ACIT, Bangalore v. M/s Concorde Shelters Pvt. Ltd.,, Bangalore

ITA 854/BANG/2009 | 2004-2005
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 85421114 RSA 2009
Bench Bangalore
Appeal Number ITA 854/BANG/2009
Duration Of Justice 5 month(s)
Appellant ACIT, Bangalore
Respondent M/s Concorde Shelters Pvt. Ltd.,, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-01-2010
Date Of Final Hearing 14-10-2009
Next Hearing Date 14-10-2009
Assessment Year 2004-2005
Appeal Filed On 21-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE A BENCH BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV JM AND SHRI A. MOHAN ALANKAMONY AM ITA NO.854(BANG.)/2008 (ASSESSMENT YEAR : 2001-02) SHRI RADHESHYAM RANDER NO.31 RAMANNAPET J.M.ROAD CROSS BANGALORE APPELLANT VS THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-5(1) BANGALORE RESPONDENT ASSESSEE BY : SHRI V. CHANDRASEKHAR REVENUE BY : SMT. JACINTA ZIMI K VASHAI O R D E R PER SHAILENDRA KUMAR YADAV JM : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) BANGALORE DATED 18-03-2008 ON THE FOLLOWING GROUNDS; 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE ASSESSEE IS AGAINST LAW EQUITY FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING TH E ADDITIONS OF RS.4 44 023/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN HOLDING THAT A SUM OF RS.5 00 960/- IS NOT AN ALLOWABLE EXPENDITURE AS PER EXPLANATION TO SEC. ITA NO.854(B)/08 2 37(1) OF THE IT ACT 1961 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE CLAIM IS NOT UNDER SECTION 37(1) BUT UNDER SECTION 28 OF THE INCOME-TAX ACT 1961. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF DR.T.A.QUERESHI VS CIT REPORTED IN 287 ITR PAGE 547 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE ASSESSEE DENIES HIMSELF LIABLE TO E CHARGED TO INTEREST UNDER SECTION 234B AND 234D OF THE IT ACT 1961 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ASSESSING OFFICER AFTER TAKING INTO CONSIDE RATION THE STATEMENT OF THE ASSESSEE BEFORE THE CUSTOMS AUTHOR ITIES THE ORDER OF THE COMMISSIONER OF CUSTOMS BANGALORE CONCLUDED TH AT THE ASSESSEE WAS THE OWNER OF THE GOODS AND SINCE THE INVESTMENT IN THE PURCHASE OF THE SAME HAS NOT BEEN REFLECTED IN THE BOOKS HE AD DED THE VALUE OF THE GOODS AT RS.18 15 689/- TO THE TOTAL INCOME. THE A O IS OF THE VIEW THAT UNLESS HE IS THE OWNER THE ASSESSEE WOULD NO T HAVE TAKEN POSSESSION OF THE GOODS BY PAYING RS.12.00 LAKHS AN D THIS VERY FACT SHOWS THAT THE ASSESSEE IS THE OWNER. FURTHER IN THE SWORN STATEMENT BEFORE THE CUSTOMS AUTHORITIES THE ASSESSEE HAS AD MITTED THAT HE IS IN THE LINE OF BUSINESS FOR THE PAST SEVERAL YEARS AND SMUGGLING TAKES PLACE IN THIS TRADE. HE ALSO REQUESTED THE CUSTOMS AUTHORITIES THAT HE ITA NO.854(B)/08 3 BE ALLOWED TO TAKE POSSESSION OF THE GOODS BY DEPOS ITING RS.12.0 LAKHS TOWARDS CUSTOMS DUTY AND ADJUDICATION LEVIES AND TH IS VERY REQUEST SHOWS THAT THE ASSESSEE IS THE OWNER OF THE GOODS. IN VIEW OF THE ABOVE FACTS AS NARRATED IN PARA-9 OF THE ASSESSMENT ORDE R THE AO CONCLUDED THAT THE ASSESSEE HAS PURCHASED 2 293.99 KGS OF SIL K YARN OUTSIDE THE BOOKS OF ACCOUNT WHOSE VALUES AS PER THE CUSTOMS AU THORITIES IS RS.18 15 689/- AND ADDED BACK THE SAME TO THE INCOM E OF THE ASSESSEE BEING INCOME FROM UNDISCLOSED SOURCES INVESTED IN T HE PURCHASE OF GOODS. 3. IN APPEAL THE CIT(A) HAVING CONSIDERED THE SU BMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER OBSERVED THAT THE CONTRABAND SILK YARN ALLEGEDLY TO BE BELONGING TO THE ASSESSEE WAS INTERCEPTED IN TRANSIT AND SEIZED BY THE DRI/CUSTOMS DEPARTMENT. THE GOODS WERE ULTIMATELY RELEASED TO THE ASSESSEE AFTER LEVY OF CUSTOMS DUTY AND ADJUDICATION CHARGES. FROM THE COURSE OF EVENTS NARRATED BY THE AO IN THE ASSESSMENT ORDER THERE IS NO DOUBT THAT THE CONFISCATED GOODS BELONGED TO THE ASSESSEE. BY HIS ACTION OF CLAIMING THE GOODS ON P AYMENT OF THE CUSTOMS DUTY/OTHER CHARGES THE ASSESSEE HIMSELF HAS ADMITT ED THE OWNERSHIP OF THE SILK YARN. HIS ALLEGATION THAT THE GOODS WERE FORCED UPON HIM IS BASELESS. THE MAIN ISSUE TO BE DECIDED IN THIS APPE AL IS WHETHER THE ASSESSEE HAS PAID FOR THE GOODS WHICH WERE VALUED B Y THE CUSTOMS AUTHORITIES AT RS.18 15 689/-. THE ASSESSEE CONTEN DS THAT HE HAS PAID FOR ITA NO.854(B)/08 4 THE SAME AND HE WAS COERCED TO TAKE THE GOODS ON PA YMENT OF DUTY. HOWEVER THE AO HAS MADE OUT A CASE THAT THE ASSESS EE IS THE OWNER AND HE WAS LIABLE TO PAY THE DUTY TO GET THE GOODS RELE ASED WHICH HE HAS DONE. WITH REGARD TO THE PAYMENT FOR THE PURCHASE OF THE SAID GOODS THE AO IS OF THE VIEW THAT THE ASSESSEE HAS PAID FOR IT OUT OF HIS UNDISCLOSED INCOME AND HENCE HE HAS BROUGHT THE SAME TO TAX AS INVESTMENT IN PURCHASE OF GOODS WHICH HAS NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SEC.69 OF THE IT ACT. FROM THE SUBMISSIONS OF THE ASSESSEE WITH SUPPORTING EVIDENCES IN THE FO RM OF ENTRIES IN THE BOOKS OF ACCOUNT PARTICULARLY THE PURCHASE REGISTE R THE QUANTITATIVE TALLY OF GOODS PURCHASED AND SOLD DURING THE YEAR THE SA LES INVOICES AND THE STOCK REGISTER IT WAS NOTICED THAT THE ASSESSEE HA S ACCOUNTED FOR PURCHASES OF 2286.110 KGS OF YARN ON 14-09-2000 IN THE PURCHASE REGISTER WHEN THE CONFISCATED GOODS WERE RELEASED T O HIM BY THE CUSTOMS DEPARTMENT ON PAYMENT OF RS.12.00 LAKHS. THE VALUE OF THE SAID GOODS WAS TAKEN AT RS.12.00 LAKHS ONLY BEING THE CUSTOMS DUTY/ADJUDICATION LEVIES AND NO FURTHER COSTS FOR THE SAME HAS BEEN R EGISTERED IN THE PURCHASE ACCOUNT. IT IS ALSO NOTICED FROM THE SALES ACCOUNT THAT THE ASSESSEE HAS ACCOUNTED FOR THE SALE OF THE SAID SIL K YARN OF 2286.110 KGS FOR RS.13 71 666/- AND THE SALES HAVE BEEN MADE TO 15 PARTIES THE COPIES OF WHICH WERE FURNISHED FOR VERIFICATION DURING THE APPEAL HEARING. FROM THE ABOVE FACTS IT IS CLEAR THAT THE ASSESSEE HAS NOT TAKEN THE COST OF THE ITA NO.854(B)/08 5 GOODS EXCEPT THE DUTY PAID ON THE SAME IN HIS PURCH ASE ACCOUNT AND HE HAS ACCOUNTED FOR THE ENTIRE SALE PROCEEDS IN THE S ALES ACCOUNT. IN VIEW OF THESE FACTS THE CIT(A) WHILE CONSIDERING THE ARGU MENTS OF THE LEARNED AR WITH REGARD TO UPHOLDING THE ADDITION TO A MAXIMUM EXTENT OF RS.4 44 023/- (BEING THE DIFFERENCE BETWEEN THE VAL UATION OF CONFISCATED SILK YARN DETERMINED BY THE CUSTOMS DEPARTMENT AT R S.18 15 689/- AND THE CONSIDERATION RECEIVED ON SALE OF THE SAID GOOD S AT RS.13 71 666/-) SEEMS TO BE LOGICAL. OTHERWISE MAKING AN ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PURCHASES AND ALSO ASSESS ING THE SALE VALUE OF THE SAME WOULD AMOUNT TO DOUBLE TAXATION. THEREFOR E THE ADDITION ONLY TO THE EXTENT OF RS.4 44 023/- IS SUSTAINED OUT OF RS.18 15 689/-. APART FROM THIS OTHER DISALLOWANCE OF RS.5 00 960/- WAS ALSO DISALLOWED BY INVOKING EXPLANATION TO SECTION 37(1) OF THE IT ACT . 4. IN THIS REGARD LEARNED AR SUBMITTED THAT THE AB OVE SAID MATTERS ARE SUB-JUDICE BEFORE THE EXCISE CUSTOM AND GOLD C ONTROL APPELLATE TRIBUNAL. THE SAME HAS BEARING ON THIS ISSUE AT H AND SO REQUESTED TO SET ASIDE THE MATTER TO AO TO DECIDE THE FINALITY O F EXCISE CUSTOMS GOLD CONTROL APPELLATE TRIBUNAL MATTER. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE IN THIS REGARD. TAKING OVERALL VIEW OF T HE SITUATION IT IS FOUND UNDISPUTED THAT THE APPEAL IS PENDING BEFORE THE CO NCERNED EXCISE CUSTOMS GOLD CONTROL APPELLATE TRIBUNAL BANGALORE . SO IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF CIT(A) AND RE STORE THE MATTER TO AO ITA NO.854(B)/08 6 WITH A DIRECTION TO DECIDE THE SAME AS PER FACTS AN D LAW ALSO AFTER TAKING INTO CONSIDERATION THE FINAL OUT COME ON THE ISSUE AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE WE RE STORE THE MATTER TO FOR THE REASONS STATED ABOVE WE REFRAIN TO MAKE ANY CO MMENT ON THE ISSUE AT HAND. 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31-03-20 10. (A. MOHAN ALANKAMONY) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: BANGALORE DATED: 31-03-2010 AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) 7. GF(DELHI) BY ORDER AR ITAT BANGALORE