DAKSHIN DAMODAR COLD STORAGE PRIVATE LIMITED,BANKURA MORE V. ACIT CIR-1 BURDWAN, COURT COMPOUND

ITA 436/KOL/2025

AI Insights

The case involves Dakshin Damodar Cold Storage Private Limited appealing against the orders of the Commissioner of Income-tax (Appeals), Gurugram, for the Assessment Year 2013-14. The primary issues in the appeal included the disallowance of certain business expenses related to donations and festival expenditures, the non-deduction of TDS on repair and maintenance expenses, and the treatment of preliminary expenses and interest income from a security deposit. The Tribunal examined each issue in light of the relevant provisions of the Income-tax Act, 1961, and the facts presented, leading to a decision that favored the appellant on most grounds except for the interest income issue.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839006 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 27-02-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTANU GHOSH
• Assessee Lawyers: SOUMITRA CHOUDHURY
• Keywords: Set aside; Business expenditure; TDS
• Section: 194C; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.436/KOL/2025 (Assessment Year: 2013-14) Dakshin Damodar Cold Storage Private Limited Bankura More, Muchkhanda, Burdwan, Pin-713103, Burdwan, West Bengal Vs. ACIT, Cir-1, Burdwan, Court Compound, Aaykar Bhawan, Burdwan, Dist- Bardhaman, PIN-713101, West Bengal (Appellant) (Respondent) PAN No. AAACD9300R Assessee by : Shri Soumitra Choudhury, AR Revenue by : Shri Santanu Ghosh, DR Date of hearing: 22.01.2026 Date of pronouncement: 17.02.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Gurugram, (hereinafter referred to as the “Ld. CIT(A)”] dated 16.12.2024 for the AY 2013-14. 2. The issue raised in ground no.1 is in respect all the issues as raised individually in ground no.2 to 5, therefore, the issues are being decided individually in ground nos.2 to 5. Printed from counselvise.com Page | 2 ITA No. 436/KOL/2025 Dakshin Damodar Cold Storage Private Limited; A.Y. 2013-14 3. The issue raised in ground no.2 is against the order of ld. CIT (A) confirming the addition of ₹9,000/- and 6,000/- in respect of donation and subscription by the ld. CIT (A). 3.1. The facts in brief are that during the course of assessment proceedings, the ld. AO disallowed the expenses on the ground that these payments made for the purpose of Durga Puja and building of temple etc. The ld. AO disallowed these payments on the ground that the assessee has failed to show that recipients were registered u/s 80G of the Income-tax Act, 1961 (the Act). 3.2. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO on the ground that the assessee has failed to prove that whether the recipients are registered under section 80G of the Act and the assessee would be entitled for any deduction u/s 80G on payment of these amounts. 3.3. After hearing the rival contentions and perusing the materials available on record, we find that in Kolkata these types of expenses are very common and have to be incurred by the business entities if they are to carry on business in the local territory. We are of the considered view that payments for festivals/sports/pujo, if made to maintain good relations for business, can be allowed as a business expenditure under Section 37(1). Consequently, we set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. The ground no. 2 is allowed. 4. The issue raised in ground no.3 is against the order of ld. CIT (A) confirming the addition of ₹91,000/- as made by the ld. AO u/s Printed from counselvise.com Page | 3 ITA No. 436/KOL/2025 Dakshin Damodar Cold Storage Private Limited; A.Y. 2013-14 40a(ia) of the Income-tax Act, 1961 for default as per the provisions of section 194C of the Income-tax Act, 1961 (the Act). 4.1. The facts in brief are that the assessee has incurred repairs and maintenance expenses during the year on account of repairs to machinery. The assessee has furnished before the ld. AO the bills of M/s Tech India but the ld. AO disallowed the same on the ground that the assessee has not deducted any TDS u/s 194C of the Income- tax Act, 1961. The ld. AO noted that if this is a consolidated bills according to the ld. AO the assessee has failed to furnish any details qua the said amount which were incurred on various dates as per the details below: Date Amount 13.08.2012 18,500 15.08.2012 17,500 18.08.2012 13,500 26.08.2012 14,000 02.09.2012 17,500 17.09.2012 10,000 4.2. The ld. AO finally disallowed the said amount for non-deduction of TDS u/s 194C of the Income-tax Act, 1961 (the Act), which was confirmed by the ld. CIT (A). 4.3. After hearing the rival contentions and perusing the materials available on record, we find that the individual details of these bills are below the limit which are liable to tax at source. Moreover, the provisions of Section 40a(ia) of the Act are not applicable as these expenses were incurred on different dates as stated hereinabove. Therefore, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition.The ground no. 3 is allowed. Printed from counselvise.com Page | 4 ITA No. 436/KOL/2025 Dakshin Damodar Cold Storage Private Limited; A.Y. 2013-14 5. The issue raised in ground no.4 is against the confirmation of disallowance of ₹7,06,335/- as made by the ld. AO in respect of preliminary expenses. The ld. AO during the course of assessment proceedings noted that the assessee has shown other expenses in the profit and loss account which included the preliminary expenses of ₹7,06,335/- and accordingly, the details were called for by the assessee. However, the assessee has not file any details for the year resulting into addition of the same to the income of the assessee in the assessment framed. 5.1. In the appellate proceedings, the ld. CIT (A) also confirmed the order of the ld. AO on the ground that the assessee has not filed any details before the ld. AO. 5.2. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has incurred these expenses in the earlier assessment year which was being claimed at 1/5th of the said expenses every year. Accordingly, the assessee has claimed at 1/5th of the said expenses. Since then, we note that the assessee has claiming similar expenses in the earlier assessment years also and which were duly allowed. Therefore, considering the facts on record and the plea of the assessee, we set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. The ground no. 4 is allowed. 6. The last ground raised in ground no. 5 by the assessee is against the confirmation of addition of ₹63,952/- by the ld. CIT (A) as made by the ld. AO in respect of interest income. Printed from counselvise.com Page | 5 ITA No. 436/KOL/2025 Dakshin Damodar Cold Storage Private Limited; A.Y. 2013-14 6.1. After hearing the rival contentions and perusing the materials available on record, we find that this is in fact the interest which has accrued on the security deposit which the assessee has not shown in the return of income. Therefore, we do not find any infirmity in the order of the authorities below and accordingly, the said ground raised by the assessee is dismissed by upholding the order of ld. CIT (A) on this issue. The ground no. 5 is dismissed. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17.02.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 17.02.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "