T.C.(A) No.987 of 2019 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.07.2020 CORAM HONOURABLE Mr.JUSTICE T.S.SIVAGNANAM and HONOURABLE Mrs.JUSTICE V.BHAVANI SUBBAROYAN T.C.(A) No.987 of 2019 Commissioner of Income Tax Chennai. .. Appellant / Appellant Vs. M/s.Real Exports Pvt Ltd., No.68, C.P.Ramaswamy Road Alwarpet Chennai 600 018. ..Respondent/ Respondent Prayer : Tax Case (Appeal) filed under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 18.07.2019, passed in ITA.No.2099/Chny/2017, Assessment Year : 2006-2007. 1/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 For Appellant : Ms.Hemalatha, Senior Standing Counsel for Income Tax Department For Respondent : Mr.A.S.Sriraman JUDGMENT [Judgment of Court delivered by T.S.SIVAGNANAM,J.] This appeal by Revenue filed under Section 260A of Income Tax Act, 1961 [the 'Act' for brevity] is directed against order dated 18.07.2019, passed by Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai in I.T.A.No.2099/Chmy/2017, for Assessment Year 2006-2007. 2.The Tax Case appeal was admitted on 05.12.2019, on following substantial questions of law : 1.Whether on facts and in circumstances of case, Tribunal was right in holding that since exports were not in dispute and Assessee could have exported goods without any purchases especially when Assessing Officer had clearly established that export sales was not commensurate with opening stock and purchases? 2.Is not finding of Tribunal bad, especially when stock that 2/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 was available on date of sale were less than available stock especially when assessee failed to prove with documentary evidence while granting relief? 3. Whether, on fact and in circumstances of case, Tribunal was right in holding that no fresh evidences was produced before CIT (Appeals) which fact is factually wrong, when fact remains that evidences were placed before CIT (Appeals) and no opportunity was granted to department before passing order which clearly violates Rule 46A? 4. Whether on facts and in circumstance of case, Tribunal was right in not considering fact that matching principle in terms of income and expenditure is not applicable when cash method of accounting is followed as sine qua non for allowability of expenditure there should be nexus between income and expenditure reported for year in question as applicable in terms of Section 36 and 37 of Income Tax Act? 3. We have heard Ms.Hemalatha, learned Senior Standing Counsel for Revenue and Mr.A.S.Sriraman, learned counsel for Assessee. 3/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 4. Assessee is exporter of cotton garments, cotton fabrics, made-ups and silk fabrics and goods and filed its return of income for assessment year 2006-2007 on 27.11.2006, admitting loss of Rs.6,90,20,428/-. Assessee's case was selected for scrutiny under Section 143(3) of Act, and assessment was completed by disallowing sample expenses and addition of undisclosed stocks in relevant to purchases. Assessee filed appeal before CIT(Appeals) which was allowed partly, aggrieved which, Department filed appeal before Tribunal. Tribunal, vide order dated 08.05.2015 remanded matter back to Assessing Officer to reconsider expenditure for made-ups. Assessing Officer sought details from Assessee and by order dated 27.12.2016, Income Tax Department held that Assessee could not produce Inventory register to verify correctness of claim; Assessee had not incurred any expenses on lorry receipt in books and claimed that goods were received on Paid Lorry Receipt basis; and that Assessee could not produce all lorry receipts to verify subsequent entries for goods received; and there were no fresh submissions from Assessee to prove its claim, and accordingly assessment was completed. 4/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 5. Assessee preferred appeal before Commissioner of Income Tax (Appeals)-III, Chennai, who, by order dated 28.04.2017 partly allowed Assessee's appeal. Aggrieved by same, Revenue filed appeal before Tribunal. Tribunal once again examined factual position placed by Assessee before Assessing Officer, at first instance when assessment was completed, and also verified details which were culled out during assessment proceedings after remand order of Tribunal in earlier round of litigation and dismissed Revenue's appeal. 6. We have carefully examined order of CIT(A) as well as Tribunal. As mentioned above, this is second round of litigation and first round culminated with order of Tribunal, remanding matter to Assessing Officer. Assessing Officer has done some factual exercises. This test was corrected by CIT(A). CIT(A) examined matter and rendered finding by partly allowing Assess's appeal. Thereafter, matter was taken before Tribunal in way of appeal by Revenue, wherein, findings of CIT(A) was re-examined by Tribunal, and 5/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 Tribunal, after assigning independent reasons, affirmed order of CIT(A). Thus, we are of considered view that there is no question of law, much less substantial questions of law arises in this appeal. 7. Accordingly, this Tax Case appeal is dismissed and order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 18.07.2019, passed in ITA.No.2099/Chny/2017, is hereby confirmed. No costs. [T.S.S.J.,] [V.B.S.J.,] 09.07.2020 ds Index : Yes / No Speaking Order / Non-speaking Order To: Commissioner of Income Tax Chennai. 6/7 http://www.judis.nic.in T.C.(A) No.987 of 2019 T.S.SIVAGNANAM, J. and V.BHAVANI SUBBAROYAN, J. ds T.C.(A) No.987 of 2019 09.07.2020 7/7 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. Real Exports Pvt Ltd