ACIT, CHENNAI v. M/s. Hanil Lear India Private Ltd., Irungattukottai

ITA 223/CHNY/2012 | 2004-2005
Pronouncement Date: 29-03-2012 | Result: Allowed

Appeal Details

RSA Number 22321714 RSA 2012
Assessee PAN AAACH2525A
Bench Chennai
Appeal Number ITA 223/CHNY/2012
Duration Of Justice 1 month(s) 26 day(s)
Appellant ACIT, CHENNAI
Respondent M/s. Hanil Lear India Private Ltd., Irungattukottai
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 29-03-2012
Assessment Year 2004-2005
Appeal Filed On 03-02-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE SHRI ABRAHAM P.GEORGE ACCOUNTANT MEMBER AN D SHRI VIKAS AWASTHY JUDICIAL MEMBER ITA NO.223/MDS/2012 (ASSESSMENT YEAR: 2004-05) THE ASSISTANT COMMISSIONER OF INCOME TAX COM.CIRCLE II(2) R.NO.512 5 TH FLOOR NEW BLOCK 121 M.G.ROAD CHENNAI-600 034. VS. M/S. HANIL LEAR INDIA PVT.LTD. PLOT NO.A6 & A7 SIPCOT INDUSTRIAL PARK IRUNGATTUKOTTAI-602 105. PAN:AAACH2525A (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.41/MDS/2012 (IN ITA NO.223/MDS/2012) (ASSESSMENT YEAR: 2004-05) M/S. HANIL LEAR INDIA PVT.LTD. PLOT NO.A6 & A7 SIPCOT INDUSTRIAL PARK IRUNGATTUKOTTAI-602 105. PAN:AAACH2525A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX COM.CIRCLE II(2) R.NO.512 5 TH FLOOR NEW BLOCK 121 M.G.ROAD CHENNAI-600 034. (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : MR. B.NANDHAKUMAR JCIT ASSESSEE BY : MR. K. NARAYANAN DATE OF HEARING : 29 TH MARCH 2012 DATE OF PRONOUNCEMENT : 29 TH MARCH 2012 O R D E R PER VIKAS AWASTHY JUDICIAL MEMBER: THE PRESENT APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE. THE RELEV ANT ASSESSMENT YEAR IS 2007-08. THE APPEAL AND THE C ROSS ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 2 OBJECTION ARE DIRECTED AGAINST THE ORDER OF THE COM MISSIONER OF INCOME TAX(A)-III CHENNAI DATED 17.11.2011. SI NCE BOTH THE APPEAL AND CROSS OBJECTION INVOLVE COMMON ISSUE S THEY ARE TAKEN UP TOGETHER FOR DISPOSAL BY THIS COMMON O RDER. 2. THE ASSESSEE COMPANY IS CARRYING ON THE BUSINESS OF MANUFACTURE AND SALE OF AUTOMOBILE INTERIOR SYSTEMS . FOR THE ASSESSMENT YEAR 2004-05 THE ASSESSEE FILED RETURN OF INCOME ON 1.11.2004 ADMITTING ITS INCOME AS ` 21 84 03 230/-. THE RETURN OF INCOME OF THE ASSESSE E WAS PROCESSED UNDER SECTION 143(1) ON 10.10.2005. THE C ASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE ON 10.10. 2005 ITSELF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED REVISED RETURN ON 24.02.2006 ADMITT ING ADDITIONAL INCOME OF ` 3 97 61 600/-. THE ASSESSING OFFICER MADE CERTAIN DISALLOWANCES/ADDITIONS IN THE GROSS T OTAL INCOME OF THE ASSESSEE AND CREATED DEMAND OF ` 43 77 352/-. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE A LSO SEPARATELY INITIATED AGAINST THE ASSESSEE. ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 3 3. AGGRIEVED AGAINST THE ORDER DATED 22.12.2006 TH E ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) RAISING VARIOUS GROUNDS. THE PRIMARY GROUNDS ON WHICH THE ASSESSEE ASSAILED THE ORDER OF THE ASSESSING OFFICER WERE AS FOLLOWS:- I) DISALLOWANCE OF ` 47 37 540/- BEING SALES REJECTION BY HYUNDAI MOTORS INDIA LTD. WHICH WAS INADVERTENTLY CLASSIFIED AS BAD DEBTS. II) SALES REJECTION OF ` 15 62 360 WRONGLY GROUPED UNDER MISCELLANEOUS EXPENSES. III) DISALLOWANCE OF ` 33 18 691/- UNDER SECTION 40(A)(I) OF THE ACT. THE CIT(A) ALLOWED THE FIRST TWO GROUNDS OF APPEAL OF THE ASSESSEE AFTER RELYING ON THE ORDER OF THE CIT(A)-X II CHENNAI IN THE ASSESSEES OWN CASE RELEVANT TO THE ASSESSME NT YEAR 2003-04 PASSED IN ITA NO.158/06-07 DATED 19.06.2007 WHEREIN SIMILAR ISSUES WERE RAISED AND DECIDED IN F AVOUR OF THE ASSESSEE. ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 4 4. THE DEPARTMENT AGGRIEVED BY THE ORDER OF THE CI T(A) PREFERRED THIS APPEAL BEFORE THE TRIBUNAL IMPUGNING ORDER DATED 17.11.2011 ON THE GROUNDS THAT - I) THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF CLAIM OF BAD DEBTS OF ` 47 37 540/-; AND II) THE LEARNED CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF CLAIM OF MISCELLANEOUS EXPENSES OF ` 15 62 360/- . 5. THE LEARNED D.R. SUBMITTED THAT THE CIT(A) HAS A LLOWED THE ABOVE MENTIONED GROUNDS OF APPEAL OF THE ASSESS EE WITHOUT AFFORDING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. THE ASSESSEE DID NOT SUBSTANTIAT E ITS CLAIM OF BAD DEBTS AND MISCELLANEOUS EXPENSES BEFORE THE ASSESSING OFFICER. THE CLAIM REGARDING IRRECOVERABL E SALE PROCEEDS / SALES RETURN WAS MADE BY THE ASSESSEE BE FORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE FIRST TIME. 6. ON THE OTHER HAND LEARNED A.R. REPRESENTING ASS ESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT TAKEN INTO CONSIDERATION THE CLAIM MADE BY THE ASSESSEE VIDE L ETTER ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 5 DATED 20.12.2006 WHICH CLEARLY EXPLAINED FOR THE SA LES REJECTION. THE LEARNED A.R. SUBMITTED THAT THE LEA RNED CIT(A) HAD GIVEN OPPORTUNITY OF HEARING TO THE ASSESSING O FFICER BEFORE PRONOUNCING THE ORDER AND THE CASE OF THE AS SESSEE IS SQUARELY COVERED BY THE ORDER OF THE CIT(A)-XII WHI CH INVOLVES SIMILAR QUESTIONS RELEVANT TO THE ASSESSMENT YEAR 2 003-04 WHICH HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE LEARNED A.R. STRONGLY SUPPORTED THE ORDER OF THE CI T(A) AND SUBMITTED THAT THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS WELL REASONED AND DETAILED ONE. HE ALS O SUBMITTED THAT THE ASSESSING OFFICER HAS NOT UNDERS TOOD THE CONCEPT OF JUST IN TIME INVENTORY AND REWORK OF REJ ECTED MATERIAL AND GENERATION OF NEW INVOICE MADE TO CUST OMERS. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT UNDERSTOOD THE FACT THAT SALES REPORTED AND REJECTI ON HAPPENED IN THE SAME ASSESSMENT YEAR ITSELF AND THU S THE ASSESSING OFFICER ERRED IN CALCULATING THE WORK-IN- PROGRESS OR CLOSING STOCK. 7. WE HAVE HEARD THE PARTIES AND HAVE GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW. THE LEARNE D CIT(A) ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 6 HAS RELIED ON THE ORDER DATED 19.06.2007 PASSED IN ITA NO.158/2006-07 RELEVANT TO THE ASSESSMENT YEAR 200 3-04 WHEREIN SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSE. THE REVENUE HAD FILED AN APPEAL AGAINST THE SAID OR DER BEFORE THE TRIBUNAL WHICH IS PENDING FOR FINAL ADJ UDICATION. WE FIND THAT THE ASSESSEE DID NOT SUBSTANTIATE ITS CLAIM OF BAD DEBTS AND MISCELLANEOUS EXPENSES BEFORE THE ASSESSI NG OFFICER. WE ALSO FIND THAT THE CLAIM REGARDING IRR EVOCABLE SALE PROCEEDS /SALES RETURN ETC. WERE MADE BY THE ASSESS EE FOR THE FIRST TIME BEFORE THE CIT(A). WE THEREFORE D EEM IT APPROPRIATE TO REMIT THE MATTER BACK TO THE ASSESSI NG OFFICER ON THESE TWO ISSUES ALONE AFTER SETTING ASIDE THE O RDER OF THE CIT(A). THE ASSESSING OFFICER IS DIRECTED TO PASS ORDER AFRESH AFTER TAKING INTO CONSIDERATION THE SUBMISSI ONS OF THE ASSESSEE DOCUMENTS ON RECORD AND WELL SETTLED LAW. THE ASSESSING OFFICER SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSING THE ORDER. 8. THUS THE APPEAL OF THE REVENUE IS ALLOWED FOR ST ATISTICAL PURPOSES. IN VIEW OF THE ABOVE THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THUS DISMIS SED. ITA NO.223/MDS/2012 & CO NO.41/MDS/2012 7 9. TO SUM UP THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 29 TH MARCH 2012. SD/- S D/- (ABRAHAM P.GEORGE) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 29 TH MARCH 2012. SOMU COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F .