Asif Abdual Karim Bidiwala, 904, Aayesha Tower, Adajan Patia

IN THE INCOME TAX APPELLATE TRIBUNAL
“D” BENCH, AHMEDABAD
BEFORE SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER AND
SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER
ITA No.2066, 2067, 2105/Ahd/2005 & 2542, 2543/Ahd/2006 &
2746/Ahd/2009 & 374/Ahd/2010
A.Ys.2003-04 & 2004-05
Asif Abdual Karim
Bidiwala,
904, Aayesha Tower,
Adajan Patia, Surat.
PAN: AEUPB 3100J
Vs ACIT, Central Circle-2,
Surat.
(Appellant)
(Respondent)
ITA No.2104, 2532, 2533/Ahd/05 & ITA No. 2581, 2582/Ahd/2006
A.Ys.2003-04 & 2004-05
ACIT, Central Circle-2,
Surat.
Vs Asif Abdual Karim
Bidiwala,
904, Aayesha Tower,
Adajan Patia, Surat.
PAN: AEUPB 3100J
(Appellant)
(Respondent)
Revenue by
:
Assessee(s) by :
Shri Vimalendu Verma &
Smt. Sonia Kumar, CITD.R.
Shri Tushar Hemani, A.R.
सुनवाई क तार ख/ Date of Hea ring
:
घोषणा क तार ख /Date of P ronouncement:
19 /01/201 5
23/01/2015
आदेश /O R D E R
PER BENCH
All these twelve Appeals pertain to the Assessment Years 2003-04
and 2004-05 respectively filed by the Assessee and the Revenue
Department. Most of the grounds by either side are connected hence
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-2these Appeals are consolidated and hereby decided by this common
order. For the sake of reference year-wise grounds are reproduced below:
“ITA No.2066/Ahd/2005, A.Y. 2003-04 (Assessee’s Appeal)
1) on the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, Ahmedabad has erred by sustaining the addition of
Rs.23,500/- on account of withdrawal for household expenditure out of total
addition of Rs.43,500/-. Your honour is humbly requested to delete the
addition of Rs43,500/- in full and oblige.
2) On the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, Ahmedabad has erred by sustaining the addition of
Rs.6,20,000/- on account of unexplained investment in flat No.904 at Ayesha
Tower, Adajan Patia, Surat. Sir, Your honour is humbly requested to delete
the addition of Rs.6,20,000/- in full and oblige.
3) On the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, Ahmedabad has erred by sustaining the addition of
Rs.56,863/- on account of unexplainied investment in Bank FDR with interest
accrued thereon. Sir, Your honour is humbly requested to delete the addition
in full and oblige.
ITA No.2104/Ahd/2005, A.Y.2003-04 (Revenue’s Appeal)”
1. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs.20,782/- made on account of estimation of business income.
2. The C1T(A) has erred in law and on facts in directing to restrict the
addition of Rs.43,500/- made on account of unexplained expenditure for
household purposes u/s. 69C of the Act to Rs.20,000/-.
3. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs.3,61,486/- made on account of unexplained capital in the name of Smt.
Anjuman A. Bidiwala wife of the assessee.
4. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs.5,55,000/- as against correct amount of addition of Rs.5,00,000/- made
on account of unexplained investment in purchasing flat no.602 at Ayesha
Tower, as pep the provisions of Section 69 of the Act .
5. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs. 10,550/- made on account of unexplained/expenditure towards
maintenance of flat No.602 at Ayesha Tower, as per the provisions of section
69C of the Act.
6. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs.25,000/- made on account of unexplained investment towards
maintenance deposit for flat No.602 at Ayesha Tower, as per the provisions of
section 69 of the Act.
7. The CIT(A) has erred in law and on facts in admitting additional evidences
in respect of investment of flat without giving opportunity of verification
correctness to the A.O, thus committing violation of Rule 46A of IT Rules.
8. On the facts and circumstances of the case, the learned CIT(A) ought to
have upheld the order of the Assessing Officer.
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-39. It is therefore, prayed that the order of the C1T(A) may be set aside and
that of Assessing Officer may be restored to the above extent.
ITA No.2542/Ahd/2006, A.Y.2003-04 (Assessee’s Appeal)
1. on the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals), Ahmedabad has erred by sustaining the penalty up to
Rs.2,79,220/- i.e. 100% of taxes assessed in case of your appellant. The Ld.
CIT(A), Ahmedabad ought to have deleted the penalty in full. Hence I humbly
request your honour to delete the levy of penalty in full imposed by the Ld. AO
and oblige.
ITA No.2581/Ahd/2006, A.Y.2003-04 (Revenue’s Appeal)”
1. The CIT(A) has erred in law and on facts in reducing the penalty levied
u/s.271(1)(c) of the Act from Rs.8,37,600/- i.e. @ 300 of the tax sought to
be evaded to Rs.2,79,220/- i.e. @ 100% of the tax sought to be evaded.
2. On the facts and in the circumstances of the case and in law, the CIT(A)
ought to have upheld the order of the AO.
3. It is therefore prayed that the order of the CIT(A) be set aside and that of
the AO be restored to the above extent.
ITA No.2532/Ahd/2005, A.Y.2003-04 (Revenue’s Appeal)
1.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition of Rs.20,782/- made on account of estimation of business income.
2.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s,154 r,w,s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to restrict the
addition of Rs.43,500/- made on account of unexplained expenditure for
household purposes u/s.69C of the Act to Rs.20,000/-.
3.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition of Rs.5,55,000/- as against correct amount of addition of
Rs.5,00,000/- made on account of unexplained investment in purchasing flat
No.602 at Ayesha Tower, as per the provisions of section 69 of the Act.
4.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition of Rs.10,550/- made on account of unexplained expenditure towards
maintenance of flat No.602 at Ayesha Tower, as per the provisions of section
69C of the Act.
5.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition of Rs.25,000/- made on account of unexplained investment towards
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-4maintenance deposit for flat No.602 at Ayesha Tower, as per the provisions of
section 69C of the Act.
6.
The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition of Rs.3,61,486/- made on account of unexplained capital in the name
of Smt.Anjuman A. Bidiwala-wife of the assessee.
7. On the facts and in the circumstances of the case and in law, the CIT (A)
ought to have upheld the order of the A.O.
8.
It is, therefore, prayed that the order of the CIT (A) be set aside and that
of the A.O, be restored to the above extent.
ITA No.374/Ahd/2010 A.Y.2003-04 (Assessee’s Appeal)
“1.
The learned C1T(A) has erred in law and on facts of the case in
confirming the action of the Id. AO in making addition of Rs.2,20,000/regarding unexplained investment by making advance rent payment for plot,
ignoring the evidences placed on record by the Appellant to the effect that
only advance rent payment of Rs.37,000/- has been made and that also has
been recorded in the books of Colospers Corporation. Accordingly, the Id.
CIT(A) has erred in law and on facts of the case by not rectifying the mistake
which is apparent from record.
2. Both the lower authorities have erred in law and on facts in passing the
orders without properly appreciating the fact and that he further erred in
grossly ignoring various submissions, explanations and information submitted
by the appellant from time to time which ought to have been considered
before passing the impugned order. This action of both the authorities is in
clear breach of law and Principles of Natural Justice and therefore deserves
to be quashed.
ITA No.2533/Ahd/2005, A.Y.2004-05 (Revenue’s Appeal)
1. The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to delete the
addition to the extent of Rs.13,50,000/- made u/s.69A of the Act on account of
unexplained cash found and seized in the course of search conducted at the
assessee's residential premises on 26/2/2004 and 27/2/2004 accepting the
assessee's unsubstantiated explanation that the cash of Rs.2,50,000/-,
Rs.3,50,000/-, Rs.3,50,000/- and Rs.4,00,000/-belonged to Smt. Anjuman A.
Bidiwala, Smt.Zubead A. Bidiwala, Azilabanu Sajidbhai Hassan Fateh and
Smt. Kalsumbanu Asifbhai Danawala respectively.
2. The CIT(A) has erred in law and on facts in rejecting the rectification
application made by the A.O. u/s.154 r.w.s.250, ignoring the apparent
mistakes that had occurred in the appellate order in directing to restrict the
addition of Rs.3,48,08,000/- made on account of income from export of
bitaionone, carbazole, fenthion and liquid printing ink medium to
Rs.45,68,559/- accepting the net profit ratio in the cases which were relied
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-5upon by the assessee in his submission and further allowing set off against it
the addition of Rs.45,59,500/- sustained on account of unexplained cash
u/s.69A of the Act.
