9911796707
TMI Blog2011 (11) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... plete the assessment in a summary manner is justified - against assessee. Difference in sales in bills vs books - Held that:- There is a discrepancy in the sales bill which as per the assessee was corrected by way of cuttings which are reflected in the sales bills forwarded to the party but the duplicate bill was not corrected. The assessee is thus directed to establish its claim by way of any third party evidence and in the absence of the same, the addition in any case, stands confirmed - Issue remitted back to AO for reconsideration - in favor of assessee by way of remand. - IT APPEAL NO. 219 (CHD.) OF 2011 - - - Dated:- 24-11-2011 - D.K. SRIVASTAVA, MS. SUSHMA CHOWLA, JJ. K. Sampath for the Appellant. Smt. Savita Kumari and Smt. Jyoti Kumari for the Respondent. ORDER Ms. Sushma Chowla, Judicial Member The appeal by the assessee is against the order of CIT(A), Shimla relating to assessment year 2007-08 against the order passed under section 144 of the I.T. Act, 1961. 2. The assessee has raised the following grounds of appeal:- That On the facts and circumstances of the case and in law the following actions of the Ld. Assessing Officer are most ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer noted the assessee to have had main dealing with its sister concern M/s Decor International, New Delhi and M/s Decor International, Rai, Haryana which were the proprietor concern of the partner Shri Suresh Gupta. The above said concerns were found to be already in existence in the business of manufacture and trading of the Venation Blinds. The Assessing Officer further noted the assessee to have started its business by using the capital of M/s Decor International. The perusal of the ledger account of the said concern in the books of account of the assessee revealed that the payments from 8.9.2006 to 21.11.2006 were directly made by M/s Decor International, New Delhi. The credit purchases to the tune of Rs. 7,43,047/- vide bill No. 2591 dated 12.10.2006 were made from M/s Decor International, New Delhi to start the business. Subsequently, credit purchase of Rs. 6,64,568/- vide bill No. 10 dated 16.2.2007 were made from another sister concern i.e. M/s Decor International. The Assessing Officer noted that out of the total purchases of Rs. 19,23,963/- made during the year, purchases to the tune of Rs. 14,32,616/- were made from its sister concerns. Out of the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the material procured from them in order to get the benefit of exemption u/s 80IC of the Act. In view of the abovesaid factual position, the Assessing Officer was of the view that the goods were not manufactured in Himachal Pradesh but were being manufactured at New Delhi or Rai and if any manufacturing was being done, the same was on a nominal scale. In view thereof, the assessee was held to be not entitled to the deduction u/s 80IC of the Act. 6. The Assessing Officer further noted that certain discrepancies in the sale bills i.e. there was a difference in the amount of bill and the amount reflected in the books of account in respect of three bills totaling Rs. 3,70,907/-. The tabulated details of the bills and their corresponding entries in the books of account are reproduced under para 5.1 at page 7 of the assessment order. In view of the above said, the assessee was show caused as to why the books of account be not rejected under section 145(3) of the Act and the assessment be completed u/s 144 of the Act. In reply dated 29.10.2009, it was submitted by the assessee that "Due to mistake of our employees he has shown less quantity in bill No. 66 dated 10.3.2007. 72 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the brand name Deck International. Admittedly, all sales of the assessee were dispatched from Delhi and Rai. The Ld. AR further brought to our notice that the concerns at Delhi and Rai continue to do their activities and new unit was set up at Parwanoo. The Ld. AR further assailed the findings of the Assessing Officer in splitting up and reconstruction of the business and pointed out that as the parties were known to the father, the senior partner, purchases were made from the said concern and even the money was invested by using his connections. Further, distinction was drawn on the cases relied upon by the Assessing Officer. Secondly, it was pointed out by the Ld. AR for the assessee as the same was being got done at job work basis, the objections raised by the Assessing Officer in this behalf were of no basis. Further, as the assessee was new to the field, the vendors supplied the goods to the sister concern. The Ld. AR pointed out that there was no basis in the observation of the Assessing Officer that the sales were inflated to claim higher deduction u/s 80IC of the Act. It was clarified by the Ld. AR that the discrepancy in the figures of sales was because of the mistake of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/Chandi/2009 relating to assessment year 2005-06 vide order dated 30.11.2009 had referred to the provisions of section 80IC of the Act and observed as under:- 6.2 The provisions of Section 80IC(2) of the Act thus provide for two types of Eligible Undertakings. Clause (a) provides for deduction in case of industrial undertakings, which are: (i) Situated in any notified Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park ("Notified Areas") in Sikkim, Himachal Pradesh, Uttaranchal, or any North Eastern State, as defined u/s 80IC(8)(vii); (hereinafter referred as 'Eligible States'); an (ii) are not engaged in the manufacture or production of any article or thing specified in thirteenth schedule of the Act. Clause (b), on the other hand, deals with industrial undertakings, which are: (i) situated in any of the Eligible States, but not in any Notified Areas; and (ii) are engaged in the manufacture or production of any article or thing specified in the fourteenth schedule of the Act." 10. The provisions of section 80IC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain capital investment was made by the said partner by way of payments being directly made by M/s Decor International between period 8.9.2006 to 21.11.2006. Further, certain purchases were also made from the sister concern and majority of the sales were made as credit sales to M/s Decor International, Delhi. The conclusion of the Assessing Officer in view of the above said factual aspects was that the control of the business of the assessee was with the sister concern and the entire capital was that of the sister concern who had either made cash investment or supplied the goods on credit. The requirement of section 80IC(4) of the Act is that the undertaking claiming the deduction under the section should not be formed by splitting up or reconstruction of business already in existence. The factual aspects as pointed out by us in the paras hereinabove reflects that there is no splitting up or reconstruction of a business already in existence as the manufactured goods are sold to the sister concern on credit, which cannot be called a case of reconstruction of business of an entity already in existence. Merely because certain purchases are made from the sister concern or the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.3. 15. The Assessing Officer while completing the assessment noted certain discrepancies in sale bills i.e. there was a difference between the amount reflected in the sale bills and that reflected in the books of account. The tabulated bills of the amount reflected in the sales bills and their corresponding entries in the books of account are reproduced in para 5.1 at page 7 of the assessment order. The total difference in the two accounts amounted to Rs. 3,70,907/-. In view of the above said discrepancy, the Assessing Officer show caused the assessee as to why the books of account be not rejected u/s 145(3) of the Act. The invoking the provisions of section 144 of the Act was to complete the assessment in a summary manner as provided u/s 144 of the Act as the provisions of section 145(3) were found to be applicable. Further, the above said provisions of the section 144 of the Act do not establish that there was default in appearance before the assessing authorities by the assessee under which also the provisions of section 144 of the Act are attracted. In the above said facts and circumstances of the case, we find no merit in the ground No.1 raised by the assessee and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
