ACIT, Circle-2(1), Tirupathi V. Sri Vishnu Cements Ltd ( merged with Zuari Cements Ltd),

CO 85/HYD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6854 (ITAT-HYDERABAD)
• Duration Of Justice: 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1994-1995
• Appeal Filed On: 07-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A C GANGAIAH; G PHANI KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBE R. ITA NO.1579/HYD/2011 (ASSESSMENT YEAR 1994-95) ASST. COMMISSIONER OF INCOME- TAX, CIRCLE 2(1), TIRUPATI. V/S M/S. SRI VISHNU CEMENTS LTD., KADAPA (PAN - AADCS 4055 M ) (APPELLANT) (RESPONDENT) AND C.O. NO.85/HYD/2011 (IN ITA NO.1579/HYD/2011) (ASSESSMENT YEAR 1994-95) M/S. SRI VISHNU CEMENTS LTD., KADAPA (PAN - AADCS 4055 M ) V/S ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), TIRUPATI. (CROSS - OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI G.PHANI KUMAR RESPONDENT BY : SHRI A.C.GANGAIAH DATE OF HEARING 4 1.2012 DATE OF PRONOUNCEMENT 4.1.2012 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1994-95 ARE DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR DATED 29.11.2010. 2. THE ONLY ISSUE INVOLVED IN THE APPEAL OF THE RE VENUE IS WITH REGARD TO DISALLOWANCE OF PRIOR PERIOD EXPENSES AMO UNTING TO RS.44,69,307 MADE BY THE ASSESSING OFFICER, WHICH H AS BEEN DELETED BY ITA NO.1579/H/11 & CO 85/HYD/11 M/S. SRI VISHNU CEMENTS LTD., KADAPA 2 THE CIT(A), AND THE EFFECTIVE GRIEVANCE OF THE REVE NUE CONTAINED IN GROUND NO.6 OF THIS APPEAL IS THAT THE CIT(A) SHOUL D HAVE GIVEN AN OPPORTUNITY TO THE ASSESSING OFFICER TO GET THE BIL LS/VOUCHERS EXAMINED UNDER S.46A(3) OF THE ACT. THROUGH THE ELABORATE GR OUNDS RAISED IN ITS CROSS-OBJECTION, THE ASSESSEE MERELY SUPPORTED THE ORDER OF THE CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD, INCLUDING THE IMPUGNED ORDERS O F THE LOWER AUTHORITIES. WE FIND THAT THE CIT(A) HAS DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWING THE CLAIM OF THE A SSESSEE FOR PRIOR PERIOD EXPENSES IN THE FOLLOWING MANNER- 8.2 I HAVE GONE THROUGH THE ORDER PASSED BY THE ASSESSING OFFICER AND SUBMISSIONS MADE BY THE APPEL LANT DURING THE COURSE OF APPELLATE PROCEEDINGS. SINCE, THE AO HAS COMPLETED THE SET ASIDE ASSESSMENT U/S. 144, THE MATTER WAS RIGHTLY REMANDED TO THE FILE OF THE AO FOR A REPORT. IN TH E REMAND REPORT, THE AO HAS STATED THAT THE APPELLANT IN SUPPORT OF THE EXPENDITURE CLAIMED IN THE ASST. YEAR HAS FURNISHED A COPY OF S TATEMENT SHOWING THE DETAILS OF VARIOUS EXPENDITURE. THE STA TEMENT FURNISHED SHOWS THE ITEM -WISE EXPENDITURE WHICH ARE NOT SUPPORTED BY ANY VOUCHERS/BILLS AND REASONS FOR BOO KING THE EXPENDITURE IN THE CURRENT YEAR WHEN THE EXPENDITUR E PERTAINS TO EARLIER YEARS. IN THE REJOINDER THE AR HAS SUBMITT ED THAT THE AO HAS NOT SOUGHT ANY CLARIFICATION ON THE INFORMATION FILED BY IT NOR CALLED FOR ANY VOUCHERS, BILLS AND EXPLANATIONS. TA KING OVER ALL PICTURE INTO ACCOUNT, THE AO COULD HAVE SOUGHT FURT HER DETAILS OF EXPLANATIONS OR VOUCHERS, BILLS ETC. TO COME TO A C ONCLUSION AS TO WHETHER THE PRIOR PERIOD EXPENSES CLAIMED WERE IN F ACT ALLOWABLE? SINCE THE AR HAS FILED A COPY DETAILS FURNISHED BEF ORE THE AO IN COURSE OF THE PRESENT PROCEEDINGS, I HAD TO PERUSE THE SAME. THE EXPENSES PERTAINS TO HEAD OFFICE AND FACTORY. THEY COMPRISE ARREARS OF MEDICAL REIMBURSEMENT, UNPAID EXPENSES A PPROVED, INTEREST CHARGED BY BANK ON WRONG CREDIT DURING 199 3, RENTAL CHARGES OF 1992-93 SETTLED, SETTLEMENT OF EARLIER Y EAR HOUSE TAX FOR COLONY HOUSES ETC. AND ETC. A PERUSAL OF THE E XPENSES REVEAL THAT THESE WERE NOT CLAIMED IN THE EARLIER YEARS, B UT BECAME PAYABLE THIS YEAR EVEN THOUGH THEY PERTAIN TO EARLI ER YEARS AND ASS SUCH THEY WERE ALLOWABLE. THE AR HAS ALSO REFERRED TO CERTAIN DECISIONS BRINGING OUT THE CIRCUMSTANCES UNDER WHIC H THE APPELLATE AUTHORITIES HAVE DIRECTED THE ASSESSING O FFICER TO ALLOW THE EARLIER EXPENSES. IN LIGHT OF THE FACTS, CIRCUM STANCES AND THE DISCUSSION AND HEREINABOVE, I AM OF THE OPINION THA T THE CLAIM OF THE APPELLANT OF PRIOR PERIOD EXPENSES AS CLAIMED I S ALLOWABLE AND THE AO IS DIRECTED ACCORDINGLY. ITA NO.1579/H/11 & CO 85/HYD/11 M/S. SRI VISHNU CEMENTS LTD., KADAPA 3 CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THERE IS CLEAR VIOLATION OF THE PROVISIONS OF RULE 46A BY THE CIT(A), INASMUCH AS THE CIT(A), HAVING OBSERVED THAT THE AO COULD HAVE SOUGHT FURTHER DETAILS OR EXPLANATIONS OR VOUCHERS, BILLS ETC., SHOULD HAVE GIVEN AN OPPORTUNITY TO THE ASSESSING OFFICER TO GET THE BILLS/VOUCHERS EXAMINED UNDER RULE 46A INSTEAD OF PROCEEDING TO DELETE THE ADDITION MADE BY THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE, AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIRECTION TO RE-DECIDE TH E ISSUE RELATING TO ALLOWABILITY OF PRIOR PERIOD EXPENSES AFTER EXAMINI NG THE BILLS/VOUCHERS AND THE EXPLANATIONS OF THE ASSESSEE IN THAT BEHALF . SINCE IT IS A VERY OLD MATTER REALTING TO ASSESSMENT YEAR 1994-95, AND THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE IS SUBJECTED TO LONG LITIGATION, WE DIRECT THE ASSESSING OFFICER TO COMP LETE THE ASSESSMENT AFRESH IN ACCORDANCE WITH LAW AND AFTER GIVING REAS ONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, WITHIN A PERIOD OF THREE M ONTHS FROM THE RECEIPT OF THIS ORDER. 4. IN THE RESULT, WHILE APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES, CROSS-OBJECTIONS OF THE ASSES SEE IS DISMISSED.. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION O F HEARING OF THE APPEAL ON 4 TH JANUARY, 2012 SD/- SD/- (ASHA VIJAY ARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 4 TH JANUARY, 2012 ITA NO.1579/H/11 & CO 85/HYD/11 M/S. SRI VISHNU CEMENTS LTD., KADAPA 4 COPY FORWARDED TO: 1. M/S. SRI VISHNU CEMENTS LTD., (MERGED WITH ZUARI CE MENTS LTD.), KRISHNA NAGAR, YERRAGUNTALA, KADAPA DIST. 2. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), T IRUPATI 3. COMMISSIONER OF INCOME - TAX(A) GUNTUR 4. COMMISSIONER OF INCOME - TAX TIRUPATI 5. THE D.R., ITAT, HYDERABAD. B.V.S.