ACIT CC 25, MUMBAI v. PARLE BOTTING LTD, MUMBAI

ITA 3689/MUM/2013 | 1997-1998
Pronouncement Date: 28-10-2016 | Result: Dismissed

Appeal Details

RSA Number 368919914 RSA 2013
Assessee PAN AAACP8417M
Bench Mumbai
Appeal Number ITA 3689/MUM/2013
Duration Of Justice 3 year(s) 5 month(s) 19 day(s)
Appellant ACIT CC 25, MUMBAI
Respondent PARLE BOTTING LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-10-2016
Date Of Final Hearing 20-11-2014
Next Hearing Date 20-11-2014
Assessment Year 1997-1998
Appeal Filed On 09-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI . . BEFORE SHRI R.C.SHARMA AM AND SHRI AMARJIT SINGH JM / I.T.A. NO.3344/MUM/2013 ( / ASSESSMENT YEAR: 1997-98) PARLE BOTTLING PVT. LTD. (NOW KNOWN AS PARLE AGRO PVT. LTD.) WESTERN EXPRESS HIGHWAY CHALKALA ANDHERI (EAST) MUMBAI - 400099 / VS. DY. CI T. CENT. CIR. 25 4 TH FLOOR AAYKAR BHAVAN MUMBAI - 400020 / I.T.A. NO.3689/MUM/2013 ( / ASSESSMENT YEAR: 1997-98) DY. CIT. CENT. CIR. 25 4 TH FLOOR AAYKAR BHAVAN MUMBAI - 400020 / VS. PARLE BOTTLING PVT. LTD. (NOW KNOWN AS PARLE AGRO PVT. LTD.) WESTERN EXPRESS HIGHWAY CHALKALA ANDHERI (EAST) MUMBAI - 400099 ./ ./ PAN/GIR NO. : AAACP8417M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI FIROZE ANDHYARUJINA (SENIOR ADVOCATE) DEPARTMENT BY: SHRI PRADEEP KUMAR ITA NO.3344&3689/M/2013 A.Y. 1997-98 2 / DATE OF HEARING: 18.08.2016 /DATE OF PRONOUNCEMENT:28.10.2016 / O R D E R PER AMARJIT SINGH JM: THE ASSESSEE AS WELL AS REVENUE HAVE FILED ABOVE MENTIONED APPEALS AGAINST THE ORDER DATED 22.02.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 39 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.1997-98. SINCE COMMON QUESTION OF LAW AND FACTS ARE INVOLVED IN THE ABOVE MENTIONED APPEALS AND PARTIES ARE THE SAME THEREFORE THESE APPEALS ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. ITA NO.3344/MUM/2013(ASSESSEES APPEAL):- 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN TREATING DEPOSIT RECEIVED IN RESPECT OF BOTTLES AND CRATES AS UNEXPLAINED CREDIT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF RS.NIL ON 28.11.1997. THE RETURN WAS ACCOMPANIED BY AUDITED PROFIT AND LOSS ACCOUNT BALANCE SHEET AND TAX AUDIT REPORT U/S.44AB OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT). THE RETURN WAS PROCESSED U/S.143(1)(A) OF ITA NO.3344&3689/M/2013 A.Y. 1997-98 3 THE ACT ON 30.03.1998. THE CASE WAS SELECTED FOR SCRUTINY THEREFORE NOTICE U/S.143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE HAS SHOWN A SUM OF RS.3 51 072/- AS THE SUM PAYABLE ON ACCOUNT OF RECEIPT OF DEPOSIT OF BOTTLES AND CRATES. THE ASSESSEE HAS EXPLAINED THAT THE SAID AMOUNT WAS RECEIVED FROM ITS AFFILIATE M/S.PARLE SALES AND SERVICES LTD. AS DEPOSIT ON THE BOTTLES AND CRATES SUPPLIED TO THEM. THE PARTICULARS OF THE ACCOUNT IS HEREBY MENTIONED BELOW:- PARTICULARS AMOUNT PARLE SALES & SERVICES LTD. WESTERN EXPRESS HIGHWAY ANDHERI (E) MUMBAI 99 DEPOSITS ON BOTTLES 1 75 58 652 DEPOSITS ON CASES 72 96 429 DEPOSITS ON BOTTLES/CASES 7 22 083 DEPOSITS ON BOTTLES 500 M.C. 7 91 147 DEPOSITS ON CASES 2 41 012 DEPOSITS ON PLASTIC CASES 85 05 750 3 51 15 073 4. ON EXAMINATION IT WAS FOUND THAT THE ASSESSEE HAS SHOWN A SUM OF RS.53 82 923/- AS SECURITY IN THE RELEVANT ASSESSMENT YEAR THEREFORE THE ASSESSING OFFICER ASKED TO JUSTIFY THE CLAIM SEEKING THE NAME OF THE DISTRIBUTORS AGENTS PARTIES ETC TO WHOM THE SECURITIES WAS PAYABLE BUT THE ASSESSEE FAILED TO PRODUCE THE PARTIES OR JUSTIFY HIS ITA NO.3344&3689/M/2013 A.Y. 1997-98 4 CLAIM OF RETURN OF SECURITY THEREFORE THE CLAIM OF THE ASSESSEE WAS DECLINED AND THE SAID SECURITY WAS CONSIDERED AS INCOME OF THE ASSESSEE. IN APPEAL THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE TO THE EXTENT OF EVIDENCE PRODUCED AS THE ASSESSEE JUSTIFIED THE CLAIM IN CONNECTION WITH THE 14 PARTIES OUT OF 27 DEPOSITORS. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT ASSESSING OFFICER WAS WRONG IN TREATING SECURITY IN RESPECT OF BOTTLES AND CRATES AS UNEXPLAINED CREDIT. IT IS SPECIFICALLY ARGUED THAT THE SECURITIES RECEIVED FROM THE PARTIES IN RESPECT OF BOTTLES AND CRATES IS NOT LIABLE TO BE TREATED AS UNEXPLAINED CREDIT AND IS NOT ALSO LIABLE TO BE TAXED SPECIFICALLY IN VIEW OF THE LAW SETTLED BY THE HONBLE SUPREME COURT OF INDIA IN CASE OF UNITED BREWERIES LIMITED VS. STATE OF ANDHRA PRADESH DECIDED ON 04.03.1997 AND INCOME TAX APPELLATE TRIBUNAL MADRAS IN CASE OF SIVA BEVERAGES VS. INCOME TAX OFFICER 1991 38 ITD 125 MAD DECIDED ON 23 RD APRIL 1991. 5. IN VIEW OF THE ABOVE SAID LAW IT IS HELD THAT THE DEPOSIT IS RETAINED AS LIQUIDATED DAMAGES FOR THE LOSS OF THE BOTTLES. THERE IS A CLEAR INTENTION NOT TO SELL THE BOTTLE THEREFORE THE DEPOSIT CANNOT BE CONSIDERED AS THE PRICE OF THE BOTTLES. IN VIEW OF THE SAID LAW WE ARE ALSO OF THE VIEW THAT THE DEPOSIT ON SECURITY HAS BEEN RETAINED AS LIQUIDATED DAMAGE FOR THE LOSS OF THE BOTTLES WHICH IS LIABLE TO RETURNED TO THE BOTTLE CARRIERS BUT IT IS ALSO NECESSARY ON THE PART OF THE ASSESSEE THAT HE SHOULD PROVE HIS CASE OF SECURITY BY ADDUCING SUFFICIENT AND ITA NO.3344&3689/M/2013 A.Y. 1997-98 5 COGENT EVIDENCE ON RECORD. CIT(A) HAS ALLOWED THE CLAIM OF THE 14 PARTIES OUT OF 27 PARTIES. NO DOUBT IN THE INTERCONNECTED APPEAL OF THE REVENUE THE QUESTION OF ALLOWANCE TO THE EXTENT OF 14 PARTIES HAS ALSO BEEN RAISED. ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE LEGAL POSITION IS QUITE CLEAR AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF UNITED BREWERIES LIMITED VS. STATE OF ANDHRA PRADESH (SUPRA) AND INCOME TAX APPELLATE TRIBUNAL MADRAS IN CASE OF SIVA BEVERAGES VS. INCOME TAX OFFICER (SUPRA). SINCE THE ASSESSEE WANTED TO ADDUCE SOME MORE EVIDENCE IN SUPPORT OF HIS CLAIM WHICH LIES AT PAGE 15 TO 52 OF THE PAPER BOOK I.E. CONFIRMATION LETTERS OF THE PARTIES THEREFORE WE ARE NOT INTENDED TO CONFINE THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 14 PARTIES OUT OF 27 PARTIES AS RESTRICTED BY THE CIT(A) WHILE DECIDING THE APPEAL OF THE ASSESSEE IN HIS ORDER UNDER CHALLENGE. WE OPEN THE CLAIM OF THE ASSESSEE TO THE EXTENT OF WHOLE OF THE AMOUNT AND REMAND THE CASE TO THE FILE OF ASSESSING OFFICER TO EXAMINE THE CASE OF THE ASSESSEE IN VIEW OF THE OBSERVATIONS AND LAW DISCUSSED ABOVE AFTER BEING GIVEN AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY WE ALLOWED THE APPEAL OF THE ASSESSEE AND DISMISSED THE APPEAL THE REVENUE. ITA NO.3689/MUM/2013(REVENUES APPEAL):- 6. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.27 56 621/- IN RELATION TO 14 DEPOSITORS OUT OF 27 ITA NO.3344&3689/M/2013 A.Y. 1997-98 6 DEPOSITORS ON THE GROUND THAT THE ASSESSEE HAD FURNISHED CONFIRMATION LETTERS FROM SUCH DEPOSITORS DURING THE APPELLATE STAGE AND THE ASSESSING OFFICER CANNOT IGNORE THEM FOR THE REASON OTHER SUPPORTING DOCUMENTS SUCH AS INVOICE COPY ETC. WERE NOT FURNISHED. (I) THAT THE LEARNED CIT(A) WHILE TREATING THE CONFIRMATION ALONE AS SUFFICIENT EVIDENCE FAILED TO APPRECIATE THAT THESE CONFIRMATIONS HAD BEEN PRODUCED AS ADDITIONAL EVIDENCES AND IT WAS HERE DUTY TO DEMONSTRATE THAT THEY WERE CREDIBLE AND RELIABLE IN THE ABSENCE OF SUPPORTING DOCUMENTS BEFORE ORDERING DELETION OF ADDITION MADE OF RS.27 56 621/-. 7. THE FACTS OF THE CASE ARE THE SAME AS DISCUSSED ABOVE IN ITA NO.3344/MUM/2013 HOWEVER THE FIGURE IS DIFFERENT. THE ISSUE RAISED IN THE SAID APPEAL IS QUITE SIMILAR OF THE ISSUE DECIDED ABOVE ACCORDINGLY THIS APPEAL IS ALSO DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED AND APPEAL OF THE REVENUE IS HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 28 TH OCTOBER 2016 MP ITA NO.3344&3689/M/2013 A.Y. 1997-98 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. / BY ORDER //TRUE COPY// / /(DY./ASSTT. REGISTRAR) / ITAT MUMBAI