3. On the facts and in the circumstances of the case and in law, the CIT (A)
ought to have upheld the order of the A.O.”
ITA No.2746/Ahd/2009 A.Y.2004-05 (Assessee’s Appeal)
1. (A) Both the Ld. A.O. and Ld. CIT(A) have erred both in law and facts in
considering the export turnover of Rs. 21,75,50,426/- as unaccounted money
launder income in the name of export of M/s. Colospere Chemical
Corporation, an assessee's proprietory concern even though the original
assessment in the name of proprietory concern was finalized at income of Rs.
4,19,05,864/- and reduced to Rs. 53,86,804/- by the appellate authorities and
the matter is pending before Hon'ble I.T.A.T. Ahmedabad.
(B) Both the Ld. A.O. and Ld. CIT(A) have erred both in law and facts in
considering the export turnover of Rs. 24,64,75,786/- of both the partnership
firms viz.
(1)
M/s. Chevrolet Dyes & Intermediates & Agro ChemicalsRs.17,07,03,298/-.
(2) M/s. Cosmos Chemicals & Intermediates - Rs.7,57,72,488/as Asifbhai A. Bidiwala's money launder Income i.e. individual's income even
though the copy of the partnership deed , import - export code of the both the
partnership firms and central excise registration certificate was provided
during the course of the assessment proceedings.
(C) Both the Ld. A.O.and Ld. CIT(A) have erred in considering the entire
export turnover i.e. both of the partnership firm and individual as income of
the assessee from unaccounted money launder in the name of bogus export
without bringing any material on record and without any base.
2. The Ld. A.O. has further erred in making addition and Ld. CIT(A) in
confirming the said addition of Rs.7,23,35,033/- on account of undue benefit
availed on account of bogus export in the hand of Asif A. Bidiwala, even
though it belonged to the various firms where appellant has no connection
with some of them. Further, till date all the DEPB benefit are cancelled by
issuing authority. Therefore there is no question of making addition of the
same as it has not accrued to the assessee.
4. Without prejudice to above, the learned A.O. has erred in reopening the
assessment proceedings u/s.147 and Ld. CIT(A) has erred in confirming
the same as no new facts were brought on record by the A.O. This is
simply a change of opinion. The reopening of assessment is without
jurisdiction and therefore liable to be quashed.
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-6ITA No.2582/Ahd/2006, A.Y.2004-05 (Revenue’s Appeal)
1 The CIT(A) has erred in law and on facts in reducing the penalty U/s
271(1)(c ) of the Act from Rs.52,47,135/- (300% of the tax sought to be
evaded) to Rs. 17,49,045/-(100% of the tax sought to be evaded) without
appreciating the facts that the assessee was completely non co-operative in
the assessment proceedings and had attempted to evade huge tax without any
reasonable cause.
2 On the facts and in the circumstances of the case and in law, the CIT (A)
ought to have upheld the order of the A.O.
3. It is, therefore, prayed that the order of the CIT (A) be set aside and that of
the A.O. be restored to the above extent.
ITA No.2543/Ahd/2006, A.Y.2004-05 (Assessee’s Appeal)
1. On the facts and in the circumstances of the case and in law, the CIT (A)
Ahmedabad has erred by sustaining the penalty up to Rs.17,49,045/- i.e.
100% of taxes assessed in case of your appellant. The Ld. CIT(A),
Ahmedabad ought to have deleted the penalty in full. Hence, I humbly request
your honour to delete the levy of penalty in full imposed by the Ld. AO and
oblige.
ITA No.2067/Ahd/2005, A.Y.2004-05 (Assessee’s Appeal)
1) On the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, A'bad erred by sustaining the addition on account of cash
found to the extent of Rs.45,59,500/-. Your honour is humbly requested to
delete the sustained addition of Rs.45,59,500/- on account of cash found and
oblige.
2) On the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, A'bad erred by sustaining the addition on account of
estimated net profit of the business to the extent of Rs.45,68,559/-. Your
honour is humbly requested to delete the sustained addition of Rs. 45,68,559/on account of estimated net profit of the business and oblige.
3) On the facts and in the circumstances of the case and also in law, the Ld.
C.I.T. (Appeals)-II, A'bad erred by not allowing the Grounds of appeals stated
in para (b) to para (1) of the 2nd Ground of Appeal filed before the Ld. C.I.T.
