2014 (9) TMI 1224 - AT - Income Tax

Addition being bogus/non-genuine/inflated fabrication charges relying on the last year s order - disallowance was made being @ 2.5% on total Dying Printing work, Fabrication charges and raw material expenses - CIT(A) deleted the addition - HELD THAT - Similar relief granted by the CIT(A) was accepted by the revenue authorities and the matter was allowed to reach finality by not challenging the same in appeal. As noted that it is a factual issue and there is no change in the facts or in the legal position. In these circumstances, and in the absence of any specific reasons for deviation of stand by the revenue authorities for this assessment year, we are of the considered view that the Assessing Officer was indeed not justified in raising these grievances against correctness of CIT(A) s order. We, therefore, dismiss the grievances raised by the AO for these short reasons alone, and decline to deal with the merits of these grievances. The preliminary objection raised by the learned counsel is indeed well taken and we approve the same.

Summary

Issues: Challenge to correctness of order by Assessing Officer under section 143(3) for assessment year 2009-10; Deletion of addition of Rs. 39,21,124 as non-genuine fabrication charges; Preliminary objection raised regarding identical relief granted in previous assessment year.

Analysis:

1. Challenge to Correctness of Order: The Assessing Officer challenged the order dated 7th December 2012, passed by the Commissioner (Appeals) for the assessment year 2009-10. The grievances raised by the Assessing Officer included the deletion of Rs. 39,21,124 as non-genuine fabrication charges made to M/s Shakir Zari Arts and M/s Ashu Garments. The AO argued that the CIT(A) erred in law and on facts by relying on the previous year's order and not considering the lack of confirmation and infrastructure for the job work. The CIT(A) was accused of ignoring crucial facts and legal precedents in this regard.

2. Deletion of Non-Genuine Charges: The main issue revolved around the deletion of Rs. 39,21,124 as non-genuine fabrication charges. The Assessing Officer contended that the CIT(A) erred in law and facts by not considering the lack of confirmation and infrastructure for the job work. The AO argued that mere payment through banking channels does not guarantee genuineness. Legal precedents were cited to support the argument that apparent lack of infrastructure raises doubts about the genuineness of the transactions. The Tribunal analyzed the factual matrix and applicable legal position to determine the correctness of the CIT(A)'s order.

3. Preliminary Objection: During the hearing, the counsel for the assessee raised a preliminary objection based on the acceptance of identical relief in the previous assessment year. The counsel argued that the revenue authorities should not challenge the same issue in subsequent years if no material change justifies a different view. Citing legal principles on finality in legal proceedings, the Tribunal agreed with the preliminary objection and dismissed the grievances raised by the Assessing Officer. The Tribunal emphasized the importance of maintaining consistency in decisions based on factual elements and the absence of material changes.

4. Final Decision: The Tribunal dismissed the appeal, upholding the relief granted by the CIT(A) regarding the non-genuine charges. The Tribunal found that the revenue authorities had accepted similar relief in previous years on materially identical facts. Without any material change justifying a different view, the Assessing Officer was deemed unjustified in challenging the CIT(A)'s order. The Tribunal declined to delve into the merits of the grievances raised by the Assessing Officer and approved the preliminary objection raised by the counsel for the assessee. The appeal was ultimately dismissed on the grounds of consistency and lack of justification for deviating from previous decisions.