M/s. Sai Phytoceuticals,, New Delhi v. ITO, New Delhi

ITA 3738/DEL/2010 | 2006-2007
Pronouncement Date: 10-02-2012 | Result: Allowed

Appeal Details

RSA Number 373820114 RSA 2010
Assessee PAN AAHCS2113E
Bench Delhi
Appeal Number ITA 3738/DEL/2010
Duration Of Justice 1 year(s) 6 month(s) 4 day(s)
Appellant M/s. Sai Phytoceuticals,, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 10-02-2012
Date Of Final Hearing 23-01-2012
Next Hearing Date 23-01-2012
Assessment Year 2006-2007
Appeal Filed On 05-08-2010
Judgment Text
ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 2802/DEL/2010 A.Y. : 2006-07 INCOME TAX OFFICER WARD 7(2) ROOM NO. 306 CR BUILDING NEW DELHI VS. M/S SAI PHYTOCEUTICALS (P) LTD. S-553 GREATER KAILASH-II NEW DELHI (PAN/GIR NO. : AAHCS2113E) I.T.A. NO. 3738/DEL/2010 A.Y.. : 2006-07 M/S SAI PHYTOCEUTICALS (P) LTD. S-553 GREATER KAILASH NEW DELHI VS. INCOME TAX OFFICER WARD 7(2) NEW DELHI AND AND AND AND CROSS OBJECTION NO. 253/DEL/2010 (IN ITA NO. 2802/DEL/2010) A.Y.. : 2006-07 M/S SAI PHYTOCEUTICALS S-553 GREATER KAILASH-II NEW DELHI VS. INCOME TAX OFFICER WARD 7(2) NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. DEEPAK MALIK ADV. DEPARTMENT BY : DR. DIVENDER SINGH D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM SHAMIM YAHYA : AM THESE CROSS APPEALS BY THE REVENUE AND ASSESSEE AN D CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE O RDER OF THE LD. ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 2 COMMISSIONER OF INCOME TAX (APPEALS) DATED 18.3.2010 AND PERTAIN TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL RE AD AS UNDER:- (I) LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN REDU CING THE ADDITION BY ` 3 03 947/- MADE BY THE ASSESSING OFFIC ER ON ACCOUNT OF NP RATE @ 10% OF GROSS SALES. (II) LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN D ELETING THE ADDITION OF ` 39 81 955/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. (III) LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN REDU CING THE ADDITION OF ` 39 81 545/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF UNEXPLAINED INVESTMENT. (IV) THE APPELLANT CRAVES TO AMEND MODIFY ALTER A DD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING T HE HEARING OF THIS APPEAL. 3. THE GROUNDS RAISED IN THE ASSESSEES APPEAL REA D AS UNDER:- (I) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACTS OF THE CASE WHILE RETAININ G ADDITIONS ON ACCOUNT OF :- (A) THE TRADING RESULTS - ` 1 50 000/- (B) BEING DIFFERENCE OF LAST YEAR - ` 5 00 000/- ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 3 / THIS YEAR IN BLOCK ASSETS. (II) THAT THE APPELLANT CRAVE TO ADD DELETE OR AM END ANY GROUND OF APPEAL AT THE TIME OF HEARING. 4. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJEC TION READ AS UNDER:- (I) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED TO RETAIN ` 1 50 000/- OUT OF NET PROFIT E STIMATED @10% OF GROSS SALES OF ` 45 39 472/-. (II) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS CORRECTLY AND RIGHTLY DELETED THE ADDITION OF ` 398 1955/- ON ACCOUNT OF UNSECURED LOAN TREATED AS INCOME FROM UNDISCLOSED SOURCES. (III) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ALSO ERRED IN LAW AND FACTS WHILE RETAINING A LUMP-SUM OF ` 5 00 000/- OUT OF ADDITION OF ` 44 33 545/- ON ACCO UNT OF UNEXPLAINED INVESTMENT IN FIXED ASSETS. 5. IN THIS CASE ASSESSMENT WAS FRAMED BY THE ASSESS ING OFFICER U/S 144 OF THE IT ACT. THE ASSESSING OFFICER NOTED THA T VARIOUS NOTICES WERE SENT TO THE ASSESSEE BUT NO RESPONSE WAS RECE IVED. THE ASSESSING OFFICER OBSERVED THAT IT IS THEREFORE AP PARENT THAT THE ASSESSEE COMPANY HAS NOTHING TO SAY ON THE MATTER A ND THEY HAVE ACCEPTED THAT THEIR BOOKS OF ACCOUNT SHOULD BE REJE CTED U/S 145(3) OF THE IT ACT. THEREFORE THE ASSESSMENT ORDER WAS P ASSED U/S 144 OF THE IT ACT AS UNDER:- ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 4 (I) THE NET PROFIT IS BEING CALCULATED AT 10% OF T HE GROSS SALES OF ` 45 39 472/-. (II) IN VIEW OF THE ASSESSEE COMPANYS FAILURE TO PR OVE THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE GIVERS OF FRESH UNSECURED LOANS AMOUNTING TO ` 39 81 955/- (` 1 67 63 676/- LESS ` 1 27 81 721/-) THE SAME IS BEING ADDED BACK TO THE NET PROFIT IN VIEW OF THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT 1961. (III) IN THE ABSENCE OF AN EXPLANATION AS TO THE SO URCE OF FUNDS THE INCREASE IN THE BLOCK OF FIXED ASSETS TO TALING ` 44 33 545/- (` 1 83 16 681/- LESS ` 1 38 83 136/- ) IS BEING TREATED AS UNEXPLAINED INVESTMENT AS PER PROVISIONS OF SECTION 69 OF THE INCOME TAX ACT 1961 . 6. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ASSESSEE COMPANY INTER-ALIA SUBMITTED THAT ASSESSEE HAS SHIFTE D AT A NEW ADDRESS AND PLEADED THAT NOTICES SENT BY THE ASSESS ING OFFICER WERE NOT RECEIVED BY IT. ASSESSEE ALSO SUBMITTED THAT VARIOUS ARGUMENTS ON THE MERITS OF THE CASE. CONSIDERING THE SAME LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT FROM THE ASSESSME NT ORDER IT IS SEEN THAT ASSESSING OFFICER HAS MENTIONED THAT A NU MBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO FILE NE CESSARY DETAILS BUT IT HAS BEEN CONTENDED BY THE ASSESSEE THAT NOTICES WER E ISSUED BY THE ASSESSING OFFICER AT THE OLD ADDRESS ALTHOUGH THE NEW ADDRESS WAS AVAILABLE ON THE RECORDS OF THE DEPARTMENT. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER MENTIONED THAT ASSESSE E HAS COMPLIED WITH VARIOUS QUESTIONNAIRE AND NOTICES ISSUED BY THE AO AND IT ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 5 CANNOT BE SAID THAT THE ASSESSEE DID NOT COMPLY WITH THE VARIOUS NOTICES/ QUESTIONNAIRE ISSUED BY THE ASSESSING OFF ICER. 6.1 LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT ASSESSING OFFICER HAS PROCEEDED TO FRAME THE ASSES SMENT U/S. 144 HASTILY AND HAS APPLIED THE RATE OF 10% ARBITRARILY . HENCE THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO ` 4 53 947/- IS REDUCED FROM ` 4 53 947 TO ` 1.5 LAKHS TO MEET THE E NDS OF JUSTICE. 6.2 AS REGARDS ADDITION OF ` 39 81 955/- AS INCOME F ROM UNDISCLOSED SOURCES. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBS ERVED THAT ASSESSEE HAS STATED THAT HE HAS SUBMITTED COMPLETE DE TAILS RELATING TO UNSECURED LOAN BEFORE THE ASSESSING OFFICER CONFIR MATIONS WERE ALSO STATED TO HAVE BEEN FILED. IN THE BACKGROUND OF TH IS DISCUSSION LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT ASSES SING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION. HENCE HE DEL ETED THE SAME. 6.3 THE NEXT GROUND RELATING TO ADDITION OF ` 44 33 545/- BEING THE DIFFERENCE OF LAST YEAR IN BLOCK ASSETS AND THE FIG URES OF THIS YEAR. LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT IT H AS BEEN STATED BY THE ASSESSEE THAT THE DETAILS OF SUCH ADDITIONS MADE TO FIXED ASSETS ALONGWITH CERTAIN PURCHASE VOUCHERS WERE FILED BEFO RE THE ASSESSING OFFICER DURING THE COURSE OF APPELLATE PROCEEDINGS . LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERVED THAT IT IS SEEN THAT COPIES OF BILLS OF PLANT AND MACHINERY VALUED AT ` 3 22 400/- WAS SUBMITTED BEFORE THE ASSESSING OFFICER. FURTHER LD. COMMISSIO NER OF INCOME TAX (APPEALS) OBSERVED THAT IT IS SEEN THAT INVOICE OF CAR PURCHASED WERE ALSO SUBMITTED BEFORE THE ASSESSING OFFICER. FROM TH E ABOVE LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT DETAILS RELATING TO ADDITION TO FIXED ASSETS WAS FILED BEFORE THE A SSESSING OFFICER BY ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 6 THE ASSESSEE. DURING THE COURSE APPELLATE PROCE EDINGS ALSO COPIES OF CERTAIN BILLS OF PURCHASES HAVE BEEN FILED. K EEPING IN VIEW THE SUBMISSIONS OF THE ASSESSEE AND THE FACTS AND CIRC UMSTANCES OF THE CASE THE ADDITION MADE BY THE ASSESSING OFFICER W AS REDUCED TO ` 5 LACS. 7. AGAINST THE ABOVE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE AND ASSESSEE ARE IN APPEA LS AND ASSESSEE ALSO FILED CROSS OBJECTION BEFORE US. 8. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THA T ASSESSING OFFICER HAS CATEGORICALLY GIVEN A FINDING THAT ASSESSEE H AS NOT RESPONDED TO THE NOTICE AND NOT REPLIED TO THE DETAILS SOUGHT. 8.1 ON THE OTHER HAND LD. COMMISSIONER OF INCOME TA X (APPEALS) HAS GIVEN A CONTRADICTORY FINDING THAT VARIOUS DETA ILS WERE SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO MENTIONED THAT CERTAIN DE TAILS WERE SUBMITTED BEFORE HIM IN THE APPELLATE PROCEEDINGS A LSO. IN OUR CONSIDERED OPINION THERE IS A VIOLATION OF RULE 46 A IN AS MUCH AS ASSESSING OFFICER HAS NOT BEEN GIVEN ADEQUATE OPPO RTUNITY TO PUT ACROSS HIS OBSERVATION AND OPINION. UNDER THE CIRC UMSTANCES THE INTEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS REMITTED TO THE FILE TO THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NOS. 2802 & 3738/DEL/2010 & CO NO. 253/DEL/2010 7 9. IN THE RESULT BOTH THE APPEALS FILED BY THE R EVENUE AND ASSESSEE AND CROSS OBJECTION FILED BY THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10/2/2012. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 10/2/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5.DR I TAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES