M/s Sunil Exports, Bangalore v. DCIT, Bangalore

ITSSA 40/BANG/2009 | misc
Pronouncement Date: 22-10-2010 | Result: Allowed

Appeal Details

RSA Number 4021116 RSA 2009
Bench Bangalore
Appeal Number ITSSA 40/BANG/2009
Duration Of Justice 11 month(s) 23 day(s)
Appellant M/s Sunil Exports, Bangalore
Respondent DCIT, Bangalore
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 22-10-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-10-2010
Date Of Final Hearing 09-09-2010
Next Hearing Date 09-09-2010
Assessment Year misc
Appeal Filed On 29-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER IT(SS)A NO.40/BANG/2009 ASSESSMENT YEAR : BLOCK ASSESSMENT PERIOD 1.4.1986 TO 31.3.1996 & UPTO 19.6.1996 M/S. SUNIL EXPORTS BY FORMER PARTNER MR. B.N. AGARWAL B 202 SPARTAN HEIGHT APARTMENTS NO.55/57 RICHMOND ROAD BENGALURU 560 025. : APPELLANT VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1) BENGALURU. : RESPONDENT APPELLANT BY : SHRI NINGOJI RAO C.A. RESPONDENT BY : SHRI G.V. GOPALA RAO CIT-I(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE FIRM IS DIRECTED AGAI NST THE ORDER OF ASSESSING OFFICER U/S 143(3) R.W.S. 158BC OF THE ACT DATED: 30.12.2008 FOR THE BLOCK PERIOD 1.4.1986 TO 31.3.1996 AND UPTO 19.6.1996. 2. THE BACK-GROUND OF THE CASE IN BRIEF WAS THAT THE ASSESSEE FIRM [THE ASSESSEE IN SHORT] FILED ITS RETURN OF INCOME FOR THE BLOCK PERIOD IT(SS)A NO.40/BANG/09 PAGE 2 OF 8 REFERRED SUPRA ADMITTING AN INCOME OF RS.35.02 LAK HS AND THE ASSESSMENT WAS CONCLUDED ON 29.8.1997 BY MAKING CERTAIN DISALL OWANCES AND ADDITIONS WHICH WAS CHALLENGED BEFORE THE HONBLE T RIBUNAL. 2.1. THE HONBLE TRIBUNAL IN ITS FINDING IN ITA NO : 139/B/97 DT.22.3.2002 DIRECTED THE AO TO ALLOW DEDUCTION U/S 80HHC OF THE ACT. 2.2. DISENCHANTED THE REVENUE TOOK UP THE ISSUE B EFORE THE HONBLE HIGH COURT AND CONSEQUENT OF WHICH THE HON BLE HIGH COURT IN ITS RULING IN ITA NO:399 OF 2002 DT: 15.11.2007 REMITTE D BACK THE ISSUE TO THE AO TO CONSIDER THE DEDUCTION CLAIMED BY THE ASSESSE E IN ACCORDANCE WITH CH. VI A OF THE ACT. 2.3. ACCORDINGLY THE AO HAD DURING THE COURSE OF REASSESSMENT PROCEEDINGS CALLED FOR VARIOUS ITEMS SUCH AS INWAR D REMITTANCE OF FOREIGN TRADE BANK STATEMENTS AND BOOKS FOR VERIFICATION T O FIND OUT THE GENUINENESS OF THE ASSESSEES CLAIM U/S 80HHC OF TH E ACT. AS THE ASSESSEE HAD PLEADED ITS INABILITY TO COMPLY WITH T HE AOS REQUEST THE AO WAS OF THE VIEW THAT SINCE THE GENUINENESS OF THE C LAIM COULD NOT BE VERIFIED THE ASSESSEES CLAIM WAS TURNED DOWN AS T HE ASSESSEE HAD NOT SATISFIED THE CONDITIONS LAID DOWN IN THE SAID SECT ION. 3. DISILLUSIONED WITH THE ASSESSEE HAD APPROACHED THE TRIBUNAL FOR RELIEF. DURING THE COURSE OF HEARING BEFORE TH E EARLIER BENCH THE SUBMISSION MADE BY THE ASSESSEE IS SUMMARIZED AS UN DER: THE ASSESSEE WAS A COMPANY (SIC) FIRM WHOSE ACCOUNT S WERE SUBJECTED TO AUDIT U/S 44AB OF THE ACT AND ALL THE BOOKS OF ACCOUNT WERE BEFORE THE AO AND THE ASSESSEE WAS ALL OWED THE DEDUCTION U/S 80HHC BEFORE THE DATE OF SEARCH WHERE BY THE IT(SS)A NO.40/BANG/09 PAGE 3 OF 8 ASSESSEE HAD FULFILLED THE CONDITIONS NECESSARY FOR CLAIMING SAID DEDUCTION BUT THE AO HAD ERRONEOUSLY TURNED DOWN ITS CLAIM. TO SUPPORT ITS CLAIM THE ASSESSEE HAD FURNISHED A PAPER BOOK WHICH CONTAINED THE COPY OF THE ASSESSEES APPLICAT ION FURNISHED U/S 154(2) OF THE ACT BEFORE THE AO WITH A REQUEST TO RECTIFY THE MISTAKE WHICH WAS APPARENT FROM THE AOS IMPUGNED O RDER DT.30.12.2008. 3.1. ON BEING QUERIED BY THE BENCH AS TO THE OUTCO ME OF THE SAID APPLICATION THE LD. AR CAME UP WITH AN ASSERTION T HAT THE AO HAD YET TO TAKE A DECISION ON THE ASSESSEES APPLICATION. 3.2. AFTER DUE CONSIDERATION OF RIVAL SUBMISSIONS THE HONBLE BENCH [IN ITS ORDER IN IT (SS)A NO:40/B/09 DT: 21.5 .2010] HAD OBSERVED THUS 5WE FIND THAT THE ASSESSING OFFICER WHILE GIV ING EFFECT TO THE ORDER OF THE HONBLE HIGH COURT OF KA RNATAKA HAS CALLED FOR VARIOUS DETAILS AND OBSERVING THAT THE A SSESSEE COULD NOT PRODUCE THE SAME THE ASSESSING OFFICER TOOK A STAND THAT THE PLEA OF THE ASSESSEE IS NOT ALLOWABLE. HOWEVER TH E ASSESSEE HAS FILED AN APPLICATION U/S 154(2)(B) ALONG WITH ALL T HE RELEVANT DETAILS AND SUBMITTING THAT ALL THE DETAILS WERE AV AILABLE BEFORE THE AO. AS THE SAID APPLICATION IS STILL PENDING B EFORE THE AO AND THE ARGUMENTS RAISED BEFORE US ARE ALSO RAISED THERE AND AFTER CONSIDERING THE SAME THE AO IS LIKELY TO COM E TO A CONSIDERED CONCLUSION WE ARE OF THE VIEW THAT THE DECISION OF AO MUST BE AWAITED AS SUCH A DECISION WOULD BE COMPREHENSIVE ORDER WHICH CAN BE CHALLENGED BEFORE THE TRIBUNAL. IN VIEW OF THE SAME WE DO NOT SEE ANY R EASON TO INTERFERE WITH THE ORDER OF THE AO AT THIS STAGE. 3.3. SUBSEQUENTLY THE ASSESSEE CAME UP BEFORE THE BENCH IN THE FORM OF A MISC. PETITION WITH A PLEA TO RECALL ITS EARLIER ORDER DT. 21.5.2010 (SUPRA) ON THE GROUND THAT THE AO HAD DISPOSED OFF THE ASSESSEES APPLICATION U/S 154(2)(B) OF THE ACT VIDE ORDER DT. 23.4.2010 BUT THE SAME WAS NOT BROUGHT TO THE REFERENCE OF THE EARLIER BEN CH ON THE DATE OF HEARING IT(SS)A NO.40/BANG/09 PAGE 4 OF 8 AS THE ASSESSEE WAS NOT AWARE OF THE SAID ORDER. IT WAS THEREFORE PRAYED THAT THE DISMISSAL OF THE ASSESSEES APPEAL BY THE TRIBUNAL ON THIS GROUND WAS A MISTAKE APPARENT FROM RECORD ETC. 3.4. AFTER DUE CONSIDERATION OF THE FACTS OF THE I SSUE AND FOR THE REASONS RECORDED THEREIN THE BENCH IN ITS ORDER IN M.P. NO: 72/B/10 DATED: 16.7.2010 HAD RECALLED ITS EARLIER ORDER DT.21.5.20 10 AND RESTORED THE ORIGINAL APPEAL OF THE ASSESSEE FOR ADJUDICATION. 4. WE SHALL NOW PROCEED TO DEAL WITH THE GRIEVANCE OF THE ASSESSEE AS RAISED IN ITS ORIGINAL APPEAL [IT (SS) A NO.40]. 5. THE ASSESSEE HAS RAISED SIX GROUNDS IN AN ILLUS TRATIVE MANNER. GROUND NO.1 BEING GENERAL IN NATURE AND NO SPECIFIC ISSUE INVOLVED IT DOESNT SURVIVE FOR ADJUDICATION. IN THE REMAINING GROUNDS THE CRUXES OF THE ISSUES RAISED ARE REFORMULATED AS UND ER: (I) THE AO ERRED IN NOT ALLOWING THE CLAIM FOR DEDUCTIO N U/S 80HHC OF THE ACT; & (II) THE AO ERRED IN NOT GIVING CREDIT FOR RS.21.03 LAKH S WHICH WAS DULY PAID BY THE ASSESSEE. 5.1. DURING THE COURSE OF HEARING THE LD. A R REI TERATED MORE OR LESS WHAT WAS SUBMITTED BEFORE THE EARLIER BENCH WH ICH HAS BEEN DULY NARRATED IN THIS ORDER SUPRA. IN FURTHERANCE THE LD. A R HAD FURNISHED A COPY OF THE IMPUGNED ORDER OF THE AO U/S 154 OF THE ACT DT: 23.4.2010. THE LD. D.R PRESENT WAS DULY HEARD. IT(SS)A NO.40/BANG/09 PAGE 5 OF 8 6. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS DILIGENTLY PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTA RY EVIDENCES PRODUCED BY THE LD. A.R IN THE SHAPE OF A PAPER BOO K. 6.1. ON A CAREFUL PERUSAL OF THE IMPUGNED ORDER OF THE AO U/S 154 OF THE ACT DT: 23.4.2010 WE FIND IN ESSENCE THAT (ACCORDING TO THE AO) AS THERE WAS NO MISTAKE APPARENT FROM RECORDS OF THE I MPUGNED ORDER U/S 143(3) R.W.S.158BC OF THE ACT DT: 30.12.2008 WHICH REQUIRES TO BE RECTIFIED U/S 154 OF THE ACT AND AS SUCH HE REJECTED THE ASS ESSEES APPLICATION U/S 154(2)(B) OF THE ACT. 6.2. AS NO APPEAL IS PREFERRED AGAINST THE ORDER O F THE AO U/S 154 OF THE ACT BEFORE US WE ARE NOT INCLINED TO VIEW T HE MERITS OR OTHERWISE OF THE AO ON THIS POINT. 6.3. HOWEVER THE EARLIER BENCH IN ITS FINDING CI TED SUPRA HAD OBSERVED THUS [AT THE COST OF REPETITION - REPRODUC ED] 5WE FIND THAT THE ASSESSING OFFICER WHILE GIV ING EFFECT TO THE ORDER OF THE HONBLE HIGH COURT OF KARNATAKA HAS C ALLED FOR VARIOUS DETAILS AND OBSERVING THAT THE ASSESSEE COULD NOT P RODUCE THE SAME THE ASSESSING OFFICER TOOK A STAND THAT THE PLEA OF THE ASSESSEE IS NOT ALLOWABLE. HOWEVER THE ASSESSEE HAS FILED AN APPLICATION U/S 154(2)(B) ALONG WITH ALL THE RELEVANT DETAILS AND SUBMITTING THAT ALL THE DE TAILS WERE AVAILABLE BEFORE THE AO. AS THE SAID APPLICATION IS STILL PE NDING BEFORE THE AO AND THE ARGUMENTS RAISED BEFORE US ARE ALSO RAISED THER E AND AFTER CONSIDERING THE SAME THE AO IS LIKELY TO COME TO A CONSIDERED CONCLUSION WE ARE OF THE VIEW THAT THE DECISION OF AO MUST BE AWAITED AS SUCH A DECISION WOULD BE COMPREHENSIVE ORDER WHICH CAN BE CHALLENGED BEFO RE THE TRIBUNAL. IN VIEW OF THE SAME WE DO NOT SEE ANY REASON TO INTER FERE WITH THE ORDER OF THE AO AT THIS STAGE. IT(SS)A NO.40/BANG/09 PAGE 6 OF 8 6.4. AS THE GRIEVANCE OF THE ASSESSEE HAS NOT BEEN MITIGATED BY THE DECISION OF THE AO IN HIS IMPUGNED ORDER DT: 23 .4.2010 WE SHALL NOW DEAL WITH THE ISSUES RAISED BY THE ASSESSEE IN ITS ORIGINAL GROUNDS. I. DEDUCTION U/S 80HHC OF THE ACT : THE HONBLE JURISDICTIONAL HIGH COURT IN ITS ORDER IN ITA NO:399 /2002 DATED: 15.11.2007 REMITTED BACK THE ASSESSEES CASE ON THE FILE OF THE AO TO CONSIDER THE DEDUCTION CLAIMED BY THE ASSESSEE I N ACCORDANCE WITH CH. VI-A OF THE ACT. SINCE THE ASSESSEE HAD PLEADED D URING THE COURSE REASSESSMENT PROCEEDINGS BEFORE THE AO ITS INABILI TY TO PRODUCE THE DOCUMENTARY EVIDENCES FOR ITS CLAIM ACCORDINGLY THE AO TOOK A VIEW THAT IN THE ABSENCE OF ANY PROOF THE GENUINENESS OF THE ASSESSEES CLAIM COULD NOT BE ASCERTAINED AND THUS HE DENIED THE CLAIM FOR DEDUCTION U/S 80HHC OF THE ACT. HOWEVER DURING THE COURSE OF HEARING THE LD. A.R FURNISHED A PAPER BOOK CONTAINING 1 -71 PAGES WHICH CONSIST OF AMONG OTHERS COPIES OF EXPORT SALE PROCEEDS REALIZATION CERTIFICATES F OR THE PERIODS FROM 1.4.93 TO 31.3.94 1.4.95 TO 31.3.96 & 1.4.96 TO 31.3.97 R ESPECTIVELY (P 42 - 68). THIS PIECE OF DOCUMENTARY EVIDENCE WAS NOT PLACED B EFORE THE ASSESSING AUTHORITY DURING THE COURSE OF REASSESSMENT PROCEED INGS CONSEQUENT ON THE DIRECTION OF THE HONBLE HIGH COURT CITED SUPRA . IN THE INTERESTS OF NATURAL JUSTICE THIS ISSUE IS REMITTED BACK ON THE FILE OF THE AO WITH A SPECIFIC DIRECTION TO LOOK IN TO THE MATTER AFRESH WITH REFERENCE TO THE EVIDENCES WHICH WILL BE FURNISHED BY THE ASSESSEE AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROV ISIONS OF THE ACT AT THAT IT(SS)A NO.40/BANG/09 PAGE 7 OF 8 RELEVANT TIME OF COURSE AFTER AFFORDING A REASONABLE OPPORTUNI TY TO THE ASSESSEE OF BEING HEARD. IN THE MEANWHILE THE ASS ESSEE THROUGH ITS A.R IS ADVISED TO PRODUCE ALL THE RELEVANT PARTICULARS AND EVIDENCES WHICH WOULD FACILITATE THE AO TO IMPLEMENT THE DIRECTION OF THIS BENCH REFERRED SUPRA. IT IS ORDERED ACCORDINGLY. II. CREDIT FOR THE TAXES PAID : THE OTHER GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO GIVING CREDIT TO THE TAXES PAID BY THE ASSESSEE. THE CLAIM OF THE A SSESSEE WAS THAT IT HAD PAID RS.21 03 340/- AS TAXES WHEREAS CREDIT WAS GIV EN ONLY TO THE EXTENT OF RS.15 55 885/- (VIDE IMPUGNED ORDER UNDER DISPUTE) AND THEREFORE PLEADED THAT SUITABLE DIRECTION BE GIVEN TO THE AO TO GIVE CREDIT FOR THE BALANCE AMOUNTS. HOWEVER ON A GLIMPSE OF THE ORD ER U/S 154 OF THE ACT DATED: 10.6.2002 [SOURCE: P 36 OF PB AR] WE FIND THAT TOT AL TAXES PAID BY THE ASSESSEE WAS ONLY TO THE TUNE OF RS. 18 05 885 /- AND NOT RS. 21 03 340 /- AS ATTRIBUTED BY THE ASSESSEE. HOWEVER THE AO SHA LL LOOK INTO THIS ASPECT WHILE IMPLEMENTING THE DIRECTION OF THIS BENCH REFE RRED SUPRA AND TO TAKE CORRECTIVE STEP IF SO WARRANTS . THE ASSESSEE IN THE MEANWHILE IS DIRECTED TO PRODUCE PROOF IF ANY FOR HAVING PAID RS.21 03 340/- BEFORE THE AO WHICH WOULD ENABLE HIM TO TAKE SUITABLE ACTION IN T HIS REGARD. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT : THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES . IT(SS)A NO.40/BANG/09 PAGE 8 OF 8 PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF OCTOBER 2010. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 22 ND OCTOBER 2010. DS/- COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE. 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE