VAMA APPARELS (I) P. LTD, MUMBAI v. DCIT CEN CIR 42, MUMBAI

ITA 3223/MUM/2010 | 2003-2004
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 322319914 RSA 2010
Assessee PAN AAACV3456A
Bench Mumbai
Appeal Number ITA 3223/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 29 day(s)
Appellant VAMA APPARELS (I) P. LTD, MUMBAI
Respondent DCIT CEN CIR 42, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 22-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2003-2004
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI B. RAMAKOTAI AH (A.M) ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) VAMA APPARELS (INDIA) PVT. LTD. KANCHANJUNGA 72 PEDDAR ROAD MUMBAI 400 006 PAN:AAACV 3456A (APPELLANT) VS. THE DCIT CEN. CIR.42 MUMBAI. (RESPONDENT) APPELLANT BY : S/ SHRI VIJAY MEHTA/ GOVIND JAVERI RESPONDENT BY : SHRI SUBACHAN RAM ORDER PER N.V.VASUDEVAN J.M THESE ARE APPEALS BY THE ASSESSEE AGAINST COMMON O RDER DATED 12/2/2010 OF CIT(A)-38 MUMBAI RELATING TO ASSESSME NT YEAR 2001-02 2002-03 AND 2003-04. THE GROUND OF APPEAL RAISED B Y THE ASSESSEE IN THESE APPEALS EXCEPT FOR THE CHANGE IN THE QUANTUM OF DIS ALLOWANCE OF TRAVELLING EXPENSES AND GENERAL EXPENSES ARE COMMON. 2. IN ASSESSMENT YEAR 2002-03 AND 2003-04 THE ASSES SEE ALSO AGGRIEVED BY THE ORDER OF THE CIT(A) IN NOT DIRECTING THE ASS ESSING OFFICER TO SUBSTITUTE THE INCOME DETERMINED UNDER SECTION 143(3) OF THE I NCOME TAX ACT 1961 (THE ACT) BY THE REDUCED FIGURE OF TOTAL INCOME PUR SUANT TO THE ORDER OF THE ITAT EMANATING FROM THE ORDER UNDER SECTION 143(3) OF THE ACT. THIS GROUND RAISED IN A.Y. 2002-03 AND 2003-04 IN OUR VIEW IS P URELY ACADEMIC AND ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) 2 REQUIRES NO ADJUDICATION. THE COMMON GROUND WHICH REMAINS TO BE ADJUDICATED IN ALL THESE APPEALS IS THEREFORE THE DISALLOWANCE OF PART OF TRAVELLING EXPENSES AND DISALLOWANCE OF 10% OF THE GENERAL EXPENSES MADE IN ALL THE THREE ASSESSMENT YEARS. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF TRADING IN READYMADE GARMENTS. FOR A.Y 2001-02 THE ASSESSEE F ILED THE RETURN OF INCOME ON 31/10/2001 DECLARING TOTAL INCOME OF RS. 32 98 820/- AND AN ORDER OF ASSESSMENT UNDER SECTION 143(3) DATED 30/3 /2004 WAS PASSED DETERMINING A TOTAL INCOME OF RS. 4 91 00 416/-. FO R A.Y 2002-03 RETURN OF INCOME WAS FILED ON 30/10/2002 DECLARING TOTAL INCO ME OF RS. 10 16 970/-. THE ORDER OF ASSESSMENT UNDER SECTION 143(3) DATED 29/3/2005 WAS PASSED DETERMINING TOTAL INCOME OF RS. 5 01 07 260/- . FO R A.Y 2003-04 THE RETURN OF INCOME WAS FILED ON 30/11/2003 DECLARING TOTAL I NCOME OF RS. 56 52 660/- AND ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) VIDE ORDER DATED 30/12/2005 DETERMINING TOTAL INCOME AT RS. 3 12 71 390/-. 4. THERE WAS A SEARCH AND SEIZURE OPERATION UNDER S ECTION 132 OF THE ACT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 28/4/20 06. CONSEQUENT TO THE PROVISIONS OF SECTION 153A OF THE ACT THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF THESE ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH SEARCH IS CONDUCTED. IT IS PURSUANT TO THE AFORESAID PROVIS ION THAT THE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 143(3) R.W.S. 153A OF THE ACT FOR THE AFORESAID THREE ASSESSMENT YEARS. THE ASSESSING OF FICER IN THE SAID ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE CL AIMED TRAVELLING EXPENSES AND NO BREAKUP OF TRAVELLING EXPENSES WAS FURNISHED. THE ASSESSING OFFICER ALSO HAS OBSERVED IN THE ORDER OF ASSESSMENT THAT IT TRANSPIRES IN THE COURSE OF SEARCH THAT THE FAMILY MEMBERS OF THE DIRECTORS ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) 3 WERE UNDERTAKING FREQUENT DOMESTIC AND FOREIGN TRAV EL. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS NOT F ILED ANY DETAILS REGARDING TRAVELLING EXPENSES NOR JUSTIFIED THOSE EXPENSES A S ONE RELATING TO THE BUSINESS OF THE ASSESSEE. IN THE ABSENCE OF DETAI LS THE ASSESSING OFFICER DISALLOWED 60% OF THE TRAVELLING EXPENSES IN ALL TH E THREE ASSESSMENT YEARS. SIMILARLY FOR WANT OF DETAILS OF GENERAL EXPENSES T HE ASSESSING OFFICER DISALLOWED 25% OF THE GENERAL EXPENSES CLAIMED IN A LL THE THREE ASSESSMENT YEARS. 5. ON APPEAL BY THE ASSESSEE THE CIT(A) CONFIRMED T HE ORDER OF THE ASSESSING OFFICER. 6. BEFORE US IT WAS SUBMITTED BY THE LD. COUNSEL FO R THE ASSESSEE THAT IN PROCEEDINGS UNDER SECTION 153A OF THE ACT IT WAS OP EN TO THE ASSESSING OFFICER TO MAKE A ROVING ENQUIRY. IN THIS REGARD IT WAS POINTED OUT THAT IN THE COURSE OF SEARCH NO MATERIAL WAS FOUND INDICATI NG THAT THE GENERAL EXPENSES OR TRAVELLING EXPENSES CLAIMED BY THE ASSE SSEE WERE NOT IN RELATION TO THE BUSINESS OF THE ASSESSEE. IT WAS FURTHER P OINTED OUT THAT IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE AC T FOR THE RELEVANT ASSESSMENT YEARS THE ASSESSING OFFICER CALLED FOR D ETAILS AND WAS SATISFIED REGARDING THESE EXPENSES. IN A.Y 2001-02 THE ASSES SING OFFICER RAISED A SPECIFIC QUERY AND THE ASSESSEE FURNISHED THE REQUI RED DETAILS AND NO ADDITION WAS MADE IN THE ORDER PASSED UNDER SECTIO N 143(3) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER RELIED ON THE DECISION OF THE HONBLE ITAT CBENCH MUMBAI IN THE CASE OF SHRI PRAFUL N. SATR A VS. ACIT ITA NO.6048 TO 6050/M/09 FOR A.Y 2001-02 TO 2003-04 WHEREIN TH IS TRIBUNAL OBSERVED AS FOLLOWS: ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) 4 36. BEFORE PARTING WITH THE GROUNDS IT IS NOTICE D THAT THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED FOR THIS ASSESSM ENT YEAR MAKING CERTAIN DISALLOWANCE IN THE SCRUTINY ASSESSMENT. S INCE THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED EARLI ER THE A.O IS ALSO DIRECTED TO KEEP IN MIND THAT THE ISSUES WHICH WERE CRYSTALLIZED IN THE ORIGINAL ASSESSMENT SHOULD NOT BE RE-AGITATED IN TH E ASSESSMENT UNDER SECTION 143(3) W.R.S. 153A UNLESS THERE IS INCRI MINATING MATERIAL. SINCE THE ASSESSMENT PROCEEDINGS HAVE BEEN ALREADY CONCLUDED AND NOT ABATED FOR THIS ASSESSMENT YEAR THE ISSUE OF R E-EXAMINATION WILL ARISE ONLY IF THERE IS INCRIMINATING MATERIAL OR ON THE ISSUE WHICH ARE NOT CONSIDERED IN THE ASSESSMENT U/S. 143(3). THE LD. COUNSEL FOR THE ASSESSEE THEREFORE SUBMIT TED THAT THE ADDITION MADE IN THE PROCEEDINGS UNDER SECTION 153A OF THE A CT IS THEREFORE TO BE DELETED. THE LD. D.R RELIED ON THE ORDER OF THE CI T(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION. WE FIN D THAT IN ALL THREE ASSESSMENT YEARS THE ASSESSMENT UNDER SECTION 143(3 ) HAS ALREADY BEEN MADE BY THE ASSESSING OFFICER. IN SUCH PROCEEDINGS THE ASSESSING OFFICER DID NOT CHOOSE TO QUESTION THE ALLOWABILITY OF THE TRAVELLING EXPENSES AND THE GENERAL EXPENSES. IN OTHER WORDS THEY WERE ACCEPTE D AS ONE FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE WHOLLY AND EXCLUSIVELY. ADMITTEDLY IN THE COURSE OF SEARCH NO MATERIAL WHATSOEVER WAS FOUND TO SHOW THAT THESE EXPENSES WERE NOT IN RELATION TO THE BUSINESS OF THE ASSESSE E. IN SUCH CIRCUMSTANCES IT WAS NOT OPEN TO THE ASSESSING OFFICER TO MAKE TH E IMPUGNED ADDITION. THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI PR AFUL N SATRA REFERRED (SUPRA) CLEARLY SUPPORTS THE STAND OF THE ASSESSEE IN THIS REGARD. IT WAS NOT OPEN TO THE ASSESSING OFFICER TO RE-AGITATE THE ISS UES WHICH HAS ALREADY CRYSTALLIZED IN THE ORIGINAL ASSESSMENT UNDER SECTI ON 143(3) OF THE ACT WITHOUT THERE BEING INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. RESPECTFULLY FOLLOWING THE DECISION REFERRED TO ABO VE WE DIRECT THAT THE IMPUGNED ADDITIONS SUSTAINED BY THE CIT(A) IN ALL T HE THREE ASSESSMENT ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) 5 YEARS BE DELETED. ALL THE THREE APPEALS OF THE ASS ESSEE ARE ALLOWED AS INDICATED ABOVE. 8. IN THE RESULT ALL THE APPEALS ARE ALLOWED AS IN DICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 22 ND DAY OF JULY 2011. SD/- SD/- (B.RAMAKOTAIAH ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED. 22 ND JULY.2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RF BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR I TAT MUMBAI BENCHES MUMBAI. VM. ITA NO.3221/MUM/2010(A.Y. 2001-02) ITA NO.3222/MUM/2010(A.Y. 2002-03) ITA NO.3223/MUM/2010(A.Y.2003-04) 6 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 14/7/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 15/7/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER