CKG Pithawala Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(1), Surat

CO 213/AHD/2011

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1366 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-09-2015
• Assessment Year: 1993-1994
• Appeal Filed On: 17-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .. , ( .) , BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2289/AHD/2011 ( / ASSESSMENT YEAR : 1993-94) THE INCOME TAX OFFICER WARD-1(1), MAJURA GATE SURAT / VS. M/S.CKG PITHAWALA PVT.LTD. VANDHANA BHIMPORE POST:DUMAS, SURAT 394 550 % & ./ ./ PAN/GIR NO. : AAACC 9407 E ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) AND C.O. NO.213/AHD/2011 FOR A.Y. 1993-94 (IN ITA NO.2289/AHD/2011 FOR AY 1993-94) M/S.CKG PITHAWALA PVT.LTD. .. THE ITO SURAT 394 550 WARD-1(1),SURAT (CROSS OBJECTOR) VS. (RE SPONDENT) REVENUE BY : SHRI DINESH SINGH, SR.DR ASSESSEE BY : SHRI R.N. VEPARI, AR +, - .& / DATE OF HEARING 14/09/2015 /012 - .& / DATE OF PRONOUNCEMENT 15/10/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD.C OMMISSIONER OF ITA NO.2289/AHD/2011(BY REVENUE) AND CO NO.213/AHD/2011 (BY ASSESSEE ) ITO VS.M/S.CKG PITHAWALA PVT.LTD. ASST.YEAR 1993-94 - 2 - INCOME TAX(APPEALS)-I, SURAT (CIT(A) IN SHORT) DATED 24/06/2011 PERTAINING TO ASSESSMENT YEAR (AY) 1993-94. THE A PPEAL AND THE CROSS OBJECTION ARE TAKEN UP TOGETHER AND ARE BEING DISPO SED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL FILED BY THE REVENU E, I.E. ITA NO.2289/AHD/2011. THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A)-I, SURAT HAS ERRED IN DELETING THE ADDITI ON OF RS.20,19,488/- ON ACCOUNT OF INCOME NOT SHOWN IN TH E P&L ACCOUNT WITH APPRECIATING THE FACT THAT ASSESSEE FAILED TO DISCHARGE THE ONUS LIES UPON HIM FOR NOT OFFERING THE RECEIPT OF RS.20 ,19,488/- IN P&L ACCOUNT. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO TH E ABOVE EXTENT. 2. BRIEFLY STATED FACTS ARE THAT THIS IS SECOND ROU ND OF LITIGATION. IN THE EARLIER ROUND, THE ISSUE OF DISALLOWANCE OF CLA IM OF DEDUCTION OF RS.20,19,488/- TRAVELLED UPTO THE STAGE OF TRIBUNA L. THE TRIBUNAL (ITAT AHMEDABAD CAMP AT SURAT) IN EARLIER ROUND OF LITI GATION IN ITA NO.604/AHD/2006 FOR AY 1993-94 VIDE ITS ORDER DATED 17/09/2009 WAS PLEASED TO RESTORE THE MATTER TO THE FILE OF ASSESS ING OFFICER (AO) WITH A DIRECTION TO GIVE DEDUCTION OF RS.20,19,490/- CLAIM ED IN LIEU OF EXPENSES INCURRED BY GUJARAT ELECTRICITY BOARD (GEB) ON BEHA LF OF THE ASSESSEE ITA NO.2289/AHD/2011(BY REVENUE) AND CO NO.213/AHD/2011 (BY ASSESSEE ) ITO VS.M/S.CKG PITHAWALA PVT.LTD. ASST.YEAR 1993-94 - 3 - (AFTER VERIFYING THE BOOKS OF ACCOUNT OF THE ASSESS EE). THE AO IN THE SECOND ROUND, YET AGAIN, CONFIRMED THE DISALLOWANCE VIDE ORDER DATED 27/12/2010 ON THE BASIS THAT IN THE ABSENCE OF THE DETAILS AND VERIFICATION OF ALLOWABILITY OF THESE EXPENSES, THE DEDUCTION CA NNOT BE GRANTED. HOWEVER, THE LD.CIT(A) ALLOWED THE DEDUCTION ON THE BASIS THAT THERE IS NO WAY THAT AN AMOUNT RECOVERED ON BEHALF OF THE CO MPANY, CAN BE TREATED AS ASSESSEES INCOME. 3. THE LD.SR.DR ARGUED AT LENGTH AND SUBMITTED THAT IT WAS INCUMBENT UPON THE ASSESSEE TO DEMONSTRATE THAT EXPENDITURE W AS PERTAINED TO THE YEAR UNDER APPEAL AND IN THE ABSENCE OF VERIFICATIO N OF THE EXPENDITURE, THE AO WAS JUSTIFIED IN DISALLOWING THE SAME. HE P LACED RELIANCE ON THE ORDER OF THE AO. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S HRI R.N.VEPARI SUPPORTED THE ORDER OF THE LD.CIT(A) AND SUBMITTED THAT THE DIRECTION OF THE HONBLE TRIBUNAL, IN EARLIER LITIGATION, IN IT A NO.604/AHD/2006 WAS CLEAR, THE AO OUGHT TO HAVE GRANTED THE DEDUCTION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE AO MADE DISALLOWANCE ON THE BASIS THAT THE EXPE NDITURE COULD NOT BE VERIFIED FROM THE GEB. HOWEVER, THE LD.CIT(A) DEL ETED THE DEDUCTION ON THE BASIS THAT THE IMPUGNED DISALLOWANCE WOULD N OT PARTAKE THE ITA NO.2289/AHD/2011(BY REVENUE) AND CO NO.213/AHD/2011 (BY ASSESSEE ) ITO VS.M/S.CKG PITHAWALA PVT.LTD. ASST.YEAR 1993-94 - 4 - CHARACTER OF THE INCOME. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT GEB HAS CONFIRMED THE RECOVERY OF THE EXPENSES. HO WEVER, THE AO DID NOT ALLOW THE EXPENSES ON THE GROUND THAT GEB FAILE D TO CORRELATE THE EXPENSES WITH THE YEAR UNDER APPEAL. WE DO NOT FIN D ANY MERIT INTO THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE SUBJECT DISALLOWANCE IS NOT SUSTAINABLE AS THE DIRECTION OF THE TRIBUNAL IN THE EARLIER ROUND OF LITIGATION WAS CLEAR THAT THE AO WOULD VERIFY FROM THE BOOKS OF ACCOUNT OF THE ASSESSEE ABOUT THE EXPENDITURE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE GEB HAD MADE RECOVERY OUT OF THE CONTRACT PAYMENT. THEREFORE, THERE IS NO DOUBT ABOUT THE FACT THAT TH E RECOVERY RELATES TO THE BUSINESS OF THE ASSESSEE. THE ASSESSEE HAS SUBMITT ED THAT RECOVERY IS IN RESPECT OF THE PAYMENTS MADE BY THE GEB ON BEHALF O F THE ASSESSEE. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTIN G THAT THE RECOVERY WERE NOT RELATED TO THE CONTRACT PAYMENTS. UNDER T HESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS JUSTIFIE D IN GRANTING THE DEDUCTION. THEREFORE, THIS GROUND OF REVENUES APP EAL IS DISMISSED AND FINDING OF THE LD.CIT(A) IS CONFIRMED. AS A RESULT , REVENUES APPEAL IS DISMISSED. 5. NOW WE TAKE UP THE ASSESSEES CROSS OBJECTION N O.213/AHD/2011 FOR AY 1993-94 (ARISING OUT OF ITA NO.2289/AHD/2011 FOR AY 1993-94- REVENUES APPEAL). THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ITS CROSS-OBJECTION: ITA NO.2289/AHD/2011(BY REVENUE) AND CO NO.213/AHD/2011 (BY ASSESSEE ) ITO VS.M/S.CKG PITHAWALA PVT.LTD. ASST.YEAR 1993-94 - 5 - (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN NOT GRANTING DEDUCTION OF RS.20,19,488/- WHICH WAS THE ACTUAL DEDUCTIBLE EXPENDITURE INCURRED BY GEB ON BEHALF OF THE COMPANY. (2) THE APPELLANT SUBMITS THAT IN VIEW OF THE CLEAR CUT DIRECTIONS OF THE TRIBUNAL ABOVE AMOUNT SHOULD HAVE BEEN ALLOWED AS DEDUCTION WHEN ALL THE INFORMATION AND EVIDENCE REL ATING TO EXPENDITURE WAS FURNISHED BEFORE THE ASSESSING OFFI CER. 6. AT THE TIME OF HEARING, THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS THE CROSS-OBJECTION FILED BY THE ASSESSEE. THE LD.SR.DR HAS NO OBJECTION. IN VIEW OF THE STAT EMENT MADE BY THE LD.COUNSEL FOR THE ASSESSEE, WE DISMISS THE CROSS-O BJECTION FILED BY THE ASSESSEE AS NOT PRESSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS-OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON THURSDAY, THE 15 TH DAY OF OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( . ) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 15/ 10 /2015 5...+, .+../ T.C. NAIR, SR. PS ITA NO.2289/AHD/2011(BY REVENUE) AND CO NO.213/AHD/2011 (BY ASSESSEE ) ITO VS.M/S.CKG PITHAWALA PVT.LTD. ASST.YEAR 1993-94 - 6 - !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 678 9 / CONCERNED CIT 4. 9 ( ) / THE CIT(A)-I, SURAT 5. :; )+78 , . 782 , 6 / DR, ITAT, AHMEDABAD 6. ;< =, / GUARD FILE. / BY ORDER, *: ) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 29.9.2015 (DICTATION-PAD 7 PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..01-05.10.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.15.10.2015 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.10.2015 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER