9911796707
TMI Blog2013 (12) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... e question of penalty imposed on the assessee under section 271(1)(c) of the Act and the question of law is whether the Tribunal was right in cancelling the penalty. This appeal is consequential to the fate of I.T. A. No. 210 of 2007. 2. I. T. A. No. 999 of 2006 is taken as the lead matter. The appeal relates to the assessment year 1993-94. The respondent-assessee is a public limited company by name M. S. International Ltd. (hereinafter referred to as "MSIL" or "the assessee"). The brief facts giving rise to the appeal may be noted. The assessee was incorporated on June 6, 1991. Its business was to manufacture and export synthetic rubber sole sheets. In respect of the assessment year 1993-94, relevant to the previous year ended on March 31, 1993, which is practically the first year of its operation, it filed a return of income on December 30, 1993, declaring a total income of Rs. 2,570. In the return, the assessee claimed deduction of Rs. 6,48,92,549 under section 80HHC. Included in this was a deduction of Rs. 6,05,43,627 in respect of export of synthetic rubber sole sheets to M/s. Taj Al Khaleej General Trading Co. of Dubai (hereinafter referred to as "Taj" of "TAKGT"). It would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were realised through Bank of Baroda from the banker of Taj in Dubai. 3. The Assessing Officer was not satisfied with the assessee's reply. It would appear that the assessee had also submitted replies to the DRI, vide its letters dated August 23, 1995, and December 1, 1995. The assessee also submitted a letter to the Assessing Officer on March 4, 1996, attaching a photocopy of another statement of the Sheikh in which the Sheikh had withdrawn his earlier statement dated December 28, 1994. The Assessing Officer was not prepared to accept the retraction of the Sheikh for the reasons that it was undated, that it was not sworn to before an Oath Commissioner, that the original was not available, that the statement was not collected through any Government agency, etc. In its earlier letter dated November 27, 1995, the assessee had stated to the Assessing Officer that the Sheikh was upset with the assessee's refusal to give certain amount of discount and that was the reason for his giving a statement on December 28, 1994, denying the imports. All these submissions of the assessee were brushed aside by the Assessing Officer for the reasons stated above and also because he suspected that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional evidence was admitted by the Commissioner of Income-tax (Appeals) who eventually held that since the assessment was made on the basis of a single statement of the Sheikh who had retracted the statement and since the second statement of the Sheikh filed by MSIL was not tested by cross-examination, the case was required to be remanded to the Assessing Officer to be examined and framed afresh. He accordingly remitted the matter to the Assessing Officer. 6. In giving effect to the order of the Commissioner of Income-tax (Appeals), the Assessing Officer on February 10, 1999, granted an opportunity to MSIL to produce the Sheikh and also issued summons to him under section 131. He had also sent letters to the Sheikh on February 24, 1997, and March 25, 1997, which remained unanswered by the Sheikh. The Sheikh also did not appear pursuant to the summons issued under section 131 and, therefore, he could not be examined or cross-examined either by the Assessing Officer or by the assessee. On March 5, 1999, the assessee submitted the documents in its possession to show that the exports were genuine. The Assessing Officer, however, in the fresh order of assessment passed on March 31, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; "1. Original Bank certificate from ANZ Grindlays Bank, Dubai, UAE showing bills received by the bank and drawn on M. S. Taj Al Khaleej General Trading Coy. by the assessee after being paid by the bank. 2. Export orders confirmed by M. S. Taj Al Khaleej. 3. Original statement showing credit limit for M. S. Taj Al Khaleej by "Export Credit Guarantee Corporation of India" a Government of India undertaking. 4. Particulars of exports duly endorsed by the customs authorities in the "Duty Entitlement Exemption Certificate" (DEEC book). 5. Bank certificate for export realization. 6. Exchange control declaration from the RBI. 7. Exchange control declaration from the RBI. 8. Attested customs shipping bill cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pping Bill No. 5974, dated December 17, 1992. (15) Invoice No. MI/68, dated January 21, 1993, for export of 1400 Synthetic Rubber Sheets. GR No. AB 395116. (16) Bill of lading No. APLU 004411973, dated March 29, 1993, issued by American President Lines Ltd. (17) Customs Shipping Bill No. 9452, dated January 22, 1993. (18) Duty Exemption Entitlement Certificate Book. Issued and maintained by Department of Revenue (Customs), Government of India bearing serial No. 055526, containing particulars of DEEC, value of the imports licence Rs. 7.20 crores (advance licence), assessee's commitment to export goods of that value, particulars of exports made." (vi) In addition to the above, the assessee also produced evidence to show that the remittances for the export sale were received from Dubai through banking channels which has been overlooked by the Assessing Officer. (vii) The income-tax authorities have ignored the fact that the assessee had exported similar goods to other foreign buyers which have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and its other companies were placed by TAKGT and that the assessee and its other group companies have not all misused the name of TAKGT company. In this very affidavit, the Sheikh further slated that all the orders were placed by the representative of his company, TAKGT, in Dubai and that he was aware of all the imports of every kind done by TAKGT from the assessee's group. Further, in the affidavit, the Sheikh explained that the statement dated December 28, 1994, was made by him on the deceit practiced by the representatives of M/s. Gujarat Apart Polymer Ltd. and its lawyer and that the statement does not have any authenticity at all. The Sheikh further admitted that the telephone number and the P. O. number given on the order form placed with the M. S. group were being used by TAKGT. Further, that no dues against any bills were to be paid and that all the payments have already been made from his accounts in A and Z Grindlays Bank, Deira, Dubai. There was a copy of another declaration from Sheikh Rasheed which was dated and also authenticated by the Dubai Chamber of Commerce and Industry, which repeats the same story to the effect that the orders placed with the M. S. group wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sheikh, but, at the same time, it would also not be fair on the part of the tax authorities re the affidavit, for contradicting which neither is been made nor any evidence has been brought the Department. The fact remains that when the assessee from the documentary evidence is able to prove the export sales made by it to the Sheikh's company TAKGT, Dubai, and having received the amount of Rs. 6,05,43,627 as remittance for the same, through banking channel of Dubai in the Indian Bank the export sales made by the assessee cannot be disbelieved on the solitary statement of the Sheikh made earlier on December 28, 1994, when the same was subsequently retracted by the Sheikh himself in a duly authenticated affidavit." 11. After examining the documentary evidence placed by the assessee the Tribunal held that there was no basis to disbelieve the entire documentary evidence merely because of the statement of the Sheikh made on December 28, 1994. The Tribunal finally held that the tax authorities were not justified in treating the export sale made by the assessee to Taj, Dubai, as non-genuine and in refusing the deduction claimed under section 80HHC. The Tribunal also deleted the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every item of evidence, including the three statements of the Sheikh. It has preferred to rest its decision on the overwhelming documentary evidence adduced by the assessee to prove the exports which included correspondence with the Governmental authorities, their approvals, etc. None of the documentary evidence has been impeached or sought to be discredited on behalf of the Revenue. The Tribunal has also taken due notice of the statements of the Sheikh and has preferred to accept the retraction, supported later by the affidavit dated January 13, 1997, sworn to by him before the Indian Consulate at Dubai. No material has been brought on record or in the course of the proceedings before the Tribunal to throw any doubt on the credibility of the affidavit sworn to before the Indian Consulate in Dubai. The Sheikh was neither produced by the Assessing Officer nor by the assessee and he was not subjected to any examination or cross-examination by the incometax authorities. It is in these circumstances that the Tribunal has chosen to accept the retraction of the Sheikh, supported by the affidavit. Added to this is the fact that there was copious documentary evidence in support of the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
