DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Dhelakhat Tea Co. Ltd., Kolkata

ITA 1011/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2485 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 14-05-2010
• Court: TRIBUNAL
• Department Lawyers: MRS JYOTI KUMARI
• Assessee Lawyers: N O N E
• Keywords: Set aside

Judgement Text

, A , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA () BEFORE . . . . . . . . , , , , , !' !' !' !' /AND . .. . . .. .! !! !, , , , # [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C. D. RAO , AM] '$ '$ '$ '$ / ITA NO. 1011 /KOL/2010 %&' !() %&' !() %&' !() %&' !()/ // / ASSESSMENT YEAR : 2002-03 DEPUTY COMMISSIONER OF INCOME-TAX, -VS- M/S. DHELA KHAT TEA CO. LTD. CIRCLE-4, KOLKATA (PA NO.AABCD 0386 Q) (+, / APPELLANT ) (-+,/ RESPONDENT ) FOR THE APPELLANT: : ./ MRS. JYOTI KUMARI FOR THE RESPONDENT N O N E / / ORDER PER D. K. TYAGI, JM ( . . . . . . . . , , , , ) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 08.12.2009 FOR THE ASSESSMEN T YEAR 2002-03 ON THE FOLLOWING TWO GROUNDS : 1. THAT LD. CIT(A)-XVI, KOLKATA RELYING ON THE DEC ISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES VS. CIT AND DEL ETED THE ADDITION. SINCE SLP IS PENDING BEFORE THE HONBLE SUPREME COURT AGAINST TH E SAID DECISION, FURTHER APPEAL IS SUGGESTED. 2. THAT LD. CIT(A)-XVI, KOLKATA HAS GROSSLY MISTAKE N TO CONSIDER THE ISSUE OF DEFERRED TAX LIABILITY. THE OBSERVATION MADE IN THE PARA 9 OF THE ORDER ONLY IS ACCEPTABLE IF THE AMOUNT WAS DEBITED FROM THE PROFIT. BUT IN THIS CA SE THE SITUATION IS TOTALLY REVERSE AND HENCE FURTHER APPEAL IS SUGGESTED. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. AFTER H EARING THE LD. D.R. WE HAVE DECIDED TO DISPOSE OF THE APPEAL. 3. GROUND NO. 1 RELATES TO DELETION OF ADDITION OF RS.13,10,964/- ON ACCOUNT OF PAYMENT OF CESS ON GREEN LEAVES. THE ASSESSEE CLAI MED AN EXPENDITURE OF RS.13,10,964/- ON PAYMENT OF CESS ON GREEN LEAVES. THE AO WITHOUT ASSIGNING ANY REASON HAS MADE THE DISALLOWANCE IN THE ASSESSMENT ORDER. IN APPEAL, THE LD. CIT(A) RELYING ON THE DECISION OF HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. AFT INDUSTRIES LTD. 270 ITR 167 DELETED THE DISALL OWANCE AS MADE BY THE AO. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT(A) RELYING ON THE DECISI ON OF CIT VS. AFT INDUSTRIES LTD. DELETED THE ADDITION. SINCE SLP IS PENDING BEFORE THE HONBLE SUPREME COURT AGAINST 2 THE SAID DECISION, THIS ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND RESTORE THAT OF THE AO. 5. WE HAVE HEARD THE LD. DR AND CAREFULLY PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS CLAIMED AN E XPENDITURE OF RS.13,10,964/- ON ACCOUNT OF PAYMENT OF CESS ON GREEN LEAVES. THE AO MADE THE DISALLOWANCE WITHOUT ASSIGNING ANY REASONS. THE LD. CIT(A) DELETED THE SAID ADDITION BY RELYING ON THE JURISDICTIONAL HIGH COURTS ORDER IN THE CASE OF CI T VS. AFT INDUSTRIES LTD. 270 ITR 167 (CAL). SINCE THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY RELYING ON THE ORDER OF THE JURISDICTIONAL HIGH COURT, CITED SUPRA , WE DO NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHELD. THIS GROUND O F APPEAL OF THE REVENUE IS, THEREFORE, DISMISSED. 