(Appeals)-II, A'bad. Your honour is humbly requested to delete all the
additions of income added vide para (ii), (iii), (iv), (vi), (vii), (viii), (ix), (x),
(xi) and (xii) of main para - 22 on page - 43 & 44 of the assessment order
dated 31.01.2005.
4) Sir, Your appellant reserves his right to add, alter, amend and/or withdraw
any ground of appeal at the time of hearing of this appeal.
ITA No.2105/Ahd/2005, A.Y.2004-05 (Revenue’s Appeal)
1
The CIT (A) has erred in law and on facts in directing to delete the
addition to the extent of Rs.13,50,000/- made u/s.69A of the Act on account of
unexplained cash found and seized in the course of search conducted at the
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-7assessee's residential premises on 20/2/2004 and 27/2V2004, accepting the
assessee's unsubstantiated explanation that the cash of Rs.2,50,000/-,
Rs.3,50,000/-. Rs.3,50,000/- and Rs.4,00,000/- belonged to Smt. Anjuman A.
Bidiwala Smt.Zubeda A.Bidiwala, Azilabanu Sajidbhai Hassan fateh and Smt.
Kalsumbanu Arifbhai Danawala respectively.
2. The CIT(A) has erred in law and on facts in directing to restrict the
addition of Rs.3,48,08,068/- made on account of Income from export of
bitaionone, carbazole, fenthion and liquid printing ink medium to
Rs.45,68,559/- and in farther directing to allow set off against it the addition
of Rs.45,59,500/- sustained on account of unexplained cash U/s.69A of the
Act.
3. The CIT(A) has erred in law and on facts in directing to delete the addition
of Rs.3,71,054/- made on account of profit on the sale of imported
Acrylamide in the open market.
4. On the facts and in the circumstances of the case and in law, the CIT (A)
ought to have upheld the order of the A.O.
5. It is, therefore, prayed that the order of the CIT (A) be set aside and that of
the A.O. be restored to the above extent.”
2.
In short, the brief background is that the Revenue Authorities have
received an information from “DRI Authorities: that there was a huge
cash found at the residence of the Assessee. The Deputy Director of
Income Tax (Investigation)-II, Surat has conducted the search operation
u/s.132 of IT Act at the residential premises of the Assessee at Surat on
26th February, 2004. In the Assessment Order, it was mentioned that the
Income Tax Authorities have conducted the search operation within 2/3
hours on receiving the information from DRI. It was also noted in the
Assessment Order that the DRI Authorities have found three
consignments of M/s. Clarity International, wherein the Assessee was
found to be a partner. It was alleged that the said consignment did not
contain the chemicals which were purported to be exported. It was found
that only water and some affluent were inside the consignment.
Therefore, the allegation was that the bogus and fraudulent export was
carried out by the Assessee to avail the DEPB benefit. Rather, it was
found that the appellant had obtained 22 DEPB from the office of Joint
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-8DGFT, Vadodara on the strength of shipping Bills & Certificate of
Export. Those consignments were detained by DRI Authorities. A cash
of Rs.46.65 lacs was found at the residence of Sri Asifbhai Abdul Karim
Bidiwala, the Assessee. However, he has claimed that the cash belonged
to 13 persons. It has also been noted by the AO that out of 13 persons 11
were presented and their statements were recorded u/s.132(4) of IT Act.
The AO has discussed vide an order u/s.144 r.w.s. 153A of IT Act dated
31st January, 2005 for A.Y. 2003-04 these facts in detail however
mentioning the statements of various persons and thereupon made the
additions as under:
“Subject to above remarks, total income is computed as under:
Business income as discussed
Rs.75,000/-
Unexplained household expenses as discussed
Rs.43,500
Unexplained Capital in the name of
Smt. Anjuman A. Bidiwala as discussed
Rs.3,61,486/-
Unexplained benami investment in purchase of
Flat No.602 Aayesha Tower in the name of
Smt. Anjuman A. Bidiwala as discussed
Rs.5,00,000/-
Unexplained investment in purchase of
Flat No.904 Aayesha Tower as discussed
Rs.6,20,000/-
Unexplained expenses on Maintenance
Flat no.602 as discussed
Rs.10,550/-
Unexplained investment in Fixed Deposit
receipts And interest thereon as discussed
Rs.56,863/-
Unexplained deposit given to Aayesha Tower
Coop. Housing Society Ltd. Surat on 16.09.2003
as discussed.
Unexplained investment in Advance rent payment
For plot no.1, 2 & 3 Ganesh Krupa Ind. Estate,
Bhestan, Dist. Surat as discussed.
Rs.25,000/-
Total Income
Rs.2,22,000/-
Rs.19,14,399/-
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
-92.1
Likewise for A.Y. 2004-05, the AO has passed an order on 31st
January, 2005 u/s.144 of IT Act regarding the facts about the search
conducted by the Revenue Department and the action undertaken by DRI
Authorities. Thereafter taxed the total income along with alleged export
business income, in the following manner:
““Subject to above remarks, total income is computed as under:
(i)
Unexplained cash u/s. 69A as discussed
Rs.59,09,500/-
(ii)
Jewellery as per Annexure-JF and Jewellery
7 tolas as per Ans. 9 of statement u/s.132(4) of
Smt. Anjuman A. Bidiwala as discussed
Rs. 46,746/-
(iii)
Valuable articles as per Ann.V as discussed
Rs. 86,800/-
(iv)
Repairing expenses for flat NO.904 as per Page
Rs.84,175/-
No.48-49 of file seized (Ann. A-1)
u/s.69C as discussed
(v)
Benami investment in purchase of flat no.605
Zilani B complexed, Adajan Patia, Surat as
Discussed.
Rs.1,15,000/-
(vi)
SMC tax payment for flat No.904 on 10.11.03
As discussed
Rs. 12,024/-
(vii)
Maintenance of flat No.602 and 904 paid on
01.12.2003 as discussed.
Rs.20,000/-
(viii)
Payment of installments for santro car as
Discussed.
Rs.1,12,500/-
(ix)
Initial investment in bank account
No.18120111544 & No.1812103338 as discussed
Rs.15,000/-
(x)
Cash deposited in bank a/c No.1594 on
17.09.2003
Rs.25,000/-
(xi)
Initial investment in M/s. Colosperse
Rs.3,00,000/-
(xii)
Net Income from export business as discussed
Rs.3,48,08,068/-
(xiii)
Premium on sale of Acrylamide in open market
Rs. 37,71,051/-
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 10 as discussed.”
2.2
Since, the addition was connected with the DRI proceedings
therefore in the past years on number of occasions these cases were
adjourned by this Tribunal and on some occasions the cases were blocked
for few months with a direction to inform and place on record the latest
development of DRI proceedings. Today, learned AR, Mr. Tushar
Hemani has placed before us an order of Directorate General of Foreign
Trade (Ministry of Commerce and Industries) ‘H’ Wing Udyog Bhawan
Maulana Azad Road, New Delhi, F-No.11/236/2011-12/ECA-I/1122,
1123 dated 11th July, 2012, under the Nomenclature as under “M/s.
Colosperse Chemical Corporation M-11, Empire State Building, Ring
Road Surat”. Vide this judgment the order was as under:
“4. I have examined the facts and submissions made in this case and noted
that the DEPBs were cancelled and penalty was imposed mainly on the
ground that appellant did not have manufacturing facility and could not
submit document showing purchase of goods from market, however, there is
no discussion about the issue of genuineness of the exports. The contention of
the appellant that even if they did not have manufacturing facility even then
they are entitled to DEPB need to be examined as under relevant Foreign
Trade Policy the merchant exporters were also eligible to get the benefit of
DEPB. I have further noted that there is nothing on the record to show that
Customs Authorities had cancelled the shipping bills by treating it as nongenuine exports, In view of the aforesaid, I am satisfied that the contention of
the appellant, that he should get benefit even as merchant exporter, need to be
examined in details, hence, I am remanding back the case to Adjudicating
Authority. In view of the aforesaid, hi exercise of the powers vested in me
under Section 15 of the FT(D&R) Act, 1992 as amended, I pass the following
order:
The Order-in-Original No. 34/F-3/4/AM05/ECA/B82 dated 17,06.2011 is set
aside and remanded back to Adjudicating Authority for de-novo proceedings
with direction to examine issue of genuineness of exports and eligibility of
appellant to get benefit as merchant exporter.”
2.3
Since, the matter was restored back, therefore an order was passed
by Joint Director General of Foreign Trade, Government of India,
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 11 Ministry of Commerce and Industry, dated 28th of March, 2014 bearing
F.No.34/F-3/4/AM05/ECa/253 under the subject “withdrawal of show
cause notice No.34/F-3/4/AM05/ECA Dated 15/17.09.2004 DEPB
Suspension order no.34/F-3/4/AM05/ECA dated 18.05.2005 as per
Order-in-appeal no.11/236/2011-12/ECA-I/1123 dated 11/18.07.2012.
Regarding the genuineness of the export and the eligibility of DEPB it
was held as under:
9. Regarding genuineness of the exports and eligibility of DEPB benefit to the
firm, this office had re-examined the case and it was observed that :(a) In terms of para 4.3.1 of Foreign Trade Policy, 2003-2004, an Exporter,
irrespective of whether Manufacturer Exporter or Merchant Exporter, is eligible
for DEPB benefit against their exports.
(b) As per ANF 4Gm which is prescribed format for applying for DEPB benefit,
the required documents are:
(i) Application in ANF-4G in duplicate duly signed in every page.
(ii) Self certified valid RCMC.
(iii) Application fee in terms of Appendix-21B
(iv) EP Copy of shipping bills
(v) Bank certificate of Exports and Realization as per given in Appendix-22A.
It is also observed that as per the relevant Policy/Procedure, the "Purchase Bill"
of the export product is not a mandatory document for applying for DEPB benefit
by a Merchant Exporter.
It is further observed that in Para-4 of the Order-in-Appeal, the Appellate
Authority has remarked that "There is nothing on the record to show that the
Customs Authorities had cancelled the shipping bills by treating it as nongenuine exports.
In the absence of any documents from Customs Authority, who has passed the
shipping bills, regarding cancellation of the subject Shipping Bills, the exports
cannot be treated as fraudulent but genuine.
Since based on the available documents as detailed above, the exports are
genuine and as relevant FTP allows DEPB benefit to exporters, irrespective of
Merchant Exporter or Manufacturer Exporter, I hereby accept the firm's
representation dt. 02.12.2013 and hereby withdraw the Show Cause Notice
no.34/F-3/4/AM05/ECA Dated 15/07.09.2004 and also withdraw the aforesaid
cancellation of 22-DEPBs.
This order has been issued keeping in mind the spirit of Hon'ble High Court
ruling and that of the Order of the Appellate Authority at New Delhi.”
3.
From the side of the Appellant, learned AR, Mr. Tushar Hemani
appeared and pleaded that in a situation when the export activity was not
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 12 found as a fraudulent activity but a genuine activity the matter is required
a consideration by the Revenue Authorities. Further, he has also pleaded
that the orders for A.Ys. 2003-04 and 2004-05 were passed by the AO
u/s.144, ex-parte, by not providing adequate opportunity of hearing to the
assessee, therefore, in the light of the decision of Hon’ble Supreme Court
pronounced in the case of Tin Box Company, 249 ITR 216 (SC) the
matter can be remanded back to the file of the AO for fresh
consideration.
4.
On the other hand, from the side of the Revenue Department,
learned DRs, Vimalendu Verma and Smt. Sonia Kumar appeared and
raised the preliminary objection by referring Ground No.7 of the grounds
of appeal which pertained to the infringement of Income Tax Rule 46A.
The contention of the learned CIT-DR is that certain new evidences were
entertained and relief was granted therefore the Revenue Department
deserves an opportunity to rebut those evidences.
5.
Having heard the submissions of both the sides and after perusing
the records of the case we hereby hold that in a situation when an exparte order has been passed by the AO u/s.144 of IT Act then the verdict
of the Hon’ble Supreme Court pronounced in the case of Tin Box
Company (supra) is required to be applied wherein it was held that it was
of no consequence if the evidences were considered at the Appellate
stage and that it is necessary to remand the matter to Assessing Authority
for assessment because the Assessment Order which counts. Respectfully
following this position, as also considering the suggestion of both the
sides, we deem it proper to restore the grounds of both the sides back to
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 13 the stage of the AO to be decided denove, needless to say after providing
an adequate opportunity of hearing to the assessee.
5.1
There is one more reason to restore this issue back to the stage of
the AO because the Revenue Department has objected the acceptance of
certain additional evidences at the stage of first appeal by learned CIT(A)
by not following the procedure prescribed under Rule 46A of IT Act.
Although, it is mentioned in Rule 46A that in one of the circumstance
that where the assessee was prevented by sufficient cause for not
producing evidence before the AO and that this is a case where an exparte order was passed, then the learned CIT(A) was eligible to entertain
new evidences but an opportunity ought to have been given to the AO to
examine the evidence or to cross examine the witness. Because of this
reason as well we deem it proper to restore these grounds back to the
stage of the AO so that those fresh evidences can also be verified.
6.
Lastly, we are restoring this issue back to the stage of the AO
because of this reason as well that the order placed before us of Joint
Director General of Foreign Trade dated 28.3.2014 is pronounced in the
case of M/s. Colosperse Chemicals Corporation Surat, however the fate
of other concerns are also required to be verified; as listed by the AO in
the Assessment Order paragraph 2.2. The Assessee is therefore directed
to place on record the fate of proceedings before DRI Authorities in
respect of those other concerns.
7.
Finally, we also take note of the fact that these are very old matters
but could not be decided earlier on account of the pendency of the cases
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 14 before the DRI Authorities and now the orders have come to a final stage
in the year 2014. Therefore, the Revenue Authorities can take a final
decision in the light of the said orders. Side by side, we hereby direct the
assessee to be present before the AO suo motu within 30 days on receipt
of this order of the Tribunal so that he can place all relevant information
and get these assessments finalize as early as possible. Otherwise, the
Revenue Authorities are at liberty to take proper legal action as
prescribed under law.
8.
Year-wise decision of the Appeals is as under:
(a)
ITA No.2104 & 2066/Ahd/2005 for A.Y. 2003-04 are restored
back to AO hence both these Appeals may be treated as allowed but for
statistical purpose only.
(b)
ITA No.2532/Ahd/2005 & ITA No.374/Ahd/2010 for A.Y.2003-
04 are against the order u/s.154 by CIT(A) and these orders do not
survive because the main Appeals have been restored back for de novo
consideration hence dismissed.
(c)
ITA No.2542 and 2581/Ahd/2006 for A.Y.2003-04. These two
cross appeal are in respect of penalty levied u/s.271(1)(c). Since, the
quantum appeals have been restored back therefore a fresh order
u/s.271(1)(c) is to be passed in the light of the quantum assessment hence
to be treated as allowed for statistical purpose since restored for de novo
consideration.
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 15 (d)
ITA No.2105 and 2067/Ahd/2005 for A.Y.2004-05. These are the
Cross Appeals now restored back to AO hence both these Appeals may
be treated as allowed but for statistical purpose only.
(e)
ITA No.2533/Ahd/2005 for A.Y. 2004-05 is the Appeal of the
Revenue Department arising from the order passed by CIT(A) u/s.154 of
IT Act dated 30th September, 2005 now do not survive in the light of the
restoration of the quantum Appeal back to the stage of the AO. Hence
dismissed.
(f)
ITA No.2746/Ahd/2009 for 2004-05 is an Appeal of the Assessee
arising from the order u/s.147 r.w.s. 144 of IT Act is hereby restored
back for de novo consideration to decide whether the entire unaccounted
income from export is to be taxed in the hands of the Assessee in the
light of the finalization of DRI proceedings. Therefore to be treated as
allowed for statistical purpose only.
(g)
ITA No.2543 and 2583/Ahd/2006 for A.Y. 2004-05. These two
cross appeal are in respect of penalty levied u/s.271(1)(c). Since, the
quantum appeals have been restored back therefore a fresh order
u/s.271(1)(c) is to be passed in the light of the quantum assessment;
hence to be treated as allowed for statistical purpose since restored for de
novo consideration.
Sd/(ANIL CHATURVEDI)
ACCOUNTANT MEMBER
Ahmedabad; Dated 23/01/2015
Prabhat Kr. Kesarwani, Sr. P.S.
Sd/(MUKUL Kr. SHRAWAT)
JUDICIAL MEMBER
ITA Nos.2066, 2104, 2533, 2067, 2105, 2532 -A-2005, 2542, 2581, 2582, 2543A-2006, 2746-A-2009, 374-A-2010
Shri Asif Abdulkarim Bidiwala, Surat
For A.Ys. 2003-04 & 2004-05
- 16 आदेश क
1.
2.
3.
4.
5.
6.
त ल प अ े षत/Copy of the Order forwarded to :
अपीलाथ / The Appellant
यथ / The Respondent.
संबं धत आयकर आयु त / Concerned CIT
आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad
वभागीय
त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
गाड फाईल / Guard file.
आदेशानुस ार / BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad