M/S. CADILA PHARMACEUTICALS LTD. (ERSTWHILE KNOWN AS CASIL INDUSTRIES LTD.),AHMEDABAD vs. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(2), AHMEDABAD

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ITA 1131/AHD/2017Status: DisposedITAT Ahmedabad24 August 2020AY 2009-104 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal remanded the matter back to the Assessing Officer to conduct a detailed inquiry into whether the advances were for purchases and services. If proven, the addition would be deleted. The Revenue's appeal was dismissed due to low tax effect.

What were the facts?

The assessee failed to provide details for sundry creditors amounting to Rs. 2,49,34,596. The Assessing Officer made an addition based on this lack of information. The assessee appealed, and the CIT(A) sought a remand report, but the assessee did not submit required details.

What were the issues?

Whether the addition made under Section 68 for unsubstantiated sundry creditors was justified, and whether the penalty proceedings under Section 271(1)(c) were valid.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH

Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED

For Appellant: Shri S.N. Soparkar, Sr. Adv, Shri Parin Shah, A.R

Cadila Pharmaceuticals V/S DCIT, Circle-1(1)(2), Ltd. (Erstwhile Known as (Erstwhile ACIT(OSD), Casil Industries Ltd.) 708, Range-1) Ahmedabad Sarkhej Dholka Road, Bhat, Ahmedabad-382210 & DCIT, Circle-1(1)(2), Cadila Pharmaceuticals (Erstwhile ACIT(OSD), Ltd. (Erstwhile Known as Range-1) Ahmedabad Casil Industries Ltd.) 708, Sarkhej Dholka Road, Bhat, Ahmedabad-382210 (Appellant) (Respondent) PAN: AAACC6251E Appellant by : Shri S.N. Soparkar, Sr. Adv. & Shri Parin Shah, A.R Respondent by : Shri Vinod Tanwani, Sr. D.R. (आदेश)/ORDER Date of hearing : 17 -08-2020 Date of Pronouncement : 24 -08-2020 & 1101/Ahd/2017 2 . A.Y. 2009-10 PER MAHAVIR PRASAD, JUDICIAL MEMBER

1.

These two appeals have been filed by the Assessee in Revenue in against the order of the Ld. CIT(A). In ITA No. 1131/Ahd/2017, Assessee has taken following grounds of appeal:

1. Ld. CIT(A) erred in law and on facts in confirming addition u/s. 68 of Rs. 1,70,92,889/- in respect of sundry creditors for the reason that appellant failed to submit confirmations ignoring fact that appellant has furnished copies of invoices, bank payment vouchers, confirmations and ledger copies which proves identity, creditworthiness and genuineness of transactions. Ld. CIT(A) ought to have considered the submission of the appellant and delete the entire addition. It be so held now.

2. Initiation of penalty proceedings u/s 271(1)(c) is unjustified.

2.

Facts of the case are that the assessee is in the business of manufacturing of Pharmaceuticals Products and assesseee company had given sundry credits to 50 concerned amounting to Rs. 24934596 and was asked by the Assessing Officer to submit the details of the 50 persons but assessee could not furnish any detail. Therefore, in the absence of required details, Ld. A.O. made disallowance of Rs. 24934596/-.

3.

Thereafter, assesse preferred first statutory appeal before the ld. CIT(A) and assesse filed certain detail of 49 persons amounting to Rs. 24934596/- and stated that all these advances were given for supply of goods and services. Ld. CIT(A) sought remand report from the Assessing Officer but appellant did not & 1101/Ahd/2017 3 . A.Y. 2009-10 submit the required details before the Ld. A.O. in remand proceedings regarding bonafide of the advances and has failed to discharge its onus.

4.

At the outset, Shri S.N. Soparkar, Ld. Senior Advocate requested that in order to meet end of the justice if this matter be sent back to the Assessing Officer with the direction that Ld. A.O. will make enquiry if advances are given for supply of goods and services then disallowances may be deleted.

5.

On the other hand, ld. D.R. has fairly agreed.

6.

Thus, in such circumstances, we remand this matter back to the file of the Assessing Officer to make detailed enquiry whether disallowed amount was paid for purchases and services if it is proved then addition will be deleted by the Ld. A.O.

7.

In the result, appeal filed by the Assessee is allowed for statistical purposes.

8.

Now we come to the revenue has taken following grounds of appeal:

1. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 14,23,179/-.

2. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance made against sundry creditors to the extent of Rs. 78,41,707/- against the addition of Rs. 2,49,34,596/-.

& 1101/Ahd/2017 4 . A.Y. 2009-10 9. At the outset, Shri S.N. Soparkar, ld. Senior Advocate argued that departmental appeal is squarely covered by the CBDT Circular No. 17 of 2019 dated 08.08.2019 wherein no appeal can be filed in ITAT if disputed tax amount is less than Rs. 50 lakhs. In that case, ITAT shall dismiss the appeal of the Revenue.

10.

On the ld. D.R. agreed for the same and stated that this appeal is covered by the CBDT Circular No. 17 of 2019 dated. 08.08.2019.

11.

In the result, appeal filed by the Revenue is dismissed.

12.

In the combined result Assessee is allowed for statistical purpose and ITA N. 1101/Ahd/2017 filed on behalf of the Revenue is dismissed on account of Low Tax Effect covered by the CBDT Circular No. 17 of 2019 dated 08.08.2019.

Order pronounced in Open Court on 24 - 08- 2020 Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 24/08/2020 Rajesh Copy of the Order forwarded to:-

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