6. GROUND NO. 2 RELATES TO DELETION OF ADDITION OF RS.2,76,022/- ON ACCOUNT OF DEFERRED TAX ASSET WHILE COMPUTING THE COMPOSITE IN COME. BRIEFLY STATED FACTS OF THE CASE ARE THAT AT THE TIME OF ASSESSMENT PROCEEDINGS , THE AO FOUND THAT IN THE BALANCE SHEET AS ON 31.3.2002 THE ASSESSEE HAS CREDITED THE RESERVE ACCOUNT BY RS.2,76,022/- IN RESPECT OF DEFERRED TAX LIABILITY. ACCORDING TO AO , THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION IN THIS REGARD. THEREFORE, HE HELD THA T THE ASSESSEE HAS CREATED FICTITIOUS LIABILITY IN ORDER TO EXPLAIN THE REAL ASSET IN THE BALANCE SHEET AND ADDED THE AMOUNT TO THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT (A) DIRECTED THE AO TO DELETE THE ADDITION AND ALLOWED THE ASSESSEES GROUND OF APPEA L. AGGRIEVED BY THE SAID ORDER, NOW THE REVENUE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING BEFORE US, THE LD. DR REL IED ON THE ORDER OF THE AO AND CONTENDED THAT THE LD. CIT(A) HAS GROSSLY ERRED IN CONSIDERING THE ISSUE OF DEFERRED TAX LIABILITY. THE OBSERVATION MADE BY HIM IN PARA 9 O F HIS ORDER IS ACCEPTABLE ONLY IF THE AMOUNT WAS DEBITED FROM THE PROFIT. BUT IN THIS CA SE THE SITUATION IS TOTALLY REVERSE. HENCE, SHE URGED BEFORE THE BENCH TO SET ASIDE HIS ORDER AND RESTORE THAT OF THE AO. 8. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DEALT THE ISSUE AS UND ER : I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE ASSESSMENT ORDER. I HAVE ALSO GONE THROUGH THE PROFIT AND LOSS ACCOUNT AS WELL AS THE BALANCE SHEET FOR THE RELEVANT PREVIOUS YEAR. ON PERUSAL OF P&L ACCOUNT, IT IS OBSERVED THAT THE APPELLANT HAS MADE ADJUSTMENT OF RS.2,76,022/- ON ACCOUNT OF DEFERRED TAX ASSET BLOW THE LINE AFTER ARRIVING ON PROFIT BEFORE TAXATION AMOUNTING TO RS.5,52,502/-. IN THE ASSESSMENT ORDER, THE AO HAS STARTED THE COMPUTATION BY TAKING NET PROFIT AS PER P&L ACCOUNT AMOUNTING TO RS.5,52,502/-. THEREAFTER, HE HAS AGA IN ADDED AMOUNT OF RS.2,76,022/-. SINCE THE APPELLANT HAS MADE THE ADJUSTMENT OF RS.2 ,76,022/- BLOW THE LINE , HENCE THERE IS NO IMPACT ON THE NET PROFIT OF THE APPELLANT AND O ADDITION COULD BE MADE ON ACCOUNT 3 OF BLOW THE LINE ADJUSTMENT IN THE P&L ACCOUNT. IN VIEW OF ABOVE, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS.2,76,02/-. THE GROUND NO . 2 IS ALLOWED. 10. SINCE THE LD. DR AT THE TIME OF HEARING BEFORE US DID NOT CONTROVERT THE AFORESAID FINDING OF THE LD. CIT(A) BY PRODUCING ANY COGENT M ATERIAL/EVIDENCE, WE DO NOT FIND ANY INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY U PHELD. THIS GROUND OF APPEAL OF THE REVENUE IS ALSO DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2.7.2010 SD/- SD/- . .. . . .. .! !! !, , , , # . . . . . . . . , , , , (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (# # # #) )) ) DATED : 2ND JULY, 2010 !01 %&23 %4! JD.(SR.P.S.) / 5 -%%6 76(8- COPY OF THE ORDER FORWARDED TO: 1. +, /APPELLANT - DCIT, CIRCLE-4, KOLKATA 2 -+, / M/S. DHELAKHAT TEA CO. LTD., 4, DR. RAJENDRA PRAS AD SARANI, KOL-1.. 3. %/&/ THE CIT, 4. %/& ()/ THE CIT(A), KOLKATA. 5. !?% -%& / DR, KOLKATA BENCHES, KOLKATA 6 -%/ TRUE COPY , /&@/ BY ORDER , A '3 / DEPUTY REGISTRAR .