M/s Kamadhenu Milk & Milk Products, Cochin v. ACIT, Ernakulam

ITSSA 34/COCH/2006 | misc
Pronouncement Date: 26-08-2010

Appeal Details

RSA Number 3421916 RSA 2006
Assessee PAN AAFHK4594L
Bench Cochin
Appeal Number ITSSA 34/COCH/2006
Duration Of Justice 4 year(s) 4 month(s) 6 day(s)
Appellant M/s Kamadhenu Milk & Milk Products, Cochin
Respondent ACIT, Ernakulam
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 26-08-2010
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 26-08-2010
Assessment Year misc
Appeal Filed On 20-04-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T. (S& A ) .NO. 34 /COCH/200 6 BLOCK PERIOD:01 - 04 - 1995 TO 04 - 10 - 2001 M/S. KAMADHENU MILK & MILK PRODUCTS KOCHI-16. PA NO.AAFHK 4594 L VS. THE ASST. COMMISSIONER OF INCOME-TAX CENT.CIR.I ERNAKULAM. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI R. SREEKANTAN NAIR RESPONDENT BY DR. BABU JOSEPH SR.DR O R D E R PER N.VIJAYAKUMARAN J.M: THIS IS AN APPEAL BY THE ASSESSEE VIZ. M/S. KAMAD HENU MILK & MILK PRODUCTS KOCHI FOR THE BLOCK PERIOD 0 1-04-1995 TO 04-10-2001. THIS APPEAL IS DIRECTED AGAINST TH E ORDER OF THE CIT(APPEALS)-I KOCHI DATED 01-02-2006. 2. THE FACTS RELEVANT ARE THAT THE ASSESSEE FIRM WA S CONSTITUTED BY A PARTNERSHIP DEED DATED 23-05-2000. THERE WAS A SEARCH OPERATION U/S.132 OF THE I.T.ACT ON 04 -10-2001 AT THE OFFICE OF THE MANAGING PARTNER SHRI C.P.UDA YBHANU 40/6678 RAZEENA COMPLEX MULLASSERY CANAL ROAD KO CHI-11 AND AN AGREEMENT DEED DATED 23-05-2000 FOR THE SALE OF IT(S&S)A NO. 34/COCH/2006 2 M/S. KAMADHENU MILK PRODUCTS AND M/SS. KMP MILK PRO DUCTS P. LTD. WAS FOUND AND SEIZED. AS PER THIS AGREEME NT THE ALLEGED SALE CONSIDERATION WAS RS. 2 00 00 000/- (R UPEES TWO CRORES) WHEREAS THE RECORDED CONSIDERATION WAS ONLY RS.1 32 50 000/- AND THE EXPLAINED SOURCE WAS ONLY RS.75 LAKHS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE DIFFERENCE OF RS.1 25 00 000/- WAS THE UNDISCLOSED INCOME OF THE ASSESSEE AND THUS FRAMED THEE ASSESSMENT U/S .158BC R.W.S.158BD AND 144 OF THE I.T.ACT. ON APPEAL TO T HE CIT(APPEALS) THIS WAS CONFIRMED. HENCE THE ASSE SSEE IS ON SECOND APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THIS BENCH OF THE TRIBUNAL I N THE CASE OF M/S. KAMADHENU MILK PRODUCTS VS. ACIT [IT(S&S)A NO.152/COCH/2004] FOR THE BLOCK PERIOD 01-04-1995 T O 04- 10-2001 DATED 15-05-2009 WHICH IS SELLER FIRM IN WHICH CASE TRIBUNAL DELETED THE VERY SAME ADDITION FROM T HE HEAD CAPITAL GAINS FOR THE REASONS STATED THEREIN. TH E LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE IMPUGNE D AGREEMENT DATED 23-05-2000 IS ONLY TO GET LOAN FROM THE BANK AND WAS NOT ACTED UPON. SALE WAS TAKEN PLACE BY A SALE DEED EXECUTED ON 01-06-2000 AND LOAN WAS ALSO IT(S&S)A NO. 34/COCH/2006 3 OBTAINED FROM PEOPLES URBAN CO-OPERATIVE BANK TRIP UNITHRA. THEREFORE TRIBUNAL ACCEPTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THE AGREEMENT DATED 23-05-2000 WAS NO T ACTED UPON. BUT IT IS ONLY THE REGISTERED SALE DE ED DATED 01-06-2000 WAS ACTED UPON AND FOR THAT LOAN WAS ALS O OBTAINED FROM PEOPLES URBAN CO-OPERATIVE BANK TRIP UNITHRA. THUS THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY A RGUED THAT THE SEIZED AGREEMENT WAS NEVER ACTED UPON IN I TS PROPER SPIRIT AND THE ORDER OF THE TRIBUNAL DATED 1 5-05-2009 WILL HOLD GOOD FOR THE REASONS BEING ELABORATELY DI SCUSSED THEREIN. HOWEVER THE LD. DR WOULD CONTEND THAT T HE DETAILS OF SALE CONSIDERATION AS PER THE FIRST AGREEMENT WH ICH IS SEIZED DOCUMENT HAS REPRODUCED IN THE ASSESSMENT OR DER AT PARA.7 SUB-CLAUSE (II). IN THIS ALL THE THREE HEA DS WERE GIVEN WHICH INCLUDES PROCESSING PLANT AT UDYOGAMAN DAL CHILING PLANT AT SALEM VEHICLE OTHER EQUIPMENTS FURNITURE AND FIXTURES GOODWILL. THESE ARE ALL THE PROJEC TED CAPITAL EXPENDITURE AS PER THE SEIZED DOCUMENT AND THERE IS NO EXPLANATION FROM THE SIDE OF THE ASSESSEE WHY THESE DOCUMENTS SHOULD NOT BE TAKEN AS DOCUMENT REFLECTIN G THE TRUE VALUE OF THE CONSIDERATION. THE BURDEN IS ON THE ASSESSEE TO PROVE THAT THIS IS NOT A DOCUMENT ACTED UPON AND IT IS A DUMP DOCUMENT. WHEN THIS WAS NOT P ROVED IT(S&S)A NO. 34/COCH/2006 4 SUFFICIENTLY THE ADDITION AS SUSTAINED BY THE AUTH ORITIES IS QUITE JUSTIFIED IS THE VEHEMENT ARGUMENT OF THE LD . SR. DR. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. ON IDENTICAL SET O F FACTS IN THE CASE OF M/S. KAMADHENU MILK PRODUCTS SELLER FI RM THIS ISSUE WAS DEALT WITH BY THE TRIBUNAL AND FINALLY CA ME TO A CONCLUSION THAT THE DEPARTMENT IS NOT JUSTIFIED IN MAKING THE ADDITION AS THIS AGREEMENT IS BEING HALF BAKED ARRA NGEMENT WAS TO AVAIL LOAN FROM THE BANK WHICH DID NOT MATER IALIZE AND THE PARTIES HAVE GIVEN A GO BY TO THE AGREEMENT AND IMMEDIATELY WITHIN SEVEN DAYS THE PARTIES ENTERED INTO A SALE DEED STIPULATING THE ACTUAL SALE CONSIDERATION . ON THIS SET OF FACTS THE TRIBUNAL DELETED THE ADDITION AND SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW BY DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AS THIS IS THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE C ASE OF SELLER FIRM THE SAME DECISION BEING CONSISTENT TO BE FOLLOWED IN THE CASE OF PURCHASER FIRM WHICH IS THE PRESENT ASSESSEE UNDER APPEAL BEFORE US. THEREFORE FOLLOWING THE SAID ORDER WE SET ASIDE THE ORDERS OF THE AUTHORITIES B ELOW AND ALLOW THE APPEAL OF THE ASSESSEE. IT(S&S)A NO. 34/COCH/2006 5 5. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM DATED THE 26 TH AUGUST 2010. PM. COPY FORWARDED TO: 1. M/S. KAMADHENU MILK & MILK PRODUCTS VETTATH BUILDI NG WARRIAM ROAD KOCHI-16. 2. THE ACIT CENT.CIR.I ERNAKULAM. 3. CIT(A)-I KOCHI. 4. CIT CENTRAL KOCHI. 5. D.R.