Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD :: empanelment :: Central Excise rule to resale the machines to a new company :: form 3cd :: cpt :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: TDS :: due date for vat payment
 
 
From the Courts »
  Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 CIT vs. Greenfield Hotels & Estates Pvt. Ltd (Bombay High Court)
 IndiaBulls Financial Services Ltd vs. DCIT (Delhi High Court)
 Maharao Bhim Singh of Kota vs. CIT (Supreme Court)
 Ravneet Takhar Vs. Commissioner Of Income Tax Ix And Ors.
 Jaiprakash Associates Ltd. Vs. Commissioner Of Income Tax
 Formula One World Championship Limited Vs. Commissioner Of Income Tax, International Taxation-3 And Anr.
 Commissioner Of Income Tax International Taxation-3 Delhi Vs. Formula One World Championship Ltd. And Anr.
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)

DALMIA CEMENT (BHARAT) LTD. Vs. THE COMMISSIONER OF INCOME TAX
September, 16th 2014
$~R-58
*    IN THE HIGH COURT OF DELHI AT NEW DELHI

                                   Date of decision: 13th August, 2014

+                         ITA 56/2002

      DALMIA CEMENT (BHARAT) LTD.       ..... Appellant
              Through  Mr. Simran Mehta, Advocate.

                          versus

      THE COMMISSIONER OF INCOME TAX..... Respondent
              Through  Mr. Kamal Sawhney, Sr. Standing
              Counsel.

      CORAM:
      HON'BLE MR. JUSTICE SANJIV KHANNA
      HON'BLE MR. JUSTICE V. KAMESWAR RAO

SANJIV KHANNA, J. (ORAL)

      This appeal by the assessee-Dalmia Cement (Bharat) Ltd. relates

to assessment year 1982-83 and was admitted to hearing vide order

dated 15th July, 2002, on the following substantial question of law:-

             "Whether the Tribunal was justified in
          sustaining the addition of Rs.1,99,000/- and
          Rs.49,750/-, respectively made by the Assessing
          Officer and the CIT (Appeals)"

2.    The assessment for the assessment year 1982-83 was completed

under Section 143 of the Income Tax Act, 1961 (Act, for short) vide

order dated 29th March, 1985. Subsequently, it was reopened under

Section 148 read with Section 147 of the Act and return declaring ,,nil

income was filed on 16th April, 1993. The reopening was necessitated


ITA 56/2002                                           Page 1 of 11
in view of the appellate orders passed in the proceedings for the

assessment year 1985-86.          We shall refer to the said order

subsequently.

3.    The appellant-assessee, as an exporter, was issued import

licence,        dated      12th       March,       1981,        bearing

No.P/W/2940019/C/XX/781/D/180. As per the terms, the appellant-

assessee could import goods valued at Rs 5,00,000/- under the licence

or could have assigned the licence to an actual user of the imported

goods. In the latter case, the appellant-assessee was required to ensure

complete documentation and file papers before the Chief Controller of

Imports and Exports.    The appellant-assessee had claimed that the

aforesaid licence of Rs.5,00,000/- was assigned to M/s. United

Engineers & Traders (Regd.), Ghaziabad (for short, "UET"), a

partnership firm, under an agreement dated 19th February, 1981, on

receipt of premium of Rs.37,500/-. It is an admitted and accepted case

that the appellant-assessee could not file necessary documentation for

utilization before the Chief Controller of Imports and Exports.

Believing that the appellant-assessee had sold the imported goods in

the open market and earned unaccounted income, the assessments for

the year in question were reopened. The Assessing Officer made an

addition of Rs.1,99,000/- and Rs 49,750/-, observing that the assessee

had not been able to show that the goods in question were actually
ITA 56/2002                                          Page 2 of 11
imported by UET and were utilised by them. The Assessing Officer in

this regard relied upon documents as well as the statement of Joginder

Singh, a partner of UET. He also relied upon the statement of G.

Kapoor, a partner of M/s. H.M. Doyal & Co., who had purportedly

acted as an agent of UET.




4.    The aforesaid addition was confirmed by the Commissioner of

Income Tax (Appeals) and by the Tribunal in the impugned order dated

24th August, 2001.

5.    Learned counsel for the appellant-assessee has submitted that the

findings recorded by the authorities and the Tribunal are perverse and

contrary to the material on record.       He has highlighted that the

Assessing Officer himself had accepted genuineness of all the invoices

under the same import licence. Our attention was drawn to the

documents placed on record, which include a letter dated 19th

February, 1981, written by the appellant-assessee to UET and states

that the appellant assessee would issue a letter of authority in favour of

UET and all costs, charges and expenses, including charges for

opening of the letter of credit and all other bank charges, would be

borne and paid by UET; a letter dated 19th February, 1981 written by

UET by which they had made part payment to the appellant-assessee

and required them to issue a letter of authority in favour of M/s. H.M.

Doyal & Co; another letter dated 20th February, 1981 was written by
ITA 56/2002                                            Page 3 of 11
UET stating that they were making payment of Rs.15,000/- and a letter

of authority be issued in favour of M/s. H.M. Doyal & Co.; and a copy

of letter of authority dated 25th March, 1981. Our attention was drawn

to the invoice dated 3rd June, 1981 for the import of consignment under

the aforesaid import licence issued by a company in Sweden in favour

of M/s. H.M. Doyal & Co., the bill of lading issued in the name of the

United Bank of India and M/s. H.M. Doyal & Co., which was also

dated 3rd June, 1981. Reference was made to the invoice which was

accepted by the Assessing Officer and was dated 3 rd July, 1981 in the

name of M/s. H.M. Doyal & Co. and the bill of lading in respect of the

said invoice, also dated 3rd July, 1981.

6.    The invoice dated 3rd July, 1981, and import thereon, which has

been accepted by the Assessing Officer, refers to the same import

licence, but this would not show that the import made under the

invoice in question dated 3rd June, 1981 was genuine and the material

imported under the invoice dated 3rd June, 1981 was not sold in the

open market.     In respect of the invoice dated 3 rd July, 1981, the

Assessing Officer did not make any addition after noticing that there

was a letter from Asia Transport Company, addressed to UET that

categorically stated that the imported goods had been cleared through

them and had been transported to Delhi. They had forwarded a lorry
ITA 56/2002                                         Page 4 of 11
receipt after endorsement in favour of UET. It was stated by Asia

Transport Company that goods had been imported by UET and had

been sent by them to the said party as clearing and forwarding agents.

It is apparent that Asia Transport Company had supported the claim of

the appellant-assessee in respect of the said invoice and the Assessing

Officer gave benefit of doubt in respect of the said consignment. As

recorded below, we have reservations on this finding and cannot regard

and treat the said finding as conclusive and binding for the

consignment covered under invoice dated 3rd June, 1981. Moreover the

facts are distinguishable as for the invoice dated 3rd June, 1981, there

was no letter of the clearing agent. The imported consignment covered

by the invoice dated 3rd June, 1981 consisted of 12 packages. The

Assessing Officer has specifically noted and recorded that UET in their

affidavit dated 15th February, 1985 had stated that they had not

imported the goods in question under the said invoice. In fact, they

had stated that they had not imported the goods under any of the two

invoices. In categorical terms, they had denied any import whatsoever.

The assessment order further records that during the course of

proceedings for the assessment year 1985-86, statement on oath was

made by Joginder Singh that UET had not affected any

import under the aforementioned import licence.     Commissioner        of

Income        Tax   (Appeals)   went     into   details,   as       before
ITA 56/2002                                          Page 5 of 11
him the assessee had relied upon the letter of credit as well as the

statement of accounts, which was obtained by the Assessing Officer

from M/s. H.M. Doyal & Co. in support of his contention that the

transaction covered by invoice dated 3rd June, 1986 was also genuine

and no addition was justified. Commissioner of Income Tax (Appeals)

noticed that the statement of accounts furnished by M/s. H.M. Doyal &

Co. started from 10th September, 1981 and the transaction in question

or the invoice in question was dated 3rd June, 1981. Bill of lading was

dated 3rd June, 1981 and the letter of credit, which was opened with

United Bank of India was also dated 3rd June, 1981. The statement of

accounts, furnished by M/s. H.M. Doyal & Co. did not show any

opening balance as on 10th September, 1981. Thus the statement of

account furnished by M/s H.M Doyal & Co. would not help decide the

issue in favour of the appellant-assessee or exonerate them. The

Commissioner of Income Tax (Appeals) referred to the statement of G.

Kapoor dated 18th March, 1988 that the endorsement on the letter of

credit had been done by his uncle, who was a partner in the firm, M/s.

H.M. Doyal & Co.; G. Kapoor had denied any business relationship or

connection prior or later to the said transaction. In his statement, G.

Kapoor had stated that money was received by demand draft, which

was brought by Sunderlal and Mool Chand Gupta. Commissioner of

Income Tax (Appeals) made specific reference to the statement of
ITA 56/2002                                         Page 6 of 11
Joginder Singh dated 17th March, 1988 in which he had denied having

imported any goods or making any payment. Joginder Singh had

stated that blank letter heads were signed by him as actual user of the

goods and this was done on consideration of a 2% commission.        He

denied any business dealing with M/s. H.M. Doyal & Co.

Commissioner of Income Tax (Appeals) emphasised that the appellant-

assessee had not furnished utilisation of the licence on behalf of the

UET in the statement submitted to the Chief Controller of Imports and

Exports. Commissioner of Income Tax (Appeals) observed that the

bill of lading for the import had been endorsed by the appellant-

assessee in favour of UET. This indicated and showed that they were

aware of the import in question and plea to the contrary should not be

accepted. He also recorded a finding that the appellant-assessee had

not been able to show that in which account of Rs.37,500/- purportedly

received by them was credited and the appellant-assessee had pleaded

inability to produce the said accounts on the ground that the books

were not traceable.

7.    The appeal filed by the appellant-assessee was dismissed by the

Tribunal primarily relying upon the findings recorded by the

Commissioner of Income Tax (Appeals) and also noticing that

Joginder Singh had clearly denied having made any import under the

licence in question. Specific reference was made to the affidavit filed
ITA 56/2002                                         Page 7 of 11
by Joginder Singh.

8.    Learned counsel for the appellant-assessee has submitted that the

statement of Joginder Singh, his affidavit and the statement of G.

Kapoor of M/s. H.M. Doyal & Co. should not have been taken into

consideration and should have been ignored as the appellant-assessee

was not given any opportunity to cross-examine and was not

confronted with the aforesaid statements/affidavit. Impugned order

passed by the Tribunal does not reveal that any such contention was

raised. Appellant-assessee has filed grounds of appeal raised before

the Tribunal, but we find that no such assertion or contention was

raised therein. In fact, it was pleaded that the statement and affidavit

of Joginder Singh should not be accepted because there were

documents supporting import of goods against the invoice dated 3rd

July, 1981 and payments made to M/s. H.M. Doyal & Co. by UET, by

way of demand drafts, were duly recorded in the books of accounts of

M/s. H.M. Doyal & Co. for the period between 10th September, 1981

onwards. Further, in respect of the invoice dated 3rd July, 1981, M/s.

Asia Transport Company had duly confirmed the import of goods.

9.    As noticed above, in respect of the consignment covered by the

second invoice dated 3rd July, 1981, no addition has been made by the

Assessing Officer primarily for the reason that M/s. Asia Transport

Company had confirmed having sent the lorry receipt for transportation
ITA 56/2002                                          Page 8 of 11
of goods along with their bill to UET. In these circumstances, the

appellant-assessee was given benefit and no addition was made in

respect of this invoice. However, in regard the invoice dated 3rd June,

1981, there was no evidence or material whatsoever. It is noticeable

that the statement of accounts furnished by M/s. H.M. Doyal & Co. did

now show any opening balance as on 10th September, 1981.            G.

Kapoor, in his statement recorded on oath under Section 131 of the

Act, had stated that they were purely a trading concern and had

dealings with four companies. They used to make local purchases at a

petty scale. They were not importing goods and the firm, i.e. M/s.

H.M. Doyal & Co., had not been dealing in purchase or sale of import

licences. G. Kapoor categorically denied having made any import

under the licence in question. However, he has accepted that the letter

of credit facility was opened by the firm with Union Bank of India and

payments were made by them for the release of documents.            He

accepted that they had acted as an agent of UET, but the transaction

was through Mool Chand Gupta, who was known to his uncles friend ,

Sardari Lal Talwar, but he was not able to tell or state to whom the

documents were handed for imported goods. The said Sardari Lal

Talwar had expired. G. Kapoor could not answer the question as to

how he had endorsed documents in favour of Dalmia International, i.e.

the assessee. He denied having any business connection or relations
ITA 56/2002                                         Page 9 of 11
with UET prior or later to this transaction. Joginder Singh, in his

statement recorded under Section 131 of the Act, had stated that they

were manufacturing cranes and power winches and had a turnover of

Rs.1.5 lacs to Rs. 2 lacs. Sometimes, they purchased imported material

for their manufacturing operations. They had procured import licences

upto 1970-71 but thereafter no licences had been procured by them.

Their firm had not purchased any import licence after 1970-71 up till

1982-83, but some persons had approached him for signatures, as

actual user for importing goods under the licences, and he had

received, commission @ 2% in cash on the goods imported, but he had

never used the said goods and did not even know what goods were

imported.     Letters, purportedly written by UET to the appellant-

assessee, were shown and it was stated by Joginder Singh that he had

signed blank letter heads of the firm and given it to different parties,

who had approached him to sign as actual user of the goods imported.

He denied having known any concern like "Dalmia International" or

"Dalmia Cement (Bharat) Ltd".        He also denied having sent the

demand draft of Rs.15,000/- to Dalmia International. He further denied

having dealings with M/s H.M. Doyal & Co. during 1981-82.




10.   The main focus and contention of the learned counsel for the

appellant-assessee is that once invoice dated 3rd July, 1981 was

accepted and no addition was made, then no addition was justified in
ITA 56/2002                                          Page 10 of 11
respect of the invoice dated 3rd June, 1981. We have considered the

said contention and examined the facts and material, but do not find

any merit in the same. In fact, we feel that the Assessing Officer was

rather liberal in accepting the case of the appellant-assessee in respect

of the invoice dated 3rd July, 1981 and this cannot be a ground or

justification for not making any addition in respect of the invoice dated

3rd June, 1981. The conduct of M/s. H.M. Doyal & Co. relied upon by

the counsel for appellant assessee does not inspire confidence or

absolve them.     In fact, statement of G. Kapoor goes against the

appellant-assessee. We do not, in these circumstances, think that the

order of the Tribunal requires interference on the ground that there was

no evidence or material, or that the order is perverse.

11.   The question of law is accordingly answered against the

appellant-assessee and in favour of the respondent-Revenue.               The

appeal is dismissed. There will be no order as to costs.



                                              SANJIV KHANNA, J.



                                          V. KAMESWAR RAO, J.
AUGUST 13, 2014
NA




ITA 56/2002                                               Page 11 of 11

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
E-catalogue online catalogue E-brochure online brochure online product catalogue online product catalogue e-catalogue Indi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions