIES & BREWERIES LIMITED BHOPAL ASSESSMENT PROCEEDINGS THOUGH THE ASSESSMENT WAS CORRECTLY REOPENED BY THE ASSESSING OFFICER IN ACCO RDANCE WITH THE PROVISION UNDER THE INCOME-TAX ACT. 4. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD . CIT(A) IN HOLDING THAT ASSUMPTION OF JURISDICTION BY THE A.O. U/S 147 WAS NOT IN ACCORDANCE WITH LAW HENCE LIABLE TO BE QUASHED. 5. THE FACTS IN BRIEF ARE THAT THE ORIGINAL ASSESSME NT WAS COMPLETED U/S 143(3) OF THE ACT. THEREAFTER THERE WAS A SEARCH AND BLOCK ASSESSMENT WAS ALSO PASSED. SUBSEQUENTLY THERETO T HE A.O. ON THE BASIS OF KERALA STATE EXCISE TECHNICAL MANUAL FORMED AN O PINION THAT THE ASSESSEE WAS SUPPRESSING THE PRODUCTION AND INDULGE D IN MAKING THE SALES OUT-SIDE THE BOOKS OF THE BEER PRODUCED BY IT. ON T HIS BASIS THE A.O. REOPENED THE ORIGINAL ASSESSMENT. THE A.O. THEREAF TER MADE AN ADDITION OF RS. 1 62 42 450/- AFTER COMPUTING THE PRODUCTION OF BEER AS PER THE METHODOLOGY PRESCRIBED IN SUCH MANUAL WHICH COULD HAVE BEEN AGAINST WHAT WAS DECLARED BY THE ASSESSEE. AGGRIEVED BY THI S THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A ) ON THE GROUND THAT THE ASSUMPTION OF JURISDICTION U/S 147 WAS MERELY A CASE OF REASON TO SUSPECT AS THERE WAS NO NEXUS BETWEEN THE INFORMAT ION IN THE FORM OF KERALA STATE EXCISE TECHNICAL MANUAL AND THE BUSINE SS OPERATIONS OF THE ASSESSEE AS THE SAME WERE CARRIED OUT IN THE STATE OF M.P. IT WAS ALSO PAGE 3 OF 5 - I.T.A.NO. 22/IND/2007 M/S. SOM DISTILLERIES & BREWERIES LIMITED BHOPAL CONTENDED THAT THOUGH NO EVIDENCE WAS FOUND EVEN IN THE COURSE OF SEARCH AS REGARD TO SUPPRESSION OF PRODUCTION OR MA KING SALES OUTSIDE THE BOOKS. THE ASSESSEE RELIED ON VARIOUS JUDICIAL DECI SIONS IN THIS REGARD. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS MA DE BY THE ASSESSEE HELD THAT REASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED AS THERE WERE NO REASONS ON THE BASIS OF WHICH IT COULD BE S AID THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE LD. C IT(A) IN DOING SO FOLLOWED THE RATIO OF THE DECISION IN THE CASE OF S HRI ARJUN SINGH VS. ADIT AS REPORTED IN 246 ITR 363 (MP) AND PHOOLCHA ND BAJRANGLAL AS REPORTED IN 203 ITR 456 (S.C.). AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD. CIT DR NARRATED THE FACTS AND CONTENDED THA T KERALA STATE EXCISE MANUAL WAS A CASE OF INFORMATION COMIN G TO THE KNOWLEDGE OF THE A.O. SUBSEQUENT TO MAKING OF ORIGINAL ASSESS MENT AND IT WAS A SETTLED JUDICIAL PRINCIPLE THAT SUFFICIENCY OF REAS ONS COULD NOT BE SEEN NOR IT WAS NECESSARY THAT ADDITION MUST BE MADE SUBSEQU ENT TO REOPENING. HENCE THE A.OS ACTION WAS WITHIN THE FOUR CORNERS OF LAW. 7. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT( A) AND RELIED ON THE ORDER OF LD. CIT(A). PAGE 4 OF 5 - I.T.A.NO. 22/IND/2007 M/S. SOM DISTILLERIES & BREWERIES LIMITED BHOPAL 8. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 9. IT IS A SETTLED JUDICIAL PRINCIPLE THAT FINALITY OF COMPLETED ASSESSMENT CANNOT BE DISTURBED IN A LIGHT MANNER AN D THEREFORE THE LAW HAS PROVIDED SAFEGUARD IN THE FORM OF REASON TO BEL IEVE WHICH MUST EXIST DOING SO. HOWEVER IN THE PRESENT CASE THE ASSESSE E IS OPERATING IN THE STATE OF M.P. AND KERALA STATE EXCISE MANUAL IS A G ENERAL INFORMATION AND THEREFORE IT IS A CASE OF PRETENCE AND REASON S TO SUSPECT ONLY. IN THIS VIEW OF THE MATTER WE HOLD THAT THE LD. CIT(A) HAS RIGHTLY QUASHED THE ASSESSMENT PROCEEDINGS. THUS THIS GROUND OF THE RE VENUE IS DISMISSED.\ 10. IN GROUND NO.2 THE REVENUE HAS CHALLENGED THE DECI SION OF LD. CIT(A) ON MERITS AS WELL. HOWEVER HAVING CONSIDERE D THE SUBMISSIONS MADE BY BOTH THE PARTIES BEFORE US AND AFTER PERUSA L OF THE ORDER OF THE LD. CIT(A) WE ARE CONVINCED THAT THERE IS NO CASE FOR SUPPRESSED PRODUCTION AS PER THE MANUFACTURING PROCESS EXPLAIN ED TO US AND THE A.O. HAS NOT CORRECTLY WORKED OUT THE PRODUCTION EVEN ON THE BASIS OF KERALA STATE EXCISE MANUAL. IN THIS VIEW OF THE MATTER GR OUND NO.2 OF THE REVENUE IS ALSO DISMISSED. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. PAGE 5 OF 5 - I.T.A.NO. 22/IND/2007 M/S. SOM DISTILLERIES & BREWERIES LIMITED BHOPAL THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH APRIL 2010. CPU* 794